How has the FTSE 100 changed since its launch way back in the
1980s and what does this mean for today's investors?
The Footsie, or FTSE 100 index to give it its proper name, was
launched in January 1984 with a base level of 1000. Made up of the
100 most valuable companies quoted on the London Stock Exchange
(LSE), it covers about 81% of the market capitalisation of all
quoted companies.
FTSE companies are chosen by a committee of the LSE on the basis
of market capitalisation at the end of each quarter. However, to
avoid too much chopping and changing, stocks do not automatically
enter the index until their market value moves them into the top
90.
Only thirty of the original 1984 list are still in the index
today. More than two-thirds of the companies in the original
Footsie index have been taken over, gone bust or are no longer big
enough to qualify. Many of the departed companies (such as
Courtaulds and ICI) were once famous household names, which have
fallen
