What is FTSE?

Each major stock exchange has its own share index, including the London Stock Exchange. The LSE is one of the oldest and most traditional stock exchanges in the world and is Europe's largest provider of financial infrastructure services. In this article, you will learn about the term "FTSE".

A securities exchange is an electronic trading platform for securities that settles standardised two-sided commitment and settlement transactions in the form of buy and sell orders. Interested parties have not always found it easy to participate, as investing money in securities was difficult and daunting for newcomers until just a few years ago due to the high minimum amounts required and a lack of access to information.

Thanks to increasing engagement with monetary and financial topics, the availability of understandable articles about investments and financial issues and user-friendly smartphone apps that make it easier to get started, more and more first-time investors are now stepping into the markets. Those who want to start investing can do so via the conventional route with stocks or mutual funds, or they can also invest in ETFs (exchange-traded funds), which are a more convenient capital investment as a securitised investment product.

Remember, investing directly in an index is not possible because an index is a measure of change in a measure of value that replicates data such as prices. ETFs, which replicate the major indices of leading global markets, are growing in popularity around the world. ETFs are easy to acquire, offer broad diversification and are easily accessible. One example is the FTSE 100.

What is the FTSE?

The FTSE, also known as the FTSE 100, FTSE 100 Index or informally and affectionately as the "Footsie", is considered the most important British share index, replicating the cumulative share price performance of the 100 most important companies on the London Stock Exchange. The letters FTSE are the abbreviation for "Financial Times Stock Exchange".

The FTSE 100 is managed by the FTSE Group, a subsidiary of the London Stock Exchange. The FTSE Group was originally formed as a joint venture between the Financial Times, one of the world's most respected daily newspapers, and the London Stock Exchange. The FTSE 100 was first launched on the 3rd of January, 1984, is weighted by market capitalisation (also referred to as market value) and is calculated in real time. A company's total market value is calculated by multiplying that company's share price by the total number of stocks issued by the company.

What is included in the FTSE 100?

The FTSE 100 more or less includes the 100 largest eligible UK companies in terms of full market value. A large number of the companies in the FTSE 100 have an international focus. Although the FTSE All-Share Index is far more comprehensive, including around 600 companies out of more than 2,000 traded on the London Stock Exchange, the FTSE 100 is nevertheless the most widely-used indicator of the UK stock market by far.

For example, the FTSE 100 includes companies such as GlaxoSmithKline, HSBC Holdings, Burberry, InterContinental Hotels, BP, Mondi, Prudential and many more, ensuring a broad spread of included values. Overall market performance can be calculated by comparing past and current price levels.

How can I invest in the FTSE 100?

The Top 100 British Stocks is an exchange-traded fund (ETF) that replicates the performance of the FTSE 100 index as closely as possible. With Bitpanda Stocks, you can invest in ETFs* such as the Top 100 British Stocks, fractionally from as little as €1, commission-free and with tight spreads. This is made possible by derivative contracts covered by the underlying stocks and ETFs.

*Bitpanda Stocks enables investing in fractional stocks. Fractional stocks in Europe are always enabled via a contract which replicates the underlying stock or ETF (financial instruments pursuant to section 1 item 7 lit. d WAG 2018). Investing in stocks and ETFs carries risks. For more details see the prospectus at bitpanda.com.