Index funds are a fantastic way to start building wealth in the stock market. By simply buying and holding a FTSE 250 tracker, a portfolio instantly becomes diversified across 250 British businesses, many of which are still in the early innings of their growth journeys. That’s why the FTSE 250’s known as the UK’s flagship growth index.
But how much money have investors actually made with this strategy over the last five years?
A disappointing five years
Since July 2021, the FTSE 250 index has risen a grand total of just 1.27%. Needless to say, that’s pretty mediocre, especially given higher interest rates over the last five years mean even a basic savings account has outperformed this so-called growth index.
To be fair, including dividends, the total return is closer to 20.45%. But that’s still pretty underwhelming. And it reflects the challenging economic environment many smaller British businesses have had to endure since 2021. So index investors could be forgiven for feeling a little short-changed.
But here’s the interesting part. While trackers have been treading water, some individual FTSE 250 stocks have been absolutely flying. And the best example of this is a company that many people will already know.
The stock-picker’s champion
Games Workshop‘s (LSE:GAW) the UK-based designer and manufacturer of the beloved Warhammer miniatures and hobby games franchise.
It’s a pretty niche enterprise, but one that’s cultivated exceptional popularity in recent years. And as such, with the business thriving, the stock’s generated a massive total return of 124.5% since the summer of 2021.
That’s roughly six times what passive index investors have earned. And it was enough to promote the FTSE 250 stock into the FTSE 100 in December 2024.
So the question now is, should investors still think about buying Games Workshop today?
Looking at the latest trading update, core revenues for its 2026 fiscal year (ending in May) are expected to be at least £625m. That’s up from £565m the year before, representing growth of at least 10.6%. And at the same time, pre-tax profits are expected to be no less than £265m.
But it’s what’s on the horizon that has me excited. Beyond its pipeline of new royalty opportunities through TV and video game projects, Games Workshop has just launched the 11th edition of its flagship Warhammer 40,000 franchise with a long list of new boxsets selling like hotcakes.
However, it’s important to keep an eye on the risks. The conflict in the Middle East has created supply chain disruptions for high-impact polystyrene – the plastic Games Workshop uses for its miniatures. And consequently, material prices have begun spiking, which could eat away at the group’s gross profit margins.
So where does that leave investors today?
Is it worth buying today?
Games Workshop is precisely the kind of business that makes a strong case for stock picking over index investing. The brand’s irreplaceable, and the margins are exceptional even if they’re potentially under pressure.
That’s why, even after an impressive run, I think Games Workshop shares are still worth considering today. And it’s why I’ve already added the once-FTSE 250 stock to my portfolio.
But there are plenty of other opportunities to explore right now, including…
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Zaven Boyrazian owns shares in Games Workshop.
