2025 continues to be a phenomenal year for the company S&P500. Including dividends, the index has generated an impressive 18.3% gain since January. What’s more, looking at the last five years, index investors have more than doubled their funds, with a lump sum of £1,000 now worth around £2,260.

But while these gains are to be celebrated, I am increasingly concerned about valuations.

Most of this growth came from “Magnificent 7” stocks, which now make up about 35% of the overall index. And with such a vast concentration of capital in companies listed at high valuations, the risk of correction seems to be increased.

That’s why I’m much more interested in investing in UK shares today. The FTSE100 also reached a record level this year. But unlike in the United States, there are still many fantastic companies offering trades at quite reasonable prices.

Development opportunities in London

One excellent British stock that I have my eye on right now is Wise (LSE: WISE). This cross-border payments company is making waves in the fintech space, with over 15.6 million vigorous users compared to just 4.7 million in 2020.

In its latest quarterly results update, the company announced that payment volumes rose again by 24% to £41.2 billion in the three months to June. This in turn resulted in an 11% augment in underlying income, reaching £362 million, even as Wise reduced trading fees as part of its strategy to steal market share.

Couple this with the steady influx of financial institutions that now rely on Wise to process their own international payments (including Morgan Stanley, Standard charterand recently Raiffeisen Bank), the company’s shares have already increased by 37% over the last 12 months.

This momentum has pushed the price-to-earnings ratio to a premium of 25.3. By British standards, it’s not low-cost. However, compared to the fintech industry’s average P/E of 29 in the U.S., the stock seems to offer a pretty reasonable entry point given its growth.

What could go wrong?

Traditional banks still dominate the international payments space. Wise has barely scratched the surface of an industry ripe for disruption. However, as with all promising investments, there are still significant risks that must be taken into account.

Co-founder and CEO Kristo Käärmann holds approximately 18% of the outstanding shares. However, it controls almost 50% of the total number of votes. This raises some management concerns. After all, if it starts pursuing questionable strategies, shareholders will have little ability to intervene.

At the same time, it’s critical to remember that Wise isn’t the only current cross-border payment solution available today.

Competing platforms such as Revolut and PayPal they are also trying to disrupt this sector. And with much deeper pockets, it’s a mistake to underestimate the pressure these competitors can exert. In fact, this is one of the main reasons why Wise is actively trying to lower trading fees, which could limit long-term earnings growth.

Nevertheless, with the company already securing the largest share of the non-bank services market at the rate of international payments, management’s strategy appears to be working. That’s why I recently added this company to my portfolio over other options in the S&P 500. But it’s not the only UK stock I have my eye on right now.