What is the 'FTSE'

The FTSE is a company, similar to Standard & Poor’s, that specializes in index calculation. While the FTSE is not part of any stock exchange, one co-owner is the London Stock Exchange (LSE). The Financial Times is the other owner and the partial namesake of the company.

The most well-known index, among many at FTSE, is the FTSE 100. This index, synonymous with FTSE, is comprised of blue-chip stocks that are listed on the LSE.

BREAKING DOWN 'FTSE'

Specifically in the trading world, the initials FTSE are synonymous with the FTSE 100 Index, more commonly noted as the FTSE 100. Still, FTSE, short for Financial Times Stock Exchange, has a number of indices and index series.

The FTSE 100 Index

This index, more colloquially known at the Footsie, is arguably the most popular and widely used stock market index around the globe. This index is representative of approximately 80% of the market capitalization of the LSE in its entirety. Larger companies comprise a greater portion of the index because it is weighted by market capitalization. The FTSE 100 is managed by the FTSE Group. The name is a mashup of its co-owners. It is calculated in real time, and when the market is open it is updated and published every 15 seconds.

The FTSE 100 is often regarded as an indicator of prosperity among qualifying United Kingdom companies and the economy in general. However, a rather large section of the companies included in this index are based in other countries around the world. Thus, in reality, the movements of this index are not a relatively strong indicator of how well the UK’s economy is doing. Another of the FTSE’s indexes, the FTSE 250, is comprised of a smaller proportion of international companies and thus acts as a better indicator of the UK’s economy in general terms.

Constituents, or, companies that will make up the FTSE 100, are determined on a quarterly basis, usually the Wednesday following the first Friday in the months of March, June, September and December. Any changes to the constituents of the index are made based on values taken from companies after the close of business the night before reviews are conducted.

Other Indexes

The number of other indexes attached to the FTSE Group is a prolific list. The FTSE has a vast number of index series that focus on different aspects including those targeted towards specific companies, those that are alternatively weighted and those focusing on fixed income among a variety of others.

RELATED TERMS
  1. Footsie

    A slang term for the Financial Times Actuaries 100 index (FTSE ...
  2. FTSE NASDAQ 500 Index

    Introduced in July 2005, the FTSE NASDAQ 500 is one of four indexes ...
  3. FTSE RAFI US 1000 Index

    An index of stocks based on the largest 1,000 fundamentally ranked ...
  4. Alternative Investment Market - ...

    A sub-market of the London Stock Exchange that permits smaller ...
  5. London Stock Exchange - LSE

    The primary stock exchange in the U.K. and the largest in Europe. ...
  6. Index

    A statistical measure of change in an economy or a securities ...
Related Articles
  1. Investing

    The Top 5 ETFs to Track the FTSE X0 for 2016 (UK)

    Read about some of the best ETFs offering exposure to mid- and large-cap companies in the United Kingdom, and decide whether they match your investment needs.
  2. Investing

    Top 3 ETFs That Short the FTSE 100 (XUKS, SUK2)

    As Brexit looms, these three ETFs can be used to gain short exposure to the U.K.'s FTSE 100 Index.
  3. Investing

    How to Short the FTSE Ahead of The Brexit Vote

    Those who believe that a Brexit is likely can position themselves to take advantage of a fall in British stocks by taking a short position
  4. Investing

    ETF for FTSE High Dividend Yield Index (VYM)

    Discover a high dividend yielding exchange-traded fund (ETF) that almost perfectly mimics the performance and behavior of the FTSE High Dividend Yield Index.
  5. Investing

    The Top 4 Leveraged (2x & 3x) China ETFs of 2016 (YINN, YANG)

    Discover four leveraged ETFs that can be used to gain exposure to China, the world’s second-largest economy.
  6. Investing

    The Most-traded ETFs in the United Kingdom

    The UK is the second-largest economy in Europe - ETFs are a highly interesting option for investors who intend to increase exposure to this market.
  7. Insights

    Britain's FTSE 100 Hits 1-Year High After BoE Rate Cut

    The FTSE 100 is a share index of companies listed on the London Stock Exchange with the highest market capitalisation.
  8. Investing

    3 Highly Liquid Vanguard International ETFs (VWO, VEA)

    Learn about the financial and investment profiles of three liquid Vanguard ETFs that invest in international equities or fixed income.
  9. Investing

    What is an Index?

    An index is a statistical means of calculating a change in an economy or market.
  10. Investing

    3 Types Of Indexing For ETF Success

    ETF success relies on the index with which it's paired. Discover three index genres for tracking average market performance.
RELATED FAQS
  1. What is the difference between the QQQ ETF and other indexes?

    Find out more about the PowerShares QQQ Trust, the index the QQQ tracks, and the difference between QQQ, the SPY and Nasdaq ... Read Answer >>
  2. What are the most common market indicators to follow the European stock market and ...

    See which market indicators and major market indexes are used most frequently by traders and analysts to measure the European ... Read Answer >>
  3. What are some examples of smart beta ETFs that use passive and active management?

    Learn about smart beta investment strategies and discover examples of smart beta exchange-traded funds that use both passive ... Read Answer >>
  4. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  5. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
  6. How do indexes determine which stocks are removed or added to them?

    Stock indexes are formed based on the kinds of stocks or financial securities they want to track. For example, the Standard ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center