There are a number of reasons that the FTSE 250 may outperform the FTSE 100. They include the following reasons:
- The UK vaccine speed. The UK has nearly vaccinated 20% of their population now.
Insert UK vaccination speed
- Goldman Sachs forecast 19% GDP rise for Q2
- The UK service sector is poised for a very good recovery since the potential for the end of lockdowns will mean the unloved sector can start growing again.
- The high savings rate in the UK, due to fiscal support keeping incomes during the lockdown, mean that strong demand is expected.
- The FTSE250 is a high concentration of financials and consumer services and should outperform the FTSE100
- Post Brexit: The ‘no-deal’ risk is now behind the UK
- There are good seasonals for the FTSE 250.
So, this means the FTSE 250 could be a decent buy between now and the start of June. An ETF could be a good way to expose yourself to this trade.