I’m a giant fan of investing within the FTSE 250.That is the index of mid-sized UK corporations that sits beneath the FTSE 100 in measurement.

Round one third of my private portfolio is invested in FTSE 250 shares – and right here’s why.

Whereas lots of the corporations within the FTSE 100 are world leaders with enticing dividends, lots of them are additionally considerably gradual to develop.

In distinction to this, the FTSE 250 is residence to a much wider mixture of corporations which are (normally) confirmed and profitable – however nonetheless sufficiently small to ship important development.

A shopping for alternative?

Over the past 20 years, the FTSE 250 has risen by a wholesome 185%. Over the identical interval, the FTSE 100 has gained simply 66%. That’s with out dividends. Though the FTSE 100 tends to supply the next yield, it’s not sufficient to cancel out the FTSE 250’s stronger long-term efficiency.

After a little bit of a hunch in 2022 and 2023, the FTSE 250 has taken off once more over the past 12 months. The index is up by 12% since November 2023. Which means a £20,000 funding within the FTSE 250 one yr in the past can be price £22,400 in the present day, plus dividends.

The excellent news is that the index’s restoration has been pushed by sturdy earnings at many FTSE 250 corporations.

The FTSE 250’s price-to-earnings ratio (P/E) of 15 and three.4% dividend yield nonetheless don’t appear costly to me. I can see long-term worth proper now in merely investing within the index. I’d in all probability do that by means of an affordable tracker fund just like the Vanguard FTSE 250 UCITS ETF.

Nonetheless, as an energetic investor, my intention is at all times to beat the market. I can’t do this with an index tracker, which can solely ever match the market.

For that reason, I’ve been trying to find shares to think about shopping for within the FTSE 250. Right here’s one inventory I feel is price researching additional proper now.

Low cost and defensive?

We’d in the reduction of on treats after we go to the grocery store. However how usually can we in the reduction of on spending on our pets?

Pets at House (LSE: PETS) boasts a outstanding 24% share of the UK pet care market. The corporate’s enterprise mannequin consists of on-line operations, pet superstores and in-store vet and grooming providers.

This all-encompassing method helps construct buyer loyalty. Certainly, Pets’ loyalty scheme has 8m energetic members, who profit from personalised provides and reductions.

One potential danger is an ongoing competitors investigation into the UK vet sector. This might finish up crimping the profitability of enormous vet chains corresponding to Pets at House. Nonetheless, my guess is that the group’s superstore method could make it simpler to adapt to any modifications which are required.

Pets at House’s share price is down by round 40% from the 500p highs seen through the pandemic pet increase. This slowdown has left the inventory buying and selling on a 2024/25 forecast P/E of 13, with a 4.8% dividend yield.

I feel the inventory is price contemplating as a long-term purchase in the present day. I don’t have a vacant slot in my private portfolio for the time being. However after I’m subsequent ready to purchase, Pets at House will likely be on my shortlist for additional research.