UK fintech PensionBee (LSE: PBEE) has carved out a successful niche for itself, to become the UK's most recognised pension consolidator with the UK pensions sector undergoing a major transformation over the last ten years.

Following the introduction of the Auto Enrolment scheme in 2012, assets in defined-contribution (DC) schemes have exploded, and the pensions industry has rapidly had to adapt to this new norm. The DC pension market has two main segments: workplace schemes and personal or individual wrappers. The latter is dominated by the self-invested personal pension (SIPP) market and the consolidation of legacy workplace schemes. This market is worth around £600 billion and is growing.

The larger workplace-scheme segment is far bigger and more complex. The government is pushing through regulations to consolidate this market, with a goal of consolidating pots into £25 billion-plus mega funds. Although the market has consolidated significantly over the past ten years, hundreds of schemes remain, some with as few as 100 members, which can add cost and complexity.

Where PensionBee comes into the picture

Auto-enrolment is widely recognised as one of the most successful pension reforms worldwide. Under the current rules, an employer must enrol an employee in a pension scheme if they are a UK resident, work in the UK, are aged over 22 and earn more than £10,000. The minimum contribution is 8% of salary, 5% from employees and 3% from the employer.

Employers can pick one of two approaches: either a contract-based approach, or a trust-based scheme. Under a contract-based scheme, individual contracts are agreed between the scheme member (the company) and the pension provider, usually an insurance company or investment platform. With a trust scheme, the company agrees a relationship with a large pension master trust, such as Nest or the People's Pension.

Auto-enrolment has greatly reduced the burden on employers of setting up pensions for employees. It also helps employees save for the future, as they are, as the name suggests, auto-enrolled in the scheme and contributions scale up with wage growth. But people do switch jobs regularly throughout their career and due to the fragmented nature of the industry, there's no guarantee your next employer will be able to offer access to the same scheme as you had previously.

How PensionBee consolidates retirement pots

PensionBee markets itself primarily as a pension-consolidation platform, but it also provides private-pension schemes, such as those for the self-employed. It does not manage the underlying investments itself, but takes a platform fee and partners with institutional giants such as BlackRock, State Street and HSBC to provide a range of low-cost funds.

PensionBee's real edge is its technology platform. Pension transfers and consolidation can be costly and time-consuming. PensionBee aims to complete electronic transfers within two weeks, although more complex transactions can take longer. The company's focus on technology, marketing and simplicity has really resonated with consumers. It estimates it generates around £100 of net asset inflows for every £1 it spends on marketing. It has a 57% brand-awareness score among consumers, one of the highest among pension brands, and customer retention of 95%.

The last time I covered the company in early 2022, it had just reported £5.8 billion in assets under management. According to its latest half-year results, that figure has grown to £8.6 billion of assets under administration across 327,000 invested customers.

With exposure in both the UK and US, the firm operates across markets representing more than $30 trillion in retirement assets. Currently, the US market is still tiny, with less than $5 million of assets under management. However, the company is in talks with more than 100 intermediaries and has an estimated $1 billion in potential recurring annual inflows over the medium term from this business line. This growth should be relatively inexpensive as it has already spent heavily on the technology it needs. As a result, most of its day-to-day spending is now on marketing, plus select technological improvements. PensionBee should be able to scale quickly and efficiently.

Profitability is in sight for PensionBee

In the first half of its 2026 financial year, the firm reported group adjusted Ebitda of -£1.1 million. The UK market alone generated adjusted Ebitda at £1.5m million in the first half or £7.5 million over the last 12 months.

According to estimates compiled by analysts at Peel Hunt, the company is expected to report adjusted Ebitda of £0.5 million for the full year across all markets. Analysts believe PensionBee will achieve sustainable profitability from 2027 onwards and reach management's 20% adjusted Ebitda margin by 2029.

PensionBee is still a small-scale business in a large market with much bigger and deeper-pocketed competitors. However, the opportunity should not be understated. Peel Hunt believes the firm will report £1.5 million of adjusted Ebitda by 2027 and then £8.08 million by 2028, as the group finally reaches an inflexion point in its growth. Sales are expected to rise from £43 million for 2025 to £83 million by 2028, according to Berenberg, as assets under management rise to near £13 billion. Canaccord Genuity has similar figures.

If the company hits these targets, it could achieve a return on invested capital of 34.5% by 2028. If there's one number that illustrates just how profitable PensionBee could be at scale, it's this. The next few years could transform its fortunes.

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Fidelity China Special Situations is an actively managed investment vehicle providing broad access to China's growth opportunities – from established technology leaders to entrepreneurial businesses that have yet to float on the stock market. In the year to date, Chinese and Hong Kong stocks have experienced greater volatility as geopolitical tensions, higher energy prices and concern over inflation weighed on sentiment, although China's diversified economy provides some resilience against these external headwinds.

It's not all about AI either. Semiconductor, power equipment and other AI infrastructure-related companies have seen stronger earnings momentum, while internet platforms have been market laggards. Domestically, consumers' confidence remains subdued amid ongoing property-market weakness. But there are signs that the economy is stabilising, supported by state policy that remains supportive, but targeted. Against this backdrop, many companies are trading at significant discounts to their global peers and there are attractive opportunities across a range of sectors spanning advanced manufacturing, property and domestic consumption, where strong long-term fundamentals are not reflected in valuations.

Three Hong Kong stocks for your portfolio

Contemporary Amperex Technology (Hong Kong: 3750) is the world's largest battery manufacturer and a global leader in the electrification value chain, supported by its leadership, manufacturing scale and continued investment in innovation.

Batteries for electric vehicles remain an important growth driver, but the firm is becoming increasingly diversified. Energy storage systems (ESS) are emerging as another major source of growth, supported by rising generation of renewable energy, electricity security needs and rapidly expanding demand for power from AI data centres. Commercial vehicles and accelerating EV penetration outside China provide further opportunities, with electrification in many markets still at an early stage. With its scale and technology leadership, this firm is well positioned to capture these multiple sources of long-term demand across transport and power systems.

Anta Sports (Hong Kong: 2020) is one of China's leading sportswear groups, with a multi-brand portfolio spanning mass-market sportswear, premium sports fashion and specialist outdoor categories. Its strong brand management, disciplined execution and proven direct-to-consumer model have supported consistent market-share gains in China's growing sportswear market. Importantly, Anta has demonstrated a strong record of acquiring, repositioning and scaling brands, providing additional avenues for growth beyond its core franchise. Newer additions, such as Jack Wolfskin and Puma, further broaden the portfolio. Anta is well positioned to continue gaining market share across China's evolving sportswear industry.

China Resources Land (Hong Kong: 1109) is one of China's leading property companies, with a high-quality investment portfolio, including shopping centres alongside its residential business. Despite the prolonged downturn in the market, the company has continued to gain market share as weaker developers have exited the industry, while its investment properties have delivered steady growth and resilient recurring income. The market is not fully appreciating the quality and value of its investment-property portfolio.

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It took both Andy Burnham and Friedrich Merz three attempts to win the leadership of their parties and ultimately reach the top job. Neither was their party's natural favourite, but time, doggedness and perhaps the exhaustion of the alternatives eventually delivered the prize they had long coveted. Burnham should hope that is where the similarities end.

Fifteen months after becoming chancellor, Friedrich Merz is in trouble. His approval rating has collapsed, his coalition is fractious and his centre-right CDU/CSU is trailing the populist-right Alternative für Deutschland (AfD) by seven percentage points in the polls. Friedrich Merz has recorded the lowest approval rating for a chancellor since records began. CDU politicians recently told Politico of internal discussions about a Kanzlertausch, or “chancellor swap”. This is an extraordinary prospect in a traditionally stable political system.

The immediate danger comes in east Germany. The AfD is polling above 40% in Saxony-Anhalt, which votes on 6 September, putting it within reach of taking control of a German state for the first time. Two weeks later, Mecklenburg-Vorpommern votes, with the AfD ahead on 36%. An AfD breakthrough into government would be a political earthquake and heap further pressure on Friedrich Merz. Yet his problems contain a broader lesson for Britain's new prime minister.

Friedrich Merz stretched the mandate

Friedrich Merz fought the 2025 federal election promising fiscal conservatism. Within days of becoming chancellor, he performed an extraordinary U-turn. Working with the outgoing parliament, he pushed through constitutional changes exempting much defence spending from Germany's debt brake and created a €500 billion infrastructure fund. Germany needed to rearm, its crumbling infrastructure required investment and its restrictive fiscal rules had become an impediment. It was realpolitik in response to a global order reshaped by Donald Trump's return to the White House. But it was also a betrayal of the proposition Merz had put to voters. Political mandates are not infinitely elastic. Voters may accept that circumstances change, but repudiating a central election commitment risks losing the trust required to make subsequent difficult decisions. Merz has discovered that borrowing more money does not magically resolve the political constraints on governing.

Burnham starts with an even bigger problem: he has no personal electoral mandate at all. In 2024 the electorate voted for Keir Starmer, Rachel Reeves and their programme while Burnham was not even an MP. That programme promised “change”, but combined higher spending ambitions with a pledge not to raise the three big taxes on working people. Burnham is now trapped. He wants to spend more, his party has demonstrated that it will not readily let him spend less, and Labour's tax pledges have closed off the most straightforward way of raising the money.

The problems facing Burnham

The result is a government searching for increasingly inventive ways to square the circle before the Budget on 28 October. The danger is that Burnham follows Friedrich Merz in concluding that the only escape is to reinterpret the mandate he inherited – except Britain has far less room for manoeuvre. Germany entered its fiscal expansion with government debt of just 63.5% of GDP in 2025, rising to 68%. Britain's public-sector net debt is already 94% and the Office for Budget Responsibility expects it to peak above 96%.

The financing requirements make the contrast starker. Germany's abandonment of its cherished debt brake has been described as a historic fiscal splurge, yet it plans to issue roughly €335 billion of longer-term federal securities this year, against £252 billion of gilts from Britain – almost as much in the same currency despite the German economy being around 50% larger. Britain is already running the sort of debt programme that Germany regards as extraordinary. That leaves Britain far more dependent on keeping bond investors onside. Germany is borrowing from a much stronger starting position and directing much of the money towards infrastructure and defence. Burnham would be asking investors to tolerate yet more borrowing from a country already carrying a much heavier debt burden.

For investors, Britain's weaker fiscal starting point leaves gilts vulnerable to a greater risk premium than Bunds, particularly if Burnham tests the bond market's tolerance. The outlook is brighter for defence equities. Rheinmetall's order book has swollen to around €80 billion, while BAE Systems boasts an £84 billion backlog and its shares have performed well this year.

Britain has advantages elsewhere. Its deeper venture-capital markets and more flexible economy give it a better chance of producing European winners from AI and other emerging technologies. It also has a shock absorber unavailable to Germany: its currency. Sterling can fall when the economy needs to adjust, whereas Germany is locked into the euro. But depreciation is no free lunch: it raises import costs, risks higher inflation and can become a verdict on investors' confidence.

For Burnham, Friedrich Merz is therefore both a warning and a useful comparison. Merz responded to changing circumstances by abandoning one of his clearest election promises and has paid a heavy political price. Burnham has inherited promises that leave him wanting to spend more and constrained in raising taxes. Borrowing offers an apparent escape, as it did for Merz. But with our debt burden already far higher, the bond market may prove far less forgiving than the electorate.

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When INPP – International Public Partnerships (LSE: INPP) – invested in the Thames Tideway Tunnel project in 2015, many investors thought its directors and managers were mad. Weren't infrastructure projects in the UK always delivered late and massively over budget? The project was a carve-out from the financially stretched Thames Water and would surely be dragged down by it.

Instead, the 16-mile super-sewer under the River Thames from Acton to Beckton was completed as planned in March 2024. In the year to 31 March, it “diverted over 20 million tonnes of sewage and drain overflow that would otherwise have polluted the River Thames and prevented over 1,000 spills”. This represents a 95% reduction in the volume of untreated waste water entering the river.

Win-win investing from INPP

Infrastructure investment is often denigrated as being expensive off-balance-sheet financing of projects the public sector should do itself. However, the success of Tideway shows why bringing in the private sector can help construct and manage infrastructure projects at a reasonable cost to the taxpayer, as well as offering good returns for investors.

INPP's stake in Tideway is one of its largest, representing 15.6% of its £2.9 billion of net assets. The investment in gas distributor Cadent is of a similar size, while a stake in 11 offshore transmission owners (OFTOs) is over 20%. The latter does the boring but essential job of connecting offshore wind farms to the onshore grid.

Lower down the list is the 4.2% invested in BeNEX. The British political class may have become disillusioned with the separation of Britain's railway system into network infrastructure, rolling stock and operating franchises, but Germany has copied the model. BeNEX has concession agreements with 14 of Germany's 16 federal states and owns more than 130 trains.

Last year, the trust won a deal to contribute £254 million to the construction of Sizewell C nuclear power station in return for a 3% stake, of which £35 million has been invested so far. The investment is “expected to generate an annual cash yield of 6% through construction and early operations, with a significant step-up in yield once fully operational”.

Meanwhile, it is trimming mature investments, selling part of its stake in Angel Trains, which owns over one-third of the UK's passenger rolling stock, for £3millionmn. It has also reduced its exposure to public-private partnerships (PPPs) through asset sales – this week, it sold stakes in 15 London schools for £58 million – and handing back concessions as they expire.

INPP’s shift to higher returns

This is part of a broader trend. Over the years, International Public Partnerships and its peers have moved away from the lower-risk PPP projects into ones that are riskier, but offer higher returns, such as Tideway and Sizewell. 3i Infrastructure (LSE: 3IN) was the first to do so, and International Public Partnerships and Pantheon Infrastructure (LSE: PINT) followed. More recently, HICL Infrastructure (LSE: HICL) has announced a further shift away from the PPP “yielders” in the portfolio (currently 53%) into “growers” (currently 47%) and “enhancers”, such as data centres and leisure facilities. This is expected to increase its annualised total return to 10%, from 8.5% historically.

The infrastructure funds have been held back in recent years by rising gilt yields, but discounts have fallen in the last year and operational performance has been good. Discounts to net asset value (NAV) range from 5% (3iIN) to 15% (HICL). Yields are between 3.5% (3iIN) and 6.1% (HICL), with dividends likely to rise with inflation.

International Public Partnerships is on a discount of 7%, yielding 6% and has 72% of its assets in the UK. A writedown of its £24 million investment in a UK broadband firm this week is not material (0.9% of NAV) and guidance is unchanged. Despite a 24% return over one year, it continues to look attractive.

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US Treasury secretary Scott Bessent has found himself caught in a standoff with currency traders more than a fortnight after the US and Japan jointly intervened to buy yen for the first time since 1998.

The move strengthened the yen at the start of August, but it has since given back roughly half of its post-intervention gain. Currency analysts warn the fundamental drivers of a weak yen, especially a yield gap between Japan (where rates are 1%) and the US (where rates are over 3.5%), have not gone away.

Scott Bessent knows a thing or two about currency trading, says The Guardian. He was part of the George Soros team in 1992 that made a billion dollars by forcing the pound off the European Exchange-Rate Mechanism. His intervention to stabilise the yen wasn't an act of charity. Japan is a “cash spigot”, with the cheap yen funding a global “carry trade” that helps prop up US technology shares.

If the yen's slide continues, then Japan might be forced to respond with “aggressive” interest-rate rises. That could quickly unwind the carry trade and trigger a Wall Street rout, as happened two years ago when a surprise Japanese rate rise sent global markets tumbling.

Don't worry, the risk of a “disorderly” unwind “seems low”, Masayuki Nakajima of Mizuho Bank tells Katie Martin in the Financial Times. The danger of higher Japanese rates is now “extremely well understood” by traders, who have made appropriate preparations. Rather than a snap yen rally, “all the ingredients are in place” for the carry trade to continue and yen selling pressure to persist. “It is increasingly clear that the market is in the mood for a fight” with the US Treasury.

What does Scott Bessent’s intervention mean for the global economy?

The “US currency intervention was not only ineffective, but counterproductive”, says George Saravelos of Deutsche Bank. Washington has been encouraging Tokyo to tap an emergency Federal Reserve dollar facility, inadvertently sending a signal that “it is not comfortable” with the “direct US Treasury sales” that Tokyo usually uses to prop up the yen.

If Scott Bessent's yen “ruse” was designed to keep US borrowing costs under control, then it has failed, agrees Simon Nixon on Substack. Washington's use of “unorthodox” tools, including selling euros rather than dollars to fund the yen intervention, has only “deepened the anxiety it was meant to soothe”. Bond traders sniff out hesitation like sharks detect blood in the water.

The spike in government debt isn't only affecting America. Japan's own ten-year yield hit a 30-year high on Monday, while France's has topped 4% for the first time since 2008, potentially pushing the country closer to the brink of a “debt crisis”.

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Tina Fordham is the former chief global political analyst at Citigroup and founder of Fordham Global Foresight. Tina has spent more than 25 years advising senior business, government and military leaders on navigating political and geopolitical risk; she has served as a senior adviser to the UK prime minister and advised military leaders. She also sits on advisory boards at Columbia University and the University of Cambridge. Her forthcoming book, Mad World: A Geostrategy Survival Guide for Leaders, is published by Whitefox in September 2026.

Matthew Partridge: Your new book, Mad World: A Geostrategy Survival Guide for Leaders, argues that in the current geopolitical climate, companies no longer have the luxury of ignoring politics?

Tina Fordham: Yes, ignoring geopolitics was something you could only afford to do in the era of globalisation, which happens to be the time that most of today's executives, myself included, grew up in.

Matthew Partridge: You've talked about the emergence of a new geopolitical supercycle.

Tina Fordham: The data for that study examines the period between 2010 and 2025. So even before Donald Trump's second term, we detected a tripling of events posing geopolitical risk. People hope things will get better after Trump leaves office in January 2029, but the evidence suggests that the drivers of geopolitical risks are multiplying and have been for a long time. Moreover, the guardrails that temper the risks are either eroding or being actively dismantled. So the idea that we only have to survive another year and a half before things return to normal is misplaced.

Matthew Partridge: Which guardrails in particular are being eroded?

Tina Fordham: There's a diagram in the book of the supercycle framework, where we talk about some of the long-term drivers, like declining trust, climate change and income inequality. However, when there are risky events or shocks, good government, liquidity from central banks, institutions or even social cohesion can help you mitigate these problems. But when these guardrails are damaged, even relatively small risks can become quite disruptive. This is difficult for most executives to get their heads around, but it's how we try to apply a systematic conceptual framework to thinking about geopolitical risk.

Matthew Partridge: Your book is primarily aimed at business leaders and executives, but would it also apply to ordinary investors deciding how to structure their portfolios and which assets to choose?

