In the last FTSE reshuffle, St James’s Place, Games Workshop and Alliance Witan were promoted to the Footsie, while Frasers Group, Vistry (LSE:VTY) and B&M fell into the FTSE 250.
Here, five Fool.co.uk contract writers put forward their candidates for FTSE 100 promotion in 2025!
IG Group
What it does: IG Group is a global financial technology company, providing online trading platforms for clients.
By Paul Summers. At the time of writing, IG Group’s (LSE: IGG) valuation puts it near the top of the FTSE 250. While it will still take a fair bit of good news to push it into the FTSE 100, I don’t think this is beyond the realms of possibility.
Part of IG’s appeal is that it makes more money when markets are volatile. Put another way, clients are more active in times of uncertainty. With military conflicts rumbling on and many economies around the world struggling to grow as inflation bounces back, I’d say that’s where we currently are. And although IG operates in a very competitive space that is often a target for regulators, the stock remains cheap relative to the UK market as a whole. That’s despite rising over 30% in 2024.
A chunky dividend and strong balance sheet could also bring more people to invest here in 2025.
Paul Summers has no position in IG Group.
Investec
What it does: Investec is engaged in investment banking, specialised finance and wealth management, mainly in the UK and South Africa.
By Alan Oscroft. Investec (LSE: INVP) is towards the top end of the FTSE 250 market capitalisation range, so it might not have far to go to reach the FTSE 100.
And I’m seeing signs of upbeat sentiment towards banks, especially ones with international and investing banking aspects.
There’s a fall in earnings expected for the year to March 2025, so that could keep the shares low at least until we see how the next year starts off.
But from then on, forecasts show earnings growing at a pace that could drop the price-to-earnings (P/E) ratio as low as six by 2027.
The South Africa operations present some geographic risk, I think. And the tight economic outlook could keep investors away from smaller financial stocks like this with their inherent higher risks.
But if Investc can grow its dividend as predicted, I reckon a run to the FTSE 100 in 2025 might really be on.
Alan Oscroft has no position in Investec.
Monks Investment Trust
What it does: This Baillie Gifford trust invests in a diverse range of growth stocks including Microsoft and Nvidia.
By Dr James Fox. The Monks Investment Trust (LSE:MNKS) is the lesser known sibling of the Scottish Mortgage Investment Trust. Managed by Baillie Gifford, the trust is a constituent of the FTSE 250 and currently has a market cap around 25% below the smallest company on the FTSE 100.
The trust’s stock is trading at a 10% discount to its net asset value (NAV) – the value of the investments held by the trust – and that’s a good starting point. And while the trust’s largest holdings are Microsoft and Amazon – both around 4% – it also holds shares in smaller growth-oriented companies, many of which haven’t performed as well as the Magnificent Seven in recent years.
Yes, the US market is running hot and there’s a lot of volatility at the moment, but large parts of the market remain overlooked. Going into 2025, this trust’s selective growth-oriented approach could position it for outsized returns in a market driven by artificial intelligence, possible interest rate cuts, and US-led growth.
James Fox does owns shares in Monks Investment Trust.
Polar Capital Technology Trust
What it does: Polar Capital Technology Trust invests in quoted companies (mainly in the US) with long-term growth potential.
By James Beard. Due to an impressive rise in its share price over the past 12 months, Polar Capital Technology Trust (LSE:PCT) looks certain to enter the FTSE 100 at the next reshuffle. Much of this growth has come from its holdings in Nvidia and other artificial intelligence (AI) stocks. The trust also has large stakes in Microsoft, Meta Platforms and Apple.
And with the trust’s shares trading at a 10% discount to its net asset value, now could be a good time for me to buy.
But the bursting of the dot.com bubble is a reminder that the tech sector can be volatile. And it’s still unclear who the AI winners will be.
However, for those (like me) that see this new technology as a potential game-changer, this could be a good way of obtaining a wide exposure to the industry through a single investment.
James Beard does not own shares in Polar Capital Technology Trust.
Vistry
What it does: Vistry is a UK housebuilder that looks to sell to registered partners and authorities, instead of the open market.
By Stephen Wright. Vistry found itself ejected from the FTSE 100 at the end of last year when its stock crashed 56%. But I don’t think it will be too long until it has made its way back again.
The issues concern incorrect costings in its South Division. But the company has made moves to address this, including an independent investigation.
Looking beyond this, I like Vistry’s business model. Its strategy of selling to established partners means it has less exposure to the open market than its peers – and more guaranteed offtake.
That sets it apart from other UK housebuilders. But one thing it has in common with them is it’s being investigated by the Competition and Markets Authority.
I have no idea what that will unearth, which is why I’m not buying the stock. But I wouldn’t be at all surprised to see it back in the FTSE 100 this year.
Stephen Wright does not own shares in Vistry.
