S&P 500 vs Global - Here's the Right Choice in 2026

追加: 2026-05-12

[00:00:00]If there is one topic that keeps coming up in the UK investing space again and again is whether to go with an S&P 500 or a global index. And I get it. You want to make the right call. You don't want to look back in a few years and realize you picked, quote unquote, the wrong one. Well, on our quest to go deeper into this topic, I will go through some details that we need to look at. Then, aside from the details, I'm going to have to go through the commoditized information first, and then I want to give you my own thoughts about the answer to this question. For context, if we've never met before, my name is Ismail, a UK investing and personal finance creator, and I've grown my own portfolio to over six figures.

[00:00:35]And throughout my investing journey, I have been invested for a period of time in the US market, and then at a later stage, I've had experience to be invested in the global index for a long period of time. So, I have learned a lot through my own personal experience, and that is what I aim to share with you today. Please note, this video is for education, and it's not meant to be in any way financial advice. When you invest, capital is at risk. So, always practice your own due diligence before you invest. All right, let's dive in.

[00:01:01]Now, in case you happen to be new, I'm just going to go through a quick recap about both. So, the S&P 500 is basically a representation of the top 500 American companies in the United States. And when I say top 500 American companies, that top company is measured by something called a market cap, which is basically how big and how valuable the company is.

[00:01:21]Obviously, the bigger the company, the higher up it is in the list of the S&P 500. So, for example, at the time of recording, Nvidia is the biggest company in the world, and as a result, it is a top company in the S&P 500. The beautiful thing about an index like the S&P 500 is that you don't have to worry about actively managing anything. The index passively manages the weighting of each company. So, for example, if the market cap of a certain company drops, it will go down the list automatically, and that is done every quarter. The S&P 500 has been a source of growth for many investors over the decades. And it's great to to who want exposure to the most powerful economy in the world, which is the United States. Now, on the other hand, the global index is pretty much the same concept. So, it is also market cap weighted. Again, you don't have to do any active management, and you don't have to worry about which stocks will rise and which stocks will drop. The very big difference, as the name might imply, is that you don't have access to only the US market, but rather you have access to the entire world. And the global index at the moment is a split of two different worlds. So, you have the developed world, which is basically nations like the US, Canada, UK, Europe. And then we have emerging markets, which are economies like China, Brazil, India, and so on. These are often economies with a lot of prospects and a lot of potential, but obviously they're not as proven as the developed world, which is the reason why, at the moment, at the time of recording, the developed world forms 90% of the FTSE All-World index, and then the emerging markets forms 10%. So, the key point I wanted to take out of this section is that these two indices, the S&P 500 and the global index, they're not the opposite. They both operate in the same way, and we will talk about this later in the video, but you will notice that they will overlap quite a lot. Right, section number two, which is the performance story. And this is probably by far the biggest incentive that drives people to ask this question, because most people want to find out which one returns more. And this is where a lot of people shoot themselves in the foot. But anyways, so let's dive into this particular section. So, when we have a look at the data from the last few years, you can see, for example, in 2023 and 2024, the S&P 500 was ahead. In 2025, however, the leadership went to the global index with 21% return in that year versus 18% for the S&P 500. And if we look at the performance so far in 2026, we can see that the FTSE All-World ETF, which is a global index, is up by 8.6% year-to-date. For the same period of time, the S&P 500 in 2026 so far is up by 7.5%. So, the FTSE All-World is slightly ahead by about 1%. Now, the reason why I mentioned all of this is that because over the last about 5 years or so, the S&P 500 has kind of almost been winning every single year. And a lot of people were drawn by that. But, as you can see recently, the FTSE All World or the Global Index is kind of starting to catch up. So, it's only classic that people now start to wonder, well, should I switch or should I go with the S&P 500? And as a result of that, at the moment in the UK retail investing space, some people have now gone down the route of I'm staying with the S&P 500 because it has more consistent record for being ahead, and other investors are saying that now the playing field has leveled up and that they are switching to the Global Index.

