How to invest in the FTSE 100

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, 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.

How to invest in the FTSE 100

1. 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.
2. 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.
3. 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.

How to open a stock trading account

Compare FTSE 100 trading platforms

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Name	Product	Finder Rating	Available Asset Types	Stock Trading Fee	Account Fee	Signup Offer	Table description
Interactive Brokers Interactive Brokers		Finder Score: ★★★★★ 4.2 / 5	Stocks, Bonds, Options, ETFs, Currencies, Futures	min $1.00, max 0.5%	$0	N/A	Winner for Best Overall Broker in the Finder Stock Trading Platform Awards.	Go to site View details	Compare	loading Fetching your data...
CIBC Investor's Edge CIBC Investor's Edge		Finder Score: ★★★★★ 3.7 / 5	Stocks, Bonds, Options, Mutual Funds, ETFs	$6.95	$0 if conditions met, or $100	100 free trades + up to $4,500 cash back	An easy-to-use platform with access to a variety of tools to help you trade with confidence.	Go to site View details	Compare	loading Fetching your data...
Questrade Questrade		Finder Score: ★★★★★ 3.9 / 5	Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals	$4.95 - $9.95	$0	Get $50 in free trades when you fund your account with a minimum of $1,000.	Opt for self-directed investing and save on fees or get a pre-built portfolio to take out some of the guesswork.	Go to site View details	Compare	loading Fetching your data...
Qtrade Direct Investing Qtrade Direct Investing		Finder Score: ★★★★★ 3.6 / 5	Stocks, Bonds, Options, Mutual Funds, ETFs, GICs	$6.95 - $8.75	$0 if conditions met, otherwise $25/quarter	Get up to a $150 sign-up bonus. Use code OFFER2024. Ends October 31, 2024.	Low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options.	Go to site View details	Compare	loading Fetching your data...

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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

List of companies in the FTSE 100

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