It’s the start of a new year, and investing with a Stocks and Shares ISA continues to be one of the most effective ways to build wealth.
2025 proved to be an exceptional year for UK shares, with the FTSE 100 index delivering a total return of 23.6%. That means anyone who put £5,000 to work last January now has £6,180 sitting in the bank. That’s even better than what US stocks eked out despite them historically outperforming.
But of course, past performance doesn’t guarantee future returns. So how much money should investors expect to make in 2026?
Another stellar year for UK shares?
Through a combination of earnings resilience, interest rate cuts, and continued impressive cash flow generation, the consensus among experts is that 2026 will be another excellent year for the FTSE 100.
In fact, the combined pre-tax profits of the entire index are expected to climb from £229bn to £260bn – a 14% increase to a new record high. With this projection in mind, analysts at AJ Bell have forecast the UK’s flagship index to rise to as high as 10,750 points over the next 12 months.
Compared to where the index stands today, that roughly translates into 8.9%. Throw in the 3% dividend yield, and the total estimated return for 2026 sits at 11.9%.
Obviously, that’s not as high as what we saw in 2025. Nevertheless, it’s still notably ahead of the index’s 8% long-term average. So for investors who prefer relying on tracker funds, a £5,000 lump sum investment could grow to £5,595 over the next 12 months. But for stock pickers, the rewards could be even greater.
Which sectors could outperform?
Looking at the current macroeconomic landscape, two sectors stand out as potential big winners this year for ISA investors:
- Energy & Mining – sticky inflation and geopolitical conflicts are driving up global commodity prices.
- Financials – banks, insurance groups, and asset managers are benefiting from sticky credit margins on the lending side and steady interest rate cuts on the investing side.
One business that overlaps with both industries is Ecora Resources (LSE:ECOR). The business acquires royalty stakes in mining projects across primarily OECD countries by helping mining giants cover the initial costs of getting spades in the ground.
In recent years, management’s been aggressively repositioning its royalty portfolio to focus on critical metals such as copper and cobalt over its legacy coal-focused projects. And in 2025, these counter-cyclical investments finally started paying off with underlying earnings surging.
Looking ahead to 2026, rising secular demand (primarily from electric vehicles) is steadily pushing the price of these commodities higher. And with new projects in Ecora’s portfolio on track to enter commercial production this year, the business appears well-positioned to continue thriving even after climbing over 75% last year.
Of course, there’s always the risk that commodity prices don’t rise as expected. New discoveries or a slowdown in EV adoption (particularly in China) due to weaker economic conditions might cause Ecora to stumble.
Even if these headwinds don’t materialise, production disruptions or development delays at Ecora’s various projects could prevent the business from fully capitalising on higher commodity prices.
Nevertheless, given the explosive growth potential surrounding this niche enterprise, these are risks worth considering, in my opinion. That’s why I’ve already added shares to my portfolio.
