The FTSE 250 is a great place for individuals to go shopping for both growth and dividend shares. But with literally hundreds of companies to choose from, the index can be a tough place for new investors to navigate.
With this in mind, here’s a selection of three top shares to consider when starting off.
Diversification is an important feature of any portfolio. So these FTSE 250 stocks span multiple industries and provide exposure to multiple regions, providing investment opportunities while also spreading out risk.
As well, this portfolio provides a balance of growth, value, and passive income. The first two phenomena can deliver strong capital gains over time, while the final one can provide a stable stream of dividends.
Growth
The Allianz Technology Trust (LSE:ATT) provides investors with extra diversification straight off the bat. Like any investment trust, it invests in a basket of other assets, in this case tech-focused businesses (as its name implies).
In total, it has positions in 47 companies, of which the most dominant holdings are US technology beasts like Nvidia, Microsoft, Apple, and Meta. This gives investors exposure to market-leaders with strong records of innovation and considerable cash resources to keep dominating.
Allianz Technology Trust has considerable growth potential thanks to fast-growing phenomena like artificial intelligence (AI), robotics and cloud computing. But be aware that its performance could be especially volatile during economic downturns.
Value
Commercial broadcaster ITV (LSE:ITV) offers solid value based on both predicted earnings and expected dividends.
For 2025, its price-to-earnings (P/E) ratio is 8.4 times, well below the FTSE 250 average of 12.9 times. Meanwhile, its corresponding dividend yield of 6.3% blows the index average of 3.6% to smithereens.
Okay, some low valuations often reflect a company’s high risk profile and/or poor growth prospects. In the case of ITV, it faces severe competitive pressures, and especially from streaming services like Netflix and Amazon‘s Prime.
But I think these dangers are more than baked into the broadcaster’s share price. In fact, I’m encouraged by the soaring popularity of its own ITVX streaming platform. Its ITV Studios production arm also has considerable profits opportunities as demand for content heats up.
Dividends
One of the best categories of shares to consider for reliable passive income are real estate investment trusts (REITs). In exchange for tax perks, these trusts are obligated to pay at least 90% of annual rental earnings out to shareholders.
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 doesn’t guarantee a market-beating dividend income for investors, though. If earnings fall — for instance, on slumping occupancy levels or rent collection issues — dividends could suffer badly.
But I believe Target Healthcare (LSE:THRL) carries far lesser risk to investors. Its focus on the defensive residential care home sector means rental income remains ultra stable across the economic cycle. What’s more, its tenants are locked down on long-term contracts (the weighted average unexpired lease term here was 26.1 years as of December).
The forward dividend yield here stands today at a tasty 6.2%.
This post was originally published on Motley Fool
