How to invest in the FTSE 100

Find out about the UK's most popular stock index, why investors can't get enough, and how you can invest in the FTSE 100 index.

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Even if you’re new to investing, you’ve probably heard of the FTSE 100 – the UK’s best-known stock market index. Find out why it’s popular with investors in the UK and worldwide, which stocks make up the index, and how to start investing in the FTSE 100.

How to invest in the FTSE 100

  1. Open a share dealing platform. Whether you want to invest directly in FTSE 100 stocks or invest in a FTSE 100 fund or ETF, you’ll need to open a share trading account.
  2. Fund your account. The next step is depositing money into your account to buy shares or invest in a fund, either by bank transfer or using a debit card.
  3. Choose your FTSE 100 investments. Either select a FTSE 100 fund or, if you want to buy shares, research the individual companies you’re considering. Once you know what you want, find the FTSE 100 stocks on your platform.
  4. Hit buy. It’s as simple as that.
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What is the FTSE 100?

The Financial Times Stock Exchange 100 (FTSE 100 for short, sometimes referred to as the “footsie”) is a stock market index comprising the 100 largest companies on the London Stock Exchange (by market capitalisation). This includes companies such as Barclays, BP, HSBC and Sainsbury’s.

Can you invest in the FTSE 100?

Yes, but not directly. Many experts talk about investing in the FTSE 100, but it’s not actually an investment fund, it’s an index. Think of an index as a hypothetical portfolio, designed to monitor the performance of the assets it contains (in this case, large-cap UK stocks). As such, you can’t actually invest directly in the FTSE 100.

However, you can gain exposure to the whole FTSE 100 list and companies in the index by either buying shares in each individual firm or by investing in a fund – such as an exchange-traded fund (ETF) or index fund – that tracks the performance of the FTSE 100 index.

Ways to invest in the FTSE 100

There are a couple of ways to invest in the FTSE 100:

  • Buy FTSE 100 stocks directly. You can buy individual shares from the FTSE 100 index using a brokerage or share trading platform. You could buy one share of each company to create your own portfolio of FTSE 100 stocks, or buy shares in selected companies.
  • Invest in a FTSE 100 index fund or ETF. If you want exposure to all the companies in the FTSE 100 without having to buy each stock (and avoiding trading fees), you could instead invest in a FTSE 100 fund or ETF. These track the performance of all the current stocks in the FTSE 100.

The FTSE 100 is made up of some really exciting companies, including Burberry, AstraZeneca and Abrdn. Because of its appeal, there are lots of funds and ETFs that track the index.

Investors can also choose to invest in all the individual stocks themselves, but this would take a lot of time, because the index changes regularly. You’d need to keep tabs on which stocks have moved out of the index, which have moved in, and whether any weightings need to be changed. An index fund would be much easier and could save you money on trading commissions too.

Compare FTSE 100 trading platforms

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Name Product Finder Score Min. initial deposit Price per trade Frequent trader rate Platform fees Offer Link
Finder Award
OFFER
CMC Invest share dealing account
4.4
★★★★★
£0
£0
N/A
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Earn up to £1,000 when you transfer a minimum of £25,000 into your CMC account, plus get your first 3 months free when you upgrade to Plus plan. T&Cs apply. Capital at risk.
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XTB
4.4
★★★★★
£0
£0
£0
£0
Earn up to 5.2% interest on uninvested cash.
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Capital at risk

Platform details
InvestEngine
4.4
★★★★★
£100
£0
N/A
0% - 0.25%
Get a Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine. T&Cs apply.
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Platform details
Saxo Share Dealing Account
4.3
★★★★★
£0
£3
N/A
0.12% per year
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eToro Free Stocks
4.3
★★★★★
$100
£0 on stocks
N/A
£0
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Capital at risk. Other fees apply.

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Wealthify
4.2
★★★★★
£1
£0
N/A
0.6%
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Hargreaves Lansdown Fund and Share Account
4.2
★★★★★
£1
£11.95
£5.95
£0
Get back up to £100 of online trading fees until 21 June. Capital at risk. T&Cs apply.
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Halifax share dealing account
4.1
★★★★★
£20
£9.50
£0
£36 per year
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interactive investor Trading Account
4.1
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£0
£3.99 (free regular investing)
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From £4.99 a month
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Moneyfarm
3.9
★★★★★
£500
£0
N/A
0.35% - 0.75%
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TILLIT
Not yet rated
£1
N/A
N/A
0.4%
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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.

FTSE 100 performance

You can use the chart below to track the performance of the FTSE 100:

Top FTSE 100 shares

Here’s a list of the top constituents in the FTSE 100 by market cap (as of May 2024). These top FTSE shares will shift regularly as the market moves. If you were to invest in a FTSE 100 fund or ETF, the bulk of your investment will go to these shares:

  1. Shell (SHEL)
  2. AstraZeneca (AZN)
  3. HSBC (HSBA)
  4. Unilever (ULVR)
  5. BP (BP)
  6. GSK (GSK)
  7. Relx (REL)
  8. Diageo (DGE)
  9. Rio Tinto (RIO)
  10. Glencore

Top FTSE 100 shares by trading volume

This table below shows you all the FTSE 100 shares that have recently seen a big change in trading volume. This refers to the total number of shares being bought or sold over a monthly period.

