The FTSE 100 would possibly get a lot of the consideration from buyers. However investing in a broad choice of FTSE 250 shares is perhaps a greater approach to attempt to construct long-term wealth.

Why? Nicely, over the long run, London’s second-most-prestigious index has delivered a a lot better return.

The FTSE 250’s composed of mid-sized corporations which can be usually in a development part. Because of this, in latest many years, the earnings of firms on this index have grown sooner than these of the extra established firms within the FTSE 100, main to raised total returns.

Since its inception in 1992, the index has delivered a median annual return of 11%. By comparability, the FTSE 100’s generated a return nearer to eight% yearly because it began within the mid-Nineteen Eighties.

Double my return

Okay, the hole between these numbers isn’t colossal. However the energy of compounding — the place one 12 months’s positive aspects construct on the earlier 12 months’s — implies that, over time, the distinction in my wealth can grow to be substantial.

Let me reveal. Primarily based on that 11% common, a £10,000 lump sum funding in FTSE 250 shares — supplemented with a £200 month-to-month funding — would make me £827,984 after 30 years. That’s assuming all dividends I obtain are reinvested.

By comparability, an an identical funding in FTSE 100 shares would flip into £407,429 over the identical timeframe, based mostly on that 8% common annual return.

Previous efficiency is not any assure of future positive aspects. However the prospect of doubtless making double (or much more) the return is the sort of alternative that’s exhausting to disregard.

What subsequent?

So which FTSE 250 shares would I purchase? Investing in a spread of shares helps me cut back danger and make a smoother return from 12 months to 12 months.

plan could possibly be to purchase 10 totally different firms shares spanning numerous sectors and geographies. Selecting a mixture of development and revenue shares would additionally probably show a great technique.

Video games Workshop (LSE:GAW) could possibly be an incredible addition to this portfolio. It’s the world’s hottest producer of tabletop gaming merchandise, due to gold medal merchandise just like the Warhammer 40,000 system.

The recognition of this area of interest passion has exploded in latest many years, driving earnings via the roof. And the corporate has scope for additional vital development, particularly in abroad territories the place it’s increasing. It now has 548 shops spanning Europe, North America, Asia and Australasia.

A take care of Amazon to make TV and movie content material based mostly on its IP might additionally take revenues to the subsequent stage. In addition to introducing its miniatures and video games to a model new viewers, the tie-up might additionally ship vital royalties.

Nevertheless, demand for its fantasy miniatures might drop throughout financial downturns. So to offset this I’d take into consideration shopping for shares in Grainger (LSE:GRI), the UK’s largest listed residential landlord.

Property shares like this are negatively impacted by rate of interest rises. However, on steadiness, residence suppliers like this may nonetheless be reliable investments over time. Spending on lodging is one factor that tends to stay fixed throughout the financial cycle.

Grainger’s increasing too, to provide long-term earnings an additional increase. It has a improvement pipeline of round 5,000 houses so as to add to its present portfolio of 11,153.

With a continual housing scarcity driving rents skywards, I feel that is one other nice inventory to contemplate.