Tired of the AI Rollercoaster? Try This Dividend-Rich Index.

The FTSE 100 tracks the biggest companies listed in London. (Justin Tallis / AFP via Getty Images)

Key Points

The FTSE 100 index rallied 22% last year, beating the S&P 500’s 18% gains, and has outpaced U.S. tech names in recent weeks.
The FTSE 100 has minimal exposure to the technology industry, with only four of its 100 constituents considered tech plays.
The index is dominated by defensive stocks that tend to be more stable, such as financials and consumer goods.

Investing in artificial-intelligence stocks takes a strong stomach. While chips and other parts of the tech ecosystem have driven the S&P 500’s rise in recent years, a brutal series of selloffs since the summer have made AI names an acquired taste.

For something a bit more appetizing, investors may want to examine an oft-overlooked major global index— one that trounced the S&P 500 in 2025, has held its own this year, and has been outpacing U.S. tech names in recent weeks. Oh, and it’s the furthest thing to AI exposure you could imagine—and is dividend-rich.

Enter the FTSE 100 , which tracks the biggest companies listed in London. Barron’s has repeatedly made bullish calls on the FTSE 100 over the years: The index is by nature defensive, diversified, and dividend-focused, with components that trade at valuations much closer to earth than anything in the U.S. tech space.

The FTSE 100 rallied 22% last year, ahead of the S&P 500’s still-impressive 18% gains. While the U.S. index is beating the British benchmark in 2026, it’s not by a whole lot—the S&P is up 11.5%, compared with 7% for the FTSE.

While tech stocks dominating the U.S. market, such as Nvidia and Meta , have recently sold off amid concerns over mounting debt to pay for AI infrastructure and the broader outlook around AI spending, the British equity bellwether has shone bright.

The FTSE 100 has gained 2% since Oct. 1, while the S&P 500 has fallen 0.1% and the tech-heavy Nasdaq Composite has shed 3%. The iShares Semiconductor exchange-traded-fund—a popular proxy for AI exposure via chips—has lost more than 15%.

“U.K. equities offer diversification away from the current AI-driven momentum seen in global markets, with traditional sectors like Financials, Materials and Energy potentially providing resilience,” wrote Jessica Kaur, a portfolio manager at UBS, in a March note, when AI stocks were undergoing another period of pronounced turbulence.

That thesis still holds true. The FTSE 100 has minimal exposure to the technology industry, with just four of its 100 constituents considered tech plays, contributing a 2% weighting combined.

The index is dominated by defensive stocks that tend to be more stable, such as financials and consumer goods, as well as energy and defense industry names that have benefited from global conflict and commodity disruptions. As of the end of September, the index’s top five holdings were HSBC, Shell, AstraZeneca, Rolls-Royce, and Unilever.

Beyond defensive stocks representing a diverse range of companies, the earnings base for the FTSE 100 isn’t the U.K. itself. Many of its names are global conglomerates that chose to list in London, with some three-quarters of the revenue generated by constituents coming from outside the U.K.

That means the index isn’t purely a bet on the U.K. economy, though U.K. growth led G-7 nations in the first half of 2026.

Then there are the dividends, long a major draw for British investors that have historically sought income-generating holdings.

While the FTSE 100 is far from immune to global pressures from inflationary energy costs that have pushed government bond yields higher, creating headwinds for equity prices, its dividend growth is nothing to sneer at.

“The case for equities is not lost,” wrote Russ Mould, investment director at the British broker AJ Bell, in a report on the FTSE 100 earlier this month.

“Consensus earnings forecasts for the FTSE 100 put the benchmark index on 13.5 forward earnings for 2026 for an earnings yield of 7.4%, a figure which still bears close comparison to gilts,” referring to British government bonds, Mould said.

“Dividend payment forecasts continue to creep higher too, and analysts now expect the total payment from the FTSE 100 to reach an all-time record £90.3 billion [$120.8 billion] in 2026, up from a forecast of £88.8 billion just three months ago,” Mould added.

Much of that dividend cash will come from only a small group of stocks, with just 10 companies expected to pay out more than half of the total forecast for 2026, according to analysis published this month by AJ Bell.

Those dividend winners include three bank stocks and two each from the energy, pharmaceutical, and consumer staples sectors, as well as a miner. In descending order of forecasted dividend payments, per AJ Bell, that group includes HSBC, Shell, British American Tobacco, Rio Tinto, BP, AstraZeneca, Unilever, NatWest, GSK, and Lloyds .

The FTSE 100, which closed at 10,690 points on Friday, also commands a median target of 12,421 among analysts surveyed by FactSet—suggesting 16% weighted upside for the index.

It’s certainly food for thought.

Write to editors@barrons.com

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