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How to invest in the FTSE 100

Investing in the UK's most famous stock index.

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Full frame shot of stock market data

What is the FTSE 100?

The Financial Times Stock Exchange 100 (FTSE 100), informally known as the Footsie, is a stock market index that tracks the 100 largest companies on the London Stock Exchange. It was created in 1984 and is maintained by the FTSE Group, a data services firm also responsible for the FTSE 250, the FTSE 350 and the FTSE All-Share. Big names in the FTSE 100 include Barclays, Carnival, Experian, HSBC, Rolls Royce, Tesco and Unilever.

Can I invest in the FTSE 100 from the US?

Yes, there are several ways to invest in the FTSE 100 from the US:

  • Stocks
  • Exchange-traded funds (ETFs)
  • American depository receipts (ADRs)

To trade stocks and ETFs, you’ll need a brokerage account that allows you to buy and sell international securities.

If you want to stick with a domestic trading platform, your FTSE 100 investment options are limited to ADRs: shares of large British companies traded on the New York Stock Exchange, American Stock Exchange and the Nasdaq. ADRs are held by US banks and are priced and pay dividends in USD.

How to invest in the FTSE 100

While you can’t invest directly into the FTSE 100, you can invest in the companies it tracks by purchasing individual stocks or index-tracking ETFs. If you’d like to pick and choose which companies you support, explore stock investment opportunities. If you’d prefer to gain exposure to everything the FTSE 100 tracks, invest in an exchange-traded fund.

Before you can start investing, you’ll need a brokerage account. Here’s a quick snapshot of the process:

  1. Open a brokerage account. If you plan to invest in global indexes like the FTSE 100, you’ll need an international trading account. Sign up with a broker that offers access to global exchanges, like Fidelity Investments or Zacks Trade.
  2. Fund your account. Before you can begin purchasing securities, you’ll need to fund your brokerage account with an external transfer.
  3. Search for securities. In-platform research and analytics tools can help you narrow down your trading options by industry, sector, market and more.
  4. Place an order. Once you’ve narrowed down your options, indicate how many stocks or ETFs you’d like to purchase and submit your order.
  5. Track your investments. Log in to your brokerage account to monitor your investments.

Compare domestic trading platforms

You don’t necessarily need an international brokerage account to invest in the FTSE 100. Domestic platforms can be used to buy ADRs.

Name Product Available asset types Stock trade fee Option trade fee Annual fee
Vanguard
Stocks,Mutual funds,ETFs,Forex
$0
$1
$20 per year
Get a personal advisor when you open an account with at least $50,000.
Robinhood
Stocks,Options,ETFs,Cryptocurrency
$0
$0
0%
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Interactive Brokers
Stocks,Bonds,Options,Mutual funds,Index funds,ETFs,Forex,Futures,Cash
$0
$0 + $0.65/contract, $1 minimum
0%
IBKR Lite offers $0 commissions, and IBKR Pro offers advanced tools for professional traders.
TD Ameritrade
Stocks,Bonds,Options,Mutual funds,ETFs,Forex,Futures
$0
or $25 If it is broker-assisted
$0 + $0.65/contract,
or $25 Broker-assisted
TD Ameritrade features $0 commission for online stock, but watch out for high short-term ETF and broker-assisted trading fees.
Tastyworks
Stocks,Options,ETFs,Futures
$0
Stocks & ETFs: $1/contract to open, $0 to close, $10 max/leg
Futures: $2.50/contract to open, $0 to close
0%
Trade stocks, options, ETFs and futures on mobile or desktop with this advanced platform.
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Compare up to 4 providers

FTSE 100 ticker

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’re 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 have a share 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 0.07% to 2.5% each year, as well as any trading commissions the broker charges.

Types of ETFs

As of June 2020, no ETFs on US exchanges track the full FTSE 100. This means you’ll need an international brokerage account to purchase FTSE 100-tracking ETFs from UK markets.

Most FTSE 100 ETFs are weighted in favor of 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. Bet against the performance of the index. If the FTSE 100 goes down, the value of a short ETF should go up.
  • 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 an 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.

What ETFs track the FTSE 100?

Popular ETFs that track the FTSE 100 include:

FundCurrencyTickerFee (TER p.a.)
HSBC FTSE 100 UCITS ETF GBPGBPHUKX0.07%
iShares Core FTSE 100 UCITS ETF (Dist)GBPISF0.07%
iShares Core FTSE 100 UCITS ETF GBP (Acc)GBPCUKX0.07%
Invesco FTSE 100 UCITS ETFGBPS1000.09%
Xtrackers FTSE 100 UCITS ETF 1CGBPXDUK0.09%
Xtrackers FTSE 100 UCITS ETF Income 1DGBPXUKX0.09%
Vanguard FTSE 100 UCITS ETF (GBP) AccumulatingGBPVUKG0.09%
Vanguard FTSE 100 UCITS ETF DistributingGBPVUKE0.09%
Lyxor FTSE 100 UCITS ETF C-GBPGBPL1000.14%
Lyxor FTSE 100 UCITS ETF D-GBPGBP100D0.14%
UBS ETF (LU) FTSE 100 UCITS ETF (GBP) A-disGBPUB030.20%
Amundi ETF FTSE 100 UCITS ETF GBPGBPFT1K0.25%

What stocks are in the FTSE 100?

Here’s a list of every tradable stock on the FTSE along with its ticker symbol and the industry it belongs to.

