FTSE 100 definition

What is the FTSE 100?

The FTSE 100, often referred to simply as the ‘Footsie’, is a stock market index that follows the 100 largest companies on the London Stock Exchange (LSE). It’s one of the most widely followed stock indices (the plural of index) in the UK, and it’s used as a key indicator of the performance of the UK stock market.

 

 FTSE 100 key features

• Composition: the FTSE 100 is composed of the 100 largest companies listed on the LSE, as measured by market capitalisation. These companies come from a wide range of industries, including finance, energy, healthcare, consumer goods, and more.
• Calculation and weighting: the FTSE 100 is a market capitalisation weighted index – which means its value is determined by the total market capitalisation of the companies on its roster. Each company’s market capitalisation is calculated by multiplying its share price by the number of shares it has in the market.
• Benchmark: the FTSE 100 serves as a benchmark for investors and is used to assess the performance of investment portfolios, especially those related to the UK stock market. It’s also considered an indicator of the overall health of the UK economy.
• Volatility: like most stock market indices, the FTSE 100 can experience fluctuations in response to economic, political, and global events. This is largely subject to changes in company valuations, interest rates, exchange rates, and other factors.

 

Which companies are in the FTSE 100? 

There are 100 companies in the FTSE 100 – and these are the largest listed companies on UK exchanges by market capitalisation. That’s too many to list here, but the 10 biggest companies listed on the FTSE 100 in October 2023 were: 

• Shell 
• Astrazeneca 
• HSBC
• Unilever
• BP
• Diageo
• Rio Tinto
• GSK
• Glencore
• RELX

The FTSE 100 is just one of many indices used to track the performance of stock markets in the United Kingdom. There are also other FTSE indices, including the FTSE 250, which tracks the next 250 largest companies after the FTSE 100.

If you’d like to invest in a FTSE 100 fund, check out the one offered by Moneybox. Just remember, all investing should be long term, and the value of your investments can fall as well as rise.