The majority of my portfolio is invested in individual UK stocks, but I also have exposure to US stocks through Vanguard S&P 500 UCITS ETF.

I buy individually FTSE100 companies in hopes of generating more dividends and growth than I could earn by simply tracking the index, but I don’t feel as confident buying individual US stocks. Hence the tracker.

I have one British tracker, the so-called Vanguard UK All-Share Index Unit Trustwhich I bought after transferring some of my existing company schemes to a Self-Invested Personal Pension (SIPP).

This gave me immediate exposure to the stock market while I set about filling my SIPP with UK shares. My timing was good as the FTSE All-Share Index dropped on July 7 when I bought the tracker. So far I’m up 16.45%.

Should I continue to follow FTSE All-Share?

I’m ecstatic with this, but I’m even happier with this Vanguard S&P 500 UCITS ETFwhich I bought on September 22 last year. It increased by 33.24%.

As a point of reference, the FTSE All-Share Index is up 9.03% over the last 12 months, while the S&P 500 Index is up 35.54% over the same period.

This is not surprising. The US stock market is home to some of the world’s most electrifying companies, led by tech giants like Magnificent Seven Apple, NvidiaAND Microsoft. However, these outstanding past performances make me wary.

Currently, the S&P 500 is trading at a high price-to-earnings ratio of 38.16. That’s more than double FTSE All-Share’s modest P/E of 14.2.

Making this trade would involve selling low and buying high, whereas I usually try to do the opposite. Here’s what I’m going to do instead.

I will continue to sell my FTSE All-Share tracker. Why? Because I’m fully invested and need some cash. The last 18 months have shown that my greatest successes have not come with trackers, but with individual UK stocks.

For example, shares in Just a group (LSE: JUST) is up 70.25% since purchase FTSE250 insurer almost a year ago. This was especially satisfying for me because I had researched the stock thoroughly before purchasing.

Just Group’s share price fell in July 2018 after the Prudential Regulatory Authority’s consultation on the capital release market forced the board to allocate additional capital to cover annuity mortgage products.

Just Group shares beat the American index

The consultations ended in failure, as often happens. However, Just’s share price failed to recover. So I took my chance.

In August, the company saw an outstanding first half, with underlying operating profit increasing by 44% to £249m, driven by higher up-to-date business sales, increased interim profits and improved operational efficiency. Just’s balance sheet looks solid, with a capital coverage ratio of 196%.

As with any stock, there are risks. Just Group sells annuities, and sales have skyrocketed as rising interest rates mean they pay more in income. When rates fall, sales may reverse. The company’s stock has a low trailing yield of just 1.51%, and its dividends are uneven, as the chart above shows.

Chart by TradingView

It just still looks incredibly inexpensive, with a price-to-earnings ratio of just 4.88. I would rather apply the proceeds from the sale of the FTSE All-Share tracker to buy great UK stocks like this than a potentially overvalued S&P 500 tracker.