Why FTSE 250 could overcome FTSE 100 for the rest of the year

During the past week, the Ftse 100 It has fallen by 8%. In contrast, the Ftse 250 It has only dropped 6%. Of course, both indices are lower during this period. But in terms of relative performance, the difference supports my suspicions. I think that FTSE 250 will continue to do better than the main index of the United Kingdom for the rest of this year.

United Kingdom versus Global Exhibition

It is reduced to the type of business contained in each index. The broader FTSE 250 is composed of smaller national companies. More of these companies trade only in the United Kingdom, or have a limited exposure to the rest of the world. The FTSE 100 contains more international businesses. Some components barely have operations in the United Kingdom, but use it as the basis for the headquarters.

As a result, FTSE 100 is more affected by the global events than FTSE 250. President Trump's tariff announcement last week is a perfect example of this. The greatest import negatively impacts companies that trade with the US. In addition, for companies that deal with China from the United Kingdom, trade terms could be even more generous since China and other nations seek to compensate for commercial deficits with the United States with more trade to other countries.

By gathering all this, the prices of the shares of some FTSE 250 companies have had a better performance than the international partners FTSE 100. I think this topic could continue, since I do not believe that rates around the world go back in the short term. It is a regime change that I think we have to be comfortable with being here to stay.

The main risk for my opinion is whether the economy of the United Kingdom begins to have a lower performance this year. In that case, companies with income abroad could be less affected than local companies.

A domestic star

To this end, an investor might want to consider buying Greggs (LSE: GRG) Actions. The well -known bakery chain with headquarters in the United Kingdom does not trade in the United States, or anywhere else in the world, except in the United Kingdom!

Of course, this does not mean that the business is not exposed to external pressures. The price of the action has dropped 40% during the last year. Part of this is due to a weakest consumer confidence. People who cut food can be attributed to the specific factors of the United Kingdom, but may also be due to the concern of what they see that happens throughout the world.

Greggs has fought with cost inflation, such as changes in the national decent salary and the contributions of the National Employer Insurance. This is still a risk in the future.

Even with all this, I still see it as an attractive action. The 2024 results showed income exceeding £ 2 billion for the first time, 11.3% more than the previous year. The underlying profits before taxes increased by 13.2%. According to the Yougov brand health survey of December 2024, it is the number one brand for the food value to take in the United Kingdom.

Given its internal exhibition and that is operating with a profitable profitable history, I think it is an idea that investors consider at this time.