2025’s investment surprise: uk beats us

In 2025, it was hard to escape the emphasis on US dominance. An element of that all-pervasiveness was down to Donald Trump and the unpredictability of his actions. However, a starring role was also played by artificial intelligence (AI) and the US megacompanies associated with the technology, such as Google, and the chipmaker Nvidia. At one point in 2025, Nvidia was valued at over $5 trillion, more than the entire UK stock market.

The US stock market, as measured by the S&P 500, hit no less than 38 new highs during 2025, ending up 16.4%. However, as the graph shows, it was beaten over the year by the UK’s FTSE 100 index, which rose by 21.5%. Ironically, what helped the FTSE beat the S&P 500 last year were some of the sectors that have held it back in previous years, such as banking (over 15% of the index) and natural resources.

The banks benefitted from falling interest rates, while the mining companies gained due to sharp rises in the price of gold, silver and copper. 2025’s best performing FTSE constituent was a lesser known company: Fresnillo, a Mexico-based silver miner incorporated and listed in London, which saw its share price rise by over 430%.

Even the 5.1% outperformance of the S&P 500 by the FTSE 100 does not tell the whole story:

• In 2025, the mighty US dollar lost some of its mightiness. President Trump had wanted a weaker dollar and, by accident or design, he got it. Against a trade-weighted basket of currencies, the dollar’s value dropped by 9.4%. The pound rose 7.7% against the dollar, which meant the S&P 500’s rise was only 8.1% in sterling terms.

• The index numbers take no account of dividends, and here the UK wins again because UK shares have traditionally paid much more than their US counterparts. Add the dividends, and the total return on the FTSE 100 was 25.8%, whereas for the S&P 500 it was 17.9% (in dollars).

If there is an investment lesson to be learned from the UK and US in 2025, it is pay attention to the hard data, not the noise.