Are these the best UK ETFs to watch in Q1 2026?

Investing in Exchange Traded Funds (ETFs) is a popular trading strategy, especially among newer investors. ETFs allow you to buy into a ‘basket of securities’ based on a specific sector or investing approach, without having to buy the assets individually.

Investing in an ETF allows for increased exposure to a diversified range of investments, the trading liquidity of equity instead of the rigidity of a mutual fund, and the ability to manage risk by trading futures just like an individual stock.

Of course, ETFs can contain all sorts of investments, from stocks to commodities to bonds. Other than the convenience, ETFs usually offer low expense ratios and lower broker commissions than buying the constituent assets individually.

And with the UK economy still on an uncertain footing, the diversification of ETFs appears more attractive than ever.

However, it’s worth nothing that an ETF will only ever perform as well as its underlying constituents. We do offer an ETF screener that can help to inform your investing decisions. But remember, past performance is not an indicator of future returns.

Open an account and start trading or investing in ETFs today.

Best UK ETFs to watch

Here are some of what we think might be the best UK ETFs to watch. Always do your own research.

1. iShares World Equity High Income UCITS ETF
2. iShares AI Infrastructure UCITS ETF
3. Invesco Physical Gold UCITS ETC
4. Vanguard FTSE All-World UCITS ETF
5. iShares Core MSCI Emerging Markets UCITS ETF

iShares World Equity High Income UCITS ETF

iShares World Equity High Income is designed for investors seeking regular income alongside global equity exposure. The fund focuses on companies with above-average dividend yields across developed markets, typically favouring sectors such as financials, energy, utilities and consumer staples. This tilts the portfolio away from high-growth technology and towards more mature, cash-generative businesses. That bias can help dampen volatility during periods of rising interest rates or weaker growth, though it may lag in strong growth-led rallies. Dividends are a key part of total return, making the fund attractive for income-focused portfolios, particularly when bond yields are less compelling. However, high dividend yields can sometimes reflect underlying business stress, so sector and stock selection matter. Performance tends to be more defensive than broad global equity funds, with returns driven by dividend income and modest capital growth rather than rapid re-rating.

iShares World Equity High Income UCITS ETF daily candlestick chart

iShares AI Infrastructure UCITS ETF

iShares AI Infrastructure UCITS ETF targets the physical backbone behind artificial intelligence, rather than end-user software or consumer-facing platforms. The fund typically invests in companies involved in data centres, semiconductors, networking equipment, power management and cooling technologies. This provides exposure to long-term growth in AI spending while diversifying away from a narrow group of mega-cap tech stocks. Returns are closely linked to capital expenditure cycles in cloud computing, enterprise IT and data infrastructure, which can be volatile in the short term. The fund may benefit from sustained investment in data centres, chips and energy-efficient hardware as AI workloads scale. However, valuations can be sensitive to interest rates and sentiment around the AI theme. It suits investors looking for structural growth exposure with a more industrial and hardware-focused profile than traditional tech indices.

​iShares AI Infrastructure UCITS ETF daily candlestick chart

Invesco Physical Gold UCITS ETC

Invesco Physical Gold UCITS ETC offers direct exposure to the gold price through physical bullion held in secure vaults, rather than mining equities. The fund is often used as a hedge against inflation, currency weakness and financial market stress. Gold has historically performed well during periods of falling real yields, rising geopolitical risk and concerns over fiscal sustainability. It does not generate income, so returns depend entirely on price movements. That makes it less attractive during strong equity rallies or when real interest rates are rising. However, it can play a useful diversifying role in multi-asset portfolios, as gold often behaves differently from equities and bonds. Performance can be volatile in the short term, but over longer periods it may help preserve purchasing power. The fund is typically used as a strategic allocation rather than a return-maximising asset.

Invesco Physical Gold UCITS ETC daily candlestick chart

Vanguard FTSE All-World UCITS ETF

Vanguard FTSE All-World UCITS ETF provides broad exposure to global equities across both developed and emerging markets in a single, low-cost fund. It tracks a market-cap weighted index, meaning large US companies, particularly technology firms, make up a significant share of the portfolio. This gives investors exposure to global growth trends, corporate earnings and long-term equity returns. The fund is often used as a core holding due to its simplicity, diversification and low fees. Performance closely follows global equity markets, so it will experience drawdowns during market sell-offs but has historically delivered solid long-term returns. Currency movements also influence returns for sterling-based investors. The fund does not attempt to outperform the market, instead offering a straightforward way to capture global equity beta. It suits investors with a long time horizon who can tolerate equity volatility.

Vanguard FTSE All-World UCITS ETF daily candlestick chart

​iShares Core MSCI Emerging Markets UCITS ETF

iShares Core MSCI Emerging Markets UCITS ETF offers diversified exposure to equities across developing economies, including China, India, Taiwan, South Korea and Brazil. The fund provides access to faster-growing economies with younger populations and expanding consumer markets, but also higher political, regulatory and currency risks. Sector exposure is often skewed towards technology hardware, financials and consumer discretionary, reflecting the structure of emerging market indices. Returns can be volatile, driven by global risk appetite, US dollar strength and domestic policy decisions. Periods of strong growth can deliver outsized gains, while tightening global financial conditions can weigh heavily on performance. Valuations are often lower than in developed markets, which can be attractive for long-term investors. The fund is commonly used as a satellite allocation to complement developed market equity exposure.

​iShares Core MSCI Emerging Markets UCITS ETF daily candlestick chart

How to invest or trade in UK ETFs with us

1. Learn more about UK ETFs
2. Decide if you want to trade or invest
3. Download the IG Invest app or open an account online
4. Search for your chosen ETF on our app or web platform
5. Select your opportunity
6. Place your trade or investment and monitor your position

Investing in funds gives you exposure to a diverse collection of investments including shares. The value of these investments can fall as well as rise, which means you could get back less than your original investment.

You can also trade ETFs. This takes a shorter—term approach and uses leverage. With leverage, your position size is far greater than your deposit.

With 5:1 leverage, you can put down a £1000.00 margin and trade a position of £5000.00. A 10% market movement would magnify your losses or gains by 5 times. This would result in a 50% price change in your initial margin.

Whilst negative price protection will prevent you from losing more than your initial deposit, financial markets can be unpredictable and you could lose the full amount you put in.

Learn more about the differences between trading and investing here.

Top UK ETFs summed up

Based on the current economic climate these are some of the best UK ETFs to watch as they track indices and sectors that tend to perform well in periods where interest rates are falling.

As they track a range of investments, they are a good way to diversify your portfolio, particularly in this uncertain economic environment.

These are just a small selection of some of the best UK ETFs to invest in. Always do your own research. Past performance is not a guide to future performance.

Footnotes:

¹ S&P Global, 2025

² Reuters, 2025