Can I generate more passive income investing in the United States or in the United Kingdom Stock Market?

Given the S&P 500 In the last two years in relation to the Ftse 100Investors on this side of the pond have been interested. That is natural, especially because the popular issue of ai has been promoted by actions listed in the United States. However, when it comes to the generation of passive income, is it the same case, which should try to buy US actions for the highest potential performance?

Different perspectives

The first way to answer the question is to observe the average dividend yield for the two main indexes. The average performance of the S&P 500 is 1.21%, and the FTSE 100 is 3.51%. So, if I just wanted to buy an index tracker that distributed income, I could argue that you should choose the United Kingdom option. If £ 10,000 invested, the monetary difference between the two options over the course of a year would be £ 230.

However, under the surface, things are more complicated. For example, a portfolio aimed at half a dozen higher performance options with S&P 500 shares would produce 7.03%. For FTSE 100, the average yield would be 8.61%. Again, the United Kingdom would be the best option if someone tried to implement this strategy.

Movements in the price of the action must be taken into account when considering dividend income. Changes in the price of shares can increase general gain or negatively affect dividends. During the last year, FTSE 100 has increased by 8.6% compared to 6.43% for S&P 500.

So, looking at three different angles, the United Kingdom's stock market seems to be more attractive. Of course, there are other ways of seeing the two markets, so this is not a definitive answer. But I am happy to invest predominantly this side of the pond for the dividend part of my wallet.

United Kingdom Potential

If an investor wants more exhibition in this area, HSBC (LSE: HSBA) is an action to consider. The global bank has a dividend yield of 5.76%, with the price of the action 43% in the last year.

The business served in 2024, even in the context of a decant 2023. Profit before taxes increased by £ 1.55 billion to £ 25.03 billion, despite a decrease in the margin of net interest. The reasons for the impulse included greater customer activity in the Heritage Management Division and more securities financing businesses. It is true that there was a higher kick of the sale of the Canadian entity, and this was a unique gain impact that will not be repeated.

Finance means that I do not see that the dividend is under any threat to next year. Looking towards the future, HSBC is moving forward with more expansion in Asia. I see this as a good movement, since more than half of the profits for the group come from this region.

A risk is that net interest income could continue to fall this year, since the central banks are expected to, including the United States Federal Reserve, the European Central Bank and even the Bank of England, further reduce their base rates. However, with careful planning, this risk can be managed.