This is what £ 1,000 invested at FTSE 250 a year ago.

He Ftse 250 The index of medium -sized companies does not always obtain the same level of attention as the blue chip Ftse 100.

But I have some FTSE 250 actions and I like the fact that emerging companies can offer growth prospects that could be more difficult to find when observing mature companies.

Pooring performance than FTSE 100

So, if I had put £ 1,000 at FTSE 250 a year ago, what would the investment be worth?

During the last 12 months, the index has increased by value by 8%.

Therefore, if an investor had put £ 1,000 in 12 months ago, it should now be worth around 1,080. That is not bad, in my opinion, but it is also significantly below the capital growth of 13% achieved during that period by FTSE 100.

There are also dividends. The performance is currently 3.3%. Again, I do not feel bad, although not as attractive as the 3.6% currently offered by FTSE 100.

Why don't I buy the index

It is assumed that the FTSE 250 contains growing companies, so what could explain its recent lower performance versus the blue chip index?

All companies face risks, but smaller companies can lack resources and experience to manage them, as well as mature companies that have existed for decades (or in some cases for centuries).

In addition, when a FTSE 100 business loses enough value, it starts at FTSE 250 and vice versa.

Therefore, the smallest index loses some companies that have increasing prices of shares, while FTSE 100 companies that decrease well enough move towards FTSE 250. Occaus It is an example.

That means that the FTSE 250 almost by design has some disadvantages compared to the largest index.

But the main reason why I do not invest directly (for example, through a background) is the same for both: I prefer to try to find individual actions that I think they can do better than the index in general.

Is that possible? Yes, but it is not necessarily as easy as it may seem.

In the wrong lane

As an example, consider a part that used to have: Hollywood bowl (LSE: Bowl).

During the past year, its price has fallen by 5%, which has a substantial performance of the index. Its 4.3% dividend yield is better, but even considering that, an investor would have made it worse to put £ 1,000 in Hollywood Bowl shares a year ago that FTSE 250 in general.

However, the business is profitable and growing easily, thanks to both your United Kingdom business and rapid expansion in Canada.

Is this a short -term sharing performance problem, then?

No. For five years, the price of Hollywood Bowl shares has lost 1%. On the other hand, during that period, FTSE 250 in general has dropped 4%, so Hollywood Bowl has done a little better in relative terms (although not much, frankly).

With a great demand for customers, an extensive network of bowling lanes (and some miniature golf sites) and a proven business model, I see a lot that I like about Hollywood Bowl.

But a risk is a weak economy that damages consumer spending on leisure activities such as bowling. So, although I like the investment case, the current price / profit ratio of 16 is a little high to get my attention. I will not invest again.