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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The market has had an up and down year, driven largely by volatility in tech and artificial intelligence (AI) stocks. The CBOE Volatility Index (often referred to as the VIX), an index which measures the stock market’s expected volatility based on S&P 500 options, reached 35 in March (following the outbreak of the war in Iran), levels only surpassed in the last five years by 2025’s tariff turmoil and the outbreak of the war in Ukraine.

The S&P 500 has ranged from 6,317 to 7,794 so far this year, meaning its year-to-date returns have been as low as -7.7% and as high as 13.9%. These rises and falls are largely correlated with the performance of the big tech stocks that dominate the index: Nvidia’s share price, for example, has ranged from lows of $164.27 to highs of $236.54 in the year so far.

Some investors like volatility, but it isn’t for everyone. According to the latest fund flow data from the Investment Association, an industry body representing UK asset managers, retail investors put more money into funds during June than any month since August 2021 – but this was largely directed towards defensive strategies such as bonds or cash-like assets.

“Exciting investments have an unfortunate habit of becoming expensive precisely because everyone finds them exciting,” said Simon Skinner, head of investments at asset manager Orbis Investments. “By the time the story feels obvious, the crowd has usually arrived and a great deal of optimism is already reflected in the price.”

So-called ‘boring’ investments – the more traditional, steady stocks and sectors – can have the opposite problem. “If nobody wants to talk about them, expectations tend to be lower and valuations often are too,” said Skinner.

There is a case to be made for the boring stocks, though, especially if you are trying to preserve your capital or generate steady income.

“Some of the best long-term investments can be businesses that do relatively mundane things exceptionally well, generate cash consistently and compound that cash for shareholders over many years,” said Marcel Stötzel, portfolio manager of Fidelity European Trust PLC and Fidelity European Fund.

Where does volatility come from?

Some sectors are inherently volatile. As Skinner puts it: “Volatility tends to be greatest where the gap between the story and the fundamentals can grow widest.”

He points to tech as the obvious example. “Valuations often depend on profits expected many years into the future, which leaves a lot of room for imagination – in both directions. When a compelling narrative takes hold, investors pile in and prices can detach quite dramatically from any reasonable assessment of value.”

But any slight threat to the optimistic narrative – be it disappointing growth numbers, capital expenditure or returns on investment – can quickly reverse this effect, taking most of the market with it when capital is concentrated into a small number of correlated stocks.

“When the story wobbles, [investors] can rush out just as quickly,” Skinner added.

Tech is also highly sensitive to interest rates. When present-day value is calculated based on future expectations, interest rates assumptions are one of the key variables.

“Growth stocks tend to have more of their earnings further out than value stocks, because they’re growing and the market’s valuing that growth,” said David Cumming, head of UK equities at investment manager BNY Investments Newton. When interest rates rise, the present-day value of these future earnings (relative to other assets like bonds) falls.

Current levels of market concentration are consistent with several of history’s largest bubbles, which Skinner points out often coincide with periods of optimism in a few narrow areas.

“The problem isn’t concentration alone,” said Skinner. “It’s concentration around a shared narrative. If a handful of very large companies are being valued on broadly the same assumptions about the future, then what looks like a diversified index can behave like a single trade when those assumptions change.”

What are some less volatile sectors?

Consumer staples, utilities and healthcare

The steadiest sectors tend to be those where demand has little to do with economic conditions or a compelling narrative – especially consumer staples, utilities and most healthcare stocks.

“People still buy toothpaste, electricity and medicine in good times and bad,” said Skinner. “Cash flows are therefore relatively predictable and, importantly, near-term. That leaves less room for imagination.

“It’s difficult to persuade yourself that a water utility is going to change the world – but equally difficult to panic that it’s suddenly worth nothing,” he added.

“Healthcare tends to go up when tech goes down,” said Cumming. The sector is “actually very cheap relative to history now, because it’s viewed as boring, and that means it looks reasonably attractive.”

Healthcare companies are also among those most likely to benefit from AI as end-users.

Some effective ways of accessing these sectors are the Xtrack­ers MSCI World Con­sumer Staples UCITS ETF (LON:XWCS), the Worldwide HealthCare Trust (LON:WWH) and the iShares S&P 500 Utilities Sector UCITS ETF (LON:IUSU).

Financials

Banks aren’t the flashiest sector to invest in, but they can offer some protection in certain circumstances.

“As long as the economy is doing OK, financials can offer protection,” said Cumming. “Financials only run into trouble if there’s going to be a recession.”

On the other hand, they can be another source of volatility in certain conditions.

“Financials can also be volatile, particularly more highly leveraged or complex banks, because changes in interest rates, credit conditions and the economic outlook can have a disproportionate impact on profitability,” said Stötzel.

Automotive

The automotive sector is “the most unloved sector in the world by far”, according to Cumming.

He highlights Volkswagen (FRANKFURT:VO), which currently trades at less than four times its expected earnings.

“Some of these stocks are wildly cheap,” he says, particularly if the EU is able to shore up the market against competition from China.

The case for balance and value

Most of the aforementioned less volatile sectors have underperformed tech in the year to date, and over longer timescales.

That’s not to say you wouldn’t be grateful to have them in your portfolio if the tech rally reverses, but as long as tech continues to dominate, any money invested in these sectors could act to hamper your returns rather than improve them.

“Balance should not mean abandoning growth,” said Sam North, market analyst at investment platform eToro. While the long-term AI investment case remains intact, in North’s opinion, it is still important to recognise that “no theme should dominate a portfolio indefinitely” and holding “more predictable companies can reduce drawdowns, provide income and give investors capital to rebalance into growth assets during periods of volatility”.

It’s also worth remembering not to focus entirely on the sector alone when considering defensive investments.

“We would be wary of assuming that every company in a traditionally defensive sector is automatically low risk,” said Stötzel. “Business models change, balance sheets matter and even apparently defensive companies can become vulnerable if they have too much debt, weak cash generation or an unsustainable valuation.”

Besides exploring defensive sectors, Skinner also advocates attention to the price you pay as the more durable form of protection.

“It’s worth distinguishing volatility from risk,” he said. “For a long-term investor, a share price moving around isn’t necessarily risky. Permanently overpaying for a business is.

“If you buy a share well below a sensible estimate of what the business is worth, you have a cushion,” Skinner continued. “A fair amount can go wrong without permanently impairing your capital because some bad news is already reflected in the price.”

Similarly, Stötzel advocates looking at business fundamentals rather than sectors to provide protection. “What protects investors in one downturn may behave quite differently in the next,” he said. “For us, protection comes more from the characteristics of the businesses you own: strong balance sheets, sustainable cash generation, pricing power and management teams that allocate capital sensibly.”

Matthew Jukes, MoneyWeek’s wine columnist for 20 years, has died at the age of 58. Readers of the magazine and indeed its staff will sorely miss his amusing and ebullient reviews and unique voice, not to mention his expertise in seeking out delicious and affordable wines.

He was always exceptionally busy elsewhere, too – he was, as The Telegraph says, “one of Britain’s busiest and most respected wine experts”, writing columns for the Daily Mail and becoming a star of TV and radio.

Matthew Jukes's legacy

Matthew also developed a popular series of annual wine reports, covering the likes of Bordeaux en primeur, Burgundy and Piemonte, as well as his “100 Best Australian Wines”, which won him an Honorary Australian of the Year award in 2012. At its launch in 2004, this was a simple list, but over the years it grew into a major tasting event in the UK that also toured China and Australia.

In 2019, he “caused a stir in the world of oenophiles” by launching his own zero-alcohol range of drinks known as Cordialities. The aim was to give those with a “wine-savvy palate” an alternative to the “cheap, sugary, fake creations” that were the only alternative for those avoiding alcohol. He experimented in his kitchen with recipes old and new, and his creations won orders from Michelin-starred restaurants all over the world. He was “very proud of the success of his business”, says David Gleave of Liberty Wines.

Above all, Matthew Jukes was a gentleman and “one of the very best human beings I have met in my life”, says Libby Brodie for City AM. He was a “gregarious and generous” host – “clever, funny and honourable”.

But there was a different energy once he was at work, says Jancis Robinson on her website. Then there would be a “laser-like focus” and no chatting. He also had a “strict moral code”, says Brodie, and would always pay his way, donating what it would have cost to charity if he found the bill had been picked up. He was simply “superb at his job” and “leaves the world in a better state than he found it”.

Dave Lewis, new CEO of alcoholic-drinks giant Diageo, laid out plans to revamp the company after several years of falling profits, says Madeleine Speed in the Financial Times. The maker of Guinness and Johnnie Walker posted a 2% decline in organic revenue for the year to 30 June 2026, while operating profits dropped 27% to $3.2 billion.

Savings will be made by “redesigning Diageo's operating model and overhauling its supply chain”, with the elimination of what Lewis calls “massive duplication”. Dave Lewis also promised to boost growth by taking Guinness global, investing in neglected, affordable brands such as Smirnoff and Captain Morgan, and offering smaller, cheaper bottles to “inflation-weary US drinkers”.

Good, says Alex Brummer in This is Money. The “simple thing to do” would be to “lop off great brands for an easy win”, but Dave Lewis has gone beyond that with his “speeded-up savings target of $1 billion”. It seems he will try to repeat his success at Tesco, where he repaired supply chains and relationships with suppliers. It's also “reassuring” that he thinks Diageo has “the brilliant brands and distribution”, particularly in North America, to “halt recent declines and maintain sales”.

What is in Dave Lewis's turnaround plan for Diageo?

There's certainly plenty of scope for Dave Lewis to repair Diageo's “outdated and overly complex framework”, says Jessica Newman in The Times. For example, Diageo is still entering 60% of all its orders manually, while in India, where it employs 30,000 people, its payroll system is around “ten times more expensive than the one at Tesco”, even though Tesco employs far more people. In sum, the “unintended consequences” of operating on a market-by-market basis are “too many complicated processes and systems building up”. What's more, the decision to cut the dividend suggests that Lewis' Diageo is clearly willing to make some hard choices.

Yet boosting growth may be unexpectedly hard, says Yawen Chen on Reuters Breakingviews. In North America, Diageo's largest market, sales fell 8.4% in the year to 30 June. And luxury groups' recent rebound suggests affluent Americans are “still buying handbags, jewellery and holidays”. Diageo's problem “may not simply be price but a structural decline: Americans may just be drinking less”. Dave Lewis's overhaul should leave the firm “leaner and better positioned”, but until and unless Diageo can fix its “US hangover”, it is set to keep its “groggy valuation”.

Many analysts wonder if the market for younger consumers is a growth area at all in view of “changing attitudes” toward drink and the rapid spread of weight-loss drugs, says Richard Hunter on Interactive Investor. Nevertheless, the market's reaction to Diageo's “resolute” update was “immediate, positive and one of relief for an overdue transformation”, suggesting that the group's “longstanding supporters” are still inclined to give the new management the benefit of the doubt.

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Istanbul has existed in its various guises for millennia, straddling Europe and Asia across the Bosphorus. It is a cosmopolitan city. Here, you will find former Byzantine churches, many today serving as mosques, standing beside bazaars and rooftop restaurants frequented by tourists from all over the world. That centuries-old charm is still evident in the ruby-red çay (tea) that arrives without asking, baklava glistening behind bakery windows, the aroma of kebabs, and cats lounging beneath cafe tables, waiting patiently for scraps.

The Hilton Istanbul Bosphorus provides the perfect vantage point from which to see all this. Since opening in 1955, the hotel has welcomed royalty, presidents and Hollywood stars, including Queen Elizabeth II, George W. Bush and actors Sophia Loren and Marlon Brando.

It was Hilton's first footprint outside the Americas, arriving at a pivotal moment in the city's modern history. And the hotel's greatest asset is arguably its location. Boasting landscaped gardens dotted with palm trees, it feels surprisingly tranquil despite being only a short walk from the bustling Taksim Square.

