Investing can feel overwhelming at times. With thousands of funds out there, how do you know which ones are actually worth your money? The good news is, you don’t need to pick individual shares or try to time the market to build a strong portfolio.
ETFs have exploded in popularity with UK investors because they make investing simple, low cost and flexible. In this guide, we’ll cut through the noise and highlight the top ETFs for 2025 covering global growth, homegrown UK companies, emerging markets and even a defensive hedge with gold.
What are ETFs?
Think of an ETF as a ready made basket of investments you can buy with just one trade. Instead of picking individual shares one by one, an ETF does the heavy lifting for you by holding a whole mix of them, sometimes hundreds all wrapped up in a single fund.
Because ETFs trade on the stock market just like regular shares, they’re easy to buy and sell. You could pick one that covers the entire UK stock market, another that invests in global tech giants, or even one that focuses on themes like clean energy, AI or emerging markets.
Why ETFs remain a smart choice for UK investors in 2025
With inflation cooling but interest rates still higher than a few years ago, UK investors are being more selective about where they put their money. Add in a shaky housing market and ongoing global uncertainty, and it’s no surprise more people are turning to ETFs as a simple, flexible way to invest.
Here’s why they continue to make sense in 2025:
- Low cost investing: ETFs typically charge far less than traditional funds. Keeping fees down means more of your returns stay in your pocket.
- Diversification without the hassle: Instead of relying on a few UK shares, one ETF can instantly spread your money across hundreds of companies or even entire regions.
- Tax friendly options: ETFs slot neatly into ISAs and SIPPs, helping you grow your investments without worrying about capital gains or dividend tax.
- Transparent and flexible: Most ETFs track an index, so you always know what you own. Plus, you can buy or sell them whenever the market’s open.
- Access to global growth themes: From UK dividend stocks to US tech, clean energy, or emerging markets, ETFs make it easy to invest in the trends shaping tomorrow.
The top 5 ETFs for UK investors in 2025
We’ve highlighted five ETFs that UK investors are turning to the most in 2025. Together they cover the essentials, global diversification, home market exposure, emerging markets growth, and even a defensive hedge with gold all in simple, low cost packages.
*This list of ‘Top ETFs’ is based on the most bought ETFs on InvestEngine’s platform. Top ETFs have been calculated by most bought (by number of clients) between July 2024 and July 2025.
Invesco FTSE All-World (Ticker: FWRG)
Provider: Invesco
Strategy: This ETF tracks the FTSE All-World Index by physically holding shares from both developed and emerging markets, giving you globally diversified exposure in a single fund.
Why consider it?
- It’s a one stop shop for global investing, giving you a slice of thousands of companies in a single trade.
- Dividends are automatically reinvested, so any returns can compound in the background without you lifting a finger.
- With a rock bottom fee of just 0.15%, it’s one of the cheapest ways to build a globally diversified core portfolio.
| Key Details | |
| Launched | 26 Jun 2023 |
| Fund Size | ~£224m |
| Ongoing Charges | 0.15% |
| Dividend Type | Accumulating |
| Region Focus | Global (Developed + Emerging Markets) |
Vanguard FTSE All-World (Ticker: VWRP)
Provider: Vanguard
Strategy: This ETF tracks the FTSE All World Index, physically holding thousands of large and mid-cap companies from both developed and emerging markets. It’s designed to give investors an easy, all in one way to own a slice of the global stock market.
Why consider it?
- A true “buy the world” fund, with over 3,500 companies across nearly 50 countries.
- Dividends are reinvested automatically (“Accumulating”), helping any returns compound over time.
- Backed by Vanguard, one of the world’s largest and most trusted ETF providers, with a low ongoing charge of 0.22%.
| Key Details | |
| Launched | 23 Jul 2019 |
| Fund Size | ~£20,986m |
| Ongoing Charges | 0.22% |
| Dividend Type | Accumulating |
| Region Focus | Global (Developed + Emerging Markets) |
iShares Physical Gold (Ticker: SGLN)
Provider: iShares (BlackRock)
Strategy: Unlike equity ETFs, this fund is backed by physical gold bullion held in secure vaults. It’s designed to track the spot price of gold, giving investors a simple and cost effective way to add exposure to the precious metal.
