2025 was an interesting year from an investment perspective. My ISA stock portfolio returned 12.40%, which compared favourably with an S&P 500 index fund in sterling (HSBC American Index) that gained 9.8%. However, I slightly lagged the MSCI World Index at 12.8% and was comprehensively beaten by my original benchmark, the FTSE All-Share, which delivered 23.9%.
None of the active fund managers I follow managed to do any better. Warren Buffett, in his final year as CEO of Berkshire Hathaway, achieved a return of just 2.61% in sterling terms. Unfortunately, Berkshire was my largest holding going into 2025, so this weighed on my overall performance. I do not hold this against Warren; Berkshire’s share price had been performing well until he announced his retirement, and at 95 years of age he certainly deserves a rest. Sixty years of compounding at an average rate of around 19.9% is an extraordinary record by any measure.
Fundsmith Equity returned a meagre 0.8% during 2025, while Lindsell Train Global actually lost money.
There is some overlap between my portfolio and the S&P 500, I own 5 of the “Magnificent 7” stocks. That said, the weighted average dividend yield of my portfolio is significantly higher at 1.81%, compared with 0.94% for the S&P 500 and around 1.32% for the MSCI World Index. The FTSE All-Share’s yield is meatier still at 3.05%, but that index is laden with companies that are not in secular growth.
American stocks were held back in sterling terms by a weaker dollar. Trump’s protectionist policies could keep the dollar subdued for some time, and historically, periods of dollar weakness have often coincided with outperformance from other markets, particularly Emerging Markets (see chart).
My investment time horizon extends well beyond Trump’s second term, so I do not intend to radically reshape my portfolio on the basis of this data alone. However, I have recently added a new position in Mercadolibre, a South American online shopping and payments company that is somewhat akin to combining Amazon and PayPal.
My holdings and performance data at year-end are set out in the charts below.
My top 5 performers in 2025 were:
Warner Bros. Discovery: +172.70%
Intel Corp: +84.00%
Alibaba: +72.80%
Alphabet: +65.30%
Tencent: +47.22%
My bottom 5 performers were:
Future Group: −43.20%
YouGov: −38.20%
Diageo: −36.80%
PayPal: −31.60%
Meituan: −30.21%
These performance figures are not adjusted for currency movements.
Warner Bros. Discovery surged after receiving multiple takeover approaches from Paramount Skydance and Netflix, which I discuss further in the options section below.
Intel’s performance was particularly striking given that I had almost written the company off this time last year. New CEO Lip Bu Tan has presented a convincing strategy, and the business appears to be recovering, although whether its new foundry operations can operate at capacity remains an open question. Intel might be helped going forward by Taiwan Semiconductor’s decision to rein in capital expenditure, which means TSMC cannot meet demand alone and may give Intel (and/or Samsung) an opportunity.
Alibaba benefited from a broader recovery in Chinese equities and the apparent return of founder Jack Ma to a more active role after his earlier clash with the Chinese Communist Party. Tencent also rode the general rebound in Chinese stocks.
Alphabet experienced some sharp volatility during the year as it swung from AI victim to AI darling. I managed to buy additional shares during the “Trump Tariff” pullback at around $143 and later sold some towards the end of the year at $289 after a strong rally had taken the position to 12% of my portfolio. In hindsight this may have been premature, as the shares now trade at about $333! Fortunately I did not sell too many, and Alphabet still represents more than 10% of the portfolio.
Last year I noted that Apple had become my first “10-bagger” (an investment that has risen tenfold). This year, after strong gains, Alphabet (Google) became the second, and at the time of writing is almost 13 times the cost of my initial purchase. I first bought Google in 2014, so that 10-bagger has been 11 years in the making.
Turning to the laggards, Future Group declined sharply, with AI seemingly eating into its business as users turn to AI tools for research instead of visiting its websites. Whether the company can pivot and monetise its data by selling to AI firms at comparable margins remains unclear, so it currently sits in the “departure lounge” of my portfolio. YouGov also fell heavily, although there are some signs of progress under returning founder Stephan Shakespeare.
Diageo appears under pressure on multiple fronts: shifting cultural attitudes and the impact of GLP‑1 drugs reducing demand for alcoholic drinks. I have held on to my “calorie-selling” businesses, but they are all clearly struggling; time will tell whether this is a cyclical setback or a more secular challenge.
I am particularly disappointed by PayPal’s share price performance. The relatively new management team (2023) seems to be executing well, and there are indications of re-accelerating growth, yet the share price remains stuck in the doldrums. There are several reasons to be optimistic: the roll-out of advertising on the platform and new technology such as the Fastlane checkout—being adopted even by competitors like Adyen, to name a couple of examples. I have been adding to my PayPal position recently.
Over the year I exited Boohoo, IG Design and Costco. Boohoo and IG Design looked attractive at the time of purchase but, in retrospect, proved to be poor investments. Both are low-margin businesses that were hammered by the post‑Covid inflationary environment because they lacked sufficient pricing power. Costco is also a low-margin business, but because it sells directly to consumers and turns stock over rapidly, it is a very different proposition and, arguably, a truly excellent company. I sold Costco purely on valuation grounds, as the shares reached a price‑earnings ratio of around 54 times despite earnings growing only 9.4% last year. Costco remains on my watchlist, but the share price would have to fall quite substantially—probably 50% or more—for it to look reasonably valued again.
New additions include Mercadolibre, as mentioned, plus a very small starter position in Novo Nordisk, the manufacturer of weight‑loss drugs such as Semaglutide/Wegovy/GLP‑1, which sold off sharply during the year amid fierce competition from Eli Lilly. Novo Nordisk is, however, pushing ahead with an oral pill version of the drug, which could significantly improve its competitive position. In addition, I now own a few shares in the Magnum ice cream business following its spin-off from Unilever.
Options
My options portfolio had an excellent year, rising 94.43%. Under the surface, however, the picture was very mixed. The PayPal options I was enthusiastic about this time last year expired worthless after a slump in the share price, and my Disney options also went to zero. The bright spot were Warner Bros. Discovery options. After the company’s summer update formally announcing the spin-off of its cable business (along with a ton of debt), the market reaction was muted, but I felt this restructuring made it a prime acquisition target. I therefore increased my holdings in both the shares and the options. Multiple bids duly emerged, and I sold the options in stages, achieving between 3x and 6.3x my initial stake. My Alibaba options were also multi‑baggers following a strong recovery in the shares. Unfortunately, the total losses on Disney and PayPal capped the overall gain.
At one point during the year, when the Trump Tariff sell‑off was in full swing, the options portfolio was down about 50%, highlighting just how volatile and risky these instruments can be. Because of this, I do not intend to allocate a large proportion of my capital to options, but they have so far been an entertaining and profitable side-line. A glutton for punishment, I have bought more PayPal options with a 2028 expiry; these are now my only remaining options position (also about 60% of the option sale proceeds still sit in cash). I have also been adding more PayPal shares since year‑end. I have excluded my options returns from the ISA performance figures above, as options cannot be held within an ISA and there is a very real possibility that the options portfolio ultimately goes to zero at some stage given the risks I'm taking.
If you have any questions contact me on Twitter/X @mattbird55 or comment below.
Good luck and all the best for 2026, Matt.
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