The FTSE All-Share Index (INDEXFTSE: ASX) is a market-capitalisation weighted index designed to track the performance of all companies listed on the London Stock Exchange’s main market.
It comprises over 600 companies and serves as a key benchmark for the UK stock market. Representing around 98% of the market’s total capitalisation, it includes both large multinationals and smaller firms.
History
The FTSE All-Share Index, originally known as the FTSE Actuaries All Share Index, was launched in 1962 by the FTSE Group (now known as FTSE Russell) to provide a snapshot of the entire London Stock Exchange’s main market.
How is the FTSE All-Share Calculated?
The FTSE All-Share Index is calculated using a capitalisation weighted methodology. Each company’s market capitalisation is calculated by multiplying its share price by the number of outstanding shares. Then, the market capitalisation of each company is divided by the total market capitalisation of all companies in the index. This gives each company its weight in the index.
The index value is calculated by summing up the market capitalisation of all companies in the index, with each company’s market capitalisation weighted according to its weight in the index. The index is adjusted periodically to reflect changes such as corporate actions, like stock splits, mergers, and acquisitions, and changes in the composition of the index, such as additions or removals of companies.
The FTSE All-Share Index is calculated and published in real-time throughout the trading day, offering investors up-to-date information on the overall performance of the UK stock market.
FTSE All-Share Biggest Companies
The FTSE All-Share includes all companies listed on the FTSE 100, FTSE 250, and the FTSE Small Cap, as well as additional smaller companies. Since the FTSE 100 contains the largest companies on the London Stock Exchange, the biggest companies on the FTSE All-Share will naturally be those in the FTSE 100.
Beyond The FTSE All-Share
The FTSE All-Share Index provides a valuable window into the performance of all companies listed on the London Stock Exchange. Its counterpart the FTSE AIM All-Share Index focuses on an entirely different market – the Alternative Investment Market. This index tracks smaller, fast-growing companies.
Frequently Asked Questions
What is the difference between the FTSE All-Share and the FTSE AIM All-Share Index?
In contrast to the FTSE All-Share Index, which gauges the performance of the entire UK stock market by tracking all companies listed on the London Stock Exchange, the FTSE AIM All-Share Index focuses specifically on a sub-section: the Alternative Investment Market (AIM). This market caters to smaller, growing companies, providing a snapshot of that particular segment of the UK’s listed businesses.
How to Trade or Invest in the FTSE All-Share?
There are several approaches to gaining exposure to the FTSE All-Share: indirect investment through instruments that track the index, direct investment in the underlying companies or speculating on index movements through spread betting or CFDs.
Indirect Investment:
Exchange-Traded Funds (ETFs): These are the most common way to invest in the FTSE All-Share. ETFs are funds that track a basket of assets, in this case, the companies within the FTSE All-Share. Buying an FTSE All-Share ETF allows you to diversify your portfolio across the index with a single purchase. There are various FTSE FTSE All-Share ETFs available, so research their fees and specific holdings before choosing one.
Index Funds: Similar to ETFs, some index funds track the FTSE All-Share. These funds are typically passively managed, meaning they aim to mirror the performance of the index. Index funds generally have lower fees compared to actively managed funds.
Direct Investment:
Stock Picking: You can directly invest in the stocks of individual companies listed on the FTSE All-Share. This requires research and analysis to choose companies that align with your investment goals and risk tolerance. Remember, the FTSE All-Share represents all companies listed on the main market, so diversification is still important within this approach.
Trading with Leverage:
Spread Betting: This involves speculating on the price movements of the FTSE All-Share index or individual companies within it. You don’t own the underlying asset but instead agree a contract with a spread betting provider on whether the price will go up or down. Profits and losses are based on the difference between the entry and exit price, magnified by the leverage offered by the provider.
CFDs: Similar to spread betting, CFDs are contracts that track the price movements of an underlying asset, in this case, the FTSE All-Share or its constituents. You can go long (buy) or short (sell) a CFD, profiting if the price moves in your favour. CFDs also involve leverage, amplifying both potential gains and losses.
