The S&P500 is an index that tracks 500 of the best stocks on US exchanges as determined by a committee, while the FTSE 100 tracks top stocks trading on the London Stock Exchange (LSE).
You might think both indices are pretty much the same, but they’re actually very different. Here’s how the S&P 500 and FTSE 100 compare in terms of size, value, diversification and performance.
What’s the difference between the S&P and the FTSE?
“S&P” stands for Standard and Poor. S&P Global is a US-based company that creates stock market indices used as performance benchmarks for part, or all, of the market.
“FTSE” stands for the Financial Times Stock Exchange, a company that similarly creates market-tracking indices. In 2015, FTSE merged with UK-based Russell Investments and was renamed the FTSE Russell Group. It’s now owned by the London Stock Exchange Group (LSEG).
The S&P 500 and FTSE 100 are indices that track collections of stocks in specific countries with the aim of tracking how the overall stock market is performing in each country. The S&P500 tracks top US stocks, and the FTSE 100 tracks top UK stocks listed on the LSE.
The S&P 500 lists stocks from 500 companies, which is 5X more than the FTSE 100, which lists stocks from just 100 companies. Even though both indices are the most popular stock market benchmarks in the US and UK, respectively, you can also reference the FTSE250 and 350 as well as the S&P100, which serve similar purposes.
FTSE 100 vs S&P 500: Which is worth more?
Spoiler alert: The S&P 500 is worth more.
The FTSE 100 is a lot smaller than the S&P 500 in terms of market capitalization. The FTSE 100 has a market cap of around £1.6 trillion GBP (approx. $2.5 trillion CAD), while the S&P’s market cap is around $25.6 trillion USD (about $3.3 trillion CAD). That makes the S&P 500 about 12X the size of the FTSE 100 based on market cap.
FTSE 100 vs S&P 500: Concentration
As of the time of writing, there are 505 stocks in the S&P 500 and 101 stocks in the FTSE 100. This is because some companies trade mutiple classes of stock. With the S&P 500 having 5X the number of stocks than the FTSE 100, the FTSE 100 is more concentrated.
The top 10 stocks in the FTSE100, which you can see below, make up more than 40% of the index. Just under 30% of the S&P 500 is comprised of its top 10 stocks (also listed below).
FTSE 100 vs S&P 500: Stock quality
Spoiler alert: The S&P 500 has riskier technology stocks, while the FTSE 100 has more cyclical stocks.
The top stocks in the FTSE 100 and S&P 500 are vastly different, and the other stocks in both indices further reflect this difference. The S&P 500 is made up of a lot of technology stocks—74, to be exact. Meanwhile, just 7 stocks on the FTSE 100 are technology stocks.
The FTSE 100 has more stocks that are considered to be cyclical. Some investors think of cyclical stocks as recession proof, as they tend to perform well even during recessions. This could be why the FTSE 100 hasn’t seen the same growth as the S&P 500, as it’s made up of stocks in financial companies and consumer staples companies. The S&P 500 is made up of technology stocks that are considered higher risk.
FTSE 100 vs S&P 500: Which is more diversified?
A good way to diversify your stocks is to align your investments to both indices.
Statistically, the S&P 500 is more diversified than the FTSE 100, with a more equal weighting of each category across the index. But the FTSE 100 holds a higher concentration of cyclical stocks that are generally considered safer than the S&P’s growth stocks. If you’re looking for diversification, your best bet is to go with both indices.
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Why choose? Instead of trying to decide between these indices, consider what both of them could do for your portfolio.
By investing in something like an index fund for both the S&P500 and the FTSE 100, you diversify your portfolio not only geographically, as you’ll get UK stocks and US stocks, but also by sector, as both indices offer a different mix of industries.
What are the top holdings in the S&P 500 and FTSE 100?
Here are the top stocks in the S&P500 and the FTSE 100. Most of the top 10 stocks in the S&P500 are for technology companies. Meanwhile, the top stocks of the FTSE 100 are mainly healthcare, industrial and energy stocks.
S&P 500
FTSE 100
Apple
6.1%
Astra-Zeneca
6.0%
Microsoft
5.8%
Unilever
5.8%
Amazon
3.9%
HSBC Holdings
4.5%
Facebook inc A
2.2%
Diageo
4.2%
Alphabet Inc A (Google)
2.2%
Glaxo-Smith-Kline
3.7%
How to invest in the S&P 500 and FTSE 100
Find an S&P 500 or FTSE 100 ETF, index fund or mutual fund. Some index funds track the performance of all stocks on the index, whereas others only track a certain number of stocks or are weighted towards specific stocks. You should select the fund that best suits your investment goals.
Open a stock trading account. To invest in ETFs or mutual funds, you’ll need to open a trading account with a broker or trading platform. Keep in mind that some index funds may only be available on certain brokerages or platforms. The providers in our comparison table let you invest in US and international stocks. Some of the index funds above are listed on the Toronto Stock Exchange (TSX).
Deposit funds. You’ll need to deposit funds into your account to begin trading. You may need to pay a foreign conversion fee to convert foreign funds to US dollars, so you can buy international stocks.
Buy the index fund. Once your money has been deposited, you can buy the index fund. Most ETFs or index funds come with a small annual fee to cover fund management expenses.
Bottom line
The S&P500 tracks top companies in the US stock market, and the FTSE 100 tracks top companies in the UK. Investors looking for growth may choose to model their investments after the S&P500, while those looking to offset risk with consumer cyclical stocks may choose to model their portfolios after the FTSE 100. A good way to diversify your stocks is to invest in funds that track both indices.
The makeup of each index is very different. Because the S&P500 tracks high-risk stocks, there’s potential for high rewards as well.
Unless you want to individually invest in 500 companies, the best way is to invest in an index fund that seeks to replicate the S&P500 and experience the same growth. You can learn how to invest in the S&P 500 here.
Invest in an index fund that seeks to replicate the holdings and performance of the FTSE 100. A fund like this typically holds all the stocks listed in the FTSE 100, and a professional investment manager rebalances the fund whenever the index changes.
Zoe was a senior writer at Finder specialising in investment and banking, and during this time, she joined the Women in FinTech Powerlist 2022. She is currently a senior money writer at Be Clever With Your Cash. Zoe has a BA in English literature and a Diploma for Financial Advisers. She has several years of experience in writing about all things personal finance. Zoe has a particular love for spreadsheets, having also worked as a management accountant. In her spare time, you’ll find Zoe skating at her local ice rink. See full bio
Zoe's expertise
Zoe has written 6 Finder guides across topics including:
Stacie Hurst is an editor at Finder, specializing in a wide range of topics including stock trading, money transfers, loans, banking products, online shopping and streaming. She has a Bachelor of Arts in Psychology and Writing, and she completed one year of law school in the United States before deciding to pursue a career in the publishing industry. When not working, Stacie can usually be found watching K-dramas or playing games with her friends and family. See full bio
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