FTSE

What Is the FTSE 100 Index?

The FTSE 100 is the UK’s flagship large-cap equity benchmark, capturing the 100 largest, most liquid London Stock Exchange listings after adjusting for free float and investability. Maintained by FTSE Russell, it is market-cap weighted rather than price-weighted, so bigger companies influence performance more in proportion to their tradable value.

Eligibility screens cover liquidity, nationality, and free float standards; corporate actions are managed under FTSE Russell’s rulebook to keep continuity. The index is reviewed four times a year, with additions and deletions implemented after the review timetable. Because many members derive a majority of revenues outside the UK, the FTSE 100 often reflects global risk appetite, commodity trends, and sterling moves as much as domestic data.

Investors commonly reference both price and total-return versions, and track it through UCITS ETFs and derivatives. In portfolios, the FTSE 100 typically supplies dividend income and mega-cap stability, but exhibits sector tilts toward energy, financials, consumer staples, healthcare, and materials; technology is a smaller slice than in U.S. benchmarks.

Top Companies in the FTSE 100 Index

How to Invest in FTSE 100 from India?

Step 1: Choose Your Route

• The simplest method is via UCITS ETFs that track the FTSE 100, listed on the London Stock Exchange (LSE) and traded in GBP.
• Advanced investors may consider FTSE 100 futures and options for tactical exposure or hedging.
• Alternatively, look at India-based global allocation funds, but confirm if they truly track the FTSE 100.

Step 2: Open an Overseas Brokerage Account

• Select a brokerage that allows international trading access, particularly to the LSE.
• Ensure the broker complies with RBI’s Liberalised Remittance Scheme (LRS).

Step 3: Fund the Account under RBI’s LRS

• Under LRS, you can remit up to USD 250,000 per year.
• Transfer the funds from your Indian bank to the overseas brokerage account.

Step 4: Account for All Costs

• Calculate the full cost stack, including bank FX spread, transfer fees, TCS (Tax Collected at Source) on remittances, brokerage commissions, stamp duty (if applicable), and the ETF’s expense ratio.

Step 5: Understand Taxation

• Dividends and capital gains from FTSE 100 investments are taxable in India.
• Keep records of transactions for accurate tax filing.

Step 6: Factor in Currency Risk

• FTSE 100 ETFs are priced in GBP.
• GBP/INR fluctuations will impact your net returns, either amplifying or reducing them.

Step 7: Buy Your Chosen ETF or Derivative

• Place the order through your overseas broker.
• For ETFs, consider accumulation vs distribution share classes depending on whether you prefer reinvested dividends or cash payouts.

Step 8: Manage Position Sizing and Risk

• Keep your position modest relative to your portfolio.
• Rebalance periodically to align with your investment goals.
• Use derivatives only if you have experience with margin and risk management.

Step 9: Revisit Sector and Market Fit

• The FTSE 100 is tilted toward energy, financials, consumer staples, and healthcare.
• Make sure this sector mix fits your time horizon, risk appetite, and diversification strategy.

FTSE 100 Historical Performance Chart

Role of the FTSE 100 in the UK economy

The FTSE 100 index is the UK market’s shorthand for large-cap sentiment, but its economic role is subtler. Because many members earn most revenues overseas, the index is a barometer of global conditions filtered through sterling. When the pound weakens, exporters’ overseas earnings translate into higher GBP profits, often lifting the index; a stronger pound can have the opposite effect.

Domestically, the FTSE 100 index underpins pensions, insurance portfolios, and retail investment products, influencing household wealth effects and corporate funding costs. Dividend distributions from mega-caps matter for income funds and annuities, while share-price levels affect equity issuance, M&A terms, and executive incentive plans.

Sector composition means commodity prices, bank net-interest margins, and defensive cash-flow dynamics shape the cycle. Policymakers and corporates watch the FTSE index alongside gilt yields and the housing market to gauge financial conditions. However, it is not a proxy for the broader UK economy: small businesses and domestic mid-caps sit outside it, and real-time labour, housing, and services data often tell a different story. Used correctly, the FTSE 100 complements, rather than replaces, on-the-ground macro indicators.