The S&P 500 and FTSE 100 are major stock market indices. While the S&P 500 consists of 500 of the largest stocks from various US exchanges, the FTSE 100 includes the top 100 stocks from the London Stock Exchange. There are significant differences between them.
For a start, if you invest in the S&P 500, your money is invested in a dollar-denominated fund (unless you use a hedged version). In addition, the S&P 500’s juggernauts are overwhelmingly fast-growing tech stocks. Meanwhile, the FTSE 100 is weighted towards slow-and-steady companies in sectors like Energy, Industrials and Financials.
We look at more differences between the S&P 500 and FTSE 100 below.
The S&P 500 and FTSE 100 are both stock market indices containing some of the biggest companies in the US and the UK. The FTSE 100 is simply the 100 biggest UK shares by market capitalisation. The S&P 500 is slightly different, market cap plays an important role but there’s other criteria a stock must meet to make it onto the index.
When looking at the S&P 500 and FTSE 100, it’s important to consider various factors. Currency fluctuations play a role, as a stronger US dollar can benefit investments in the S&P 500 when converted to pounds, while a stronger pound can have the opposite effect. Investors can mitigate this risk by using currency hedging strategies.
Another aspect to consider is income. Holding an index fund covering either of these indices will lead to dividend payments, but the FTSE 100 has a current yield of 3.9% whereas the S&P 500 pays a lower yield of 1.1%.
Additionally, the price-to-earnings (P/E) ratios differ, with the FTSE 100 usually having a much lower average P/E ratio (around 10), while the S&P 500 tends to trade at higher multiples (around 20).
If the US dollar gets stronger compared to the pound, it means that investments in the S&P 500 may be worth more when converted to pounds. On the other hand, if the pound gets stronger, it can make investments in the S&P 500 less valuable for British investors.
It’s important to realise that when investing in companies abroad, you’re exposing yourself to currency risks as well as equity risks.
However, there are ways to isolate yourself from these risks while still getting exposure to the S&P 500. For example, iShares S&P 500 GBP Hedged UCITS ETF uses currency hedging strategies to cancel out the effect of currency movements on your returns.
The S&P 500 contains 500 stocks, while the FTSE 100 is made up of just 100.
The FTSE 100 is also a lot smaller than the S&P 500 in terms of market capitalisation – (as of July 2024) the FTSE 100 has a market cap of just over £2 trillion, while the S&P’s market cap is around $45 trillion (about £35 trillion). That makes the S&P 500 about 17 times the size of the FTSE 100 in terms of market cap.
There are 503 stocks in the S&P 500 and 102 stocks in the FTSE 100 — this is because of the different classes of shares that some companies have. When it comes to concentration, even though the S&P 500 is very top-heavy due to the mega-cap stocks weighted at the top, you might be suprised about the results.
The top 10 stocks in the S&P 500 make up just over 30% of the total index. Whereas for the FTSE 100, the top 10 shares make up around 47% of the total index. There, the FTSE 100 could be viewed as a more concentrated index.
The top 10 stocks in the S&P 500 (also listed below) make up just short of 30% of it.
Judging stocks on quality is quite a subjective form of analysis. The top stocks in the FTSE 100 are vastly different from the top ones in the S&P 500, and the rest of each index also largely differs. The S&P 500 is made up of a lot of technology stocks, whereas the FTSE 100 contains only a handul.
The FTSE 100 has more stocks that could be considered “defensive”, meaning they may perform well during a recession or a downturn. Because, setors like Consumer Staples, Energy and Utilities can have pricing power or involve essential spending. However, the S&P 500 also now has its own fair share of blue-chip stocks. When it comes to stock quality, it depends what you’re looking for as an investor.
It depends on what sort of diversity you want. Obviously, the S&P 500 contains more stocks than the FTSE 100, but this doesn’t neccessarily make it more diverse.
A number of US companies in the S&P 500 have international operations, but so too do business in the FTSE 100. Both indices contain stocks across a wide range of sectors. The S&P 500 is quite concentrated with around 30% in Information Technology stocks, but the FTSE 100 is thinly spread at the bottom with only around 1% in Technology and 1% in Telecommuncations.
These trading apps allow you to invest in companies within each index directly or to invest in funds/ETFs (exchange-traded funds).
