5 best UK index funds to buy in 2025

Our investment experts have compared and reviewed many of the best index funds available in the UK today and you can find out which ones rank top on this page. Learn which UK index funds you may want to consider buying in 2025. 

What are the 5 top UK index funds to buy?

1. iShares Core FTSE 100 ETF (ISF)
2. iShares MSCI World SRI UCITS ETF (SUSW)
3. Fidelity Index World Fund (PIWOA)
4. FTSE U.K. All Share Index Unit Trust
5. iShares Emerging Markets Equity Index Fund (UK)

The best UK index funds, compared

1. iShares Core FTSE 100 ETF (ISF)

Key details

• Date created: April 27, 2000
• Expense ratio: 0.07%
• 5-year return: 18.4%
• Minimum investment amount: £1
• Dividend yield: 3.72%
• Risk level: High

The iShares Core FTSE 100 UCITS ETF provides investors with exposure to the 100 largest companies listed in the UK. The ETF seeks to track the performance of the FTSE 100, which comprises the 100 top UK companies, offering a diversified investment option in the United Kingdom market. 

The iShares Core FTSE 100 UCITS ETF is one of the best UK index funds and can be held in ISAs or SIPPs, making it accessible to investors wanting to utilise tax efficient investment vehicles. ISF is also priced in Sterling and traded on the LSE, meaning currency fluctuations will not interfere with returns. 

2. iShares MSCI World SRI UCITS ETF (SUSW)

Key details

• Date created: October 12, 2017
• Expense ratio: 0.20%
• 5-year return: 11.21%
• Minimum investment amount: £1
• Dividend yield: N/A
• Risk level: Moderate

The iShares MSCI World SRI UCITS ETF (SUSW) is an exchange-traded fund that tracks the MSCI WORLD SRI Select Reduced Fossil Fuel Index. This ETF exposes investors to global markets while focusing on companies that demonstrate strong environmental, social, and governance (ESG) practices and have minimal controversies. 

As an ESG fund, SUSW emphasises investing in companies that prioritise sustainability and responsible business practices. The fund’s portfolio consists of companies with outstanding ESG ratings, such as its top holdings, Tesla, Microsoft, and Home Depot, which are recognised for their contributions to renewable energy, technological innovation, and community engagement. 

3. Fidelity Index World Fund (PIWOA)

Key details

• Date created: March 03, 2014
• Expense ratio: 0.12%
• 5-year return: 9.45%
• Minimum investment amount: £25
• Dividend yield: 1.79%
• Risk level: High

The Fidelity Index World Fund aims to mirror the performance of the MSCI World index. It offers diversification by including companies from around the world, although much of the fund focuses on U.S. businesses. Some of its largest holdings include companies like Apple, Amazon, and Alphabet (Google).

While the Fidelity Index World Fund is one of the best UK index funds to buy in 2025, it’s important to consider its focus on the US market and, specifically, the tech industry. Any future downturns in the U.S. or the technology industry could result in underperformance for the fund. 

4. FTSE U.K. All Share Index Unit Trust (VUKASSA)

Key details

• Date created: April 14, 2009
• Expense ratio: 0.06%
• 5-year return: 16.12%
• Minimum investment amount: £100
• Dividend yield: 3.39%
• Risk level: High

The FTSE U.K. All Share Index Unit Trust is the best UK index fund for gaining exposure to the overall equities market in the UK. It aims to mirror the performance of the FTSE U.K. All Share Index. It provides exposure to various industries within the UK market, with a significant portion, approximately 25%, allocated to the financial sector. 

The fund holds a diversified portfolio consisting of 574 stocks. Investing in VUKASSA allows investors to participate in the growth potential of the UK market across different sectors. It offers a broad representation of the UK economy, including industries such as finance, technology, healthcare, and more. 

5. iShares Emerging Markets Equity Index Fund UK (IEEM)

Key details

• Date created: November 20, 2009
• Expense ratio: 0.21%
• 5-year return: 13.19%
• Minimum investment amount: £1000
• Dividend yield: N/A
• Risk level: High

The iShares Emerging Markets Equity Index Fund (UK) is is one of the best index funds in the UK to buy now, especially if you want exposure to emerging markets. The fund aims to mirror the performance of the FTSE Emerging Index. This index serves as a benchmark for leading companies listed in emerging markets. 

