Now that we are in the first week of 2022, let’s review the Stock Market Performance for the year 2021. We will take a look at major stock market indices in the United States, as well as across the world. See the list below.
- S&P 500, United States
- Nasdaq, United States
- Dow Jones, United States
- Russell 2000, United States
- FTSE 100, United Kingdom
- DAX Performance Index, Germany
- NIKKEI 225, Japan
- Hang Seng Index, Hong Kong
- BSE Sensex, India
The Stock Market Performance in the United States
The major stock market indices in the United States are the following:
The S&P 500 Index is an index made of 500 of the largest publicly-traded companies in the United States. The composition (i.e. which stock makes up what percentage of the index) of the S&P 500 is determined by the market cap of the stocks.
The S&P 500 Index grew by approximately 29% in the year 2021. The long-term historical growth rate of the S&P 500 Index is in the range of 8-10%, so a 29% return in a year can be considered really good.
Nasdaq 100 Index contains 100 non-financial companies (making Nasdaq 100 Index technology-focused instead) listed on the Nasdaq Stock Market. It actually contains 103 stock symbols (because some companies have two share classes – e.g. Alphabet has GOOG and GOOGL). The Nasdaq stocks are weighted in the index according to their market cap.
The Nasdaq 100 Index grew by approximately 23% in the year 2021.
The Dow Jones Industrial Average Index contains 30 prominent companies. In the Dow Index, the share price of the stock is used for weighting the 30 stocks.
The Dow Jones Industrial Average Index grew by approximately 20% in the year 2021.
Russell 2000 Index is made of 2000 small-cap companies in the United States. Stocks in Russell 2000 index are weighted according to their market cap.
The Russell 2000 Index grew by approximately 15% in the year 2021.
The Stock Market Performance Across the World
The major stock market indices across the world are the following:
It is important to note that the returns on these international markets are represented in their local currencies.
FTSE (Financial Times Stock Exchange) 100 Index
The FTSE 100 Index is an index of 100 large companies listed on the London Stock Exchange. The top 5 companies (by market capitalization) in the FTSE 100 are the following:
|AZN||ASTRAZENECA PLC ORD SHS||134.3 B GBP|
|ULVR||UNILEVER PLC ORD||102.2 B GBP|
|DGE||DIAGEO PLC ORD||94.2 B GBP|
|HSBA||HSBC HLDGS PLC ORD||91.1 B GBP|
|GSK||GLAXOSMITHKLINE PLC ORD||81.4 B GBP|
The FTSE 100 Index grew by approximately 12% in the year 2021. The long-term returns on FTSE 100 have been under 8% annualized, so a 12% return for the year 2021 is considered a good performance.
DAX Performance Index
The DAX Performance Index is a stock market index consisting of the 40 major German blue-chip companies trading on the Frankfurt Stock Exchange.
The top 5 companies (by market capitalization) in the DAX Performance Index are the following:
- LINDE PLC EO 0,001 (LIN)
- SAP SE O.N. (SAP)
- SIEMENS AG NA O.N. (SIE)
- VOLKSWAGEN AG VZO O.N. (VOW3)
- MERCK KGAA O.N. (MRK)
The DAX Performance Index grew by approximately 16% in the year 2021.
NIKKEI 225 Index
The Nikkei 225 Index consists of 225 stocks trading on the Tokyo Stock Exchange. Nikkei 225 index is a price-weighted average index, i.e. the percentage composition of the stocks in the index is determined by the stock price per share (similar to what Dow Jones does).
The NIKKEI 225 Index grew by approximately 6% in the year 2021.
Hang Seng Index
The Hang Seng Index is made of 60 large companies’ stock trading on the Hong Kong Stock Market. Hang Seng Index is a market-cap-weighted index.
The Hang Seng Index fell by approximately 15% in the year 2021.
BSE (Bombay Stock Exchange) Sensex Index
The BSE SENSEX is an index of 30 large well-established companies listed on the Bombay Stock Exchange. BSE Sensex is a market-cap-weighted index.
The BSE Sensex Index grew by approximately 21% in the year 2021.
Stock Market Index: Winner of 2021
Among the 9 stock market indices, the S&P 500 (+29%) brought in the best returns in the United States and the best in the world overall. NASDAQ Composite (+23%) came in the second position in the United States as well as in the world. BSE Sensex (+21%) came in the first position among the international indices, and third among the 9 indices we considered.
However, it is important to note that the currency exchange rate for US dollar to Indian Rupee has fluctuated in the range of 72.5 to 76.0 (current rate on Jan 3, 2022, 1 USD = 74.29 Indian Rupee) throughout the year. Depending on at what Forex rate you invested, your ‘dollarized’ returns could vary and be different from the +21% we have observed here.
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