How to invest in the Financial Times Stock Exchange 100 Index

Looking to invest in one of the biggest, most established stock indices in the world? It doesn’t get much bigger than London’s FTSE 100 Index.
By: Harry Atkins
Harry Atkins
Harry joined us in 2019, drawing on more than a decade writing, editing and managing high-profile content for blue… read more.
Updated: May 24, 2021
Tip: our preferred broker is, eToro: visit & create account

We’ll walk you through all the different ways to get some exposure to the FTSE 100 Index, enabling you to make informed decisions with your money.

Where can I buy into the FTSE 100 Index?

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$1
Exclusive promotion
Our score
9.3
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Start Trading
Description:
Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.
Payment Methods
Full regulations list:

What is the FTSE 100 Index?

The Financial Times Stock Exchange 100 Index (commonly called the FTSE 100, or the “Footsie”) is a share index of the 100 largest stocks on the London Stock Exchange by market capitalisation. Some of the largest, most profitable companies in the world are tracked by the FTSE 100, such as GlaxoSmithKline and HSBC. The index represents a wide variety of different sectors and industries and has a market cap of well over £2 trillion.

Is it a good investment?

Under the right circumstances? Absolutely. You can tap into a large number of expanding companies, offering a great combination of growth potential and risk management through diversification. If you can time an investment into the FTSE 100 when the market is looking bullish, you can ride the index as it increases and realise large profits.

Just make sure to avoid a bear market, as stock indices big and small tend to suffer big losses under those conditions.

How do I invest in the FTSE 100 Index?

We propose this three-step plan that you can follow when you start your investing journey: 

  1. Choose an investment type
  2. Use our top tips to succeed
  3. Choose a platform to invest with

1. Choose an investment type

There are multiple ways to invest, depending on factors such as the relative size of transaction fees for each approach, as well as the level customer service that you want when investing. Here are some of the most popular options and a brief summary of why you might want to consider them.

ETFs

An ETF (exchange-traded fund) is an investment fund that’s traded on a stock exchange in a manner similar to an individual stock. You can trade FTSE 100 ETFs any time during regular stock market hours, giving them an edge over some other investment methods which only trade once a day when markets close. ETFs usually include numerous different assets at once, such as stocks, bonds, commodities, or all the stocks listed on an index such as the FTSE 100. An ETF can be a smart, low-cost way to start on the stock market, granting you access to a diversified portfolio of 100 blue-chip stocks along with the flexibility of being able to trade your investment at any time during the day. 

If there’s any downside to ETFs, it’s this: while diversification helps ETFs mitigate risk, it also means that investors are left holding both the best- and worst-performing stocks within a given index. More selective investors might thus choose the next investment method on our list instead.

Individual stocks

If you want to focus on just the top-performing stocks in the FTSE 100, here’s what you can do: Buy FTSE 100 index shares of all 100 stocks that the index tracks. This allows you to evaluate each stock as you go, then decide which FTSE 100 stocks you want to keep and which ones you want to sell, something you can’t do when you invest in the index as a whole. 

The problem with buying 100 individual stocks is that you must make 100 separate trades to buy each one, plus even more trades when you sell the stocks you elect not to keep. This leads to lots of transaction fees and lots of time spent trading. Beginner investors with smaller budgets and less time to burn might want to try a different approach.

Mutual funds

A FTSE 100 fund is a professionally-managed investment fund that collects money from many different investors, then invests the capital into different assets. A FTSE 100 fund (also called an index fund) is a mutual fund designed to follow the performance of the FTSE 100, and thus enables you to invest in all 100 of the FTSE 100’s stocks at once. A mutual fund is bought through a broker, or directly from the company that administers the fund. 

One drawback of a FTSE 100 fund is that it can only be bought at the end of the stock market’s trading day. Another is that mutual funds charge higher fees than ETFs do. Therefore, as a general rule, a FTSE 100 funds can work for investors who want to buy and hold for a longer stretch of time, whereas people looking to make money trading their investments in the short term would be better off with a FTSE 100 ETF.

