This FTSE 100 stock continues to hit the market!

He FTSE 100 The index began on January 3, 1984, just over 40 years ago. Until the mid-1990s, it practically equaled its American counterpart, the S&P 500. However, for most of the last three decades, the US index has reigned supreme.

For example, here's how the two have performed on these three time scales:

My chart shows that the US index has easily outperformed the Footsie for long periods. In fact, it is obvious that (at least in recent history) investors would have been better off betting on the United States than the United Kingdom.

However, this is not the full picture, because the figures above excluded dividends – regular cash distributions that some companies pay to shareholders. The Footsie currently offers a dividend yield of 4% annually, nearly triple the S&P 500's 1.5% annual cash yield.

Therefore, adding dividends to the above returns would significantly increase the returns of the FTSE 100. However, even after taking these into account, the US index has established a considerable lead over the Footsie.

This stock is a star.

Of course, with 100 different companies on Footsie, individual stock returns can vary wildly over time. For example, take Pershing Square Holdings (LSE: PSH), a company that listed in London in May 2017.

My wife and I purchased these shares for our family portfolio in August 2022, paying 2,989 pence per share. On Friday 12 January it closed at 3,588 pence, more than a fifth (+20.1%) of our purchase price. This is a considerable return, considering the FTSE 100 has gained just 1.6% over the same period.

Furthermore, the PSH has increased by 23.3% in six months and 18.6% in one year. In five years, it has demolished the broader index, rising 219.2%, compared to 9.4% for the Footsie. What's more, it has surpassed the S&P 500's 79.1% gain in half a decade.

This is actually a hedge fund.

What is the story behind your repeated market-beating returns? Pershing is actually an investment trust, an investment fund with publicly traded shares.

The underlying fund is Pershing Square Capital Management, a well-known American hedge fund managed by outspoken American stock picker William Ackman. Nicknamed 'Wild Bill', Ackman is known for making big, bold bets. And they have mostly paid off for him, as he has amassed a personal fortune of $4.1bn (£3.2bn).

For example, during the early stages of the Covid-19 crisis in the spring of 2020, Ackman turned a $27 million investment into a $2.6 billion profit in one month by betting on the markets' short-term collapse. credits. What a remarkable trade.

Investing in hedge funds is typically only for the super-rich, with minimum investment levels typically above £500,000 or £1m. However, I have Ackman working to make me richer for less than £30 per share.

Of course, investing in hedge funds can be risky. Some have exploded spectacularly, while thousands more have closed this century. Furthermore, past performance is not a guide to future returns. What if Ackman resigned?

Still, I'm hopeful this stock will outperform the FTSE 100 (and S&P 500) in the next five to ten years.