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After lagging for a lot of the 12 months, the S&P 500 is now up about 12.6% 12 months so far, whereas the FTSE 100 is up roughly 11.97% as of mid-September 2025. The S&P 500 touched a recent excessive of 6,624 factors on Tuesday 16 September. In the meantime, the FTSE 100 has flatlined a bit, with progress underneath 1% over the previous 30 days.
This shift suggests international investor sentiment could also be altering. The FTSE has been bolstered this 12 months by its excessive publicity to vitality, financials, industrials, and defence – sectors that profit from greater rates of interest, commodity power, and geopolitical concern. In the meantime, the S&P 500 has been extra uncovered to progress and know-how names, a lot of which have come underneath stress on valuation issues, regulatory danger, and weak macro alerts within the US.
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I wouldn’t say which means the FTSE is in any bother – somewhat that the US market is catching up after an uncommon interval of underperformance.
With the US Federal Reserve anticipated to chop rates of interest this week, the temper has modified. If borrowing prices ease, it usually helps firms with heavy debt burdens or these whose progress is determined by accessible credit score.
All indicators level towards a 25-basis level fee lower. That is pushed by weak labour information and inflation pressures which can be easing however nonetheless current. For an investor, this might mark the beginning of a looser financial coverage surroundings. Nevertheless, a lot is determined by how persistent inflation proves, and the way clearly the Fed conveys its trajectory for future fee strikes.
S&P 500 corporations in the actual property funding belief (REIT) sector, financials, and client discretionary are amongst these more likely to acquire from this shift in coverage.
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An S&P 500 inventory that would profit
One S&P 500 inventory that would profit is VICI Properties (NYSE: VICI), a REIT centered on gaming, hospitality, leisure. and leisure properties. I feel it’s a superb inventory for buyers to contemplate when fascinated about fee cuts.
VICI at the moment gives a dividend yield of 5.5% with a payout ratio of round 66%. This means it has adequate earnings to proceed protecting funds. That is mirrored in its profitability, with a web margin estimated to be above 70% in latest reporting.
The steadiness sheet additionally appears manageable, with a low debt-to-equity ratio and regular income progress. Notably, with $46bn in belongings, it’s one of many largest REITs within the US.
Naturally, it faces some REIT-related dangers. The enterprise is determined by its tenants (casinos, accommodations, leisure) sustaining sturdy operations. Financial shocks, weak tourism, or regulatory adjustments might harm money stream, resulting in disappointing outcomes and a share value dip.
Closing ideas
The S&P 500’s latest nudge previous the FTSE 100 displays altering investor preferences. There’s a transfer away from purely defensive or worth performs towards progress and rate-sensitive names now that the Fed is loosening.
In that surroundings, REITs like VICI Properties look fascinating. Whereas not with out danger, I feel VICI is one inventory that’s effectively positioned to learn if charges proceed falling.
For somebody constructing international publicity, combining FTSE-based worth/defensive names with just a few well-chosen S&P 500 REITs might assist steadiness progress and earnings in a shifting macro backdrop.