Tina Fordham: There are certainly implications for everyday people who are having to think about how to manage their own lives, their families and their careers in a time of unprecedented global change.

Most people have yet to recognise that we are in a new age. They assume we are still in the period most of us became used to: one of continuously improving living standards. In fact, the period between the fall of the Berlin Wall [1989] and the collapse of Lehman Brothers [2008] was actually the most peaceful and prosperous period in all of human history – not the baseline for the future. You can mess it up.

Matthew Partridge: Turning to specific issues, I've noticed that in your recent talks you've been a lot more pessimistic about the prospects for a lasting resolution to the situation in the Strait of Hormuz. Why is that?

Tina Fordham: We were among the few to come out strongly and say that the conflict between Iran, Israel and the US would not be a short war, which was counter to the consensus at the time that it would all be over very quickly. Our reasoning was based on how Iran has always negotiated. It was never going to be enough simply to order them to meet the White House's maximalist demands.

I also felt that there is vanishingly little evidence in history of aerial bombardment causing regime change, one of the original aims of the conflict. Every US president since Jimmy Carter in the 1970s has wargamed and studied possible options for dislodging this regime and concluded that it was too hard to do without massive loss of life and huge disruption, so president Trump wasn't going to change that.

So now, we've got the situation where the US has seemingly depleted its stock of long-range munitions, while Iran can regenerate its drones faster than the US can replenish its stocks. While the markets have been reacting to the good news – in the short term – that there may be a resumption of oil supplies to the Strait of Hormuz, the actual long-term effect of this war has been to give Iran a source of leverage that it didn't have before, a power it is not going to relinquish. Meanwhile, Trump seems to have got bored with this conflict, except he's realised he can't just walk away.

Matthew Partridge: What is the most likely outcome?

Tina Fordham: Most market participants have assumed that America doesn't want to have high petrol prices before an election. However, while this might have applied over the last 25 years, I think this time we're going to end up in a situation that is between war and peace, where Trump will keep threatening because that's the only tool he has.

What's more, the Gulf states have prevailed upon the White House not to destroy Iran's energy infrastructure because of what that would do to the rest of the region. So, we are likely to be left in a situation where Iran is more powerful – if battered – after this war. What's more, the situation sends a message to the rest of the international community that if they don't like their present borders, or have some beef with their neighbour, the US has a much smaller capacity to stop them.

Matthew Partridge: On a more positive note, it looks as though Ukraine is fighting back against Russia and seems to be regaining some of the territory the invader stole. Will that continue?

Tina Fordham: The Ukraine conflict is being fought over feet and yards of territory. While this is a quagmire for Russia, with China prevailing on Putin not to go nuclear, neither is he going to come to the negotiating table in any meaningful way and agree to a ceasefire. Russia will not seek a deal that gets sanctions rolled back. That is simply not how Putin thinks.

Given that 40% of Russia's energy infrastructure has been destroyed, resulting in queues for petrol, Putin may want to make a grand gesture to demonstrate control. There is therefore a material risk of Russia attacking a Nato member. Most British people don't seem to have factored this risk in, even though we're being attacked by Russia all the time.

Matthew Partridge: Could Putin end up like the Serbian dictator Slobodan Miloševic – who was overthrown in 2000 – and succumb to internal dissent or a palace coup?

Tina Fordham: While there is no chance of Putin ending up in The Hague, a palace coup is more plausible than a popular revolution. But, the trouble with palace coups is you really need an alternative. And Putin has made sure that there are no plausible successors to him. So, while he and his policies are increasingly costing the Russian elites more than they're gaining, leaders like this can hang on for a long time.

Matthew Partridge: Do you think Ukraine's brave resistance and the fact it's actually been able to at least block Russia will give hope for other countries like Taiwan?

Tina Fordham: Ukraine has certainly given Beijing pause for thought. The fact that both the US and Russia have been dealt a serious blow by much weaker middle powers suggests that might doesn't necessarily win and can leave you stuck in a very awkward position for a long time.

Matthew Partridge: Trump will have to leave office in January 2029. The Republicans are now expected to lose at least one House of Congress seat in the midterms. Do you think that a bad result in the midterms will rein in Trump, or do you think that he might become even more unpredictable?

Tina Fordham: This is the question on the minds of many. The Iranian regime have said that they weren't going to negotiate any longer with the US but are going to wait until after Trump has left office.

While the US constitution means that Trump is limited to two terms, he is printing “Trump 2028” hats already. There's also the possibility that Trumpism may outlast Trump himself. In the most sinister scenario, the dubious behaviour by many in the administration means that even if they are voted out, the threat of possible investigations may complicate the usual peaceful transfer of power.

Matthew Partridge: In your book, you say that while the big losers from automation had been older, blue-collar workers, the worst affected by AI will be middle-class people in their 20s and 30s, who tend to be more politically aware. Will this fuel opposition to AI?

Tina Fordham: Absolutely. It will also increase demand for policy solutions. Covid has led to a rise in both benefits and expectations of government support. The historians who speak very grandly about previous waves of innovation and industrialisation forget that during the Industrial Revolution, working-class people didn't have the vote, which is not the case today.

In any case, revolutions are not fought by the poor, they are launched by the middle classes, and it's not only university students and recent graduates who are angry, but also those in the their 50s who are being told they need to work longer because the pension age is being delayed. All of this is going to add to pressure on governments at the same time that Europe needs to spend more on defence.

Matthew Partridge: What is the upshot of all this for investors?

Tina Fordham: We used to think about geopolitical risk in terms of what could go wrong and undermine a portfolio. But recent geopolitical developments and other themes such as AI have led to a situation of constant potential danger, as opposed to sporadic upsets. The threats won't dissipate within a year or two; this backdrop is set to last longer than a decade.

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There is a pervasive belief that the “Magnificent Seven” tech stocks are the drivers behind the relentless rise of the US stock market. The Magnificent Seven, sometimes called the Mag 7, are Nvidia, Amazon, Alphabet, Microsoft, Apple, Meta and Tesla – seven of the largest companies in the US and therefore the world.

But the Magnificent Seven no longer ride together and their performances this year are very different. The S&P 500 has returned 13.4% year to date. Amazon has returned 21%, but Tesla -25%. In between are Nvidia (19%), Apple (16%), Alphabet (12%), Microsoft (6%) and Meta (0.4%). As a result, Meta and Tesla have been pushed down the list of the world's largest companies by TSMC, Broadcom, SpaceX and Saudi Aramco, now in sixth, seventh, eighth, and ninth place, respectively.

Fifteen companies in the S&P 500 have more than doubled in value this year, led by Sandisk (+413%), Dell (+255%) and Micron (+207%). None of the Magnificent Seven come in the top 150; Tesla is near the bottom. As strategist Ed Yardeni notes, the Magnificent Seven are up just 4.8% this year against 16% for the remaining “impressive 493”. Information technology is still the S&P's second-best-performing sector (up 23.6% against +28.4% for energy), but the Magnificent Seven no longer lead it.

The Magnificent Seven have invested heavily in AI

The dull performance may be accounted for by investors' concern about the gigantic amounts of money these companies are investing in AI. This may seem like collective insanity, but these companies are led by and employ many of the smartest people in the world. How likely is it that they are wrong and the itinerant pundits, with limited knowledge and experience, are right? In any case, any fall-off in investment and thereby an increase in cash flow could lead to renewed outperformance.

Yardeni notes that the forward multiple of earnings of the S&P 500 Growth index has fallen to 20.2 against 18.3 for the Value index. In 2000, he says, Growth traded on a multiple above 40. Growth's forward earnings have been boosted by mark-to-market capital gains, so the multiple of sustainable forward earnings is higher but, he points out, “bull markets do not die of old age or of accumulated gains. They usually die when earnings roll over.”

The driving force of the bull market is then “FEMO” – fabulous earnings momentum, rather than “FOMO”, or fear of missing out, as in the late 1990s. “In the current bull market, the S&P 500 is up 117% since it began on October 2022. That ranks fifth of the eight bull markets since 1969.” Taking a longer-term perspective, the index is up 277% since 2015, but between 1985 and the millennium, it was 625%. “If the analogy continues to hold and the market keeps climbing, the interesting years are ahead rather than behind.”

How other markets are faring

Yardeni also monitors sentiment, which suggests that institutional investors are bullish (a contrary indicator), but “retail investors not so much”. Markets do not go up in a straight line, so a setback or period of sideways trading would be likely to dampen sentiment, paving the way for a further advance. The chances of a serious setback to earnings growth are small; if the Gulf war and its effect on oil prices could not achieve that, what could?

Elsewhere, the outlook is at least as good. The reliably pessimistic and risk-averse British have led to a serious undervaluation of the UK market and a takeover bonanza for private equity and overseas bidders, which shows no sign of slowing. The yen, at last, is showing signs of stabilising if not reversing its 15-year bear market. This would mean that the strong underlying performance of the Japanese market would look even better for overseas investors.

The outlook for the European economy is improving while its companies have successfully globalised. Technology companies in emerging markets are doing even better than in the US with year-to-date performance of 32%, so South Korea (+71%) and Taiwan (+62%) lead the country performance table even after the recent setbacks. Earnings growth in the MSCI All Countries World index ex US has been pedestrian in the last three years, but is about to accelerate sharply, with 34% growth expected in the next 12 months.

Further evidence of a broadening market comes from the improved performance of smaller companies, with the Russell 2000 index for the US hitting record highs and outperforming the S&P 500 over the last year. Small caps in the UK, Europe and Japan have continued to underperform, but performance has picked up and may be moving ahead.

This is not the end for the bull market

The outperformance of the Magnificent Seven in recent years looks like having been a passing phase. Its end does not signal the end of the bull market, much less an imminent collapse, but a healthy return to the traditional pattern whereby mega-caps lag a broadly advancing market.

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The past few years have been very tough for UK housebuilders and their shareholders, says Jo Rands, a portfolio manager on the UK Equity Income, UK Managers' Focus and UK Rising Dividends strategies at ClearBridge Investment. The government has pledged to build 1.5 million homes in five years, but various headwinds, including cost increases and higher interest rates, have caused UK housebuilders' shares to plunge over the past two years. Yet with Andy Burnham entering No. 10 with talk of building more council houses, and even bringing back a form of Help to Buy, their shares have rallied recently. Will this continue?

Why are UK housebuilders struggling?

At the core of the British housing crisis is the fact that we're simply not building enough housing, either in the public or the private sphere. David Crosthwaite, chief economist of the Building Cost Information Service, notes that housebuilding peaked in 1970, with nearly 400,000 homes completed, of which just under half were council houses. Fast-forward half a century and only 200,000 homes were built last year, of which just 4,000 were council housing. Essentially, “you have a diminishing supply of housing, particularly social housing, at a time when the population is continuing to grow at a strong rate”.

Unsurprisingly, the gap between housebuilding and population increase has created a huge backlog. There are several ways of estimating this unmet demand, says Edward Clarke, an associate director at planning consultancy Lichfields UK. When you take into account what statisticians call “concealed households” – people who would like to start a household, but are currently “sofa surfing”, or living with their friends and parents – then “we really need to build two million more homes”. That might seem like a shockingly large number, but Clarke thinks it could even be an underestimate. Getting the homes-to-population ratio in line with continental Europe would require even more construction – around 2.4 million additional homes.

It isn't just young people, and those on the margins, who are suffering as a result. The shortfall in supply means that houses in the UK are less affordable, in terms of the ratio of prices to incomes, than they are in countries such as France and Germany, as Jeremy Matallah, co-founder of rent-to-own company Keyzy, notes. Just to meet the immediate needs of the market, “we should be building around 300,000 homes a year”, roughly a 50% increase from the 200,000 homes a year that we are building at the moment.

Hoarding land and restrictive planning rules

Most experts agree that the big factor behind the lack of supply is the planning system. In 2024, the Competition and Markets Authority, the competition regulator, was called in to investigate allegations that builders and developers were hoarding land excessively, says Paul Smith, managing director at The Strategic Land Group. It found that the market for land was not working properly and that the planning system was such a fundamental barrier to the delivery of new houses that it felt compelled to talk about it, even though this was outside its original remit.

The planning system acts as a block on development in two main ways, says Smiths. Firstly, there simply isn't enough land earmarked for development, with only a third of councils in England even bothering to have up-to-date local plans. Worse, the process for dealing with individual planning applications, which is supposed to act as a “safety valve” given the lack of local plans, is too subjective (and therefore unpredictable) as well as increasingly complex.

Even when decisions are made, the process is getting ever slower due to a shortage of town planners. Indeed, “applications for new homes take more than three times longer to be approved than they did a decade ago, with the median time around 349 days”, says Smith. This matters, as even putting in a planning application can be expensive for a developer, costing around £150,000-£200,000 per application, even if the application is not successful. “If the process was speeded up and the outcome was more predictable more developers would be willing to take the risk.”

The plethora of rules and regulations make the planning system dysfunctional. Section 106 agreements, for example, which oblige builders to help contribute to additional development-related infrastructure, have been around for decades, but their scope has been broadened to the extent that you now see local police forces asking developers to contribute money so they can buy more laptops, says Smith. The Future Homes Standard rules on carbon emissions also “typically add around £7,000 to £8,000 per home in extra building costs”.

The Building Safety Act, approved in 2022, which significantly increased the safety requirements for tower blocks, is particularly contentious. The intention, to avoid a repeat of the Grenfell Tower disaster, is of course understandable, but the legislation “feels like a bit of a sledgehammer to crack a nut, reducing the appetite that anybody has to actually build flats”, says Adam Murray, CEO of planning and development consultancy Urbana. Indeed, developers in Germany and the US are safely able to build high-quality tower blocks “without having to follow rules such as having to have two staircases”, says William Reeve, chief executive of property technology company Goodlord. Loosening these rules is key if we are not to end up depending solely on single-family homes.

A blizzard of other problems for UK housebuilders

Poor planning rules aren't the only constraint on housebuilding. Even when development is allowed, buying land can be difficult when a site is owned by multiple parties, says Matt Beckley, partnerships director at Keon Homes. Remediation of former industrial land to make it fit for housing can also prove expensive. The government provides some support in the form of grants, but “there needs to be a good, hard look at the amount of funding that's available and how that is financed”, says Beckley.

Housebuilders are also “contending with a notable skills shortage, which means builds are taking longer to complete and projects are stalling”, says James Anderson, a construction supply-chain expert at Catnic. The National Audit Office has estimated that as many as 755,000 workers are needed to help meet housebuilding targets, even before factoring in those leaving the sector. The industry, including Catnic, is providing training, but additional help will be required.

The demand side is a problem too, says David Smith, portfolio manager of Henderson High Income trust. Elevated mortgage rates and political uncertainty over tax issues have weighed on consumers' sentiment, leading to a “lacklustre number of transactions”. Higher inflation and borrowing costs are also having a negative impact, says Ronnie George of Volution. He believes some form of subsidies for those buying a home, along the lines of Help to Buy, could be useful.

Andy Burnham's challenge

New prime minister Andy Burnham clearly faces a significant challenge. But many are optimistic that he can really make a difference, given his record as mayor of Greater Manchester between 2017 and 2026. His achievements in that time in office were far from perfect, says Smith, and he didn't quite hit the ambitious housebuilding targets that he set himself – he ended up making some concessions to those who opposed greenbelt development. But he deserves credit for going out and creating his own plan for local development rather than just “kicking the can down the road”, as local leaders in other parts of the country did.

As mayor of Manchester, Burnham at least showed an “understanding of the problem and a willingness to try and address it”, says Matallah, who is impressed that Burnham has promised to go beyond the existing commitment to invest £39 billion over ten years in affordable housing by tackling the “structural undersupply of social housing for the past 40 years”. There are indications that Burnham may be willing to allow councils to keep more of the revenue that they make from the sale of council houses, to use public lands for development and even take on debt in order to build more houses.

Burnham's “Manchesterism" – the belief that growth can be boosted by “devolving power to give mayors and councils the power and resources to make decisions” – could work, says Terry Woodley, managing director of development finance at Shawbrook. “Of course, there needs to be some sort of national strategy put in place, with regular monitoring to make sure that the councils are using these powers to boost development,” but decentralisation, combined with Burnham's enthusiasm, represents “the best chance to boost housebuilding levels that we have seen in over a decade”.

And it's not as if Burnham is starting with a blank slate, says Clarke. Over the last two years, the Starmer government put a lot of effort into reforming the system in order to meet their targets of building 1.5 million homes in five years. This was expressed in their proposed reform of the National Planning Policy Framework (NPPF), a draft version of which was circulated last December (with further revisions in May). As well as trying to make the process more rules-based and hence predictable, the new NPPF encourages councils to free up more sites by pushing them to allow development in the “greybelt” – that is, lower-quality greenbelt sites. The NPPF has also raised overall targets for home building in various areas.

Signs of an uptick in the housebuilding sector

Already many in the sector are starting to become more upbeat about the prospects for an increase in the number of homes built. “You've always got to be optimistic in this game,” says Smith, and there are a number of “easy wins” the government can make to help remove “the grit from the system”. Smith is particularly happy that Matthew Pennycook, the minister of state for housing and planning, has been kept on and elevated to a Cabinet role.

“We have at last moved away from a situation where there wasn't a proper housing minister, and if there was, they were moved on every 12 months,” says Bleckley. It feels “like there is now a will to get more houses built than there has been for more than ten years”. This doesn't mean the government will hit its targets for housebuilding over the next five years (although Bleckley hopes he's wrong about this), but “I do think that there will definitely be an uptick”.

There are “many uncertainties”, says Clarke, but there has recently been an increase in the number of planning submissions made, which is a good leading indicator of future activity. We “should expect to see more homes being built if the market conditions allow for it”. Similarly, despite his concerns about the shortage of planners, Woodley is starting to see that “some of the developers that we work with are getting approvals” more rapidly.

The housebuilding market may be about to turn

The market may now have reached the point where it is too negative about the housebuilders, says Jack Fletcher-Price, an equity analyst for Morningstar, but things are unlikely to improve until something happens to shift investors' perceptions. If (or when) such a catalyst appears, things could change quickly. Shares in housebuilders shoot up, sometimes by as much as 5% in a day, every time there is a rumour that the government is going to bring back some kind of Help-to-Buy scheme, for example.

If there is an uptick in housebuilding, the big housebuilding firms will be best placed to profit “because they tend to have stronger balance sheets, established land banks and greater access to funding, allowing them to respond more quickly if market conditions improve”, says Guiseppe Scozzaro, a partner with chartered accountants and business advisers Goodman Jones. Any uptick would “also benefit a much broader range of firms, from planning consultants and specialist lenders, to building-materials suppliers and infrastructure providers”. We take a look at some of the most promising investment ideas below.

