This week sees the latest quarterly re-shuffle for the FTSE 100 index of leading UK company shares, as companies leave and enter the index based on their current market capitalisation.
John Wood Group plc (LSE:WG) and 3i (LSE: III) are both leaving the FTSE 100 as part of this quarterly reshuffle.
Wood Group is a multi-national oil and gas services company headquartered in Aberdeen, Scotland. 3i Group plc is a multi-national private equity and venture capital company headquartered in London.
Joining the FTSE 100 index this quarter is Bunzl and Ashmore.
Bunzl plc (LSE: BNZL) is a multi-national distribution and outsourcing company headquartered in London. It has been listed on the London Stock Exchange since 1957 and has been included in the FTSE 100 on three previous occasions.
Ashmore Group plc (LSE: ASHM) is a large British investment manager dedicated to the emerging markets. It will become one of the youngest members of the FTSE 100 as it was only established in 1992. This is the first time Ashmore has appeared in the FTSE 100.
These movements remind us that the FTSE 100 is simply an index of the 100 most highly capitalised UK companies listed on the London Stock Exchange.
The performance of the FTSE 100 index is often used as a benchmark by investors and as a way of gauging the progress of their UK equity investments. It is the index most commonly quoted by the media as a measure of business prosperity.
Whilst this makes it a useful benchmark, it is important to remember that investors own portfolios will typically consist of a slightly different basket of company shares, performing differently.
Investors also benefit from the payment of dividends from their investment in these company shares, which the progress of the FTSE 100 index does not reflect.
Photo credit: Flickr/jam_90s
