Best UK ETFs to watch: mid-2026 picks

ETF themes in 2026 so far

Three macro themes have shaped ETF performance and flows in 2026 more than any others. Defence spending has undergone a structural re-rating following NATO's 5% of GDP commitment, with European and global defence ETFs among the strongest performers of the year. Precious metals, particularly gold and silver, hit multi-year and all-time highs in early 2026 before a sharp correction in March and April, with gold mining ETFs among the top performers through February before giving back some gains. AI-related thematic ETFs continue to attract significant inflows, driven by the ongoing infrastructure buildout.

Against this backdrop, the core holdings that form the base of most UK investors' ETF portfolios, broad global equity and S&P 500 trackers, have also performed strongly. The FTSE 100's outperformance versus US indices year-to-date has renewed interest in UK equity ETFs after years of relative underperformance.

Core holdings: global equity and S&P 500 ETFs

For most UK investors, the foundation of an ETF portfolio is a low-cost global equity or S&P 500 tracker held in an ISA. The following remain the most widely held and traded in this category:

iShares Core MSCI World UCITS ETF

• What it tracks: approximately 1,400 large and mid-cap companies across 23 developed markets, weighted by market cap. Around 70% is in US equities, with the remainder in Europe, Japan and other developed markets.
• Why it is widely held: one of Europe's largest ETFs by AUM, with deep liquidity and a low OCF. Provides diversified developed market exposure in a single trade. The accumulating share class reinvests dividends internally, making it efficient for ISA investors who do not need income.
• 2026 context: the fund's heavy US and technology weighting has benefited from the continued AI infrastructure theme, though it did not capture the FTSE 100's specific outperformance, which required dedicated UK equity exposure.

Vanguard FTSE All-World UCITS ETF

• What it tracks: around 3,800 companies across both developed and emerging markets, providing broader geographic coverage than a developed-market-only tracker.
• Why it is widely held: the distributing share class (VWRL) is popular with income-focused investors who want dividend payments. Its inclusion of emerging markets adds exposure to China, India, Brazil and other growth economies alongside developed market equities.
• 2026 context: emerging markets have been a mixed picture in 2026, with China macro uncertainty partially offsetting stronger performance in India and South Korea. The fund's breadth means it captures more of the global opportunity set but also more of the geopolitical noise.

Vanguard S&P 500 UCITS ETF

• What it tracks: the S&P 500, the 500 largest US companies by market cap, with technology and AI-related stocks accounting for the largest share of the index at around 32%.
• Why it is widely held: one of the lowest-cost ways to access the world's most watched equity index, with a 0.07% OCF and deep secondary market liquidity on the London Stock Exchange. ISA-eligible and available in both accumulating (VUAG) and distributing (VUSA) share classes.
• 2026 context: the S&P 500 has delivered approximately 17.2% year-to-date through mid-June 2026, a little behind the FTSE 100's 18.5%, but remains the core equity holding for the majority of UK retail investors building long-term portfolios.

iShares Core S&P 500 UCITS ETF

• What it tracks: identical index to the Vanguard S&P 500 ETF above. The iShares version trades under the ticker CSP1 and is one of the largest UCITS ETFs in Europe by AUM.
• Why it is widely held: the iShares and Vanguard versions are the two most commonly compared S&P 500 trackers for UK investors. Both carry the same 0.07% OCF. The choice between them often comes down to platform availability and which has the tighter spread on any given day.
• 2026 context: the S&P 500 experienced one of its sharpest intra-year corrections in recent history in April 2026, falling to a low of around 4,982 before staging a strong recovery to trade above 7,500 by mid-June. For investors who held through the drawdown, the fund has delivered approximately 17.2% year-to-date. The episode is a useful reminder that even the world's most liquid and widely held index tracker can fall sharply in a short period, and that time in the market rather than timing the market remains the central argument for low-cost index investing.

Theme: defence ETFs

The re-rating of European and global defence stocks following the NATO 5% of GDP commitment has been one of 2026's most consequential investment themes. Defence ETFs have attracted record inflows and several new funds have launched or gained significant traction with UK investors.

VanEck Global Defence UCITS ETF   

• What it tracks: a global index of defence and aerospace companies including Lockheed Martin, Northrop Grumman, RTX (Raytheon), BAE Systems and Rheinmetall.
• Why it is widely watched: the most widely traded defence ETF for UK investors in 2026, with growing inflows. It provides global exposure across US and European defence contractors and has benefited significantly from the NATO spending commitment and ongoing geopolitical tensions.
• 2026 context: one of the strongest-performing UCITS ETF categories year-to-date through mid-2026. The structural tailwind from European defence spending increases is expected to persist as NATO members work toward new spending targets.

