What are we tracking? An overview of UK indices
April 9, 2007I gave you a brief introduction to index funds the other day and realised that my knowledge of indices beyond the FTSE 100, the FTSE AIM or the S&P 500 was rather limited. To give you an idea what indices are available that you can track using index funds, here’s a list of the main indices in the UK. This list won’t by any means be complete, but instead only cover the common indices. For further information, Digital Look or Morningstar are good places to start investigating…
- FTSE 100: The footsie 100 covers the 100 most highly capitalised (i.e. largest) companies listed on the London Stock Exchange (LSE). It was first used as a benchmark in January 1984 with a base value of 1000 and reached its highest value so far in December 1999 with 6950.60 base points. The FTSE 100 is seen as the leading share index in Europe and is a barometer of the success of the British economy. According to the FTSE Group’s website the index represents about 80% of the UK share market (in value). Represented companies include Vodafone, HSBC, BP, Sainsbury, Cadbury Schweppes and 95 others
The FTSE 100 (blue, below) has grown by 22.24% in the last 5 years. - FTSE 250: This index covers the 101st to 350th largest companies who have their primary listing on the London Stock Exchange. This includes companies like: Ladbrokes, Woolworths, Carphone Warehouse, First Choice and HMV. The index has grown by 92.65% in the last 5 years (red, below).
- FTSE 350: This index is simply an aggregate of the FTSE 100 and FTSE 250. Overall growth in the last 5 years was 30.23%.
- FTSE Small-Cap: The FTSE Small-Cap index represents all companies outside the FTSE 350 range and includes approximately 2% of the UK market capitalisation. It has grown by 58.80% in the last 5 years.
- FTSE All-Share: The FTSE All-Share index lists all companies currently traded on the LSE. It is an aggregation of the FTSE 100, FTSE 250 and FTSE Small-Cap Index. It has grown by 31.05% in the last 5 years.
- FTSE AIM 100: The FTSE Alternative Investment Market 100 index contains the 100 largest companies with a primary listing on the AIM. The objective of the AIM is to offer smaller companies from any country or sector the chance to raise capital on one of the world’s leading exchanges (i.e. London). According to their website, AIM companies originate from 37 sectors, 90 sub-sectors and 26 countries. The AIM 100 was introduced in May 2005. The AIM 100 (blue, below) has fallen by 9.19% in the last year, but grown by 22.18% in the last 6 months.
- FTSE AIM 50: This index overlaps partially with the AIM 100 as it lists the 50 largest UK companies with a primary listing on the AIM. Like the AIM 100, it was introduced in May 2005 (red, below). The index has fallen by 11.82% in the last year, but grown by 19.85% in the last 6 months.
- FTSE AIM All-Share: As the name suggest, this index includes all shares listed on the Alternative Investment Market. It has shown a growth of 38.04% in the last 5 years.
- FTSE Fledgling: This index represents companies that have shown superlative returns in the past. These companies are likely to be involved in growth areas of the economy like the consumer service sector which, according to the LSE website, has experienced a 1500% positive change in their sector share price in the last 5 years. The index as a whole has grown by 126.66% in the last 5 years.
- FTSE techMARK: This index is supposed to reflect the performance of technology stocks listed on the LSE. It has a “little brother”, the techMARK 100, which represents the 100 largest technology companies listed on the London Stock Exchange. The techMARK (blue) has grown by 23.04% in the last 5 years, while the techMARK 100 (red) managed a growth of 38.90% in the same period.
That’s it for the major UK indices. I will have a closer look at US indices, European indices (excluding UK) and Asian indices soon.