Restoring the iconic Hilton Istanbul Bosphorus

Originally designed by Chicago-based architectural firm Skidmore, Owings & Merrill, alongside celebrated Turkish architect Sedad Hakkı Eldem, the hotel building remains one of Istanbul's most recognisable examples of mid-century modernism. A recent refurbishment by local outfit Autoban has carefully retained its Turkish identity while embracing an element of the ever-changing nature of the city. Vintage details have been retained as they remain emblematic of the hotel's history, from the original Hilton logo in the lobby and the striking flying carpet installation suspended overhead at the entrance to the outdoor swimming pool, which is the largest hotel pool in Istanbul.

Throughout the property, there are further nods to the Hilton's past, including a lobby inspired by a sapphire necklace that Sophia Loren wore during a visit. Merve Seckin, the hotel's head of marketing, pointed out to me the restored handcrafted çintemani tiles that had remained hidden for years and, thanks to the renovation, are once more on display.

The Hilton's 475 rooms and suites have views of either the Bosphorus or the hotel's gardens. I stayed in the Bosphorus Suite, which had panoramic views over the city. From my balcony after dark, I could see the glow of the Beşiktaş Stadium, which I later discovered was for the Europa League football final. Coincidentally, Hilton Istanbul Bosphorus was also where the soon-to-be champions, Aston Villa, were staying.

Another famous face, albeit from further back in time, was jazz musician Louis Armstrong, who performed here in 1958. The hotel’s Sazzou jazz bar pays homage to Armstrong through its cocktail menu and intimate live music sessions.

Turkish delights with a twist

Breakfast at restaurant Arlo is an elaborate affair, with an abundant spread of regional cheeses, honey, olives, freshly baked simit (a type of bread) and countless local specialities, which are best enjoyed with several glasses of Turkish tea.

Dinner at Malva, the hotel's signature restaurant, led by chef Sefa Birinci, took a contemporary approach to cooking with fresh Anatolian ingredients. Each course built playfully upon the last, beginning with warm potato bread, accompanied by a lit edible candle made from kefir-fermented homemade butter. Standout dishes included braised artichoke with pea sorbet, balancing sweetness with earthiness; delicate manti (dumplings) filled with richly flavoured ribeye and topped with caramelised onions; and a herbaceous sorbet of coriander, parsley and mint to refresh your palate.

What to see in Istanbul

As comfortable as the Hilton is, Istanbul is a vibrant, fascinating city to explore. Depending on the length of your stay, you may want to dedicate a whole day to exploring a different corner. On my first day, I took a guided tour through Sultanahmet, exploring the Hagia Sophia, the Basilica Cistern and the Blue Mosque. Afterwards, you can wander through the 15th-century Grand Bazaar, where spices perfume the air, and lanterns light the market's passages in vibrant shades of blue.

In Beyoglu, you can ride the nostalgic red tram along Istiklal Avenue before climbing Galata Tower for sweeping views over the Golden Horn, an inlet of the Bosphorus that separates old Istanbul from new. Don't forget to sample Turkish delight in many flavours, and if you're an avid coffee drinker, do try a traditional Turkish coffee, brewed slowly in hot sand.

You will also want to take a ferry across the Bosphorus to Kadıköy, which offers a more relaxed take on the city. There, you'll find waterfront tea gardens and it's best to arrive hungry. You are bound to discover mouth-watering kebabs for sale here or one of Istanbul's famous “wet burgers”, which are burgers drenched in tomato sauce.

No matter how many days you spend in Istanbul, the chances are that you'll find it's not enough to see everything the city has to offer. Conrad Hilton, the founder of the hotel chain, famously remarked, “London or Chicago… neither of these can ever hope to match the magic of this famed city of antiquity”. More than 70 years after he opened the Hilton Istanbul Bosphorus in the city, it's hard to disagree.

Oojal was a guest at Hilton Istanbul Bosphorus. From £232 per night. Visit hilton.com for more information.

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After years of being told to spend our pensions last because they could be handed down free of inheritance tax, a new rule coming in from next April flips that guidance on its head. From 6 April, 2027, most unspent pensions passed on will be included in the estate for inheritance tax (IHT) purposes and could be taxed at 40%.

The move has triggered a big change in behaviour, with many over-55s (the earliest you can currently take your pension) withdrawing more of their money sooner rather than later, often to help out younger generations. Experts are cautioning about knee-jerk financial decisions, however.

Michelle Holgate, director and wealth manager at RBC Brewin Dolphin, said: "The inclusion of pensions in estate calculations for inheritance tax purposes from April 2027 is already reshaping how clients and advisers are approaching planning conversations.

“For some retirees, the instinct to act quickly by drawing down a pension and gifting the proceeds to children is understandable, but there are a number of important considerations.”

Record pension withdrawals

In the 2025/26 tax year, £22.4 billion in taxable payments was withdrawn from pensions flexibly – marking a new record, according to HMRC. This has increased by £3.8 billion in the previous financial year (2024/25). It is also up by £7.1 billion since 2023/24.

Much of this money is being given away to younger generations as gifts during their parents or grandparents’ lifetime. More than half of first-time buyers received financial help from family in 2025, for example, amounting to a total of £8.3 billion, according to research by estate agency Savills.

At the same time, just over two thirds (67%) of parents and grandparents already funding private school or university costs say the inheritance tax change is motivating them to provide further financial support during their lifetime, a separate survey of 1,010 people in May 2026 by Rathbones found.

“More clients are choosing to help children and grandchildren now – whether that’s supporting housing, education or other financial needs – rather than waiting for assets to pass on death,” said Ross Coombes, senior financial planning director at Rathbones.

“For many, the ability to see the impact of that support during their lifetime is a key motivation, alongside the tax considerations.”

Gifting – things to consider

1. Care costs

Before taking any action, experts said it is important to be realistic about your retirement needs and health so you can plan around how much money you are likely to need during your lifetime.

Giving away lump sums may cause issues further down the line if you need to rely on local authority support to meet care costs. The rules on ‘deliberate deprivation of capital’ may mean that the local authority may seek to recover their extra costs from you or those you have made the gift to.

Nick Clark, chartered financial planner at Lubbock Fine Wealth Management, said: “If you make large gifts or spend your tax-free lump sum too quickly, you cannot get that money back later in your retirement when you might need it most – and you may face undue tax liabilities during your lifetime.”

2. Income tax

Pulling large amounts from your pension to avoid your loved ones paying an IHT bill tomorrow could leave you with a big income tax bill today.

“While up to 25% of any withdrawal may be tax-free, the balance is added to your other income in that tax year. For some this may mean they pay 40% (or 45%) on some or all the taxable amounts [of the pension withdrawal],” said Sean McCann, chartered financial planner at NFU Mutual.

Becoming a 40% (or 45%) taxpayer has other knock-on consequences, such as a reduction in the tax-free savings allowance of £1,000 to £500 if you become a 40% taxpayer and complete loss if you move into the 45% band, he added.

Some of the other consequences of moving up a tax band include paying a higher tax rate on dividend income (if you have used your £500 a year dividend allowance) and the loss of the marriage allowance (if your spouse or civil partner claimed it) if you’re no longer a basic rate taxpayer.

If the taxable pension lump sum together with your other income means you breach £100,000 of taxable income per year, you begin to lose the tax-free personal allowance. “In which case, anything between £100,000 and £125,140 is effectively taxed at 60%’’, McCann said. This is known as the 60% tax trap.

Taking more than the 25% tax-free allowance will also trigger the Money Purchase Annual Allowance, restricting future gross annual contributions to a maximum of £10,000.

3. Inheritance tax

Inheritance tax is one of the most feared but least understood taxes. The rules can be tricky to navigate so it may be worth speaking to a professional financial adviser, but there are some key things to remember.

First up is the seven year rule. ‘’Lump sum gifts remain in the estate for seven years – they effectively ‘eat’ the £325,000 tax-free allowance first. The reduction if you die between years three and seven only applies if more than £325,000 gifted’’, said McCann. In some cases, earlier gifts also need to be reviewed. Ensuring the history of gift making is properly analysed is essential and easily overlooked.

Gifts from regular income, which don’t impact normal standard of living, are free of IHT immediately. McCann said many people are buying annuities and giving away excess income, “in the knowledge they can stop the regular gifts if their circumstances change’’. Keeping good records of the gifts are essential, though.

You can also give away up to £3,000 each tax year and carry forward any unused allowance for one year, via the annual exemption. Used consistently it can make a meaningful difference, provided clear records are kept, Tony Cockayne in the disputed wills and estates team at law firm Michelmores says.

Marriage and civil partnership gifts can be exempt, but only within set limits: £5,000 from each parent, £2,500 from each grandparent or great-grandparent, £2,500 between the couple, and £1,000 from anyone else.

The gift must be made before the ceremony and conditional on it taking place, so leaving it until afterwards risks losing the exemption, Cockayne warns.

Thousands of households living near new or upgraded electricity pylons and power lines are set to start receiving an energy bills discount worth £250 a year.

The government has revealed the first locations where outdated electricity infrastructure will be upgraded, with households living close to these projects eligible for money off their bills.

The scheme is due to start in the first half of 2027, with most eligible households getting an automatic discount on their electricity bill every six months via their electricity supplier.

It is understood up to 50p a year will be added to all energy bills to fund the initiative.

Michael Shanks, energy minister, said: “Upgrading Britain’s electricity grid is a vital part of how we deliver secure, homegrown energy and unlock economic growth across the country.

“It is a moment of national renewal – upgrading what was built largely in the 1960s for the modern age to bring down electricity bills for households across the country.

“It’s vital we build again as a country and we are determined those communities which host pylons should benefit, which is why we’re bringing down the energy bills of those hosting this vital national infrastructure.”

Who is eligible for the discount?

Households who live within 500 metres of the new or upgraded electricity infrastructure, such as pylons and power lines, will be eligible for the Bill Discount Scheme.

The government expects between 120,000 and 160,000 homes to receive a discount through the scheme over the next 10 years.

However, the locations where the updates will be carried out are being released in waves. The first 43 locations where these upgrades are planned to take place have now been released by the Department for Energy Security and Net Zero (DESNZ).

England

• Bramford to Twinstead – East Anglia
• Norwich to Tilbury – East Anglia, and East of England
• Eastern Green Link 3 - converter station – East of England
• Eastern Green Link 4 - converter station – East of England
• Sea Link - converter station – East Anglia
• Grimsby to Walpole – Yorkshire and the Humber, and East of England
• North Humber to High Marnham – Midlands
• Brinsworth to High Marnham – Yorkshire and the Humber, and the Midlands
• Chesterfield to Willington – Midlands
• North London Reinforcement – London/ South of England

Scotland

• Banniskirk Hub 400 kV substation and HVDC converter station – North Scotland
• Cambushinnie 400 kV substation – North, and central Scotland
• Fort Augustus Substation 400 kV Upgrade – North Scotland
• Spittal - Loch Buidhe - Beauly 400 kV overhead line – North and North West Scotland
• Beauly - Peterhead 400 kV overhead line – North, and North East Scotland
• Carnaig 400 kV substation – North Scotland
• Hurlie 400 kV Substation – North East Scotland
• Kintore - Tealing 400 kV overhead line – North East Scotland
• New Fanellan 400 kV substation and Converter Station – North Scotland
• Creag Dhubh – Dalmally 275 kV overhead line – West Scotland
• Edinbane substation – West Scotland
• Broadford substation – West Scotland
• Skye 132 kV overhead line reinforcement – West Scotland
• Netherton Hub – North East Scotland
• Tealing - Westfield 400 kV overhead line – Central, and East Scotland
• Bingally 400 kV Substation – North Scotland
• Greens (New Deer 2) 400 kV substation – North East Scotland
• Lewis Hub – West Scotland
• Emmock 400 kV Substation – North East Scotland
• Crarae 275 kV Substation – West Scotland
• Coalburn Substation – Central Scotland
• Mark Hill Substation– South West Scotland
• Stranoch OHL and Substation – South West Scotland
• Chirmorie – South West Scotland
• Branxton Substation – South East Scotland
• Sanquhar Substation- South Scotland
• Denny to Wishaw 400 kV Reinforcement (DWNO) – Central Scotland, and South Scotland
• Eastern Subsea HVDC Link from Westfield to South Humber (TGDC) (EGL4) – East of Scotland
• Kincardine North – Tealing 400 kV Substation (TKUP) – East of Scotland
• Kincardine North 400 kV Substation (LWUP) – East of Scotland
• Kincardine North – Wishaw 400 kV Reinforcement (DWUP) – Central Scotland and East of Scotland
• Gala North – Harker Area 400 kV (CMN4) – Scottish Borders

Wales

• Pentir to Trawsfynydd – North Wales

If you live within 500 metres of the above locations, you may start receiving a discount on your energy bills from early 2027.

