The FTSE 100 index of main corporations incorporates among the prime names in British enterprise, like Shell and Unilever.

That may not look like a ticket for progress. In any case, mature corporations typically discover it tougher to develop their enterprise than smaller, nimbler upstarts.

In reality, although, it has been a wonderful 12 months for the index.

Sturdy price progress

It has repeatedly hit a brand new all-time excessive in latest months – together with a brand new peak yesterday (3 March).

So, what would an investor now be sitting on if that they had invested £10k into the FTSE 100 a yr in the past?

It has moved up 14.9% throughout that interval. So, a £10k funding ought to now be price round £11,490. Not unhealthy!

3.4% dividend yield from main blue-chip shares

The index additionally yields roughly 3.4% for the time being.

If somebody had purchased a yr in the past on the decrease price, the yield could be accordingly increased. So, they’d now be yielding someplace within the area of three.9%.

So over the previous yr that will have added up to shut to £400 of dividends on a £10k funding.

Taken collectively, £10k invested a yr in the past would now be price nearly £11,900.

Right here’s one strategy to spend money on the FTSE 100

Shopping for shares in 100 totally different corporations could possibly be time-consuming in addition to requiring vital capital, not to mention incurring a number of buying and selling charges.

That explains why quite a lot of buyers purchase shares in funds that observe the FTSE 100 index.

There are many choices obtainable and a few have extra engaging price buildings than others, so it could pay to do some research and examine the alternatives.

Right here’s why I’m not shopping for a FTSE 100 tracker proper now

Personally, I don’t personal such shares and at present don’t have any plans to.

What works for various buyers varies primarily based on their very own circumstances, aims, and method. Somewhat than investing in a tracker fund, I choose to purchase particular person shares.    

For instance, one FTSE 100 share I’ve been shopping for is JD Sports activities (LSE: JD).

Over the previous yr, £10k invested within the retailer would have shrunk to beneath £6,700 even together with dividends – a far cry from the general FTSE 100 efficiency, alas.

However I’ve seen that share price tumble as a shopping for alternative for my portfolio.

I choose shopping for particular person shares to an index because it means I can put my cash into what I feel are nice companies not simply no matter ones make it into the index. JD Sports activities has issued a couple of revenue warnings over the previous yr, however I nonetheless see it as a fantastic enterprise.

Why?

It has a big buyer base that has confirmed prepared to shell out on pricey sportswear. The corporate understands its goal clients nicely, it has a robust model, and an growth plan which means not solely does it have international attain, however that’s set to continue to grow.

The price fall factors to among the dangers, akin to a weak economic system hurting client spending and the store property growth programme consuming into short-term income.

As a long-term investor, although, I reckon the present price is nicely under what I count on JD Sports activities to be price in future. That’s the reason I’ve been shopping for the shares.