[00:04:32]And many people make this decision based on other factors as well. The first one is concentration risk. Many people are now not very comfortable with the fact that the top 10 companies in the S&P 500 represents almost a third of the entire index. And that naturally causes the index to fluctuate quite a lot with geopolitical events and news. The Global Index is, of course, not immune to this.

[00:04:52]It also gets affected, but kind of the blow is a little bit softer. Another thing that many people consider is I mentioned it briefly earlier, which is the overlapping. So, because the US economy is the most powerful economy in the world, naturally it takes a very big chunk of the Global Index. As you can see from this chart right here, the US is overwhelmingly the most dominant country in the Global Index, representing 2/3 of the entire FTSE All World Index. So, you're not really missing out on the gains of the US if you are fully 100% on the Global Index.

[00:05:24]It's really about that choice whether you want to be 60% exposed to the US or 100% exposed to the US. If you end up doing 50/50 between Global Index and an S&P 500, you're going to end up with 80% concentration roughly to the US and then 20% to the rest of the world. So, you're pretty much almost like as if you're holding an S&P 500 purely.

[00:05:49]Right. So, before I sat down to record this video, I've kind of made some bullet points. I usually make a bullet points about talking points that I want to cover.

[00:05:57]And I have so many things in here that goes into this topic of S&P 500 versus global, fees, currency exchange effects, the ETFs available for each, and so many other things.

[00:06:09]But, I'm just recording this. Um get into a point where you know what?

[00:06:17]I'm going to toss this aside because it honestly not going to be that helpful. I can throw as much information as I can at you.

[00:06:26]It's probably not going to make a huge difference.

[00:06:30]The reason why I say that, and having been investing for years now, it honestly does not matter. It simply does not matter.

[00:06:43]Statistically speaking, most people have less than 100,000 pounds invested.

[00:06:51]If you are that stage, especially if you're just starting out, none of this thing will make any difference. And quite honestly, the answer to should I go with the S&P 500 on an all world is you can choose either one you want. It does not really make a huge difference at this stage. At this particular stage, I think you are probably focusing on the wrong thing because an extra 1% or 2% in returns on a 1,000 pounds portfolio is an additional 20 quid a year. So, just to clarify something, investing is a form of leverage. In other words, investing leverages something which is called capital. You need to have some first to be able to see massive leverage. In other words, at this stage, the biggest advice I can give you is, of course, get started with investing.

[00:07:39]You can set up your first investing account, and you can set up your monthly contribution, whether you want to start with 50 quid a month, 100 quid a month.

[00:07:46]And honestly, that is far better than doing nothing at all and ending up precisely with nothing later on in life.

[00:07:53]But, here's the thing. Once you do your initial setup and you pick your first ETF, after that, all your effort and energy should be redirected to the thing that will make the most difference, which is your contributions. So, the amount of money that you contribute is the fastest way to get you to your first milestone, which is that 100,000 pounds. A six-figure portfolio is usually the point when these small differences in terms of fees, FX impact, currency impact, should I go with an S&P 500 or global?

[00:08:25]At that point, small differences will make a difference, and they will become meaningful. But, right now, your focus is far better spent on not spending too much time consuming so much content around which ETF should I pick, and rather, I'd encourage you to go and sort your day-to-day life and just focus on your life, your career prospects. You are better off just figuring out how to make yourself more valuable in the marketplace so that you can perhaps ask for a raise from your employer.

[00:08:53]I'm not saying this is easy stuff. This is the boring crap that nobody will talk about because, you know, you're going to tune out from it, and nobody wants to hear, "Oh, the solution to my problem is I need to make more money." Of course, it's a boring advice that you might have heard again and again.

