FTSE 100 ETF performance in 2025

Stock price trend and valuation

• The FTSE 100 delivered a strong performance in 2025, recording total returns of roughly 22–24% including dividends.
• The index reached several record highs during the year, including breaking above 9,000 points for the first time.
• Performance compared favourably with many global equity benchmarks, particularly on a sterling-adjusted basis.

 

Key drivers of performance

• Gains were led by energy, mining, defence, and financial stocks, supported by higher commodity prices and increased government spending commitments.
• Dividend income and share buybacks played an important role, with UK-listed companies continuing to return significant cash to shareholders.
• The index benefited from relatively low starting valuations compared with US equities.

 

Periods of volatility

• Short-term swings occurred in response to global economic data, geopolitical developments, and changes in interest rate expectations.
• Some domestically focused companies underperformed, but this did not prevent the index from posting strong overall gains.

 

Sector and broader context

• The FTSE 100’s sector mix favoured more defensive and income-generating businesses, which proved attractive during periods of global uncertainty.

 

Summary

In 2025, the FTSE 100 stood out as one of the stronger-performing major equity indices, driven by dividends, value-oriented sectors, and relatively attractive valuations. For UK investors, it provided a combination of capital growth and income that compared well with global peers.