Centrica (CNA) - All you need to know
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Ways to invest in Centrica
The best and most popular method is by buying shares through an online stock broker. You can sign up, fund your account, and get started in just a few minutes. With any of the top stock brokers you can buy and sell shares easily, and many offer lots of useful beginner material to help you get started.
There are plenty of other options too. There are various funds and trusts that you can get that pool your money together with other investors and use it to hold shares in a wide range of companies. Or there are methods like CFDs, which are more suited to short term day traders. Learn more about all the different methods using the links below.
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What is Centrica?
Centrica is a UK-based utility company, offering gas and electricity services for both residential and commercial customers. Centrica is best known as the holding company that owns British Gas, the largest energy company in Britain. Although it’s fallen on tough times recently, Centrica could still present an opportunity.
Before you start, familiarise yourself with the stock market and how it works. Centrica is a utility stock, and you can learn more about what that means and what other stocks are available in our guide to the different types of investments.
How to invest in Centrica
The best way depends on what your goals are and how soon you want to see returns. There are methods where you are in control of everything, or you can delegate some of the responsibility to the professionals – in return for a fee. Below is a list of all the ways you can buy Centrica shares and you can follow the links to find more information.
- Stock brokers. The easiest and most affordable way is usually to buy shares through an online broker. Many online brokers charge just a few pounds of commission per trade, and can process your trades in a matter of seconds. The best online brokers also offer research tools to help guide your decisions.
- Mutual funds. A mutual fund lets you contribute to a pool of money in conjunction with many different people and then leave the decisions over which stocks to own to a fund manager. With all the buying power provided by investors, the fund manager can get many different stocks. If you look for a fund that has holdings in Centrica, you can get some of the benefits of owning it without the risk of pinning all your hopes on its success.
- ETFs. An exchange-traded fund, or ETF, is a fund that tracks the performance of a market or index by owning all the stocks in it. You can get access to an ETF just as you would an individual stock. ETFs are simple, low-effort vehicles, and they don’t rely on a manager making good decisions to provide a return as they automatically hold anything that’s listed on the exchange they’re following. You can find ETFs that follow a certain industry or economic sector (such as a utilities or energy ETF, in the case of Centrica).
- CFDs. You can invest in Centrica stock by trading a contract for difference (CFD). A CFD is an agreement between a buyer and a seller in which the buyer pays the seller the difference between the current value of an asset and the value of that asset on the contract’s date. Essentially, this is a way of speculating on price performance without actually owning the share itself. CFDs are favoured by traders with a short term outlook because they make it easy to jump in and out of positions quickly, and also offer additional, more advanced benefits like trading with leverage.
- Investment trusts. An investment trust is similar to a mutual fund, except the total amount of money in it is fixed. That means the only way to gain access is to buy shares in the trust from someone else – replacing the money they pooled in the trust with yours. Trusts tend to do a bit better than mutual funds but you have to put up a bigger lump sum at first.
- ISAs. An ISA (Individual Savings Account) is a tax-free savings account for UK residents that lets you allocate a portion of your income for investments. You can use that money to get shares and protect any money you make from the taxman. The total amount is limited – up to £20,000 per year in the UK – but there’s very little downside to using one and if you have the allowance it’s worth using an ISA to start with.
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