Understanding The FTSE indices Methodology
Learn the different types of FTSE indices that are calculated by the group and how they are correlated

The main FTSE indices includes the FTSE 100, 200 and the 350 indices are calculated by FTSE international a company formed by the Financial Times and the London Stock Exchange to assess the performance of various industrial sectors of the UK and other European based markets.
They are market cap weighted, additional adjustments made for the availability of stocks and shares to existing and potential investors; notably this is based on free float.
The FTSE indices are widely used by investment managers globally for investment analysis, existing investment performance measurement, financial asset allocation, investment portfolio hedging and finally for creating a wide range of index tracking funds.
The new changes cannot be applied to any specific FTSE indices but mainly due to what is known as the ICB Universe database product and due to the enhancements to the ICB this will not be implemented into the FTSE indices until late 2009.
The indices have become established and renowned as an innovative method to measure for new investment and contract products globally.
FTSE indices are already the driving force behind more than seventy ETFs, spanning a range of asset classes on major stock exchanges such as London Stock Exchange, New York Stock Exchange and the NASDAQ.
The most important FTSE indices are listed below:
BBC Global 30 Index
AIM Index Series
All-World Index Series
APCIMS Private Investor Index Series
Asian Sector Index Series
Bursa Malaysia Index Series
CNBC Global 300 Index Series
CSAG Terror-Free Index Series
CySE Index Series
DIFX Index Series
Emerging Markets
Environmental Technology Index Series
EPRANAREIT Global Real Estate Index Series
eTX Index Series
European Index Series
Global Bond Index Series
Global Equity Index Series
Global Sector Index Series
Global Small Cap Index Series
Global Style Index Series
Gold Mines Index Series
GWA Index Series
Hedge
Hedge Momentum Index
High Dividend Yield Index
IDFC India Infrastructure Index Series
Japan Index
Kaigai Index
Latibex Index Series
Med 100 Index
MPF Index Series
MTIRS Index Series
Multinationals Index Series
NAREIT US Real Estate Index Series
NASDAQ Index Series
New EU Index
NORDIC 30 Index
Private Banking Index Series
RAFI Index Series
Russia IOB Index
SET Index Series
SGX Shariah Index Series
Shariah Global Equity Index Series
ST Index Series
techMARK Index Series
UK Commercial Property Index Series
UK Gilts Index Series
UK Index Series (inc. 100 Index)
Vietnam Index Series
Watch List Index Series
Xinhua Index Series
ASEAN Index Series
ATHEX Index Series
JSE Africa Index Series
FTSE4Good Environmental Leaders Europe 40 Index
FTSE4Good IBEX Index
FTSE4Good Index Series
FTSEurofirst Index Series
Macquarie Global Infrastructure Index Series
TSEC Taiwan Index Series
These indices cover many different regions, industrial sectors, investment strategies and ethical requirements. However the FTSE indices actually aid stock market brokers with investment portfolio hedging, analysis, and index tracking and performance measurement. Amazingly many people don’t know that the real time FTSE indices are actually calculated on systems owned and operated by Reuters. For many people that don’t know about the real accuracy of the FTSE Indices should know that each index is calculated using a standard set of ground rules established by FTSE and guided by the Institute and Faculty of Actuaries.
The indices are free floated and adjusted in order to reflect the availability of stocks in the market for public investment. Calculating indices the method must be transparent and disciplined based on strict adherence to well known publicly outlined rules.
To protect the integrity of the index FTSE group must be a separate entity from both the Financial Times and the LSE.
Following a rules based methodology versus opposed to a principles based on the FTSE group believes that greater disclosure and transparency will prevail in the markets. Most fund managers utilize the indices as a benchmark, with certain industries and sectors dominate the FTSE top half with the 100 and 250 indices.[tags]ftse indices,FTSE 100 index,FTSE 250,FTSE 350,London Stock Exchange,Financial Times,FTSE NASDAQ Index,FTSE Small Cap Index[/tags]









