Introduction to the Financial Times Stock Exchange Group (FTSE)
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. The LSEG also controls Borsa Italiana, Millennium IT, and a few other financial brands.
The indexing division of the FTSE is almost similar to the Standard & Poor's; it specialises in building index offerings that the global financial markets can use as benchmarks.
- An index is composed of a hypothetical portfolio of stock holdings so that it can serve as a depiction of the performance of a specific market segment which is also called a benchmark.
- Although the FTSE extends many indexes, its two most well-known indexes are the FTSE 100, which is constituted of the most highly capitalized blue-chip stocks listed on the London Stock Exchange, the Russell 2000 Index, a small cap stock market index of the smallest 2,000 stocks in the Russell 3000 Index.
Understanding The FTSE
The FTSE Russell Group, founded in 2015 after the merger of FTSE and Russell Investments, is a U.K. based global provider of benchmark financial indexes, analytics, and market data.
The FTSE's indexes are available beyond asset classes, styles, and strategies. They are intended to meet the needs of an extensive variety of clients, including buy-side, custodians,sell-side, asset owners, exchanges, investment consultants, and exchange traded fund (ETF) providers.
How The FTSE Works
Indexes trace the performance of a group of securities. FTSE Rusell generates indexes and performs research and analysis for financial firms. FTSE Russell's most familiar indexes include the FTSE 100, FTSE 250, FTSE 350, and the FTSE All-Share. FTSE Russell offers ethical indexes as well, collectively known as FTSE4Good, which track global, Europe, U.K., U.S., and other markets. Some commonly recognizable companies trading on the FTSE 100 include:
- Rolls-Royce Holdings
- BP
- AstraZeneca
- Barclays
- GlaxoSmithKline
Example Of The FTSE
- The FTSE 100 is a market cap weighted index. Companies near the peak of the market cap list usually attract the most attention.
- As a historical example, consider the influence of British Petroleum (BPL), one of the most significant components by weight, on the index.
- As per The Irish Independent, BP reported a solid fourth-quarter earnings report which served to lift its stock price by almost 1%, while the value of the FTSE 100 climbed almost 2% on February 5, 2019.
