How to invest in the FTSE 100 Index on the ASX

Want to invest in the FTSE 100 Index? Here’s what this index looks like, and how you can add it to your ASX share portfolio right now.
The post How to invest in the FTSE 100 Index on the ASX appeared first on The Motley Fool Australia. –

Investing in ftse 100 represented by investor placing money in piggy bank in front of English flag

Most ASX investors would be familiar with our flagship S&P/ASX 200 Index (ASX: XJO). But fewer would know about the FTSE 100 Index (FTSE: UKX).

And fair enough too. The ASX 200 covers companies we all know and love (maybe love is a bit strong…), like Woolworths Group Ltd (ASX: WOW), Afterpay Ltd (ASX: APT) and Commonwealth Bank of Australia (ASX: CBA).

In contrast, the FTSE 100 can boast of companies like Unilever plc (LON: ULVR), HSBC Holdings plc (LON: HSBA) and Diageo plc (LON: DGE).

If those aren’t household names for you, I don’t blame you. But they might be in the United Kingdom. The FTSE 100 is Britain’s flagship index, much like the ASX 200 is our own. And like the ASX 200, the FTSE 100 covers 100 of the largest companies on the London Stock Exchange.

So why might you want to invest in the FTSE 100?

Well, there are a few reasons. The first is diversification of course. The ASX is a fine market, but it represents just one country. Investing outside of Australia will always reduce your portfolio’s exposure to Australian risks and problems, such as currency movements or economic issues.

Secondly, the FTSE 100 is home to companies that don’t have any equal here on the ASX. We don’t have a global consumer staples giant like Unilever, for instance. Or a global alcohol company like Diageo (owner of many famous brands like Johnny Walker).

Vaccine maker AstraZeneca plc (LON: AZN) also calls London home, as do oil giants BP plc (LON: BP) and Royal Dutch Shell plc (LON: RDSA) (LON: RDSB). The FTSE even has a tobacco giant in British American Tobacco plc (LON: BATS).

These companies might not be everyone’s cup of English breakfast tea, but there’s no doubt they are very different to the ASX’s largest holdings.

Finally, the FTSE is also known as an index of dividend heavyweights, much like the ASX is. Even after a tumultuous year, the index currently has a trailing dividend yield of 2.3%.

How to invest in the FTSE 100 on the ASX

Many ASX brokerage platforms offer the opportunity to buy UK-listed shares, including those from the big ASX banks for a start.

But there’s another (some might say easier) path to the FTSE 100.

The ASX is home to an exchange-traded fund (ETF) that exclusively tracks the FTSE 100. It is the BetaShares FTSE 100 ETF (ASX: F100). This ETF mirrors the index and holds all 100 of its constituents, including the companies mentioned above. It charges a management fee of 0.45% per annum for the privilege. So if you want to invest in the FTSE 100 Index, that’s probably your easiest option.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Sebastian Bowen owns shares of Betashares FTSE 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Diageo, HSBC Holdings, and Unilever. The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post How to invest in the FTSE 100 Index on the ASX appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!