Financial Times Stock Exchange Group (FTSE): Definition (2024)

What Is the Financial Times Stock Exchange Group (FTSE)?

The Financial Times Stock Exchange (FTSE), now known as FTSE Russell Group, is a British financial organization that specializes in providing index offerings for the global financial markets. TheLondon Stock Exchange Group(LSEG) owns the FTSE Russell Group. In addition to the FTSE Russell Group, the LSEG also owns Borsa Italiana, Millennium IT, and other financial brands.

The indexing division of the FTSE is similar to that of ; it specializes in creating index offerings that the global financial markets can use as benchmarks. An index is comprised of a hypothetical portfolio of stock holdings, so it can act as a representation of the performance of a particular market segment—also called a benchmark.

Although the FTSE offers many indexes, its two most well-known indexes are the FTSE 100, whichis comprised of the most highly capitalizedblue-chip stockslisted on the London Stock Exchange, and the Russell 2000 Index, a small-cap stock market index of the smallest 2,000 stocks in the Russell 3000 Index.

Key Takeaways

  • The Financial Times Stock Exchange (FTSE) Group is a financial organization that specializes in the management of asset exchanges and creating index offerings for the global financial markets.
  • The London Stock Exchange (LSE) Group currently owns FTSE.
  • In May 2015, FTSE Group combined with Russell to form the brand name, FTSE Russell.
  • The FTSE 100 is generally the most well-known FTSE index, but the FTSE Group manages many indexes.

Understanding the Financial Times Stock Exchange Group (FTSE)

The FTSE Russell Group, established in 2015 after the merger of FTSE and Russell Investments, is a U.K.-based global provider of benchmark financial indexes, market data, and analytics.

The FTSE's indexes are available across asset classes, styles, and strategies and are designed to meet the needs of a wide variety of clients, including buy-side, sell-side, custodians, asset owners, exchanges, investment consultants, and exchange-traded fund (ETF) providers.

The FTSE 100 Index

The FTSE 100 is very widely usedin Europe. At its creation, in Jan. 1984, the index had a base level of 1,000. It has since reached highs of over 7,000. Many market analysts, traders, and investors look to the FTSE 100 as a proxy for the performance of the wider U.K. stock market, similar to the way that many U.S. investors look to the Dow Jones or the S&P 500 indexes.

The level of theFTSE100 is calculated using the total market capitalization of the constituent companies and the index value. Total market capitalization changes alongside individual share prices of the indexed companies throughout the trading day, so the index value also changes. When the FTSE 100 is quoted up or down, it is measured against the previous day’s marketclose.

It is calculated continuously on every trading day—from 8:00 a.m. at the market opening until the 4:30 p.m. LSE close. A FTSE 100 declinemeans the value of the largest U.K.-listedcompanies has decreased. When the FTSE hits a new high, it means the total worth of all the indexed companies has increased.

Readjustment of the indexconstituents (the companies that make up the FTSE 100) happens every quarter, usually, the Wednesday following the first Friday inMarch, June, September, and December. Any changes to the underlying index constituents and their weighting come from the values of the companies taken at the close of business the night before the review.

As of June 26, 2023, the top five FTSE 100 holdings by market cap were:

  1. AstraZeneca
  2. Shell
  3. HSBC
  4. Unilever
  5. BP

The FTSE 100 is often considered a leading indicator of prosperity for companies in the U.K. and the U.K. economy in general. As such, it typically draws investors looking for exposure to big U.K. companies. While several of its listings do include companies with homes outside of the U.K., it is most significantly made up of U.K. companies and impacted by U.K. daily developments.

Other FTSE Group Indices

As mentioned, there are a prolific number of indexes attached to the FTSE Group and the FTSE Russell brand. TheFTSE Group's most popularindexes—in addition tothe FTSE 100—are theFTSE 250, the FTSE 350, and the FTSE All-Share.

Some of the other popular FTSE Russell indices include:

  • FTSE Nasdaq 500
  • FTSE AIM 100
  • FTSE RAFI US 1000
  • FTSE4Good Indices
  • FTSE Dividend Growth
  • Russell Top 200
  • Russell 3000
  • Russell 2000
  • Russell 1000
  • Russell Equal Weight Indices
  • Russell Geographic Exposure Indices

Investing in the FTSE

Though you cannot directly invest in an index, you can invest in funds that replicate, track, or even short the FTSE index. Many of these are exchange-traded funds (ETFs) that allow for easy access to the indices. Examples of funds that track these indices that you can invest in are the Vanguard FTSE 100, the Vanguard FTSE 250, the iShares 350 U.K. Equity Index Fund, the iShares Core FTSE 100, and the Vanguard FTSE U.K. All Share Index Unit Trust.

What Is the U.S. Version of the FTSE?

The "FTSE" is the Financial Times Stock Exchange in the U.K. that is a provider of different indices, its most popular being the FTSE 100, which tracks the top 100 companies by market cap in the U.K. The U.S. version of this would be the S&P 500, which tracks the top 500 U.S. companies by market cap, or the Dow Jones Industrial Average (DJIA), which tracks 30 prominent U.S. companies.