The most promising housebuilding investments to buy now

One of the most attractive housebuilders is Persimmon (LSE: PSN). Its relatively high exposure to the north of England, compared with London and the southeast, “was previously seen as a negative, but it is now viewed as a positive, as you're seeing much better house-price growth up there”, says Morningstar's Jack Fletcher-Price. David Smith of Henderson High Income also likes that the firm is “one of the most vertically integrated UK housebuilders, with in-house brick, tile and timber-frame manufacturing operations, helping to improve cost control, efficiency and security of supply”. Persimmon trades at 11 times 2027 earnings and on a yield of 5.8%.

If snapping up a bargain is your priority, then you might want to think about Barratt Redrow (LSE: BTRW). It is even cheaper relative to its fundamentals than Persimmon, says Fletcher-Price, although he thinks that Persimmon has the more attractive business. The stock is trading at just a touch more than half its book value (the value of its net assets). Barratt also appears cheap on other metrics, trading at 12 times 2027 earnings and offering an attractive yield of 3.97%.

If you're willing to take on a bit more risk, then Vistry (LSE: VTY) is even more of a bargain, trading at an even greater discount of more than 70% to its book value, and at only 6.4 times its 2027 earnings, following a series of scandals over understated costs, followed by poor results. The company has a unique model, says ClearBridge's Jo Rands. It partners with local authorities on projects and so “could possibly do well from a greater emphasis on affordable housing”.

As well as housebuilders, businesses exposed to drainage, piping, insulation, heating systems and other construction inputs could see stronger demand if housing output increases, says Smith. One promising play on that theme is Genuit (LSE: GEN), which provides water, climate and ventilation systems for buildings. The firm has enjoyed solid growth, with revenue climbing by a third between 2020 and 2025, and profits doubling during the same period. Despite this, the stock trades at less than ten times 2027 earnings and on a dividend yield of 4.9% Volution (LSE: FAN) also specialises in ventilation systems. It has had an even stronger record of growth than Genuit.

Aided by a series of acquisitions, the company has nearly doubled its revenues and tripled its profits over the five years to 2025. Chief executive Ronnie George thinks that greater awareness of the importance of good ventilation, especially following the Covid pandemic and several tragic cases where people have died from asthma triggered by mould, will drive further demand for its systems. The bulk of its business used to come from retrofitting old buildings, but new-builds account for around half of revenue. Volution trades at 15.8 times 2027 earnings and offers a dividend yield of 2.1%.

Another company that should do well from any uptick in UK housebuilding is Ibstock (LSE: IBST), which makes bricks and concrete for the UK construction industry. Revenue has been volatile since 2020, but the long-term trend is upwards, with both sales and profits expected to keep increasing over the next few years. Two new brick factories have been completed, which should help to keep revenue growing. Ibstock trades at 16.4 times expected 2027 earnings and offers a dividend yield of 2.8%.

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Over the last 12 months, developer Caswell & Dainow have seen a 50% increase in enquiries, the majority from homeowners interested in selling parts of their garden off for development.

Co-founding director Adam Dainow says: “In the cost-of-living crisis people are looking at ways they can release large sums of cash to help out."

But not everyone agrees that selling off some of your land, while appealing in the short-term, will have little or no impact on the value of your home when you come to sell up.

MoneyWeek investigates the pros and cons of selling off some of your garden.

Does your land have development value?

Your plot must be big enough for at least one property which is in keeping with the size expectations of similar neighbouring properties.

In inner city locations where space is scarce, your plot may not be expected to host a property and a garden, for example. A small terrace or balcony may be sufficient. In suburban areas, where large gardens and privacy may be expected, a desirable plot is likely to be larger.

How much money could you get from selling part of your garden?

That depends on whether you live in a higher or lower value housing market. According to Caswell & Dainow, a plot of land where a typical three- or four-bedroom house sells for £500,000 to £600,000, your land could be worth up to £100,000 before planning permission or between £150,000 to £200,000 after planning permission has been granted.

In housing markets where the same size property sells for between £750,000 to £1 million, homeowners could expect £150,000 to £175,000 for their garden pre-planning permission and from £200,000 to £275,000 post planning permission. These values rise to up to £300,000 and £400,000 pre- and post-planning respectively where nearby homes sell for up to £1.5 million.

Dainow says: “We worked with a homeowner in North London who received £150,000 for land to the rear of his property where planning was secured for a three-bedroom family home and a family in South London who received £140,000 for overgrown side land that had become a regular site for fly tipping.”

But those living in more modest neighbourhoods need not miss out.

“In areas of lower value, landowners may still net between £30,000 and £60,000 for a slice of their garden for a single home,” he says.

How does it work?

If your property has a mortgage secured on it, your lender must agree to the sale first.

The bank’s lending is based on the original value of your property, which will go down when you sell part of it – reducing the value of their security.

The lender will also be looking at the future saleability of your home, says Nicholas Mendes, mortgage technical manager at brokerage John Charcol.

“Practical details matter,” he says. “If the sale affects access, parking, drainage, services, boundaries, or rights of way, it can quickly become a problem.

“What often derails these plans is not the idea of selling land itself, but the knock-on effect.

“A lender may be nervous if the remaining property becomes less marketable, if valuable development potential is being carved away, or if the title becomes more complicated because of covenants, restrictions, or unclear boundaries.”

Your mortgage lender is likely to request a valuation at your cost before making a decision. Lenders can ask for part of the mortgage to be repaid from the sale proceeds depending on the size of your debt and value of your property after selling some of your garden.

If you have been given the go ahead, you have three routes to choose from;

• Sell your garden to a developer before getting planning permission – this is a quickest option but will net you the lowest price.
• Agree with the developer on a ‘subject to planning’ offer, whereby they agree to buy your garden at a higher price on the condition they can get planning permission – you’ll need to instruct a solicitor to draw up a contract.
• Apply for planning permission yourself. This is the costliest option but if successful, you’ll end up with the highest price for your land.

Will selling your land devalue your home?

That depends on the size of your original plot, the amount of land you are left with and the type of area you live in.

Richard Sexton, managing director of Legal & General Surveying Services, said: “In some cases, selling off some land won’t hit the value of your property, particularly where the remaining plot is still generous for the type and location of the property.

“A house with an acre of land may still feel substantial and attractive with half an acre of land, especially in rural or semi-rural settings. However, buyers will pay a premium for space, outlook and exclusivity – so removing development land can still reduce desirability even if the house remains objectively sizeable.”

Land only adds meaningful value to a home where it contributes to privacy, setting, future potential or overall enjoyment of the property. If the sale changes the character of the house or reduces separation from the neighbours there is usually a material impact on value and market appeal.

Those with a smaller plot to begin with, in a suburban location, are more at risk of damaging the value of their property.

“Carving off land can alter the balance of the property quite significantly, affecting privacy, parking, outlook and future extension potential,” adds Sexton.

“In valuation terms, buyers tend to react more negatively where the remaining plot begins to feel compromised or out of keeping with neighbouring homes.”

Brett Ray, registered valuer and founder of Survey Shack, an app-based property assessment tool, has seen the impact on saleability first hand.

“Part of the garden to a house on my street had previously been separated from the original plot,” he said.

“That property has now been on the market for over a year. Ray believes this shows how reducing garden size and altering the original plot can “affect future saleability”.

Since the pandemic, Ray says outside space has become much more valuable, particularly in and around large towns and cities so homeowners should weigh up the risks and benefits carefully.

What to consider before selling your land

A loss of privacy, your garden or windows being overlooked, extra traffic down your drive or side access to your property and the stigma of being the property with the smallest garden on the street are all serious considerations for sellers, says Trudy Woolfe, director of lender services at e.surv chartered surveyors.

“Many people just see the pound signs rather than thinking about the impact,” she adds. “It’s a fine balance.”

Practical complications around access rights, drainage and shared boundaries can all affect saleability and the chances of getting a mortgage if not handled properly.

If your garden has development potential, by selling off the land, you are eliminating an upside of the original property.

And, by selling it to a developer who secures planning permission and sells it on to a builder, you lose control over the design quality and materials used which could have a detrimental impact on the desirability of your home.

Dainow says a good developer will make sure any new homes built on garden land would be positioned to protect the homeowner’s privacy and property value.

But rather than take the developer’s word for it, you can get specific terms written into the contract with the developer.

For example, you could agree you don’t want to look at any windows from a particular elevation or that maintenance of any new access created is the responsibility of the new owner.

You can also include an ‘overage’ clause in your contract which stipulates that the seller gets more money if the land becomes more valuable after the sale because more homes are being built on the land than originally agreed.

Independent advice should be sought from both a solicitor and chartered surveyor with development land expertise before agreeing any terms as land values can vary considerably depending on planning prospects and local demand.

India is rapidly becoming one of the world’s economic powerhouses.

India’s economy grew by 6.5% in 2025, according to IMF data, making it the fifth-fastest growing that year. With a GDP of over $4.1 trillion it is also the sixth-largest global economy.

It overtook China as the world’s largest country by population in 2023, and its growing population – particularly its expanding middle class – underpins much of its current and expected economic growth.

“A young working-age population, urbanisation and rising incomes should continue to expand the consumer base and gradually shift spending towards financial services, healthcare and other discretionary categories,” said Chetan Sehgal, lead portfolio manager at Templeton Emerging Markets Investment Trust.

Its economy has been transformed over the last decade by reforms such as the goods and services tax (GST), a single indirect tax which simplified the pre-existing tax system in 2017, and the unified payments interface (UPI), a protocol that facilitates instant digital payments on mobile devices using a unique digital ID.

“Registered GST taxpayers have increased from around 6.7 million in 2017 to 16.5 million as of May 2026, while UPI processed more than 240 billion transactions in FY2025/26 and had more than 550 million users by June 2026,” said Sehgal. “This brings more consumers and businesses into the formal system, creates digital transaction histories and expands the addressable market for credit, insurance, payments and savings products.”

All of this amounts to a powerful shift that could create an enormous amount of value for the country’s consumers and investors.

“India today reminds us of China’s internet opportunity 20 years ago – but with artificial intelligence (AI) potentially accelerating the transformation,” said Kevin Carter, founder and chief investment officer of investment manager EMQQ Global.

What’s driving India’s stock market?

India’s stock market has come up against greater challenges this year than it has faced in recent times, particularly the consequences of the conflict in Iran.

Between the start of the year and 19 August, the MSCI India index fell 9.3%, reflecting a range of macroeconomic headwinds that mostly result from the US-Iran conflict.

“India has been impacted by volatility in crude [oil] prices as a result of ongoing wars,” said Sehgal, “as well as by cost inflation in the AI supply chain, where India is a major importer.”

Since hitting a low of 1,049.11 at the end of March, though, the index has staged something of a recovery, gaining 10.8% between the end of the month and 19 August.

“Indian stocks have stabilised after a bruising first quarter and are proving resilient to both the Iran war and the ‘AI-takes-all’ market environment,” said Peter Clark, chief executive at global wealth manager Bentley Reid.

“Though cyclical headwinds remain there are growing signs that the record foreign selling of Indian equities is over with $2 billion of net inflows being recorded in June,” Clark added.

He highlighted that the MSCI Emerging Market index is dominated by Taiwanese and Korean chipmakers. Three companies – Taiwan Semiconductor, Samsung Electronics and SK Hynix – account for more than 28% of the index as of 31 July.

“If the AI trade ever reverses, ‘AI laggard’ is a moniker the Indian market may be happy to own,” said Clark.

Which are the most appealing sectors in India’s stock market to invest in?

Though it is perceived to be light when it comes to AI, India’s stock market benefits from having several sectors where it is a major global player.

IT services

For years, IT services companies have been at the forefront of India’s economic growth. Companies like Tata Consultancy Services (MUMBAI:TCS), Infosys (MUMBAI:INFY) and Wipro (MUMBAI:WIPRO) are among the world’s largest, with combined market capitalisations of over $100 billion.

Despite fears that AI could disrupt this market, Sehgal still views it as a significant sector for the country. “India retains significant advantages from its large skilled workforce, global delivery capabilities and deep client relationships,” he said. “We believe that, as enterprises adopt AI in their workflows, there will be opportunities for such companies to develop new solutions and move further into higher-value consulting and transformation work.”

Financial services and banking

One of the most significant impacts of UPI is that it brought a population of Indian consumers that had previously been largely unbanked into the mainstream financial system – and continues to do so.

“As more households and businesses enter formal payment and tax systems, banks gain greater visibility over customers and cash flows, supporting credit underwriting and the cross-selling of savings, insurance and other financial products,” said Sehgal.

Sehgal picked out ICICI Bank (MUMBAI:ICICIBANK) as an example of the kind of bank he favours: “well-managed private-sector banks with strong deposit franchises and disciplined underwriting”.

Pharma and healthcare

“Healthcare remains a structural opportunity,” said Sehgal. “Rising incomes, greater insurance penetration and increasing expectations for quality of care should support demand across hospitals, health insurance and pharmaceuticals.”

India has also historically been a strong producer of pharmaceuticals and could benefit from further demand from the world’s largest companies.

“There’s a need from the multinational [pharmaceutical companies] to have an alternative supplier at scale,” Gabriel Sacks, manager of the Aberdeen Asia Focus fund, told the MoneyWeek Talks podcast. “When you don’t look at China, then you start to look at places like India.”

Consumer discretionary spending

India’s growing middle class and rising smartphone adoption is also creating rapid growth in consumer discretionary spending, “particularly in areas such as food delivery, convenience and other digitally enabled services” Sehgal said.

Coupled with the GST reducing tax rates on consumer goods, discretionary spending and demand for premium offerings are expected to rise.

Are Indian stocks overpriced?

There are clearly opportunities for investors here, but given its size relative to other emerging markets, India’s stocks don’t necessarily fly under the radar. The biggest challenge to would-be investors in India over recent years has been that its companies are relatively expensive.

According to the website World PE Ratio, India’s stock market has an average price/earnings (P/E) ratio of 22.4 as of 18 August. That makes it more expensive than the Dow Jones Industrial Average, which tracks 30 US large cap stocks with an average 21.5 P/E ratio.

The good news is that prices have come down this year. The MSCI India Index fell 8.9% in 2026 through to 18 August.

“Recent underperformance relative to other emerging markets has also reduced India's valuation premium to below its long-term average,” said James Thom, lead manager of Aberdeen New India Investment Trust. “The energy crisis has eased, liquidity conditions are becoming more supportive and policymakers are refocusing on the reform agenda… In our view, improving fundamentals combined with more reasonable valuations create a compelling backdrop for the market.”

How to invest in India

It can be difficult for DIY investors based overseas to access Indian stocks directly, though this may depend on your broker.

For most investors, using a fund or investment trust is likely to be the best means of gaining exposure.

Aberdeen New India Investment Trust (LON:ANII) targets “world-class, well governed companies at the heart of India’s growth”.

Banks ICICI Bank and HDFC Bank (MUMBAI:HDFCBANK), telecoms business Bharti Airtel (MUMBAI:BHARTIARTL) and automaking conglomerate Mahindra & Mahindra (MUMBAI:M&M) are the trust’s top holdings as of 31 May.

Templeton Emerging Markets Investment Trust (LON:TEM) has 8.3% of its portfolio invested in India as of 31 July. ICICI Bank is its largest Indian holding, accounting for 2.5% of the portfolio.

EMQQ Global issues the India Internet ETF (LON:INQP) which specifically targets the opportunities in India’s expanding internet economy. Top holdings as of 19 August include food delivery business Eternal (formerly Zomato), non-banking financial company Bajaj Finance and Reliance Industries, a conglomerate that includes the country’s largest telecoms operator, Reliance Jio.

The fund “focuses on the digital disruptors across fintech, e-commerce, quick commerce, online travel and consumer platforms,” said Carter. “These companies are already taking share from traditional businesses, and AI should accelerate that by lowering costs and improving monetisation.”

Fast-fashion retailer Shein is about to make its debut as a listed company. It is floating on the Hong Kong market at the end of this month, with a target valuation of between $25 billion and $30 billion. It remains to be seen whether it can get that away successfully, but it looks like a missed opportunity for the City of London.

Shein initially explored a listing in New York, and when that looked troublesome, switched its focus to the City. Over the course of 2024 and 2025, Shein was trying to get approval for its initial public offering (IPO) here. It jumped through all the hoops, but more and more questions kept being asked about whether it was suitable for the London market.

The UK Sustainable Investment and Finance Association, for example, objected that London must “uphold strong governance standards”. Liam Byrne, the then chair of the House of Commons Business and Trade Committee, wrote to the stock exchange to demand it put tests in place to “authenticate statements” by firms seeking to list, “with particular regard to their safeguards against the use of forced labour”. The questions went on and on, but the message was clear. Shein did not look like the right sort of company for the privilege of listing on a bourse as distinguished as the LSE.

Shein has legitimate questions to answer... but so what?

Seriously? Looking back, it has to be asked what the critics could possibly have been thinking. It is legitimate to ask questions about Shein's business model. When you are selling summer dresses to teenagers around the world for a fiver or less, you are probably not paying the workers in the factory a fortune. There are concerns about its supply chains, about its governance standards and its relationship with the Chinese government. It is probably not a company that many of us would want to work for, or even buy stuff from.

But so what? The harsh reality is that the London stock market is in terrible shape. More companies have left it than joined in every year since 2022. In the last 20 years, the number of companies quoted on the main market has fallen from more than 1,700 to less than 1,000. In 2024, London dropped to 20th place globally for IPOs, overtaken by Oman and Malaysia among many others. Almost every week brings news of another major company accepting a takeover from a foreign bidder – easyJet was the latest example – and each time it happens the market gets a bit smaller. On its current track, the City is trapped in a vicious cycle. The market gets smaller and smaller, global investors have less incentive to pay any attention to it, valuations remain low, and more companies decide to leave, or else never list their shares in the first place.

The London Stock Exchange is trapped in a vicious circle

A Shein IPO was a chance to break out of that. Whatever its faults, it is a huge player in the global fast-fashion industry, and has millions of loyal customers around the world and a formidable business model. It has made online retailing work in a way that few of its competitors have been able to. At a $30 billion valuation, it would have been one of the biggest IPOs in Europe this year, would have leapt straight into the top half of the FTSE 100, and would have added a major technology company to an index that is dominated by a handful of ageing banks, oil companies and pharmaceutical conglomerates.

Shein would have put the London market back on the map and stirred up some interest from global asset managers who have largely forgotten it even exists. In its wake, a lot more of the fast-growing Asian technology companies might decide that London was a pretty good place to list their shares after all, and investors buying Shein might well decide there were a few more companies on the same market that were worth adding to their portfolio too. Valuations would start to rise, the market would recover, and it would become a more attractive place for entrepreneurs to list their business. A vicious circle could have been replaced with a virtuous one. As it is, the London market must make do with ridiculous and self-important moral posturing that no one is listening to anyway.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Millions of people rely on the state pension but the cost is ballooning – and it’s only set to surge further.

