FTSE 250 Index Options

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FTSE 250 Index Options

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FTSE 250 Index Options

The FTSE 250 is quite similar to the FTSE 100, but it’s more like a little brother to the latter. While FTSE 100 is made up of multinational corporations, the FTSE 250 is comprised mainly of businesses with a domestic focus in the United Kingdom.

One important characteristic to pay attention to is the fact that FTSE 250 companies aren’t 250 of the highest capitalized stocks in Britain, rather they’re just stocks ranked from 101 to 350 in terms of market capitalization.

This makes the risk and returns profile of the FTSE 250 completely different to the FTSE 100.

Some of the FTSE 250 companies are as follows:

  • 3i Infrastructure
  • Acacia Mining
  • BBA Aviation
  • Caledonia Investments
  • Fidelity European Values
  • Greggs

The Bottom Line

Since the companies in the FTSE 250 are mostly mid-cap to small-cap, they can often lack informational efficiency that’s enjoyed by large-cap companies in the FTSE 100. At the same time, these mid-cap companies can also outperform their large-cap counterparts, but there is a sense of high volatility, which might be attractive for investors.

Because of their size, the FTSE 250 companies also have the potential of scaling rapidly. They also provide investors with a good option when it comes to diversifying their investment portfolio.

Beginners thinking of getting into the FTSE 250 should, as with all investing, practice caution and do their homework to further develop their skills and get familiar with the inner workings of the index.

Learn More About Investing in Indices

If you are thinking about trading the FTSE 250 companies index, it’s a good idea to increase your trading skills and market knowledge. You can get an amazing amount of info at ROInvesting’s learning center. We offer a full range of tools you can use to improve your understanding and confidence. Discover the info you need, the questions you should be asking and how our platform – the award-winning MetaTrader 4 – can help you analyse trades.

Trading the FTSE 250 companies index at ROInvesting

At ROInvesting you can trade the FTSE 250 or any number of important indices via contracts for difference, known in the industry as CFDs. CFDs are a modern trading instrument with several features requested by modern traders. Sign up now to find out more.

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HSBC FTSE 250 Index Class S – Accumulation (GBP)

Income and accumulation units

With income units, any income is paid as cash. This can be withdrawn, reinvested or simply held on your account. With accumulation units any income is retained within the fund; the number of units remains the same but the price of each unit increases by the amount of income generated within the fund. Generally accumulation units offer a slightly more efficient way to reinvest income, although many investors will choose to hold income units and reinvest the income to buy extra units.

Charges and Savings

Initial charges
Initial charge : 0.00%
Initial saving from HL : 0.00%
HL dealing charge : Free
Net initial charge : 0.00%

The initial saving applied to a fund depends on how it is priced. Dual priced funds have two different prices (a sell price and a buy price); single priced funds have a single price (at which the fund can be bought and sold).

For dual priced funds the difference between the buy and sell price is made up of the initial charge and other costs e.g. the fund manager’s dealing costs. The ‘initial saving from HL’ will reduce the buying price, but even with a full discount the buying price may still be higher than the selling price.

For single priced funds the price quoted does not include the ‘initial charge’. Any ‘initial charge’ after deduction of the ‘initial saving from HL’ will be added to the price quoted.

Please note that even where a full saving is offered a dilution levy could be applied on the way in or out of the fund.

Annual charges
Performance fee : No
Ongoing charge (OCF/TER) : 0.18% i
Ongoing saving from HL : 0.10% i
Net ongoing charge : 0.08%
There are other unit types of this fund available:
Inclusive – Income (GBP) (Net ongoing charge 0.18%)
Inclusive – Accumulation (GBP) (Net ongoing charge 0.18%)
Class C – Income (GBP) (Net ongoing charge 0.18%)
Class C – Accumulation (GBP) (Net ongoing charge 0.18%)
Class S – Income (GBP) (Net ongoing charge 0.08%)

HMRC believes that from April 2020 rebates of annual charges (such as loyalty bonuses) paid on funds held in nominee accounts, such as our Fund & Share Account, should be subject to income tax. Loyalty bonuses paid on funds in ISAs and SIPPs are unaffected, and they remain tax-free.