Some of the 43 projects in this first wave have not yet received planning consent or are still going through an appeals process though. Households will only qualify for the Bill Discount Scheme after construction has started on them.

How will the discounts be applied?

Most qualifying households will automatically receive the discount.

Some households, such as those on commercial meters, may need to apply for the discount. The government or Ofgem will contact you if you need to take action.

Discounts will be applied to households’ electricity bills by their supplier every six months.

Why is the government updating the network?

The government wants to update the network as most of it was built in the 1960s.

The network is being upgraded to handle a higher capacity of energy, including from renewable energy produced by solar panels and wind farms.

The government also says upgrading the network will reduce the UK’s reliance on imported gas and lead to cheaper energy bills for consumers.

It comes as ministers look to tackle higher energy bills more broadly for households, including removing VAT on electricity bills from October which is expected to take £45 off the yearly price cap.

Andy Burnham is the UK’s newest prime minister, and the seventh since 2010. It makes him the 59th person to hold the office in Britain.

Each one has left their mark on UK history, but how much do you know about them?

Test your knowledge in our prime ministers quiz.

How well did you do in our prime ministers quiz? Share your results on social media.

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• Will taxes rise in the Burnham government's first Autumn Budget?
• Three tasks for new chancellor John Healey
• Can Andy Burnham’s Manchesterism work for Britain?

Inheritance tax (IHT) receipts are on the up and expected to rise further as more estates are dragged into HMRC’s net.

The government raked in £8.5 billion in inheritance tax receipts in 2025/26, with the Office for Budget Responsibility (OBR) forecasting the tax take will increase to almost £15 billion by 2030/31.

The watchdog says rising equity and house prices, frozen tax thresholds and the impact of policies announced in the 2024 Autumn Budget, namely unused pensions falling under the scope of IHT from April 2027, will, in part, cause the rise.

It means families may want to take steps to ensure their estate’s eventual IHT bill is as low as possible.

Unfortunately, many are still making six costly mistakes, says Clare Moffat, pensions and tax expert at retirement firm Royal London.

1. Not knowing the implications of cohabiting vs. marrying

Every person receives a £325,000 tax-free threshold, known as the nil-rate band. Any portion of the estate over this threshold could be subject to IHT.

For example, if you died and your estate was worth £300,000, there would be no IHT liability.

If you have a husband, wife or civil partner and you die, any unused nil-rate band is passed to them, taking their threshold up to a potential £650,000.

If a property is being passed to children or grandchildren, there is an additional residence nil-rate band of £175,000 which can be transferred as well, potentially taking someone’s IHT-free allowance to £1 million.

However, these bands can only be transferred if you’re married or in a civil partnership, rather than if you’re cohabiting with someone.

Moffat says: “For me, this tops the list of mistakes that people can make if they're in a long-term relationship.

“This means unmarried couples are potentially missing out on a total of £1 million in inheritance tax exemption.”

2. Not making the most of exemptions during your lifetime

There are a host of exemptions and allowances which mean you can gift money during your lifetime and it won’t fall into your estate for inheritance tax purposes.

For example, you get a £3,000 annual exemption each year. If you didn’t use it all in the previous tax year, you can carry the unused allowance forward to the next – but only for one tax year.

You can also donate £250 cash gifts to as many people as you want per tax year, unless you have used another allowance, like the annual exemption, on that person.

You can also gift an unlimited amount of money, so long as it is made out of ‘surplus income’ – that is money from pensions, rent or dividends – and it doesn’t reduce your standard of living.

Gifting money out of surplus income could become a useful way to reduce inheritance tax liabilities when unused pensions fall under the scope of IHT from April 2027.

Moffat says: “Gifting during life is not for everyone but for people who know that they will have more than enough to live on when they're retired, the benefits are that it can help family when they need it most, be stopped at any time and you don’t need to worry about the seven-year rule.”

The seven-year rule means you can give away as much of your estate as you like during your lifetime, and if you live for another seven years the gifts won’t be subject to IHT.

3. Not keeping records

Keeping detailed records of any gifting throughout your lifetime will make it easier for the executors of your will to evidence it when they have to pay the IHT bill.

A lot of people don’t do this. Research from financial firm Canada Life found 54% of over 55s who had given a financial gift in the previous seven years had kept no record of it.

Executors need to fill in the IHT400 form upon someone’s death to report the full value of their estate. The IHT403 form has to be filled in alongside it to disclose lifetime gifts.

Delays in this form-filling process can mean a longer wait for probate to be granted and can increase the risk of queries from HMRC, prolonging the closure of the estate.

4. Not having important conversations

IHT disputes among families are on the rise, so having honest conversations with loved ones has never been more important.

This can prevent legal costs racking up and delays in probate being granted, leaving you unable to deal with the estate.

Moffat says: “Having good, open conversations about gifts or what a person's wants and wishes are for what's to happen after their death could prevent costly legal action at what is a difficult and emotional time for family, friends and loved ones.”

5. Forgetting the £2 million taper

The residence nil-rate band starts to reduce by £1 for every £2 your estate is worth more than £2 million.

Once someone’s estate reaches £2.35 million, the £175,000 residence nil-rate band is lost completely. A surviving spouse completely loses their residence nil-rate band once their estate breaches £2.7 million.

Moffat says: “For people who might be close to this bracket it's important to know this as they'll need to keep an eye on how much their total estate will be worth.

“They could take steps to reduce it to below £2 million using some of the options to gift during their lifetime, meaning the residence nil-rate band is available again.”

6. Not considering where inheritance tax should be paid from

If you make a larger gift which is not covered in the gifting exemptions and exceeds your inheritance tax allowance, for example to a child or grandchild to buy a house, and then die within seven years, IHT could be owed on that gift.

The beneficiary of the gift may not be able to pay this bill if it comes unexpectedly, the gift is tied up in property or has already been spent.

To reduce the risk of this, the donor of the money could take out a ‘gift inter vivo’ life insurance policy. This would cover the cost of the eventual IHT bill for the beneficiary, should you die within seven years.

Typically, these policies pay out less over time, as taper relief is applied to the IHT liability depending on when a gift was made.

For example, if you make a larger gift and die less than three years later, it would be taxed at 40%, but if you die six to seven years later, the rate drops to 8% on the gift.

While equity markets stuttered in July – the MSCI World Index, which represents 85% of the total market capitalisation of each developed market in the world, grew just 0.5% during the month – flows into exchange-traded products were strong.

European-listed exchange-traded funds (ETFs) and exchange-traded commodities (ETCs) attracted flows of €47.3 billion in July, up 28.5% from €36.8 billion the previous month, according to data from investment research firm Morningstar.

Fund flows can give a broad indication of how investors feel about the market at a given point of time, though there is of course no guarantee that this will continue in future.

Among European-listed ETFs, those focusing on equity investing attracted €34.2 billion in flows during July, up from €29.9 billion in June. ETFs tracking bonds attracted €8.8 billion in July, up from €7.7 billion in June.

“Despite a softer month for US equities, money continued to flow into both global and US-focused equity [ETFs], reflecting investor conviction in the long-term artificial intelligence and technology-led growth story,” said Jose Garcia-Zarate, senior principal at Morningstar. “Investors largely treated market weakness as a buying opportunity, continuing to allocate capital to growth-oriented exposures.”

While ETF flows remained strong in aggregate, there was some divergence between the allocations towards different styles of fund.

The Europe-listed ETF sectors that saw the biggest inflows and outflows

Blend equity ETFs (those holding a combination of value and growth stocks) saw some of the largest inflows among Europe-listed equity ETFs during July, according to Morningstar’s analysis.

Global large cap blend equity ETFs attracted €10.1 billion in flows during the month, followed by US large cap blend equity at €8.6 billion.

While ETFs that contained a blend of US large- and small-caps saw the largest flows, their counterparts that focused on either growth or value saw divergent flows. ETFs targeting US large cap growth stocks were among those that saw the largest outflows (€1.4 billion worth), but US large cap value ETFs saw outflows of €117 million.

^{Source: Morningstar Direct. Data as of 31 July 2026.}

“Interestingly, we saw little evidence of a meaningful rotation into defensive or value strategies during the pullback,” said Garcia-Zarate.

The ETF sectors that saw the largest outflows were global large cap value, which saw outflows of €539 million, and Europe ex-UK with €442 million in outflows.

Which Europe-listed ETFs saw the largest flows during July?

Vanguard’s FTSE All-World UCITS ETF (LON:VWRP) topped the list of ETFs seeing the largest inflows during July, with €3.3 billion flowing into the fund. iShares MSCI Japan ETF (LON:IJPN) came second, with €1.6 billion inflows.

State Street SPDR MSCI World ETF (LON:SWLD) saw the largest outflows, at €1.9 billion, followed by Xtrackers S&P 500 Swap ETF (LON:XSXG) which registered €981 million outflows.

^{Source: Morningstar Direct. Data as of 31 July 2026.}

What happened to global ETP flows in July?

The data on flows into European-listed ETFs and ETCs was consistent with the picture that global ETP flows painted.

Global flows into exchange-traded products (ETPs) – which includes ETFs and ETCs – hit a record $362.6 billion in July, according to data from asset manager BlackRock.

BlackRock’s analysis showed that flows into equity ETPs rose for the third consecutive month to $64.8 billion.

Tech-focused ETPs saw higher flows than any other sector. Flows into tech ETPs reached a record $60.5 billion in July, smashing through the previous record of $32.0 billion, set the previous month.

Younger people faced with historically high housing prices and ongoing cost of living pressures may be hoping an inheritance will help them out.

Nearly one in four (23%) Gen Z (born between 1997 and 2012) say they are not prioritising retirement saving because they expect to inherit money or property.

This view is also common among Millennials (born between 1981 and 1996), with one in five (20%) of this generation saying the same, according to a Standard Life survey of 6,000 people conducted in June 2026.

Grandparents who have benefited from house price increases and may be enjoying bumper pensions, and who are worried for their younger loved ones’ financial prospects, could feel pressure to give away their homes to grandkids now, in an attempt to reduce the risk of them paying inheritance tax later.

Experts have said it’s trickier than just handing over the keys, however.

How much can I give away free of inheritance tax?

To quickly recap on the key inheritance tax rules – every homeowner has two inheritance tax-free allowances.

You have a nil rate band of £325,000 and there is a residence nil rate band of up to £175,000 when a family home is passed to direct descendants, including grandchildren, though this second allowance is tapered for estates above £2 million.

Married couples and civil partners can inherit each other’s allowances, meaning up to £1 million may be passed on by them after death before IHT becomes due.

Also, most gifts a person makes during their lifetime are exempt from inheritance tax – but the person must survive for seven years after giving it (these are known as ‘potentially exempt transfers’).

A gift can be money, property or possessions – anything that has value. A gift must reduce the value of the estate and you must include any loss incurred as part of the gift. For example, if a person sells their house to a child for less than it’s worth, the difference in value counts as a gift.

An outright gift is where value is transferred to another individual without conditions.

Losing legal control

Many people assume giving away their home – often one of their most valuable assets – is a straightforward way of reducing inheritance tax. The reality is often far more complicated.

Legally there are a number of things to consider.

When the original owner gives their property away, they lose legal control over it. This is true whether the original owner remains living in the property or not – but several factors mean it can be especially tricky if they continue to reside there.

Laura Walkley, partner and head of the private client department at TWM Solicitors LLP, said: “Even where there is complete trust between family members, circumstances and relationships can change over time. In a worst-case scenario, the original owner could lose their home.”

Four key scenarios could put the person giving away the property at risk, Walkley pointed out; disputes, debt, divorce and death.

