For investors interested in UK markets or European oriented investments, the financial Times Stock Exchange 100, or FTSE 100 Company List is a good starting point. A private firm compiles the list of the top 100 companies by market capitalization. Though these companies have to be listed on the London stock exchange, many of them are not UK-based companies. This means that the FTSE 100 company list is not a good proxy for the health of the UK economy.
An interesting aspect of the companies on the FTSE 100 index is that they represent leading firms across a wide spectrum of industries within Europe. They are large market capitalization firms, the value of the company in terms of London market shares, suggesting that novice investors would do well to start with these companies. The companies are large enough to be termed foundational or long-term investments.
Additionally, because of the exposure to the London market, the companies in the British index gain from easy access to European markets. If a beginner investor decides to choose a few companies as foundational investments, they will be tying their portfolio to global trade throughout Europe. For investors that typically buy US shares only, expanding the investment portfolio to include European exposure can help balance portfolio performance.
Among the easiest ways to enter the FTSE 100 shares market is to buy either ETF’s or mutual funds. There are several varieties of these funds that have different fee structures. Beginning investors should check out the fee structures for the lowest cost method.
An investor outside of the UK buying FTSE 100 shares and equities will expose themselves to volatility through the currency pair of the British pound (GBP) versus the US dollar (USD). This currency volatility can be enough to make investing in the FTSE 100 companies riskier than the average beginner might want to tackle. If an investor understands how to handle currency risk with hedges, then expanding investment horizons by investing in the British index can be a positive influence on the portfolio.