What is the Footsie?
Footise is slang for the Financial Times 100 benchmark for the performance of equities traded on the London Exchange.
Started in January 1984 with an initial value of 1,000, the index contains the 100 largest U.K.-domiciled companies traded on the London Exchange (based on market capitalization).
How Does the Footsie Work?
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 Does the Footsie Matter?
Because it covers several industries and the funds.
The top 10 holdings constitute 44.27% of the 's 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.