What it is:
How it works (Example):
The market cap, its largest component stocks have the greatest influence on the 's value. The is quite unusual in that it reweights its component stocks daily to represent the actual state of the market. Meanwhile, the is fully rebalanced (that is, the FTSE adds or subtracts stocks from the index) on a quarterly .
Why it Matters:
Because it covers several industries and the funds.caps of its constituents compose the vast majority of the UK , the FTSE 100 is one of the most widely followed European indexes. As such, it is the for a variety of , , and exchange-traded
The top 10 holdings constitute 44.27% of the market cap. The industries may be diverse, but recent additions make it an that is increasingly regarding as detached from the UK economy. The market-cap weighting creates a disproportionately high influence for large companies and the sectors in which they reside.'s