How to invest in the FTSE 100

What’s the best FTSE 100 index fund?

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

Note: We’ve added a link next to each of these funds, which takes you to a share trading app where you can sign up to invest in that FTSE 100 fund.

Icon	Fund	5-year performance	1-year performance (to March 2023)	Link to invest
	Vanguard FTSE 100 (VUKE)	32.37%	14.59%	InvestInvestCapital at risk
	iShares Core FTSE 100 (CUKX)	31.75%	14.57%	InvestInvestCapital at risk
	Invesco FTSE 100 (S100)	30.23%	14.42%	InvestInvestCapital at risk
	HSBC FTSE 100 (HUKX)	31.54%	14.03%	InvestInvestCapital at risk
	Lyxor FTSE 100 (100D)	30.59%	14.26%	InvestInvestCapital at risk
	Xtrackers FTSE 100 (XDUK)	31.66%	14.36%	InvestInvestCapital at risk

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 FTSE 100, and how you can invest in it.

Platforms where you can invest in the FTSE 100

These trading apps allow you to invest in companies within the FTSE 100 directly or to invest in FTSE 100 funds/ETFs.

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What is the FTSE 100?

The Financial Times Stock Exchange 100 (FTSE 100 for short, which is pronounced “footsy”) 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?

You may hear investment experts talk about investing in the FTSE 100, so it’s easy to make the assumption that it is an investment fund. But it’s actually an index. Think of an index as a hypothetical portfolio, designed to monitor the performance of the assets it contains (in this case, stocks in large UK companies). As such, you can’t actually invest directly in the FTSE 100.

However, you can gain exposure to FTSE 100 companies by either buying shares in each individual company or by investing in a fund – such as an exchange traded fund (ETF) – that tracks the performance of the stocks 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 ETF, you’ll need to open an account with a trading platform or brokerage.
2. Fund your account. You need to put money in your account to buy shares or invest in a fund, either by bank transfer or using a debit card.
3. Choose your investments. Either select an investment fund or, if you want to buy stocks, do some research into the companies you’re considering. Once you know what you want, find the stocks on your platform.
4. Hit buy. It’s as simple as that.

Our expert says: Why should you invest in the FTSE 100?

"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 them crashing are also lower than average. All of this makes the FTSE 100 a decent bet if you want to manage your risk levels. 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."

George Sweeney, DipFA

Deputy editor

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 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 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 individual shares (and avoiding trading fees), you could instead invest in a FTSE 100 fund or ETF. These track the performance of the stocks in the FTSE 100.

Compare FTSE 100 trading platforms

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Product UKFST	Finder Score	Min. initial deposit	Price per trade	Frequent trader rate	Platform fees	Offer
eToro Finder AwardFree Trades	9Excellent	$100	£0 on stocks	N/A	£0		Go to site Capital at risk Platform details Compare	loading Fetching your data...
XTB Free Trades	9.2Excellent	£0	£0	£0	£0	Earn up to 4.5% interest on uninvested cash.	Go to site Capital at risk Platform details Compare	loading Fetching your data...
Hargreaves Lansdown Finder Award	8.5Great	£1	£11.95	£5.95	£0 (0.45% for funds)		Go to site Capital at risk Platform details Compare	loading Fetching your data...
interactive investor	8.4Great	£0	£3.99 (free regular investing)	£0	From £4.99 a month	Get £100 worth of free trades with an ii Trading Account by 5 April. Capital at risk. T&Cs apply. New customers only.	Go to site Capital at risk Platform details Compare	loading Fetching your data...
Freetrade Free TradesOffer	9.1Excellent	£1	£0	N/A	£0	Get a free share worth up to £100 when you sign up and deposit at least £50. T&Cs apply. Capital at risk.	Go to site Capital at risk Platform details Compare	loading Fetching your data...

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Finder Score for trading platforms

To make comparing even easier we came up with the Finder Score. Costs, features, ease and range of investments across 30+ platforms are all weighted and scaled to produce a score out of 10. The higher the score the better the platform – simple.

Pros and cons of investing in the FTSE 100

Bottom line

The FTSE 100 contains some of the best-known British brands, such as Lloyds, Rightmove 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 indices, which could be a more cost-effective way to get exposure to these stocks. Make sure you consider the fees involved and that your broker lets you invest in stocks on the London Stock Exchange.

Frequently asked questions

• What's the best way to invest in the FTSE 100?

  The most straightforward way to invest in FTSE 100 is through an investment fund, such as an ETF, that tracks the performance of stocks in the index. This option means you won’t own shares directly, but your returns will still reflect the performance of FTSE 100 companies. You can also buy shares in each individual company, but this will be much more laborious and time-consuming than investing in a fund and may incur high share-trading fees.

• Who owns the FTSE 100?

  The FTSE is owned by the London Stock Exchange Group. The FTSE 100 is one of a number of indexes that the FTSE offers and is probably the best known and most widely used. Other popular indexes include the FTSE 250, the FTSE 350 and the FTSE All-Share.

• Is the FTSE 100 an ETF?

  No. The FTSE 100 is an index. You can invest in an ETF that tracks the FTSE 100.

• Can you short the FTSE 100?

  To do this, you would need to short either individual stocks on the FTSE 100 or short an index fund that tracks the FTSE 100. Find out more about short selling in our guide.

• What's the difference between the FTSE 100 and the FTSE 250?

  The FTSE 100 is the top 100 stocks on the London Stock Exchange, while the FTSE 250 is the top 250. That means that the first 100 stocks of the FTSE 250 are the FTSE 100, plus the next 150 are featured.

• Is it better to invest in the FTSE 100 or the S&P 500?

  Neither index is better or worse – they’re simply different, as we explain in our full guide on the FTSE 100 vs S&P 500. The S&P 500 includes more companies, so is statistically more diverse. However, this means it also includes a number of higher-risk stocks than the FTSE 100. The good news is that you don’t have to choose one or the other to invest in. Instead, why not split your investment across 2 funds – one tracking the FTSE 100 and one tracking the S&P 500?

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