The Investing Show podcast: Recent Episodes
The Investing Show
Welcome to This is Money's podcast, The Investing Show, where we invite fund managers to explain how they invest and tell us about the companies and parts of the world that they think will deliver the best returns - to help you learn from their successes.
An inflation panic has sent interest rate expectations soaring in the UK, even as the US Federal Reserve is tipped to stall.
Base rate is now forecast by some to climb as high as 6 per cent as the Bank of England battles stubborn inflation, rather than peak near its current level of 4.5 per cent.
Rate expectations combined with rising gilt yields have sent shockwaves through the mortgage market, as lenders rapidly pull and reprice deals. The average two-year fixed rate mortgage has now hit 5.9 per cent.
But while the mortgage market apple cart has been well and truly upset by much higher rate expectations, what does this mean for investors?
On this episode of the Investing Show, Richard Hunter and Simon Lambert discuss what interest rates on both sides of the Atlantic may mean for investors and look at the shares that could do badly and those that could do well.
Venture capital trusts offer the opportunity to invest in some of Britain's most exciting small growth companies and a juicy 30 per cent income tax break.
By pooling investors money in investment trusts run by specialist managers, VCTs offer a way to spread your risk while backing the small firms that could become the next big thing, with previous examples including Zoopla, Depop and Five Guys.
But they say you should never let the tax tail wag the dog, so before putting money into a VCT you need to make sure it is right for you.
On this episode of the Investing Show, Simon Lambert and Richard Hunter are joined by Bestinvest's Jason Hollands, who explains what you need to know about VCT investing - and talks through some of the offers out there.
Commercial property has had a rocky ride over recent years, but is it now a great value investing opportunity with the power to beat inflation?
On this episode of the Investing Show, Simon Lambert is joined by the manager of TR Property Investment Trust, Marcus Phayre-Mudge, who explains why he thinks a careful approach to backing retail, warehouse and office real estate could deliver rewards for years to come.
The market for offices was written off by many during the pandemic but has rebounded strongly for landlords who can offer quality.
Marcus says that there are two elements that he believes will drive the office market for years to come: demand for high quality space ‘to tempt staff back in’ and demand for more energy efficient buildings, to allow companies to save money and deliver on environmental pledges.
He says: ‘We expect a green building supercycle’.
The fund manager, whose trust holds shares in listed property companies across Europe, says that what ties the philosophy behind TR Property’s diverse investments together is looking for quality management in those businesses – something that he says is key to success.
Marcus explains the issues investors need to consider before buying into commercial property, including why an investment trust is a better way forward than an open-ended investment fund, many of which have been forced to lock in investors during turbulent periods.
He also talks through where he sees the best opportunities and how he sees retail and office space changing, including the demand for better quality premises for shops and businesses keen to attract shoppers and workers to bricks and mortar.
Like many property trusts and funds, TR Property had a tough 2022, with a 35 per cent share price fall, but the trust has climbed 8.5 per cent since the start of the year. Shares currently trade at an 8 per cent discount to net asset value.
TR Property has averaged a 9.48 per cent total return over the past decade and has a dividend yield of 4.37 per cent, according to Morningstar data. It has an ongoing charges figure of 0.58 per cent, but also a performance fee can apply.
Impax Environmental Markets has spent two decades scouring the world for companies that can help deal with the challenges the planet faces.
Long before the recent trend for green investing and ESG funds emerged, its managers were earning their spurs by tracking down disruptive companies with a difference.
And this has proved to be a highly profitable strategy for the investment trust's long-term investors, with a total return of 75 per cent over five years and 311 per cent over ten years, according to Association of Investment Company figures.
Yet, Impax has not been immune from the storm for growth stocks and is down 5.9 per cent over the past year, with shares falling to a 5.19 per cent discount to net asset value.
But what are environmental markets and what does Impax look for in a company? On this episode of the Investing Show, Impax Environmental Markets' senior portfolio manager Jon Forster joins Simon Lambert and Richard Hunter to explain more.
He also reveals some of the fascinating things that the companies Impax invests in do, from the UK company helping industrial users make better use of steam, to firms helping reduce the impact of agriculture while improving its yields.
The FTSE 100 has started the year on the front foot and investors are watching closely to see if it can hit a new record high.
The UK’s blue-chip index led the way among main global stock markets last year, keeping its head above water and delivering a respectable total return including dividends of 4.7 per cent.
