Best Performing Index Funds Over 10 Years: What the Data Actually Shows
The 10-year performance record of the major index funds tells a clear and instructive story — not about which manager was smartest, but about which markets grew fastest and which asset classes rewarded long-term holders most consistently. This analysis covers the best-performing mainstream index ETFs available to European investors over the decade to 2025, examines what drove those returns, and draws out the practical lessons for portfolio construction in 2026. For context on which specific funds to use, see our complete guide to index funds for European investors.
- → US equities — especially the Nasdaq-100 and S&P 500 — dominated the 10-year return charts, driven by the outsized performance of mega-cap technology companies
- → A simple global index (MSCI World / VWCE) delivered approximately 11–12% annualised in EUR terms over 10 years — better than most actively managed funds after fees
- → The 10-year outperformance of US vs. global was unusually large by historical standards — a reflection of US tech dominance that may or may not repeat over the next decade
- → Emerging markets significantly underperformed over 10 years — but valuation differences now make them more attractive on a forward-looking basis than a decade ago
- → Past performance data is essential context — but the right lesson is diversification and cost minimisation, not chasing the last decade’s winners
The 10-Year Leaderboard: Best Performing Index ETFs (2015–2025)
The following table shows approximate annualised total returns for the major index categories available to European investors over the 10 years to end-2025, expressed in EUR. All figures include dividend reinvestment and are before personal tax. They reflect index-level performance — individual ETF returns will be within 0.1–0.3% of these figures depending on the specific fund’s tracking accuracy and TER.
| Index | European ETF | ~10yr Ann. Return (EUR) | What Drove It |
|---|---|---|---|
| Nasdaq-100 | EQQQ / XNAS | ~18% | AI, cloud, mega-cap tech dominance (Apple, Nvidia, Microsoft) |
| S&P 500 | VUAA / CSPX | ~12% | US economic dominance, tech concentration, USD appreciation vs EUR |
| MSCI World | IWDA | ~11% | Mostly US (~65-70% weight); global diversification muted upside vs pure S&P 500 |
| FTSE All-World | VWCE | ~10% | MSCI World + EM drag; true global exposure including emerging markets |
| MSCI Europe | MEUD | ~7% | Slower earnings growth, energy/financials/industrials heavy; no tech mega-caps |
| MSCI Emerging Markets | EMIM | ~5% | China regulatory crackdowns, EM currency weakness, geopolitical risk premium |
| Global Aggregate Bonds | AGGH | ~1% | Near-zero yields 2015–2021, severe losses in 2022 rate cycle |
“The 10-year performance data is not a recommendation to overweight the Nasdaq-100. It is a description of what happened. The next decade may look very different — which is precisely why the diversified global index remains the rational default.”
What Drove the Nasdaq-100’s Outperformance
The Nasdaq-100’s approximately 18% annualised return over 10 years was driven by a small number of exceptionally large companies. Apple, Microsoft, Nvidia, Alphabet, Meta, and Amazon collectively account for roughly 45% of the index by weight. Their combined market cap growth — driven by the cloud computing boom, the iPhone ecosystem’s maturation, and the AI acceleration of 2022–2025 — produced returns that no diversified index could fully capture.
Understanding this is essential for interpreting the data correctly. The Nasdaq-100’s 10-year return was not the result of technology being systematically undervalued throughout the period. It was the result of a handful of companies achieving something genuinely extraordinary — and the index happening to be concentrated in exactly those companies. This does not tell us that the Nasdaq-100 will deliver similar returns over the next decade. It tells us that extraordinary concentration in extraordinary companies produced extraordinary results. Regression toward the mean is the base case.
A significant but underappreciated factor in the 10-year outperformance of US indices for European investors is USD/EUR currency movement. The dollar strengthened meaningfully against the euro over the decade, adding approximately 1–2% annualised to USD-denominated returns when expressed in EUR. This tailwind is not guaranteed to repeat — and may reverse. VWCE and IWDA are unhedged, meaning their EUR returns include this currency effect. AGGH is EUR-hedged, which is why its bond returns are more directly comparable to local EUR fixed income.
The Case Against Chasing Past Performance
The single most dangerous application of 10-year performance data is using it to shift a portfolio heavily toward last decade’s winners. The sequence of great returns requires companies to both grow earnings rapidly and expand valuations simultaneously. Once valuations are high, future returns can only come from earnings growth alone — without the multiple expansion tailwind that amplified returns during the 2015–2025 period.
The US stock market ended 2025 at price-to-earnings ratios significantly above long-run historical averages. The Nasdaq-100 was trading at over 30x forward earnings. European equities were at approximately 14x. Emerging markets at approximately 12x. Valuation is not a timing tool — markets can remain expensive for years — but it is the most reliable long-run predictor of returns. The asset classes that underperformed the last decade are now considerably cheaper than those that outperformed. This is relevant for investors with 10+ year horizons constructing portfolios today. The themes connecting this to broader economic shifts are explored in our Global Economics 2026 series.
Practical Lessons for Portfolio Construction
A global index is the rational starting point. VWCE or IWDA provides exposure to all major markets — US, Europe, Japan, emerging markets — in proportion to their market capitalisation. It automatically overweights markets that grow and underweights those that shrink. Over the last decade this tilted heavily toward the US. That allocation is not a fixed assumption; it reflects actual market realities as they evolved.
Satellite positions should be modest and considered. Adding a 10–15% allocation to EQQQ or VUAA alongside a VWCE core is a deliberate tilt toward US tech that has recent evidence behind it. Adding more than 20–25% in a single sector or region is concentration that requires a specific thesis — not just an observation that it worked well last decade.
Bonds are not dead. Global aggregate bonds (AGGH) delivered approximately 1% annualised over 10 years — a poor decade driven by the 2022 rate shock. With rates now at 4–5%, the expected forward return from investment-grade bonds has risen substantially. Their role in a portfolio is volatility dampening and capital preservation — not return maximisation. For investors within 10 years of retirement, a 20–40% bond allocation has regained its historical justification.
| Portfolio Type | Allocation | 10yr Historical Return (approx.) | Best For |
|---|---|---|---|
| Core global | 100% VWCE | ~10% | Long-term wealth builders, 20+ year horizon |
| Core + US tilt | 75% VWCE + 25% VUAA | ~11% | Those who want extra US exposure with diversification floor |
| Balanced | 70% VWCE + 30% AGGH | ~7% | Investors within 10 years of retirement |
| Growth tilt | 60% VWCE + 25% VUAA + 15% EQQQ | ~13% | Higher risk tolerance, 15+ year horizon |
The best-performing index funds of the last decade were those with the highest US technology exposure — primarily the Nasdaq-100 and S&P 500. A European investor who simply held VWCE or IWDA throughout captured approximately 10–11% annualised returns without any active decisions. The lesson is not that you should now overweight Nasdaq; it is that staying invested in a low-cost global index for the full decade — through Brexit, COVID, rising rates, and geopolitical upheaval — produced results that almost no active manager matched after fees. The most reliable way to capture the next decade’s best-performing sectors is to own all of them, cheaply, and not sell.
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