A History of the FTSE AIM All-Shares Index

All of the FTSE indices can trace their origin back to 1962 when the FT Actuaries Index was launched. This was designed to track the broad performance of the UK Stock Market. The Financial Times Stock Exchange Group (better known as FTSE) is a joint venture that was established in 1995 between the Financial Times and the London Stock Exchange. All of the FTSE’s indices are managed by FTSE Russell, a body that is entirely owned by the London Stock Exchange Group. There is a complete series of FTSE indices that have been created with the purpose of tracking the performance of standard and large-scale listing shares on the London Stock Exchange. After the creation of these indices, the Alternative Investment Market series indices were introduced, with the purpose of tracking how well the growth segment of medium and smaller companies is performing.

1995 saw the commencement of operations of the AIM segment. Originally, it only included 10 companies, which represented a market capitalisation of £82 million. However, over the years since it was launched, this segment has now grown to have over 3,500 companies listed, which raise over £90 billion of capital for its participants. Currently, the AIM index includes companies that have their headquarters in 24 different countries, and which operate across over 100 countries. The companies that are listed on the AIM indices may grow and eventually move on to hold a listing on the LSE’s more rigorous primary market. This has already happened to over 100 companies that were originally listed on the AIM market since its inception.

What is the Composition of the FTSE AIM All-Share Index?

The FTSE AIM All-Share Index is a listing of all of the AIM-quoted companies that can meet the eligibility criteria set by the FTSE. In terms of market capitalisation, the top 10 listings found on the FTSE AIM All-Share Index are:

• ASOS
• New Europe Property Investments Plc
• ABCAM
• Hutchison China Meditech
• James Halstead
• Dart Group Plc
• Breedon Aggregates Ltd
• Newriver Retail Ltd
• Clinigen Group Plc
• Origin Enterprises Plc

Companies listed on the AIM indices include those from all 19 supersectors of the Industry Classification Benchmark (ICB). These include sectors such as real estate, healthcare, basic resources, oil and gas, retail, industrial services and goods, technology and financial services. These supersectors give investors a clear way to pinpoint macroeconomic investment and trading opportunities, and at the same time provide a stable basis for trading products. Based on market capitalisation, the top sectors found on the AIM indices include the following:

• Healthcare
• Industrial services and goods
• Financial services
• Technology
• Gas and oil

What are the Rules for Companies Listing on the AIM All-Shares Index?

Unlike those companies that list on the LSE’s main market indices, the companies that list on the AIM indices do not have to meet the same requirements with regard to market capitalisation and size, the number of shares that must be in free float, the minimum employee figures, the amount of profitability or turnover, or the length of trading record time. There are, however, some guidelines that must be adhered to, including the following:

• Company shares must be free from any restriction on transferability.
• Settlement arrangements for trading of company shares must be in place.
• Trading in any AIM security must be possible via electronic settlement.
• All companies listed on AIM indices must have an appointed broker and a nominated advisor.
• All companies must have paid a London Stock Exchange joining fee.
• Any company regarded as an “investing company” must raise at least £6 million in cash through equity fundraising when they are admitted to AIM.

How are the Companies on the FTSE AIM All-Shares Index Reviewed?

The companies on the FTSE AIM All-Shares Index are subject to review on a regular basis, and companies may either be added or removed depending on circumstances. Meetings are held quarterly to determine which companies should be on the index, with these meetings taking place every February, May, August and November. The make-up of the companies on the AIM All-Shares Index may change depending on relevant current market capitalisation data. For example, if a company has grown beyond the category of a small-to-medium-sized operation, it may qualify to move up to the primary LSE market rather than remaining on the AIM indices. However, it is important to note that a company cannot be automatically promoted from the AIM indices to the Main Market, but instead must apply formally to move up. There are numerous AIM companies that are very successful but which choose to remain on the junior market, as the regulation is much less stringent. This explains why some of the companies that appear on the AIM All-Shares Index are quite large.