After a strong finish to 2022 and good start to 2023, it is now up 14 per cent on its October lows at 7,860, within a whisker of its all-time closing high at 7,877.
So why has the FTSE 100 been performing so well and can it continue its run throughout this year? On this episode of the Investing Show, Simon Lambert and Richard Hunter take a look back at the scorecard for the Footsie and other major markets last year and look forward to what may happen this year.
Inflation has dominated consumers and investors' minds over the past year, as the dramatic rise in the cost of living has eaten into incomes and share prices.
Official data shows that inflation is still running hot and central banks are continuing to hike interest rates to combat it, but there is also an expectation that inflation will start to fall away dramatically next year.
Will inflation subside, can it stay low, and will this help households and investors?
Tom Becket, of Canaccord Genuity Wealth Management, joins Simon Lambert and Richard Hunter on this episode of the Investing Show to explain why he feels inflation may prove stickier in the UK than in the US and markets will remain volatile, but bold investors looking for value could profit.
Doom and gloom are dominating the headlines but investors are being too pessimistic, says Temple Bar manager Ian Lance.
He says: ‘Today, we think is a really interesting environment. We go as far as saying it is as interesting as 2008 and 2000, which were the last two times we think we used to see bargains of this nature.’
‘At the moment we think the UK is a very cheap market.’
The value investor looks for shunned stocks that are trading at least 50 per cent below their intrinsic value and, taking a five-year view, looks at what they should be worth when they recover.
Lance, co-manager of Temple Bar investment trust alongside Nick Purves, says that while the UK stock market has fallen by less than its international peers this year, it still contains plenty of bargains for value investors.
He discusses his views on where value lies in the UK and elsewhere in the world on this episode of the Investing Show, with This is Money’s Simon Lambert and Interactive Investor’s Richard Hunter.
Ian explains why he sees Marks & Spencer as significantly undervalued and why even despite BP’s huge share price rise since its pandemic low, the energy giant also remains good value and underappreciated by investors.
Temple Bar sits within the Association of Investment Companies UK Equity Income sector and is the best performing trust in that sector over the past year, with a total return of 8.48 per cent. It yields 4.1 per cent and has an ongoing charges figure of 0.57 per cent.
Redwheel Capital, Lance’s firm, took over management of Temple Bar two years ago. Over five years the trust has returned 11 per cent, compared to a sector average of 20.5 per cent.
Britain has a new Prime Minister who has vowed to be pro-business and help consumers, but will that filter through to the stock market?
Simon Lambert and Richard Hunter discuss the UK's change at the top on this episode of the Investing Show.
Liz Truss is taking on both Britain's top job and an economic challenge that would make most baulk.
Inflation has breached double-digits, at 10.1 per cent, and is forecast to rage higher still. Meanwhile, the pound has slumped against the dollar, UK borrowing costs are rising, business and consumer confidence is sinking and the Bank of England is warning about recession.
Yet, on the flipside, looked at overall Britain's business and household finances are in decent shape and the consumer economy fared much better through Covid than many expected.
Meanwhile, the UK stock market has held up better than most this year - with the FTSE 100's big international firms supporting that index - and until the cost of living crisis combined with the downfall of Boris Johnson as PM, the UK was being talked about as an investing opportunity.
So can our new Prime Minister get confidence back up and investors buying in, or does whoever is at Number 10 Downing Street make little difference to the UK stock market and would investors be better off looking for guidance from across the Atlantic and the state of the US economy and markets?
Investors are past the halfway mark for 2022 and it has been a troubling year so far, with the global markets dominating US in bear market territory.
But even as the S&P 500 in the US has fallen 20 per cent since the start of the year, the UK stock market has for much of that period managed to keep its head above water and even after recent falls the FTSE 100 is down 4 per cent since the start of 2022.
The chief issue rattling investors is high inflation and rapidly rising interest rates, with central banks dramatically changing their tune and signalling that rather than supporting markets they are happy to raise rates into a recession.
But with both the Bank of England and the Fed hiking, why is the UK doing better than the US and will the second half of the year be better than the first? Richard Hunter and Simon Lambert discuss these issues and more on this episode of the Investing Show.
On this show, they take a look at why the shift to rising interest rates is troubling investors and making them shun growth stocks – and the sectors where inflation is boosting share prices.
