Already this year FTSE100 the index of leading UK shares has hit a fresh all-time high. It also crossed the 10,000 mark for the first time in history.

Over the last five years, the value of the FTSE 100 index has increased by 51%.

So if someone were to deposit £1,000 today, what could they be sitting on in a year’s time?

What drives stock market returns

The answer to this question depends on three elements. One of them is share price changes, which I will come back to in a moment.

Secondly, dividends. Currently, the FTSE 100 offers a dividend yield of 2.9%. So someone who invests £1,000 should earn around £29 in dividends over the next year.

Dividends are never guaranteed so the actual amount may be higher or lower, but as a general indicator of what to expect, I think the current yield on the FTSE 100 is a useful starting point.

The third factor that affects returns is brokerage fees, costs and commissions. These may seem diminutive, but they impact returns even on a one-year basis, let alone over the long term.

That’s why it’s worth looking for a suitable share trading account, Stocks and Shares ISA or trading app.

Digging into price movements

The Footsie’s 51% rise over the last five years means £1,000 invested then should be worth around £1,510, even before dividends are taken into account. But how might the index perform over the next 12 months?

It performed well in the first days of 2026. Last year’s results (+22%) showed that the index can perform well even in times of economic slowdown. This is partly because the FTSE 100 index includes companies listed in London, but a significant part of their profits are generated abroad.

What might 2026 bring?

I believe a repeat of last year’s performance is unlikely over the next 12 months, given the tender UK economy and geopolitical uncertainty. But if this happened, £1,000 could be worth over £1,200 a year.

On a more bullish note, what happens if geopolitical concerns subside and the world enters growth mode? If this happens, perhaps the FTSE 100 will do even better than last year.

However, at record high levels in a rather feeble economy, I also see a downside risk for the flagship index. This could reduce the value of the £1,000 you currently invest.

I buy FTSE 100 shares

Personally, however, I do not “buy the index” when investing in it FTSE100 tracker fund. Instead, I own individual FTSE 100 shares which I think are good value.

One that I have been buying into in recent months is a chain of high street bakeries Greggs (LSE: GRG), a well-known company that I find quite basic to understand.

Over the past year, the company’s share price has fallen 21%. Concerns about slowing growth rates lend a hand explain this, although I still see significant growth opportunities.

Wage inflation poses a threat to profitability.

However, with a mighty brand, proven business model, thousands of stores, economies of scale and some unique products, I think Greggs has a long-term winning formula.

Hopefully this will impact the share price. Trading for just 12 times earnings, the FTSE 100 share seems affordable to me given its business potential.