FTSE 250: Investing in the FTSE 250 has proven to be a powerful wealth-building strategy for long-term investors. With the index historically outperforming its larger counterpart, the FTSE 100, even a small, consistent investment could translate into substantial gains over time. A prime example? If you invest £500 monthly into the FTSE 250 and achieve its average annual return of 11%, you could be looking at a £1 million portfolio after 30 years.

This index, which is known for housing mid-cap growth stocks, has shown an 11% average annual yield since its inception. That 3% difference from the FTSE 100’s average may seem small, but when compounded over time, it makes a tremendous impact. For example, after 30 years of investing, the FTSE 250 has the potential to double the returns of its larger sibling, with a possible outcome of around £1.4 million compared to £745,000 if invested in the FTSE 100.

However, for those looking to speed up their journey to seven figures, stock-picking within the FTSE 250 might be worth exploring. Select stocks like Kainos Group (LSE: KNOS) have outpaced the index, offering a 432% total return since 2015. Diversifying into such high-growth stocks while still holding a core FTSE 250 fund could be a winning combination for many investors.

While no investment is guaranteed, the FTSE 250’s track record makes it an attractive option for those focused on long-term growth.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.