FTSE 100 shares have had a great 2025. Can it last?

At the start of this year, the tea leaves were not necessarily positive for the FTSE 100 index of leading British companies.

The economy was fragile, with limited growth prospects. Geopolitical risks weighed on the economic outlook.

Fast-forward to now. The FTSE 100 is up by 18% since the start of the year. Along the way it has repeatedly set new all-time highs.

Can the good times keep rolling?

Glass half full – or half empty?

Funnily enough, the answer to that question is similar to what it would have been 12 months ago.

Globally, risks including geopolitical uncertainty remain. Meanwhile, the UK economy continues to look sluggish.

However, that has not stopped the FTSE 100 powering ahead over the past year.

Even after its rise, the index still sells on a lower price-to-earnings ratio than leading US stock indexes.

So, it could be that the FTSE 100 keeps doing well. Then again, given the wider economic context, it may be that the FTSE 100 starts to fall.

Here’s my approach

Either scenario could make sense to me. But, like everyone else, I do not know for certain what will happen next.

That is fine, as I am not investing in the index (for example, by buying shares in an index tracker).

Instead, I am looking for what I see as attractively valued individual shares within the FTSE 100.

One share to consider

One FTSE 100 share I think investors ought to consider at the moment is telecoms giant Vodafone (LSE: VOD).

While the index’s 18% gain so far this year is impressive, Vodafone has done twice as well with its 37% share price rise since the turn of the year.

The company is well-known, thanks to its strong brand and enormous customer base across many European and African countries.

But one thing not all investors have fully appreciated is the growth opportunity Vodafone has in Africa. That is true of voice and data services, but I think another interesting area is mobile money.

Both Vodafone and Airtel Africa have been going gangbusters in their mobile money operations. Vodafone describes its own M-PESA offering as “the world’s most successful money transfer service”.

Companies like Wise may have their own view on that, but what is not in doubt is that Vodafone has a large mobile money operation with significant potential for future growth.

Last month Vodafone announced its first dividend increase in seven years. The share currently yields 4.3% and still sells for pennies despite its strong performance so far this year.

One risk I see is rivals scaling up their mobile money operations, perhaps taking market share from Vodafone and hurting its profitability.

But with its large customer base, geographic diversification, and strong brand, I see a lot to like about the FTSE 100 company.

The post FTSE 100 shares have had a great 2025. Can it last? appeared first on The Motley Fool UK.

More reading

• Can investors afford to miss these 3 dirt-cheap UK shares?
• Below £1 now, Vodafone’s share price looks undervalued to me anywhere up to £2.76
• I asked ChatGPT for cheap FTSE 100 index shares. It said…
• Should I buy Vodafone shares while they’re still under £1?
• Why Germany could hold the key to the future direction of the Vodafone share price

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Airtel Africa Plc, Vodafone Group Public, and Wise 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.

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