Although the headline FTSE 100 index in the UK has not suffered as much as many other global markets, including the US, many investors will be feeling pain in their portfolios, as the below that the mid cap FTSE 250 is down 21 per cent year to date and individual popular stocks have taken even more substantial hits.
Among the biggest fallers over the past six months in the FTSE 100 are some major household names with Royal Mail down 48 per cent, Ocado down 46 per cent and ITV down 45 per cent.
If inflation starts to ease and central banks take their foot off the gas later in the year, could that see a rally for the stocks that have been beaten down by inflation crisis?
This is a question many investors are debating as they try to decide whether it is time to buy into shares on sale in the bear market or keep their powder dry fearing more bad news ahead.
One concern for investors is that much of the aggregate decline in stock market valuations has come from a downgrading on the price side of the price-to-earnings ratio, reflecting investors willing to pay less for stocks.
With fears that a recession is on the way, the earnings side could be riding for a fall too – leading to further market declines. With that in mind, Richard takes a look ahead at the US earnings season and what it could bring.
The high-flying Blue Whale Growth fund has reaped the rewards of the US stock market's bounce back from the coronavirus crash - delivering a 34 per cent gain for investors over the past six months.
The global fund - run by Stephen Yiu and backed by Peter Hargreaves - is invested heavily in the US, which accounts for 72 per cent of its holdings and its top ten features a raft of technology-related companies, including Adobe, Facebook and Microsoft.
Considering the remarkable run that US shares and the tech sector have been since the coronavirus crash lows at the end of March, has the market become detached from reality - as some suggest - or have the world's well-known digital names proved themselves far more resilient than people thought?
Stephen joins Simon Lambert on this episode of the Investing Show to share his views on what has happened with the market - and also why he sees some big names such as Facebook as value investments but would not buy Tesla or Netflix.
The Blue Whale fund holds just 25 companies from around the world, which it considers to have the best prospects, resilient business models and - perhaps surprisingly for a US and tech heavy growth fund - and to be good value.
In fact, Stephen describes himself as a value investor, but says that this involves looking to pick up companies at a good price, rather than the kind of bargain basement value investing strategy once described by legendary investor Ben Graham as picking up pennies in front of a steamroller.
Stephen discusses how this philosophy fitted with using a high proportion of cash in the fund as the coronavirus crisis hit to add to holdings of Amazon and PayPal at a knock down price, but also then selling down some of those holdings after their share prices rocketed in the sharp recovery.
He also reveals why despite Tesla riding out the storm, he doesn't see the company as one he would invest in and why although Netflix's subscription model is highly attractive it suffers from the same business model problems as Premier League football clubs.
Studies show that dividends paid out and reinvested are the key to long-term stock market total returns, but should you invest for income, growth or a mix of the two?
‘It’s not just about high yield, it’s about owning companies with dividends that we think can steadily grow into the future’, says Troy Income & Growth co-manager Hugo Ure.
This style of investing can deliver both a decent and solid income and companies that can see their share price rise over time, he argues.
Troy Income and Growth predominantly invests in UK companies and currently yields 3.2 per cent – below the market’s 4 per cent – but has grown its annual payout by 5 per cent on average over the past five years.
On this episode of the Investing Show, Hugo discusses how he looks for the best income and growth opportunities, how to avoid value traps when weighing up high yield stocks and some of the companies he thinks can produce robust and growing dividends in years to come.
Among the trust’s top ten holdings are some familiar big gun names, including Unilever, Lloyds and Shell, but Hugo also talks us through some of the lesser-known names, such as Sabre Insurance, which insurers non-standard drivers and operates in a niche in which it can continue to grow.
The Blue Whale fund has delivered sparkling performance since its launch just over two years ago, but its manager is also looking to protect his investors if a downturn arrives.
Manager Stephen Yiu looks for the 30 best companies in the world and says that were we to go into recession tomorrow, he would be comfortable that they could still deliver returns.
With the fund becoming an investor's darling thanks to its strong returns, how it would fare in a downturn or if the US stock market it is heavily invested in tumbles, should be a key question for investors.
So what has been the secret to Blue Whale’s start-up success and where is the fund investing now?
On this episode of the Investing Show, its manager Stephen Yiu joins Simon Lambert and Richard Hunter to discuss its performance.
He talks about the companies that he is backing, why he believes the US still holds great opportunities and how he seeks to protect his investors from shares that face risks – and overvaluation.
The wealthy western world’s population is ageing and medicine is changing fast.