The full new state pension has risen in value by 55% over the last 10 years alone and is forecast to have cost the government £146 billion in 2025/26.

The Office for Budget Responsibility (OBR) projects it will cost 9% of GDP by 2075/76, up from 5% now, putting the rise down to an ageing population and the cost of the triple lock – the policy which means the state pension rises annually by the highest figure out of inflation, wages and 2.5%.

The UK’s ageing population and falling birth rate are compounding the strain on taxpayers, as pensioners will likely live for longer but there will be fewer workers to pay taxes.

There were 585,396 births in England and Wales in 2025, according to the latest available data from the Office for National Statistics (ONS), down from 594,677 in 2024 and the lowest number since 1977 (569,259).

Meanwhile, life expectancies across the UK are on the up. Over 19% of girls and 12% of boys born in 2024 can expect to live to 100, according to the ONS. By 2049, this is forecast to rise to 26% for girls and 18% for boys.

Source: ONS

These factors are forecast to push up the cost of the state pension to ever greater heights.

Heidi Karjalainen, senior research economist at the Institute for Fiscal Studies (IFS), said an ageing population will also seep into health spending, “creating greater overall pressure on public finances”.

What could the UK state pension look like in the future?

These surging costs could prompt the government into ditching the triple lock and/or raising the state pension age higher than currently planned.

The state pension age will rise to 68 by 2048, but in an April 2026 report, the IFS said there was a “good case for legislating for further increases in the state pension age beyond 68, as part of the response to rising life expectancy and the resulting public finance pressures”.

Considering the growing cost of the state pension, swathes of think tanks have called on the government to ditch the triple lock policy.

How think tanks like the Intergenerational Foundation, IFS and Tony Blair Institute for Global Change (TBI) think the rising cost of the state pension should be combatted varies, but all three agree it needs to put less pressure on the public purse.

However, for now at least, the triple lock is here to stay. Prime minister Andy Burnham has pledged to honour the Labour manifesto pledge and retain the policy.

What happens to the mechanism afterwards is less clear. But despite fears it might not be as plentiful in the future, some Brits seem undeterred.

A recent survey by investment platform Hargreaves Lansdown found that one in 10 people expect to be totally dependent on the state pension in retirement, while two thirds said they will rely on it “to some extent”.

How much do you need for a comfortable retirement?

Trade body Pensions UK’s Retirement Living Standards give an indication of how much money you need each year for a certain standard of living in retirement.

The standards are updated each year and based on someone owning their home, and after tax deductions.

To meet a ‘moderate’ standard of living, a single person household currently needs £32,700 a year. This rises to £45,400 a year for a ‘comfortable’ lifestyle.

The amount needed for a ‘minimum’ standard of living in retirement is £13,900 for a single person.

Calculations from wealth management firm Quilter estimate you would need an overall pension pot of £691,000 to match Pension UK’s comfortable standard of living. To meet the moderate level, you would need a total pot of £413,000.

Quilter’s calculations are based on someone receiving a full new state pension (£12,548 per year) and using their pot to buy an annuity paying 6.1%.

Someone who started saving into a pension at 25 would need to contribute £270 a month to reach the £691,000 figure by age 66, assuming growth of 6% and after fees.

That same person would need to contribute £162 a month to reach the £413,000 figure by age 66, assuming the same growth and after fees.

But what about if your state pension was reduced?

Assuming someone received a new state pension of £3,583 a year (based on 10 National Insurance years), the size of the pension pot needed for a comfortable standard of living rises to £838,000.

To meet the moderate level, the size of the pot needed rises to £560,000.

Someone who started saving into a pension at 25 would need to contribute £328 a month to reach the £838,000 figure by age 66, assuming growth of 6% and after fees.

For the moderate standard of living, that same person would need to contribute £219 a month to reach the £560,000 figure by age 66, assuming the same growth and after fees.

Source: Quilter, based on a single person household. The amount of income needed for couples is different.

Source: Quilter, based on a single person household. The amount of income needed for couples is different.

How to prepare for retirement without having to rely on the state pension

Increasing pension contributions

Contributing more to a workplace pension is a good place to start. The total minimum contribution for a UK workplace pension is 8%, made up of 3% from your employer and 5% from you, including some tax relief.

But you can contribute more and some employers will increase their contributions.

If you’re in your 30s, 40s and 50s, consolidating private or workplace pensions can make it easier to keep track of savings and save you money on fees. Be careful to check the features of the pension before you do this though.

Make sure you’re not consolidating one that comes with a guaranteed annuity rate, Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown said.

Guaranteed annuity rates pay out a guaranteed rate. They generally come from older plans and can pay out much more than more modern plans.

Morrissey added: “When looking to consolidate, check whether the [new] provider meets your needs – do they offer the investment choice you want, the educational resources or access to a helpdesk? These can prove extremely important.”

Consider building other investment pots

You can also add money into an ISA, alongside your pension, if you’re after more flexibility in how you can access your savings.

An approach like this can be beneficial for someone who is self-employed and may want to draw on money earlier due to a lack of work and a drop in income.

Morrissey said: “You can benefit from investment growth in a stocks and shares ISA and still access money if you need it – any income taken will also be tax-free. Using this alongside a pension means you still benefit from the tax relief of a pension with the flexibility of an ISA.”

Can you boost your savings?

Make sure you check how hard your savings are working too.

Recent research by savings app Spring revealed £227 billion was sitting in current accounts with over £10,000 in them earning no interest.

If you're starting saving, it's a good idea to put the money into a high-paying easy-access savings account and build up an emergency buffer, which you can use for unexpected expenses, such as a boiler breakdown or loss of a job.

Typically, you should have enough in this account to cover three to six months’ worth of essential outgoings such as your mortgage and bills.

Any spare money after this could be put into a savings account or you could invest it. Research has shown investing over the long-term tends to offer better returns than putting money into a savings account.

But remember, investing means the value of your money can go up or down at any time and there are risks attached. You should generally invest any money for at least five years to allow your investments time to ride out any dips in the market.

If you invest, make sure money held in a general investment account or stocks and shares ISA is actually invested, with not too much held in cash or money market funds.

Claire Trott, head of advice at wealth management firm St. James’s Place said: “Allowing it [money] just to sit in cash or cash-like funds can feel safe but they will have their buying power eroded over time by the increase in the cost of living and inflation.”

Investors were feeling deeply bearish about European stocks earlier this year, with warnings that the closure of the Strait of Hormuz would unleash the continent's second energy crisis in a decade. That danger has not passed, but markets got carried away. Unusually strong second-quarter earnings have allayed fears of stagflation. The Stoxx Europe 600, a pan-European stock index that includes UK-listed shares, is up 13% since its low in March.

German earnings on the DAX index rose 11% year on year, the best showing “in at least ten quarters”, according to Deutsche Bank analysts. The country's carmakers remain in poor health, but that was more than offset by a superb showing from industrial and chemical firms. The wider Stoxx 600 did even better, recording year-on-year earnings growth of 23%.

European stocks have turned in their “best earnings season in nearly four years”, say Sagarika Jaisinghani and Alice Atkins on Bloomberg. Miners and industrials are booming. The continent's small technology sector is outperforming the US giants, led by Dutch chip specialist ASML, whose shares have risen 57% this year. Foreign investors are piling in, with European stocks attracting the second-strongest inflows in a decade so far this year. Given the challenging backdrop, the “resilience” of the continent's corporations is deeply reassuring.

European stock markets have long been overshadowed by Wall Street and some of the racier Asian markets, says Joseph Wilkins on CNBC. Goldman Sachs analysts argue that many of the things investors think they know about Europe are “myths”. Chinese competition, for example, isn't an existential challenge, because carmakers represent just 1% of the continent's market capitalisation. “Since 2022, European banks have considerably outperformed the Magnificent Seven.” And with anxiety growing about AI exposure, the old continent offers an obvious “hedge”.

Eurosclerosis continues for European stocks

US equity valuations are “on the nuttier side of bonkers”, but that doesn't necessarily make European stocks good value, says Stuart Kirk in the Financial Times. The Euro Stoxx 50 index of eurozone blue-chips has managed a fairly boring annualised return of 11.1% over the past decade. True, ASML is a “world-class firm”, but the performance of the continent's other industrials and banks is underwhelming when compared with US peers. “Europe's 25% price/earnings discount to US shares is not deep enough.”

European growth remains sclerotic, says James Carter for National Review. The EU's GDP per capita is just half that of the US, down from 76.5% in 2008. Contrary to popular belief, Europeans work just as much as Americans; indeed, employed Europeans average longer working weeks than their US counterparts. The real issue is sluggish productivity growth.

The danger of an energy shock has not gone away either. European natural gas prices have been trading above €60/MWh, levels not seen since the tail end of the 2022-2023 energy crisis. The continent's gas storage is the lowest it has been for this time of year since at least 2009.

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Investing ‘factors’ refer to a number of styles or strategies that dictate how investors choose their stocks. Some of the best-known are value and growth.

Momentum investing is one of the simplest investing factors, but paradoxically one of the most difficult to successfully adopt.

In essence, it means you buy stocks, funds or other assets that are rising in price, and sell the ones that are falling.

It is an especially prevalent factor in the current market environment. As of 18 August, the MSCI World Momentum Index has returned 21% so far this year, compared to 13% for the MSCI World Index (the former index is based on the latter, but has a heavier weighting towards stocks that have positive momentum traits).

In July, the respected fund manager Terry Smith, CEO and chief investment officer of investment management company Fundsmith, wrote to investors in the Fundsmith Equity Fund explaining that he would tweak the value-driven strategy for which he is known to account for the prevalence of momentum investing.

He compared trying to buy undervalued stocks to “trying to catch the proverbial falling knife”. “All we are getting is cut fingers as their downward share price spiral is exacerbated by the index momentum enhancement effect,” he said.

Momentum investing’s current outperformance is so strong, that it is forcing seasoned investors to change their approach.

It’s particularly important to understand the concept as it’s not an easy strategy to replicate.

“It’s wonderfully simple to apply but also fraught with risks if you blindly follow what you see as a trend without understanding what you are actually buying and the risks involved,” said Rob Morgan, chief investment analyst at Charles Stanley Direct.

What is momentum investing?

Momentum investing effectively means buying stocks or other assets that are increasing in price.

“Momentum investing is simple in principle,” said Angeline Ong, senior investment analyst at IG. “Buy what's already going up or sell (short) what's already going down. It's built on the idea that any asset that has performed well over the recent past tends to keep performing well in the near term, and vice versa.”

A basic approach might be to rank stocks or funds by their returns over a given time period (three, six or 12 months) and buy whichever has generated the greatest returns.

“Some investors are probably doing it without even thinking about it, by buying a share or fund they notice is performing well,” said Charles Stanley Direct’s Morgan.

More advanced momentum investors might make use of technical analysis tools which measure patterns in how an asset is trading.

For example, the relative strength index measures the speed and change of an asset’s price and quantifies this as a number between 0 and 100; a reading of 50 or above indicates positive momentum (though a reading above 70 is usually interpreted as a sign that a stock is overbought and that its price might soon fall back), while a reading below 30 indicates it might be oversold and due a rebound.

Some also use long-term moving averages to look for signs of momentum. A stock’s 50-day moving average price rising above its 200-day moving average can be interpreted as a ‘buy’ signal; (and vice versa: if it falls below, this can signal a ‘sell’).

Ong added that momentum investing is often considered a natural opposite to value investing.

“Value investors buy cheap stocks that the market has undervalued, and wait for them to re-rate,” she said. “Momentum investors and traders buy stocks the market already likes, and ride the trend.”

What are the drawbacks of momentum investing?

For most non-professional investors, momentum investing is a challenging strategy to execute over the long term.

One obvious reason for this is that the stocks or sectors that have momentum behind them are constantly changing. A stock can go from having positive momentum to being overbought – and then, oversold – very quickly, so if you’re not spending most of your waking hours looking at live market data, you could easily miss the switch and be left out of pocket.

It can also lead to significant over-concentration. Momentum investing by definition targets the most popular stocks at any given time. If a majority of the world’s investors are deliberately targeting momentum stocks, the effect can become circular; investors keep putting more and more money into a given stock or sector, simply because everyone else is.

That can generate excellent returns when the stock market is gaining, but it can unravel quickly when it falls.

“If $200 billion market valuation stocks are moving 33% a day in a bull market, you can reasonably speculate about what’s going to happen if or when things reverse,” Terry Smith wrote in his July letter. “In 2007–08, the S&P fell 57% in five months. Next time round, it would not surprise me if it accomplished this in five days.”

“Popular momentum trades can also become crowded, which amplifies the snapback when they unwind,” said Ong – as happened with silver prices in early 2026.

Momentum is arguably better-suited towards shorter term approaches.

“In momentum investing's purest, fastest-moving form, which involves chasing days-to-weeks price action, it is seen as more of a trading strategy, not an investing one, and needs discipline and speed most retail investors may not have time for,” said Ong.

As well as it being a difficult strategy to consistently get right, Ong highlighted that it can lead to higher costs; momentum strategies require frequent buying and selling, which racks up trading costs and, for taxable accounts, capital gains tax.

How can you adopt a momentum investing strategy?

If you do want to try momentum investing for yourself, you have two basic options.

The first is to attempt to identify momentum stocks yourself. This will take a lot of technical analysis, and given the potential of the market to change in a flash, it will be time-consuming to ensure you’re on top of all your picks.

The simpler approach would be to buy a momentum-focused fund. This leaves the hard work of deciding what to buy and sell to the fund manager or index provider.

There are plenty of passive funds, most of which are focused on the MSCI World Momentum Index or similar indices. Some examples include the iShares Edge MSCI World Momentum Factor UCITS ETF (LON:IWFM), the Xtrackers MSCI World Momentum UCITS ETF (LON:XDEM) or the L&G Developed World Momentum Factor Index Fund.

Active funds following a momentum strategy are less common. Active fund managers, in theory, earn their living by picking out opportunities the market has overlooked, rather than simply following what everyone else is doing.

But Smith is not the only active manager to acknowledge that momentum can (and, debatably, should) play a role in their investment decisions. So momentum does factor into the strategies behind some active funds and investment trusts.

Morgan, for example, highlights Artemis US Extended Alpha Fund as an active strategy that incorporates elements of momentum investing (its stated objective is to profit from both rising and falling share prices). Notably, though, the fund describes its approach as contrarian, which is in some respects antithetical to momentum investing.

“It’s not pure quantitative momentum but represents partial exposure to the factor,” said Morgan.

Investment trusts where momentum is one of the characteristics assessed include JPMorgan European Growth & Income (LON:JEGI), which targets companies exhibiting value, quality and momentum characteristics, and Aberdeen UK Smaller Companies Growth Trust (LON:AUSC) which assesses companies based on quality, growth and momentum criteria.

Suddenly, it seems, a member of the Tata family – Noel Tata – is back in the driving seat of the gigantic “salt to software” group, which owns Jaguar Land Rover, Air India and Tata Steel, and is India's largest private-sector employer. And not everyone is happy.

Tata Group, India's largest conglomerate has been consumed by boardroom drama for months. Now, though, matters have come to a head, says The Economist. Natarajan Chandrasekaran – chair of the $280 billion group's holding company Tata Sons – has announced he will step down after his term ends next February.

“This is very much the beginning of the Noel Tata era,” one investor told the Financial Times, and it began with a rout. Shares in Tata's listed companies – including its cash-cow IT outsourcer Tata Consultancy Services – dived as investors worried about what lies ahead.

Noel Tata, a half-brother of the group's legendary leader Ratan Tata, who died in 2024, is commonly described as lacking “the stature” of his sibling. Nonetheless, on Ratan's death, he acquired a key role in the 158-year-old conglomerate's firmament when he took over as chair of Tata Trusts – a collection of charitable trusts that majority-own the holding company. That set him on a collision course with Chandrasekaran.

The main cause of the boardroom feud that came to dominate business gossip in the country was over whether to list the Tata holding company – as demanded by India's central bank, which had classified it as “one of the country's largest shadow banks” in 2022, and was pushing for greater transparency.

Noel Tata was set against the move, arguing that staying private meant more freedom to make “long-term strategic bets” and conserve the company's “founding ethos and desire to serve India”.

His critics say his real motive was “to exert more control” so he could set up the eventual succession of the rising generation of Tatas – his 33-year-old son, Neville, and daughters Leah and Maya – before he exits the stage on his 70th birthday in November.

People close to the family dispute these alleged manoeuvres. Certainly, Noel Tata hardly comes across as an aggressively Machiavellian operator, says The Indian Express. Known for “his quiet demeanour, discretion and aversion to public attention”, he has “built his reputation not through flamboyance but steady performance” – making a successful fist of building Trent, the conglomerate's retail arm, and later serving as a director at its aircon arm Voltas and the Tata Investment Corporation.

Will Noel Tata win Tata Group's succession drama?

Some Indians of a more nationalist bent are wary of Noel Tata's international credentials. Although born in Mumbai, his mother Simone Tata hailed from Switzerland and he himself holds Irish citizenship – via his marriage to Aloo Mistry, a member of another prominent Indian business dynasty whose mother, Patsy, was born in Dublin. He also spent much of his early life abroad, including in Britain and France.

Still, after decades of being overlooked for the conglomerate's top jobs, some argue Noel Tata deserves his chance to steer the tanker. He lost out in 2011 when his brother-in-law, Cyrus Mistry, was announced as Ratan Tata's successor – and then again in 2016 “when Mistry was dramatically ousted from the chairmanship” and Chandrasekaran (the first real outsider to lead the group) was installed, says The Indian Express.

But the price paid for this, says Reuters Breakingviews, is yet more turmoil in a conglomerate renowned for its “abysmal record on managing succession” – at a critical time for many of its companies.

It's up in the air whether Noel Tata's family will eventually assume control; meanwhile, the group is rudderless. But “this was a long time coming”, one Mumbai-based investor told the FT. Neville Tata has been “groomed very carefully. I don't think these guys will let go of the opportunity.”

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I am contemplating the Torre di Chia from the balcony of my suite at the Conrad Chia Laguna Sardinia hotel. The Spanish built the defensive round tower in the 16th century – on the far side of the lagoon from where I am standing – to ward off pirates raiding the southern coast of the Mediterranean island. Other than its half-millennium of history, there isn't very much that is remarkable about it.

