Important Financial Decisions

The Financial Times Stock Exchange is more commonly referred to as the FTSE. The FTSE Group was set up in 2002 as a joint venture between The Financial Times and the London Stock Exchange. It works with partners and clients in 77 countries and has offices in London, Frankfurt, Hong Kong, Beijing, Boston, Shanghai, Madrid, Paris, New York, San Francisco, Sydney and Tokyo.

The FTSE Group has created over 120,000 equity, bond and asset class indices, which it manages. It derives its income from the use of the information provided by these indices, which are organised into seven main groups - global equity, regional and partner, fixed income, real estate, alternative investments, responsible investment and investment strategy.

The various indices are used for investment analysis, performance measurement, asset allocation, portfolio hedging and the creation of index tracking funds. They are used by various investors, such as stock exchanges and brokers, investment banks, fund managers, asset owners and consultants.

The FTSE Group does not give financial advice to clients. Consequently, it is able to provide market information that is truly objective.

Perhaps the best known of the FTSE group's indices is the FTSE 100 Index, which lists the top 100 companies quoted on the London Stock Exchange. There's also the FTSE 250 Index, the FTSE 350 Index, FTSE All Share Index and FTSE Small Cap Index. The Alternative Investment Market (or AIM) is a stock market for smaller value companies and is less regulated so that firms can start there before moving up to the full exchange. This market is covered by the FTSE AIM UK 50 Index, FTSE AIM 100 Index, and FTSE AIM All Share Index.

These indices aren't set in stone and the companies within them can change frequently. The FTSE 100 Index, for example, is reviewed at regular intervals. If a company's share price falls, this reduces the overall value of the business. The index lists the 100 highest value companies and so a firm may be relegated to a lower index if its value falls and it will be replaced by one from a lower index that now has a higher value.