Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » Should I buy a FTSE 250 index tracker for my ISA?
    News

    Should I buy a FTSE 250 index tracker for my ISA?

    userBy userJune 5, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Getty Images

    In April, global stock markets had a meltdown and lots of shares quickly went on sale. I managed to invest in a Nasdaq 100 index tracker at the time, and that has since jumped by 22%. Now, I’m wondering if I should do the same with the FTSE 250.

    Why?

    The main reason I’ve considered the mid-cap index is because it’s out of favour with investors. Indeed, it was higher at the end of 2019 than it is today!

    But if investors reassess many FTSE 250 firms’ prospects at some point, there could be lucrative gains. Especially as there’s also a 3.4% dividend yield on offer.

    But why is it struggling to push on? There appear to be a number of reasons for the stagnation. The most obvious is that many of the companies in the index tend to be more domestically focused, making it a better barometer of the UK economy than the global FTSE 100.

    Unfortunately, the UK economy hasn’t done very well in recent years. It has faced sluggish GDP growth following both Brexit and the pandemic, and persistently poor productivity is a long-running — perhaps structural — problem. 

    High inflation is challenging for consumers and businesses, while excessive regulations tend to block meaningful growth (according to the government). 

    As we know, taxes on individuals and businesses are very high, and there’s mounting pressure on the Chancellor to increase taxes further to balance the books. The Organisation for Economic Co-operation and Development (OECD) recently downgraded the UK’s growth prospects for 2025 and 2026.

    Meanwhile, UK energy bills are among the highest in the world, which piles further pressure on British industry and consumers. According to trade organisation Make UK, manufacturers’ energy bills in the UK are 46% higher than the global average.

    Finally, the mid-cap index lacks significant technology exposure, to put it mildly. Just 3.94% of it is classified as information technology, versus 51.6% for the Nasdaq 100.

    We’re living through a powerful technological revolution, which is only likely to accelerate with advancements in AI. This lack of tech makes me question the FTSE 250’s future growth prospects.

    Picking individual stocks

    Of course, there will always be lucrative opportunities within the FTSE 250. One of my best-performing UK stocks in recent years has been Warhammer maker Games Workshop, which joined the FTSE 100 last year after a long period of outperformance.

    So, rather than invest in an index tracker, I will continue to selectively consider individual mid-cap stocks. One that interests me today is Gamma Communications (LSE: GAMA), which will join the FTSE 250 later this month.

    Gamma is a telecoms and cloud services provider focused on business customers in the UK and Europe. It offers voice, data, mobile, and cloud-based communication solutions, with around 90% its revenue recurring. 

    Last year, revenue increased 11% to £580m, with operating profit jumping 34% to £95.6m. Its UK business now has over 1m active licenses, and has attracted major clients like Morrisons, Equiniti, and the AA.

    An economic downturn is a near-term risk here, as this could see businesses pause investments. But as European companies move towards more cloud-based communications solutions, Gamma looks set up for solid growth over the long run.

    With the stock trading at just 12.5 times forward earnings, I think it’s worth considering.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleThe Wise share price jumps 12% on US primary listing news
    Next Article Federal student loan interest rates fell for the first time in 5 years
    user
    • Website

    Related Posts

    7.3% and 8.6% yields! 2 dividend shares to consider in July to target a £1,200 passive income

    June 29, 2025

    1 penny stock to consider snapping up while it’s still under 10p! 

    June 29, 2025

    Meta seeks $29bn from private credit giants to fund AI data centres

    June 28, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d