What is remarkable is what it sits on – ancient Bithia. This settlement, built by the Phoenicians, had existed since at least the eighth century BC. But when the Phoenicians arrived, there were people already living in the area – a people we call the Nuragic civilisation. We don't know what they called themselves. Curiously, they haven't left us any writing – or none that we have found at any rate. So, historians have named them for the often monumental dry-stone structures that lie dotted around the interior of the island in various states of preservation. One of the most impressive Nuragic sites is at Su Nuraxi, a 90-minute drive due north from Conrad Chia Laguna.

(Sardinia is peppered with archaeological sites. Another, called Nora, is located 25 minutes from the Conrad and it is also well-worth visiting. Like Bithia, it was founded by the Phoenicians, but it is the impressive Roman ruins that you see today.)

What remains of Bithia – and there isn't very much – is to be found on the raised promontory, marked out by the Torre di Chia (one of the area's relatively more recent additions). Here, the coastline is stunning, with two golden beaches – Monte Cogoni and Dune di Campana – just off to the side. It reminds me a little of the famous Mayan ruins at Tulum, on the Caribbean coast of Mexico, and I wonder why Bithia isn't better known.

Three hotels in the Chia Laguna Nature Resort

The Conrad is one of three hotels in the Chia (pronounced “kia”) Laguna Nature Resort, along with Baia di Chia Resort Sardinia, Curio Collection by Hilton; and The Village. The first two are run by the Hilton Group, and all of the accommodations are charming.

The rooms and suites at the Baia di Chia have more of a cottage feel to them, and they either overlook the lagoon or the sea. Guests of the resort can use the large pool and restaurants here and, of the three hotels, it is closest to the beaches and cabanas. I am told this is where the Germans like to stay – and, really, who could blame them?

The Italians, arriving in family groups, apparently enjoy the relaxed fiesta atmosphere of The Village, where there is live music and entertainment in the evenings and a buffet restaurant.

As for the British, we – and our American cousins – like our luxuries and it is to the Conrad hotel that we retire. The decor is elegant and the colour scheme reflects the natural, neutral tones of the area – wicker, stone and terracotta-tiled floors. Amphorae have been arranged in the recesses of the stairs and corridors to remind you of the local ancient history.

Drink the elixir of life at the Conrad Chia Laguna

The Conrad has a terrace bar and restaurant, called Bar Bollicine and La Terrazza respectively. The restaurant serves a menu centred around local and Mediterranean dishes. I recommend the seafood fregula, which are very small balls of Sardinian pasta. You must also try the seadas, which is the local sweet speciality. It is a fried pastry containing pecorino cheese and covered in local honey. It sounds savoury, but it is really very nice. (Two courses cost €55.) And do try the wine. The local cannonau red grape is supposedly what makes Sardinia a “blue zone” – a region where the inhabitants remain sprightly well into old age and live for an especially long time. At least, that's what the locals say, anyway.

In the warmer months, Sa Mesa is another restaurant option, focused on Sardinian dishes. And not far away is the Conrad Spa in case the cannonau doesn't do the trick. The Conrad also has its own outdoor swimming pool (and pool bar) and padel courts. During the peak season, the resort has nine restaurants, eight bars and five swimming pools in total.

The triumph over mass tourism

The rooms and suites at the Conrad Chia Laguna are either garden-facing or look out onto the sea. Our “king suite” is comfortable, with a tub in the bathroom. As is often the case in the Mediterranean, the large balcony terrace is the standout feature and it's where we while away the hours. There is a small table and a couple of armchairs under cover and, forward, a pair of sun loungers. Below is the lagoon, framed by the hills and occasionally visited by pink flamingos. And beyond it, the Torre di Chia and ancient Bithia.

With the passing of centuries, the Phoenicians who founded Bithia became the Carthaginians, who were conquered by the Romans and the Romans themselves later succumbed – each wave leaving its mark on Sardinia. In the seventh century AD, Bithia was abandoned for the same reason the Nuragic peoples had moved inland and the Spanish built their tower centuries later – the persistent threat of coastal raids. It seems incongruous that such a naturally beautiful place could have ever witnessed destruction. Happily, the area has held out better against the onslaught of mass tourism and the vicinity has retained much of its wild ruggedness. And so the passage of time continues.

Chris was a guest of Conrad Chia Laguna Sardinia. From €270 a night, including breakfast. Visit hilton.com

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Investors have been warned against putting money into mini bonds issued by unregulated companies just five years after the Financial Conduct Authority (FCA) banned promotions of the risky products.

The high-profile collapse of London Capital & Finance in 2019 – where 11,600 bondholders lost an estimated £237 million – prompted the FCA to ban the marketing of mini-bonds to retail investors in 2021.

They can now only be sold to high-net worth and sophisticated investors who can handle more risk in their investment portfolio.

But the regulator remains concerned after the July failure of Woodville Consultants, a litigation funder that raised capital from retail investors through unregulated loan notes.

The FCA is now warning consumers about the risks of investing in loan notes and mini-bonds issued by unregulated companies, after it said it continues to see people lose money in these high-risk investments.

What is a mini bond?

A mini bond usually involves lending money to a company for a set period in return for interest.

Mini bonds were popular pre-pandemic when savings and interest rates were at record lows.

The rate of return is often high - even at double digits - to tempt investors and reflect the risk. But they are not regulated so you can’t get any recourse from the Financial Services Compensation Scheme or Financial Ombudsman Service if something goes wrong.

Ultimately, if the company fails, consumers could lose every penny.

Nouran Moustafa, practice principal for Roxton Wealth, said her starting point for an ordinary retail client with mini bonds is a very simple 'no'.

She said: “The word ‘bond’ sounds reassuring, but some of these investments are anything but. You can be lending to one unregulated company, with little liquidity, limited diversification and the possibility of losing every penny if that business fails.”

Moustafa feels they could “potentially” have a place, but if so “only for a very small minority of sophisticated investors who fully understand the structure" and who aren't relying on that money for the future.

“My rule is simple: if losing 100% of that investment would materially change your life, you should not be anywhere near it," said Moustafa. “No yield is worth destroying your financial plan.”

What is the latest mini bond warning about?

Despite promotions of mini bonds to mainstream investors being banned since January 2021, the FCA said consumers may still come across adverts for loan notes and mini bonds in everyday places including social media, online adverts or websites promoting high fixed returns.

The adverts can look simple and safe but may be scams, said the FCA.

Lucy Castledine, director of consumer investments at the FCA, said: “Big, fixed returns are a warning sign, not a guarantee. Loan notes, mini-bonds and other speculative illiquid securities are high-risk investments and are not suitable for most people.

“Ordinary retail investors should only invest through regulated firms because if they invest through an unauthorised firm, they may have little or no protection if things go wrong. We are working hard to prevent harm, but consumers should still stop and check before investing.”

Anita Wright, chartered financial planner for Ribble Wealth Management said mini bonds can be seductive but investors should ask why the offer reached them.

She said: “Credit this good doesn't need retail money, banks price it for a living, and private credit funds fight over the scraps. When the capital is raised instead from savers through a commissioned introducer, every desk with a credit team has already looked and walked away.

“You are not early. You are last,” Wright said, adding that the only people who know the business they are lending to and can afford to write off the investment completely should consider buying one.

“Even then the deal is lopsided,” she continued. “If the business fails you lose like a shareholder, if it thrives you still only get your interest.”

Households will have a new energy-saving option that they can pickup in the supermarket from next week – plug-in solar panels.

The Iran conflict and cost of living crisis have pushed up energy bills in recent months with Ofgem's price cap remaining high.

Rooftop solar panels are often highlighted as one way of going green and potentially reducing your electricity bills.

But not everyone can afford the upfront cost and many don’t have the roof space or permission to install them.

There will be another option from 27 August though when government changes to energy power regulations go live and shops such as supermarkets and hardware stores including B&Q and Lidl will be allowed to sell plug-in solar panels.

These can be installed on balconies or in gardens to capture energy from the sun.

What is a plug-in solar panel?

A plug-in solar panel is a smaller and less powerful version than a rooftop one.

They are popular in Europe but couldn't be used in the UK until a change in regulations.

Rather than attaching to your roof, you can find a common sunny spot at your home such as a balcony or garden and connect it to your mains via a cable that plugs straight into a typical socket.

The idea is that people in flats or who can’t install panels on their roof such as renters or leaseholders can still try to reduce their energy bills and go solar.

Similar to a rooftop panel, electricity is generated from sunlight.

But there are differences as the plug-in panels can't store power (with the rooftop versions, you can store the power in a special home battery), meaning you need to be home to actually use it as it is being generated.

How much could you save with a plug-in solar panel?

The government estimates that the panels could save households between £70 and £110 on energy per year.

There are other costs though. You will need to purchase the kit, which is estimated to cost between £400 and £600. You will also need a professional tradesperson to install it.

It may therefore take a few years to breakeven.

The savings will ultimately depend on your own energy usage but anything plugged in will use energy from the panel first before drawing it from the National Grid and your main bill.

Is a plug-in solar panel worth it?

The cost of installing a rooftop solar panel starts from £6,000, according to the Energy Saving Trust so a plug-in panel is cheaper to start with.

But there is less capacity for energy savings.

The maximum power of the plug-in panels has been capped at 800 watts.

The website Money Saving Expert suggests that’s the equivalent of two kilowatt hours of electricity per day, while the average UK household uses 7.4kWh.

Another issue is that the panels don’t store energy, so it is best to make sure they are being used while you are at home so you can benefit from the power being generated.

Renters and leaseholders may also need to get permission to install a plug-in panel depending what their rental or leasehold agreements say.

Martyn Fowler, founder of green energy supplier Elite Renewables, said: “The value is highest when you use the electricity as it is being generated. If the system produces a unit of electricity and you consume that unit in the house, you have avoided buying one from your supplier.

“Homes with a steady daytime load will benefit most. Someone working from home is likely to use more of the generation than a property that sits empty all day.”

Orientation matters as well.

Fowler added: “A panel mounted vertically on a balcony will generate less over the year than the same panel at a good angle facing south.

“Plug-in solar is a useful entry point into solar. It will not transform your energy bill, but it can be a low-cost way to reduce grid use and start generating some of your own power.”

The Bank of England might be best known for setting interest rates and printing banknotes, but there’s much more going on at the central bank you might not be aware of.

Jack Leslie and Rupal Patel, Bank of England (BoE) economists and authors of the new book Money: The Inside Story, discussed how the central bank holds 400,000 bars of gold and ‘giant’ and ‘titan’ banknotes worth up to £100 million in its vaults.

Speaking on the MoneyWeek Talks podcast, they also explained how electronic payments in the UK, from coffees to house purchases, go through the Bank’s ‘black box’.

They recalled a “spooky” story of how a sewer worker in the 1800s accidentally discovered an old drain which led to the Bank’s gold vaults.

Plus, Leslie and Patel explained why the first colour banknotes were printed amid a German plot during World War Two to airdrop counterfeit notes over the UK and crash the economy.

The episode is also available to watch on our YouTube channel.

Bank of England facing ‘uncertain’ external environment

As well as some of the quirkier Bank of England-related facts, Leslie and Patel also addressed the biggest challenges facing the central bank – such as the rise in wholesale energy costs due to ongoing tensions in Ukraine and the Middle East.

Speaking to MoneyWeek’s digital editor-in-chief, Kalpana Fitzpatrick, Patel described increasing interest rates as a “blunt tool” to combat inflation, in that it can reduce demand, but that it is less effective at counteracting shocks on the supply side.

Patel also said interest rate decisions taken by the BoE’s Monetary Policy Committee can take “about 18 months to two years” to filter through to inflation.

She explained: “What the Bank of England is looking at is trying to think about inflation about two years ahead, and that’s quite difficult to do when the external environment is quite uncertain and you keep getting these new shocks.”

Leslie also addressed the issue of soaring government debt – recent analysis from The TaxPayers Alliance, a pressure group, estimates public sector debt has now tipped over the £3 trillion mark.

Asked whether printing more money could be the answer to pay off some of the debt, Leslie said: “When there’s more money in the system, you can actually buy fewer things because those things are more expensive.

“And so it’s really not a useful tool in helping out governments when they need more money.

“We can see the effects of that in other countries. A lot of people would’ve heard of Zimbabwe or Germany where money was printed and caused something called hyperinflation…and that’s just not useful.”

How you can get rid of old banknotes

They also explained what you can do if you come across an old banknote that’s no longer classed as legal tender.

You can exchange any Bank of England note that’s ever been issued back to 1694, for the same value modern note with the Bank of England, Leslie said.

He added: “You can physically come into the Bank of England because we have a counter for the public to exchange those notes.”

If you’ve got half or more of a note, you can exchange it for a new one.

“As long as you’ve got more than 50% [of the note], so just a fraction more than 50%, we’ll swap it for a new note,” he said.

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick, Andrew Van Sickle and Cris Sholto Heaton are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

Subscribe to the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence. You can also watch the episodes on our YouTube channel.

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NS&I is raising its Premium Bonds prize fund rate from September, taking the total monthly prize pot close to £500 million.

The government-backed savings bank will increase the prize fund rate from 3.80% to 4.35% from the September draw.

NS&I says there will be more than 308,000 extra prizes up for grabs, including 12 additional £100,000 prizes, 27 more £50,000 prizes and an extra 51 £25,000 prizes.

There will also be over 2.3 million £100 prizes in total and the overall monthly pot will rise by £63 million to more than £497 million.

NS&I is also increasing the odds of winning from September, from 22,000 to one to 21,000 to one. The odds were also raised in July.

Caitlyn Eastell, personal finance analyst at data firm Moneyfactscompare, said: “[Premium Bonds] may be particularly appealing to savers who have already used their ISA allowance or are likely to breach their personal savings allowance.

“However, despite the improved odds, they are a game of chance and the 4.35% shouldn’t be mistaken for a headline rate.”

Eastell added: “The best easy access ISAs pay over 4.5% and returns could be even higher if [savers are] willing to lock away their cash.”

Source: NS&I

NS&I boosts rates on savings accounts

In addition to increasing the Premium Bonds prize fund rate and odds of winning, NS&I is also increasing interest rates on 10 savings accounts from today (18 August).

NS&I is boosting rates on its easy-access Direct Saver and Income Bonds savings accounts.

The Direct Saver’s rate is increasing from 3.45% gross/AER to 3.75% gross/AER while the Income Bonds savings account’s rate is rising from 3.4% gross/3.45% AER to 3.69% gross/3.75% AER.

Interest is paid yearly on the Direct Saver. You can hold a minimum of £1 and maximum of £2 million in the account.

Interest is paid monthly on the Income Bonds account. You need a larger £500 to open it and can hold a maximum of £1 million.

NS&I is also hiking rates on its one, two, three and five-year fixed-rate Guaranteed Growth and Guaranteed Income British Savings Bonds.

Rates are increasing by between 0.09 and 0.15 percentage points.

Source: NS&I

Are the savings accounts worth it?

If you like the idea of your money being 100% backed by the Treasury, the Direct Saver and Income Bonds could be more appealing now their rates have increased.

Money in most savings accounts is protected under the Financial Services Compensation Scheme (FSCS) in case your provider collapses, but only up to £120,000.

However, even with your money being backed by the Treasury through the Direct Saver and Income Bonds, you can get more competitive rates via other easy-access accounts on the market currently.

Santander’s Edge Saver account is paying 6% interest, if you open a Santander Edge or Santander Edge Explorer current account. The accounts come with respective monthly fees of £3 and £17.

If you don’t want to pay a monthly current account fee, you could also put your money in a cahoot Sunny Day Saver and get 5% on balances up to £3,000, or the Chase Saver has an interest rate of 4.5% on balances up to £3 million.

NS&I’s changes to their fixed-rate British Savings Bonds have made them best buys, correct at the time of writing.

Based on MoneyWeek analysis of Moneyfacts data, the one, two, three and five-year bonds are all in the top 10 for their respective terms, however, the top rates on the market are currently paying up to 5%.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “Given that this is the most popular term to fix your savings over, [NS&I is] clearly hoping to persuade rate-chasers to make a small compromise in order to secure a rate that’s 100% backed by the Treasury.

“There are better deals on offer elsewhere – especially if you are fixing for longer – so if the rate is the most important thing to you, you can find a more rewarding home for your money.

“However, getting so close to the most competitive deals could be enough to tempt some savers into the NS&I fold.”

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Tax-free allowances let you shield some of your savings and investments from the taxman.

For instance, you can put £20,000 into tax-sheltered ISAs each tax year, and you won’t have to pay tax on any interest or investment returns earned on it.

Each allowance has its own rules, and they can be difficult to keep track of – but making the most of them each tax year can mean you keep more of your money.

Isabella Galliers-Pratt, senior investment director at Rathbones, said: “Once you’ve used ISA and pension allowances, the question becomes: where does my next pound go? The right route depends on time horizon, risk tolerance and personal tax circumstances.

“It’s important to balance the understandable desire to shelter investments from tax with the risks involved. Paying tax isn’t a bad thing – it typically means your investments have performed well.”

ISA allowances

An individual savings account (ISA) is a savings or investment account where you do not have to pay tax on the interest or returns you make.

All adults in the UK can put up to £20,000 a year into ISAs. There are four types, but the main two are the cash ISA and the stocks and shares ISA.

You don’t have to pay tax on the interest you earn in a cash ISA. This differs to traditional savings accounts where the interest can be taxed if it exceeds savings allowances.

Stocks and shares ISAs also differ from General Investment Accounts (GIA) as the investments you hold in an ISA are not liable for capital gains tax or dividend taxes.

This makes ISAs incredibly useful for people who want to reduce the amount of tax they pay on their savings and investments.

While you can put up to £20,000 into ISAs each tax year, the allowance operates on a “use it or lose it” basis, meaning the moment a new tax year starts, you can no longer use the previous year’s allowance.

That’s why it’s recommended you use as much of your ISA allowance as you can each tax year. This will protect your interest or returns from the taxman.

Savings allowance

While interest earned on savings not held in an ISA is taxable, you can earn some tax-free.

For instance, you can earn a certain amount of interest tax-free via the personal savings allowance (PSA). The threshold is £1,000 of interest for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers have no PSA.

You do not have to pay any tax on income, including from savings interest, that falls within your £12,570 tax-free personal allowance.

If you have an income of less than £17,570 a year, you also get an additional tax-free savings allowance known as the starting rate for savings.

This is worth a maximum of £5,000 and you lose £1 of it for every £1 you earn above the personal allowance.

Once the interest earned goes above the threshold for your tax band, you will start to pay tax on your savings.

You can do a rough calculation of how much interest you will get in one year by taking the interest rate of your account and working out what that is as a percentage of your savings.

If this ends up being higher than your savings allowance, consider ways to reduce your tax liability – potentially by moving your savings into an ISA or using another allowance.

