As a result, Cairn Energy has been downgraded to the mid-cap FTSE 250 index.The British Energy Group has also moved up into the FTSE 250, along with MyTravel Group. According to Derek Mitchell, manager of the £63.5m F&C UK Prime Fund: “Utilities as a group has suffered lately because the bond market has sold off.” Cairn Energy joined the FTSE 100 only in the third quarter of 2004. Mitchell says that a downgrading of the oil and gas exploration firm was inevitable, as it reported disappointing numbers in the fourth quarter of 2004. He adds that it might take a long time for the City to regain confidence in the stock, as its poor figures came as a shock to investors after its strong performance earlier in the year. However, Mitchell says he has no plans to sell the stock. He has instead increased his holding in Cairn, as the stock has experienced something of a rally since its low point. “Even though December was disappointing, I still own this stock. I think we will get positive drilling news and should see the share price regaining some lost ground,” he says. Mitchell also currently holds International Power, which he says “is not a typical utility, as it is not a high-yielding stock. However, their results were very good. I can see its share price moving up to 200p.” He adds that he is unlikely to increase his holding in the blue-chip stock. Real estate company Savills moved from the FTSE SmallCap index to the FTSE 250 index. Falling from the FTSE 250 down to the FTSE SmallCap were media company Chrysalis Group, mail company DX Services and electronics group Alba. The committee reviews the FTSE UK index series once every quarter. The latest changes will take effect this week.