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For the last 15 years, the S&P 500‘s been the place to be. The US stock market has outstripped all rivals, largely thanks to the outperformance of its mighty technology sector.
Europe, China, India and emerging markets generally haven’t kept up. Neither has the FTSE 100. It’s packed with old-school blue-chips in oil, mining, banking, insurance, defence, pharma, tobacco and telecoms. These have struggled to keep pace with whizzy tech stars like Amazon, Apple, Nvidia and Tesla.
But investing is cyclical. Nothing races ahead forever, and the US bull run has slowed.
Performance gap closes
So far in 2025, the S&P 500’s up just 1.69%. After two blistering years of double-digit growth, a breather was probably due. Donald Trump’s tariffs haven’t helped, nor has the uncertainty swirling around Tesla as Elon Musk crashes in and out of politics.
By contrast, the FTSE 100 has climbed a healthy 6.25%. It’s not shooting the lights out, but it’s steady. Over five years, US stocks are still miles ahead, up 90% versus 43% for UK shares. But that doesn’t tell the full story.
UK companies generally pay better dividends. The S&P 500 yields just 1.28%. That rises to 3.6% on the FTSE 100.
The maths adds up fast. Reinvest a 1.28% yield on £10,000 and after 20 years, it grows to £12,897. At 3.6%, the pot climbs to £20,285. That’s a big difference.
Individual winners
When I set up my Self-Invested Personal Pension (SIPP) two years ago, I parked a quarter of it in the Vanguard S&P 500 UCITS ETF. It’s done well, but a heap of my FTSE 100 holdings have done better.
Now I’ve run out of cash to buy top UK shares on my shopping list, such as RELX (LSE: REL). Should I generate it by whittling down my US tracker?
RELX is a £75bn information and analytics giant, operating in more than 180 countries. Its done brilliantly, with little sign of slowing. The shares are up a relatively modest 10% over the last year, but 103% over a decade.
2024 results showed adjusted operating profit up 10% to £3.2bn on revenues of £9.43bn. Margins edged up to 33.9% as management tightened costs and boosted productivity.
RELX is growing well
That progress has carried into 2025, with growth across all four divisions in Q1. Financial crime compliance tools and digital identity checks are in demand. Its scientific and medical publishing arm also keeps growing.
There are risks. A global slowdown could hit its events business. Tariffs and currency shifts might impact revenues. At 1.53%, the dividend is modest, but the board’s committed to progressive payouts, with a 7% hike last year. It also made share buybacks totalling £2.5bn between 2024 and 2025.
Success doesn’t come cheap. RELX shares trade on a price-to-earnings ratio of over 32. But it has looked expensive for years and still kept climbing. Analyst sentiment remains strong.
I think it’s well worth considering, even at today’s price.
My SIPP’s convinced me that buying individual stocks can beat index tracking over time. I’m not ditching my S&P 500 tracker entirely. I need some US exposure, for diversification. But I may trim my holding to go hunting for home-grown opportunities — including RELX — over the weeks ahead.
