The S&P 500 consists of 500 of the largest US companies, including Nvidia, Apple, and Tesla. The FTSE 100 consists of 100 of the UK’s largest companies, including Shell, AstraZeneca, and HSBC.
Which index is better? Where should investors look to grow their wealth? Which country is likely to offer the best returns on investment in the years ahead? The answer is obvious, isn’t it? Or is it?
Exceptions
A common viewpoint on this in the year 2026 is: yes, the S&P 500 is top dog. This is based on the dynamism of the US economy, a smorgasbord of exciting tech firms, a favourable business environment, and other factors. In many eyes, the S&P 500 is the embodiment of American exceptionalism.
Data backs this up. Proponents point to 10%-11% yearly returns stretching back over a century. The last 10 years have been particularly fruitful with 16% average returns for the S&P 500!
Aye, there’s the rub. The year 2016 marked a strong divergence in fortunes between the two indexes. The primary reason being the rise and rise of tech. The S&P 500 has the world’s biggest and brightest tech firms. The FTSE 100 has hardly anything by comparison.
What about before that? Interestingly, the FTSE 100 was performing better in the early parts of this century. A £10,000 stake in the S&P 500 would be worth £16,000 by the year 2014. The same stake in the FTSE 100 would be worth £17,000.
The original question then. Is the S&P 500 that much better than the FTSE 100? Perhaps, but it’s only the last 10 years where there has been a serious difference.
Of course, we can’t know whether the future will be better for the S&P 500 or the FTSE 100 any more than whether England will ever again win an Ashes series in Australia. That’s why I plan to get the best of both worlds – by investing in both.
One to consider
With the rise of modern banking and investing apps, I can invest in stocks from the US, UK, and other countries all from my iPhone. I can even invest in the maker of said electronic device Apple (NASDAQ: AAPL).
The popularity of iPhones, iPads, MacBooks, and other devices propelled Apple to being the second-biggest company in the world. It has also been in the vanguard of the S&P 500’s excellent performance in the last decade.
While the hardware is excellent, I think one reason the company could continue to excel is on the software side. When it comes to operating systems for smartphones or computers, no one else comes close, for my money.
That’s not to say Apple will always rule the roost. For one, the newest iOS release caused some controversy with users complaining that it prioritised ‘form over function’. The firm’s $3,500 VR headset – the Apple Vision Pro – looks like it will end up a flop too. Perhaps that’s a sign the innovative spark is no longer present.
To sum up? It’s impossible to say whether technology and the S&P 500 will continue to dominate. But if it does, I expect Apple shares to do very well. I’d say they’re worth considering.
