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How to invest in the FTSE 100
What you need to know about investing in the UK's most famous stock index.
Can you invest in the FTSE 100?
The Financial Times Stock Exchange 100 (FTSE 100) is a stock market index comprising the 100 largest companies on the London Stock Exchange (by market capitalization), which includes companies like BP, HSBC, Barclays and Sainsbury’s.
While you can’t actually invest directly into the FTSE 100 (unless you bought shares in each of the companies in the index), you can get exposure to the index by investing in an exchange-traded fund (ETF) which tracks the performance of the stocks in the FTSE 100.
The FTSE 100 and coronavirus
As with the rest of the stock market, the FTSE 100 has recently dropped significantly in the face of the coronavirus pandemic. While every stock in the index is down this month, some have fared better than others. The potential advantage of investing in an index is to help diversify your portfolio and mitigate exposure to risk. However, certain FTSE 100 stocks are likely to perform markedly worse than others over the coming months, and it may be worth curating a list of FTSE 100 companies you want to invest in.
How to invest in the FTSE 100
- Buy FTSE 100 stocks directly. You can buy individual stocks from the FTSE 100 index using a brokerage or share-trading platform. You could buy one share of each company to create your own index, or buy shares in select companies.Depending on which platform you use, you may be charged trading fees or commissions on every share you buy, which can end up being quite expensive.
- Invest in a FTSE 100 ETF if you want exposure to all the companies in the FTSE 100 without having to buy individual stocks (and avoiding trading fees), you could instead invest in an FTSE 100 ETF. These are index funds that track the performance of the stocks in the FTSE 100.
- How to start trading the FTSE 100. Whether you want to invest directly in FTSE 100 stocks, or invest in a FTSE 100 ETF, you’ll need to open an account with a trading platform or brokerage.
Compare FTSE 100 trading platforms
FTSE 100 ticker
You can use the chart below to track the performance of the FTSE 100:
How do FTSE 100 ETFs work?
When you buy an FTSE 100 ETF, you are not investing directly in the companies in the index. Most FTSE 100 ETFs will hold shares in the companies in the index, but you won’t yourself by just buying the ETF.
However, the ETFs performance will track closely with the performance of the stocks in the index. For example, if the FTSE 100 increases in value by 2%, your ETF should also increase close to 2%.
To invest in an ETF, you’ll generally need to pay a fee of around 0.07% to 0.25% each year, as well as any trading commissions charged by the broker.
Types of ETF
Most FTSE 100 ETFs will fully track the performance of the FTSE 100, meaning the fund is weighted more towards the companies with higher market capitalization. However, there are some ETFs such as the db X-Trackers FTSE 100 Equal Weight UCITS ETF (XFEW) which invests in the companies in the index equally. This means the performance of smaller companies will have a larger impact on the ETF, relative to their size.
Short ETFs. There are a number of short FTSE 100 ETFs, which effectively bet against the performance of the index. If the FTSE 100 goes down, the value of a short ETF should go up. Learn more about shorting stocks (or “short-selling”) in our guide.
Leveraged ETFs. Leveraged ETFs multiply the gains and losses of the index, meaning you’ll get a higher or lower return relative to the size of your investment. You’re effectively borrowing extra capital to potentially increase your returns. For example, if you invest £1,000 in a FTSE 100 ETF with 10x leverage and it goes up 5%, you’d make £500 instead of £50. However, the same would apply to losses.
