What is the 'FTSE'?

The FTSE, or the FTSE Group, is a company, similar to Standard & Poor’s, that specializes in index calculation. While the FTSE is not part of any stock exchange, the co-owners are the London Stock Exchange (LSE) and The Financial Times. FTSE is an acronym for Financial Times and Stock Exchange.

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

BREAKING DOWN 'FTSE'

Among traders, the initials FTSE are synonymous with the FTSE 100 Index, or the FTSE 100, but FTSE has a number of indices and index series.

The FTSE 100 Index

This index, more colloquially known as the Footsie, is arguably the most popular and widely used stock market index worldwide. It was first created in January 1984 and had a base level of 1,000. As of March 2018, it had a level of over 7,000.

This index is representative of approximately 80% of the market capitalization of the LSE in its entirety. Larger companies compose a greater portion of the index because it is weighted by market capitalization. The FTSE 100 is managed by the FTSE Group. 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 considered an indicator of prosperity among qualifying United Kingdom companies and the economy in general. However, a large section of the companies included in this index are based in other countries. Thus, in reality, the movements of this index are not a relatively strong indicator of the UK economy. Another of the FTSE’s indexes, the FTSE 250, has a smaller proportion of international companies and is considered a better indicator of the UK’s economy in general terms.

Constituents, or, companies that make up the FTSE 100, are determined on a quarterly basis, usually the Wednesday following the first Friday in 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

There are a prolific number of indexes attached to the FTSE Group. Other indices maintained by the FTSE Group include so-called ethical indices such as the FTSE4Good Global index, which focuses on corporate responsibility. The FTSE Group's most popular indices in addition to the FTSE 100 are the FTSE 250, the FTSE 350 and the FTSE All-Share.

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