Why consider it?
- A straightforward way to invest in gold without the hassle of storing it yourself.
- Often used as a hedge, gold can help protect portfolios during market volatility or inflationary periods.
- Backed by BlackRock, with physical gold bars held securely in HSBC’s London vaults.
| Key Details | |
| Launched | 11 Apr 2011 |
| Fund Size | ~£12,400m |
| Ongoing Charges | 0.15% |
| Dividend Type | Does not pay dividends (non-income producing) |
| Region Focus | Physical Gold |
Vanguard FTSE Emerging Markets (Ticker: VFEG)
Provider: Vanguard
Strategy: This ETF tracks the FTSE Emerging Markets index, physically holding shares from across major developing economies such as China, India, Brazil and South Africa. It gives investors a simple, low cost way to tap into the growth of emerging markets while spreading risk across thousands of companies.
Why consider it?
- Access to faster growing economies with younger populations and rising consumer demand.
- Covers over 5,000 companies, offering broad diversification across multiple regions and sectors.
- Low ongoing charge (0.22%) compared to most active emerging market funds.
| Key Details | |
| Launched | 24 Sep 2019 |
| Fund Size | ~£2,225m |
| Ongoing Charges | 0.22% |
| Dividend Type | Accumulating |
| Region Focus | Emerging Markets (largest weights: China, Taiwan, India, Brazil) |
Vanguard FTSE 100 (Ticker: VUKG)
Provider: Vanguard
Strategy: This ETF tracks the FTSE 100 index, physically holding the 100 largest companies listed on the London Stock Exchange. That means instant exposure to familiar UK names across sectors like energy, banking, and consumer goods.
Why consider it?
- A simple, low cost way to invest in the UK’s biggest and most established companies.
- Many FTSE 100 firms are global players, giving you indirect exposure to international revenues.
- Popular with income focused investors, as the FTSE 100 is known for its strong dividend culture.
| Key Details | |
| Launched | 22 May 2012 |
| Fund Size | ~£5,400m |
| Ongoing Charges | 0.09% |
| Dividend Type | Accumulating |
| Region Focus | UK (FTSE 100 companies) |
Comparing the top 5 ETFs side by side
To help you weigh up your options at a glance, here’s how the top 5 ETFs for UK investors in 2025 compare side by side on cost, size, and focus:
| ETF Name | Ticker | Strategy | TER | Dividend Type | Launched | Region Focus | Fund Size |
| Invesco FTSE All-World | FWRG | Passive (FTSE All-World index; developed & emerging markets) | 0.15% | Accumulating | 26 Jun 2023 | Global | ~£224m |
| Vanguard FTSE All-World | VWRP | Passive (FTSE All-World index; developed & emerging markets) | 0.22% | Accumulating | 23 Jul 2019 | Global | ~£20,986m |
| iShares Physical Gold | SGLN | Passive (tracks the price of physical gold, secured in vaults) | 0.15% | Does not pay dividends | 11 Apr 2011 | Physical Gold | ~£12,400m |
| Vanguard FTSE Emerging Markets | VFEG | Passive (FTSE Emerging Markets index) | 0.22% | Accumulating | 24 Sep 2019 | Emerging Markets | ~£2,225m |
| Vanguard FTSE 100 | VUKG | Passive (FTSE 100 index) | 0.09% | Accumulating | 22 May 2012 | UK | ~£5,400m |
Best place to hold ETFs as a UK investor
One of the great things about ETFs is you can hold them in different UK accounts depending on your goals:
- Stocks & Shares ISA: Tax free growth and withdrawals, up to your annual allowance. The simplest choice for most investors.
- SIPP (Self Invested Personal Pension): Tax relief on contributions and tax free growth, but your money is locked away until retirement.
