UK investors appear to be taking a remarkably sober attitude towards market volatility that has dominated recent months, and are favouring simple, low-cost index investing rather than chasing niche themes. Money continues to flow into low-cost passive ETFs with an estimated $257.5 billion of net inflows in the first half of 2026, according to Vanguard data, setting a record-breaking pace.
In the UK specifically, funds (including ETFs) attracted over £43 billion in net new retail and institutional assets through May, predominantly driven by passive, equity-based vehicles.
While no single ranking covers every investment platform, data from major UK DIY platforms, including AJ Bell, Hargreaves Lansdown, Interactive Investor and InvestEngine, shows a remarkably consistent pattern. Low-cost global equity ETFs dominate, followed by US equity, technology and gold ETFs, while high yields and rate uncertainty drove consistent demand for government and corporate bond ETFs.
Let’s look at the top 10 most popular ETFs with UK retail investors, and ponder what each is trying to achieve, and crucially, if they are still worth buying.
| ETF | Objective | OCF |
| Vanguard FTSE All-World UCITS ETF (VWRP/VWRL) | Global developed & emerging markets | 0.22% |
| Vanguard S&P 500 UCITS ETF | Track the S&P 500 | 0.07% |
| iShares Core S&P 500 UCITS ETF | Low-cost US large-cap exposure | 0.07% |
| Invesco NASDAQ-100 UCITS ETF | Largest non-financial Nasdaq companies | 0.20-0.30% |
| iShares Physical Gold ETC | Physical gold | 0.12% |
| Vanguard FTSE Developed World ETF | Developed markets only | 0.12% |
| iShares MSCI World UCITS ETF | Developed world equities | 0.20% |
| Vanguard FTSE All-World High Dividend Yield ETF | Global dividend income | 0.29% |
| iShares MSCI ACWI UCITS ETF | Developed + emerging markets | 0.20% |
| HSBC MSCI World UCITS ETF | Low-cost developed world tracker | 0.15% |
Performance comparison
(Approximate total returns to mid-July 2026)
| ETF | 2026 YTD | 1 Year | 5 Years |
| Vanguard FTSE All-World | 8-10% | 12-15% | 80-95% |
| Vanguard S&P 500 | 7-9% | 13-16% | 105-125% |
| iShares Core S&P 500 | 7-9% | 13-16% | 105-125% |
| Invesco NASDAQ-100 | 10-14% | 15-22% | 140-170% |
| iShares Physical Gold | 24-30% | 35-45% | 95-120% |
| Vanguard FTSE Developed World | 9-11% | 13-15% | 85-100% |
| iShares MSCI World | 9-11% | 13-15% | 90-105% |
| Vanguard High Dividend | 7-9% | 11-13% | 60-75% |
| iShares ACWI | 8-10% | 12-15% | 80-95% |
| HSBC MSCI World | 9-11% | 13-15% | 90-105% |
How they compare with FTSE All-World ETFs
| Feature | FTSE All-World ETF | S&P 500 ETF | Nasdaq-100 ETF |
| Diversification | Excellent | High | Moderate |
| Countries | ~50 | US only | US only |
| Holdings | ~3,500-4,000 | 500 | 100 |
| Emerging markets | ✔ | ✖ | ✖ |
| AI exposure | High | Very high | Extremely high |
| Volatility | Medium | Medium-high | High |
| Best for | Long-term core portfolio | US growth | Aggressive growth |
What each ETF is trying to achieve
Vanguard FTSE All-World
The classic ‘one fund’ solution. It owns thousands of companies across developed and emerging markets and is widely regarded as one of the best core holdings for long-term investors.
Vanguard/iShares S&P 500
Provides exposure to America’s 500 largest companies including Microsoft, Nvidia, Apple, Amazon and Meta. It has outperformed most global indices over the last decade thanks to US technology leadership.
Invesco Nasdaq-100
Concentrated exposure to AI, cloud computing and technology leaders. Higher potential returns but significantly greater volatility.
iShares Physical Gold
Acts as a portfolio diversifier and inflation hedge. Gold has been one of the strongest-performing major asset classes during 2026 amid geopolitical uncertainty.
MSCI World ETFs
Very similar to FTSE All-World but exclude emerging markets, making them even more heavily weighted towards the US.
All-World High Dividend ETF
Designed for investors seeking income rather than maximum capital growth.
Are they still worth buying?
⭐⭐⭐⭐⭐ Vanguard FTSE All-World
Still arguably the best ETF for most UK investors. It provides instant diversification, automatically rebalances and keeps costs low.
⭐⭐⭐⭐☆ S&P 500 ETFs
Remain attractive because US companies continue to dominate AI, cloud computing and software. However, valuations are above historical averages, so future returns may be more modest than the past decade.
⭐⭐⭐⭐☆ Nasdaq-100
Excellent long-term growth potential but investors should expect much larger drawdowns during market corrections due to its concentration in mega-cap technology.
⭐⭐⭐⭐☆ Gold
Gold has already enjoyed a very strong run in 2026, so future returns may moderate. Nevertheless, many investors continue to hold 5-10% as insurance against inflation and geopolitical risks.
⭐⭐⭐⭐☆ MSCI World
An excellent alternative to FTSE All-World if you are comfortable excluding emerging markets.
⭐⭐⭐☆☆ High Dividend ETFs
Well suited to investors seeking income, but they have generally lagged broader global equity markets over longer periods.
Investor verdict
The evidence suggests UK retail investors are favouring simple, low-cost index investing rather than chasing niche themes. The Vanguard FTSE All-World ETF has become the standout ‘default’ investment across multiple UK platforms, while S&P 500 and Nasdaq-100 ETFs remain popular with investors seeking greater exposure to US technology.
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For someone building a portfolio today, a sensible approach would be:
- Core (70-90%): Vanguard FTSE All-World.
- Satellite (10-20%): S&P 500 or Nasdaq-100 for additional AI and US technology exposure.
- Diversifier (0-10%): Physical gold to help reduce portfolio volatility.
That combination keeps costs low, provides global diversification, and maintains exposure to the structural growth themes that have driven long-term returns while avoiding excessive concentration in a single market or sector.
Disclaimer: The author Steven Frazer has a personal interest in Vanguard S&P 500 and iShares Physical Gold.
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