UPDATE: The FTSE 100 has just recorded its best annual performance since the financial crisis, skyrocketing nearly 18% in 2025. This surge has ignited discussions on whether savvy investors can build a £1 million portfolio through Stocks and Shares ISAs.
As a holder of FTSE 100 shares, I have personally benefited from last year’s astonishing gains. Notable companies like HSBC, Games Workshop, and Coca-Cola HBC have shown exceptional price increases, making them prime candidates for wealth generation.
Could investing in a FTSE 100 tracker fund be the key to achieving millionaire status in an ISA? Many experts express skepticism.
Why the FTSE 100’s Remarkable Leap?
The UK’s large-cap shares have enjoyed a spectacular year due to a combination of factors. Global investors have flocked to FTSE shares, drawn by their affordability and the rising interest in dividend-yielding stocks. Additionally, robust performances from the financial services, defence, and mining sectors have propelled these stock prices in 2025.
For long-term investors, the FTSE 100’s remarkable rise marks a significant turnaround following years of underperformance, averaging just 7% annual returns over the past 25 years. Unfortunately, these figures do little to inspire confidence in the potential for stock market millionaire status.
Investing in an ISA
Imagine an ISA investor who has consistently invested £500 monthly into a FTSE 100 tracker fund for the past 25 years. By retirement, they would accumulate around £405,036. While this is a respectable sum, it falls far short of the coveted million-pound mark.
It’s crucial to remember that past performance is not always indicative of future results. The FTSE 100 may continue its upward trajectory beyond the stellar returns of 2025.
A Better Path to Wealth?
For those truly aiming for life-changing wealth, diversifying with high-growth US stocks may be a more effective strategy. I have embraced this approach by investing in several S&P 500-focused exchange-traded funds (ETFs), including the iShares Edge USA Quality Factor ETF (LSE:IUQA). This ETF has delivered an impressive average annual return of 14% since its inception nearly a decade ago. If this trend continues, a £500 monthly investment over the next 25 years could result in an ISA worth approximately £1,347,913.
The fund strategically invests in US companies with a history of strong and stable earnings, including tech giants like Apple, Nvidia, and Microsoft. As the digital revolution accelerates, particularly in sectors such as AI, cloud computing, and cybersecurity, the growth potential remains substantial.
Moreover, the ETF’s diverse holdings—including financial services, consumer goods, and telecoms—offer both growth opportunities and crucial diversification.
Risks and Rewards
As with any shares-based ETF, investing in the iShares Edge USA Quality Factor ETF exposes individuals to market volatility. However, for those seeking to build significant wealth within an ISA, this strategy warrants serious consideration.
Many are asking: will 2026 be the year of the ISA stock market millionaire? With the FTSE 100 hitting 10,000 for the first time, it’s an exciting time for investors.
In this fast-moving financial landscape, staying informed is vital. Investors should continuously evaluate their strategies and consider emerging opportunities.
For more insights on investing strategies and stock recommendations, stay tuned as we continue to provide timely updates.
The time to act is now; don’t miss out on the chance to make your financial dreams a reality!
