The Financial Times Stock Exchange 100 is a capitalisation-weighted index of the largest 100 companies publicly-listed and traded on the London Stock Exchange. Maintained by the FTSE Group, the index is used by investors to measure the prosperity of the businesses regulated by the United Kingdom Company Law and evaluate the overall British economic scenery. Read more about it below and find out why it’s one of the best options to trade CFDs.
Brief History of the FTSE 100 Index
The Financial Times Stock Exchange 100 Index, also known as the FTSE 100 Index, FTSE 100, FTSE, or informally called the Footsie – was founded on January 3, 1984; at the starting level of 1000 points. In December of 1999, when the internet revolutionised the trading world – the index reached an all-time high of 6,950. A rise in the price of Brent crude oil to about 60 US dollars was another factor. This record was surpassed in May 2018, with a closing value of 7,877.45 and an intra-day value of 7,903.50.
The Financial Times Stock Exchange 100 Index – Overview
The index is maintained by the FTSE Group, a joint venture between the Financial Times of London and the London Stock Exchange. It is composed of the largest 100 companies by market cap which account for 81% of the entire market capitalisation of the London Stock Exchange. The market cap represents the current value of a companies’ share price, times the number of shares issued. Apart from this characteristic, in order to be listed the firms must meet other criteria, such as having a full-listing on the London Stock Exchange with Sterling or Euro denominated price on the Stock Exchange Electronic Trading Service. The listing is updated quarterly, meaning that companies can change at any time and make space for other with a larger market cap. Throughout the years the list has changed exponentially mainly due to depreciation of market value, mergers and termination of some companies. In some cases, the components changed their names, such as HSBC, the formerly Midland Bank.
The index is calculated in real-time and published every second when the market is open. The trading session on the London Stock Exchange starts at 08:00 and ends at 16:30. Closing values are taken at 16:35. The FTSE 100 is typically used as a useful and accurate indicator of how well the UK stock market performs, but not of the UK financial market or economy per se, as many listed companies have internationally-focused operations. A better indication of the UK economy is the FTSE 250 Index, as it contains a large portion of companies that operate within the UK.
After the latest update from March 18, 2019 – the top ten companies listed on the FTSE 100 Index are:
- 3i (III)
- Admiral Group (ADM)
- Anglo American plc (AAL)
- Antofagasta (ANTO)
- Ashtead Group (AHT)
- Associated British Foods (ABF)
- AstraZeneca (AZN)
- Auto Trader Group (AUTO)
- Aviva (AV)
- BAE Systems (B)
Don’t forget, the companies are ranked based on market capitalisation! You can find the complete list and monitor the updates of indices and their prices on the FTSE Group’s website.
How to invest in the FTSE 100 Index
You can invest in the FTSE 100 Index stocks through the platform of an online CFDs broker. The firm you choose is extremely important because it hosts your investment and offers you the means to reach the best results. TradeFW.com is an online investment firm registered and authorised to operate by the Cyprus Securities and Exchange Commission (CySEC). The broker keeps your funds in a segregate account, offers you negative balance protection and a professional trading environment, filled with informative materials and modern tools to guide and help you. As a beginner, you’ll need all the help you can get and having it all in just one place is a big advantage!
Once you’re settled and have an online broker, it’s time to buy shares! In one way or another, all 100 companies are a safe buy, as they will be profitable even in tough economic times due to their high market cap. However, it is indicated to invest in companies that are from your area of expertise, or the ones that you think are compatible with your trading style, strategy and financial goals. If you’re looking to diversify your investment portfolio, you can simply buy shares from several different industries. Don’t worry; you have where to choose from!
Conclusion The FTSE 100 is an index of leading companies listed on the London Stock Exchange. It is mainly used to gauge the prosperity of the UK stock market, as its components account for 81% of the entire market capitalisation of the London Stock Exchange. You can invest in it and diversify your portfolio through the platform of an online broker, by buying shares.