If you invested 1,000 USD over five years, which stock indexes around the world would provide the best return?
The above question was answered in a chart posted by Voronoi, which illustrates the growth (or decline) of a 1,000 USD investment in the main indexes around the world.
Darren Winters explains; six country’s stock market index performances are compared over five years. They are as follows; S&P 500 (USA); FTSE100 (UK); S&P TSX Composite (Canada); Nikkei 225 (Japan); NIFTY 50 (India) and Hang Seng Index HSI (formerly UK colony now part of China)
The investing period covers five years, from April 2019 to April 2024.
NIFTY 50 (India) is the stock index around the world, giving an investor 1,000 USD the best return.
The NIFTY 50 is an index of the 50 most actively traded Indian stocks.
It is a diversified index representing India’s companies in significant sectors of the economy and is a benchmark for investors to gauge the performance of the broader Indian stock market.
Investing in the NIFTY 50 over the five years was a winner from the beginning with 1,000 USD almost doubling to 1,924 USD.
India has one of the fastest-growing economies and is forecast to become the third-largest economy in just five years.
Global corporations and investors are bullish on India.
India’s multi-year bull market led to several records shattered in 2023. For example, India’s total stock market capitalization surpassed $4 trillion for the first time, while India-focused ETFs pulled in net inflows of $8.6 billion over the year.
India, a prime prospect for global investors, a booming economy, and NIFTY 50 offering nearing 100% returns over five years, the middle class is growing.
The fourth-largest auto market in the world. India is forecast to grow from USD 116.86 Billion in 2023 to USD 217.90 Billion by 2031.
India’s public debt to GDP is 81.6%, and its fertility rate is 2.139 per woman.
Nikkei 225 (Japan) is the second best stock index in the world. 1,000 USD invested over five years would grow to 1,725
Japan’s stock appreciation has been due to monetary inflation and the money supply expansion, which inflates asset prices.
Japanese Public Debt to GDP is 236% in 2023. The fertility rate has collapsed, with twice as many deaths as births.
However, the depreciation of the Japanese Yen is a tailwind for exports, with Japan being the fifth largest exporter, valued at 798.25 Billion USD in 2023.
S&P 500 (USA) comes in third as the best stock index around the world
Darren Winters explains that a 1,000 USD investment in the S&P 500 index at the start of 2019 would be worth 1,709 USD today.
The US is the second largest export, valued at 2 trillion USD in 2023, so the depreciation of the USD could also provide a tailwind for its exporters and US stocks.
Then there is a noticeable drop with the S&P TSX Composite (Canada) 1,310 USD, the FTSE100 (UK) 1,098 USD for your 1,000 USD invested over five years.
Hang Seng Index HSI, worse with 1,000 USD reduced to 598 USD.