Up 13.8%! This FTSE 100 index tracker’s crushing the S&P 500 this yr!

The S&P 500’s didn’t ship the type 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 considerations 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 to this point, in contrast with the S&P 500’s 9.3% acquire. That makes it one of many world’s best-performing ETFs up to now 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 implies a lot of the returns are handed again to shareholders.

However it’s value noting that this year’s stellar rise is uncommon and doesn’t occur usually. Since inception, the ETF’s delivered annualised returns of seven.41% — broadly consistent 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 choice?

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 factors up to now in 2025, up 14.7% yr to this point. 

Extra importantly, its long-term observe record’s much more spectacular. Since September 2005, the belief has generated a outstanding 1,274% whole return. That’s equal to annualised returns of 14% a yr over the previous twenty years.

In fact, previous efficiency is rarely a assure of future returns. The fund’s heavy publicity to US tech provides focus threat and overseas forex threat if the greenback loses worth.

However Scottish Mortgage has one thing {that a} simple FTSE 100 tracker can not match — true world diversification. 

Sure, the portfolio focuses on high-growth know-how names resembling Nvidia, Microsoft and Meta. However it additionally invests in retail innovators together with Meituan and MercadoLibre. Plus, it boasts healthcare performs resembling 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 number of the world’s most enjoyable companies.

What it means for traders

The S&P 500‘s lengthy been considered 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 selecting shares. When constructing a portfolio with a multi-decade outlook, diversification’s crucial to keep away from prolonged losses from focus threat.

For these eyeing a low-cost approach to mirror the efficiency of the FTSE 100, the iShares ETF appears a wise choice to contemplate. 

However for traders who’re keen to embrace just a little extra threat in alternate for larger diversification and development potential, I feel Scottish Mortgage could possibly be a fair higher fund to take a look at over the long term.

The publish Up 13.8%! This FTSE 100 index tracker’s crushing the S&P 500 this yr! appeared first on The Motley Idiot UK.

Extra studying

• 2 FTSE 100 shares I’ll contemplate piling into if the inventory market crashes!
• Here’s how your youngsters might have a £1m Shares & Shares ISA at 30
• My high FTSE 100 inventory to contemplate for a SIPP
• Right here’s how a 40-year-old might goal a £743,338 retirement fund with UK shares
• How a lot do you want in an ISA to intention for £10,000 a month in passive revenue?

HSBC Holdings is an promoting associate of Motley Idiot Cash. Mark Hartley has positions in AstraZeneca Plc, HSBC Holdings, Scottish Mortgage Funding Belief Plc, and Unilever. The Motley Idiot UK has advisable AstraZeneca Plc, HSBC Holdings, MercadoLibre, Meta Platforms, Microsoft, Moderna, Nvidia, Rolls-Royce Plc, and Unilever. Views expressed on the businesses talked about on this article are these of the author and subsequently could differ from the official suggestions we make in our subscription companies resembling Share Advisor, Hidden Winners and Professional. Right here at The Motley Idiot we imagine that contemplating a various vary of insights makes us higher traders.

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