Glossary entry
The FTSE 100 is an index of 100 large eligible companies listed on the London Stock Exchange. Its methodology uses market capitalization with adjustments for shares available to investors and other eligibility requirements. Many constituents operate internationally, so the index's performance reflects global business conditions and currency effects as well as developments in the United Kingdom.
Illustrative example
A large constituent earns much of its revenue overseas. Changes in global demand or exchange rates can influence its contribution to the FTSE 100.
What to consider
The index is not a complete measure of the UK economy. Check the currency and whether a comparison includes dividends.
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