FTSE SmallCap

FTSE SmallCap is a stock market index within the FTSE UK Index Series that represents smaller eligible companies in the UK equity market that are included in the FTSE All-Share Index but are not large enough to qualify for the FTSE 350. It is calculated and maintained by FTSE Russell, part of the London Stock Exchange Group (LSEG).

The FTSE SmallCap provides exposure to the smaller-capitalisation segment of companies listed on the London Stock Exchange, subject to the eligibility, liquidity, investability, and other requirements of the FTSE UK Index Series.

Position within the FTSE UK Index Series

The FTSE UK equity-index structure can be represented as:

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

The FTSE 350 consists of the FTSE 100 and FTSE 250, while the FTSE SmallCap covers eligible companies below that segment.

A simplified structure is:

$\text{FTSE UK Index Series}\supset \text{FTSE All-Share}\supset \text{FTSE 350}\supset \text{FTSE 100}\text{ and }\text{FTSE 250}$

with the FTSE SmallCap forming the smaller-capitalisation segment within the FTSE All-Share.

Composition

The FTSE SmallCap consists of companies from the FTSE All-Share that are not large enough to be constituents of the FTSE 350.

Companies can move between the FTSE 250, FTSE SmallCap, and other segments as their relative market capitalization and eligibility change.

Market capitalization

Market capitalization is generally calculated as:

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

For index construction, FTSE Russell applies additional investability and free-float adjustments.

A simplified representation is:

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

The resulting investable market capitalization is used in determining index representation, subject to the applicable methodology.

Index weighting

The FTSE SmallCap uses a market-capitalisation-weighted methodology, with constituent representation adjusted for investability factors.

A simplified constituent-weight calculation is:

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

Consequently, larger companies within the FTSE SmallCap generally have a greater influence on the index than smaller constituents.

Eligibility

Companies must satisfy the relevant FTSE UK Index Series eligibility requirements to be included in the FTSE SmallCap.

Eligibility can involve factors such as:

• listing;
• nationality;
• security type;
• market capitalization;
• free float;
• liquidity;
• investability.

FTSE Russell has continued to revise the eligibility rules for the FTSE UK Index Series. From the June 2026 review, eligible UK and non-UK incorporated companies can qualify with a minimum free float of 10%, subject to all other applicable criteria.

Liquidity requirements

Liquidity is an important component of the FTSE UK Index Series methodology.

Companies must satisfy applicable liquidity requirements to remain eligible for inclusion in the relevant indices. This is intended to ensure that index constituents represent securities that can be traded sufficiently by market participants.

Index reviews

The FTSE SmallCap is maintained through the FTSE UK Index Series review process.

The FTSE UK Index Series is subject to quarterly reviews, together with adjustments resulting from corporate actions and other events.

Companies can be added to or removed from the FTSE SmallCap as a result of:

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

FTSE 250 and FTSE SmallCap

The FTSE 250 represents the mid-capitalisation segment immediately below the FTSE 100, while the FTSE SmallCap represents companies within the FTSE All-Share that are not large enough to qualify for the FTSE 350.

A simplified relationship is:

$\text{FTSE 350}=\text{FTSE 100}+\text{FTSE 250}$

and:

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

FTSE Fledgling

The FTSE Fledgling Index represents companies that qualify for inclusion in the FTSE UK Index Series but are too small to be included in the FTSE All-Share.

The FTSE SmallCap is therefore larger in the FTSE UK index hierarchy than the FTSE Fledgling.

The relationship can be simplified as:

$\text{FTSE All-Share}\supset \text{FTSE SmallCap}\supset \text{FTSE Fledgling}$

This is a conceptual representation rather than a direct constituent hierarchy, because the FTSE Fledgling consists of companies outside the FTSE All-Share.

FTSE All-Share

The FTSE All-Share Index combines the FTSE 100, FTSE 250, and FTSE SmallCap.

A simplified relationship is:

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

The FTSE All-Share is designed to provide broad coverage of the UK equity market and represents approximately 98% of UK investable equity market capitalization according to FTSE Russell.

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 other changes so that such events do not create artificial movements in the index.

Price and total-return indices

The FTSE SmallCap is available in different index variants, including price and total-return methodologies.

A price index reflects changes in constituent prices.

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

A simplified relationship is:

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

FTSE Russell's factsheet identifies both price and total-return methodologies for the FTSE UK Index Series.

Investment products

The FTSE SmallCap can be used as a benchmark or underlying reference for financial products including:

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

FTSE Russell states that its indices are designed for applications including index-tracking funds, derivatives, and performance benchmarking.

Benchmark

The FTSE SmallCap can serve as a benchmark for portfolios focused on smaller UK-listed companies.

A simplified active-return calculation is:

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

Risk and volatility

Smaller-capitalisation companies can have different risk characteristics from larger companies.

Potential characteristics can include:

• lower trading liquidity;
• greater sensitivity to domestic economic conditions;
• wider bid-ask spreads;
• higher company-specific risk;
• greater price volatility.

These characteristics do not apply uniformly to every FTSE SmallCap constituent.

Importance

The FTSE SmallCap provides a benchmark for the smaller-capitalisation segment of the UK equity market. By covering eligible companies within the FTSE All-Share that are not large enough for the FTSE 350, it complements the FTSE 100 and FTSE 250 and contributes to the broader market coverage provided by the FTSE All-Share.

See also

• FTSE 100
• FTSE 250
• FTSE 350
• FTSE All-Share Index
• FTSE Fledgling
• 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