Sectoral Composition and Framework of the FTSE 350 Index

Highlights

• Includes large and mid-cap companies from the London Stock Exchange.

• Reflects performance across diverse sectors like finance, healthcare, and industrials.

• Structured using a market-capitalization weighted methodology.

The FTSE 350 encompasses companies listed on the London Stock Exchange, covering a wide range of sectors including financials, industrials, healthcare, consumer goods, energy, and telecommunications. This broad representation makes the index a composite measure of performance among both established and mid-sized entities. The inclusion of firms from multiple sectors creates a diversified structure that reflects overall market activity within the United Kingdom.

Constituent Structure and Classification

The FTSE 350 combines the FTSE 100 and FTSE 250 indices, which collectively include large-cap and mid-cap companies. Constituents are selected based on free-float market capitalization, and each company’s weight within the index aligns with this metric. Sector allocation is dependent on the relative capitalization of the businesses within each industry, with finance and consumer-facing sectors often comprising substantial portions.

Eligibility and Periodic Review

For a company to be included in the FTSE 350, certain eligibility criteria must be met. These include liquidity thresholds, primary listing requirements, and minimum shareholding dispersion. The index undergoes scheduled reviews to ensure that each listed entity complies with the necessary standards. Rebalancing takes place using established rules to ensure ongoing alignment with market movements and structural integrity.

Sector Weighting and Market Activity

The weighting of sectors within the FTSE 350 is dynamic and reflects prevailing trends in capital allocation and market performance. Key sectors such as banking, pharmaceuticals, and consumer services demonstrate varied representation based on market capitalization. Sectoral distribution can influence overall index movements as companies are weighted relative to their market value within the aggregate structure.

Methodology and Technical Basis

The FTSE 350 is maintained using a transparent methodology designed by FTSE Russell. It applies a market-capitalization weighted model, adjusted for free float, to ensure accurate index tracking. The calculation is governed by clearly defined parameters that standardize the inclusion and removal of companies during each review period. This structure supports transparency and consistency in index construction.

Market Representation and Sector Breadth

The index represents a significant share of the UK equity market's overall capitalization. It captures market activity across a broad spectrum of industries, allowing for comprehensive sector tracking. Companies listed in the index typically exhibit substantial liquidity and public shareholding, which contributes to a more balanced and representative index profile. Prominent sectors include finance, industrial manufacturing, energy, and telecommunications.