Mello Nov 2019: Why US markets outperform

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The S&P 500 has outperformed the FTSE 100 since the bear market hit its low in March 2009.  This has been driven by US technology stocks and less exposure to low quality sectors.

In 2006, the five largest US companies were Exxon Mobil, GE, Microsoft, Citigroup and Bank of America.  Two banks, an oil company, an industrial and a software business.

It is perhaps no surprise that the S&P 500 tanked during the global financial crisis.  The five largest US companies today are Apple, Microsoft, Alphabet, Amazon and Facebook.

The US equity market has moved from old economy to new economy stocks.

The five largest companies in the FTSE 100 are Royal Dutch Shell, Unilever, HSBC, BP and AstraZeneca.  Two oil companies, a bank a pharmaceutical and a consumer staples group.

The FTSE 100 continues to be driven by old economy stocks.

Top five stocks in the S&P 500 and the FTSE 100

Source: SharePad and The Four, Scott Galloway


Performance

The FTSE 100 index and the S&P 500 index delivered similar returns from 1984 to March 2009 (excluding dividends).  But from March 2009, the S&P 500 has meaningfully outperformed the FTSE 100.

The two blue-chip equity markets appear to have decoupled.

The S&P 500 total return index has increased by 313% from the close on 3 June 2009.  The FTSE 100 total return index has increased by 147% over the same period.

FTSE 100 and the S&P 500 (excluding dividends) from 1984

Source: SharePad

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Mello Nov 2019: Why US markets outperform

The S&P 500 has outperformed the FTSE 100 since the bear market hit its low in March 2009.  This has been driven by US technology stocks and less exposure to low quality sectors.

In 2006, the five largest US companies were Exxon Mobil, GE, Microsoft, Citigroup and Bank of America.  Two banks, an oil company, an industrial and a software business.

It is perhaps no surprise that the S&P 500 tanked during the global financial crisis.  The five largest US companies today are Apple, Microsoft, Alphabet, Amazon and Facebook.

The US equity market has moved from old economy to new economy stocks.

The five largest companies in the FTSE 100 are Royal Dutch Shell, Unilever, HSBC, BP and AstraZeneca.  Two oil companies, a bank a pharmaceutical and a consumer staples group.

The FTSE 100 continues to be driven by old economy stocks.

Top five stocks in the S&P 500 and the FTSE 100

Source: SharePad and The Four, Scott Galloway


Performance

The FTSE 100 index and the S&P 500 index delivered similar returns from 1984 to March 2009 (excluding dividends).  But from March 2009, the S&P 500 has meaningfully outperformed the FTSE 100.

The two blue-chip equity markets appear to have decoupled.

The S&P 500 total return index has increased by 313% from the close on 3 June 2009.  The FTSE 100 total return index has increased by 147% over the same period.

FTSE 100 and the S&P 500 (excluding dividends) from 1984

Source: SharePad

Sign up to read full article.

Get FREE access now

Already a member? Login