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The S&P 500’s didn’t ship the kind of ends in 2025 that traders have grown used to over the previous decade. A number of headwinds have gotten in the way in which, from renewed commerce tariffs to issues over Federal Reserve coverage.
Whereas American markets have wobbled, an index tracker nearer to residence has stolen the present.
The iShares Core FTSE 100 ETF’s (LSE: CUKX) up 13.8% yr up to now, in contrast with the S&P 500’s 9.3% acquire. That makes it one of many world’s best-performing ETFs to this point this yr.
Its high holdings by weight are a Who’s Who of British blue-chips: AstraZeneca (7.81%), HSBC (7.39%), Shell (7.14%), Unilever (5%) and Rolls-Royce (4.1%). The expense ratio is a really slim 0.07%, which suggests many of the returns are handed again to shareholders.
However it’s value noting that this yr’s stellar rise is uncommon and doesn’t occur usually. Since inception, the ETF’s delivered annualised returns of seven.41% — broadly in keeping with the common returns of the FTSE 100 (when together with dividends).
Over a decade, that works out to a cumulative return of 113.5%. Not unhealthy for a low-cost, set-and-forget fund.
A greater possibility?
Regardless of the robust displaying from the ETF, I discover myself extra drawn to a different fund solely. The Scottish Mortgage Funding Belief’s (LSE: SMT) delivered even stronger positive aspects to this point in 2025, up 14.7% yr up to now.
Extra importantly, its long-term observe file’s way more spectacular. Since September 2005, the belief has generated a exceptional 1,274% complete return. That’s equal to annualised returns of 14% a yr over the previous 20 years.
After all, previous efficiency isn’t a assure of future returns. The fund’s heavy publicity to US tech provides focus danger and international forex danger if the greenback loses worth.
However Scottish Mortgage has one thing {that a} simple FTSE 100 tracker can’t match — true international diversification.
Sure, the portfolio focuses on high-growth expertise names reminiscent of Nvidia, Microsoft and Meta. However it additionally invests in retail innovators together with Meituan and MercadoLibre. Plus, it boasts healthcare performs reminiscent of Moderna and even non-public fairness holdings together with SpaceX and Databricks.
This unfold throughout industries and geographies helps cushion the belief from region-specific dangers and exposes it to a few of the world’s most fun companies.
What it means for traders
The S&P 500‘s lengthy been thought to be the benchmark for fairness efficiency. But in 2025, it’s been left behind by a easy FTSE 100 tracker — and the extra adventurous Scottish Mortgage.
That underlines the significance of wanting past Wall Avenue when choosing shares. When constructing a portfolio with a multi-decade outlook, diversification’s essential to keep away from prolonged losses from focus danger.
For these eyeing a low-cost strategy to mirror the efficiency of the FTSE 100, the iShares ETF appears a wise possibility to think about.
However for traders who’re prepared to embrace slightly extra danger in trade for larger diversification and development potential, I believe Scottish Mortgage could possibly be a good higher fund to have a look at over the long term.