FTSE 100 ETFs
|Fund||Currency||Ticker||Fee (TER p.a.)|
|HSBC FTSE 100 UCITS ETF GBP||GBP||HUKX||0.07%|
|iShares Core FTSE 100 UCITS ETF (Dist)||GBP||ISF||0.07%|
|iShares Core FTSE 100 UCITS ETF GBP (Acc)||GBP||CUKX||0.07%|
|Invesco FTSE 100 UCITS ETF||GBP||S100||0.09%|
|Xtrackers FTSE 100 UCITS ETF 1C||GBP||XDUK||0.09%|
|Xtrackers FTSE 100 UCITS ETF Income 1D||GBP||XUKX||0.09%|
|Vanguard FTSE 100 UCITS ETF (GBP) Accumulating||GBP||VUKG||0.09%|
|Vanguard FTSE 100 UCITS ETF Distributing||GBP||VUKE||0.09%|
|Lyxor FTSE 100 UCITS ETF C-GBP||GBP||L100||0.14%|
|Lyxor FTSE 100 UCITS ETF D-GBP||GBP||100D||0.14%|
|UBS ETF (LU) FTSE 100 UCITS ETF (GBP) A-dis||GBP||UB03||0.20%|
|Amundi ETF FTSE 100 UCITS ETF GBP||GBP||FT1K||0.25%|
List of companies in the FTSE 100
|Admiral Group||ADM||Nonlife Insurance|
|Anglo American plc||AAL||Mining|
|Ashtead Group||AHT||Support Services|
|Associated British Foods||ABF||Food Producers|
|AstraZeneca||AZN||Pharmaceuticals & Biotechnology|
|Auto Trader Group||AUTO||Media|
|Aveva||AVV||Software & Computer Services|
|BAE Systems||BA.||Aerospace & Defence|
|Barratt Developments||BDEV||Household Goods & Home Construction|
|Berkeley Group Holdings||BKG||Household Goods & Home Construction|
|BP||BP.||Oil & Gas Producers|
|British American Tobacco||BATS||Tobacco|
|British Land||BLND||Real Estate Investment Trusts|
|BT Group||BT.A||Fixed Line Telecommunications|
|Carnival Corporation & plc||CCL||Travel & Leisure|
|Centrica||CNA||Gas, Water & Multi-utilities|
|Compass Group||CPG||Support Services|
|CRH plc||CRH||Construction & Materials|
|DCC plc||DCC||Support Services|
|EasyJet||EZJ||Travel & Leisure|
|Evraz||EVR||Industrial Metals & Mining|
|Ferguson plc||FERG||Support Services|
|Flutter Entertainment||FLTR||Travel & Leisure|
|GlaxoSmithKline||GSK||Pharmaceuticals & Biotechnology|
|Halma||HLMA||Electronic & Electrical Equipment|
|Hargreaves Lansdown||HL.||Financial Services|
|Hikma Pharmaceuticals||HIK||Pharmaceuticals & Biotechnology|
|InterContinental Hotels Group||IHG||Travel & Leisure|
|International Airlines Group||IAG||Travel & Leisure|
|JD Sports||JD.||General Retailers|
|Just Eat Takeaway||JET||Software and Computer Services|
|Kingfisher plc||KGF||General Retailers|
|Land Securities||LAND||Real Estate Investment Trusts|
|Legal & General||LGEN||Life Insurance|
|Lloyds Banking Group||LLOY||Banks|
|London Stock Exchange Group||LSE||Financial Services|
|Meggitt||MGGT||Aerospace & Defence|
|Melrose Industries||MRO||Automobiles & Parts|
|Mondi||MNDI||Forestry & Paper|
|Morrisons||MRW||Food & Drug Retailers|
|National Grid plc||NG.||Gas, Water & Multi-utilities|
|Next plc||NXT||General Retailers|
|NMC Health||NMC||Health Care Equipment & Services|
|Ocado||OCDO||Food & Drug Retailers|
|Persimmon plc||PSN||Household Goods & Home Construction|
|Phoenix Group||PHNX||Life Insurance|
|Polymetal International||POLY||Precious Metals and Mining|
|Prudential plc||PRU||Life Insurance|
|Reckitt Benckiser||RB.||Household Goods & Home Construction|
|Rentokil Initial||RTO||Support Services|
|Rio Tinto Group||RIO||Mining|
|Rolls-Royce Holdings||RR.||Aerospace & Defence|
|Royal Bank of Scotland Group||RBS||Banks|
|Royal Dutch Shell||RDSA||Oil & Gas Producers|
|RSA Insurance Group||RSA||Nonlife Insurance|
|Sage Group||SGE||Software & Computer Services|
|Sainsbury’s||SBRY||Food & Drug Retailers|
|Scottish Mortgage Investment Trust||SMT||Equity Investment Instruments|
|Segro||SGRO||Real Estate Investment Trusts|
|Severn Trent||SVT||Gas, Water & Multi-utilities|
|Smith & Nephew||SN.||Health Care Equipment & Services|
|DS Smith||SMDS||General Industrials|
|Smiths Group||SMIN||General Industrials|
|Smurfit Kappa||SKG||General Industrials|
|Spirax-Sarco Engineering||SPX||Industrial Engineering|
|Standard Life Aberdeen||SLA||Financial Services|
|St. James’s Place plc||STJ||Life Insurance|
|Taylor Wimpey||TW.||Household Goods & Home Construction|
|Tesco||TSCO||Food & Drug Retailers|
|TUI Group||TUI||Travel & Leisure|
|United Utilities||UU.||Gas, Water & Multi-utilities|
|Vodafone Group||VOD||Mobile Telecommunications|
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