1. The donor and recipient could fall out, and the recipient may decide to evict the original owner or to sell the property.
2. The recipient might also need to borrow against it, exposing the property to claims by creditors.
3. If the recipient goes through a divorce, the property may be vulnerable to claims for financial provision by a former spouse.
4. If the recipient dies before the person who made the gift, unless suitable arrangements are put in place, the property will pass under the recipient’s will or intestacy, potentially ending up in the hands of people the donor never intended to benefit.

Inheritance tax property gifting rules

Giving your home away while continuing to live in it is also one of the biggest inheritance tax misconceptions – it doesn’t automatically mean your loved one avoids inheritance tax.

Shaun Moore, tax and financial planning expert at financial advice firm Quilter, said: “If you gift a property but still benefit from living there, HMRC will treat it as a 'gift with reservation of benefit'. This means the property would still be counted as part of your estate for inheritance tax purposes.”

To avoid this, you would typically need to pay a full market rent to the new owner, plus your share of the bills. This creates its own complications and could generate an income tax liability for the recipient, who would also need to declare that rent on their annual tax returns.

You do not have to pay rent to the new owners if you only give away part of your property and the new owners also live at the property.

There’s normally no inheritance tax to pay if you move out and live for another seven years.

Capital gains tax problem

Grandparents with more than one property who want to give one away to a grandchild could also find there may be capital gains tax implications if the property is not the giver’s main residence.

Only a person’s private residence is exempt from capital gains tax. “So, if I gifted a buy-to-let, for example, the gift is viewed as a disposal for CGT purposes that realises any gain made,” said Moore.

This triggers an immediate CGT bill. Even if you receive no money for the property, you must pay capital gains tax on the difference between what you originally paid for it and what it is worth on the day you gift it.

Care costs

Permanently giving away your home could also create headaches if you come to need care in later life. You won’t be able to sell your home or use equity release, for example, to unlock some of your housing wealth to pay for your care.

At the same time, under deprivation of assets rules, local authorities could scrutinise gifts made later in life if they believe assets have been transferred primarily to avoid care costs.

Consequently the council may be reluctant to pay for your needs or even demand money back from the grandchild you gave the property to.

Alternatives to grandparents giving away property

Before taking the huge step of giving away your home (or another property) to your grandchildren, it is important to establish whether gifting property before death is even necessary.

Tom Kimche, financial adviser at Netwealth, said: “Outside of property, there are several other ways to gift which could be a better fit during your lifetime.

“For example, beyond the annual £3,000 gifting exemption, gifts from surplus income can often fall outside the scope of IHT if properly structured and documented.

“Larger gifts can also leave your estate for IHT purposes if you survive for seven years after making them.”

Structure is another important consideration. Gifts can be made directly or through relatively simple structures such as bare trusts.

“If you would like greater control and asset protection, discretionary trusts or Family Investment Companies (FICs) may be worth considering, though they add cost, complexity and additional tax considerations,” said Kimche.

Retail investors were in a buoyant mood early in the summer as new figures show they poured £3.8 billion into investment funds during June, the highest monthly total since August 2021.

The data from The Investment Association (IA) – an industry body representing the UK’s investment managers – showed that retail investors allocated £12.3 billion into funds during the first six months of the year.

June’s positive fund flows marked the eighth consecutive month of net fund inflows.

While the annual totals suggest that investors were willing to invest, there is evidence that resilience and defensiveness were top of mind.

“Investors have shown resilience by staying invested in the markets, shifting their portfolios to lower-risk strategies, with bonds, diversified mixed assets and cash-like assets leading the way,” said Miranda Seath, director of market insight and fund sectors at the IA.

Fixed income strategies saw monthly inflows of £2.3 billion, the highest monthly figure since January 2021 and up 53% from £1.5 billion in May 2026. Within fixed income strategies, funds focused on government bonds saw the largest inflow, at £674 million during June.

Despite a Memorandum of Understanding between the US and Iran alleviating pressure on oil prices and calming inflation expectations for much of the month, investors allocated their money cautiously and equity funds saw net outflows of £1.1 billion. This was, however, an improvement on the £1.5 billion outflows that occurred in May.

Where were fund flows concentrated in the first half of 2026?

Across the first six months of 2026, equity funds saw total outflows of £7 billion – though, again, this marks a slowing of outflows compared to the £14.3 billion that fled the sector in the second half (H2) of 2025.

Fittingly given the volatile year that US stocks have had, net monthly flows to the North America sector fluctuated between inflows and outflows each month during H1, but it was the only IA equity sector to end the period in positive territory, with inflows of £1.7 billion.

Seath attributed this flip-flopping to investor unease and uncertainties relating to artificial intelligence (AI).

The North American Smaller Companies sector saw its first month of inflows this year during June, bringing in a net £181 million.

Half-yearly outflows from UK-focused funds fell to their lowest level since 2021 – with £3.1 billion leaving these funds in H1 2026 compared to £4.8 billion in H2 2025.

This moderation in UK equity outflows follows a strong 2025 for UK stocks, said Seath.

“Investors may be taking advantage of a more defensive market composition in the face of broader uncertainty,” she added. “The UK market has relatively high exposure to 'halo' sectors, those with heavy assets and low obsolescence, such as mining and energy, which are often viewed as more resilient during periods of uncertainty and offer a counter trade to investments in AI and tech stocks helping to diversify portfolios.”

Funds focused on Asian equities, though, saw outflows of £1.6 billion during H1. Certain Asian markets are highly exposed to the volatility of certain parts of the AI infrastructure industry.

“Emerging markets chip manufacturers have become key players in the global AI value chain, driving strong performance but also creating potential new concentration risks in markets including South Korea,” said Seath.

Did active or passive funds see the biggest fund flows in the first half of 2026?

Fund flows are a good way to see what investors are backing in the active versus passive debate. The data from H1 2026 shows passive strategies are overwhelmingly more popular.

Tracker funds saw inflows of £9.7 billion in the first half of the year – their strongest half-year since 2024.

Most of this demand came from equity tracker funds, which saw inflows of £6.8 billion.

Actively managed equity funds, by contrast, saw outflows of £13.9 billion during the first half of the year.

In bad news for sustainable investments, responsible investment funds also saw outflows of £2.7 billion across H1, with outflows from SDR-labelled funds shedding £1.9 billion.

Insurer Admiral Group (LSE: ADM) is among several firms which earlier this year saw their share price slump because of fears that AI-powered rivals could capture most (or all) of their business. However, since then many of these stocks have bounced back, with investors deciding that such fears are overhyped.

Admiral Group's shares fell by 14% in January after US firm Lemonade, which uses AI to process claims, launched a cheap policy for self-driving cars. While the policy was aimed at US consumers, it fuelled fears about AI being used to undercut traditional insurers.

Investors also fretted that the better driving record of autonomous vehicles compared with those steered by people could reduce the need for car insurance. Some analysts, such as AJ Bell's Dan Coatsworth, wonder whether car insurance will eventually be purchased by car manufacturers rather than by individual drivers.

How Admiral Group is using AI to cut costs

Yet even if such fears come true in the very long run, it's worth noting that full self-driving for individual cars (as opposed to a relatively small number of taxis currently on the streets) is at least a decade away from mass adoption. In any case, Admiral Group has itself been using AI and digitisation to cut costs and give it an advantage over its main rivals.

Earlier this year, Admiral Group also bought Flock, a technology firm it had been working with. The purchase gives it full access to, and ownership of, Flock's technology, which uses AI and telemetry (the process of collecting data from remote sources and passing it to a receiving system) to judge how well people are driving.

Meanwhile, Admiral Group has been taking steps to diversify its business by branching out into household, travel and pet insurance. While these areas currently make up only a small proportion of overall profit, they are growing at an extremely rapid rate, which should improve the group's medium-term prospects.

Meanwhile, sales almost tripled between 2021 and 2025, and are forecast to keep growing over the next few years. While profits have been more volatile, they have increased since 2021. Admiral boasts strong margins, with a double-digit return on capital employed. This has allowed the group to raise dividends to record levels. The stock's valuation also looks attractive at 15 times expected 2027 earnings and a dividend yield of just under 5%.

Admiral Group's share price has plenty of momentum behind it, having beaten the overall UK market over the last one, three and six months. It is trading well above its 50- and 200-day moving averages, and has also been one of the best performers in the FTSE 100 over the last six months. I suggest that you go long at the current price of 3,772p at £1 per 1p. I would put the stop-loss at 2,800p, which would give you a total downside of £972.

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.

European stocks are set to get a boost. As the world becomes more divided and unpredictable, countries are shifting their focus back to producing things at home. They are realising that while there are benefits to global trade and specialisation, relying too heavily on other nations leaves them exposed. Europe, which embraced globalisation and trade, is left vulnerable.

The continent has therefore set up several major funding programmes to strengthen its own defence, infrastructure and industrial capacity. We call this the “Making Europe Great Again” agenda. It is creating a potential tailwind for European stocks.

Three European stocks to watch

Ørsted A/S (Copenhagen: ORSTED) is the largest energy company in Denmark and a global leader in the development, construction and operation of wind farms. It boasts the offshore wind farm with the highest capacity in the world. Renewables are seen by Europe as a solution to its dependence on gas imports.

Despite a long-term decline in the share price, Ørsted has seen key financial metrics, including profit and cash flow, increase since 2021. The consensus among analysts is that Ørsted has become a buying opportunity, with increasing levels of cash and tradeable assets improving the company's financial health.

Ørsted is engaged in projects spanning multiple continents, notably the completion of Hornsea 3, a wind farm in the North Sea off the UK coast that could provide continuous power to 3.3 million homes. This project and others are eligible for support from €800 million of a €1.2 billion loan facility from the European Investment Bank that remains outstanding.

Our second European stock is ACS Group, or Actividades de Construcción y Servicios (Madrid: ACS), a Spanish company providing construction and related services. ACS recently took the decision to increase its overall exposure to digital infrastructure, taking a primary role in a partnership with BlackRock under which the €2 billion joint venture will collaborate to build a data-centre pipeline with a capacity of 1.7 gigawatts.

ACS has made clear that this is one step on the journey towards establishing the firm as a global leader in the digital-infrastructure sector. This shift away from third-party contracted involvement to ownership and development of data-centre facilities clearly displays ACS's desire to insert itself into this rapidly expanding industry. ACS has predicted that the firm's overall income from digital infrastructure will rise from €10 billion in 2025 to €25 billion in 2030, suggesting scope for considerable returns in future.

Thales (Paris: HO) is a French company providing various offerings in the defence, aerospace and digital-security sectors. Defence makes up 50% of sales. Long-term public-procurement contracts predominate in this area, making Thales a potential recipient of Europe's defence-spending splurge.

Thales has signed both public and private partnerships, including making a 60% jump in the production of radar antennas for the Netherlands' Ministry of Defence and a deal with Renault to produce 1,000 units per month of the Thales Toutatis loitering-munitions drone, up from 150 per year.

The second agreement is particularly noteworthy. The use of drones in the conflict between Russia and Ukraine has brought the concept into the mainstream. From early 2024 through to summer of the following year the number of drones used in the conflict increased 1,000%. With European countries realising their own need to catch up in this regard, Thales appears to be positioning itself to follow this trend upwards.

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“Baby-faced” billionaire Yang Zhilin recently dealt the biggest shock to Western markets since DeepSeek, wiping hundreds of billions of dollars off the valuations of AI and chip stocks.

Kimi K3, developed by Yang’s Moonshot AI, is the most advanced “open-weight” large language model to emerge from China yet, topping many benchmarks with its capabilities “at a third of the cost”.

At a stroke, notions of Silicon Valley's technical dominance have been swept away, with its developer, Moonshot AI, challenging the likes of Anthropic and OpenAI at the frontier – prompting questions about their mega-valuations.

Moonshot's founder has a good story to tell too, says The Telegraph. Yang Zhilin is a prog-rock devotee who named his firm in honour of Pink Floyd's The Dark Side of the Moon, seemingly in tune with Western ideas and culture.

The 34-year-old has built a “mythology” that has “helped distinguish Moonshot from China's otherwise austere AI industry”, says the Financial Times. Employees describe an intense culture of long hours in Moonshot's headquarters in Beijing's Haidian district. “But Yang has also infused the company with his own... obsession with rock music... A white piano stands prominently in the office.”

