Guest Sign UpLoginNew PostSections ₦0What's Up?DownloadsShopChatToolsAdvertise
Join the Publishers' Program. Get paid for writing.
Recharge DSTV, GOTV, StarTimes, & PREPAID METERS on

Mr A

Overview of the FTSE All-Share Index

The FTSE All-Share Index, also known as the FTSE UK All-Share Index or FTSE All-Share, is a crucial benchmark for the UK stock market, representing the performance of a wide range of companies listed on the London Stock Exchange (LSE). Developed by FTSE Russell, a leading global index provider, the FTSE All-Share Index aims to present a comprehensive picture of the UK's equity market and its performance.

In this article, we will explore the main aspects of the FTSE All-Share Index, including its composition, calculation, and importance in the financial world. Additionally, we will discuss its relation to other major UK stock indices and ways that investors can gain exposure to it.

What Makes Up the FTSE All-Share Index?

The FTSE All-Share Index consists of around 600 companies listed on the LSE, covering approximately 98% of the UK's market capitalization. These companies come from a broad range of industries and sectors, making the index highly diversified and representative of the UK's mature and relatively liquid equity market.

FTSE Russell updates the index's constituent list quarterly, taking into account factors such as market capitalization, industry classification, liquidity, and eligibility for inclusion. Companies must meet the necessary requirements for each of these factors to qualify for the FTSE All-Share Index.

Calculating the FTSE All-Share Index

The FTSE All-Share Index is a market-capitalization-weighted index, meaning that the index's overall value depends on the total market capitalization of its constituents. In other words, companies with larger market capitalizations (share prices multiplied by the number of outstanding shares) have a more significant impact on the index movement. Consequently, smaller companies have less influence on the overall performance of the index.

FTSE Russell calculates the FTSE All-Share Index by considering the stock price, the number of shares, and the free float adjustment factor (the proportion of a company's shares available to the general public for trading) for each of its constituent companies. Using these factors, they calculate the total market capitalization for the index and, in turn, arrive at the index value.

Why Is the FTSE All-Share Index Important?

The FTSE All-Share Index holds great significance in the financial world for several reasons:

  • Benchmark for the UK stock market: Investment professionals and analysts widely use the FTSE All-Share Index performance as a key benchmark for the UK stock market, making it an essential tool for evaluating the overall market sentiment and the health of the UK economy. It provides a comprehensive picture of the trends among UK equities, thereby allowing investors to understand how well the domestic market is faring.
  • Portfolio performance comparison: The FTSE All-Share Index serves as a critical reference point for fund managers to gauge their portfolios' performance relative to the broader market. By comparing their returns to the index, they can determine if they have outperformed or underperformed the general market and make any necessary adjustments to their investment strategies.
  • Basis for index-tracking products: Due to its comprehensive nature, many index-tracking investment vehicles, such as index funds and exchange-traded funds (ETFs), use the FTSE All-Share Index as their benchmark. This enables investors to access a broad range of UK equities through a single investment.

FTSE All-Share Index vs. Other Major UK Stock Indices

Several other prominent UK stock indices exist, each focusing on different segments of the market. Here's how the FTSE All-Share Index differs from two other well-known UK stock indices:

  • FTSE 100: The FTSE 100, also known as the "Footsie," comprises the 100 largest UK-listed companies by market capitalization. While this index represents approximately 81% of the UK's market capitalization, its focus on larger companies makes it less diverse than the FTSE All-Share Index. Nevertheless, the FTSE 100 is widely observed as an indicator of the UK's economic health.
  • FTSE 250: The FTSE 250 is another index featuring the 101st to 350th largest companies listed on the LSE. These are considered mid-cap companies (with market capitalization between £1 billion and £5 billion) that often demonstrate higher growth potential than large-cap companies. The FTSE 250 offers a snapshot of a smaller yet essential segment of the UK stock market, and the performance of the companies within the index can provide insights into the prospects of medium-sized enterprises in the country.

Investing in the FTSE All-Share Index

There are multiple ways for investors to gain exposure to the FTSE All-Share Index, including:

  • Index funds: These are mutual funds that aim to replicate the performance of a specific index by holding all or a representative sample of its constituents. Investing in an FTSE All-Share Index fund can provide direct exposure to a broad range of UK equities.
  • Exchange-traded funds (ETFs): Similar to index funds, ETFs track the performance of an underlying index. However, unlike index funds where redemptions and subscriptions take place at the end of the trading day, ETFs are traded throughout the day on an exchange like individual stocks. Investors can purchase ETFs that track the FTSE All-Share Index to gain exposure.
  • Individual stocks: Rather than investing in a fund or ETF, investors can also attain exposure to the FTSE All-Share Index by directly buying stocks of its constituent companies in proportion to their weightings in the index. However, this approach may not be practical for retail investors due to the large number of stocks and the associated transaction costs.


The FTSE All-Share Index is a comprehensive and crucial benchmark for the UK stock market, reflecting the performance of around 600 companies listed on the LSE. It plays a vital role in enabling investors, fund managers, and analysts to evaluate the overall health of the UK equity market and make informed investment decisions.

Understanding the FTSE All-Share Index, as well as its relationship with other major UK stock indices, can help investors better assess the domestic market and determine the most suitable investment vehicles for their needs.

Follow @JalingoHQ on twitter.
That is very nice

Related Topics

Top SectionsSee More

This forum does not have any topics.

Top Posters This Month (500 Credits)
(See More)