With risk appetite rising again, now could be the time to consider searching for quality FTSE 100 shares to buy. The London index is packed with top shares that might soar in value as global trade tensions begin to unravel.
The UK and world economies aren’t quite out of the woods however. And so it could also be a good idea to look at some choice investment trusts and exchange-traded funds (ETFs) to also diversify an investor’s holdings.
With this in mind, here are two top stocks to consider for a winning Stocks and Shares ISA.
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Taylor Wimpey — 8%+ dividend yields
Housebuilder Taylor Wimpey’s (LSE:TW.) a FTSE 100 share I own in my own portfolio for dividends. Encouragingly for me and other investors, City analysts expect payouts to rise steadily over the next few years, as illustrated below:
| Year | Dividend per share | Dividend yield |
|---|---|---|
| 2025 | 9.57p | 8% |
| 2026 | 9.66p | 8.1% |
| 2027 | 9.73p | 8.2% |
As with any UK share, these dividends are by no means guaranteed. In this case, dividends could be impacted by a sharp economic downturn that adversely impacts home sales.
While this is a risk, I’m optimistic that the housing market will remain rock-solid as interest rates fall further. Earlier rate cuts pushed Taylor Wimpey’s order book £200m higher in the year to 27 April, to £2.3bn, latest financials showed.
The housebuilders are receiving support from elsewhere too, like an intensifying price war among mortgage suppliers. The ‘Bank of Mum and Dad’ is also supporting the market through generous cash gifts given to first-time buyers.
Estate agency Savills says that 52% of these buyers received financial assistance from their parents in 2024, the second-highest figure since 2013.
I plan to hold my Taylor Wimpey shares for the long haul, as the UK’s fast-growing population could support excellent returns for years to come.
WisdomTree Europe Defence ETF — a surging fund
Since launching in March, the WisdomTree Europe Defence ETF (LSE:WDEP) has risen a healthy 6.1% in value. This explains in part the appeal of the defence sector as a lifeboat during uncertain economic times.
However, this is only half the story, with expectations of prolonged continental rearmament also boosting the fund’s demand. This is something I think could run and run as Europe’s NATO contingent supercharge their defence budgets.
According to the respected Stockholm International Peace Research Institute (SIPRI), European arms spending leapt 17% last year, to $693bn, far above the 9.4% rise reported across the broader globe. It noted that “all European countries increased their military spending in 2024 except Malta“, an increase that primarily reflected tension over Russian expansionism.
Through WisdomTree’s defence ETF, investors can get exposure to some of Europe’s largest defence companies including BAE Systems, Rolls-Royce, Leonardo and Rheinmetall. This blue-chip focus gives it plenty of scope to rise further, in my opinion.
Some of the fund’s key constituents also sell large amounts of hardware to the US. And so they are vulnerable to reduced defence spending from Washington. However, the fund’s diversified approach — it holds shares in 24 different companies — would help limit such a scenario on overall returns.
