£5,000 invested in the FTSE 250 at the start of 2025 is now worth…
The FTSE 250 has had a bit of a lacklustre 2025. Despite its older sibling, the FTSE 100, massively outperforming by double-digits, the UK stock marketâs so-called growth engine has seemingly been left behind, rising by a measly 7.4% since the start of the year, including dividends.
That means a £5,000 initial investment is now only worth around £5,369. And yet, for some stock pickers, the story has been quite different.
Take Anglo-Eastern Plantations (LSE:AEP) as a prime example. Shares of the palm oil producer have more than doubled, rising by roughly 110% since the start of the year. In terms of money, a £5,000 investment in January is now worth £10,500. And thatâs before counting dividends.
So why is the FTSE 250 as a whole underperforming? And can Anglo-Eastern shares potential double again in 2026?
Whatâs happening to FTSE 250 shares?
The FTSE 250âs underwhelming performance as a whole essentially boils down to a lack of investor appetite for UK-focused companies. With uncertainty ravaging the British economy, investors are withdrawing their money from UK equity funds at a record pace, dragging down valuations.
The private equity sector has certainly taken notice, triggering an avalanche of takeover attempts â many of which are proving successful. In total, there have been roughly £28bn worth of completed or pending acquisitions since January. And with very few IPOs to offset this impact, the FTSE 250 shrinks with each takeover.
A hidden opportunity?
As a global commodities business, Anglo-Eastern hasnât been plagued by British economist scepticism. Managementâs successfully been ramping up production while palm oil prices have simultaneously been rising.
The result? A 39% revenue boost over the first six months of the year, paired with a 78% surge in pre-tax profits. And looking out into 2026, this growth could continue.
Managementâs also been expanding its plantation portfolio and begun the construction of a new mill to increase its annual capacity. At the same time, Indonesiaâs Biodiesel B50 mandate is on track to be introduced in mid-2026, which is expected to increase crude palm oil consumption considerably.
In other words, demandâs expected to rise, pushing up prices even further, and paving the way for even more impressive margin expansion for Anglo-Eastern. And according to one analyst, this could send the stock price all the way to 1,700p by this time next year.
What to watch
Compared to where the shares are trading today, that translates into a potential capital gain of 27.8% paired with an extra 4.9% dividend yield â enough to turn £5,000 into £6,634.
So while Anglo-Eastern shares may not double next year, they still appear set to generate market-beating returns. Of course, forecasts are not set in stone, and there are critical risks to consider.
Stricter environmental regulations surrounding palm oil production could cause costs to rise. This adverse impact could be compounded even further if Indonesia suffers poor weather conditions that impact crop yields, or if palm oil prices suddenly reverse.
In other words, management could execute perfectly, yet the business could still be disrupted by uncontrollable external forces. Nevertheless, Anglo-Eastern Plantations remains an interesting FTSE 250 opportunity worth exploring further, in my opinion. And itâs not the only stock Iâve got my eye on right now.
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