Yang Zhilin heads to China's MIT

Yang Zhilin was born in 1992 and grew up in Shantou in the southern state of Guangdong – China's industrial heartland. Former classmates recall that he was always “unusually gifted”. Having started coding in high school, he won first prize in the National Olympiad in Informatics, earning him direct admission to Tsinghua University, often dubbed “China's MIT”.

Even in that specialised atmosphere, he was known as “Yang the genius” because of the way he managed to balance elite academic performance with his musical interests. He was a drummer in a campus band called Splay, organised music competitions and gained a reputation for being “romantic and idealistic”. Some reports suggest that he switched his undergraduate degree from thermal engineering to computer science, having been inspired by a Haruki Murakami novel.

In 2015, Yang Zhilin completed his PhD at Carnegie Mellon University, where he studied under AI gurus Ruslan Salakhutdinov and William Cohen, worked at Google Brain and Meta, and founded a retailer-focused start-up, Recurrent AI, before returning to China in 2019.

In 2023, he co-founded Moonshot AI with Tsinghua University classmates. “Recurrent AI taught him how to woo investors and scale a business,” says The Telegraph. “But he learned painful lessons too.” Moonshot's early years, when he attempted to build a “Chinese-first version of ChatGPT”, were marred by a lawsuit from investors in Recurrent AI that saw him hauled before the Hong Kong International Arbitration Centre before a settlement was reached.

Moonshot's chatbot Kimi was an instant hit, but also “plagued by outages and... overtaken by larger rivals”, says the FT. Rival DeepSeek's successful R1 model was another “existential test”. Yang Zhilin returned to the laboratory to focus on model training. He also made the pivotal decision to make Moonshot's AI models available to developers globally.

Moonshot's open approach has enabled China to “cast itself as a champion of low-cost, open-source AI”, says The New York Times. But that openness has raised concerns in Beijing about “the potential threats the technology might pose” to Communist Party rule. “[He] may be wise to moderate his views,” says The Telegraph. “Other tech billionaires in China have found... that the Party likes its economic champions on a short leash.”

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Investors have struggled to understand Funding Circle (LSE: FCH) since its initial public offering (IPO) in 2018. The City had been looking for a valuation of £1.75 billion, but the fintech could only get away with £1.5 billion – even though half the offer was taken up by one single “whale” investor. The shares then fell 23% in the first week of trading, and they have never recovered to trade above the offer price of 440p.

However, after a long spell marred by poor returns, losses and uncertainty, the outlook may now be improving. To see why, we should first look at what the business does and how the model has changed.

Funding Circle's business model and change of direction

Funding Circle was founded to help improve access to finance for the UK's small and medium-sized enterprises (SMEs) by connecting investors and borrowers. In its first few years, the company spent heavily on technology to build its platform and marketing to reach to potential customers. These efforts consumed all of its profits and more. In 2018, 2019 and 2020, the business lost a total of £230 million.

Initially, it started off as a peer-to-peer (P2P) lending platform connecting retail investors with SMEs that wanted to borrow. This was designed to disrupt the traditional lending market where a lender uses its own balance sheet to fund loans.

Instead, Funding Circle provided the technology that sat in the middle connecting the two parties. However, this proved to be too costly to be effective. So the group suspended access to its P2P platform to new investors in April 2020 at the start of the pandemic and permanently closed the platform in 2022.

The pandemic enabled Funding Circle to make the most of government lending schemes, allowing the business to drastically reduce its funding costs; today, a combination of government and institutional financing, heavily skewed towards the latter since the end of Covid, meets the group's funding needs.

The company reaped the benefits of its strategic shift almost immediately. For the 2021 financial year, it booked a profit of £64 million, a sharp turnaround from the prior year's loss of £108 million. Most of this growth was driven by the government's Coronavirus Business Interruption Loan Scheme (CBILS) scheme.

In the following two years, Funding Circle slumped back to a loss. Then, after two years of losses (totalling £40 million), it returned to profitability in 2024. This time it looks as if the lender has cracked the code.

Funding Circle is at inflection point

Funding Circle has now reached “escape velocity” after reaching a “key earnings inflection point”, say brokers Canaccord Genuity. For 2025, the group reported sales of £204 million and adjusted profit before tax of £26 million. In the first six months of the current financial year, management has outlined revenue growth of 50%, with £23 million of profit before tax at a 17% margin.

The firm tends to see more borrowing activity in the first half of the year. Even so, based on activity in the second half of 2025 and first half of 2026, Canaccord Genuity estimates a run-rate of more than £250 million of revenue and £37 million of profit before tax. These numbers are all the more impressive considering the funding environment. The last time the company was this profitable was during the pandemic, when demand was high and money was cheap. Today, rates are still elevated and economic activity is mixed, to say the least.

Funding Circle has always had a technological edge. This allows it to assess borrowers quickly and efficiently before making a lending decision. The group also now runs servicing, reporting and performance history at a scale that is difficult for newer entrants to replicate. That's why it's become good at attracting institutional capital. Its well-honed, home-grown tech does the hard work, giving capital providers the returns they require with low risk.

In the first half of the year, the company inked £900 million of forward flow agreements – commitments from funders to purchase a regular stream of newly created loans – with lenders such as Deutsche Bank. A total of 93% of assets under management now relate to this off-balance sheet funding.

Funding Circle has an edge in information

Meanwhile, Funding Circle has branched out into new products, including short-term lending. In doing so, it has evolved from a term loan provider into a broader SME finance platform built around three customer propositions: long and short-term loans, FlexiPay (buy now pay later) and credit cards.

These increase the platform's appeal to borrowers, while also helping Funding Circle enhance its information edge. A borrower that uses all of these products generates a huge amount of data to feed back into Funding Circle's lending models. Those models now have 15 years of proprietary data across credit cycles to underpin lending decisions.

As Funding Circle builds on the foundations that it has created, profit growth should accelerate over the next few years. Canaccord Genuity has pencilled in top-line growth of 50% to nearly £300 million by 2028. As the group scales its tech platform, its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) margin will expand from 15.3% to 27.6% according to the broker. Ebitda is forecast at £82.2 million for 2028, with profit before tax rising to £72 million.

Cash balances are also expected to rise materially, from £101 million at the end of 2025 to £257 million by 2028. Based on these forecasts and at a share price of 226p, Funding Circle is trading at eight times pre-tax profits for 2028 after adjusting for cash, with a projected free cash flow yield of 15%. That's far too cheap for a business that's set to grow its top line at a compound annual rate of more than 20% for the foreseeable future.

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London hasn't been “left behind”, it hasn't suffered from “deindustrialisation”, and there is little sign that it was harmed by “40 years of neoliberalism”. So Britain's new prime minister, Andy Burnham, probably hasn't given much thought to London, except as a place to escape as he pursues his relentless focus on Manchester and the rest of the North. But he should. There are worrying signs that the economic decline of the capital is starting to accelerate – and that is turning into an emergency.

Last week, we learned the population is falling for the first time in three decades. More than 400,000 Londoners left the capital for other parts of the country in 2025, according to the Office for National Statistics. Sure, plenty of people still moved to London, but there was still a net outflow of 130,000. That might make it easier to get a seat on the tube, or to find a flat to rent, but it is hardly a sign of economic vibrancy.

What's more, the latest data from HM Revenue & Customs showed that figure includes 1,200 non-doms. Not everyone approves of allowing wealthy foreigners to pay less tax than the locals, but there is no question that the money they brought into the country fuelled a lot of London's finance and service industries, from lawyers to wealth managers to family offices.

Meanwhile, the property market is slumping. In Westminster, prices are down by 23% over the last year, and are still going down. It is almost as bad in other areas, with falls of 10% in Kensington and Chelsea, and 7% in Hammersmith and Fulham. Measured in real terms, prices are now down by 40% or more from their peak, as a slow-motion crash unfolds.

Even some of our best-known retailers are feeling the pain. Harvey Nichols was one of the most glamorous stores in the capital – a destination for celebrities and high-rolling tourists from around the world. Yet its long-time owner, the Hong Kong entrepreneur Dickson Poon, has tired of its constant losses and has put the business up for sale. Rewind 20 years and the world's luxury giants, or the wealth funds of the Gulf, would be battling for control of this trophy asset. Not now. The leading bidders are Next, Mike Ashley's Frasers, and even Gordon Brothers, the owner of Poundland and Laura Ashley. There is nothing wrong with any of those companies – Next is one of Britain's best-run businesses – but they are hardly the kind of owners associated with Knightsbridge. London’s high-end retailers are not worth as much any more.

London is the engine of the British economy

Add it all up, and one point is surely clear: London's economy is in deep trouble. That matters for the rest of Britain, since London is central to the wider economy. The capital accounts for over a fifth of the nation's output, even though it has only 13% of the population. The average worker is 28% more productive than workers in other parts of the country. London pays 27% of the income tax the Treasury collects every year, and 36% of the corporation tax. It is the engine of the British economy. It is impossible to imagine any other part of the country replacing it.

It is not hard to understand why London is in trouble. The decision to end non-dom status may have played well to voters and activists, but it was hugely destructive. After leaving the EU, we could have done a lot more to help the City find new business, but instead kept it wrapped up in regulation. The city's infrastructure is in steady decline, and housebuilding has collapsed. Shops have been hit by the decision to end VAT refunds for tourists. Successive governments seem to have been on a mission to damage it as much as possible.

So while the new government spends its time worrying about the regions, it urgently needs to get to grips with London's rapid decline. Once a city starts to contract, that can accelerate very quickly. The world's wealthy stay away because it does not have the services they require. Global businesses don't bother with it because it doesn't matter so much any more. Success is turbo-charged by a network effect, but so is failure. London, unfortunately, is starting to switch from one to the other.

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What is the UK's new social media ban?

The government said in June that it will bring in a social media ban for children. Modelled on a similar ban already in place in Australia, the necessary legislation is due to be put to Parliament in the autumn, and to take effect early next year. The restrictions will broadly define social media as sites that promote social interaction between users, allow them to post material or links to external sites, and use recommendation algorithms or “persuasive design”, such as infinite scrolling. The onus will be on the technology platforms to enforce the ban by introducing age checks on users; they will face fines if they don't.

What platforms will be in the social media ban?

The social media ban will mean YouTube, Facebook, TikTok, Instagram, Snapchat, Kick, Reddit, Threads, Twitch, X, and Bluesky will be off limits to under-16s. Some dating apps and live-streaming sites could also be covered. However, other platforms popular with young teens – including Discord, Roblox, Pinterest, YouTube Kids and WhatsApp – will not be banned. Educational services, e-commerce, libraries, museums and music streaming platforms are also expected to be exempt.

However, the UK is going further than Australia by also specifically banning all platforms – including Discord and Roblox, for example – from offering live-streaming for under-16s, and from allowing strangers to contact child users. Chatbots offering romantic companionship will also be banned for under-18s.

What's the rationale behind the social media ban?

Supporters argue that the evidence of harms caused by social media is now overwhelming. Numerous studies have found that teenagers who spend large amounts of time on it report higher rates of anxiety, depression, loneliness and poor self-esteem. Teens are especially vulnerable to the features designed to make platforms addictive (auto-play, infinite scroll, and so on), and recommendation algorithms tend to reinforce access to undesirable or toxic content. Social media is a breeding ground for cyberbullying, while late-night scrolling leads to poor sleep and exhaustion.

A ban is needed because the current system is not working. A survey by Ofcom found that among children aged 10-12, over half use Snapchat, more than 60% TikTok and more than 70% WhatsApp. All three apps have a national minimum age of 13. Also, even if no ban will be perfect, that's not a reason for not having one. Bans on sales of cigarettes and alcohol to teenagers are also not 100% effective, but few would dispute their usefulness. A ban is also enormously popular, with polls showing large majorities in favour.

What are the arguments against banning social media for children?

The tech firms naturally oppose any bans as an unjustified interference in their businesses. But it's not just Big Tech that's worried. Smaller UK enterprises that make apps aimed at teens are waiting anxiously to discover whether their in-app features will see them classed as social media.

