Last July, investing £20,000 into the FTSE 100 would have been a straightforward, if unremarkable, decision that has since paid off handsomely.
The UK blue-chip index climbed 19.1% over the past 12 months, delivering one of its stronger annual performances in recent memory.
With dividends factored in at a trailing yield of around 3.1%, the total 12-month return rises to an impressive 22.2% for investors who stayed the course.
That return would have turned a £20,000 stake placed in July 2025 into approximately £24,440 today, a gain that many cash savers could only dream of matching.
The FTSE 100 hit an all-time high of just over 10,910 on 27 February, before markets briefly wobbled when Donald Trump launched his war on Iran and oil prices surged.
Investors braced for another inflationary shock, yet the blue-chip index held steady and continued its upward trajectory through the turbulence.
The contrast between equity and cash returns over the long term remains stark, with data from advice site Unbiased illustrating the gap in compelling fashion.
Over the last decade, the average Stocks and Shares ISA has grown at an average compound rate of 9.64% a year, with dividends reinvested, against just 1.21% for the average Cash ISA.
A £20,000 investment compounding at the Cash ISA rate over 30 years would grow to £64,868, while the same sum in equities would reach £304,406, almost five times as much.
The standout individual performer within the FTSE 100 over the past year has been infrastructure services provider Computacenter (LSE: CCC), which has surged an extraordinary 114%.
Computacenter helps large organisations manage their hardware, software, and cloud networks, and has posted a string of positive trading updates that caught the market’s attention.
Profits are forecast to double this year, driven by accelerating AI infrastructure and data centre investments, particularly from the United States.
The company’s strong performance earned it promotion to the FTSE 100 in June, cementing its status as one of the UK market’s most talked-about growth stories.
Its shares carry a price-to-earnings ratio of 27, which is elevated but arguably justifiable given the scale of the opportunity in front of the business.
Risks remain, however, as Computacenter operates on tight margins and any slowdown in economic sentiment could weigh on revenues and profits.
There is also the broader concern that if AI investment proves to be a bubble, companies deeply exposed to that theme could face significant headwinds.
For long-term investors, the broader lesson remains consistent: staying invested in equities, whether through an index or individual stocks, continues to outperform sitting in cash over time.