The FTSE 250 and S&P 500 are both stock market indices that track a certain number of stocks in an exchange or country. The S&P 500 is 500 stocks on US exchanges, chosen by a committee. The FTSE 250 is the 250 stocks after the 100th stock on the London Stock Exchange when you order the companies on the exchange by their market capitalisation.
The S&P 500 and the FTSE 250 are collections of stocks from their respective exchanges – in the FTSE 250’s case, it’s a collection of stocks on the London Stock Exchange and in the S&P 500’s case, it’s a collection of US stocks.
Another difference is how each index is constructed. The stocks that make up the S&P 500 are hand-picked by the US Index Committee, which picks the leaders in 11 sectors. The FTSE 250 is constructed by data alone – companies need to have a premium listing of equity shares on the main market of the London Stock Exchange and must have a minimum free float of 10% (UK incorporated) or 25% (non-UK incorporated). The stocks are ordered by their market capitalisation – the top 100 stocks make up the FTSE 100 and the following 250 make up the FTSE 250.
The S&P 500 is made up of 500 stocks, while the FTSE 250 is just 250 stocks. The overall market capitalisation of the S&P 500 is significantly higher than that of the FTSE 250 because a lot of the companies in the FTSE 250 are smaller. The market cap of the S&P 500 is $36.7 trillion (£29.74 trillion), compared with the market cap of the FTSE 250, which is £419 billion.
As we mentioned above, the S&P 500 is worth more than 70 times the value of the FTSE 250. It holds twice the number of stocks.
The S&P 500 has a better diversified set of stocks. It has a lot of technology stocks, making up around 15% of the index, but it’s well spread across a number of sectors. The FTSE 250 has a number of financial companies and a small number of health care, utilities and communication stocks.
If you’re looking for diversification, you might decide to invest in both indices. This gives you additional global exposure.
These trading apps allow you to invest in companies within the indices directly or to invest in funds or ETFs.
Here are some of the best performing FTSE 250 and S&P 500 funds according to justETF:
| Fund | Icon | 5-year performance (to February 2024) | 1-year performance (to February 2024) | Link to invest |
|---|---|---|---|---|
| Vanguard FTSE 250 UCITS ETF Distributing (VMID) |  | 15.50% | -0.37% | Invest with XTBCapital at risk |
| Invesco FTSE 250 UCITS ETF (S250) |  | 14.69% | -0.68% | Capital at risk |
| Xtrackers FTSE 250 UCITS ETF 1D (XMCX) |  | 14.21% | -0.93% | Capital at risk |
| iShares FTSE 250 UCITS ETF (MIDD) |  | 13.46% | -0.89% | Invest with eToroCapital at risk |
| HSBC FTSE 250 UCITS ETF GBP (HMCX) |  | 13.00% | -1.29% | Capital at risk |
| Fund | Icon | 5-year performance (to February 2024) | 1-year performance (to February 2024) | Link to invest |
|---|---|---|---|---|
| Invesco S&P 500 (SPXP) | | 100.34% | 16.39% | Invest with XTBCapital at risk |
| Xtrackers S&P 500 Swap (XSPX) | | 99.39% | 15.91% | Invest with XTBCapital at risk |
| Vanguard S&P 500 (VUSA) | | 97.44% | 15.78% | Invest with XTBCapital at risk |
| iShares Core S&P 500 (CSP1) | | 97.42% | 15.78% | Invest with XTBCapital at risk |
| SPDR S&P 500 ETF (SPX5) |  | 97.09% | 15.74% | Capital at risk |
| HSBC S&P 500 (HSPX) | | 96.87% | 15.39% | Capital at risk |
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
The S&P 500 has performed better historically, but that doesn’t mean that it’s going to do well in the future. But why choose? Investing in both the FTSE 250 and the S&P 500 would give you diversification across lots of sectors as well as let you invest in lots of different-sized companies across the globe.
If you do wish to choose between them, choose one that’s got exposure to the types of stocks you’re interested in – the FTSE 250 has a lot of defensive stocks, like consumer staples and financial services, while the S&P 500 has a lot of technology, industrial and healthcare stocks.
| FTSE 250 | S&P 500 | ||||
|---|---|---|---|---|---|
 | Centrica |  | Apple | ||
 | Tritax |  | Microsoft | ||
 | Unite Group |  | Amazon | ||
 | Harbour Energy |  | Facebook Inc A | ||
 | Convatec |  | Alphabet Inc A (Google) |
These trading apps allow you to invest in companies within the indices directly or to invest in funds and ETFs.
The FTSE 250 and the S&P 500 are both popular stock market indices to invest in. Investors typically choose to invest in an index with an index fund. These are designed to reflect the performance of the index, either by replicating it or by choosing similar stocks, or a mixture of the two.
Whichever you choose, you’ll get a well-diversified range of shares across a lot of sectors and investment types.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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