What is the FTSE 100 quarterly reshuffle?

Four times a year, the UK stock market goes through a quiet but significant reorganisation. A body called FTSE Russell — a subsidiary of the London Stock Exchange Group — reviews which companies are large enough to belong in the FTSE 100, the most famous index in British finance. Companies that have grown sufficiently in value move up; those that have shrunk drop down. The September 2026 quarterly review, confirmed by LSEG, brings EasyJet and Ithaca Energy into the FTSE 100, while Entain and Persimmon exit into the FTSE 250.

If you have been following the Challenge and tracking FTSE 100 companies in your virtual portfolio, this is a story worth understanding. Index reshuffles are not just administrative tidying — they can shift share prices by several percentage points in a matter of days.

What is the FTSE 100?

The FTSE 100, often called the “Footsie”, is an index of the 100 largest companies listed on the London Stock Exchange, measured by market capitalisation — that is, the share price multiplied by the total number of shares in existence. It includes many names that are household words: energy companies, banks, supermarkets, pharmaceutical groups, consumer goods businesses, and miners.

The index is not a fixed club. It operates more like a league: companies rise into it when their value grows large enough and fall out of it when their value shrinks. This is what makes the quarterly review important. The composition of the FTSE 100 is not decided by anyone’s personal opinion; it follows a set of transparent ranking rules. When a company crosses a defined threshold — either up or down — FTSE Russell acts.

Immediately below the FTSE 100 sits the FTSE 250, covering companies ranked 101 to 350 by size. Below that is the FTSE SmallCap and then the FTSE All-Share, which captures the whole market. The quarterly review can reshuffle companies between any of these tiers.

September 2026: who is moving?

In its September 2026 review, FTSE Russell confirmed the following changes, which took effect at the close of trading on Friday 19 September 2026:

Joining the FTSE 100

• EasyJet — The budget airline is returning to the FTSE 100 after a spell in the FTSE 250, having seen its market capitalisation recover sufficiently to meet the entry threshold. Unusually, its promotion comes while the company has agreed to be acquired by a private equity firm in a deal valued at roughly £5.7 billion. If the takeover completes, EasyJet could leave the index again — but for now, the rules treat it as an active listed company and it qualifies for promotion.
• Ithaca Energy — A North Sea oil and gas producer, Ithaca has seen its share price rise sharply over the past year, driven by improved production guidance, a 20% stake in the Rosebank field (subject to regulatory approval for first oil in early 2027), and a dividend yield above 9%. That combination of growth and income has attracted significant investor interest and pushed the company past the FTSE 100 entry threshold for the first time.

Leaving the FTSE 100

• Entain — The owner of Ladbrokes, Coral, and the Bwin online betting brand has had a difficult year. Its share price has fallen approximately 30% since January, dragged down by weaker-than-expected earnings, ongoing regulatory pressures across its international markets, and fading hopes of a takeover that once drove the valuation higher. That decline has pushed Entain below the cutoff for FTSE 100 membership, and it drops into the FTSE 250.
• Persimmon — The housebuilder has seen its shares fall around 13% in 2026, reflecting weak housing market conditions, concerns about mortgage affordability, uncertainty ahead of the government’s autumn budget, and rising costs including national insurance contributions and stamp duty changes. Persimmon had actually been a FTSE 100 member for years, but its reduced market value now places it below the entry bar.

Why does this move share prices?

The practical answer lies in how passive investment funds work. Many funds — including index tracker funds and exchange-traded funds (ETFs) — are designed not to pick individual stocks but simply to hold the same shares as an index, in the same proportions. If you invest in a FTSE 100 tracker fund, the fund manager does not choose which companies to buy; the index composition decides it for them.

This creates a predictable mechanical effect whenever the FTSE 100 changes:

• When EasyJet and Ithaca Energy join the FTSE 100, every tracker fund that follows the index must buy those shares. All those funds buying at roughly the same time creates additional demand, which pushes the price upward. This is sometimes called a “promotion bounce.”
• When Entain and Persimmon leave the FTSE 100, those same tracker funds must sell the shares they held. The resulting selling pressure pushes the price of the departing companies downward.

The effect tends to be most visible in the days approaching the changeover date, when funds adjust their portfolios ahead of the deadline. By the time the actual change takes effect, some of the move has usually already happened — because experienced investors anticipate what the funds will have to do and trade accordingly. Markets, as ever, tend to act on what is expected to happen rather than waiting until it actually does.

This is closely related to how news moves a share price: in both cases, what matters is not just the event itself but how many investors knew it was coming and positioned themselves in advance.

What does it mean for a company to be “in” or “out”?

