Largely speaking, FTSE 100 companies have proven top stocks to buy over the last five years. A £20,000 investment in an index tracker fund in May 2021 would have turned into £37,615 today. That’s based on the Footsie’s average annual return of 12.7% in that time.
That’s a pretty great return, I’m sure you’ll agree. But some FTSE 100 shares have performed far better in that time. Take Babcock International (LSE:BAB), Fresnillo (LSE:FRES), and Lion Finance (LSE:BGEO). A £20k lump sum spread equally across these blue chips five years ago would have turned into £129,207 over the same period.
The question is, can these high performers keep delivering stratospheric returns? Past performance isn’t a guarantee of future returns, but I think they can. Here’s why.
Defence giant
Babcock has delivered an average annual return of 14.8% over five years. As one of Europe’s largest defence companies, its shares have soared since the Ukraine war began in 2022. Earnings have jumped as regional arms spending has accelerated, driving its promotion from the FTSE 250 in March 2025.
But that’s not all. A successful turnaround strategy has also thrust Babcock’s share price through the roof. The results? A sharp reduction in debt, the sale of low-margin businesses, fewer cost overruns, and a reinstated dividend that have all reignited investor appetite.
It’s now in a much better shape to capitalise on the improving defence sector outlook. Remember, though, that supply chain issues could stall its momentum.
Gold star?
Mexican miner Fresnillo is the country’s largest gold miner. It’s also the biggest silver producer by volume on the planet. So it’s delivered spectacular investor profits as demand for these safe-haven assets has exploded.
Over a five-year horizon, the average yearly return comes in at 34.5%. But precious metal prices have buckled more recently as the US dollar has roared back. So could the party be over for Fresnillo shares? Possibly, but I’m not convinced. The buck could keep gaining momentum as interest rates likely rise.
However, there’s a plethora of reasons to expect gold and silver to bounce back and for Fresnillo to rise again. These include:
- Rising geopolitical tensions
- Slowing economic growth
- Returning inflationary pressures
- Rising jewellery demand in emerging markets
- Increasing bullion purchases from central banks
Roaring returns
Like Babcock shares, Lion Finance’s stock traded on the FTSE 250 until very recently (March, in fact). Its share price growth has put those of high-flying UK banks like Lloyds and Barclays firmly in the shade. With dividends added in, the average annual return over five years is an extraordinary 64.4%.
This reflects Lion’s focus on developing markets Georgia and Armenia. Rapid economic growth here has supercharged the bank’s revenues and profits, and delivered those stunning share price gains. The bank’s net income has soared around eight times since the pandemic, reflecting low product penetration and strong economic growth in its territories.
A slowdown following the Iran war could impact near-term performance. But given its huge structural opportunities, I expect more blistering returns from Lion Finance shares over the next five years.