How do FTSE 100 ETFs work?

A FTSE 100 ETF is traded on stock exchanges. So unlike funds, the price can fluctuate throughout trading hours. Generally, ETFs are cheaper to run than funds (which is why they have low ongoing fees).

An ETF tracking the FTSE 100 also tends to be cheap because it doesn’t require much oversight. The FTSE 100 index is maintained by FTSE Russell and it’s reviewed each quarter. FTSE 100 ETFs should automatically adjust to reflect any changes.

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.

The ETF’s 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%. Your fund returns may be slightly less than the index price returns after investment charges are deducted.

Types of ETFs

Here’s a quick summary of the main types of FTSE 100 ETFs you’ll come across:

  • Market cap weighted ETFs. Most FTSE 100 ETFs will be market-cap weighted and track the performance of the index, meaning the fund is weighted more towards the companies with higher market capitalisation. However, there are some ETFs organised differently, such as the X-Trackers FTSE 100 Equal Weight UCITS ETF (XFEW). As the name suggests, it invests in all the companies in the FTSE 100 index equally. This means the performance of smaller firms will have as much of an impact as the larger stocks.
  • 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 FTSE ETF should go up.
  • 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 magnification would apply to losses.

FTSE 100 ETFs

Below are some of the most popular FTSE 100 exchange-traded funds available. They’re ranked by ongoing costs (this should be as low as possible considering each one mirrors the same investments). Just search the stock ticker on your share dealing account, keep in mind not every platform will have every FTSE 100 ETF.

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’s the best FTSE 100 index fund?

Here are some of the best-performing FTSE 100 funds according to JustETF:

Fund5-year performance (to June 2024)Link to invest
Xtrackers FTSE 100 (XDUK)Xtrackers icon38.29%Invest with HLCapital at risk
HSBC FTSE 100 (HUKX)HSBC icon38.17%Invest with XTBCapital at risk
Vanguard FTSE 100 (VUKE)Vanguard icon38.08%Invest with XTBCapital at risk
iShares Core FTSE 100 (CUKX)iShares icon38.06%Invest with eToroCapital at risk
iShares Core FTSE 100 (Dist)(ISF)iShares icon37.96%Invest with XTBCapital at risk
Invesco FTSE 100 (S100)Invesco icon36.92%Invest with HLCapital at risk
Amundi FTSE 100 (100D)amundi icon36.99%Invest with HLCapital at risk

Why should you invest in the FTSE 100?

Zoe Stabler

Finder expert Zoe Stabler answers

Investing in the FTSE 100 tends to be regarded as a relatively safe and low-risk bet – insofar as investing is ever “safe and low-risk”. No investment is risk-free.

Because it’s made up of the UK’s biggest companies, the FTSE 100 tends to include businesses that have been around a while. Companies that have a track record of solid performance. This might mean they’re not the most exciting (or potentially most rewarding) companies to invest in. But the chances of these firms crashing are also lower than average. All of this makes the FTSE 100 a decent option if you want to manage your risk. Plus, if you opt to buy shares, many FTSE 100 stocks pay dividends.

As we always bang on about, though, it’s essential to have a diverse investment portfolio. So, while a FTSE 100 tracker fund will likely feature in many investors’ portfolios, there’s no need to put all your eggs in one basket. There’s nothing stopping you from investing in the FTSE 100, while also bolstering your portfolio with an even lower-risk investment (such as bonds) and a selection of higher-risk, higher-reward assets (like US tech stocks).

Pros and cons of investing in the FTSE 100

Pros

Cons

  • You can’t beat the market if you’re investing in an index copying market performance
  • Little international diversification — you’re only invested in UK shares
  • Less choice. Choosing top FTSE shares can mean missing out on up-and-coming UK stocks.

Bottom line

The FTSE 100 contains some of the best-known British brands, such as Lloyds, Tesco and Rolls-Royce. You can invest in all 100 stocks individually if you have the time. But it could be more expensive this way.

There are index funds and ETFs that track the FTSE 100, which could be a more cost-effective way to get exposure to these stocks. Now that you know how to invest in the FTSE 100 index, make sure you consider the fees involved and that your broker lets you invest in the London Stock Exchange.

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.

Stock market crash: How does this dip compare with others?

This live chart compares the current dip in the FTSE 100 with the 5 worst market crashes of the last 50 years.

The worst market crash of the last 50 years was the financial crisis that lasted between 2007 and 2009. The lowest point came after 344 days of trading, when the market had fallen by 46% from the point when the crash first started.

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Written by

Ceri Stanaway

Ceri Stanaway is a researcher, writer and editor with more than 15 years’ experience, including a long stint at independent publisher Which?. She’s helped people find the best products and services, and avoid the pitfalls, across topics ranging from broadband to insurance. Outside of work, you can often find her sampling the fares in local cafes. See full profile

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