Can I build a long-term Global ETF portfolio to rival the S&P 500?

The S&P 500 has historically shown very good and consistent gains, however the USA is proving to be quite a volatile market this year (2025) and so a more widely diversified portfolio would seem a sensible option.

However, investing in the whole global core market - e.g. Core MSCI World (ETF SWDA with 1,300 holdings) gives us a diluted performance.

Now in my current portfolio, I have cherry-picked some S&P 500 stocks by using sector S&P 500 ETFs which have shown good performance and which I believe may continue to show good performance, such as:

• Tech - e.g. IITU or XLKQ
• Communications - e.g. IUCM
• Commodities - e.g. COMM
• Finance - e.g. IUFS
• Consumer - e.g. IUCD
• Utilities - e.g. IUSU

But what if I build a portfolio based on these sectors but using specially selected global market shares instead?

Many of the world/global ETFs will, of course, still be heavily weighted in US stocks, and they probably will not have a past performance record quite as good as their S&P 500 counterparts.

I have listed below some alternative global sector choices and also included a Physical Gold and Crypto ETF just for fun!

As you can see, the S&P 500 has historically performed better than a global equivalent, but the difference is not enormous.

It is your choice whether to include Gold and Crypto in your portfolio, but I am interested in making a World index portfolio with returns on a par with the whole S&P 500.

So I will remove the S&P 500 ETFs, gold and crypto and see what I have left...

5yr chart

1yr chart

Holdings

These are all accumulating ETFs.

Countries and Sectors

Performance vs S&P 500

Looking at the 5 year performance we get an average gain of 90% for our five (equally weighted) ETFs  vs a gain of 106% for the S&P 500.

A world ETF such as SWDA or SWLD has returned 83% in five years, so my 'selective' portfolio would have beaten SWDA.

Buying the ETFs on Trading 212

You can buy a USD or GBP-based version of each ETF, only if it is offered on your broker platform...

• $XWTS or £XSSW  Comms
• $XDWT or £XXTW Info Tech
• $XDWF or £XWFS  Finance
• $XDWC or £XWDS Consumer discretionary
• $XDWU or £XWUS Utilities

XWDS and XWUS are not currently available on Trading 212 but you can buy the USD versions on T212. USD-based ETFs will obviously have a foreign exchange rate applied - if the GBP is weak then this can work out in your favour when selling.

Here are the performance figures for the last four years of my equal-weighted 'global' select 5 ETF portfolio vs an S&P 500 ETF (CSP1)...

Instead of using an equal weighting, I would tend to be bullish on Finance and Tech just now due to DJT, but less optimistic on Utilities.  The Communications and Info Tech ETFs are closely related.

I could create a Pie on T212 like this:

• 30% $XWFS   Finance
• 20% $XSSW   Communications
• 20% $XXTW  Info Tech
• 20% $XDWC  Consumer discretionary
• 10% $XDWU  Utilities

You could add Gold and a small amount of Crypto in too if you wish.

Dollar cost averaging into this Pie should produce reasonable returns. It would still have shown a loss in 2022 (as did the S&P 500), but if you also held Gold (e.g. SGLN) the loss would have been less painful.

Simple 2 ETF portfolio (World+USA Tech)

In a previous blog, I suggested a simple 2 ETF DCA portfolio.

• HMWS or SWLD (slightly cheaper TER than SWDA) - World Index tracker  (suggest 70%)
• XLKQ - S&P 500 Tech stocks capped @20% selected (suggest 30%) or XXTW for a global tech ETF

This has beaten the S&P 500 index over the last five years (just - 24%/yr) but uses a global, more diversified index tracker ETF. A 60/40 split would give you a gain of 134% over the last five years. Please read the article for more details. 

Here we start with a £10k pot and Dollar Cost Average into it £500 a month over a period of 5 years...

VNRG+XLKQ would show even better performance, but it is USA based and not a global portfolio.

Aggressive 3 ETF portfolio (USA+USA Tech+USA comms)

For a slightly more diverse portfolio than a vanilla S&P 500 portfolio, we could go for the following three USA-based ETFs:

VNRG - Vanguard North America (acc)

IITU    - iShares Information Technology (acc)

IUCM  - iShares Communications (acc)

You could DCA into this every month. Over the last 5 years, a 60/20/20 portfolio this could have shown an annual gain of almost 40%/yr (£10k start, DCA £300 a month for 5 years).

Summary

Overall, if I was very worried about US market volatility and DJT (which I am!), this approach (HMWS+XLKQ - or HMWS+XXTW which is even more global) seems to offer a good compromise between performance and diversity. XXTW has beaten both IITU and XLKQ over the last 6 months and HMWS has beaten CSP1 over the last 3 months!

This approach seems to beat the S&P 500 in many cases, yet it is 'selectively globally diversified'. Almost 40% annual gain is hard to beat!

Adding Gold (SGLN) may be beneficial.

If you Dollar Cost Average (buy funds each month), I would buy whichever ETF is down that month, rather than spread my buys across all ETFs each month.

The Magnificent 7 don't seem such a bargain these days, so just buying the S&P500 (e.g. DCAing) and thus investing 30% in the Mag 7 does not seem so attractive.

VNRG+XLKQ or a three ETF portfolio (see above) are still very dependent on the USA.

On the other hand, would just holding SWDA and CSP1 or VNRG be just as good, plus some satellite ETFs like IITU, IUFS and IUCM?

It is certainly an option for future consideration. What do you think?