Here are some of the most popular S&P 500 and FTSE 100 funds along with their recent performance, according to JustETF:
| Fund | Icon | 5-year performance (to Aug. ’24) | 1-year performance (to Aug. ’24) | Link to invest |
|---|---|---|---|---|
| Invesco S&P 500 (SPXP) |  | 94.07% | 22.23% | Invest with XTBCapital at risk |
| Xtrackers S&P 500 Swap (XSPX) |  | 93.77% | 22.24% | Invest with XTBCapital at risk |
| iShares Core S&P 500 (CSP1) |  | 91.84% | 21.98% | Invest with XTBCapital at risk |
| HSBC S&P 500 (HSPX) |  | 80.38% | 20.63% | Invest with XTBCapital at risk |
| Vanguard S&P 500 (VUSA) |  | 79.29% | 20.60% | Invest with XTBCapital at risk |
| SPDR S&P 500 ETF (SPX5) |  | 79.17% | 20.61% | Invest with XTBCapital at risk |
| Fund | Icon | 5-year performance (to Aug. ’24) | 1-year performance (to Aug. ’24) | Link to invest |
|---|---|---|---|---|
| Xtrackers FTSE 100 (XDUK) | | 31.44% | 10.09% | Invest with HLCapital at risk |
| iShares Core FTSE 100 (CUKX) | | 31.39% | 9.60% | Invest with eToroCapital at risk |
| Invesco FTSE 100 (S100) | | 30.75% | 9.76% | Invest with HLCapital at risk |
| HSBC FTSE 100 (HUKX) | | 11.99% | 6.09% | Invest with XTBCapital at risk |
| Amundi FTSE 100 (100D) |  | 11.93% | 5.35% | Invest with HLCapital at risk |
| iShares Core FTSE 100 (Dist)(ISF) | | 8.14% | 5.57% | Invest with XTBCapital at risk |
| Vanguard FTSE 100 (VUKE) | | 8.07% | 5.67% | Invest with XTBCapital at risk |
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
The FTSE 100 is home to 6 world-class mining companies, meaning it could strike it big in a green metals bull market.
According to metals expert Guillaume Pitron, “Over the next generation, we will consume more minerals than in the last 70,000 years.” That is due to the world’s increasing adoption of resource-hungry “green” technologies. The battery in an electric car, for example, needs lithium, manganese, cobalt, graphite, steel and nickel to run.
In previous commodities bull markets, the FTSE 100 has tended to outperform other indices. In 2022, its focus on commodities paid off as Russia’s invasion of Ukraine caused price shocks in oil, gas, nickel and other raw materials.
By owning FTSE 100 miners like Anglo American, Antofagasta, BHP Group, Fresnillo, Glencore and Rio Tinto, investors can get exposure to a wide range of critical metals. However, commodities markets are viciously cyclical. If global economic growth slows, that could be a major downer for mining companies.
Here are the top holdings of the S&P 500 and the FTSE 100. As you can see, the top 10 stocks in the S&P 500 contains mostly Information Technology companies. Meanwhile, the top stocks of the FTSE 100 are mainly Energy, Financials and Healthcare shares. Keep in mind the largest constiuents of each index can shift regularly.
| Holding | Icon | Proportion |
|---|---|---|
| Apple |  | 6.6% |
| Microsoft |  | 7.3% |
| Amazon |  | 3.5% |
| Meta (Facebook Class A) |  | 2.1% |
| Alphabet Inc A (Google) |  | 2% |
| Holding | Icon | Proportion |
|---|---|---|
| AstraZeneca |  | 8.1% |
| Unilever |  | 5% |
| HSBC Holdings | | 6.3% |
| Diageo |  | 3.3% |
| GSK |  | 3.3% |
This can be down to interpretation, but here are some of the head to head stats and insights as a broad overview.
| S&P 500 | FTSE 100 | |
|---|---|---|
| Type of stocks | Large cap US equities | Large cap UK equities |
| Number of holdings | 503 | 102 |
| Top sectors | Information Technology 29.5%, Healthcare 12.8%, Consumer discretionary 10.3%, Financials 13.1%, Communication Services 8.9% | Financials 18.9%, Consumer Staples 16.5%, Healthcare 13.3%, Energy 12.5%, Consumer Discretionary 12.4% |
| Exposure to global economy | High | High |
| Past performance | Stronger | Weaker |
| Availability of ETF | Wide | Wide |
These trading apps allow you to invest in companies within the indexes directly or to invest in funds/ETFs.
Both the S&P 500 and the FTSE 100 allow you to invest in some of the biggest stocks and shares in the US and UK respectively. Each index has its benefits and drawbacks, you might find that investments copying both could find a place in your portfolio.
Each index contains some excellent businesses across a variety of sectors and generating profits around the world (not just in the US and the UK). Ultimately, investors seeking growth may lean towards the S&P 500, while those looking for stability and higher income payments from dividends may prefer the FTSE 100.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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