2. Use our top tips to be a successful investor

Before you invest, check out these top tips. By keeping these in mind, you’ll be able to make smarter investment decisions and avoid taking on any unnecessary risk.

  • Do your research. When it comes to investing, you need to put in the time and the work in order to succeed. In this case, that means evaluating all the pros and cons, and whether that investment fits your goals. The next step is to build a sound investment plan, which will improve your chances of success and enable you to make calm decisions when the market becomes volatile.
  • Set a budget. The budget you set should account for your specific tolerance for risk, as well as how much money you are able to lose without experiencing difficulties. Don’t crush your confidence or your ability to make future trades by taking bigger losses than you can afford to swallow, and never invest more than you can afford to lose.
  • Select the right platform. When deciding on the right trading platform, consider factors such as the relative size of transaction fees and the level of customer service and advice you feel you need. Shop around, pick a platform, and then don’t be afraid to change your approach if you’re not getting what you want out of the experience.
  • Grow your investments gradually. You can’t master all investing concepts right away, so the size of your investments should reflect your experience level. Make smaller investments at first and reinvest any profits you make to grow your capital over time. You can always invest more as you become more experienced.
  • Think long-term. Keeping an eye on your long-term goals will help you decide when is best to cash in your profits, cut your losses, or invest more into the FTSE 100.

3. Choose a platform to invest with

OK, so you want to invest. But where do you put your money to make that happen? Here are some of the best options:

  • Brokers & trading platforms. Online brokers offer easy-to-use platforms with low prices, and very little hassle. However, online brokers don’t usually offer in-depth investment advice. So if you’re looking for a more personally-tailored customer experience, you might want to consider another option.
  • Robo advisors. Robo advisors use algorithms to execute trades, so you don’t need to be involved when it’s time to press the ‘buy’ button. Some robo advisors will also allow you to discuss your investment strategy with an actual human advisor to help you take a good approach in terms of the instructions you give the robot. Combine that available guidance with relatively low trading fees, and it’s easy to see why robo advisors are an attractive option for many investors. Just know that robo advisors are still a more hands-off investing approach than a top financial advisor will offer.
  • Financial advisors. Financial advisors offer the most investment advice to investors. They’ll look over your financial goals and explain how each investment option and decision fits with those goals. Of all investment options, financial advisors charge the most for their services. As investing can get complicated, the fees charged by financial advisors can sometimes be worth it. However, since it isn’t too difficult, a financial advisor is unlikely to be worth the money in this instance.
  • Banks. Investing through your bank grants you the convenience of having all of your financial instruments (e.g. checking account, savings account, mortgage, line of credit, and investments) in one place. The problem is that banks tend to charge high fees without providing the level of service that, say, a financial advisor offers. So other than the convenience factor, banks might not provide a level of service good enough to justify the extra expense you’ll incur.
1
Min. Deposit
$50
Exclusive promotion
Our score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.

What should I do now? 

Ready to get started? If so, simply head over to your chosen platform’s website, select the investment product you wish to buy (an ETF, individual stocks, or a mutual fund), and click buy. After you have invested your money, you’ll want to keep up-to-speed on any news affecting the UK economy, so you can react to market events to preserve your capital and make bigger profits.

Try some of our investment courses for beginners

Stocks Courses
If our Stock Markets 101 course was your introduction to stock market investing, think of the Stock Investing course as the next step, your intermediate-level guide to investing. Just remember, this is not a get-rich-quick scheme and takes time, patience, and emotional stability.
Stocks Courses
Luckily, it’s far easier to begin trading than it was in the 90s when Wall Street and big money were the only options. Get started with our introduction to stock trading. You’ll come away feeling more confident about the task ahead, while acquiring a base knowledge of all the most…

Fact-checking & references

Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.

Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Harry Atkins
Financial Writer
Harry joined us in 2019, drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the… read more.