FTSE 250 Index

Updated on 2023-08-29T12:01:04.967582Z

What is FTSE 250 Index?

The FTSE 250 index is the index that includes next largest companies after FTSE 100 from 101st to 350th based on market capitalization. These companies are listed on the London Stock Exchange (LSE). The top 100 companies are on the FTSE 100 index.

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Understanding FTSE 250 Index

The FTSE 250 companies ranked based on their market capitalization. It includes the companies from 101st to 350th that are listed in the London stock exchange after FTSE 100 index. The FTSE 250 mostly consist investment trusts, and managed like mutual funds. The investors purchase them in order to acquire shares. For instance, J P Morgan had six investment trusts at the time of writing as constituents of the FTSE 350. The FTSE 350 is combined list of companies on FTSE100 and FTSE250 indices.

The FTSE 250 shows the UK economy’s performance as it consist more domestic companies rather and it gives the correct indication about an economy. The FTSE 250 index tracks the largest 250 companies listed on London Stock Exchange after FTSE 100. The FTSE 250 index’s top 10 companies include 3i Infrastructure-3IN, 4imprint-FOUR, 888 Holdings-888, Aberforth Smaller Companies Trust-ASL, Aggreko-AGK, Airtel Africa-AAF, Alliance Trust-ATST, Allianz Technology Trust-ATT, AO World- AO, Apax Global Alpha, as of May 2021.

Frequently Asked Questions (FAQs)

How FTSE 350 Index relates with FTSE 250 index?

FTSE 350 and FTSE 250 are the FTSE indices. FTSE indices refers to the different UK stock market indices such as FTSE 100 Index, FTSE 250 Index, FTSE 350 Index, FTSE Small Cap Index and FTSE Fledging Index. These indices present the different stocks traded and listed on the London stock exchange.  A stock index helps an investor to compare the performance of the company in the market.

FTSE 350 index companies is the combination of FTSE 100 and FTSE 250 companies, it includes largest 350 companies of both the FTSE 100 index and the FTSE 250 index.  FTSE 350 index is the combination of all the companies traded on the LSE under FTSE100 index and FTSE 250 index.

How to trade on FTSE 250?

An investor cannot directly invest the FTSE 250 or other indices. There are other ways to do the indirect investment through Exchange Traded Funds (ETFs) that tracks the performance of the index at low cost and the investor can enjoy the effect in long term by adding some benefits of paying dividend. The two major ETFs include the Vanguard FTSE 100 UCTIS ETF and the iShares Core FTSE 100 UCITS ETF that are designed to monitor the performance of FTSE 100.

Investors can go with Contracts for Difference (CFDs) for short-term exposure. CFD allows traders and investors to trade on a rising or falling index. Mostly, UK traders prefer to invest and trade with spread betting provider to get tax free gains. The FTSE 250 computed by weighing all the listed stocks of LSE by market capitalization and make an index by market capitalization of 101st to 350th largest companies.

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

The FTSE 250 includes the group of companies from 101 to 250 that listed on the LSE. Where, FTSE 100 consists of the 100 largest public companies listed on LSE.  The composition of the FTSE 250 index may change after a certain time as companies are reviewed every three months, the changes will happen depending on the market capitalization of a company whether it goes higher than others.

Investor believes that FTSE 250 gives the better indication about the performance of the UK market in comparison of the FTSE100 as FTSE250 includes more domestic companies and the companies that the most of their revenues from UK only.