Biotechnology lies at the intersection of this growing need for healthcare and treatments that are tailored to patients, such as immunotherapy, rather than taking a traditional one size fits all approach.
Investors’ excitement for this brave new world saw many biotech fund and trusts deliver startling performance from 2012 to 2016 before the sector then suffered a fall, as the last US election brought worries to the fore.
Things have begun to look up again for biotech over the past year and we are joined on this Investing Show by Ailsa Craig, of International Biotechnology Trust, to find out more about this and the sector.
Scottish Mortgage has delivered big returns to investors by backing some of technology and the modern consumer world's biggest names.
But are the best days already past of the star firms, such as Amazon, Google and Tesla, that have helped deliver a 474 per cent return over ten years?
And is China's burgeoning technology scene good enough to warrant major backing?
On this episode of the Investing Show, Scottish Mortgage's co-manager Tom Slater, joins us to explain how the trust invests and why he believes 'the world's most exciting, interesting growth companies' have many more years of good times ahead.
Lloyds Banking Group shares leapt almost 13 per cent last week on hopes of a Brexit deal.
But that was a rare bit of sunshine in an overwhelmingly gloomy year for the millions of UK investors who hold Lloyds shares.
Despite the fact that Lloyds shares pack a dividend yield of 6.2 per cent, trade on a lowly forward price-to-earnings ratio of 7, and can be bought for less than they are worth, with a price-to-book value of 0.8, they are deeply unloved.
Even after today's bounce, Lloyds shares are down about 20 per cent on where they stood before the Brexit vote and a third below there 2015 peak.
While Lloyds is considered the most UK economy-focused of Britain's big banks, its rival big names are out of favour too, with HSBC, Barclays and RBS all firmly off investors' wish lists.
Britain's banks should be doing well at this point in the economic cycle, but are instead suffering from a double hangover, induced first by the financial crisis and then Brexit.
So, is this a chance to profit, or a value trap for investors? Simon Lambert, of This is Money, and Richard Hunter, of Interactive Investor, take a look.
Interest rates are being cut again around the world but investors would be foolish to think that the trade that has made them money in the past five to ten years will continue unchecked.
That is the warning of Tom Becket, chief investment officer at Psigma Investment Management, who says investors should beware the overcrowded strategy of holding low yielding government bonds and high growth US shares.
The US Federal Reserve has cut interest rates and the European Central Bank has followed and restarted quantitative easing, meanwhile expectations in the UK are now for the base rate to fall rather than rise.
Yet the new world of falling rates will not be the same as the post-financial crisis one, where a wave of cheap money provided a rising tide that lifted all boats, argues Becket.
Instead, he says that investors may consider looking to the world’s unloved assets, including Japanese shares, certain emerging markets, Europe’s better companies and UK companies beaten up by the Brexit storms.
He joins Simon Lambert and Richard Hunter on the latest Investing Show to explain why he thinks the mood music has changed for the cheerleaders of globalisation and how investors can prepare themselves to protect their wealth and profit in the years ahead.
The desire to look after the planet better has led to a huge rise in interest in drawing more of the energy we use from renewable and less polluting sources.
Yet, for investors this presents a conundrum. The old energy sector - represented by oil, gas, coal and electricity – has been a rich source of profits and dividends, so will they have to forgo these in the future - or could backing the new energy sector instead deliver the returns they desire, whilst also protecting the world we live in?
A handful of investment trusts and funds offer the opportunity to try to do this, combined with the specialist knowledge needed to sift the wheat from the chaff. We speak to Chris Tanner, of JLEN, Environmental Assets Group, which invests directly into projects to deliver income for investors and currently yields 5.6 per cent, to find out more.
In our interview he explains how the trust invests, what it looks for in renewable energy and other green infrastructure investments and why its 18 per cent share price rise this year reflects a surge in interest from big and small investors.
The trust has ongoing charges of 1.3 per cent and its share price has shifted to a hefty 16.7 per cent premium to its net asset value, albeit it has often traded around 10 per cent mark over the past five years.
Dividends are paid four times a year and Chris explains that he believes the share price performance and premium is down to a combination of the search for yield, institutional and personal investing interest in renewable energy and its solid inflation-linked returns on investment.
Income investors are always on the hunt for steady and strong dividends, but many of them would not consider Asia to be the place to go looking.
However, Mike Kerley, of Henderson Far East Income has rewarded investors willing to back his investment trust with a solid stream of dividends combined with share price growth in recent years.
