Constructing a diversified portfolio permits traders to unfold danger in addition to goal market-beating returns. Somebody who invested £20k equally 5 years in the past on this specific FTSE 100 share and exchange-traded fund (ETF), for example, would have greater than doubled their cash to £45,493.

I believe these London-listed shares stay prime investments to think about. Right here’s why.

A prime fund

A mix of hovering tech earnings, sustained financial assist, and a rebounding US economic system has pushed the S&P 500 via the roof since 2020. Over the previous 5 years, the index-linked fund iShares Core S&P 500 ETF (LSE:CSPX) has delivered a median annual return of 14.8%.

Admittedly there’s extra danger to purchasing US-focused funds like this right now. It is because growth-sapping and inflation-stoking commerce tariffs launched by President Trump could possibly be coming.

Intelligence supplier S&P International thinks US tariffs on Canada and Mexico alone will increase client price inflation (CPI) by 0.5% to 0.7%. That’s assuming stated tariffs persevered via 2025.

S&P additionally thinks US actual GDP over the subsequent yr can be 0.6% decrease if new commerce taxes are launched, with the Federal Reserve pausing deliberate charge cuts sooner than anticipated.

But regardless of this risk, I’m nonetheless assured concerning the S&P 500 wanting forward. Whereas previous efficiency isn’t all the time a dependable indicator, the index has been resilient regardless of previous macroeconomic and geopolitical turmoil.

Since February 1995, the S&P 500 has appreciated by a whopping 1,160%. I consider it’ll proceed hovering over the subsequent 30 years too.

For one, it nonetheless offers vital publicity to progress themes like elevated digitalisation, the rising inexperienced economic system, rising healthcare demand, and the monetary providers growth. A considerable weighting of multinational large-cap shares additionally makes it much less reliant on a robust US economic system to drive earnings than a mid-cap tracker is.

Lastly, the S&P 500’s distinctive mixture of innovation champions and established trade leaders offers progress potential in addition to resilience over the long run.

Sport on

Investing in particular person shares doesn’t present safety via diversification like an ETF. However it will probably additionally ship superior returns if inventory pickers select correctly.

Take Video games Workshop (LSE:GAW), for instance. Since 2020, the tabletop gaming specialist has delivered a formidable common annual return of 18.3% as gross sales have stored hovering.

Because it opened its first store within the late ’70s, the fantasy wargaming passion has turn into a multi-billion-pound trade. And thru its Warhammer line of merchandise — which it has been cultivating for nearly 40 years — Video games Workshop has turn into the undisputed market chief.

That is mirrored within the premium costs of its fashions and different paraphernalia, and consequently its monumental revenue margins. Core gross margin was 67.5% within the six months to 1 December.

Can Video games Workshop proceed its gorgeous share price ascent, although? Some analysts have considerations, reflecting much less scope for earnings progress as what was a distinct segment passion has turn into extra mainstream.

I’ve no such considerations, nevertheless. For one factor, the enterprise continues to quickly develop its retailer community throughout the globe. It’s additionally taking steps to supercharge its royalty revenues, as illustrated by its blockbuster TV and movie cope with Amazon final yr.

Revenues progress might sluggish throughout financial downturns. Nonetheless, over the long run, I’m anticipating Video games Workshop to maintain delivering.