FTSE Russell is a subsidiary of the London Stock Exchange Group (LSEG) and the Financial Times Stock Exchange (FTSE).
Its expertise lies in index calculation, design, and management, providing benchmarks across equities, fixed income, and commodities. These indexes help investors, asset managers, and financial institutions measure performance, build portfolios, and create investment products like ETFs and derivatives.
History
The origins of FTSE Russell can be traced back to 1995 when FTSE Group was formed as a joint venture between the Financial Times and the London Stock Exchange. Initially known as FTSE International Limited, the company focused on developing and maintaining equity indexes for the UK market, which quickly became widely adopted benchmarks by investors.
Over time, FTSE Group expanded its index offerings globally, covering both developed and emerging markets. This expansion provided investors with comprehensive benchmarks for assessing international investment opportunities.
In 2011, the London Stock Exchange Group acquired FTSE Group and merged it with its own index business, forming the current entity, FTSE Russell. This strategic move solidified FTSE Russell’s position as a leading provider of financial market indexes globally.
Throughout its evolution, FTSE Russell has been at the forefront of index innovation and technology, continuously enhancing its methodologies, data analytics capabilities, and index construction techniques to deliver more accurate and relevant benchmarks for the investment community.
FTSE Russell Indexes
FTSE Russell manages a vast array of indexes covering various asset classes and regions, catering to the diverse needs of investors globally. Some of the key indexes it oversees include:
UK and European Indexes:
- FTSE 100 Index
- FTSE 250 Index
- FTSE 350 Index
- FTSE SmallCap Index
- FTSE All-Share Index
- FTSE AIM UK 50 Index
- FTSE AIM 100 Index
- FTSE AIM All-Share Index
- FTSE MIB (Italy)
Russell Indexes (US Market):
- Russell 3000 Index
- Russell 2500 Index
- Russell 2000 Index (widely tracked US small-cap index)
- Russell 1000 Index
- Russell Top 200 Index
- Russell Top 50 Index
- Russell Midcap Index
- Russell Microcap Index
- Russell Small Cap Completeness Index
Global Equity Indexes:
- FTSE Global Equity Index Series
- FTSE4Good Index (focused on sustainable and ethical investments)
Index Construction
FTSE Russell uses strong and transparent methodologies in constructing its indexes, ensuring they accurately reflect the intended market segments and investment objectives. Some key aspects of their index construction process include:
Market Capitalisation Weighting: Many FTSE Russell indexes are market capitalisation-weighted, allowing them to reflect the relative size and importance of individual constituents within the index.
Reconstitution and Rebalancing: Indexes are regularly reconstituted and rebalanced to ensure they remain representative of the target market segment. This process involves adding or removing companies based on predefined criteria, such as market capitalisation thresholds or liquidity requirements.
Industry and Sector Classification: FTSE Russell applies a standardised industry classification system, enabling investors to analyse and compare performance across different sectors and industries.
Index Committee Oversight: A dedicated team of experienced professionals oversees the index construction process, ensuring adherence to established methodologies and addressing any exceptional circumstances or market events that may require adjustments.
FTSE Russell indexes are essential benchmarks for the financial industry, underpinning investment funds, trading products, and portfolio performance evaluation.
Trusted for their clarity, accuracy, and comprehensive global coverage, these indexes empower investors worldwide to target specific regions or investment styles. In comparison to other major index providers, such as S&P Dow Jones Indices and MSCI, FTSE Russell stands out for its innovative index construction methodologies.
