S&P 500 vs FTSE 100 vs Nasdaq 100: Which Index to Track?

If you rank the major stock indices purely by the last decade's growth, it is not close: the Nasdaq 100 compounded at roughly 20.9% a year while the FTSE 100 managed about 5%. But "best" is not the same as "fastest," and choosing between the S&P 500 vs FTSE 100 vs Nasdaq 100 is really a choice about how much concentration, income and volatility you want to live with.

This is a ranking of the five indices a US, UK or European investor genuinely compares — ordered by 10-year annualized return, then pressure-tested on income, valuation and risk. Read it before you pick a core holding, and if you want the mechanics behind index funds themselves, start with a structured ETF and index-investing course.

Which stock index should you track?

For most long-term investors, the S&P 500 is the best single index to track, with the Nasdaq 100 the runner-up for those who can stomach bigger swings for higher growth. The S&P 500 wins on breadth: roughly 500 US companies across all 11 sectors, so no single theme sinks you. The Nasdaq 100 has returned more over the past decade but does so with far heavier technology concentration and sharper falls. The FTSE 100 ranks lower for growth but higher for income.

Here is the full ranking at a glance, scored on the metric that starts most arguments — long-run growth — with the trade-off spelled out for each.

Source: Trade That Swing / ChartRow, 5yearcharts, Morningstar/iShares, IG International, 2025–2026. Returns are annualized over roughly the last 10 years and will shift as markets move.

What the ranking tells you right now: raw return falls as you move down the list, but so does concentration risk and so does price. The reader deciding today has to weigh the Nasdaq 100's growth against its 33% drop in 2022, and the FTSE 100's modest growth against a dividend yield three times the S&P 500's.

The five major indices, ranked by 10-year return

Nasdaq 100 vs S&P 500: the closest call

For most investors the real decision is between the top two, because they own so much of the same thing. If you already track the S&P 500, adding the Nasdaq 100 mostly doubles down on mega-cap technology rather than diversifying. The table below is where the two-way choice is won or lost.

Source: ChartRow, justETF, FatFire index factsheets, GuruFocus and Siblis Research, 2026.

The Nasdaq 100 has won on return and lost on stability. Its beta is roughly 1.2 to the S&P 500's 1.0, meaning it tends to move about 20% harder in both directions. Its worst-ever fall was around 82.9% in the 2002 dot-com collapse. If you want the growth without holding two overlapping funds, many investors simply hold the S&P 500 and accept a slightly lower ceiling. For the full two-way breakdown, see our deeper look at the Nasdaq 100 versus the S&P 500.

Why does the FTSE 100 lag on growth but win on income?

The FTSE 100 sits last on return for one structural reason: its make-up. Financials are the largest sector at about 26%, and the index is heavy in energy, mining and consumer staples while holding effectively 0% information technology. It simply never owned the mega-cap tech names that powered the US indices over the last ten years.

That same composition is why it pays. Banks, miners and oil majors return cash to shareholders, giving the FTSE 100 a dividend yield of roughly 3.5% — against about 1% for the S&P 500 and 0.65% for the Nasdaq 100. It is also the cheapest of the group, trading near a 15x trailing P/E versus ~26x for the S&P 500 and ~35x for the Nasdaq 100.

Put numbers on it. A $100,000 position in the FTSE 100 pays roughly $3,500 a year at a 3.5% yield; the same $100,000 in the S&P 500 pays about $1,000 at ~1%, and in the Nasdaq 100 about $650. That income gap compounds into a real cushion in years when prices go nowhere — which is precisely when income matters most. A growth index gives you nothing to spend until you sell; an income index pays you while you wait.

What this means for you: the FTSE 100 is a value-and-income index, not a growth one. If you need income today or want cheaper valuations, its ranking flips from last to first. For the long historical picture, compare 20 years of S&P 500 versus FTSE 100 returns.

What about currency and tax if you invest from the UK?

The ranking measures each index in its home currency, but that is not what a UK investor actually earns. Buy a US index and you take on dollar exposure on top of the index itself: a strong pound can quietly erase part of a good American year, while a weak pound flatters it. The FTSE 100 sidesteps that currency layer for a sterling investor — one reason some hold it even after seeing the return gap.

Tax changes the picture too. Holding a tracker inside a Stocks and Shares ISA shelters both growth and dividends from UK tax, whereas unwrapped holdings fall under Self-Assessment. Many UK investors also choose UK- or Ireland-domiciled funds that track the S&P 500 or Nasdaq 100 to reduce withholding-tax friction on dividends. None of this reorders the raw-return ranking — but it changes how much of that return reaches your pocket, so decide the wrapper before the index.

How do you choose the right index for you?

Rank the indices against your situation, not against each other. The order changes depending on what you need the money to do.

If you are building long-term wealth and have decades: the S&P 500 is the sensible default core, with a Nasdaq 100 tilt only if you can hold through a 30%-plus drop without selling. If you want income now: the FTSE 100's ~3.5% yield leads. If you want to diversify away from mega-cap tech: pair a large-cap index with the Russell 2000. If you want lower drama: the Dow Jones offers blue-chip exposure with milder swings than the Nasdaq 100.

Your life stage matters as much as your appetite. A 25-year-old with forty years ahead can treat a 33% Nasdaq 100 drawdown as a buying window and lean into growth. Someone within five years of drawing on the money should tilt the other way — toward the broader S&P 500, the steadier Dow, or the income of the FTSE 100 — because a deep fall right before you sell is the one risk no return figure can undo. The index that is "best" at 25 is often the wrong one at 60.

Whichever you land on, two habits protect the decision: rebalance on a schedule so a runaway winner does not quietly become your whole portfolio, and watch fees, because a 0.20% versus 0.90% expense ratio compounds into thousands of dollars over a couple of decades.

Most investors do not pick one and stop — they combine a broad core with a satellite tilt. Understanding how these funds are actually built, and how fees quietly erode returns, matters as much as the index you choose. If the difference between index funds and ETFs is still fuzzy, read index funds versus ETFs before you buy.

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Investing involves risk, including possible loss of capital, and past performance does not predict future returns. This article is educational content, not investment advice.