- General Investment Account (GIA): No limits, but no tax breaks either. Handy if you’ve maxed out your ISA or SIPP.
- Business Account: Lets companies put spare cash to work through ETFs.
For most people, an ISA is the easiest place to start, while a SIPP is best for retirement savings. GIAs and business accounts add flexibility once you’ve used up your main allowances.
Global vs UK ETFs: beating home bias with international ETFs
It’s natural for UK investors to stick with what they know. Big names like HSBC, BP, Shell and Tesco feel familiar, and the FTSE 100 has a reputation for generous dividends.
But the UK market is heavily tilted towards banks, oil and mining companies, and offers very little exposure to the fast growing tech and healthcare sectors that have driven global returns in recent years. That’s where global ETFs can make a big difference. By broadening your portfolio beyond the UK, you can get a slice of Apple, Microsoft and Nvidia in the US, Nestlé and ASML in Europe, or Samsung and Tencent in Asia.
You’re not just chasing growth either, you’re spreading risk. Remember, the UK makes up less than 4% of the world’s stock markets, so sticking only to domestic shares means missing out on most of what’s happening globally. The sweet spot for many investors is a mix: UK ETFs for steady dividend income from familiar names, combined with global ETFs to capture innovation and growth abroad.
Key factors to consider when choosing an ETF
Once you know you want to invest in ETFs, the next step is working out which ones actually fit your portfolio. A few details can make a big difference:
- Index tracked: Most ETFs follow an index, but the same theme can be tracked in different ways. For example, two “global” ETFs might have very different weightings towards the US or emerging markets.
- Replication method: Some ETFs physically hold the underlying shares, while others use swaps to mimic the index. Both are regulated, but some investors prefer the transparency of physical replication.
- Currency exposure: Many ETFs are global, so shifts in exchange rates can affect your returns in pounds. Some funds hedge this, while others don’t.
- Fund provider: Sticking with established names like iShares, Vanguard or Legal & General can give extra peace of mind, especially if you’re investing long term.
- Track record: Newer ETFs can be appealing, but funds with a longer history give you more data on how they’ve performed through different market conditions.
Focusing on these practical details helps you avoid surprises and pick ETFs that genuinely suit your goals, rather than just going for the first one with an appealing theme.
How to buy ETFs in the UK easily with InvestEngine
Buying ETFs in the UK is simpler than ever, and InvestEngine is built to make the process quick, flexible and low cost. You can open an account online, choose your ETFs, and invest in just a few clicks with no trading fees and no hidden charges.
Why use InvestEngine?
- No trading or platform fees: Buy and sell ETFs commission free, so more of your money stays invested (ETF costs apply).
- Flexible account options: Choose from an ISA, SIPP, GIA or Business Account all with no platform fees on DIY portfolios.
- Automate your investing: Set up a Savings Plan to invest regularly. Just pick the amount and frequency, and we’ll do the rest.
- Powerful tools: Compare ETFs side by side, track your holdings clearly, and rebalance your portfolio with ease.
Start investing in ETFs the easy way and build a portfolio that works for you, all without unnecessary costs.
In summary
ETFs remain one of the simplest and most cost effective ways for UK investors to build a well diversified portfolio in 2025. Whether it’s owning the world through an all market tracker, focusing on the FTSE 100 for steady dividends, tapping into emerging economies, or even adding gold for balance, the top picks we’ve highlighted show just how flexible ETFs can be.
The key is finding the mix that suits your goals, whether you’re growing long term wealth in an ISA, saving for retirement in a SIPP, or just starting out with a general investment account. With low costs, transparency and easy access through InvestEngine, ETFs are a practical foundation for almost any portfolio.
Important information
Capital at risk. The value of your investments may go down as well as up, and you may get back less than you invest.
ETF costs apply. If in doubt, you may wish to consult a professional adviser for guidance.
Tax treatment depends on your personal circumstances and may change in future. This article is for general information only and does not constitute financial advice.