We believe all loyalty bonuses are tax-free and we are challenging HMRC’s interpretation. However, while we make this challenge we are paying loyalty bonuses within the Vantage Fund & Share Account net of an amount equivalent to the basic rate tax. If we are successful in our challenge we will return this money to clients. If we are unsuccessful we will use the money to pay over any amounts due to HMRC.

If loyalty bonuses are taxable then the value of our ongoing saving to you could be reduced, depending on the rate of tax you pay. The below table gives an indication of how this may affect you.

In this case, the ongoing saving is 0.10%, of which 0.00% is paid by loyalty bonus. The tax that could be payable on this loyalty bonus, and therefore the value of this saving to you, is shown below.

Non-taxpayer Basic rate taxpayer Higher rate taxpayer Additional rate taxpayer
Ongoing saving from HL: 0.10% 0.10% 0.10% 0.10%
Loyalty bonus: 0.00% 0.00% 0.00% 0.00%
Tax on loyalty bonus: 0.00% 0.00% 0.00% 0.00%
Value of ongoing saving to you: 0.1% 0.1% 0.1% 0.1%

Tax rules can change and benefits depend on individual circumstances. Please remember loyalty bonuses received on funds held in the Vantage ISA or Vantage SIPP are exempt from tax.

Also, loyalty bonuses received by overseas investors, companies and charities are not required to be paid with the deduction of tax. Therefore, if you are an overseas investor, or you represent a company or charity please let us know if you would like your loyalty bonuses paid without the deduction of an amount equivalent to the basic rate tax.

In some cases the ongoing savings are provided by our loyalty bonus. Loyalty bonuses are tax-free in an ISA or SIPP. However, they may be subject to tax in a Fund & Share Account which would, in effect, reduce their value and increase the net ongoing charge.

FTSE UK Index Series

The FTSE UK Index Series is designed to represent the performance of UK companies, providing market participants with a comprehensive and complementary set of indexes that measure the performance of all capital and industry segments of the UK equity market.

  • For more information on the complete FTSE UK Index Series, please see our spotlight page FTSE UK Index Series.
  • Contact us about licensing FTSE UK Index Series data here.

Headline indexes include:

  • FTSE 100 Index (UKX) – comprises the 100 most highly capitalised blue chip companies listed on London Stock Exchange.
  • FTSE 100 Total Return Index – measures the total return of the underlying FTSE 100 index, combining both capital performance and income (reinvested on the dividend (xd) date).
  • FTSE 100 Net of Tax Index (UKXNUK) – applies tax adjustments to dividends for the total return index calculation.
  • FTSE 250 Index – comprises mid-capitalised companies not covered by the FTSE 100, and represents approximately 15% of UK market capitalisation.
  • FTSE All-Share Index – representing 98-99% of UK market capitalisation, the FTSE All-Share index is the aggregation of the FTSE 100, FTSE 250 and FTSE Small Cap Indexes.
  • FTSE 350 Supersectors Indexes – 18 real-time industry sector indexes derived from companies in the FTSE 100 and FTSE 250 indexes.

Dividend indexes

Represent the cumulative value of ordinary declared cash dividends by the individual constituents of the underlying FTSE 100 Index, calculated on the ex dividend (xd) date and expressed in terms of index points. The indexes run for a one-year period from the trading day following the third Friday in December to the following third Friday in December.

  • FTSE 100 Declared Dividend Index (F1DIVD) – all dividends are as declared by companies and no withholding tax adjustments are made.
  • FTSE 100 Dividend Index – RDSA Withholding (F1DIV) – an exception is made for dividends paid by Royal Dutch Shell A Shares from which a 15% withholding tax is deducted.

      FTSE 100 Dividend Index RDSA Withholding Valuation

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