There have always been moral panics about how children waste their time, says Christopher Snowdon in The Spectator. But what the government has planned is “more like banning the printing press than banning Grand Theft Auto”. It won't work, and no one really expects it to – so why bother?

Moreover, the science, in terms of the harms caused by social media, is far from settled, says the FT, with much research showing only weak associations between teenage usage and mental ill-health. And, strikingly, not all campaigners on this issue support an outright ban.

There are fears that bans will encourage children to move to riskier platforms and instil a counterproductive false sense of security in parents. Such campaigners say the government should force the companies to make their products safer, for example by banning addictive features such as infinite scroll.

Is the social media ban working in Australia?

No. The Australian government's eSafety Commission found last week that 81% of children aged ten-15 had accessed at least one of the banned platforms following the ban. Slightly more encouragingly, the proportion of that age group who actually held their own social-media account fell from 52% to 42%. The research is hardly definitive, based on surveys involving just 800 children and parents. But it's broadly in line with other surveys.

Why did Australia's social media ban have such a limited impact?

The biggest issue was “ineffective implementation of age-assurance measures by platforms”, the research found. More than half of children said they had not been asked to confirm their ages. Some 18% said platforms had incorrectly estimated their age to be above 18, and 37% said they had simply claimed to be 16 or above to maintain access.

The federal government in Canberra recently doubled the maximum penalty for companies that fail to comply with the ban to A$99 million (£52 million), arguing that tech giants were “not doing enough” to comply with the new rules. But even so, the early signs are that the road to compliance – even if possible – will be long and winding. “The impact of the law will not be measured in weeks or months, but over generations,” said Julie Inman Grant, the eSafety commissioner.

What are the alternatives to banning social media for under-16s?

Some campaigners favour more nuanced policy interventions. Rather than banning access altogether, governments could regulate the design of platforms – for example by prohibiting addictive features such as infinite scrolling or autoplay for younger users, limiting algorithmic recommendations, making accounts private by default and preventing children from being contacted by strangers.

All these interventions would still rely on effective age verification. But rather than raise age limits, regulators “should redouble efforts to make social sites more suitable for teens”, said The Economist. This would be preferable to an unproven and almost certainly unworkable outright ban. Governments should also “force web firms to cough up more data on how teenagers use their products–the better to help researchers measure harms, and come up with ways to prevent them”.

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Maynards, Little Sampford, Essex

A 1670s, Grade II-listed former farmhouse with a moat that runs around three quarters of the grounds. It has exposed wall and ceiling timbers, oak floors, open fireplaces with wood-burning stoves and a bespoke kitchen. 4 bedrooms, 2 bathrooms, 2 receptions, 2-bed annexe, 5 acres.

Price: £1.5m Cheffins 01799 -23656

Pond Cottage, Wilton, Marlborough

This 17th-century thatched cottage is situated in an idyllic position overlooking the village pond. It is accessed by a private bridge and surrounded by gardens that include well-stocked borders and a vegetable garden. The cottage has beamed ceilings, inglenook fireplaces and a large dining kitchen. 4 bedrooms, 2 bathrooms, office/bedroom 5, 2 receptions, utility, garage.

Price: £995,000. Hamptons 01672-837178

The Mill, Arnesby, Leicester, Leicestershire

A converted, Grade II-listed 19th-century windmill with a two-bedroom cottage and a range of outbuildings set in grounds that include a wildlife pond and a paddock. The mill has a double-height entrance hall, a bespoke staircase and a glass walkway on the first floor that connects the main accommodation with the former windmill. 4 bedrooms, 4 bathrooms, 2 receptions, 2 studies, balcony, motor house, 4.44 acres.

Price: £2.75m Fisher German 01858-410200

Bulkeley Grange, Malpas, Cheshire

A restored, Grade II-listed Victorian country house with a terrace with stone steps leading down to a sunken garden, wildflower meadow and a pond. It has oak floors and period fireplaces. 7 bedrooms, 5 bathrooms, 3 receptions, kitchen, library, stables, 9.7 acres.

Price: £2.25m Savills 01244-323232

Tinley Lodge, Shipbourne, Tonbridge, Kent

A country house surrounded by gardens that include a large pond with a pontoon, a Japanese garden with a wildlife pond, decking, multiple seating areas and an outdoor kitchen. It has an open-plan dining kitchen and living area with an Aga and French doors leading onto a courtyard garden. 5 bedrooms, 4 bathrooms, 2 receptions, study, 1-bed annexe, 2 studios, stables, paddocks, 8.01 acres.

Price: £4.95m Knight Frank 020-3967 7176

Barley Hill Farm, Combe St. Nicholas, Chard, Somerset

A Victorian former farmhouse with earlier origins set in large gardens that include two walled gardens, a wildlife garden with ponds, a wooden footbridge and wooded area adjoining a paddock and an orchard. 5 bedrooms, 3 bathrooms, 3 receptions, kitchen, 2-bed annexe, conservatory, office, dairy, 2-bed cottage, 1-bed coach house.

Price: £1.65m Knight Frank 01935-812236

Loughbrow House, Hexham, Northumberland

This late Victorian house is now in need of some renovation. The house is surrounded by landscaped gardens and set on a small estate that includes two cottages, a gate lodge, a pond, a sequence of small streams crossed by stone bridges, a walled garden with a greenhouse, woodland and a former quarry. 7 bedrooms, 5 bathrooms, 3 receptions, kitchen, reception hall, library, stables, grazing land, 31.4 acres.

Price: £2.1m+ Galbraith Group 01434-693693

Puddledock, Norden, Corfe, Dorset

Puddledock comprises a 200-year-old building incorporated into a contemporary state-of-the-art house with a deck running the length of the property that overlooks the wildlife ponds. It has vaulted, beamed ceilings and a modern wood-burning stove. 4 bedrooms, 4 bathrooms, reception, 7.06 acres.

Price: £2.25m Savills 01202-856873

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The writer Bret Easton Ellis once said that his advice to young artists was simple – marry someone rich. The line holds true because, well, it's true. Ellis may be biased towards seeing the uglier logic of money – the way it quietly shapes outcomes while pretending not to – but in this case, the bleak diagnosis is backed up by the numbers.

The art market does not reliably sort by talent. It sorts by who can keep going, stay visible, absorb unpaid years, access the right rooms, and remain legible to collectors and institutions long enough for momentum to build. A striking statistic from the most recent Frieze London art fair is that just 7% of exhibiting artists came from working-class families.

This statistic is not saying “talented working-class artists are being excluded” (which would be bad enough). It is saying something harder – the conditions for becoming an artist are already filtered by class before the market even gets to pretend it is judging talent. Talent is not the organising force. Survival is.

Making the market see emerging art

I founded New Blood Art, a gallery, in 2004, because I could see a gap the market had not built a mechanism for – the gap between serious artists leaving art school and buyers who wanted thoughtful original work by credible emerging artists, but who had no reliable way of finding it and needed a trusted filter.

New Blood Art did not simply spot artists before the market noticed them. Rather, it created visibility, credibility and access for collectors at the point when a market around them did not yet exist.

Take artist Georgia Dymock. We introduced her at New Blood Art in 2020, just after her graduate diploma in fine art at University of the Arts London. We listed her painting Purple Pinch at £1,700. In April 2022, it sold on the secondary market at Phillips' “New Now” auction for £23,940 – a fourteen-fold increase in under two years. The fourteen-fold increase is exceptional. The pattern is not.

Across 22 years, New Blood Art has had many examples of artists first shown or supported early on, who later gained serious market traction. Without that initial platform, credibility, access for collectors and market context, would the later traction have happened in the same way, or at the same speed?

We can't say for certain that those artists wouldn't have garnered attention without New Blood Art. But the pattern across 22 years makes the question legitimate, and it becomes reasonable to argue that early visibility, credibility and access for collectors materially affected the speed or likelihood of later traction, alongside my ability to identify serious artists early.

What 22 years at New Blood Art taught me

The artists who survive long enough to build meaningful careers are usually those with some form of material protection – financial stability, housing security, helpful geography and, above all, the capacity to absorb years of low or unpaid work. Most art students leave college with debt, need to earn, and cannot afford the years that an art career takes to build. And when only a small group can afford to keep going, only a small group get to tell the story of the world. Whose stories have we lost from the history of art?

The economics of early-stage work

The second realisation is commercial, and perhaps it has taken me this long to see it clearly because New Blood Art arose out of idealism as much as being a business interest. Consider where Dymock's £22,000 uplift went. A modest resale royalty may have returned to the artist under Artist's Resale Right, but the larger gain went to the auction house and the early seller. Nothing returned to the platform that showcased and launched her.

That is the economics of early-stage work – the identification, advocacy and development that actually forms careers carries sustained cost, while the rewards concentrate later, elsewhere in the market. Yet if nobody does this work of launching serious artists, then these artists don't gain visibility. The work is essential, while structurally unpaid. My gallery has, in effect, carried a public-interest function that the economics of the sector never reflected.

Splitting New Blood Art in two

There have been personal costs, too. Sustaining an independent gallery for 22 years without venture capital, while also carrying early-stage artists' development work the emerging art market does not properly pay for, had become unsustainable. Professionally and personally, I needed to step back. I downsized, spent time in a Cornish fishing village, and began asking myself a stark question: was it possible to operate profitably in the emerging art market, while holding on to the values that made the business worth building in the first place?

What has come back from this reflective 18-month period is clarity. New Blood Art had been carrying too much inside one structure and I decided to separate the two kinds of work so both can function properly. The gallery has now become smaller, sharper and more commercially focused, with a tighter roster of contemporary artists, many of whom we first came across years ago at their degree shows. The New Blood Art Foundation is now in formation and it will carry the public-interest and outreach work, including the Emerging Art Prize in collaboration with Fine Art departments across the UK, artists' development, mentoring and, I hope, studios and residencies.

The cost of independence

The route to charitable status has been thought-provoking and demanding. It has forced me to separate mission, governance, money and power. A foundation growing out of New Blood Art cannot simply be a more worthy arm of the gallery; it has to be able to protect its own public-interest purpose, especially where the commercial gallery and the Foundation sit close together. That raises an uncomfortable question. The Foundation is being created to support artists without financial cushioning, inherited networks, or easy access to the art world. But serious governance also requires time, confidence, independence and security. An unpaid independent chair is not just structurally complicated, it is also difficult to find.

The chair needs to be competent in a specialist field, independent, available, committed, financially secure enough to work unpaid, and not personally or financially entangled with me or with New Blood Art. That is a very narrow pool.

A foundation built to address the fact that only the financially cushioned can sustain an art career finds that only the financially cushioned can afford to govern it. Unpaid governance, like unpaid studio years, is a filter.

Artists as infrastructure

The Foundation's long-term vision of permanent bases across the UK rests on a pattern MoneyWeek readers will recognise from the property sector. Developers have long used artists to warm up cold districts – King's Cross, Peckham, Hackney Wick, Deptford. Artists arrive. Creative presence generates cultural heat, footfall, interest from buyers and rising values. Then the studios close and the artists are priced out of the value they helped create.

That cycle is not only unfair; it is economically short-sighted. Artists are not decorative add-ons to regeneration. They are often the source of the atmosphere, identity and desirability that later becomes financial value – value which can dissipate once they are removed. Anchoring artists permanently, as cultural infrastructure, is the enlightened version of that trade – it holds the value where it was made. Housing artists is not philanthropy. It is investment.

This is the opportunity I want the Foundation to build towards – a structure where artists are held as part of the long-term cultural and economic life of a place. For philanthropists, developers, institutions and collectors, this is a chance to support practising emerging artists and bring live cultural energy into buildings and districts.

Artists shouldn't just be used to revive the discarded edges of cities. They should be embedded in places of existing power and value – Knightsbridge, the Square Mile, major corporate buildings, prime developments – because their presence is not remedial, but is inspiring and generative.

In an AI-shaped world, original human creation will become more valuable, not less. This is an invitation to philanthropists, developers and corporations to build with us the conditions where cultural life is visibly happening inside your buildings.

