3 FTSE 250 shares to target a 14.8% annual return
Never mind the tech stars of the US stock market. The FTSE 250 is also a great place to find wealth-boosting growth shares, in my opinion.
Take the following high-performing UK shares: Chemring Group (LSE:CHG), Baillie Gifford US Growth Trust (LSE:USA) and Lion Finance (LSE:BGEO). These mid-cap growth stocks have produced an average annual return of 14.8% during the past decade.
The question is, can these FTSE 250 heroes keep delivering stunning returns? I think they can, and believe they demand serious consideration right now.
Defence star
Global defence spending has rocketed since early 2022, lifting Chemring’s share price through the roof. This defence stock’s delivered an average yearly return of 11.9% on a 10-year horizon.
To put that into context, that’s more that double the broader FTSE 250’s corresponding return of 5.5%.
I wouldn’t bet against further stunning price gains as geopolitical tensions grow. Chemring manufactures countermeasures, sensors and explosives. And it’s thriving as Western nations rebuild their arsenals following the post-Cold War lull.
The company reported £488m worth of new orders in the first half of 2025, up 44% year on year at stable exchange rates. To meet future demand, it’s rapidly expanding production — by 2028, total explosives capacity will be 275% higher than it is today.
Despite supply chain strains and competitive threats, I’m expecting further share price growth.
Tech boom
The Baillie Gifford US Growth Trust has delivered an excellent 10.1% average annual return since late 2015. This is down to the stunning performance of the US stock market and — more specifically — the soaring tech sector.
In total, the investment trust holds 58 tech stocks including ‘Magnificent Seven’ star performers Nvidia, Meta and Amazon. It also has stakes in private companies like SpaceEx that would otherwise be off limits to private investors.
Today, more than 35% of Baillie Gifford’s trust is dedicated to tech stocks. This could cause it to underperform during economic downturns. More broadly speaking too, almost 90% of the entire product is dedicated to cyclical and sensitive industries.
Yet as we’ve seen, the trust’s strategy can also lead to supersized returns. I’m expecting it to keep delivering the goods as new tech sectors like artificial intelligence (AI), robotics and quantum computing take off.
Banking giant
Lion Finance has been one of the FTSE 250’s greatest investments since 2015. It’s delivered a 22.5% average annual return since then, more than four times greater than the index average.
The stock traded under the Bank of Georgia name until earlier this year. This reflects its emerging-market-focus which has fuelled spectacular profits (and share price) growth over the last decade. It provides banking services in Georgia, and last year it expanded into Armenia to boost future growth.
Demand for financial services is rocketing across these regions. In the second quarter, Lion Finance’s profit before one-off items rocketed 19.4% year on year, supported by a 22.5% rise in its loan book.
Lion Finance faces significant competition from Georgian rival TBC Bank. Even so, a solid economic backdrop suggests it could keep generating standout returns.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon, Chemring Group Plc, Meta Platforms, and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
