Hello Adrian baltham here again from how to invest in shareholder UK I hope you will the subject. Of this video is the 4100 otherwise known as the foxy or the. False 100 index now the first thing to say about the footsie 100 is it it is a UK index therefore to do with. Shares that are on the London Stock Exchange in the UK and it’s an index so what do we. Mean by an index well an index is a way.
Of understanding whether the overall market of the shares in the index element of the market have gone up or down over a period of time and by how much and it does this by. Starting at a point in time and in particular value in time so in terms of the footsie 100 index it was started back in.
1983 and it was started with a value of 1000 that’s not a price it’s not a cost it’s just a number it’s an index number that it started with at the time I’m making. This video the footsie 100 index is round about the 6,000 mark that means the index had gone up. By six times in between 1983 and around April March time of 2012 by doing so it is battery outstripped the value of inflation and the bonds and of savings. And the many other form of investment you could have made in that period of time so what is the footsie 100 index then well the footsie 100 index is the top are the largest. 100 shares in of rather the UK stock market of course as the share prices of those 100 companies changes over time that means the value of.
The companies changes over time and the first 100 index needs to keep in it the top 100 companies so so every quarter or four times a. Year the the constituents a the companies it’s sitting that foots 100 index change.
So so those that are no longer in the top 100 drop out of the index and those that. Have now grown in size and up to being the 40 100 index coming to the index and it’s a little bit more complicated than that there are some rules associated with that. So they don’t get too much change from quarter to quarter but essentially that’s.
The concept so that as we go forward in time the footsie 100 index always keeps in it. More or less the top the top 100 companies by size all of the companies in the footsie 100 index part of the London main market. Come back to that in a minute as I’ve said the footsie 100 index comprises the largest 100 companies together they.
Make up about 81 percent of the total value of all of the companies in the UK main index. On main market rather the next 250 companies by size and always mid caps they are in the footsie 250 index and by value they. Represent about 15% of the total value of the UK main market so together the fortune 100. And the 40 to 50 taken together are known as a footsie 350 index and after that makes up about 96% of the value of all the companies in the market this puts his small. Cap are the next tier of companies and taken together these make up about about 2% of the market and if we are together the footsie 100 the 40 to 50 and.
The 40 small cap and then we get another index that’s known as the footsie All Share Index now. That are yet even more companies that are far too small to be in any of those other indexes I’ve already mentioned and they. Sit in what’s known as the footsie fledgling index and all these companies.
Together make up the main market now as all of the main market there’s another market known as the alternative investment market of aim for short. And this was set up fairly recently so not too many years ago and his purpose was to allow smaller companies to come onto the London Stock Exchange and therefore to raise. Finance for the business by getting investors to buy their shares.
And the rules associated with a company’s not as stringent as difficult to qualify for as they are on the main index and hence why aim companies aim shares are clusters a bit riskier than. Those on the main index because the rules to qualify as an aim company floats on the aim aim market are not too stringent sorry somebody. Then on this video we’ve talked about the London Stock Exchange we’ve talked about the main market we’ve talked about the alternative investment market and we’ve talked quite a bit about the 4100.
Index and some of the other indices of the london stock market. I hope you found it useful if you have them please visit my website how to invest in shares code at UK for more information and also for the. Free guide as I said earlier my name is Adrian Botha and I look forward to seeing you again on a future. Video bye bye for now you.