FTSE 100 definition
The FTSE 100 is a market-capitalization weighted index representing the performance of the 100 largest & most highly capitalized UK-domiciled blue chip companies, listed on the London Stock Exchange, which pass screening for size and liquidity. The index is the leading share index in Europe and represents approximately 82% of the UK's market capitalization of the whole London Stock Exchange and is suitable as the basis for investment products, such as funds, derivatives and exchange-traded funds. The FTSE 100 Index also accounts for 9.15% of the world's equity market capitalization. The FTSE 100 is the most widely used UK stock market indicator. The constituents of the UK FTSE indices all traded on the LSE are ranked by market capitalization -- the value of all the shares added together. The FTSE 100 has a fixed number of constituents 100 and it tracks the performance of these highly-capitalized companies.
The constituents of the index are determined quarterly; the largest companies in the FTSE 250 Index are promoted if their market capitalization would place them in the top ninety firms of the FTSE 100 and, similarly, FTSE 100 companies whose market capitalization drops to below that of the 100 highest performing constituents will be moved out of the FTSE 100. The index is calculated in real time, so the FTSE moves up and down continually as the prices of its constituent stocks change.
FTSE All World Index
This index was originally known as FT-Actuaries World Indices. In 1995, Wood Mackenzie and Co sold its stake in the index to Standard & Poor's & the name of the index was changed to FT/S&P - Actuaries World Indices. Later in November 1999, FTSE International Limited acquired the stakes of Goldman Sachs & Co and Standard & Poor's. The name changed to the FTSE World Index series. FTSE took exclusive rights to integrate the Baring Emerging Markets data series with its existing FTSE World Index series. This resulted in the creation of the FTSE All-World Index series on June 30, 2000.
The new All-World series is sub-divided into three segments - Developed, Advanced Emerging and Emerging Markets. The FTSE all-world Index series is the large /Mid cap aggregate of 2,700 stocks from the FTSE Global Equity Index series, Covering 49 different countries. It covers 90-95% of the investable market capitalization worldwide. The modular nature of the series provides maximum breadth of options for structuring portfolios with indexes calculated at regional, national and sector level.
MSCI World Index
The MSCI World Index is a stock market index of 1500 'world' stocks, in 23 countries (but excludes stocks from emerging economies) globally and represents approximately 85 of the total market capitalization in those countries. MSCI is a series of indexes constructed by Morgan Stanley to help institutional investors benchmark their returns. Each MSCI Index measures a different aspect of global stock market performance. It is a free-float weighted equity index. It is used to measure developed-market equity performance throughout the world.
The index is calculated without dividends, with net or with gross dividends reinvested, in both US dollars and local currencies. MSCI indices are fully consistent across geographical markets and industries, making them ideal for use in both exchange traded funds and index funds aiming to represent a range of investment strategies. These indexes are also used for investment purposes - in the form of exchanged-traded funds - by all types of investors.
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