FTSE All-Share Index

FTSE All-Share Index is a stock market index designed to represent the broad performance of companies listed on the London Stock Exchange that meet the eligibility requirements of the FTSE UK Index Series. It combines the FTSE 100, FTSE 250, and FTSE SmallCap indices and provides broad coverage of the UK equity market.

The FTSE All-Share is maintained and calculated by FTSE Russell, part of the London Stock Exchange Group (LSEG). It is used as a benchmark for investment performance, portfolio management, asset allocation, and financial products.

Composition

The FTSE All-Share combines three principal market-capitalisation segments:

• FTSE 100 — large-cap companies;
• FTSE 250 — mid-cap companies;
• FTSE SmallCap — smaller-cap companies.

A simplified relationship is:

$\text{FTSE All-Share}=\text{FTSE 100}+\text{FTSE 250}+\text{FTSE SmallCap}$

The index is therefore broader than the FTSE 350, which consists only of the FTSE 100 and FTSE 250.

Market coverage

The FTSE All-Share is designed to provide broad representation of the UK equity market.

FTSE Russell describes its UK equity indices as covering different segments of the UK market according to defined eligibility and investability criteria.

The index should not necessarily be interpreted as representing every company listed in the United Kingdom because securities must satisfy the applicable FTSE UK Index Series rules.

Market capitalization

Market capitalization is generally calculated as:

$\text{Market Capitalization}=\text{Share Price}\times \text{Shares Outstanding}$

For index purposes, FTSE Russell uses adjustments for factors such as free float and foreign ownership restrictions when determining the investable market capitalization of constituents.

Index weighting

The FTSE All-Share is a market-capitalisation-weighted index using free-float-adjusted market values.

A simplified representation of a constituent's index weight is:

$\text{Index Weight}=\frac{\text{Free-Float-Adjusted Market Capitalization of Constituent}}{\text{Total Free-Float-Adjusted Market Capitalization of Index}}\times 100\mathrm{\%}$

Consequently, larger companies generally have a greater influence on the movement of the index than smaller companies.

FTSE Russell describes market-capitalisation weighting as a common methodology in which a company's representation is determined by its market value and the shares available to investors.

Free float

Free float refers broadly to shares that are considered available for public investment.

A free-float adjustment can be represented as:

$\text{Free-Float-Adjusted Market Capitalization}=\text{Market Capitalization}\times \text{Free Float Factor}$

The FTSE methodology contains additional rules governing the treatment of restricted and strategic shareholdings.

FTSE All-Share and FTSE 350

The FTSE 350 consists of the FTSE 100 and FTSE 250.

The FTSE All-Share adds the FTSE SmallCap segment.

A simplified relationship is:

$\text{FTSE All-Share}=\text{FTSE 350}+\text{FTSE SmallCap}$

Thus, the FTSE All-Share provides broader coverage than the FTSE 350.

FTSE 100

The FTSE 100 represents the large-cap segment of the FTSE UK Index Series.

It contains 100 eligible companies ranked at the top of the relevant UK equity universe by market capitalization, subject to the applicable methodology.

FTSE 250

The FTSE 250 represents the mid-cap segment immediately below the FTSE 100.

It contains 250 eligible companies, subject to the FTSE UK Index Series methodology.

FTSE SmallCap

The FTSE SmallCap represents smaller eligible companies outside the FTSE 350.

The inclusion of the FTSE SmallCap segment makes the FTSE All-Share substantially broader than the FTSE 350.

Index calculation

A simplified market-capitalisation-weighted index calculation is:

$\text{Index Value}=\frac{\sum _{i=1}^n{\text{Adjusted Market Capitalization}}_i}{\text{Index Divisor}}$

The index divisor is adjusted when necessary to account for corporate actions and changes in index composition so that such events do not create artificial changes in the index level.

Index reviews

The FTSE All-Share is maintained through the review process of the FTSE UK Index Series.

FTSE Russell conducts regular reviews of the UK equity indices. Changes can occur because of:

• changes in market capitalization;
• changes in free float;
• changes in liquidity;
• new listings;
• delistings;
• corporate actions;
• changes in eligibility.

FTSE Russell's UK index reviews are conducted quarterly, with review changes generally implemented in March, June, September, and December.

Corporate actions

Corporate actions can affect the composition and calculation of the FTSE All-Share.

Examples include:

• mergers;
• acquisitions;
• demergers;
• rights issues;
• share issues;
• share buybacks;
• stock splits;
• company delistings.

Index adjustments are designed to maintain continuity in the index's representation of the underlying market.

Price and total-return variants

The FTSE All-Share can be represented through different index variants.

A price index reflects changes in the prices of constituent securities.

A total-return index incorporates dividend income according to the applicable methodology.

A simplified representation is:

$\text{Total Return}=\text{Capital Return}+\text{Dividend Return}$

The precise treatment of dividends depends on the particular index variant.

Investment products

The FTSE All-Share can be used as a benchmark or underlying reference for investment products such as:

• index funds;
• exchange-traded funds (ETFs);
• structured products;
• derivatives;
• other index-linked investments.

Tracking products may not exactly match the index because of management fees, transaction costs, taxes, cash holdings, and tracking error.

Benchmark

The FTSE All-Share can be used as a benchmark for portfolios investing broadly in UK equities.

A simplified active-return calculation is:

$\text{Active Return}=\text{Portfolio Return}-\text{Benchmark Return}$

The index can therefore be used to evaluate whether an actively managed UK equity portfolio has outperformed or underperformed its broad market benchmark.

Diversification

Because the FTSE All-Share includes large-, mid-, and smaller-capitalisation companies, it provides broader market exposure than narrower UK indices such as the FTSE 100.

However, the index remains concentrated according to market capitalization, meaning the largest companies can account for a substantial proportion of the index's total value.

Importance

The FTSE All-Share Index is an important broad benchmark for the UK equity market. By combining the FTSE 100, FTSE 250, and FTSE SmallCap, it provides exposure across large-, mid-, and smaller-capitalisation companies and is widely used for investment benchmarking, portfolio management, asset allocation, market analysis, and index-linked financial products. FTSE Russell maintains rules-based methodologies for determining index constituents and their weights.

See also

• FTSE 100
• FTSE 250
• FTSE 350
• FTSE SmallCap
• FTSE UK Index Series
• London Stock Exchange
• FTSE Russell
• London Stock Exchange Group
• Stock market index
• Market capitalization
• Free float
• Index fund
• Exchange-traded fund
• Benchmark (finance)
• Portfolio management
• Passive management
• Diversification