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Bond markets have a habit of reminding governments that they, not politicians, determine the price at which the state can borrow. Despite Andy Burnham’s message to the New Statesman last September that we've got to “get beyond this thing of being in hock to the bond market”, ten-year gilt yields remain around levels not seen since the aftermath of the Truss-Kwarteng mini-Budget.

There is no doubt that Andy Burnham's affable persona and savvy TikTok game are a refreshing contrast to his predecessor's stiffness. But while politicians trade in popularity, investors are interested in profits.

The rising stock of a prime minister is not necessarily reflected in the stock market. Indeed, external shocks have undone the plans of every occupant of Downing Street over the past decade. And each, whether Conservative or Labour, has reached for much the same economic playbook: more borrowing, higher spending, a larger state and, ultimately, higher taxes. With public debt already elevated and fiscal room increasingly scarce, Burnham may become the first prime minister forced to discover whether that playbook has finally reached its limits.

The public-sector finances data for June were marginally stronger than expected, with borrowing £300 million below the Office for Budget Responsibility's (OBR) forecast. The cost of inflation-linked debt interest fell as the ceasefire in the Iran conflict pushed down energy prices. It was a timely reminder that governments do not control the most important variables in their own fiscal forecasts. With hostilities resuming, inflation is unlikely to remain so well-behaved, leaving Burnham's fiscal headroom squeezed.

As one official reportedly told the new prime minister on arriving in Downing Street: you might not be interested in foreign policy, but it's interested in you. Events overseas can force an indebted government into making unpopular decisions. The National Institute of Economic and Social Research (NIESR) estimates that higher energy prices and weaker growth have eroded most of the government's fiscal headroom of £24 billion.

Higher inflation creates a double squeeze for the Treasury, raising debt-interest costs while reducing what departmental budgets can deliver. The director of the NIESR, David Aikman, says that “Commitments must be funded through taxation or savings elsewhere – not through more borrowing. That is the minimum needed just to hold the debt level where it is”.

Burnham vs the bond market

Burnham might want to get beyond bond markets, but unless he can unwind the relentlessly vicious circle of higher debt, higher deficits and stagnant growth, he will be doomed to repeat it. In her first act as chancellor, Rachel Reeves tried to pay for higher public-sector pay by removing the winter fuel allowance, sowing the seeds of her own demise. Taxing jobs through higher national insurance while raising the minimum wage made employment more costly, bearing down on growth. She then assembled a smorgasbord of wealth taxes owing to Labour's manifesto commitment not to raise the three main taxes. Although Reeves reduced gilt issuance, it remains historically high. The Debt Management Office plans to issue around 50% more gilts this year than in 2022-2023. Burnham inherits the same fiscal constraints, but with Labour polling around ten points below the level that delivered its 2024 landslide, reducing his political as well as economic room for manoeuvre.

There is a more fundamental problem if he attempts revolutionary change. He was not even part of Labour's 2024 election victory and, like all unelected prime ministers before him, will face complaints that he lacks a mandate to make difficult decisions. He has repeatedly stressed that Britain is a parliamentary democracy where parties choose their leaders. It is not unusual: 12 of the 19 people to serve as prime minister since 1945 first entered Downing Street between general elections. But that has never made governing easy. Only four went on to win a majority at the subsequent election.

With a fragmented electorate split at least four ways, Burnham may need little more than 25% plus one vote for a majority. Yet volatile voters are unpredictable. His strategy will be to unite the left by invoking his favourite bogeyman, the “Thatcher tribute act” Nigel Farage. Failing that, his programme itself has a distinctly left-wing flavour: capping household bills, re-industrialisation, stronger public control of utilities and a National Care Service. Politically, it is an attempt to rebuild Labour's coalition. Economically, however, it assumes global events remain reasonably benign.

But the more he talks left, the more the bond markets will push him to the right. His priorities are expensive, and his options for paying for them are shrinking. The Laffer Curve is already alive and well in the disappointing revenues generated by a tax burden that has reached its highest level in decades.

Gilt issuance remains elevated, inflation an ever-present threat and he cannot afford to lose credibility by breaching the fiscal rules. “Events, dear boy, events,” as Harold Macmillan put it, still have a habit of overwhelming even the best-laid plans. Burnham's greatest opponents may not reside in the House of Commons, but in the bond market.

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Over the past five years, the Japanese yen has lost 30% of its value against the US dollar and nearly as much against the pound. The currency recently hit a 40-year low against the greenback. Now, powerful figures in global finance are drawing a line in the sand.

Over the weekend, Japan's Ministry of Finance and the US Treasury confirmed they had jointly intervened in currency markets to support the yen. Japan is thought to have sold $59 billion to buy yen, with Washington staging a smaller intervention – its first in Japan since 2011 – in support.

The move sent the Japanese yen up 3.5% against the US dollar, a significant rise in foreign-exchange terms that reversed months of depreciation. Japan's own interventions had become increasingly ineffective. America brings much more potential firepower to the table.

Why is the US buying Japanese yen?

US Treasury secretary Scott Bessent has shown markets there is “a new sheriff in town”, says Katie Martin in the Financial Times. The real mystery is why Washington is getting involved at all. One explanation is simply that Donald Trump likes Japan, telling reporters “Japan's been very good to us, with the exception, of course, of Pearl Harbor”.

Self-interest, too, may be motivating Bessent. Japan's “massive sales” of dollar assets (mainly US Treasuries) are raising US borrowing costs at a time when government yields are already under pressure. His solution? “Stand behind Japan like a scary big brother” to “scare off the yen sellers.” The Japanese yen stabilised at around 157 to the dollar this week, stronger than the 163 level prior to the intervention.

The operation is likely to halt, at least temporarily, a “disruptive further depreciation” of the yen, says Brad Setser of the Council on Foreign Relations. A weak yen tends to pressure other Asian currencies lower. By making the region's exports cheaper, weak Asian currencies cut against the White House's desire for US re-industrialisation. The administration of a short, sharp shock to speculators betting against the Japanese yen might cause them to re-evaluate the trade.

Recent market “negativity” towards Japan has been overdone. The country has several important strengths, including a big current account surplus and ownership of huge tranches of overseas assets.

The one missing piece is higher interest rates. At 1%, Japanese rates are far below those in America, which causes steady selling pressure as local investors seek better yields overseas. Therein lies the rub, says Robin Brooks on Substack. Japan cannot afford to raise interest rates because of its mammoth government debt, which is equivalent to 248% of GDP. But without the support of rate hikes, this currency intervention will ultimately “fail like all previous ones”. Despite its slide, the Japanese yen is probably still overvalued. Its rout is “a symptom of a debt crisis that's getting papered over”.

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Mastercard and Visa are the dominant global payment networks. Their systems allow you to tap your card to buy a coffee virtually anywhere in the world, and two seconds later you are walking away. It feels effortless, but behind that two-second transaction lies a complex global relay. Your bank confirms funds, the merchant's bank requests authorisation and fraud systems assess the risk.

To most people, Mastercard (NYSE: MA) and Visa (NYSE: V) are little more than logos on cards. In reality, they represent a global system that allows a payment in Birmingham to work just as easily as one in Bangkok. The infrastructure is so seamless that we never need to think about it, yet it is why these two companies have proved so difficult to disrupt.

The question now is whether this lucrative duopoly, which has fended off challengers for decades, is finally facing a genuine threat. For years, critics have seen rival technologies emerge, only to watch Mastercard and Visa absorb the innovation and become stronger. Yet as we look towards a future of sovereign payment systems, digital currencies and autonomous machine commerce, investors need to consider whether today's threats are fundamentally different from those of the past. Will new technologies merely change how we pay, or will they replace the invisible pipes through which every transaction flows?

Why Mastercard and Visa's duopoly is so durable

Understanding why this duopoly has proved so durable starts with one misconception. Mastercard and Visa do not lend money, issue most cards, or sign up merchants. They simply provide the trusted communications network linking cardholders, merchants and their banks.

When a payment is made, the merchant's bank sends an authorisation request through Mastercard or Visa. The network identifies the correct issuing bank and securely routes the request. That bank checks whether the card is valid, confirms that funds or credit are available and carries out fraud checks before approving or declining the transaction.

The decision then travels back through the network to the merchant. Later, Mastercard and Visa coordinate settlement, ensuring that money moves correctly between the financial institutions involved.

The networks do not lend money, take deposits or bear the risk if a customer fails to repay a credit-card balance. Those responsibilities sit with the issuing banks. Mastercard and Visa simply provide the rules, technology and communications network that allow thousands of financial institutions to work together.

This is very different from the model used by firms such as American Express. Amex combines the roles of card issuer, payments network and merchant acquirer within a single business. This gives it greater control over the relationship with the customer, but also means taking on more risk and investing more capital. That integrated model also helps explain why some smaller businesses still refuse American Express. Historically, its merchant fees have often been higher than those charged on Mastercard and Visa transactions.

Mastercard and Visa took the opposite approach. By leaving lending, underwriting and merchant relationships to partner banks, they created an asset-light model that could expand globally without requiring the same balance sheet.

The result is a network that becomes more valuable as more participants join. Any bank can connect its customers to the system. Any merchant can accept payments through it. That structure has allowed Mastercard and Visa to expand into more than 200 countries and territories while avoiding many of the risks carried by traditional financial institutions.

Alternatives exist. American Express has built a successful premium franchise. UnionPay dominates China. JCB is strong in Japan. Discover is well-established in North America. Yet none has matched Mastercard and Visa's mix of global acceptance, bank partnerships and asset-light economics.

Uniform standards for Mastercard and Visa

This position has made Mastercard and Visa into two of the world's most valuable technology companies: both are worth over half a trillion dollars. Yet their origins were far more modest.

In the 1950s and 1960s, consumer payments were fragmented. Shoppers often carried multiple store cards, while banks struggled to process payments between different institutions. Master Charge and Bank Americard, the predecessors of Mastercard and Visa respectively, were established to create a common standard that allowed different banks and merchants to participate in the same payment system.

For decades, the networks operated as cooperatives owned by the banks that used them. This worked while electronic payments were still developing, but it became difficult as the industry matured. The member banks were also competitors, fighting for market share in card issuance and lending. Disputes over fees, governance and access became increasingly common. The solution was to separate the infrastructure from the banks. Between 2006 and 2008, Mastercard and Visa demutualised and listed in New York. Freed from competing shareholder interests, they could focus on expanding the network itself. They stopped operating primarily as industry utilities and became technology companies, investing heavily in fraud detection, cybersecurity, data analytics and international expansion.

Although Mastercard and Visa are often discussed together, they are not identical businesses. Visa has historically maintained the larger share of global payments volume, particularly in the US, while Mastercard has often positioned itself as the more international challenger. However, their investment cases are remarkably similar. Both benefit from the same long-term trend: the shift from cash towards digital payments. Neither needs to eliminate the other to succeed. The global payments market has been large enough for both companies to compound alongside one another for decades.

Their role today is often misunderstood. Mastercard and Visa do not need to replace every domestic payment system. Instead, they increasingly act as the common language that allows different systems to work together.

France provides a useful illustration. Many French payment cards carry both the logo of the domestic Cartes Bancaires (CB) network and either Mastercard or Visa. When that card is used in France, the transaction may be processed through the local CB network. Use the same card abroad and the payment is likely to travel across the Mastercard or Visa network instead. The customer rarely notices the difference because the systems work together seamlessly.

This helps explain why local payment networks are not necessarily threats. Countries can build efficient domestic payment systems, but international commerce is a much harder problem. Cross-border payments require common technical standards, fraud protection, dispute-resolution rules and the trust of thousands of banks and millions of merchants. Mastercard and Visa have spent more than half a century building those connections.

That does not mean they are invulnerable. Domestic schemes such as India's Unified Payments Interface (UPI), Brazil's Pix and China's UnionPay have demonstrated that governments and local providers can build highly successful alternatives for domestic payments. But they also highlight where Mastercard and Visa's greatest strength lies. Their advantage is not that they process every payment. It is that they remain the network connecting different payment systems across borders.

That distinction will become crucial as new payment technologies emerge. The question is not whether other systems will exist alongside Mastercard and Visa. They already do. Rather, it's whether anything can replace their global infrastructure.

