The FTSE 100 is the top 100 companies listed on the Financial Times Stock Exchange, based in London.
It is currently in the top ten of global exchanges with around a $4 Trillion market cap. While it may not have as many flashy companies among its listings compared to those across the pond, it still boasts blue-chip stocks like Unilever, Diageo, and GlaxoSmithKline.
the stock market equivalent of "Who would win in a fight, Batman or Superman?". While the S&P 500 represents the top 500 companies in the US, the FTSE 100 only represents the top 100 companies in the UK. This means that there will always be a huge disparity in market cap between the two, especially if you consider that the top 3 S&P 500 companies alone, are worth more than the entire FTSE 100!
But size isn't everything. The information technology sector makes up 27.5% of the S&P 500, whereas the same sector isn't even in the top five sectors in the FTSE 100, instead, the Healthcare, Industrial Goods, and energy sectors take the lion's share. In fact, tech accounts for just 0.82% of the FTSE 100. It is this difference that has made the difference in performance to both indexes.
So given these facts, what does the FTSE really have going for it? And the answer is dividends. Yup. By concentrating on older, more established sectors like energy, banks, and healthcare, sectors that are less affected by boom and bust models and instead focus on growing their bottom line slowly, but solidly, it has been able to offer a historic dividend yield of 4.8% compared to the S&P 500 at just 1.8%. (And lastly, the answer is Batman. It's a proven fact!)
Given that there are 100 large companies to keep track of, you’ll rarely find a slow day in the newsroom. Especially with how stories from any direction might impact a company’s outlook (like that time Henry Cavil posted a pic of him painting a little Warhammer figurine, and all of a sudden, Games Workshop was worth more than Marks and Spencer!)
Alternatively, something you might not know is that the FTSE 100 is changing every quarter. Yup. Every three months, companies that have lost enough value, against companies in the FTSE 250 that have gained value creates a relegation and promotion battle that would make the English Premier League look tame! If you stay above 90th in the table you're safe for another quarter, drop to 111th in the table and you are automatically out. But in those 20 spaces, companies vie for sacred FTSE status.
Do you want to play “footsie” with the FTSE 100? Why not try using our FTSE 100 price prediction tool? Everyday Pynk users (or 'Pynksters' as we call them) are rewarded for submitting price predictions on the price of FTSE 100 and other assets. Learn about the price of FTSE 100 and keep an eye on the value of FTSE 100 and earn rewards as you do.
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