Investing £3,000, or any other amount in the FTSE 100 right now might seem like a risky proposition. Indeed, the coronavirus crisis is still rumbling on, and it is likely to remain a persistent threat to the global economy for some time.
However, some FTSE 100 companies are weathering the storm better than others. One operation, in particular, stands out.
FTSE 100 leader
The Scottish Mortgage (LSE: SMT) investment trust has one of the best performance records of any London-listed investment business.
It’s easy to see why. Over the past decade, the company has owned some of the fastest-growing tech businesses in the world. Over the past few months, many of these businesses have come into their own.
For example, the firm’s second-largest holding, online retail giant Amazon, has become a lifeline for many people in the coronavirus pandemic.
Lockdowns around the world have prevented people from leaving their homes to shop. Amazon has been able to step in to fill this need at a time when many other retail businesses have been overwhelmed or forced to close.
The investment trust’s third and fourth-largest holdings, Chinese technology giants Alibaba and Tencent saw similar benefits when the Chinese economy closed earlier this year.
All of these companies have substantially outperformed the broader market in 2020. That’s helped Scottish Mortgage gain more than 10% this year. This performance means it is one of the best performing FTSE 100 stocks in 2020 so far.
Technology is becoming an increasingly important part of our everyday lives. This trend is only likely to accelerate over the next few years. For many people, technology has been a saviour in the coronavirus crisis, and the changes that have come about over the past few months may mean that we adjust the way we live forever.
This suggests that the outlook for businesses like Amazon, Alibaba and Tencent is bright. Scottish Mortgage could be one of the best ways to gain access to these companies for UK investors.
The FTSE 100 investment company also offers the benefits of diversification.
Investing in the technology sector can be quite a challenging process. Many technology businesses struggle in their early days, and a large number fail. However, there are fortunes to be made if you can buy the right companies.
As such, the best way to profit from technological change may be to own a diverse basket of stocks. The FTSE 100 investment trust offers a great way to do this at a click of a button.
Its portfolio contains a total of 89 different companies, spread across 10 different countries. It also owns several businesses in various sectors, which further reduces risk and increases the chance of a positive total return over the long run.
What’s more, shareholders are set to receive a dividend yield of 0.45%. That’s not much, but it’s better than the interest rate available on most savings accounts today.
All in all, this trust appears to offer a great way to access a globally diversified basket of tech stocks at the click of a button.
Rupert Hargreaves has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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.