The trust has a total return of 151.6 per cent over the past decade and 46 per cent over the past three years, while currently yielding 5.98 per cent.
So why should investors look to Asia for income? Mike joins Simon Lambert and Richard Hunter on the latest investing Show to explain how he looks for high dividends, combined with value and a solid balance sheet that has the backing of lots of cash.
He looks for a combination of companies that offer either high yields and sustainable dividends, or those that offer potential dividend growth such as Australia’s Treasury Wine Estates.
Mike also eyes those companies that can use that cash pile to fund dividend growth in the future.
Mike explains how he looks for companies for the trust, why maturing businesses in Asia offer good opportunities and the growth in Asia should back up their future prospects – and he gives his thoughts on what may happen next for China.
Britain's stock market is doing far better this year so far than last, but over the longer term has lagged behind its international rivals.
After the fall in the pound following the Brexit vote initially boosted UK share values, that effect has fizzled out and investors are now reluctant to back British companies.
But Tony Yarrow and Vincent Ropers, of Wise Funds, managers with a value and quality approach - who invest largely in investment trusts and also other funds for their portfolios - believe that when a Brexit solution is found that UK shares will bounce back.
They tell Simon Lambert how they go about choosing investments, why they prefer investment trusts and give their view on the Neil Woodford saga.
Britain’s companies offer some great opportunities at the moment despite Brexit, but investors should look further down the ladder than the FTSE 100 big guns.
That’s the view of Colin McLean, co-manager of the SVM UK Growth fund, who says that he is backing British firms with good profit margins, solid business plans and something special in their product or service.
This gives the ability to reinvest their cash to grow for years to come, whereas the Footsie’s big international companies are less in control of their own destiny.
Colin joins us on the latest Investing Show to discuss where he sees the winners in the UK stock market.
He explains why he has been backing Ocado for years and stuck with through the tough times as investors waited patiently for the deal that would finally deliver on its promise to turn be a tech company and not just an online supermarket.
Colin also discusses why he is backing AB Dynamics, the UK’s largest listed automotive consulting specialist and how the push for driverless and much safer cars can help it for years to come.
A storm has engulfed Neil Woodford after his mega fund was forced to close its doors and lock investors in.
The row has shifted from just the Woodford Equity Income fund that had the shutters pulled down, to the fund manager's Woodford Patient Capital trust, his investment firm itself and the companies it holds.
What can DIY investors learn from the affair in terms of how they manage their own money, keep an eye on what's going on in the funds they hold, and whether an investment trust would be a better option?
Furthermore, what will happen next for Britain's most famous fund manager, his business and his investors?
Simon Lambert and Richard Hunter discuss the Woodford blowout on the Investing Show.
Investors have no shortage of choice about where to put their money to work nowadays, but narrowing that abundance of opportunities down is tough.
So what can we learn from those whose job this is?
On this episode of the Investing Show, we talk to David Coombs, head of multi-asset investments at Rathbones, who sifts through the world’s investments to find the pieces of the jigsaw needed to deliver good and reliable inflation-beating returns for investors.
He explains why he does not see risk as a bad thing over a long time horizon, but instead a necessity in order to beat inflation - and why shares have long proven to be the best chance of achieving that goal.
But Coombs says that rather than waste capital on investments he doesn’t think will deliver a return, or help balance where needed, he is looking for 40 to 50 of the world’s best companies.
For the fund manager that means often investing in companies that have high growth potential, such as those in new technologies and shaping long-term trends, which while they may seem to priced expensively are valued highly because investors seen them delivering profits for years to come.
He contrasts this with traditional High Street retailers, which although cheaper in current price-to-earnings valuation terms, have much less certainty in whether they will still be making money decades down the line.
Yet, Coombs also says companies must use digital strategies to help customers - and that they are as important as shareholders when weighing up many businesses.
Brexit is delayed, companies are delaying investment and there is a consumer and property market slowdown being reported.
On the flipside, wages are rising, inflation is near the 2 per cent target and unemployment is low.
So, where do investors in UK shares stand? The UK stock market looks decent value but is there more bad news to come that will send shares down or an opportunity to share off the Brexit hangover?
On this episode of the Investing Show, we speak to Fidelity UK Opportunities manager Leigh Himsworth.
He says that while there has been a hiatus in company investment, the economic backdrop looks quite positive, with low unemployment and rising wages.
