The FTSE 100 is a UK stock market index made up of the 100 largest companies listed on the London Stock Exchange. UK investors can invest in it by buying an ETF that tracks the index.
This guide explains what the FTSE 100 is, what affects its performance, how FTSE 100 ETFs work and the main risks to consider.
Capital at risk. The value of your investments can go down as well as up, and you may get back less than you invest. This article is for general information only and is not personal advice.
How to invest in the FTSE 100: quick answer
You cannot invest directly in the FTSE 100 index. You can invest in an ETF or fund that aims to track it.
| Step | What to do |
|---|---|
| 1 | Choose a FTSE 100 ETF |
| 2 | Choose an account, such as an ISA, SIPP, GIA or Business Account |
| 3 | Decide whether to invest a lump sum or regularly |
| 4 | Check sector, UK and currency exposure |
| 5 | Make sure it fits your wider portfolio |
What is the FTSE 100?
The FTSE 100 tracks the share prices of the 100 largest companies listed on the London Stock Exchange.
It includes companies in sectors such as:
- Banking
- Energy
- Healthcare
- Consumer goods
- Mining
- Insurance
- Industrials
Although the FTSE 100 is a UK-listed index, many of its companies earn a large share of their revenue overseas.
What affects FTSE 100 performance?
The FTSE 100 can be affected by:
- Global economic growth
- Commodity prices
- Interest rates
- Bank of England policy
- The value of the pound
- Energy and mining sector performance
- Investor demand for dividends and defensive sectors
Because many FTSE 100 companies earn money overseas, currency movements can have a meaningful impact on returns.
FTSE 100 ETFs available on InvestEngine
Examples of FTSE 100 ETFs include:
| ETF | Ticker | Exposure |
|---|---|---|
| Invesco FTSE 100 | S100 | FTSE 100 |
| Vanguard FTSE 100 | VUKG | FTSE 100 |
| iShares FTSE 100 | CUKX | FTSE 100 |
ETF costs and details can change, so check the latest fund information before investing.
ETFs featured above may include paid partners.
How to buy FTSE 100 ETFs with InvestEngine
InvestEngine is a UK-based ETF investing platform, authorised and regulated by the Financial Conduct Authority, built for long-term investors who want to create DIY ETF portfolios.
With InvestEngine, you can buy and sell FTSE 100 ETFs with 0% dealing fees and 0% platform fee on DIY portfolios. ETF costs apply.
How it works
- Create an InvestEngine account
- Choose your account type
- Search for the FTSE 100 ETF you want
- Choose how much to invest
- Set up a one-off investment or regular Savings Plan
Risks of investing in the FTSE 100
- Market risk: FTSE 100 ETFs can fall in value.
- UK concentration: the index is limited to UK-listed companies.
- Sector concentration: financials, energy, healthcare and consumer staples can dominate.
- Currency exposure: overseas revenues mean exchange rates can affect performance.
- Dividend risk: dividends are not guaranteed.
- Limited technology exposure: the FTSE 100 has less tech exposure than some US indices.
FAQs
Can you invest directly in the FTSE 100?
No. You can invest in ETFs or funds that track the FTSE 100.
Can you hold FTSE 100 ETFs in an ISA?
Yes. Eligible FTSE 100 ETFs can be held in a Stocks and Shares ISA.
Does InvestEngine charge dealing fees for FTSE 100 ETFs?
InvestEngine charges 0% dealing fees for buying and selling ETFs. DIY portfolios also have 0% platform fees. ETF costs apply.
Is the FTSE 100 only exposed to the UK economy?
No. Many FTSE 100 companies are UK-listed but earn revenue globally.
In summary
FTSE 100 ETFs give UK investors a way to invest in the UK’s largest listed companies through one fund. They can offer income and large-company exposure, but investors should understand sector concentration, currency exposure and market risk.
Capital at risk. ETF costs apply. Tax treatment depends on your personal circumstances and may change in future. This communication is for general information only and does not constitute personal advice.