The Financial Times Stock Exchange 100 Index, commonly referred to as the FTSE 100, is a market index featuring 100 of the best-performing companies listed on the London Stock Exchange. It serves as an index benchmark for the UK stock market and attracts investors around the world. In this article, we’ll take a closer look at the history, composition and significance of this influential index.
History of FTSE 100
The FTSE 100 was established in 1984 and originally included 100 companies with the highest market capitalization on the London Stock Exchange. Over time, the index has been adjusted to reflect changes in the market due to mergers, acquisitions, and bankruptcies. In May 2018, it reached its all-time high of 7,877 points.
Composition of the FTSE 100
The FTSE 100 comprises a variety of companies from finance, energy, mining, consumer goods and healthcare. Notable names on the index include HSBC Holdings, BP, Unilever GlaxoSmithKline and Royal Dutch Shell.
Significance of FTSE 100
The FTSE 100 is an influential benchmark for the UK stock market and closely monitored by investors worldwide. It serves as a barometer of economic health in the UK, with changes in the index often reflecting shifts in conditions. As such, investors can use the FTSE 100 to gauge market sentiment and make informed investment decisions with confidence.
Investing in the FTSE 100
Investors can access the FTSE 100 through various investment vehicles, such as index funds and exchange-traded funds (ETFs). These vehicles give investors a diversified portfolio of companies listed on the FTSE 100 that provides exposure to the UK stock market with minimal risk.
Conclusion
In conclusion, the FTSE 100 is an influential stock market index that plays a pivotal role in the UK economy. Containing companies across various industries, it offers investors valuable data to make informed investment decisions. Whether investing directly into the index or using investment vehicles, the FTSE 100 provides numerous opportunities to gain exposure to the UK stock market.
