The Motley Fool

3 ways to invest in the FTSE 100

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The FTSE 100 is the UK’s main stock market index. Made up of the largest 100 companies on the London Stock Exchange, it includes well-known UK shares such as AstraZeneca, Unilever, BP, and HSBC Holdings.

We can’t invest directly in the FTSE 100. That’s because it’s simply an index. However, there are a number of ways to get portfolio exposure to it. Here’s a look at three straightforward ways to invest in the Footsie.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!


One of the easiest ways is through exchange-traded funds (ETFs). These are securities that track the movements of an index, sector, or asset. For example, if the FTSE 100 goes up 5%, a FTSE 100 ETF will go up 5% too. ETFs trade on the stock market just like regular shares, so they’re easy to buy. However, an account with a broker is needed to invest in one.

There are a number of ETFs that track the performance of the FTSE 100, including:

  • The iShares Core FTSE 100 UCITS ETF (ticker: CUKX)

  • The HSBC FTSE 100 UCITS ETF (ticker: HUKX)

  • The Vanguard FTSE 100 UCITS ETF (ticker: VUKE)

One advantage of investing in these kinds of ETFs is that ongoing fees are very low. The HSBC FTSE 100 UCITS ETF, for example, has an ongoing fee of just 0.07% per year. On the downside, most brokers charge trading commissions to buy and sell ETFs.

Footsie index funds

Another way to invest in the FTSE 100 is through index funds. These are quite similar to ETFs in that they track the movements of indexes. However, they’re not traded on the stock market like ETFs are, which means the process of buying and selling them is a little different.

Some popular FTSE 100 index funds include:

  • The iShares 100 UK Equity Index

  • The HSBC FTSE 100 Index

  • The Legal & General UK 100 Index Trust

  • The Vanguard FTSE 100 Index

One thing to note about index funds is that overall fees are often higher than the fees for ETFs. This is due to the fact that many brokers charge higher custody fees for accounts with funds (ETFs are considered to be shares).

Invest in the FTSE 100 by buying shares

Finally, a third way to invest in the FTSE 100 is to buy individual Footsie shares, such as Unilever, Diageo, and Rightmove

Buying individual FTSE 100 stocks is a riskier approach than buying an ETF or index fund because it increases stock-specific risk. This approach is also harder work. It takes time and effort to research the best stocks to buy.

However, there are two main benefits of this approach. Firstly, investors have more flexibility in terms of portfolio construction. Don’t want to invest in oil stocks or tobacco stocks? No problem. Simply avoid stocks like Royal Dutch Shell, BP, British American Tobacco, and Imperial Brands.

Secondly, investors can potentially outperform the index itself. Pick the right FTSE 100 shares and it’s possible to generate market-beating returns.

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Edward Sheldon owns shares of Diageo, London Stock Exchange Group, Rightmove, and Unilever. The Motley Fool UK has recommended British American Tobacco, Diageo, HSBC Holdings, Imperial Brands, Rightmove, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.