Membership of the FTSE 100 is not simply a matter of prestige. It has tangible practical effects on a company and its shares:

• Visibility and institutional ownership. FTSE 100 companies are held by far more funds than FTSE 250 companies, including large pension funds and global asset managers who have mandates to track the top index. Inclusion means millions more pounds’ worth of shares are automatically held by these funds.
• Analyst coverage. Larger, more prominent companies tend to attract more research from investment banks and independent analysts. More coverage often means more liquidity — it is easier to buy and sell shares without moving the price sharply.
• Reputational signal. Joining the FTSE 100 is often treated as a sign that a company has crossed a meaningful size threshold. Being demoted, conversely, can generate negative press and raise questions about the company’s direction even if the underlying business is still profitable.

None of this makes FTSE 100 membership a guarantee of strong share performance. Plenty of FTSE 100 companies perform poorly, and plenty of FTSE 250 companies outperform them significantly. But it does mean that index changes are events worth tracking as a signal about market dynamics.

The September 2026 changes in the context of the Challenge

If you are running a virtual portfolio in the Student Investor Challenge, the FTSE reshuffle illustrates something important: market events do not happen in isolation. EasyJet’s FTSE 100 return is unusual because it coincides with a live private equity takeover deal. If the takeover completes at the agreed price, existing shareholders receive cash and the shares are delisted — at which point the FTSE promotion becomes irrelevant. If the deal falls apart, the share price reaction could be sharp in either direction.

Ithaca Energy’s promotion tells a different story. It is driven by genuine operational improvement and a high yield, rather than corporate activity. That kind of promotion tends to have a cleaner read-through: the company is larger and more profitable than before, tracker funds will need to buy it, and that creates some mechanical tailwind.

Entain’s demotion is a reminder that even recognisable brands with billions in annual revenue can see their share price erode steadily. A 30% decline over a year is not catastrophic for a business, but it is enough to knock a company out of the country’s most prominent index. And Persimmon’s exit reflects how sensitive housebuilders are to the interest rate and mortgage environment — a sector-level lesson rather than a company-specific failure.

Understanding these nuances is part of building genuine investment judgement, which is exactly what the Challenge is designed to develop. The quarterly reshuffle is not just a piece of financial housekeeping; it is a window into how markets really work.

How to use this in your portfolio decisions

Knowing that an index reshuffle is coming is not a straightforward signal to buy or sell. Here are a few things worth keeping in mind:

1. The move often comes before the change date. If the market expects a company to be promoted, the “promotion bounce” may already have happened by the time it officially joins the index. Buying after a promotion is announced but before it takes effect can sometimes mean buying near a short-term peak.
2. Demotion does not mean the business is failing. Persimmon is still a major UK housebuilder. Its demotion reflects a share price decline driven by external conditions, not necessarily by anything permanently wrong with the company itself. Whether that makes it an opportunity or a warning sign depends on your view of the housing market — a deeper question than the index change alone.
3. Takeover situations complicate the picture. EasyJet’s promotion is likely to be short-lived if its private equity deal completes. Holding shares in a company subject to a takeover involves specific risks and dynamics that go beyond normal share price movements.

The most useful skill here is not trying to trade around the reshuffle itself, but researching the underlying companies: what does each one actually do, what are the main risks to its revenue, and what would have to happen for its share price to recover or fall further?

FAQ

What is the FTSE 100?

The FTSE 100 is an index of the 100 largest companies listed on the London Stock Exchange, ranked by market capitalisation (share price multiplied by the number of shares in existence). It is often referred to as the “Footsie” and is the most widely followed measure of the UK stock market.

When does the FTSE quarterly review happen?

FTSE Russell reviews the composition of the FTSE UK Index Series four times a year: in March, June, September, and December. The review examines share prices over a set ranking period and announces which companies meet the criteria to enter or leave each index tier. Changes typically take effect around the third Friday of the review month.

Why do shares move when a company enters or leaves the FTSE 100?

Index tracker funds and ETFs that follow the FTSE 100 are required to hold the same shares as the index, in the same proportions. When a new company is added, these funds must buy its shares; when a company is removed, they must sell. This creates predictable mechanical buying or selling pressure around the changeover date, which tends to push the promoted company’s share price up and the demoted company’s share price down.

What is the difference between the FTSE 100 and FTSE 250?

The FTSE 100 contains the 100 largest companies on the London Stock Exchange by market capitalisation. The FTSE 250 covers the next 250 companies — those ranked 101 to 350. A company that shrinks below the FTSE 100 cutoff is demoted to the FTSE 250; one that grows large enough rises from the FTSE 250 into the FTSE 100. The quarterly review can also move companies between the FTSE 250, FTSE SmallCap, and the broader FTSE All-Share.