What is the FTSE 100?

Like the S&P 500, the FTSE 100 is a common element of tracker funds, but what is it exactly?

The FTSE 100 is an index that represents the performance of the 100 largest companies by market capitalization that are listed on the London Stock Exchange. These companies are chosen based on their market size, liquidity, and industry group. The index is widely regarded as a good indicator of the overall performance of the UK stock market.

The index is calculated by FTSE Group, which is a subsidiary of the London Stock Exchange Group. The index is updated every 15 seconds during trading hours, and the value of the index is calculated using the prices of the individual stocks that make up the index.

The FTSE 100 was first launched in 1984 with a base value of 1,000. Since then, it has grown to become one of the most widely-followed stock market indices in the world. The index is seen as a bellwether for the UK economy, and many investors use it as a benchmark for their own investment portfolios.

The companies that make up the FTSE 100 come from a variety of different industries, including financial services, mining, oil and gas, and consumer goods. Some of the largest companies in the index include HSBC, BP, and Royal Dutch Shell.

The FTSE 100 is often used as a benchmark for other indexes, including the FTSE 250 (which is made up of the next largest 250 companies after the FTSE 100) and the FTSE 350 (which is a combination of the FTSE 100 and the FTSE 250).

Overall, the FTSE 100 is an important measure of the performance of the UK stock market and the economy as a whole. It is watched closely by investors, analysts, and the media, and is often used as a benchmark for investment performance.

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