If you’ve used up your savings allowances, you could consider Premium Bonds, a savings vehicle run by the government-owned National Investment and Savings (NS&I).

Unlike savings accounts, Premium Bonds do not pay a set level of interest. Instead, you could potentially win tax-free prizes, worth between £25 and £1 million, in the monthly prize draws.

Each £1 you hold in Premium Bonds gives you one entry into the draw, and you can save up to £50,000 in them. As the prize draw is random, prizes are not guaranteed, but the more you have saved in them, the more likely you are to win.

Pensions allowance

Most people can put a maximum of £60,000 into their pension each year while benefitting from tax relief from the government.

This is lowered to £10,000 if you start to take your pension in multiple lump sums (a one-off lump sum of up to 25% does not count), take an annual income from your pension, or take your entire pension in one go. This is known as the Money Purchase Annual Allowance (MPAA).

The annual tax-free total includes contributions made by you, your employer, and the tax relief from the government.

You can also make use of unused allowances from the previous three tax years, meaning if you haven’t put any money into your pension for the past three years, you could put up to £240,000 into your retirement pot in a given tax year.

Galliers-Pratt at Rathbones said: “If you’ve only maximised your ISA, it’s worth taking another look at your pension. The annual allowance is £60,000, and the three-year carry forward rule allows unused allowances from previous tax years to be topped up in one go. For higher earners, the associated tax relief can be particularly valuable.”

Capital gains tax allowance

Capital gains tax (CGT) is a tax you pay on the profit you make when selling assets. In terms of investments, you may need to pay some when you sell your stocks and shares held in a General Investment Account (GIA).

All UK adults have a tax-free CGT allowance of £3,000 regardless of their tax band.

It can be difficult to predict whether the gains you realise from your investments will breach this allowance as how much your investments will grow cannot be perfectly calculated.

To be on the safe side, consider transferring your investments into an ISA to ensure they are not taxed.

One way to do this is through a process called “Bed and ISA”, where you sell investments held in a GIA and buy them back immediately inside an ISA. Most major platforms are able to do this for you, but you can do it yourself if you wish.

You may have to pay some tax when transferring the investments as you are selling them and then buying them back, but they will be shielded from any further tax once they are inside the ISA.

If your ISA allowance is already used up, there are some things you can do. You only need to pay CGT at the point of sale, meaning if you are not in a rush to get the money, you can wait until the next tax year to sell your shares when the allowance refreshes.

Galliers-Pratt said: “GIAs offer flexibility, but income and gains are taxable. Making full use of annual capital gains and dividend allowances, and carefully timing realised gains, can help keep tax bills under control.”

Dividend allowance

UK adults also get a dividend allowance that allows you to be paid up to £500 in dividends before paying tax.

Dividends above this threshold are taxed at 10.75% for basic rate taxpayers, 35.75% for higher rate payers, and 39.35% for additional rate payers.

The exception to this is if any dividend income falls within your £12,570 personal allowance, which is not taxed.

You do not pay any tax on dividends paid from investments in your ISA, meaning if you are expecting more than £500 in dividends a year it may be a good idea to prioritise holding these investments in your ISA.

Transfer money to spouse

There are certain tax benefits available if you’re married or in a civil partnership and you share your finances.

Galliers-Pratt said: “Couples can effectively double their ISA, dividend and CGT allowances. Transfers between spouses are typically tax-free, making this a simple but often overlooked planning opportunity.”

Every UK adult gets the allowances listed above – they are given to an individual, not a family or household.

That means that if you share your finances you can effectively enjoy a £40,000 ISA allowance, meaning you can protect more of your savings or investments from the taxman.

As for capital gains tax or dividend tax, you can carefully plan who holds which investments to keep money within the tax-free allowance. The same principle can be applied for cash savings.

If you or your spouse have an income below the £12,570 personal allowance and the other is a basic rate taxpayer, you can also get up to £256 worth of tax relief a year through the marriage allowance. This allows one partner to transfer £1,260 of their personal allowance to the other, which can mean the couple reduces the amount of income tax they pay overall.

IHT gifting allowance

Each tax year, the ‘annual exemption’ means an individual can give away up to £3,000 worth of gifts without them being added to the value of their estate for inheritance tax purposes.

Any unused part of this allowance can be carried forward to the next tax year, but only for one year. That means if you did not give any gifts in the previous tax year, you could give £6,000 in gifts this year.

The small gift allowance allows you to give up to £250 per person each tax year as long as you have not used another allowance on them. Birthday and Christmas gifts given from your regular income are also exempt from inheritance tax.

You also get gift allowances for weddings and civil partnerships. It is £5,000 if the recipient is your child, £2,500 if they are your grandchild or great-grandchild, and £1,000 if they are anyone else. The wedding/civil partnership allowance can be used alongside the £3,000 annual exemption.

Regular payments to another person (for example to help with the living costs), are exempt from inheritance tax as long as you can afford the payments after your own living costs, and they are paid from your regular monthly income. This can be used along with any other allowance apart from the small gift allowance.

Any gifts beyond these allowances are subject to the ‘seven year rule’. This states that assets given away are still counted as part of your estate for inheritance tax purposes, and therefore potentially taxed, unless seven years have passed.

Children's ISA allowance

If you have children, you can pay into their Junior ISA (JISA) and it will be protected from tax.

You can put a maximum of £9,000 into a JISA each year, but be aware that the money held in a Junior ISA is legally your child’s.

Consider Venture Capital Trusts (VCTs)

If you have used up all of your available allowances and still want to invest in the most tax-efficient way possible, you could consider looking into Venture Capital Trusts (VCTs) or the Enterprise Investment Scheme (EIS).

Both these schemes are designed to encourage investment into early-stage companies in the UK by offering tax relief, but they can be complicated and riskier than traditional investments so it is important to know how they work before you invest in them.

In the 2026/27 tax year, you can get 20% tax relief on investments through VCTs (down from 30% in the 2025/26 tax year) and 30% relief on investments through the EIS.

Galliers-Pratt said: “VCTs and EIS continue to attract wealthier investors seeking tax advantaged exposure to UK growth companies. Risk, time horizon and complexity vary significantly, so suitability should drive decisions.”

The Nutshell Growth Fund invests in quality stocks from exceptional businesses, but only when their valuations offer an attractive prospective return. Our concentrated portfolio of around 30 global companies is selected for two characteristics that do not always come together: exceptional financial quality and a reasonable price. By quality stocks, we mean businesses with a strong record of revenue and profit growth, resilient margins, attractive returns on capital and substantial cash generation. Quality alone, however, is not enough. A wonderful company can still be a poor investment when too much future success is reflected in its share price.

Three quality stocks for your portfolio

Adobe (Nasdaq: ADBE) provides software tools used to create and manage digital content, including Photoshop, Illustrator, Acrobat and Premiere Pro. Its products are vital to the daily workflows of designers, marketers and large companies, creating high switching costs and strong customer retention. Its subscription model provides predictable recurring revenue, high margins and substantial free cash flow. Adobe can reinvest this cash into product development while continuing to return capital to shareholders.

The concern is whether generative AI strengthens Adobe's product suite or allows cheaper competitors to erode its position. We believe Adobe's established customer relationships, proprietary content and ability to integrate AI directly into widely used products give it significant advantages. Importantly, the market is no longer placing a premium valuation on those strengths. Adobe's earnings multiple has fallen as investors have focused on the competitive threat from AI. We believe much of that risk is now reflected in the price. Adobe does not need to return to its former valuation: continued moderate growth, resilient margins and strong cash generation should produce an attractive prospective return. Management have backed their confident outlook by announcing a significant share buyback programme earlier this year – further support for the idea that the share-price weakness is overdone.

Auto Trader (LSE: AUTO) operates the UK's largest digital automotive marketplace, connecting car buyers with thousands of vehicle retailers. Its scale creates a powerful network effect: buyers visit because it offers the broadest choice of vehicles, while retailers advertise because that is where the buyers are. This makes its market position extremely difficult to replicate. Auto Trader also benefits from a capital-light business model, high margins and strong cash conversion. It does not own the vehicles listed on its platform; instead, retailers pay for advertising, data and digital services. The shares have weakened due to concerns about relationships with dealers and the impact of AI on online search. We believe these concerns underestimate the value of Auto Trader's brand, audience, inventory access and proprietary market data. Its reduced valuation offers investors the opportunity to own a highly profitable and cash-generative franchise at a reasonable price.

Amphenol (NYSE: APH) makes the connectors, cables and sensors used across data centres, communications networks, industrial equipment and aerospace. These components represent a small proportion of a system's overall cost, but they are critical to its performance and reliability. Customers value technical expertise and consistency over choosing the cheapest supplier, supporting long-term relationships and attractive returns. Demand is supported by investment in AI infrastructure and data centres. Amphenol is not conventionally cheap on a headline earnings multiple. However, relative value does not simply mean buying the stocks trading on the lowest price-earnings (P/E) ratios. We assess valuation relative to the durability of growth, cash generation and the opportunity to reinvest capital. We believe Amphenol's exceptional execution and potential for growth justify a higher multiple.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Shrinkflation is rife. When did you last open a tube of Pringles and find the crisps reaching the foil seal? The gap at the top is no optical illusion – the makers of Pringles narrowed the canister and cut the contents from 200g to 165g while the price climbed towards £2.25. The result was a 118% increase in the price per gram.

Customers may see fewer crisps, but shrinkflation isn't just an irritation for consumers. Investors should see something more revealing: it can be an early signal that a company's ability to raise prices openly is beginning to weaken.

Economist Pippa Malmgren coined the term “shrinkflation” in 2009 to describe the practice of reducing a product's size while leaving the headline price unchanged, or even increasing it. Rather than risk the backlash of an overt price rise, manufacturers subtly trim the contents, relying on a simple behavioural quirk: shoppers notice the price on the shelf far more readily than the net weight printed on the packaging. It has become one of the defining responses to the inflationary era, helping consumer-goods companies to defend margins while avoiding the shock of higher prices.

When reducing pack sizes risks becoming too obvious, manufacturers often turn instead to “skimpflation”, replacing more expensive ingredients with cheaper alternatives. Tesco has reduced the pork content of its Finest sausages from 97% to 90%; Morrisons has lowered the beef content in its ready-meal lasagne. The prices barely changed, but the products became cheaper to make.

Why do companies rely on shrinkflation instead of raising prices?

For investors, the question is why companies rely on such tactics. Businesses with genuine pricing power can usually raise prices openly because customers value the product sufficiently to want to pay more. Companies serving more price-sensitive consumers have fewer options. Rather than test demand with a visible price rise, they shrink- or skimpflate. Executives describe this as “revenue growth management”, or “pack architecture optimisation”. Investors should recognise it as an attempt to protect margins when conventional pricing power is under pressure.

The reason the tactic works lies as much in psychology as in economics. Consumers are generally more sensitive to changes in the price printed on the shelf than to slight reductions in weight or volume. Behavioural economists describe this as asymmetric price perception. For a time, shrinkflation allows manufacturers to recover higher input costs without risking the sharp fall in demand that often follows an outright price increase. The strategy has limits. Used sparingly, it can help preserve margins during periods of unusually high inflation. Used repeatedly, it risks weakening the brand value that once gave a company its pricing power. Once consumers begin to question whether a trusted brand still represents good value, winning back that confidence can take years.

Shoppers who feel they are repeatedly paying more for less become more willing to switch to private-label alternatives offering similar quality at a lower price. Brands that repeatedly rely on hidden price increases risk training customers to look elsewhere.

Fortunately for investors, listed companies rarely succeed in hiding the effects indefinitely. The evidence usually appears in the accounts. Looking beyond headline revenue growth to the split between pricing and volumes often provides a clearer picture of a brand's health than sales growth alone. Mondelez's financial results reinforce the point. It reported 4.3% organic net revenue growth in 2025, which appears respectable at first glance. A closer look shows pricing contributed 8.0 percentage points, while volume and mix reduced growth by 3.7 percentage points. Revenue was still rising, but customers were buying fewer products. Nestlé's reporting tells a similar story. Organic growth remained positive as higher prices offset rising costs, yet its measure of physical demand, “real internal growth”, remained negative.

This matters. Strong pricing supported by stable volumes often signals genuine pricing power. Strong pricing accompanied by persistent volume declines deserves much closer scrutiny. Companies can protect profits for a time through smaller packs and higher prices, but falling volumes may indicate that customers are beginning to question the value of the brand.

A changing environment around shrinkflation

The environment that allowed shrinkflation to flourish is also changing. Consumers are more aware of the practice, retailers are paying closer attention to perceptions of value and regulators are making price comparisons easier. In the UK, reforms to the Price Marking Order require unit prices to be displayed more clearly and consistently from April 2026. French supermarket Carrefour has gone further, placing prominent shrinkflation notices beneath affected products during pricing disputes, while UK supermarkets have continued expanding their own-label ranges. Together, these developments make it harder for manufacturers to rely on shrinking packs without attracting greater scrutiny.

For investors, the lesson is not that every company using shrinkflation should be avoided. Commodity inflation sometimes leaves management teams with difficult choices and modest reductions in pack size may be preferable to price rises that drive customers away. The important question is whether shrinkflation has become a temporary response or a permanent habit. Investors spend plenty of time analysing margins, cash flow and valuation. They should devote equal attention to whether revenue growth reflects customers' willingness to pay higher prices, or simply the effects of shrinking packs and higher prices. Shrinkflation can be a valuable clue to a company's underlying health.

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When America's “germ czar”, Anthony Fauci, 85, stepped down as head of the National Institute of Allergy and Infectious Diseases after 38 years in 2022, he was somewhat at a loose end. “I asked myself what I could do over the next few years while I am still filled with passion and energy and blessed with good health,” he wrote in his 2024 memoir – deciding that the answer was “to share my experiences with the world and particularly the younger generation”.

What Fauci didn't expect, says The Atlantic, was the complete “unmaking” of his reputation and emergence as a polarising public figure so reviled in some quarters that he's received death threats. Recent events – including an appearance before a Congressional committee at which he pleaded the Fifth Amendment more than 100 times – haven't helped.

But what has really sunk Fauci in the eyes of many was the exposure of his self-indulgent private journals covering the pandemic years, which were seized upon by opponents after he foolishly saved them on a government server. As Peggy Noonan summed up in The Wall Street Journal, the diligent doctor stands before us unmasked. “His diaries make clear that he saw the pandemic less as a historic emergency than a media opportunity.” During Covid's darkest days, Fauci was more interested in detailing every glowing profile and accolade and a growing list of celebrity fans.

The nation is completely split, says The Times. Fauci's enemies – led by the Republican senator Rand Paul, who subpoenaed him to appear before the Senate Homeland Security and Governmental Affairs Committee last month – claim Fauci's sins extend further than personal vanity. They accuse him of suppressing discussion of the causes of Covid to protect fellow scientists “who were doing dirty deals with Chinese labs”. Or, at the very least, encouraging lockdowns and vaccine mandates that were “unnecessary and harmful”.

His supporters, by contrast, view his hounding as “McCarthyism”. Fauci had no choice but to take the fifth, says The Atlantic, because of “what seems to be an effort to catch him in a lie” – not covered by the “blanket presidential pardon” granted by Joe Biden to head off expected lawfare.

Anthony Fauci – America's fall guy

Anthony Fauci was born in Brooklyn in 1940 and received his medical doctorate from Cornell University in 1966. He opted almost immediately to specialise in immunology and enter government service, rising to become head of the NIAID in 1984. By the time Covid hit in 2020, he was viewed almost universally as a “national treasure” – a distinguished practitioner, whose “deep expertise, avuncular demeanour and direct style of communication” made him “a source of trust for hundreds of millions of people” through national emergencies from HIV onwards. Considered consummately non-partisan, he served under six US presidents on both sides of the aisle.

Anthony Fauci was richly rewarded for his services, says The New York Post. By the time he retired, he was “the highest paid federal employee in the nation”, earning $480,654 annually – “more than the president's salary”. Since then, the “divisive doctor” has added multi-millions to his war chest – supplementing a top teaching job at Georgetown University with lucrative book deals and speaking engagements. Tickets for his “next gig”, scheduled in Florida in September, are going for $160 each. Whether Fauci will make that engagement is now up in the air, says CNN. Last week, the Senate committee voted to hold him in contempt of Congress, potentially opening the way for an appointment with the Department of Justice. For all his vanity, it seems a harsh fate, says The Times. “There was always going to be an explosion” after Covid. Anthony Fauci has become “the fall guy”.

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JPMorgan UK Small Cap Growth & Income (LSE: JUGI) is worth considering as a way to play the recovery in UK small caps while earning an appealing income.

UK equities of all shapes and sizes have looked cheap compared with the rest of the world for the best part of the past decade. However, two things have changed over the past few years that have shifted the narrative significantly in favour of investors.

The first has been the demand from private equity and trade buyers to acquire UK businesses. This is a side effect of low valuations and excess capital in private equity markets, and the rate of take-outs is only accelerating.

The second has been the willingness of businesses to return money to their investors. The UK market has become the share buyback capital of the world as management – under pressure from their boards and investors, and lacking other compelling investment opportunities – have poured free cash into buybacks.

JPMorgan UK Small Cap Growth & Income trust pays dividends

The £500 million JPMorgan UK Small Cap Growth & Income trust, which was formed via the merger of JPMorgan's small and mid-cap trusts in 2024, is one of several JPMorgan-managed trusts that have committed to pay an annual dividend that is based on a percentage of net asset value (NAV), rather than on income received from their holdings.

The trust targets total annual dividends of at least 4% of NAV (based on NAV at the end of previous financial year on 31 July), which are funded from both capital and income. For example, the trust reported NAV of 373.1p for the year to 31 July 2026, up around 10p year on year. It hence proposes to pay dividends of 3.73p per share each quarter in the current year ending 31 July 2027, totalling 14.9p for the year. That represents a yield of 4.1% on the current price of 364p.

This approach makes a lot of sense in the world of small and mid caps, where reinvesting for growth should be a priority for the underlying companies over shareholder returns. It gives managers Georgina Brittain and Katen Patel much more flexibility to invest where they see growth, not just income.

The added side effect of this approach is that it forces managers to top-slice their holdings and book the profit, which is then returned to investors. An automatic approach to taking profits removes some of the market-timing risk that comes with active management.

JPMorgan UK Small Cap Growth & Income is deeply undervalued

Still, income is only part of the attraction here, since the portfolio is also deeply undervalued and should offer scope for capital gains.

The trust's portfolio of approximately 80 stocks is trading at a forward price/earnings ratio of around 11, according to Brittain, while the Deutsche Numis Smaller Companies plus AIM index trades on 13. The free cash-flow yield is around 9%.