He adds: ‘With the market at the current level it’s actually quite an interesting point to invest in the UK.'
We ask where are the places to profit, where can investors shore against uncertainty and the risk of being hit and what are the companies he is currently backing and why?
Britain's commercial property market can be as much of a soap opera as its residential one.
In recent years it has swung from its post-financial crisis woes, to being firmly on the up, before buckling under the burden of Brexit and fears for the retail sector.
The latest trouble for the sector comes in the world of shopping centres and high streets, where retailers are attempted to negotiate their way out of expensive rents - and in some cases going bust.
Yet, despite the worries, property can remain a profitable place to invest and deliver solid income as part of a portfolio.
Navigating there way through that, investment trusts such as Ediston Property Investment Company, can chunky dividends - 5.5 per cent in its case, although investors must be happy with ongoing charges of 1.7 per cent.
On this episode of the Investing Show, Calum Bruce of Ediston, talks through where the opportunities lie in British commercial property, why retail isn't all bad news and how to invest for the best returns while trimming risk.
He says that property remains an interesting and potentially profitable place to invest part of your portfolio and can deliver a steady stream of income.
The Sanford DeLand UK Buffettology Fund was one of only three UK All Companies funds to last year up.
Even then, manager Keith Ashworth-Lord admits that this was only by a marginal amount, at 0.4 per cent and largely down to acting swiftly to ditch some underperforming companies earlier in the year and then making a few smart buys when the market fell at the end of 2018.
Nonetheless, in a tough year for investors the manager's strategy of investing along the lines of Warren Buffett's philosophy paid off and the Buffettology fund made savers money rather than losing it, as most other UK funds did.
While its ongoing charges are a relatively high 1.23 per cent, long-term performance has been impressive.
Over five years the Buffettology fund is the top performer in its sector with a 92.4 per cent gain, according to FE Trustnet figures, and since the start of 2019 it has built on that with a 5.4 per cent rise.
So, what did Keith learn from 2018's turbulent year for investors?
In this Investing Show interview he talks through both the winners and the losers with This is Money's Simon Lambert.
Keith also explains why he bought into some companies to the tune of more than £36.7million when shares were on sale late last year - and how he aims to invest like Buffett in the UK.
The fund holds just 30 different shares making it a high conviction portfolio and Keith says that he looks to buy companies that have a strong competitive advantage over rivals, Buffett's famous moat, and uses a business perspective investing strategy.
A reverse vending machine that recycles plastics, an alternative to cotton that is less devastating for the environment, and clever software to help farmers grow more with less effort.
Those are just three of the things that companies held by investment trust Impax Environmental Markets produce.
If you thought investing to make the world better, was all about ethical funds that just avoid tobacco, arms and oil, then think again.
It is possible to invest your money with companies that are trying to answer the questions that the world is throwing at us, improving the environment and making the most of scarce resources – and make a profit from that.
On this Investing Show, published on 5 October 2018, Jon Forster, of Impax Environmental Markets, joins us to explain what this interesting investment trust does and what he has learnt in almost two decades of investing this way, through both boom and bust.
The trust focuses on energy, water, waste and sustainable food and within those categories are some companies doing fascinating things. Watch the video to find out more.
Brexit may be a worry on many people’s minds but the UK is still home to companies - both big and small - that can deliver an inflation-beating return, says Rosemary Banyard.
The manager of the Sanford Deland Free Spirit fund is able to hunt for the best shares to invest in across the UK stockmarket, from the giants of the FTSE 100 to the more nimble world of smaller companies.
At the moment that means keeping close tabs on those prepared for Brexit.
She joins us on the Investing Show to explain how she looks for the best companies to buy, why a moat is important, and why the average post tax returns of 28 per cent for the firms in her fund matter.
She also has some reassuring words on Brexit, whatever happens. Rosemary says: ‘The companies that I am invested in are well advanced in preparations in the event that there is a no-deal Brexit.’
The property market is one of Britain’s great soap operas, with plenty of twists and turns and heroes and villains along the way.
At the moment there is a cliffhanger: will house prices start falling?
Steady growth has been swapped for a slide towards stagnation in the headline figures, but how much does that mask a regional divide, with things looking far healthier outside of London and the commuter belt?
In this Investing Show special, Andrew Montlake of mortgage broker Coreco, joins us to discuss what’s going on in the residential property and buy-to-let markets.
