Everything you need to know about the FTSE MIB index

Have you heard of the Italian Stock Exchange (FTSE MIB) ? This is the benchmark stock index of the Italian Stock Exchange. Created since 2004, FTSE MIB index, continues to delight many companies. If you don’t know then what it is about, now is the time to find out in this article.

What is the FTSE MIB ?

The FTSE MIB Index is an Italian stock index. It is the main benchmark for Italian stock markets and comprises the 40 most liquid and highest capitalization stocks listed on the Italian stock exchange, the Milan Stock Exchange. Visit the site for more information on ftse mib values. Does he know, this index captures about 80% of the national market capitalization. In addition, the index shows that its constituents are drawn from the universe of stocks traded on the main stock market of the Italian Stock Exchange « and that it » seeks to replicate the broader sector weightings of the Italian stock market.

How to calculate the Milan Stock Exchange index ?

First and foremost, it should be noted that stock market indices are the synthesis of the value of the basket of shares they represent. The movements of the index are a good approximation of the change over time in the value of the securities included in the portfolio. There are different methods of calculating the indices, depending on the weight assigned to the stocks in the basket. We can therefore distinguish : 

• Equal weight indices : they are characterized by equal weighting factors for all the securities that make up the index. The capitalization of the included companies does not matter, as all stocks in the index have the same weight ; 

• Price-weighted indices : in this case, the weight associated with each security varies according to its price (if the price of a security increases more than the others, its weight within the index automatically increases). They are very easy to calculate because they are given by the simple sum of the prices of the securities that make up the index. 

• However, these indices have the drawback of not correctly reflecting the performance of the entire portfolio : in fact, the most “expensive” stocks are more represented, regardless of the number of shares present and the size of the portfolio. ‘business ; 

• Value-weighted indices : they solve the problems of the previous ones because the weight of each stock is proportional to its market capitalization. Unlike other calculation methods, in this case, the indices are adjusted following corporate transactions such as spin-offs, consolidations, payment of extraordinary dividends, free transfers or new paid issues.