The team focuses on finding the most profitable UK small and medium-sized companies with the best domestic and international growth potential. Return on invested capital (Roic) is one of their key metrics when looking for the most productive businesses. The top holding is Premier Foods, the owner of the Mr Kipling brand of cakes, at 5% of the portfolio.

JPMorgan UK Small Cap Growth & Income also makes use of gearing, with borrowing averaging around 10% of NAV – a level the managers feel is comfortable given the liquidity of the portfolio. So there are the four levers that can help create value: income, growth, valuation and gearing. What's more, the trust is still trading at a modest discount to NAV (5%, down from over 10% earlier this year), so investors can currently buy the underlying portfolio on a double discount.

Notwithstanding the headwinds that have held back UK equities over the past ten years, the shares have produced a strong total return of 11.9% per year compared with 5.9% for the benchmark. As these headwinds become tailwinds, the trust appears primed to keep delivering for investors.

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With a new prime minister and a blank sheet of paper, John Healey could have started his chancellorship with a burst of announcements. After all, Andy Burnham appears determined to try to do things differently and, even if most of the policies announced so far are very small-scale, at least he is trying. His chancellor, by contrast, has been very quiet. He popped up briefly to replay a few familiar complaints about price gouging by the supermarkets, even though the major grocery chains operate on some of the slimmest margins in the world, and there have been a few leaks about more borrowing. Apart from that, No. 11 has remained silent.

He may, of course, be storing up the major announcements for his first Budget, now scheduled for the end of October. But the really significant chancellors of the last 50 years all made major policy decisions within their first few weeks in office. Gordon Brown announced the independence of the Bank of England. Nigel Lawson slashed the top rate of tax from 60% to 40%. George Osborne created the Office for Budget Responsibility and set out plans for controlling the growth of public spending. You might agree or disagree with any of those decisions, but there is no question they were significant and had a major impact on the economy. Each of these chancellors seized the day to make big reforms, aware there would never be a better time for a change of direction.

It would not have been hard for John Healey to hit the ground running. He could immediately have licensed new fields in the North Sea, as well as reduced the windfall tax on new developments. That would have made it clear from day one that the new government was more interested in energy security than in virtue signalling on climate change. He could have suspended the rise in employers' national insurance for six months to give companies a chance to start hiring again. To help with the cost of living, he could have lifted a range of tariffs that are still left in place from when we were part of the EU. He could have suspended some of the green levies that, when added to the highest industrial energy prices in the developed world, have crushed manufacturing. He could have cancelled pointless taxes such as the packaging levy that have added to the costs of retailers.

He could have demonstrated a commitment to curbing Britain's out-of-control welfare spending, perhaps by replacing the “triple lock” for pensioners with a slightly more affordable “double lock”. The list goes on.

John Healey appears to have pressed the “repeat” button

Instead, he is sticking to the script written by Rachel Reeves. There are lots of attempts to shift the blame onto business for persistent inflation, ignoring the impact that the constant criticism is likely to have on confidence. There are repeated attempts to manipulate the figures to allow the government to get away with borrowing yet more. Most of all, there is a complacent assumption that the economy will recover so long as the government spends more, despite all the evidence to the contrary. Reeves took months to announce anything of significance and even then it was just a huge tax raid. John Healey appears simply to have pressed the “repeat” button.

Meanwhile, genuine reforms to the supply side of the economy, such as freeing up planning rules to make it easier to build things, scrapping pointless regulations such as the GDPR on data protection inherited from the EU, and creating incentives for entrepreneurs and firms to start investing again, have been sidelined. They might come in the Budget, but I don't think anyone is holding their breath. There might only be two years left before a general election, and if Labour doesn't manage to get the economy growing before then, accelerating wage growth and getting unemployment down, it will surely lose. It is becoming painfully clear that the centre left doesn't have any ideas apart from taxing and borrowing more to try and keep the public-spending juggernaut on the road for a few more years. John Healey seems content with a re-run of the Reeves years – the results will be just as bad.

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In October 2006, the spot price of uranium went from $19 per pound (lb) to $143/lb in seven months. That move was so violent it altered how I thought about commodity markets entirely. That parabolic acceleration is not an accident. It is the direct expression of uranium's inelasticity when it comes to demand. Reactors cannot simply switch fuels, utilities cannot defer fuel purchases indefinitely, and once a supply deficit opens, the market has no choice but to bid until demand destruction forces equilibrium.

There is no substitute, no workaround, no patience. Uranium either arrives or it does not, and when it does not, prices do not rise gently. They spike. That is precisely what we are seeing now, and precisely why the dislocation in the sector matters so much. Every piece of the 2006 set-up is in place again. Demand is inelastic, supply is constrained, and the market has only just begun to price it in.

Uranium fundamentals remain strong despite volatility

The uranium sector continues to endure volatility despite incredibly strong fundamentals. Production is proving harder to deliver than has been modelled. There is now visual proof that reactors are actually being built rather than merely being announced, and prices remain on a one-way trajectory to multi-year highs. Uranium equities, by contrast, have endured a correction that in our view is completely detached from the fundamental story. History shows volatility has been the mechanism through which this sector re-rates, not evidence against the thesis.

The HANetf Sprott Uranium Miners UCITS ETF ACC (LSE: URNP), the cleanest proxy for the sector, makes the case on its own numbers. Over five years the exchange-traded fund has logged 11 declines of 20% or more, averaging a fall of 30.7% over roughly 46 days, against 14 rallies of 20% or more, averaging a gain of 45.6% over a faster 34 days. Rallies are consistently sharper and shorter than the slides that precede them. The deepest, longest falls have tended to set up the biggest rallies, not a new downtrend.

The 46.14% fall into October 2024 was followed by a rally of 134.60% over 132 days, the largest move in the dataset. The shallower 23.24% pullback last October gave way to a rally of 65.33%, the second-largest on record. The decline now in force began in January 2026, down 39.18% over 120 days. It is the longest in the dataset and the second-deepest, sitting statistically almost exactly where the sector's two biggest rallies began. Seasonality reinforces this too. The second half of the year is consistently the stronger half for URNM.

Delivery has proved harder than anticipated this year, even among the strongest operators. Canada's Cameco (Toronto: CCO; NYSE: CCJ), one of the world's biggest producers, suspended production at Cigar Lake (the world's highest-grade uranium mine) owing to repairs at a sulphuric-acid plant at Orano's McClean Lake mill. That episode followed flooding-related transport disruption at McArthur River and Key Lake, a mine and mill complex, although 2026's guidance holds at 19.5 million pounds to 21.5 million pounds. Peninsula Energy, listed in Australia, withdrew its 2026 guidance outright due to slow progress at Lance, its flagship project and one of the biggest in the US. Lotus Resources, also Australian, paused a key project after a fire and an acid shortage, putting its 1.01 million-pound offtake at risk.

Uranium supply keeps arriving late and light

Add a third consecutive downward revision from Kazatomprom (LSE: KAP, GDR) the national operator of the Republic of Kazakhstan – the world's top producer – and the pattern across majors and juniors is identical. Supply keeps arriving late and light, widening the deficit the market is meant to be pricing.

The lesson isn't that any single firm is untrustworthy, it is that mining uranium at scale is hard, and the deficit the market keeps citing is not going to close on anyone's stated timeline. A utility's choice is not between contracting now and waiting for certainty, since certainty is not coming from anyone in this market soon. The choice is between paying up for scarce, proven supply today or gambling on a junior's timeline, hoping the discount compensates for the risk.

Against that backdrop, Paladin's result for its financial year (FY) 2026 stands out. Production came in at 4.82 million pounds, above the guided range, with costs of production at $43.3/lb, below expectations. Set against that is a step-up in capital expenditure for FY27 to between $29 million and $35 million, roughly 2.5 to three times the figure for FY26. The strip ratio (measuring how many tonnes of rock have to be shifted to reach a unit of valuable ore) at the H pit of its Langer Heinrich mine is 4.1, more than double the 1.8 at the J pit. Credit where it is due: Langer Heinrich is the first mine in this cycle where production is ramping up. The path was never going to be a straight line, but Paladin has gone further down it than anyone else.

The US and Saudi Arabia have signed a 30-year civilian nuclear co-operation agreement, locking out Chinese, Russian, Korean and French rivals and positioning US incumbents such as Westinghouse, BWXT and Centrus as likely providers. The 123 Agreement, signed on 22 July, is now heading to Congress, and it may be the single biggest catalyst for demand in the pipeline given Cameco's own talk of 15 or more reactors in Saudi Arabia. Alongside it, America's Department of Energy (DOE) has confirmed $17.5 billion of loan terms for ten new Westinghouse AP1000 reactors, with seven letters of intent already signed.

China is running 58 reactors with 33 more under construction and a fourth straight year of ten or more approvals. India keeps contracting, with a roughly $1.9 billion, 22 million-pound Cameco deal running from 2027 to 2035, plus a $2 billion agreement with Kazatomprom, likely to be followed by an Australian deal later this year. This is demand locked in through long-term contracts.

Uranium is ready to roll

So-called term prices (a gauge encompassing all long-term contract pricing) sit at an 18-year high, approaching $100/lb, on very low volume. The long-term price (a specific benchmark within term prices) is up almost 10% in six months to $94.00/lb. The three-year forward price stands at $101.00/lb and the five-year at $108.00/lb. A thin market grinding steadily higher is arguably a stronger signal than a liquid one doing the same. There are simply very few holders willing to sell at these levels, even as the deficit builds.

Yellow Cake's (Aim: YCA) second-quarter statement confirms the picture from the physical side. The company, which buys and stores uranium, is adding pounds and buying back its own stock at a 15% discount to net asset value (NAV) at the exact moment term prices are breaking out. The World Nuclear Association (WNA) is now saying publicly that mine development cannot keep pace with the construction of reactors, echoing what we have seen across the sector.

Kazatomprom's own management, in a call we hosted this month with managing director Seitzhan Zhanybekov, noted that Western utilities are returning to the table after three years spent building conversion and enrichment capacity outside Russia.

Every component of this thesis is now firing at once, and firing harder than expected. Supply isn't just tight, it is breaking. Demand isn't just growing, it is being signed into law and contracted in billions. The market has priced almost none of it into equities. This is one of the highest-conviction entry points in the post-2019 cycle.

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Shipping services group Clarkson (LSE: CKN) has emerged over the last few decades as a global shipbroking franchise, with its shares rising from 90p at the turn of the century to over £50 per share today. Clarkson was founded in 1852 and has been listed on the London Stock Exchange since the 1980s.

Success was not inevitable, though. In the 1990s, Clarkson and its competitor Braemar (LSE: BMS) were navigating a shipping market that had been in the doldrums for over a decade. In 1999, Clarkson reported revenues of £27 million, 30% below the level achieved a decade earlier.

Fortunately for patient shareholders, Clarkson's management correctly identified a turning point, noting that while reported shipping rates had hit historic lows, an upturn in the global economy was beginning to drive a recovery in freight rates.

The rise of China, which joined the World Trade Organisation in 2001, caused a massive increase in demand for shipping raw materials such as copper and iron ore. Clarkson was perfectly positioned to capture this growth, with established hubs in London, Singapore and Shanghai.

Braemar's management steered a different course, explaining in 1999 that the firm needed to “expand activities into non-cyclical marine services” to offset weak freight rates. So Braemar diversified into more stable, but lower-margin activities, such as bunkering (buying oil storage and matching sales to ship operators). This generated impressive revenue growth: in 2007, the bunker trading segment earned £33.4 million (just under half of group revenue) – but at an operating margin well below 0.5%. Eventually, Braemar acknowledged that this was a poor strategic choice, and management disposed of the bunkering business.

Thus Braemar's unhealthy “diworsification” into stable revenue meant falling margins. Its earnings before interest and taxes (Ebit) margin fell below 15% as the global financial crisis hit, and would continue to decline for another decade. By contrast Clarkson, which remained focused on choppy, but profitable shipbroking activities, expanded Ebit margins to almost 20% just before the financial crisis hit in 2007.

More recently Clarkson suffered a 5% decline in revenue in the financial year ending December 2025, as Donald Trump's policies disrupted global trade. However, group Ebit margin stood at 15% in 2025 and the core shipbroking division achieved a 20% margin. The focus on this uneven, but profitable activity had continued to pay well. Clarkson has grown its dividend every year for the last 24 years and a further increase to 115p is forecast for this year. An investor who paid 90p per share in 2000 is now receiving more than their initial investment every year.

Clarkson is a hidden growth engine

Diving deeper tells an even more interesting story. Despite revenue declining in the broking division (roughly three-quarters of group revenue), the much smaller research division grew revenue an encouraging 14% at an almost 40% margin. This division represents a hidden but scalable growth engine where revenue growth feeds directly to the bottom line because the data it collects and sells has already been created through the group's massive transaction flow.

There are some similarities with the Parameta division of interdealer broker TP ICAP, which was identified by activist investor Justin Hughes as being a hidden gem. Both Parameta and Clarkson's research divisions sit downstream of high-volume, over-the-counter broker desks, turning transaction data that isn't publicly available into high-margin, recurring revenue. Using this by-product of their parent companies' brokerage operations creates near-zero cost of goods sold (Cogs) for their digital subscription services.

Regulation has been a key driver of these divisions. Parameta's growth has been boosted by the need to demonstrate best execution, which turns the service into an essential compliance requirement. Similarly, environmental and emissions regulations makes Clarkson's expertise and data more valuable. Currently, only 7% of the global shipping fleet uses alternatives to fossil fuels, although this is expected to treble by 2030. Regulatory pressure to tighten emissions standards is expected to force the early retirement of older vessels, accelerating the need for new ships.

Clarkson, as the market leader in valuations, sale and purchase, is uniquely positioned to advise and finance these multi-billion-pound fleet renewals, through its World Fleet Register. This database of the global merchant fleet was built over decades and contains vessel ownership, specifications, age, order books and trading activity. The group's other flagship data service is the Shipping Intelligence Network, which offers country profiles and coverage of the complexities affecting shipping markets, such as an assessment framework of the recent closure of the Strait of Hormuz. Over 90% of research division revenue recurs every year, and growth accelerated to 24% year-on-year in the first half of 2026, with the margin improving to over 40%.

Since 2000, Clarkson has been the second-best-performing stock in the FTSE 250, second only to engineering group Goodwin. That said, the eight-figure pay package received by chief executive Andi Case – over £11 million in 2024 – has met with some resistance from institutional shareholders. In part, Case's pay is high because Case has two roles: while running the group, he also continues to work as a revenue-generating shipbroker, which earns him significant sums in performance-related pay from commissions on broking deals. This is fairly standard in the world of shipbroking, although notably Braemar's former chief executive James Gundy recently stepped back from managing the company to focus on his (presumably better rewarded) shipbroking role.

Still, institutions would be better to focus their attention on high rewards for failure, such as in the UK banking sector, where there is a long record of bosses receiving high pay despite failing to create value, or even destroying it. The recent outperformance of the banking sector has been caused by a rising tide of supportive macroeconomic variables that has lifted all boats. Conversely, Clarkson's 5,100% share price increase since January 2000 – versus a flat share price at Braemar over the same time horizon – shows that in shipbroking investors should be happy to reward quality management. Superior strategic choices have led to a huge variance in outcomes.

Clarkson has formidable defences

Yet one risk to the investment case for Clarkson comes from Braemar. In May last year, it unveiled aggressive plans to grow revenues to £200 million by 2030, up from £136 million in the year ending February 2026, including a commitment to hire ten new brokers per year. So far, Clarkson has distributed rewards fairly between brokers and shareholders. However, this is a people business, where the assets walk out the door every evening, so bidding up the price of talent risks a greater share of rewards going to “star players” with the contacts and nous to drive a hard bargain.

That said, at over £600 million, Clarkson's annual revenue is almost five times that of Braemar's. The larger group enjoys natural advantages that flow to the market leader, such as superior liquidity and the ability to spread fixed technology costs across a larger revenue base. Clarkson handles roughly one in every ten global shipping fixtures, which has created a powerful network effect: shipowners gravitate to where the most charterers are, and charterers go where the selection of tonnage is widest. Each successful deal reinforces this position.

Braemar seems to have learnt from past mistakes and has combined its revenue goal with a target underlying operating profit margin of 15%. So its expansion is unlikely to spark a fierce bidding war for top talent.

Following the decline in revenue last year, Clarkson's most recent half year to June was much stronger. Higher demand for chartering services and elevated freight rates provided a helpful climate as it tends to earn a percentage commission on commercial activities. A buoyant market in shipping vessels' valuation, combined with strong demand for derivatives instruments to help manage risk, also proved helpful.

Revenues jumped 39% to over £414 million in the first half, at a 14% Ebit margin, excluding acquisition-related costs. The company said in August that it expects the full-year outcome to be “materially ahead of market expectations”. Broker Zeus has raised its earnings per share forecast by 14% for both 2026 and 2027 to 279p and 310p. That puts the group on 17 times this year's forecast and 16 times the following year. Clarkson also enjoys a strong balance sheet, with £155 million of cash at the end of June.

For comparison, Braemar trades on just nine times forecasts for the current financial year and seven times the following year, with a net debt position of just under £3 million at their February year end. At 225p, Braemar's share price has trod water for 20 years. The valuation looks attractive if management can deliver on revenue and margin aspirations. Yet after many years of disappointing performance – revenue last year was below the level achieved in 2016 – investors' scepticism is understandable.

Thus Braemar is a turnaround situation, looking to follow the success of its larger rival. Meanwhile, Clarkson has become essential shipping infrastructure, where “key-man risk” of brokers leaving is mitigated by the group's franchise and data subscription recurring revenue. While Clarkson's offices are located in St Katharine Docks, just beyond London's old Roman walls, the long-established broker has formidable defences to protect its market position.

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Is the UK too centralised and will devolution help?

Devolution has long created separate administrations for Scotland, Wales and Northern Ireland, rather creating the illusion that the British state must be a quasi-federal one. But the whole of England – 85% of the UK’s population – remains governed by Whitehall. Westminster decides everything, says The Economist, from the sums that local authorities can charge for planning applications to how long the tinkling of ice-cream vans may go on. Local and regional taxes account for less than 2% of GDP, much lower than in peer nations.

It wasn’t always this way. In the 19th century, the great cities were beacons of civic pride and municipal power. But the post-war centralisation of the state has turned us into a country where the phrase “postcode lottery” is used to describe the supposedly “horrifying prospect” of public services differing from place to place.

Voices from across the political spectrum have long argued that decentralising power would help build a more effective and responsive state, and spur growth. The basic argument is that regional leaders are better placed to understand their economies and public services – and can join up policies across transport, housing, skills and employment.

What is Labour doing?