He also looks at why mortgage rates are near their all-time lows despite a base rate rise and how long that could last.
Smaller company shares have delivered the best long-term returns, research shows, but investors must be prepared for volatility along the way.
Research by Paul Marsh and Scott Evans of the London Business School showed that a £1 investment in the Numis Small Companies Index at its starting point in 1955 would have been worth £6,417 by the end of 2018, with dividends reinvested.
The same investment in the FTSE All-Share would have yielded just £991.
But while the FTSE All-Share delivered a total return of minus 9.5 per cent last year, the small cap index lost 11 per cent.
There will be many investors who saw small caps in their portfolios lose far more than that, with bad news regularly rewarded by 20 to 30 per cent drops in share prices.
So how can you sift through the small companies to find the gems and cut the chance of things going wrong
Top fund manager, Gresham House's Ken Wotton's micro-cap fund fell just 1.3 per cent last year compared to the average fund's 8.8 per cent decline and has delivered a total return of 66.5 per cent over five years compared to the average fund's 41 per cent. He explains how he finds the best small cap shares and reduces risk.
‘We want an income not just for today, but a growing income into the future,’ says Evenlode Global Income’s Ben Peters.
Tapping into dividends that can deliver that is something that holds the key to a good total return for investors over the long term, the fund manager says, and hunting for those dividends around the world provides a much wider choice.
Ben has been co-manager of Evenlode Income for the past five years and that UK-focussed fund has proved a hit with investors, returning 58.8 per cent over five years compared to the average UK All Companies fund’s 18.4 per cent.
A global income fund seemed the logical next step and despite a tough year Evenlode Global Income returned 1.8 per cent in 2018, compared to minus 3 per cent for its benchmark index and minus 5.9 per cent for the average fund in the sector.
So how do you find the best dividend-paying companies – and how important is income now versus the potential for growing payouts in the future?
Ben and fellow manager and analyst Chris Elliott join us on the Investing Show to outline their thoughts on hunting for solid, reliable and growing dividends and explain why consumer staples, healthcare, and the media sector can help deliver those – hence the plethora of household names in the portfolio.
Not so much of interest are firms involved in capital intensive businesses, or who can’t set their prices so easily, says Ben, and will struggle to grow their dividends.
‘We want companies that can grow, but with a limited need for lots of capital to drive that growth’, says Ben. ‘And if we can find businesses that can do that, then they invest in themselves appropriately, to develop their products, develop their services, deliver more value to their customers, which is very important, then there is some cash left over and that can come back to investors in the form of a dividend.’
There are many places to invest around the world for growth, but a Japanese housebuilder is not necessarily one that you would expect.
But Lida is one of the companies Monks investment trust has bought in its hunt for promising growth companies around the world.
This is because there are finally signs of life in Japan’s long-suffering property market, says Spencer Adair, deputy manager of Monks, and Lida makes clever earthquake-proof factory-built homes sold in Japan and across Asia.
And so a Japanese housebuilder can be found alongside more traditional growth names such as Amazon and Tesla in Monk’s holdings.
Spencer joins Simon Lambert on the latest Investing Show, to explain how the trust looks for products or services that are going to be more popular in the future, asking ‘what are they making, what are they doing and why do their customers love it?’ instead of trying to predict share prices.
The trust has four categories of growth that it looks to find companies that fall under.
This ranges from stalwarts, with products and services that will never go out of fashion, such as Prudential, to younger rapidly growing stocks, cyclical growth companies, and latent growth, companies with no growth record but where analysis suggests something fundamental has changed.
Listen to our interview with Spencer to find out how a trust launched in 1929 invests in the digital age.
The Blue Whale Growth fund has made headlines since its launch in 2017 thanks to its backing from Peter Hargreaves.
But while the Hargreaves Lansdown co-founder's name has certainly helped put the fund on investors' radars, its performance is doing so too.
Blue Whale Growth, managed by ex-Hargreaves Lansdown man Stephen Yiu, is up 16.7 per cent over the past twelve months and is the third best performing global fund, according to FE Trustnet.
Blue Whale's performance is all the more impressive considering the average IA global fund is up 1.3 per cent over the past 12 months.
It holds a relatively small selection of shares, currently just 28 different stocks, and aims to buy great companies and invest and hold at an attractive price, but also constantly re-evaluate both those elements.
Blue Whale's manager Stephen Yiu joined us on the latest Investing Show to explain what that means in practice, what a great company is and why he thinks both Amazon and Adidas fit the bill.
