Why did these ETFs dominate 2025 and what to expect in 2026

When Index Funds Outperform Individual Stocks

In 2025, we witnessed an interesting phenomenon: while stocks of tech giants like Nvidia and Alphabet posted solid performance, some exchange-traded funds (ETFs) systematically outperformed the broader market. With over 14,000 ETFs available on the market, the challenge for investors is not finding a fund, but identifying which instruments can truly protect and grow their portfolios.

Unlike individual securities, ETFs offer instant diversification at low costs, allowing exposure to entire sectors, commodities, or global indices with a single transaction. For those planning to build a solid strategy for 2026, ignoring ETFs would mean missing concrete opportunities for returns.

The Three Winners of 2025: An Unexpected Analysis

According to Barchart data, three ETFs surpassed the 50% gain threshold in the last 12 months. What’s surprising is that two of these have little to do with the tech sector.

The first protagonist is the SPDR Gold Shares ETF (GLD), managed by State Street Global Advisors. This instrument represents one of the largest physically-backed gold funds, with $148.2 billion in assets under management. The approach is extremely pragmatic: the fund simply holds physical gold and tracks its price. When gold rises, the fund’s value increases accordingly.

The crucial feature is that GLD is based on actual physical gold, not futures contracts. This makes it the most direct way to gain exposure to a physical gold ETF without the complications of direct custody. The annual fee of 0.4% ($40 for every $10,000 invested) is a reasonable compromise for convenience and security. Over the past year, shares gained 67%.

The Market Outsider: Platinum

Even more surprising is the performance of the Abrdn Physical Platinum Shares ETF (PPLT). This UK fund (whose manager reverted to the original Aberdeen name in March 2025) operates on the same logic as GLD but with an even more fascinating twist: it offers exposure to platinum through physical bars stored securely.

With $3.1 billion in assets and a fee of 0.6%, PPLT achieved something extraordinary: a 138% increase in the last 12 months. Not only does this gain more than compensate for the higher fee, but it also demonstrates how physical precious metals ETFs continue to attract capital during periods of market uncertainty.

The Anchor to the Tech Sector: Semiconductors

The VanEck Semiconductor ETF (SMH) is the only one of the three winners linked to traditional stocks. Managed by VanEck Associates and with $40.2 billion in assets, this ETF tracks the index of the 25 largest U.S.-listed semiconductor companies, with a modest fee of 0.35%.

Top holdings include Nvidia (which alone accounts for 20% of the fund), Taiwan Semiconductor, Broadcom, Micron Technology, and ASML Holdings. Over 12 months, shares increased by 52%. The semiconductor sector has driven markets over the past two years, and all signs suggest this trend will continue into 2026.

What Changes in 2026: Diversification Beyond the Obvious

The 2025 data tell a fascinating story about true diversification. Investing only in “growth stocks” or “tech” is not enough: real returns come from those who can combine seemingly different exposures. Physical gold ETFs continue to serve as portfolio stabilizers, precious metals remain safe-haven assets during turbulence, and chips remain the weak link of the global economy.

For 2026, investors should consider these three ETFs not as shortcuts, but as pieces of a broader strategy. The key is not to chase the top performers of 2025, but to understand why they worked and whether the conditions that favored them will persist.