So far, 2026 has been a good one for the stock market. The FTSE 100 index of leading British companies has hit a new all-time high.

Some people like the idea of what is known as passive investing. That means that they buy shares in a fund that broadly mirrors or ‘tracks’ the performance of an index like the FTSE 100. Hence the name ‘index tracker‘.

Given the strong performance of the FTSE 100 over the past year, that could have been a lucrative approach.

Strong price gains

In the past 12 months, the FTSE 100 has gained 19.6% in value. That means that £5,000 invested a year ago would now be worth around £5,980.

Not only that, but there would have been dividends along the way too.

The FTSE 100 yield stands at 2.9%. Someone who invested a year ago would be earning a higher yield due to their lower purchase price (yields are a function of dividends earned annually and what one pays for the shares).

So, £5,000 invested in the FTSE 100 a year ago ought to have earned around £174 in dividends.

Index trackers typically charge some fees, which would likely have eaten into the returns.

But with so many passive investors in the market, there is a lot of competition. So those fees can be fairly small in some cases.

I’m not buying the index

Although the FTSE 100 has had a strong year, not all of the hundred companies within it have.

In fact, that sort of mixed performance helps explain why I do not own any index-tracking shares.

Rather than ‘buying the index’, I prefer active investing. In other words, I purchase a mix of individual shares that I think look attractively valued relative to their long-term commercial prospects.              

Beaten down blue-chip share

As an example, one of the shares I own is JD Sports (LSE: JD).

It is a member of the FTSE 100, but its performance has been very different to the wider index lately. In the past 12 months, the share price has fallen 4%.

There are reasons for that, including a profits warning last January. With consumer sentiment being fairly weak at the moment, demand for expensive sportswear and shoes could fall.

The company’s performance in recent years reflects spending on expansion. Revenue last year grew 9%, but net profit actually fell.

My hope is that the long-term benefits of the expansion will become more obvious, while the costs receding into the rearview mirror could mean profits growth.

On that basis, I reckon the current JD Sports share price, in pennies, looks cheap.

The dividend is not much to write home about, at little over 1%. But the company’s cash generation could also mean growth in the dividend over time.