FTSE 100 Index
Good ETF Proxy: EWU - iShares MSCI United Kingdom ETF
The FTSE 100 Index — also called FTSE 100, FTSE, or, informally, the 'footsie' — is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange.
The index is maintained by the FTSE Group, an independent company which originated as a joint venture between the Financial Times and the London Stock Exchange. It is calculated in real time and published every 15 seconds.
FTSE 100 companies represent about 81% of the market capitalisation of the whole London Stock Exchange. Even though the FTSE All-Share Index is more comprehensive, the FTSE 100 is by far the most widely used UK stock market indicator. Other related indices are the FTSE 250 Index (which lists the next largest 250 companies after the FTSE 100), the FTSE 350 Index (which is the aggregation of the FTSE 100 and 250), FTSE SmallCap Index and FTSE Fledgling Index. The FTSE All-Share aggregates the FTSE 100, FTSE 250 and FTSE SmallCap.
The constituents of the index are determined quarterly; the largest companies in the FTSE 250 Index are promoted if their market capitalisation would place them in the top ninety firms of the FTSE 100 Index.
Component companies must meet a number of requirements set out by the FTSE Group, including having a full listing on the London Stock Exchange with a Sterling or Euro denominated price on SETS, and meeting certain tests on nationality, free float, and liquidity.
With only historical exceptions, the companies listed on this index must by law include the abbreviation 'plc' at the end of their name, indicating their status of public limited company.
Weighting
They involve the total market capitalization of the companies weighted by their effect on the index, so the larger companies make more of a difference to the index than smaller. This is also called the free float method.