FTSE 100 Share Index: What Investors Need to Know
Introduction:
The term “FTSE 100 Share Index” is often used interchangeably with “FTSE 100,” but what exactly does it mean? Whether you’re new to investing or brushing up on market terms, this guide will help you understand what the FTSE 100 Share Index is, how it’s structured, and why it’s a cornerstone of UK financial markets.
What Is the FTSE 100 Share Index?
The FTSE 100 Share Index (also known simply as the FTSE 100) is a market capitalization-weighted index of the 100 largest companies listed on the London Stock Exchange.
It is maintained by FTSE Russell and serves as a key performance benchmark for the UK stock market.
Key Facts About the FTSE 100 Share Index
- Launched: January 3, 1984
- Base Level: 1,000 points
- Constituents: Top 100 UK-listed companies by market cap
- Currency: Quoted in GBP (£)
- Review Schedule: Quarterly (March, June, September, December)
What Companies Are Included?
The index includes well-known multinational firms like:
- Shell (Energy)
- HSBC (Banking)
- Unilever (Consumer goods)
- AstraZeneca (Pharmaceuticals)
- BP (Energy)
The makeup changes over time based on market capitalization during quarterly reviews.
Why Is It Called a “Share Index”?
The term “share index” highlights that the FTSE 100 tracks the performance of shares (stocks) in the top 100 companies. It represents the collective movement of their prices and provides a snapshot of market sentiment.
How Investors Use the FTSE 100 Share Index
- Benchmark performance of UK funds or portfolios
- Gauge overall market health
- Analyze sector trends (e.g. energy, financials)
- Track long-term growth and dividend income
Investors can’t buy the index directly but can gain exposure through ETFs, index funds, or derivative products.
Where to Find FTSE 100 Share Index Data
You can monitor live and historical data on platforms like:
- FTSE Russell official website
- London Stock Exchange (LSE.co.uk)
- Yahoo Finance
- Bloomberg / Reuters
- TradingView
Conclusion
The FTSE 100 Share Index is one of the most important indicators of the UK stock market. Whether you’re using it to benchmark performance, track economic trends, or invest through index funds, understanding how it works is essential for any UK-based or global investor.
FAQs
1. What is the FTSE 100 Share Index?
It’s a stock market index that tracks the 100 largest publicly traded companies on the London Stock Exchange.
2. Can I buy the FTSE 100 Share Index directly?
No, but you can invest through FTSE 100 ETFs or mutual funds that replicate its performance.
3. Why does the FTSE 100 matter?
It acts as a barometer for UK stock market performance and is followed by investors, analysts, and policymakers worldwide.
4. Is the FTSE 100 only for UK investors?
No. Investors globally can invest in FTSE 100 funds through various international broker platforms.
5. How often does the FTSE 100 Share Index change?
The list of 100 companies is reviewed and updated quarterly based on market capitalization.
