Buying One of Every Share on the FTSE.

kmhtkmhtkmht

I am thinking of buying ONE of every share listed in the FTSE 100, would the price be as of today, £5,764.10 to own one of every share in the FTSE 100?!

I have never understood these indices and share prices in general, in that they'll list a number, i.e. Tesco at 318.00 right now, does that mean £3.18?

Say I was to proceed and buy one of every share of the FTSE 100 - what's the simplest route to do it? Cost?

Alechjo

I am afraid the drawback is that broker would charge you for every share you buy, e.g. Hoodless Brennan would charge you J7x100=J700! Some brokers charge percentage, I have no real experience whether it is possible to do it cheaply or not.

I understood share prices on LondonStockExchange website, if currency is GBP - quids, if GBX - pence.

Motley Fool claims it is easy to beat FTSE by following their advice - have no idea how well it works.

Would be also interested if someone experienced comes and answers :T

Deemy

kmhtkmhtkmht wrote:

I am thinking of buying ONE of every share listed in the FTSE 100, would the price be as of today, £5,764.10 to own one of every share in the FTSE 100?!

I have never understood these indices and share prices in general, in that they'll list a number, i.e. Tesco at 318.00 right now, does that mean £3.18?

Say I was to proceed and buy one of every share of the FTSE 100 - what's the simplest route to do it? Cost?

Sorry but the FTSE is market cap weighted Which means that by buying an equal number of shares in all will NOT result in something that tracks the FTSE

I.e., I think BP is the biggest at about 9% of the index !

Tim_L

And it would cost something like £15 per share in transaction fees (and the same to sell it), assuming you wanted certificates rather than holding the shares in a nominee account when the charges would be slightly lower.

What's the idea here? It seems to be a completely pointless exercise. If you want to track the indexes then unit trusts are available, do much the same thing, and don't involve fiddling around with tiny numbers of shares.

EdInvestor

Because of the weighting, more than 60% of your money in an index tracker fund is invested in the top 20 shares. So you could consider just buying them.

When you look at the list, you'll see that there are a lot of banks in there, plus many mining/oil companies.You could always weed some of them out, to make it less risky.

Buying an equal amount of each share ( rather than the weighting) will also make your portfolio less risky and might improve its performance.[Of course by now it doesn't look much like a tracker any more, but hey, what's so great about trackers?]

There's a spreadsheet here which is quite useful:

https://www.fundies.info

dunstonh

Lots of good answers already. Nothing much left to say. Apart from putting emphasis on the fact that the FTSE100 is a naff index to follow.

Cook_County

A couple of extra comments:
1. If you really wanted to follow the FTSE you could buy iShares in the FTSE so you'd only have one lot of brokers fees to pay.

2. It still might be just worth buying 1 share in a few companies if (and only if) the perks are greater than the brokers fees (and only 1 share is required to get the shareholder perks).

Stonk

Not only will it cost a fortune in transaction fees to set up the proposed strategy, but you will also suffer the ongoing costs of having to sell 2 or 3 of your shares and buy different ones, with each quarterly review of the FTSE constituents.

This has got to be the worst investment strategy ever! I hope you weren't serious.

moneysavingobsessive

The easiest way would be to buy into a tracker fund. The funds use economies of scale to buy a basket of stocks resembling an index (e.g. FTSE 100). It won't track it exactly, but this can also be a good thing - the fund managers may for example exclude what they think will be an underperforming share.

Alternatively, national savings (and others) offer bonds which offer 100+% of FTSE growth over a set period with a capital guarantee. This isn't as good as it looks however as it ignores (compound) dividend payments and interest.

Depends how much risk you are prepared to take, but smaller companies (therefore all-share or small cap) tend to experience larger growth, but are also more risky.

Tim_L

You could do something like this by spreadbetting, either by spreadbetting on an index or picking individual shares, though I think the minimum stake in all financial spreadbetting firms I'm aware of is a fiver which is equivalent to owning 500 shares in each company. The advantage is that there's no tax or dealing charges, and you don't need to stump up the full capital amount to buy the shares (though you have to cover the potential marginal losses).

EdInvestor

moneysavingobsessive wrote:

It won't track it exactly, but this can also be a good thing - the fund managers may for example exclude what they think will be an underperforming share.

If this happens, it is not a tracker fund.

You could do something like this by spreadbetting... The advantage is that there's no tax or dealing charges, and you don't need to stump up the full capital amount to buy the shares (though you have to cover the potential marginal losses).

Spreadbetting is very risky, not for newbies.