The post-Brexit pandemic performance of the FTSE 100 index might make you think twice about investing in UK stocks, but it doesn’t tell the whole story that is revealed by other UK stock indexes.
With the US S&P 500 index recording record highs recently, you might be wondering why the UK’s large-cap FTSE 100 index is lagging behind. The fact is, the FTSE 100 doesn’t tell the whole story about UK stocks in the post-Brexit pandemic-stricken world, so today I talk about the FTSE 250 index of mid-cap stocks and the FTSE techMARK index of UK technology companies.
What Are the FTSE 250 and techMARK Stock Indices?
The FTSE 250 index represents the 250 largest UK mid-cap companies that fall just below the FTSE 100 list of large-cap stocks. Although the constituent stocks may be regarded as medium-sized companies, many of them have an international presence.
The FTSE techMARK All-Share index represents a set of innovative and technology companies listed on the London Stock Exchange, so you might think of it as the UK’s equivalent of the Nasdaq. The techMARK 100 index is derived from the wider techMARK All-Share index.
Should You Buy FTSE 250 or techMARK Stocks Right Now?
The first of the following three charts shows how the FTSE 100 index has not yet returned to its pre-pandemic price level after being flat in the run-up to the March 2020 crash.
While nowhere near the performance of the S&P 500 and other US indices, the subsequent two charts show how the FTSE 250 and FTSE techMARK indices have surpassed the pre-pandemic price levels after already rising in the run-up to the March 2020 crash.
FTSE 100 index 5-year chart (source: London Stock Exchange)
FTSE 250 index 5-year chart (source: London Stock Exchange)
FTSE techMARK index 5-year chart (source: London Stock Exchange)
If you’d bought either of these indices at any time during the past decade, you would have made money. The trend still appears to be up, so there may still be money to be made, but remember that… the trend is only your friend until it ends.
FTSE 250 and techMARK Price Targets 2021
In the current climate, it’s hard to put hard numbers on where the lesser-known UK stock indices could go. But theoretically, they could go all the way to the moon. On a more sombre note, when the current bull market ends, the falls could be as far as 50%.
Where to Trade the FTSE 250 and techMARK Stocks
You can buy into the UK mid-cap or tech stocks story by buying the FTSE 250 or FTSE techMARK index via an ETF, contract-for-difference (CFD), spread bet, or another financial instrument with one of these brokers:
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