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3rd April 2019 | Mateusz Groszek | Portfolio Fundamental Analyst

Understanding the indexes - S&P UK, S&P Europe 350

Did you know that the United Kingdom stock exchange capitalization is one of the biggest in Europe? This is one of the numerous reasons why investors call the United Kingdom the European financial capital.

The most popular indexes from the S&P is the S&P United Kingdom. The index contributes the companies only from the United Kingdom. The big brother of the S&P U.K. Index is the S&P Europe 350, it also includes the companies from the U.K., but includes also the whole of Europe. Today we will describe those both indexes.

S&P United Kingdom Index

The S&P United Kingdom, as the name states, measures the shape of United Kingdom companies. The S&P U.K. index includes the 91 largest British firms. As you probably know, the most popular indexes in the world S&P 500 and Nasdaq are floating adjusted-market capitalization weight. The S&P UK index is also the floating adjusted-market capitalization weight. 

In the investor community, this index could be less popular then FTSE 100 index, but they are almost the same. The first index includes 91 companies with the highest capitalization, the FTSE 100 index includes 9 more companies. So, from where does the difference in popularity come from? It is simply because FTSE is a British provider of stock market indices and S&P is the American one. 

Furthermore, the S&P United Kingdom could be associated with diversification. The index alone could give us exposure to 11 sectors. As we mentioned earlier, the UK is the European financial capital, that is the main reason why the Financial sector will have the highest weight in the index – 19.8%. The next one is the energy sector with 17.1% weight and consumer staples 16.5%.

S&P Europe 350

The S&P Europe 350 is the big brother of the S&P United Kingdom Index. It consists of 350 leading blue-chip companies drawn from 16 developed European Markets. To be included in the index company they must be domiciled in one of the following countries: Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland or the United Kingdom. 

The index is also a float-adjusted market cap. The key criteria for stock selection is, of course, market cap. The S&P Europe 350 could offer us greater diversification. It gives the investor geographical diversification and sector diversification. Which country has the highest market cap in the index? As we mentioned earlier, it is the United Kingdom with almost 28% weight in the index and 91 companies. Below you will find the country breakdown list.

Country breakdown (29.03.2019)

Three columns

Country

Number of constituents

Index weight

United Kingdom

91

28%

France

50

16.8%

Switzerland

34

14.6%

Germany

46

13.5%

Netherlands

17

5.4%

Spain

18

4.8%

Italy

22

3.8%

Sweden

27

14:30 - 21:00

Denmark

14

2.7%

Finland

12

2.1%

Belgium

8

1.8%

Norway

7

1.0%

Ireland

8

1.0%

Luxembourg

2

0.3%

Austria

3

0.3%

Portugal

2

0.3%

Summarizing, the S&P United Kingdom index is a component of the S&P Europe 350 index. The United Kingdom stock exchange capitalization is the highest in Europe. Its weight in Europe index is highest, 28%. Both indexes are floating adjusted market index.

Golden Sand Bank ("Bank") exercised due diligence to ensure that the information contained in this publication was not incorrect or untrue as at the date of publication.

All Investment products are at risk, as their value can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek financial advice. This publication is not an investment recommendation or investment advice in connection with any services provided by the Bank to the Client.

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