FTSE 250 CAPE Valuation at 22,064
The FTSE 250, at 22,064, reflects mid‑cap strength. CAPE ratios for the 250 tend to run higher than the 100, given growth orientation. Current CAPE is ~20x, above long‑term averages of ~16x, suggesting stretched valuations.
Valuation context
At 20x CAPE, expected real returns fall to ~3–4% annually. Dividend yields around 3% provide some support, but valuations imply limited upside. Mid‑caps are more cyclical, making elevated valuations riskier.
Quality investor implications
Quality investors must be highly selective. Companies with strong balance sheets and durable advantages can still compound, but broad exposure may disappoint. The margin of safety is thin, and patience is warranted.
Conclusion
The FTSE 250 at 22,064 looks expensive relative to history. Quality investors should focus on niche leaders with genuine moats rather than broad exposure.