The fund holds approximately 1,850 different holdings and predominantly focuses on regions such as Asia, Latin America, the Middle East, and Africa. This diverse geographical allocation allows investors to tap into the growth potential of emerging economies across different continents.

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What is a UK index fund?

It’s a type of investment fund that aims to track the performance of a specific industry or sector. The best UK index funds invest in stocks from the United Kingdom. Other index funds traded on the UK market are also referred to as UK index funds. A UK index fund aims to replicate the returns of the index it tracks, rather than trying to outperform the market.

How much do UK index funds cost?

For most passive funds the cost is less than 0.5% per year. Each index fund charges an annual maintenance or management fee, which is referred to as the fund’s ‘expense ratio’ and given as a percentage of your investment. 

For active funds, you may have to pay 0.75% or more. That type of mutual fund is run by active managers, so you’re paying for the time and expertise of the fund managers who decide which stocks to invest in.

In addition, you may have to pay a trading fee when you buy or sell a stake in a mutual fund. Some trading platforms charge a fee each time you make an investment. This varies depending on the brokerage you use; most services don’t charge any commission, others charge a couple of pounds each time.

How to choose the right UK funds for you

Our experts ranked the best index funds based on a range of factors, from the annual running cost to the risk profile of each fund. You should use the same features to pick the mutual funds that suit your expectations and investment goals.

• Annual management fee. Each mutual fund charges an annual fee as a percentage of your investment. Passive funds tend to be cheaper, while active funds are more expensive. When you invest in UK index funds, you’re normally looking to buy and hold for a few years. Small fee differences can add up to a big variation in returns over the long term, so you should favour mutual funds with the lowest maintenance fees.
• Fund size. The more money in an index fund, the more stable its performance is likely to be. Funds with low assets under management (AUM) can rely too heavily on the performance of one or two stocks and lack the diversification investors want. 
• Index fund weighting. Each index fund tracks a stock market index, but there can be big differences in how the fund tracks its benchmark index. Pay close attention to the weighting in particular. An index fund that scales its weighting so that a larger percentage, say 10%, goes into one or two stocks is going to be far more affected by the performance of those companies than one which invests 5% in all stocks equally.
• Risk profile. Each index fund factsheet has to report its risk profile on a scale between 1 and 7, with 7 being the riskiest. This synthetic risk and reward measure (SRRI) is an industry standard that you can use to compare risk across asset management companies. Less risk is better, but many people choose to have a balance of different risk profiles in their portfolio, as the riskier ones can generate higher returns (as well as higher losses).
• Hedging and currency risk. Every index fund is denominated in a particular currency, such as GBP or USD. That means that fluctuations in the strength of that currency can act as a drag or boost on performance. If your fund is in GBP and the pound is weak relative to USD, that means the fund will underperform the same fund denominated in USD. Some index funds hedge their currency risk to avoid this, others don’t.
• Share class. Some funds generate income from dividends. For these types of funds there are two share classes: income and accumulation. The former means that any income is paid out automatically, while accumulation means the money is automatically reinvested. Accumulation is more convenient, while income means you might build up spare cash in your brokerage account. An index fund can be one or the other, while some offer a choice between both.

Are UK index funds a good investment?

Investing in the best UK index funds can be a good investment if you’re located in the United Kingdom. Many of the world’s largest funds are often based in the United States or other countries. This means for UK investors investing in overseas funds; it can become expensive. By investing in the top UK investment funds, you’ll save on currency conversion fees, which will ultimately lower your costs. 

Some of the best UK investment funds in 2025 are targeted at the UK stock market. For example, many funds track the FTSE 100, which allows you to easily invest in the leading companies listed on the London Stock Exchange. You’ll also find funds that track the wider UK economy. 

Whatever you decide to do, you’ll need to use a specific type of broker that allows you to buy the best UK index funds. You can click the blue button below to visit our selection of top-rated brokers to buy any of the funds we’ve discussed on this page. 

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