Comparative performance of FTSE 100 and S&P 500

The following chart shows the average monthly out-performance of the FTSE 100 Index over the S&P 500 Index for the period 1984-2013. For example, the FTSE 100 Index has out-performed the S&P 500 Index by an average of -0.6 percentage points in January.


  1. Although since 1984 the S&P 500 has overall greatly out-performed the FTSE 100 (+1021% against +575%), there are months in the year when the FTSE 100 fairly consistently out-performs the S&P 500.
  2. The five months that are relatively strong for the FTSE 100 are: February, April, July, August and December. For example, the FTSE 100 has out-performed the S&P 500 in February in 13 of the past 15 years.
  3. The greatest monthly difference in performance is seen in May, when the S&P 500 on average beats the FTSE100 by 1.3 percentage points each year.


The table below shows the monthly out-performance of the FTSE 100 Index over the S&P 500 Index since 1984. For example, in January 1984, the FTSE100 increased 6.3%, while the S&P 500 fell -0.9%; the out-performance of the former over the latter was therefore 7.2 percentage points.

The cells are highlighted if the number is negative (i.e. the S&P 500 out-performed the FTSE 100).

 FTSE 100 v S&P 500(£)

The following chart is similar to the above except the S&P 500 monthly returns have been currency-adjusted into sterling returns.

COMPARATIVE MONTHLY RETURNS OF FTSE 100 V S&P 500(£) [1984-2013]An effect of adjusting for currency moves is to amplify the out-performance of the FTSE 100 index in certain months (April, July, and December). Conversely, the FTSE 100 under-performance is amplified in January, May and November.

Whereas before the relatively strong FTSE 100 months were February, April, July, August and December, we can see that the currency-adjusted strong months are just April, July, and December.


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FTSE 100 Index (1984-2013) – price performance

To quickly recap a previous post, the FTSE 100 Index was launched in 1984 with a value of 1000 and closed 2013 at 6749. This is an increase of 575% over the 30 years, giving an annual growth of 6.57%.


The following chart shows the price performance of the FTSE 100 Index 1984-2013. A simple linear trendline has been added.

FTSE 100 Index [1984-2013] with trendlineThe trendline calculates a value of 6695 for the end of 2013, which is just 54 points away from the actual value (less than 1% difference). As can be seen in the chart, the FTSE 100 Index is pretty much bang on its long-term (since 1984) trend.


The following chart plots the FTSE 100 Index against the real index (inflation-adjusted) for 1984-2013.

FTSE 100 inflation-adjusted [1984-2013]Inflation-adjusted the FTSE 100 Index closed 2013 at 2304 – an increase of 130.4% on the starting value 30 years ago, an average annual growth rate of 2.8%.

Comparison with S&P 500 and gold

The following chart plots the FTSE 100 Index against the S&P 500 Index and gold. The three series have been re-based to start at 100 for ease of comparison.

FTSE 100 v S&P 500 v GOLD [1984-2013]The above chart is not that useful as the S&P 500 Index and gold are both priced in dollars, so the following chart plots them in sterling terms against the FTSE 100 Index.

FTSE 100 v S&P 500(£) v GOLD(£) [1984-2013]

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Sovereign rating downgrade effect on equity markets

What is the effect on equity markets when sovereign debt loses its AAA rating?

The following chart shows the effect on five equity markets when the related sovereign debt lost its triple-A rating.


  1. The date of the downgrade is taken as the first date that the sovereign lost its AAA rating. For example, Moodys downgraded Japan in November 1998 but Standard & Poor’s kept Japan at its highest rating of triple-A until February 2001. In this study the first date (November 1998) is used.
  2. The time period analysed is from two months before the downgrade to 12 months after. The downgrade is announced in week 9 – as indicated by the dotted line in the chart.
  3. The five indices are indexed to 100 at the end of week 9.


  1. In the short term (two months) following the downgrade all the equity markets except Japan performed strongly.
  2. After the first two months, Japan then rebounded strongly, although the French market then suffered a period of weakness.
  3. 12 months after the downgrade all equity markets were higher, with an average increase of 17.7% from the time of the downgrade.

The data is summarised in the following table-

Date of losing AAA Country Index Index change 12 mnths after downgrade(%)
Apr 1993 Canada S&P/TSX 18.5
Nov 1998 Japan Nikkei 225 23.5
Apr 2010 Spain IBEX 17.0
Aug 2011 US S&P 500 18.0
Jan 2012 France CAC40 11.6
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International markets in 2012

Equity and commodity markets

The following chart shows the returns on a range of international stock markets and commodities in 2012.


  1. The German market was the strongest (+29.1%), followed by the Asian markets of India, Japan, and Hong Kong.
  2. The FTSE 100 was ranked 22 out of the 25 markets appearing here.
  3. Over half the markets increased by more than 10% in 2012.

Currency markets

The following chart shows a sample of currency moves against the British pound in the year. For example, the British pound increased 16.5% against the Japanese Yen, and fell in value 6.7% against the Polish Zloty.

Equity and commodity markets (sterling)

The following chart shows the returns on the same range of markets shown above, but this time in sterling terms (i.e. showing the returns for a UK investor).


  1. The German market remains the strongest for 2012, with its returns reduced from 29.1% to 26.4% due to the slight appreciation of GBP against EUR over the year.
  2. A big difference is the return for the Nikkei Index in sterling terms – falling from 22.9% to 5.5%.
  3. In sterling terms the FTSE 100 climbs from 22nd position to 15th.
  4. And in sterling terms the FTSE 250 Index climbs to 2nd position.
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S&P 500 tracking the average performance for an election year

The chart below below from Bespoke Investment Group plots the average performance of the S&P500 Index in an election year and the performamce of the index this year.

As can be seen, the market in 2012 has tracked pretty closely the average market in all election years since 1928. If this tracking continues, expect the market to increase to the end of the year.

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