Can Americans Invest in the FTSE?

Yes, Americans can invest in the FTSE. The easiest way to do this is by investing in exchange-traded funds that track these indices, such as the Vanguard FTSE 100, the Vanguard FTSE 250, the iShares 350 U.K. Equity Index Fund, and the iShares Core FTSE 100.

What Is the Difference Between a Stock Market and a Stock Exchange?

A stock exchange is a specific organization/marketplace that facilitates equity trading. For example, the New York Stock Exchange and Nasdaq. A stock market is used as an umbrella term to refer to all of the stocks that trade in a particular country or region. Such as all of the companies that trade on both the New York Stock Exchange and the Nasdaq.

The Bottom Line

The Financial Times Stock Exchange, now known as the FTSE Russell Group, provides a variety of indices that track different segments of the U.K. financial markets. Its most popular index, the FTSE 100, tracks the top 100 companies by market cap in the United Kingdom, similarly to how the S&P 500 works in the U.S. Investors looking to gain exposure to these indices can invest in funds that track the indices, such as the iShares Core FTSE 100.

Financial Times Stock Exchange Group (FTSE): Definition (2024)

FAQs

Financial Times Stock Exchange Group (FTSE): Definition? ›

The Financial Times Stock Exchange (FTSE), presently known as FTSE Russell Group, is a British financial organization specializing in producing index offerings for the global financial markets. The London Stock Exchange Group (LSEG) controls the FTSE Russell Group.

What is the meaning of FTSE? ›

What does FTSE stand for? 'FTSE' is short for 'Financial Times Stock Exchange', which is derived from the names of two companies that launched the FTSE – 'Financial Times' and 'London Stock Exchange'. The '100' in 'FTSE 100' represents the number of stocks in the index.

Why is FTSE called Financial Times? ›

1984 - How did the FTSE get its name? FTSE stands for Financial Times Stock Exchange, representing the two companies that launched the FTSE 100 – the Financial Times and the London Stock Exchange.

What does the FTSE stand for in the world of finance? ›

Arbitrage Trading Program (ATP): What it is, How it Works. Trade. Investing. Trading. Automated Investing.

What is the full term of FTSE? ›

Financial Times Stock Exchange Group (FTSE): Definition. Trade. Investing.

What is the function of FTSE? ›

FTSE Indices Explained

Financial Times Stock Exchange (FTSE), also called “Footsie,” is an organization specializing in evaluating the financial market. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.

What is FTSE importance? ›

The FTSE 100, also known as the Financial Times Stock Exchange 100 Index, is the primary benchmark for the performance of the largest companies listed on the London Stock Exchange (LSE).

What are the largest companies in the FTSE? ›

The top FTSE 100 companies are AstraZeneca, Shell, Linde, HSBC Holdings, Unilever Group, BP, Diageo, Rio Tinto Group, Glencore, British American Tobacco, and GlaxoSmithKline.

Which country owns Financial Times? ›

Based in London, the paper is owned by a Japanese holding company, Nikkei, with core editorial offices across Britain, the United States and continental Europe.

Is FTSE only in the UK? ›

Whether you're an experienced investor or just getting started, you've probably heard of the FTSE 100. Also known as the Footsie, its full name is the Financial Times Stock Exchange 100 Index. But what actually is it? It's an index of the largest 100 UK companies listed on the London Stock Exchange.

Who created FTSE? ›

History. The FTSE Group was created in 1995 by Pearson (former parent of the Financial Times) and the London Stock Exchange Group.

What is the difference between S&P and FTSE? ›

The S&P 500 contains 500 stocks, while the FTSE 100 is made up of just 100. The FTSE 100 is also a lot smaller than the S&P 500 in terms of market capitalisation – (as of March 2024) the FTSE 100 has a market cap of around £1.9 trillion, while the S&P's market cap is around $42.8 trillion (about £33.6 trillion).

How many stocks are in the FTSE All World? ›

FTSE Global All Cap Index, a global index covering approximately 9,000 stocks from small cap to large cap. FTSE All-World Index, a global index covering approximately 4,000 mid cap and large cap stocks.

What is FTSE main market? ›

The Main Market is the largest stock market in the UK by value of the companies listed. The market is owned and operated by the London Stock Exchange, and is a stock market with an international pedigree. When companies join The Main Market, they benefit by becoming constituents of one of the FTSE UK Index Series.

What is the FTSE 100 for dummies? ›

The FTSE 100 is an index of the shares of the 100 biggest companies by market capitalisation on the London Stock Exchange (LSE). You can trade the index's price movements, or buy, sell or short shares of the constituents of the index.

Who owns London Stock Exchange? ›

London Stock Exchange: The London Stock Exchange is Europe's leading stock exchange and is owned by the London Stock Exchange Group plc.

What is the difference between FTSE USA and S&P 500? ›

FTSE 100 vs S&P 500: Concentration

There are 503 stocks in the S&P 500 and 102 stocks in the FTSE 100 — this is because of the different classes of shares that some companies have.

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