The US is home to the world's most exciting companies, but also to some seriously overvalued shares.
The UK stock market is unloved, but can it be undervalued with the threat of a no-deal Brexit hanging over us.
All this means that investors need to be picky, says Tom Becket, chief investment officer of Psigma Investment Management, who says that the time for simply buying the market and hoping for the best is over.
He joins us on the Investing Show to reflect on a recent trip to the US, explaining how President Trump's economic plans are working out and why although Main Street may be doing better, a divide still remains between it, Wall Street and, of course, Silicon Valley.
The more than 20 per cent falls from their peaks in the share prices of the so-called Faang stocks - Facebook, Amazon, Apple, Netflix and Google - has highlighted how even some of the best companies in the US market are at risk of changes in sentiment.
But with the US market making up more than half of the global stock market, investors cannot afford to ignore it completely.
At home in the UK, investors also face a conundrum, with shares beaten down by concerns over what Brexit will mean for companies - although some will benefit from a weaker pound.
Tom joins Simon Lambert, of This is Money, and Richard Hunter, of Interactive Investor, to talk through the US, the UK and opportunities elsewhere in the world.
A reverse vending machine that recycles plastics, an alternative to cotton that is less devastating for the environment, and clever software to help farmers grow more with less effort.
Those are just three of the things that companies held by investment trust Impax Environmental Markets produce.
If you thought investing to make the world better, was all about ethical funds that just avoid tobacco, arms and oil, then think again.
It is possible to invest your money with companies that are trying to answer the questions that the world is throwing at us, improving the environment and making the most of scarce resources – and make a profit from that.
On the Investing Show, Jon Forster, of Impax Environmental Markets, joins us to explain what this interesting investment trust does and what he has learnt in almost two decades of investing this way, through both boom and bust.
The trust focuses on energy, water, waste and sustainable food and within those categories are some companies doing fascinating things.
After a decade distorted by emergency rates and quantitative easing, investors need to rethink their strategy for a world where they can no longer simply rely on cheap money boosting returns.
That is the view of David Miller, investment director at Quilter Cheviot, who, in addition to using funds to invest for his clients, is also a committed stock-picker and believes buying individual company shares is still a route to success.
‘It’s a question of working out who’s got a good business model, who makes a profit, who’s borrowed too much money and has a balance sheet that will evaporate at the first sign of trouble,’ he says.
‘Those are judgments that are now having to be made after that longish period when much of a muchness seemed to be ok.’
David joins Simon Lambert, of This is Money, and Richard Hunter, of Interactive Investor, on the Investing Show to explain how he finds good companies.
He discusses what investors should look out for and highlights some of the opportunities he sees at the moment in the UK stock market, particularly those in the FTSE 250 going after the big guns’ business.
One company that he highlights as having profited from a successful business model, despite being in a tough sector, is retailer B&M.
Britain’s companies have seen a slight resurgence in interest from investors recently, having been out-of-favour for some time, but David says that he believes it’s important to dig deeper than countries or sectors and instead identify the companies that have carved out a successful niche and are capitalising on that.
Do you know about the investment trust that made 23 per cent when shares crashed 30 per cent during the financial crisis - Ruffer investment company?
Its aim is ‘consistent positive returns, regardless of how the financial markets perform’, which in practical terms it says means, ‘we try not to lose money in any 12 month period, and to grow the value of our investors’ wealth over the long haul.’
So how does it do that? What were the investments that meant it outperformed the UK stock market by 50 per cent in 2008? And could it pull that trick off again?
Ruffer’s co-manager Duncan MacInnes joins Simon Lambert and Richard Hunter on the Investing Show to explain where the investment trust is invested now and how it positions itself to protect investors when a stock market storm becomes a hurricane.
This defensive position means that when markets are rising, Ruffer will tend to lag behind but when things turn bad it should be better placed to weather the storm.
Its aim is not to match stock market performance but to deliver long-term inflation-beating returns in a less volatile manner.
Over the past three years things have been tough, with just an average 3.4 per cent annual return, but taken over the longer-term it has delivered average annual gains of 7.2 per cent over ten years.
Duncan tells us why what is important is not which correction it is that eventually turns into a big drop, but knowing that one eventually will - and being prepared for that.
He also talks us through where Ruffer sees opportunities, and why these like Japan and gold miners usually lie in what people would term value investments.