CompanyTicker symbolIndustry
3iIIIFinancial services
Admiral GroupADMNonlife insurance
Anglo American plcAALMining
AntofagastaANTOMining
Ashtead GroupAHTSupport services
Associated British FoodsABFFood producers
AstraZenecaAZNPharmaceuticals and biotechnology
Auto Trader GroupAUTOMedia
AvevaAVVSoftware and computer services
AvivaAV.Life insurance
BAE SystemsBA.Aerospace and defense
BarclaysBARCBanks
Barratt DevelopmentsBDEVHousehold goods and home construction
Berkeley Group HoldingsBKGHousehold goods and home construction
BHPBHPMining
BPBP.Oil and gas producers
British American TobaccoBATSTobacco
British LandBLNDReal estate investment trusts
BT GroupBT.AFixed line telecommunications
BunzlBNZLSupport services
BurberryBRBYPersonal goods
Carnival Corporation and plcCCLTravel and leisure
CentricaCNAGas, water and multiutilities
Coca-Cola HBCCCHBeverages
Compass GroupCPGSupport services
CRH plcCRHConstruction and materials
Croda InternationalCRDAChemicals
DCC plcDCCSupport services
DiageoDGEBeverages
EasyJetEZJTravel and leisure
EvrazEVRIndustrial metals and mining
ExperianEXPNSupport services
Ferguson plcFERGSupport services
Flutter EntertainmentFLTRTravel and leisure
GlaxoSmithKlineGSKPharmaceuticals and biotechnology
GlencoreGLENMining
HalmaHLMAElectronic and electrical equipment
Hargreaves LansdownHL.Financial services
HSBCHSBABanks
Hikma PharmaceuticalsHIKPharmaceuticals and biotechnology
Imperial BrandsIMBTobacco
InformaINFMedia
InterContinental Hotels GroupIHGTravel and leisure
International Airlines GroupIAGTravel and leisure
IntertekITRKSupport services
ITV plcITVMedia
JD SportsJD.General retailers
Johnson MattheyJMATChemicals
Just Eat TakeawayJETSoftware and computer services
Kingfisher plcKGFGeneral retailers
Land SecuritiesLANDReal estate investment trusts
Legal and GeneralLGENLife insurance
Lloyds Banking GroupLLOYBanks
London Stock Exchange GroupLSEFinancial services
M&GMNGAsset managers
MeggittMGGTAerospace and defense
Melrose IndustriesMROAutomobiles and parts
MondiMNDIForestry and paper
MorrisonsMRWFood and drug retailers
National Grid plcNG.Gas, water and multiutilities
Next plcNXTGeneral retailers
NMC HealthNMCHealth care equipment and services
OcadoOCDOFood and drug retailers
Pearson plcPSONMedia
Persimmon plcPSNHousehold goods and home construction
Phoenix GroupPHNXLife insurance
Polymetal InternationalPOLYPrecious metals and mining
Prudential plcPRULife insurance
Reckitt BenckiserRB.Household goods and home construction
RelxRELMedia
Rentokil InitialRTOSupport services
Rio Tinto GroupRIOMining
RightmoveRMVMedia
Rolls-Royce HoldingsRR.Aerospace and defence
Royal Bank of Scotland GroupRBSBanks
Royal Dutch ShellRDSAOil and gas producers
RSA Insurance GroupRSANonlife insurance
Sage GroupSGESoftware and computer services
Sainsbury’sSBRYFood and drug retailers
SchrodersSDRFinancial services
Scottish Mortgage Investment TrustSMTEquity investment instruments
SegroSGROReal estate investment trusts
Severn TrentSVTGas, water and Multiutilities
Smith & NephewSN.Healthcare equipment and services
DS SmithSMDSGeneral industrials
Smiths GroupSMINGeneral industrials
Smurfit KappaSKGGeneral industrials
Spirax-Sarco EngineeringSPXIndustrial engineering
SSE plcSSEElectricity
Standard CharteredSTANBanks
Standard Life AberdeenSLAFinancial services
St. James’s Place plcSTJLife insurance
Taylor WimpeyTW.Household goods and home construction
TescoTSCOFood and drug retailers
TUI GroupTUITravel and leisure
UnileverULVRPersonal goods
United UtilitiesUU.Gas, water and multiutilities
Vodafone GroupVODMobile telecommunications
WhitbreadWTBRetail hospitality
WPP plcWPPMedia
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

Why should I invest in the FTSE 100?

One of the primary reasons investors branch out into foreign markets is to diversify their portfolio. And the FTSE 100 is well-positioned to offer investors a comprehensive slice of the UK market — especially for those purchasing index funds. This balanced and comprehensive index can help investors broaden their reach with international assets from established companies on a reputable exchange.

What are the risks of investing in the FTSE 100?

No index is immune to risk or volatility. If the companies the FTSE 100 tracks do well, your investments will thrive. But if the market goes downhill, so will your investments.

Because stocks and ETFs that track the FTSE 100 aren’t traded on US markets, investors must contend with market-rate conversions and currency transactions — a potentially confusing undertaking for newbies.

Some investment experts also argue that the FTSE 100 only represents part of the British economy, and is heavily dominated by international oil and mining companies. Investors keen to get their hands on UK securities may be disappointed to learn that some of the companies the FTSE 100 tracks aren’t predominantly British.

Bottom line

The FTSE 100 offers US investors the opportunity to broaden their portfolios but it isn’t without drawbacks. But an international trading account is required for most transactions and the FTSE 100’s performance is skewed by the high percentage of oil and mining companies it tracks.

Review your trading account options on different platforms to find the brokerage best suited to your investment needs.

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