The FT 30 Index was first calculated in 1935 by the Financial Times newspaper. The Index started at a base level of 100, and calculated from a subjective collection of thirty major companies, which in the early years were concentrated in the industrial and retailing sectors.
For a long time the Index was the best known performance measure of the UK stock market, but it became less representative of the whole market and was also price-weighted (like the DJIA), and not market capitalisation-weighted. Although the Index was calculated every hour, the increasing sophistication of the market needed an index calculated every minute, and so the FT 30 has been usurped by the FTSE 100.
Today, the FTSE 100 Index (sometimes called the ‘footsie’) is the most well-known index tracking the performance of the UK market. The Index comprises 100 of the top capitalised stocks listed on the London Stock Exchange, and represents approximately 80% of the total market (by capitalisation). It is market-capitalisation-weighted, and the composition of the Index is reviewed every three months. The FTSE 100 is commonly used as the basis for investment funds and derivatives, and was first calculated on 3 January 1984 with a base value of 1000.
The FTSE 100 Index, and all the FTSE indices, are calculated by FTSE International, a joint venture between the Financial Times newspaper and the London Stock Exchange.
Similar in construction to the FTSE 100, except it comprises the next 250 highest capitalised stocks listed on the London Stock Exchange after the top 100. Sometimes referred to as the index of ‘mid-capitalised’ stocks, this index comprises approximately 18% of the total market capitalisation.
Similar in construction to the FTSE 100, but including all the companies from the FTSE 100 and FTSE 250 Indices.
Comprised of companies with a market capitalisation below those in the FTSE 250, but above a fixed limit. This lower limit is reviewed every December. In December 2003 the lower limit was set to approximately £56m. Consequently the FTSE Small Cap Index does not have a fixed number of constituents. In mid-2004, there were approximately 338 companies in the Index, which represented about 2% of the total market by capitalisation.
The FTSE All-Share is the aggregation of the FTSE 100, FTSE 250 and FTSE Small Cap Indices. Effectively all those London Stock Exchange listed companies with a market-capitalisation above the lower limit for inclusion in the FTSE Small Cap Index. In mid-2004, there were approximately 688 companies in the Index. The FTSE All-Share is the standard benchmark for measuring the performance of the broader UK market.
This Index comprises the smallest companies that do not meet the minimum size requirement of the FTSE Small Cap Index.
Reflects the performance of companies in the Technology, Media and Telecommunications sectors.
An index of all companies included in the London Stock Exchange’s techMARK sector.
The top 100 companies of the FTSE techMARK All-Share, under £4bn by full market capitalisation.
Source: The UK Stock Market Almanac 2005