Theme: gold and precious metals ETFs

Gold hit all-time highs above $5,344 per troy ounce in early 2026 before a correction in March-April, recovering to around $4,700 by mid-June. Silver crossed $100 per ounce for the first time in January 2026. Both precious metals ETCs and mining equity ETFs were among the best-performing UK ETF categories in January and February 2026, before giving back gains in the April market correction. Gold mining ETFs delivered +7.8% year-to-date through to early May 2026, despite a sharp -22% drawdown in March-April, reflecting both the commodity price moves and company earnings growth.

iShares Physical Gold ETC   

• What it tracks: the spot price of gold, backed by physical gold bars held in a JP Morgan vault in London. It is an ETC (exchange-traded commodity) rather than an ETF, but functions similarly for investors.
• Why it is widely held: the most widely traded physical gold ETC listed on the London Stock Exchange. Its low OCF (0.12%), deep liquidity and sterling-denominated pricing make it the default route for UK retail investors seeking gold exposure. ISA-eligible.
• 2026 context: gold has been driven by central bank buying, geopolitical safe-haven demand and the broader precious metals bull market. Its negative correlation with equities in risk-off episodes makes it a useful portfolio diversifier, even at current elevated prices.

Global X Silver Miners UCITS ETF 

• What it tracks: a basket of global silver mining companies, providing leveraged exposure to silver prices relative to a physical silver ETC. Mining equities amplify commodity price moves, both up and down.
• Why it is widely watched: named by Morningstar as the second best-performing UK ETF in February 2026, with a 27.88% gain in a single month driven by silver's rally to above $100 per ounce. The fund exemplifies the satellite-position approach: higher potential return but significantly higher volatility than physical silver exposure.
• 2026 context: silver mining ETFs are not a core holding for most investors but have attracted attention as a high-beta play on the silver price rally. Previous silver bull markets have ended with sharp reversals, making position sizing discipline important.

Theme: AI and technology ETFs

AI-related ETFs continued to attract strong inflows through 2026 as the infrastructure buildout expanded and enterprise deployment accelerated. The theme has broadened from the hardware-focused plays that dominated 2023-24 toward a wider set of beneficiaries including software, data centres and robotics.

WisdomTree Artificial Intelligence UCITS ETF

• What it tracks: a rules-based index of companies classified as AI leaders, including pure-play AI companies and large-cap technology firms with significant AI revenue. Top holdings include Nvidia, Microsoft, Alphabet and Meta.
• Why it is widely watched: one of the most accessible AI thematic ETFs for UK ISA investors, with a manageable OCF (0.40%) relative to other thematic funds. Its rules-based methodology ensures regular rebalancing as the AI landscape evolves, rather than being frozen at a point in time.
• 2026 context: Nvidia's extraordinary Q1 FY27 results (revenue of $81.6 billion) and the continued hyperscaler AI capex commitments provide a strong fundamental backdrop. The fund's performance has been closely tied to Nvidia's weight, which is both its biggest advantage and its biggest concentration risk.

Theme: UK equity ETFs

The FTSE 100 has delivered a 12-month total return of approximately 18.5% to mid-June 2026, building on an exceptional 2025 in which the index returned 21.6% for the full year. This has renewed interest in dedicated UK equity ETFs among investors who want specific FTSE 100 exposure rather than the diluted allocation they receive in a global tracker. UK equities remain meaningfully underweighted in most global indices relative to their economic significance, which some investors view as an opportunity.

iShares Core FTSE 100 UCITS ETF 

• What it tracks: the FTSE 100 index, providing exposure to the 100 largest UK-listed companies including HSBC, AstraZeneca, Shell, BAE Systems and Rolls-Royce.
• Why it is widely held: one of the lowest-cost FTSE 100 trackers available, at 0.07% OCF, with deep liquidity. The distributing share class pays dividends out as cash, making it a natural choice for income investors who want to draw on the FTSE 100's approximately 3.1% dividend yield.
• 2026 context: the FTSE 100 has significantly outperformed US indices in 2026, driven by defence, mining, financial and energy stocks. Investors who used a global tracker as their only equity holding missed the UK-specific outperformance, illustrating the case for a dedicated allocation.

ETF quick-reference table: mid-2026

Things to consider before investing in ETFs

ETFs are generally lower-risk than individual shares due to their built-in diversification, but they are not risk-free. Key considerations include:

• Tracking error: ETFs aim to replicate an index but rarely do so perfectly. Synthetic ETFs (which use derivatives) introduce counterparty risk; physical ETFs hold the underlying assets directly.
• Currency risk: most major index ETFs are priced in USD or EUR. The sterling value of your holding will be affected by GBP/USD and GBP/EUR movements, independently of the index's performance.
• Concentration risk: broad index ETFs like the MSCI World are less concentrated than individual stocks, but the top 10 S&P 500 companies still account for around 38% of the index. Thematic ETFs like the defence or AI funds carry significantly higher sector concentration.
• OCF vs total cost: the ongoing charge figure covers the fund's management cost but not dealing commissions, platform fees or bid-offer spreads. The total cost of ownership across a year depends on how frequently you trade and your platform's fee structure.
• Distributing vs accumulating: distributing ETFs pay dividends as cash; accumulating ETFs reinvest them within the fund. For ISA investors who do not need income, the accumulating class typically provides better long-term compounding, since dividends are reinvested without incurring dealing costs or tax.