FTSE shares: a near-once-in-a-decade opportunity to get richer?
2025 was a stellar year for FTSE shares. Looking just at the UKâs flagship index, the FTSE 100 delivered a record-breaking 26% total return. And with the impressive momentum continuing in 2026, that numberâs closer to 35%, including the last two months.
Yet, this could be just the tip of the iceberg. In fact, investors could be looking at a buying opportunity in British businesses that havenât been seen in almost a decade.
An economic rebound?
Looking at the UKâs economy today, thereâs plenty to be gloomy about, including stubbornly above-target inflation and rising unemployment. However, something thatâs seemingly fallen below the radar of most investors is that productivityâs actually rising, with the latest forecasts for 2025 placing estimated growth at 1.4%.
Excluding the post-pandemic economic recovery, thatâs the highest projected level of productivity growth seen since 2017, and just prior to the 2008 financial crisis before that. And if this improvement can be sustained, it could create a powerful tailwind that most FTSE shares can capitalise on.
Digging deeper, there are two possible factors driving this surprise surge.
The first is that investments made by businesses to cut costs and improve efficiency over the last few years are finally starting to pay off. And weâre already seeing supportive evidence of this with record profits emerging and rising profit margins among many UK stocks.
However, the second explanationâs less exciting. Due to the government increasing both employer National Insurance contributions and the Minimum Wage, low-paid jobs, particularly in the hospitality and retail sectors, have been cut, temporarily boosting the perceived productivity of the remaining workforce.
The truth is likely a combination of both factors. But as it turns out, there are several FTSE shares that can benefit either way.
A hidden winner?
Regardless of whether productivityâs being boosted through operational efficiency or labour restructuring, Kainos Group (LSE:KNOS) still benefits.
The company offers a portfolio of software and digitalisation services to help businesses automate operations and become more efficient. If companies need to cut back on jobs, Kainos can help ensure minimal disruption. If companies want to become more efficient with their existing workforces, Kainos can help implement artificial intelligence (AI) and other software solutions.
This nifty combination has already translated into record sales and orders across the first half of its 2026 fiscal year (ending in March). Meanwhile, its relatively new software-as-a-service segment is currently on track to surpass £100m high-margin recurring revenue by the end of this year.
Needless to say, this structural tailwind bodes well for Kainos shareholders. But of course, there are still some risks. One of the firmâs biggest customers is the UK government, making it susceptible to budget cuts, particularly for the NHS.
At the same time, with the rise of new AI models potentially lowering long-term demand for external digitalisation experts, this economic productivity tailwind may end up being offset.
Nevertheless, AI disruption risk is potentially problematic for its currently larger services segment. By comparison, its rapidly expanding software arm appears to be an AI beneficiary. And with management aggressively investing in this long-term growth engine, this risk could be mitigated.
Thatâs why, in my opinion, Kainos could be worth a closer look. And itâs not the only FTSE share Iâve got my eye on right now.
The post FTSE shares: a near-once-in-a-decade opportunity to get richer? appeared first on The Motley Fool UK.
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Zaven Boyrazian has positions in Kainos Group Plc. The Motley Fool UK has recommended Kainos Group 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.
