Forecast: here’s what £20,000 invested in the FTSE 100 could be worth by 2027
It’s no secret that the FTSE 100 has been on a bit of a rampage so far in 2025. Year to date, the UK’s flagship stock market index is up more than 12%, or 15.8% when including dividends. That’s almost double the average 8% total return it has historically delivered. So, passive index investors are likely patting themselves on the back right now.
However, the question now becomes, can the FTSE 100 maintain this momentum into 2026 and then later into 2027? Here’s the latest analyst forecasts for British stocks.
More growth on the horizon
The latest projections from The Economy Forecast Agency predict the FTSE 100 could reach anywhere from 11,600 to 13,347 points by August 2027. Compared to where the market is priced today, that’s a potential capital gain of 25% to 44%.
In terms of money, a £20,000 investment today could be worth anywhere between £25,000 and £28,800 within the next two years. And that’s before counting the extra gains from dividends.
Even if the index only manages to deliver on the lower end of this forecast range, that still suggests its recent momentum is expected to continue.
Considering that large-cap UK stocks remain much cheaper compared to peers in developed markets like Europe and the US, they’re becoming increasingly attractive to both domestic and foreign investors. Corporate earnings are also demonstrating strength, the Bank of England is cutting rates at a faster pace, and while there have been a few hiccups, Britain’s trade environment is far more stable than America’s.
That’s certainly a proven recipe for bullish momentum. But of course, no forecast is ever set in stone. Not every analyst is as bullish. And even with this projection, the broad range reflects the continued uncertainty surrounding geopolitical, tariff, regulatory, and economic issues.
What about stock pickers?
For investors taking control of their portfolios and picking individual stocks, the expected upward trajectory of the FTSE 100 is potentially a good omen. By strategically only investing in the best businesses, a portfolio could generate far more substantial returns since it’s not weighed down by any laggards.
So far this year, Fresnillo (LSE:FRES) has been a perfect demonstration of this, rising by a massive 168%.
Rising silver and gold prices have sent the Mexican mining enterprise into overdrive, with the latter compounded by higher production volumes. What’s more, favourable currency exchange shifts along with operational improvements have reduced production costs by around 20%, expanding margins even further. The end result has been a 30% jump in its half-year revenues paired with a 300% surge in profits!
Management’s top-notch execution, paired with external tailwinds, has enabled Fresnillo shares to thrive. But of course, that doesn’t guarantee this FTSE 100 stock will continue to be the biggest winner over the next two years.
Rising political opposition to the mining sector could create significant headwinds in the group’s future exploration endeavours. And should the price of precious metals start to reverse, the stock’s recent momentum will likely dissipate.
Neither of these threats is within management’s control. As such, this isn’t a stock I’m rushing to buy right now. But there are plenty of other FTSE 100 opportunities that looked primed to surge over the next two years.
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