The government under Keir Starmer had already made a start on devolution with the English Devolution and Community Empowerment Act, which came into force in April this year. The Act establishes a framework for shifting powers out of Whitehall by creating elected strategic authorities, expanding local mayoral powers and establishing a Community Right to Buy, giving localities a “true right of first refusal” for Assets of Community Value.

The Act also beefs up the Local Audit Office, in charge of monitoring the local council’s finances. The underlying presumption is that devolution will become a default constitutional arrangement, rather than something individual councils negotiate with ministers on a case-by-case basis.

What has Andy Burnham added?

The new prime minister has announced plans to go further. In March, the then chancellor, Rachel Reeves, announced that the Treasury would develop a fiscal devolution road map and consider giving regional leaders control over a share of national taxes. Burnham has now confirmed that this will happen, with mayors (and perhaps also other local authorities) being handed a slice of regional income-tax receipts from 2028, in place of central grants.

Details of the plan will be unveiled in the Budget on 28 October and a new devolution White Paper (draft legislation) will be published this autumn. This will build on a new blueprint called “The New Model of Government”, which takes the existing settlement further, and gives local leaders even “greater power to shape their places through control over local transport, housing, innovation, local energy and cultural investment”.

Is this good news?

Potentially, yes. Burnham’s diagnosis of “the link between centralisation and poor local performance is almost certainly right”, says The Economist, and local and regional governments must be given a better incentive to drive their own growth, rather than beg for bigger handouts. For that, more fiscal devolution is needed – devolution of spending powers, if not, at first, tax-raising powers – and income tax is the obvious choice.

The sums won’t be large at first: the Centre for Cities think tank estimates that around 2% of income tax raised locally is enough, on average, to replace the grants that existing mayors receive. But it’s an important move in the right direction and means that if a place can create more and better-paying jobs, it will directly reap the benefits via higher tax revenues. Burnham’s plans are a welcome first step, agrees Robert Colvile in The Times. Naturally, however, there are some big question marks and caveats.

The challenges to devolution

Most crucially, devolving finance will mean nothing while councils’ budgets are dominated by “the frightful four” spending liabilities of adult social care, temporary accommodation, children’s services and school transport. “These are services that councils are legally obliged to provide, but haven’t been given the money to pay for, meaning they’ve squeezed out everything else.”

Second, there’s no point in devolving power if it’s only the power to do what Labour wants. Burnham’s first policy announcements on capping bus fares across England and offering more favourable tax arrangements to pubs and clubs at the expense of “what he deemed ‘anti-social business’”, such as vape shops, signal a very top-down kind of local politics.

What’s needed is devolution that lets places keep the fruits of their success and allows for competition between regions. Labour’s instincts will be to “enforce equality of outcomes via all the levers available to it”.

Is there any hope of genuine change with devolution?

There’s certainly a risk that devolution is “oversold as the answer to everything”, says Sam Freedman on Substack. In reality, it is likely to be a slow process and there will necessarily be trade-offs and problems along the way. Local authorities have been eviscerated since the 1980s, meaning that devolving too much power too quickly would be unwise; “much of the initial focus will need to be on capacity building”.

Currently, when powers are devolved to mayors, Whitehall retains responsibility for the approximately 50% of England (by population) that does not have one. So there’s much work to do in terms of strengthening local authorities and building new structures.

For devolution to work, many similar trade-offs will “need to be balanced right – between speed and sustainability; autonomy and national consistency; freedom and accountability; neatness and historical identity; equality and incentives to grow”. Devolution promises to be the defining issue of Burnham’s premiership, but there’s a long and hard road ahead.

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Nationwide has increased interest rates on its fixed term savings accounts and ISAs, with customers now able to get up to 4.7% on their cash savings.

The higher rates are available if you lock your money away to grow for a fixed amount of time, with no withdrawals allowed.

For the ISA products, any interest earned during the term will be tax-free.

Richard Stocker, Nationwide’s head of savings, said: “We’re pleased to launch new higher rates on our fixed rate cash ISAs and bonds, while continuing to ensure customers can access the same rates whether they open their account online or in branch.

“With the UK’s largest branch network, backed by our Branch Promise, we’re committed to ensuring customers who prefer face-to-face service aren’t disadvantaged. Many of our branch-accessible products are among the highest-paying available from a major high street provider, reflecting our commitment to combining choice, value and support for savers.”

The improved interest rates make the accounts some of the most attractive among major high street savings providers, but they are not the highest available on the market.

What are the new rates?

Interest rates for Nationwide’s new fixed-term ISAs range from 4.4% to 4.7% depending on the amount of time you choose to lock your savings away for.

As the account is locked for a fixed-term you cannot access it whenever you like without paying a penalty.

If you make any withdrawals from the account, you will need to pay an early access charge equivalent to between 60 and 300 days’ interest depending on the term of your ISA. Your ISA will also be closed.

There is a 14-day grace period after opening the account where you can withdraw your cash without paying a penalty.

You must be a UK resident aged 18 or over to open one of these accounts. Any interest you earn from cash held in an ISA is entirely tax-free.

The table below shows the new fixed-rate ISAs and their interest rates:

Source: Nationwide, 14 August

The new interest rates for non-ISA accounts are slightly lower than the new rates for the ISA products.

These accounts can be opened by UK residents aged 16 and over and no withdrawals are allowed at all 14 days after opening the account.

A table showing a full list of the new rates can be found below:

Source: Nationwide, 14 August

Customers can access the exact same rates whether they open the accounts in-branch or online.

Are Nationwide’s new savings accounts any good?

Nationwide’s new, higher rates on fixed-term accounts are decent, but are still not the best on the market.

The top 4.7% rate on the five year fixed-rate ISA is just shy of the market-leading rate of 4.85% from Leek Building Society and Vida Savings.

This is the case for all of the new ISA accounts, which each offer a good interest rate, but none are the absolute best in the market.

As for the non-ISA savings accounts, there is a much bigger gap between Nationwide's rates and the market leaders.

The table below shows Nationwide’s new rates compared to the market leaders.

Source: Moneyfactscompare.co.uk, 14 August. Calculations based on £25,000 lump sum investment.

Nationwide customers may be happy to miss out on a slightly lower interest rate considering other perks offered by the building society – for example, the ability to visit bank branches.

Nationwide has promised not to close any more branches until at least the start of 2030, in contrast to the prevailing trend of branch closures.

Nationwide has also offered a £100 Fairer Share bonus to millions of eligible customers each year since 2023.

Rachel Springall, finance expert at Moneyfacts, said: “While they might not be market-leading rates overall, savers who would prefer to place their cash in a fixed account over the longer term, with a provider that offers an in-branch service, will find them competitively priced against other high street brands.

“Customers who flock to Nationwide can benefit from in-branch face-to-face support, which is ideal for those who may have accessibility issues, plus, its current account range is well worth considering due to the variety of cost-saving add-ons. When it comes to finding the best savings accounts, it’s always important to shop around and keep any nest egg as tax-efficient as possible, such as by using an ISA.”

Millions of households face further water bill rises to fund £3.4 billion worth of investment in the network.

The regulator Ofwat has provisionally approved a package of funding to increase capacity, provide cleaner drinking water and upgrade treatment sites.

However, it means bills are set to rise by up to £43 a year between 2027 and 2030 for many customers in England and Wales.

The hikes are not yet confirmed and are going through a consultation phase, before any final approval is made in December.

The rises come in addition to previously approved increases to upgrade the network between 2025 and 2030.

Helen Campbell, executive director for delivery at Ofwat, said: “We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”

Which water firms are increasing bills?

Customers of the following five water firms are set to see their bills rise over the three-year period:

Source: Ofwat

Water firms say they need to increase customers’ bills to replace pipes and reduce leaks across the network, provide water to more people and businesses and because of heavier rainfall which can lead to more flooding and loss of water from storm overflows.

However, recent rises have been met with criticism from households and campaigners following water supply issues and pollution in rivers and seas.

Kierra Box, water campaigner at environmental group Friends of the Earth, said: “Our rivers and seas are chock full of filthy sewage and chemicals, which have seen next to no improvement despite recent bill hikes.

“Now ordinary people are being asked to foot the bill once again to pay for decades of water company inaction on upgrading our crumbling water infrastructure. It’s daylight robbery.”

Customers with Anglian Water, Dŵr Cymru Welsh Water, Hafren Dyfrdwy, Northumbrian Water, South West Water, United Utilities, Yorkshire Water and SES Water will face no further bill rises between 2027 and 2030.

How you can cut your water bill

It’s worth regularly checking your water bill and comparing it to earlier bills to see if there has been a spike.

If there has been, you might have a water leak in your home that means you’re using a lot more than you usually do and will need to get fixed.

You could also switch to a water meter which charges you based on your actual usage rather than the rateable value of your home. Most homes can have a water meter installed for free.

However, a water meter can see your bill rise as well as fall. The Consumer Council for Water (CCW), which represents water and sewerage customers, has a calculator you can use to find out if you might save money with a meter.

Typically, single-person households or homes with a high rateable value tend to benefit the most.

You might also be eligible for the WaterSure scheme which caps your water bill.

You’ll need to have a water meter, be on certain benefits such as Universal Credit or Pension Credit and have a medical condition that means you have to use extra water or have a large number of people living in your household.

Plenty of water firms offer customers free or cheap water-saving gadgets such as leak-detecting strips and water-efficient shower heads too.

Advice website Save Water Save Money has a tool on its website where you can enter your postcode and find out what gadgets you’re eligible for.

There are smaller practical steps you can take to save water around your home, such as making sure your dishwasher is full when using it and taking shorter showers.

The UK’s investment trusts are declining in popularity with the country’s investor base, new research suggests.

Financial consumer site Boring Money’s latest investment trust report shows that investment trust ownership among UK investors has fallen to its lowest level since the company started tracking adoption in 2021 – falling from 12% to 9% in the last year.

The report, based on four surveys (the largest of which included 6,000 nationally representative UK adults) reveals a stark fall in the percentage of 35-54 year-olds owning investment trusts, where adoption fell from 12% to 7% over the last six years.

“[US activist hedge fund] Saba created upheaval in the industry and highlighted the importance of the retail investor vote,” said Holly Mackay, CEO of Boring Money. “This coupled with declining levels of adoption is a real call to action for boards [of investment trusts] to engage with the customers of tomorrow, and demonstrate the role that trusts have to play in an investor’s portfolio.”

A lower percentage of UK investors holding investment trusts doesn’t necessarily mean they’ve become less popular in absolute terms though, given there are now more UK investors than ever before.

But Boring Money also noted a decline in the proportion of assets held in investment trusts on individual investment platforms, indicating ownership is declining in absolute terms too.

Why is investment trust ownership declining?

Investors appear to be favouring simpler and often cheaper vehicles over investment trusts.

Exchange-traded funds (ETFs) have surged in popularity recently: over the last six years, ETF ownership has nearly quadrupled from 5% to almost 20%.

“ETFs feel easier for people to compute,” said Mackay. “They have become synonymous with cheap and easy. Investment trusts are still thought to be difficult and old-fashioned.

“Trusts are trying to compete with 60 page PDFs and complex explainers and this misses a key point about getting through to retail investors,” she continued. “Beyond the hobbyists, most people want to spend as little time on this as possible. It’s about delivering key messages succinctly and with limited space.”

Boring Money’s research suggests that 45% of today’s investment trust holders have held their investment trusts for 10 years or more, compared to 18% of ETF holders, and that eight times as many investors bought ETFs for the first time in the last year compared to investment trusts.

“To try to capture some of the growth going to ETF providers, investment trusts have more to do to communicate their benefits to a broader investor base which has higher expectations for simple, compelling messaging and competitive price points,” Mackay said.

How is the investment trust industry responding?

The investment trust industry is moving to address this communication deficit.

“Investment trusts have fantastic benefits for investors of all ages, but we need to make sure that more people are aware of them,” said Nick Britton, research director at the Association of Investment Companies (AIC), an industry body representing UK investment trusts.

The AIC is launching a campaign aimed at raising awareness of investment trusts among investors aged 25-44. This is an interesting demographic to target: Boring Money noted that investment trust ownership among under-35s has increased from 7% to 9% since 2021, in contrast to the age group immediately above it, where adoption fell

“Investment trusts are particularly suitable for younger investors because their investment horizon is long and they can back exciting companies like SpaceX at an early stage of their development,” said Britton. “They can also use gearing [borrowing] to enhance returns and offer access to many parts of the market that other kinds of funds can’t reach.”

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Stamp duty land tax is another cost to factor into the equation when buying property in England or Northern Ireland.

It is applied at different rates depending on the value of the property, if the home you’re buying costs more than £125,000. That threshold rises to £300,000 for first-time buyers purchasing a home worth £500,000 or less.

The average house price in England was £292,095 as of May 2026, according to the latest data from HM Land Registry, meaning the typical mover would pay around £4,604 in stamp duty.

A first-time buyer would not have to pay any stamp duty for the same transaction.

Regional house price variation means the average amount of stamp duty is drastically different depending on where in England you are moving to, with analysis of home buyer enquiries across England in the first half of 2026 by Zoopla showing a stark North-South divide.

Around half of all first-time buyers in London, the East of England, and South East England have to pay stamp duty, compared to just 10% in the north of England as property prices in these regions eclipse those in the north.

The story is not much different for home movers. While almost all of those buying their next home in England have to pay some stamp duty, the amount they pay on average is very different.

The amount you’ll pay in the north of England will typically be between £1,500 and £2,200, while in some parts of the south, stamp duty bills can rise to almost ten times this.

Richard Donnell, executive director at Zoopla, said: “For home movers, stamp duty is a near-certain cost wherever you live – and in Southern England it runs to five figures. Six in ten property purchases are made by existing homeowners.

“When the cost of moving becomes a meaningful friction, some of those moves don't happen, especially with lower levels of house price inflation in recent years across southern England.”

The analysis did not include the data for buyers in Northern Ireland.

Average stamp duty costs by region for first-time buyers

If you’re buying your first home and it’s worth £500,000 or less, you could benefit from first-time buyers' relief. This means you’d only pay stamp duty on any portion of the property value over £300,000, at a rate of 5%.

The difference in house prices across regions means many first-time buyers in certain parts of England may not need to pay any stamp duty on their first home, or pay relatively low amounts.

Only 2.1% of first-time buyers face a stamp duty bill in the North East, Zoopla said, and for those who do, the median stamp duty bill is £3,750.

In Yorkshire and the Humber, 3.8% of first-time buyers pay stamp duty. This rises to 6.2% of first-time buyers in the North West and 9.3% in the West Midlands. The median bill in all of these locations for first-time buyers is £2,500.

As average house prices in London, the East and South East of England are much higher than elsewhere in the country, first-time buyers’ relief is less generous. In each of these regions, over 50% of first-time buyers have to pay stamp duty.

This percentage peaks in London, where around 80% of all first-time buyers pay some stamp duty.

The average stamp duty bill for a first-time buyer in the capital is £8,750, while it’s £5,000 in the South East, and £4,500 in the East of England.

Average stamp duty costs by region for home movers

Almost all home movers will have to pay stamp duty when they buy their next house – but the amount they have to pay depends on property value.

The North East region has the fewest home movers paying stamp duty, though a majority still pay it (63%). The amount paid is relatively low, though, with an average bill of £1,500.

It reflects how the North East is the cheapest region in England for house prices, as the average house costs just £163,933, according to HM Land Registry, more than £100,000 less than the average for England.

Between 82% and 92% of home movers pay stamp duty in the other northern regions, the Midlands, and the South West.

The highest average stamp duty bill among these regions is the South West, where the typical home mover will pay £5,000.

These numbers steeply rise in London, the East and South East of England. The typical home mover will pay around £10,000 in stamp duty in the East of England, £11,250 in the South East, and an eye-watering £20,000 in London.

Almost all home movers pay stamp duty in these regions too.

How stamp duty is paid

Stamp duty is due in England when the price of the home you are purchasing is above the tax-free threshold.

Home movers have to pay stamp duty on properties worth over £125,000 and the amount you pay depends on the price of the property. The table below shows the rates at which it is levied.

If you already own a residential property and are buying a new one, you’ll usually have to pay 5% on top of these stamp duty rates, if it means you’ll own more than one home.

First-time buyers have a larger tax-free threshold of £300,000, and pay slightly different rates of stamp duty. These are shown in the table below.

You will have to pay the full stamp duty amount to HMRC within 14 days of buying your property.

Even if you do not invest much in bonds, the bond markets are hugely important. Jim Leaviss, the former M&G bond guru, who sadly passed away last month, was fond of saying that “there is nothing more fascinating than a fixed-income instrument”. There is a lot of truth in this. The bond markets directly reflect consensus about inflation, growth, government finances and more, while influencing the price of many other assets.

So while investors who are willing to take greater risk in other investments such as shares are likely to earn higher long-term returns, they should still be looking at bonds.

Take long-term government bonds, with 20 or 30 years to maturity. Very few of us probably hold these consciously. Yes, they will be part of many funds and exchange-traded funds (ETFs): bonds with maturity of more than 20 years are around 16% of the iShares Core UK Gilts ETF (LSE: IGLT). And you could certainly buy something like iShares USD Treasury Bond 20+yr ETF (LSE: IBTL) if you think yields are getting too high and you want to bet on them falling. Yet with yields at 5.7% for the 30-year gilt and 5.2% for the 30-year Treasury, they are not exactly compelling to most individual investors. Longer-dated bonds appeal to institutional investors who for various regulatory reasons need to hold “low-risk” assets against their liabilities.

What’s going on in the bond markets?

That said, long-bond yields have been crawling up (in some cases, such as Japan, moving a lot faster than a crawl) as institutions become less keen on holding them. There can be multiple factors behind this, including technical ones such as changes in the preferences of specific institutions for specific maturities in specific countries. However, the broad-brush conclusion is that investors are worried that high government deficits will mean high bond issuance for many years in the future. All else being equal, that's bad for bond prices (on the basis that supply will increase faster than demand).

What it does not (so far) seem to be signalling is any consensus that inflation will be structurally higher. Inflation breakevens – the difference between yields on nominal bonds and comparable inflation-linked bonds – are not moving. If we use US bonds (the deepest market with fewest technical distortions), the 20-year breakeven is at 2.4% and the 30-year at 2.2%, both around the bottom of their range for the last five years.

I find this hard to reconcile. If major governments continue to run large deficits – and it is difficult to see how they will not – they will surely respond to rising long-term bond yields by issuing more short-term debt (this is already happening) and by pressuring central banks to keep short-term rates down to make that as affordable as possible (this is starting with Donald Trump's demands on the US Federal Reserve). That seems to be a recipe for higher inflation, yet the bond market shows little sign of pricing that risk in.

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