FTSE

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.

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