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.
Popular stocks in the S&P 500 and FTSE 100
- Facebook inc A
- Alphabet Inc A (Google)
- Johnson & Johnson
- Berkshire Hathaway
- Procter & Gamble
- HSBC Holdings
- British American Tobacco
- Royal Dutch Shell A
- Rio Tinto
- Reckitt Benckiser
FTSE 100 vs S&P 500: Which is bigger?
Spoiler alert: The S&P 500 is bigger.
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.
|S&P 500||FTSE 100|
|Type of stocks||Large-cap US equities||Large and mid-cap UK equities|
|Number of holdings||505||101|
|Top sectors||Information Technology (IT) 27.5%, Healthcare 13.3%, Consumer discretionary 12.4%, Financials 11.4% ,Communication Services 11.2%||Healthcare 11.6%, Industrial goods & services 10.9%, Energy 10.2%, Basic resources 9.7%, Personal care drug and grocery stores 9.3%|
|Exposure to global economy||Greater||Slightly weaker|
|Availability of ETF||Wider||Weaker|
Platforms that let you invest in US and international stocks
These trading apps allow you to invest in companies and funds/ETFs listed in the FTSE 100 and S&P 500.
What’s the best S&P and FTSE index fund?
Here are some of the best performing S&P 500 and FTSE 100 funds according to JustETF:
|Icon||Fund||5 year performance||1 year performance (to July 2022)||Link to invest|
|Vanguard S&P 500 (VFV.TSX)||100%||-5.67%||Invest with CIBC Investor's Edge|
|iShares Core S&P 500 (XSP.TSX)||121%||-8.84%||Invest with CIBC Investor's Edge|
|Invesco S&P 500 Low Volatility (SPLV.NYSEARCA)||72%||1.28%||Invest with CIBC Investor's Edge|
|HSBC S&P 500 UCITS (HSPD.LSE)||97%||-7.30%||Invest with Interactive Brokers|
|SPDR S&P 500 ETF (SPY.NYSEARCA)||100%||-7.99%||Invest with CIBC Investor's Edge|
|Xtrackers S&P 500 Swap (XSPX.LSE)||97%||-7.01%||Invest with Interactive Brokers|
|Icon||Fund||5 year performance||1 year performance (to July 2022)||Link to invest|
|Vanguard FTSE 100 (VUKE.LSE)||96%||8.29%||Invest with Interactive Brokers|
|iShares Core FTSE 100 (CUKX.LSE)||96%||8.28%||Invest with Interactive Brokers|
|HSBC FTSE 100 (HUKX.LSE)||95%||7.79%||Invest with Interactive Brokers|
|Lyxor FTSE 100 (100D.LSE)||95%||5.29%||Invest with Interactive Brokers|
What are the top stocks 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|
|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 Canadian 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 your Canadian dollars into US dollars, so you can buy US 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.
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.
Frequently asked questions
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
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