[00:09:09]And perhaps you might be seeking comfort, and you might find it better if I just comforted you by saying, "Oh, I have this amazing ETF strategy that if you sort stuff out like this, you're going to end up with 3% or 4% more in returns." That is very comfortable to talk about, but the thing that I really think will move the needle the most and will get you the fastest benefit from investing is your ability to increase your contributions over time. If you are below pounds in your investment portfolio, the fastest route is your contributions. I have spent a decade trying to figure out this world of financial freedom and the meaning of money and what is the meaning of doing all of this? Because at the end of the day, I don't think you are investing for the sake of investing.

[00:09:55]I'm sure you don't care about investing.

[00:09:57]You want the outcome that investing gets you, which is the financial safety, the ability to have options in life, the ability to choose to do work that is meaningful to you, that doesn't drain you every single day, and the ability to not be reliant on state pension and minimum retirement age laws in the UK. And you can choose when you want to retire and what you want to do with your life. And over a decade of trying to explore that world, and I have experienced so many things.

[00:10:24]I have worked two minimum wage jobs, day and night shifts when I was at uni. And I have gone through the white-collar route, and I've worked in corporate.

[00:10:32]I've worked for one of the biggest companies in the world, and I've experienced the professional and corporate route. I've also took a radical shift from that and shifted to the world of business ownership and entrepreneurship. And I'm telling you all of this is because I have gone through all those experiences and I've learned all those lessons over this decade. I'm trying to summarize my decade to you. I did many of these things by choice because I wanted to learn for myself what is it like to end up with a meaningful life, with financial freedom, with financial security, being having the ability to spend time with your family and do work that is meaningful to you.

[00:11:12]And I came to the conclusion that I'm going to summarize it to you in this video so that you don't have to waste your time trying to watch 300 hours of YouTube videos trying to explain advanced ETF strategies while you have 500 quid to start your investing journey. You are far better off focusing on your day-to-day life. You can set up your investing account to get started.

[00:11:34]And as I'm saying, every single amount you invest is well worth it because you want to develop the habit now. If you start with investing 50 quid a month, that's fine. 100 quid a month, that is fine. Choose any amount you want. The point is you want to start the habit. But then the moment you do and you set up everything and on this topic of S&P 500 versus FTSE All-World, if you want to pick one between the two, follow the framework that I like to call the peaceful sleep at night effect. Just pick the one that does not cause you to make impulsive decisions and that does not make you question your choice every single week. But generally speaking, beyond that, anything else is just meaningless and it's not going to move you forward by a significant amount.

[00:12:14]Then once you do that, forget that you have an investing account that exists and shift your focus to your day-to-day life and sort out your career. It is a very boring conversation to have and I do get why people escape it because it is deeply uncomfortable for somebody to walk on to their boss or to their manager and say, "What can I do to get a pay rise?" Or "Can I get a pay rise?" straight away.

[00:12:38]Um or trying to figure out options in life. "What should I go with? Should I go with this career or with this career?

[00:12:45]Should I do a side hustle on the side to earn more money?"

[00:12:48]This sort of stuff is deeply uncomfortable and there is a very good reason why a lot of people start investing with the wrong expectation that somehow it's this magical route that will make them money really fast without having to go through that discomfort of, you know, speaking to people in day-to-day life. And I can tell you, again, over a decade of experience in this, it does not work.

[00:13:08]You are better off facing that discomfort because it is your much higher chance of reaching the goal you want to reach faster. Okay, I went on a very big detour here. This is probably not a usual S&P 500 versus global index video if you've seen one before.

[00:13:25]And I do hope it gave you something to think about. And if you're ever stuck on anything, or you'd like to gain the perspective of people who are going on the same journey as you, you are also more than welcome to join the channel community, which is a free community by the way. It's a place where you can ask questions, share your thoughts, and be around other investors, or people who are building for their future. So, if that is of interest, here is the link on screen right now, or you can click on the link in the description if you like.

[00:13:52]If you do want to open your investing account, set it up so that you can get started. I will leave also links in the description as well. And while you're down there checking out any links, if you like these sort of videos and you want to see more, feel free to click the subscribe button. Otherwise, have a great day.