Investing in FTSE 250 stocks can be a great way to aim for substantial long-term wealth. With this in mind, here’s a top stock and a low-cost fund for savvy investors to consider today.
The growth AND dividend stock
Alongside plenty of top growth stocks, the FTSE 250 is also home to many big-paying dividend shares. Bank of Georgia (LSE:BGEO) is one I think deserves serious attention right now.
The large dividends it’s famed for could give investors a steady stream of income to invest, accelerating wealth growth through compounding. For 2025, the bank’s dividend yield sits at a fatty 5.2%. This reflects the firm’s capital distribution policy, which targest a payout ratio in the range of 30% to 50% of annual profits.
Bank of Georgia shares provide a way for investors to tap fast-growing emerging markets at the crossroads of Asia and Europe. The business, which is a leading player in Georgia’s financial services industry, also has a growing presence in Armenia.
This dual approach is giving revenues and profits growth an additional boost. In the nine months to September, pre-tax profits here leapt 44% year on year.
As these results show, Bank of Georgia has considerable appeal as a growth share as well as a dividend stock.
Since 2018, Bank of Georgia’s provided an average annual return of 16.6%. Political turbulence in the country could impact future returns. But on balance, I’m still optimistic about the company’s long-term outlook.
As ratings agency Fitch recently commented: “the elevated political and governance risks“ that threaten banks’ liquidity and local-currency stability “are reasonably balanced by the banking sector’s resilience to current political risks, with many credit metrics exceeding historical averages“.
The risk-reducing fund
Purchasing an exchange-traded fund (ETF) could be another lucrative way to target the FTSE 250. Tracker funds like this can harness the index’s growth and passive income potential while reducing investors’ risk.
The Xtrackers FTSE 250 UCITS ETF (LSE:XMCX) is one such fund I think’s worth considering. With an ongoing charge of 0.15%, it’s one of the cheapest vehicles out there tracking the UK mid-cap index.
By giving exposure to the whole FTSE 250, the fund spreads risk across hundreds of companies in different sectors and sub-sectors. To give you a flavour, some of its largest holdings include fashion house Burberry, financial services provider IG, and real estate investment trust (REIT) Tritax Big Box.
With a 3.3% dividend yield, too, and a structure than facilitates dividend distribution, it can also provide a healthy passive income for reinvestment.
The fund’s not delivered as strong a return as Bank of Georgia shares have in recent years. However, its index-tracking approach has still provided a solid annual average return of 5.7% since its creation in 2007.
Despite its risk-mitigating qualities, the fund could still underperform during broader stock market downturns. Yet on balance, I think it could still be a great long-term asset to own in a portfolio of FTSE 250 shares.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
This post was originally published on Motley Fool
