Page 4: The work of FTSE
FTSE Group is a world-leader in the creation and management of equity indices and associated data services. It manages and develops globally recognised indices ranging from the FTSE All-World Index to the recently launched FTSE4Good Index Series. FTSE is owned by The Financial Times and the London Stock Exchange. FTSE became a limited company in 1995, although it has calculated indices since the 1930s. FTSE rose to global prominence in 1985 when it created the FTSE All-World Index to provide an index of prominent shares from across the globe.
By providing independent indices for clients in nearly 80 countries, FTSE offers the means by which pension providers, investment banks, brokers, stock exchanges and fund managers can monitor financial products relative to particular indices. This enables customers to measure the performance of their investments against an independently measured index. For example, individuals who contribute to a pension plan which is invested in a portfolio of shares in the FTSE 100 Index can keep a regular eye on how their future pension is performing by examining the FTSE 100 Index in their daily newspapers, TV or the Internet.
FTSE benefits from its trademark; the FTSE name is recognised throughout the world. FTSE has copyright over the company information it collates into an index. FTSE gains its revenue from selling licences to companies that wish to use selected indices to inform their own investment decisions and enhance their own management performance.
FTSE also gains revenue from licensing indices to companies who want to sell investment products that feature FTSE index names. For example, investment 'tracker funds' are designed to track a particular FTSE index - they are tied to the average performance of the market sector to which they relate. In addition, the company licenses the use of its indices to the media e.g. websites that want to quote FTSE indices as part of the data they provide.