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The FTSE 100 index started out on 3 January 1984, just over 40 years ago. Until the mid-1990s, it pretty much matched its American counterpart, the S&P 500. However, for most of the past three decades, the US index has reigned supreme.
For example, here’s how the two have performed over these three timescales:
| Index | FTSE 100 | S&P 500 | Difference |
| Six months | 2.6% | 6.2% | 3.6% |
| One year | -3.0% | 19.9% | 22.9% |
| Five years | 9.4% | 79.1% | 69.7% |
My table shows that the US index has easily beaten the Footsie over extended periods. Indeed, it’s obvious that — in recent history, at least — investors would have been better off betting on America than the UK.
However, this isn’t the full picture, because the above figures excluded dividends — regular cash distributions paid by some companies to shareholders. Currently, the Footsie offers a dividend yield of 4% a year, nearly triple the S&P 500’s 1.5%…