Mastercard and Visa's business model

Mastercard and Visa have one of the most attractive business models in the global economy. They do not need to earn pounds from every transaction. They only need to capture a fraction of the value flowing through their networks.

The economics of a payment are split between several participants. When a merchant accepts a card payment, it pays a fee known as the merchant service charge. A portion compensates the issuing bank for providing the card and taking on lending or fraud risk. And Mastercard and Visa receive fees for operating the network, processing transactions and providing the rules and technology that let the system function.

Think of it like a toll road. While a transaction may involve hundreds or thousands of pounds changing hands, Mastercard and Visa earn only a minuscule fee for letting the payment through. Yet multiplied across hundreds of billions of payments each year, the tolls create a vast and highly profitable revenue stream.

Note that once the network is built, processing additional transactions costs very little and therefore carries exceptional incremental margins. As payment volumes grow, revenues can rise much faster than operating costs. This is why both companies consistently generate some of the highest operating margins in global equity markets.

Nobody wants to leave Mastercard and Visa's payments network

Mastercard and Visa's dominance rests on several reinforcing advantages: trusted brands, acceptance at millions of merchants, deep relationships with banks, vast amounts of transaction data, established operating rules and unrivalled global scale.

Together, these create a network effect that has taken decades to build, and explain why so few companies attempt to compete with them directly. Most new payment businesses choose to work with Mastercard and Visa rather than replace them.

A typical financial technology company can build a better app, offer lower fees, or create a more attractive customer experience. Yet when a customer taps their card or phone to pay using Apple Pay or Google Pay, the transaction will often still rely on Mastercard's and Visa's underlying infrastructure. In the payments industry, this is known as riding the rails.

Building a rival system would require far more than better technology. A competitor would need to persuade thousands of banks, millions of merchants and regulators around the world to adopt an entirely new standard. This is what makes Mastercard's and Visa's position so difficult to attack. Their advantage is not simply the technology itself, it is the system surrounding it: the banks, merchants, rules, data and trust that have accumulated over decades.

Every few years, a new technology arrives that promises to make Mastercard and Visa irrelevant. So far, none has succeeded. Digital wallets such as Apple Pay and PayPal improved the customers' experience without replacing the underlying networks.

Account-to-account payment systems and QR-code payments can be cheaper for merchants because they bypass traditional card networks. However, they tend to work best within individual markets. They solve the problem of cost, but not the challenge of creating a trusted global network for international payments.

A longer-term uncertainty is whether AI-driven commerce creates an entirely new payments architecture. If machines begin executing transactions on behalf of consumers and businesses, the winners will need secure digital identities and trusted authorisation systems. Whether that creates an opportunity for Mastercard and Visa or opens the door to a new competitor remains uncertain.

The geopolitics of payments

Still, the nature of the competitive threat may be changing in other ways. For decades, global payments operated under the assumption that financial networks would remain politically neutral. That assumption has weakened. The increasing use of financial sanctions and restrictions on cross-border payments has reminded governments that whoever controls critical financial infrastructure also holds significant influence.

The response has been a push towards greater financial independence. More countries have already been building their own domestic payment networks, such as Brazil's Pix and India's UPI, which allow consumers to transfer money directly between bank accounts, often at little or no cost. If more governments come to view payments as a matter of national security as well as cost and efficiency, they will have the ability to build domestic alternatives.

Mastercard and Visa still have a major advantage in international commerce, where global acceptance matters far more than simply moving money from one account to another. However, even if the expansion of domestic networks is unlikely to displace them from this role, they can gradually reduce payment volumes – and hence revenues – from national markets that have historically been an important source of activity.

Mastercard and Visa are adapting rather than resisting. Instead of insisting that every payment runs through their networks, they increasingly provide the layer of technology that allows different systems to operate securely. More broadly, both companies have long been expanding beyond their traditional business of moving payments from one bank to another.

Regulation has constrained traditional payment fees – particularly interchange fees earned by banks, which are capped in many countries. Meanwhile, competition has encouraged financial institutions and merchants to demand more sophisticated services.

So Mastercard and Visa have focused on value-added services. They now provide technology that helps banks and businesses prevent fraud, verify identities, secure digital payments and analyse transactions. Just recently, Visa announced a new deal to buy BioCatch, a fraud intelligence firm, for $2.4 billion.

This shift has strengthened an already attractive business model. In effect, the duopoly are moving from simply operating payment networks to providing the software that helps many different payment networks function, and keeping payments safe and reliable.

Mastercard and Visa's trust layer

Whether this strategy is enough to offset future threats remains one of the biggest questions facing the industry. Mastercard and Visa have survived previous attempts to bypass them because most innovations have changed how we pay, not how payments are trusted and settled.

Sovereign payment systems, account-to-account transfers and blockchain-based settlement all represent more meaningful challenges. Yet history suggests that the duopoly are highly effective at adapting to new payment rails rather than being displaced by them.

Tomorrow morning, millions of people will buy a coffee with a tap of a card, phone or smartwatch without giving the process a second thought. Behind that simple action, a global network will verify their identity, assess fraud risk and connect two financial institutions in a fraction of a second.

That reliability has helped make Mastercard and Visa two of the world's most valuable companies. They are an essential part of the global economy. The technology that wins is often the technology people stop thinking about because it simply works, and that may be their greatest competitive advantage.

Their asset-light models, powerful network effects and trusted brands have produced two decades of exceptional returns for investors. There are still clear opportunities for growth as cash continues to decline, cross-border commerce expands and value-added services become a larger part of the business.

Still, none of that guarantees attractive investment returns from this level. The market already recognises their quality and values both companies accordingly (both are on a trailing price/earnings ratio of around 31 at time of writing). The real question is not whether these remain exceptional businesses, but whether future growth will be sufficient to justify the premium investors already pay for them. Disruption need not destroy the networks to disappoint shareholders. It only needs to erode the ambitious expectations embedded in today's valuations.

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.

Marcel Stötzel, lead manager of the Fidelity European Trust (LSE: FEV), isn’t deterred by claims that Europe’s economic record and outlook are just as dismal as the UK’s.

“Europe is plagued by poor demographics, low productivity and high government debt, none of which are getting any better,” he agrees. Economic output per capita is half the level of the US. But European stocks are not proxies for their economies, as they derive only a third of their turnover from Europe. “We are more bullish than ever.”

Meanwhile, on the macro front, he sees five reasons to be positive. “Germany's fiscal brake has been lifted, Mario Draghi's report on EU competitiveness promises to cut red tape, there is a large savings rate to be mobilised, Europe is spending more on defence and European integration is tightening.” As a result, “the GDP growth gap will not continue to widen” and “we are overweight domestic Europe for the first time.”

A disappointing year for Fidelity European Trust

Following its merger with Henderson European Trust nearly a year ago, Fidelity European Trust has become a £2.2 billion investment trust. It trades at a modest 5% discount to net asset value (NAV) and yields 2.3%. However, while performance has been excellent since its 1991 launch (13.2% per year against 9.5% for the FTSE Europe ex-UK index), it has lagged the index by 10% over one year, 13% over three, and 12% over five. This puts it 11%, 31% and 33% respectively behind JP Morgan European Growth & Income (LSE: JEGI).

In the latest annual report, Sam Morse, fellow portfolio manager, attributed last year's disappointing performance to “limited exposure to defence stocks, holdings in Novo Nordisk, chemical producer Symrise and software company SAP”. Novo Nordisk soared on the back of its weight-loss drug Wegovy, but then crashed 75% from its mid 2024 high before a slight recent recovery. SAP has suffered from concerns that AI will disrupt the businesses of established software companies. JP Morgan European Growth & Income had been more nimble, selling SAP early last year and Novo Nordisk the year before.

Still, every manager has a bad year, and Stötzel will surely get performance back on the rails again, maintaining the long-term record. He focuses on “companies with the ability to grow dividends sustainably for three-five years.” Examples include Inditex, owner of the Zara chain, which kept manufacturing at home and in North America instead of outsourcing it to China. This has enabled better quality control, less wastage, faster delivery and more flexibility.

Other top holdings include ASML, with a virtual global monopoly in the supply of machines for manufacturing semi-conductor chips, pharmaceutical company Roche, cosmetics giant L'Oréal and oil and gas producer TotalEnergies.

Should you invest in Fidelity European Trust?

Stötzel says the portfolio has a higher return on capital and better dividend growth than the market, while trading at no more than the historic valuation of 18 times earnings. Overall, European equities are no better than fair value, but if Stötzel is right and economic growth picks up, earnings growth should accelerate and investment returns continue to be strong. There would be a further boost if the historic aversion of Europeans to investing in equities abates.

Stötzel's thesis about the improving economic outlook for Europe relative to the US may prove optimistic, but it is more plausible than any thesis for the UK, to whose market investors continue to be patriotically attached. Europe is a much larger and broader market than the UK with many more growth stocks, offering managers a better choice for long-term investment. Fidelity European Trust may have tripped up last year, but it has a great long-term record, while investors in JP Morgan European Growth & Income must hope that pride doesn't come before a fall.

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.

It's 5.30pm and almost dusk as I sit by a lotus lake, sipping green tea and scribbling down some thoughts in a notebook. I'm writing a “Love letter to the Earth” – a few words of thanks and hope while a lady plays three large crystal singing bowls behind me. I fold the piece of paper carefully in four, place it into a lantern with a tea light, then gently lower it into the water. With a gentle push, I send it across the lake to float away into the night.

It's a simple, yet powerful, ritual. This small act of gratitude and acceptance is designed to connect guests with the “Interbeing” philosophy and Zen teachings of Vietnamese monk Thich Nhat Hanh. Part of the “Goodnight Kiss to the Earth” ceremony, it's a chance to pause, reflect and let go.

The Four Seasons Resort The Nam Hai – on the outskirts of the Unesco town of Hoi An – has long championed wellness and finding a sense of calm. The award-winning Heart of the Earth Spa has become central to the guests' experience, drawing on local traditions and ritual-based practices. Its programme of alternative therapies, ceremonies and expert-led workshops is underpinned by Thich Nhat Hanh's teachings, and takes place in the main spa building or in independent lakeside pavilions overlooking the water, where each treatment begins with a salt foot scrub and a cup of herbal tea. It's a real sanctuary and, for me, a welcome retreat from the noise and crowds of Hoi An.

The tranquillity extends into the villas. Each night after dinner, I return to a candle flickering by my front door, and two more on either side of my bathtub. With no traffic noise around to disturb the peace, this is a rare luxury in a country that is seldom quiet. There's even a small singing bowl sitting on my desk.

This year marks the tenth anniversary of the resort's Four Seasons rebrand. The resort was originally created according to the principles of phong thuy (Vietnamese feng shui). Entrances sit to the side rather than the front, huge vases containing water represent the feminine, and sit on square bases that represent the masculine. A series of stepping platforms – tiered swimming pools, stairs and pavilions – cascade down toward the beach. Nothing follows a straight line, everything is flowing.

Sixty suites and 45 standalone villas are spaced across 67 ares, arranged in U-shape clusters to catch the sea breeze. The style references the country's vernacular architecture – dark wood interiors, plenty of stone and local handicrafts. My one-bedroom villa has a back garden with outdoor shower, an open-plan living area, marble bathroom, and bedroom with handcrafted furniture and colourful textiles. The bed – a four-poster in the centre of the room on a raised platform – is surrounded by silk curtains.

Eat well at Four Seasons Resort The Nam Hai

The resort's wellness-led approach is found in the dining options, too. Lunch at Lá Sen is a relaxed, open-air affair, where dishes span Vietnamese and French cuisines. I enjoy the “Buddha bowls”, which come with either salmon or tuna, and make for a refreshingly light lunch on a hot day, especially with a chilled glass of local kombucha. I try all the flavours – turmeric, spirulina, ginger and beetroot. I take a tour of the orchid house and the vast vegetable and herb gardens. Much of the produce makes its way to the resort's kitchens (a surplus of mangoes goes to the staff).

Afternoons pass in a rhythm of sea-swims and cycling – each villa comes with its own bikes and the resort's car-free paths make for unhurried pedalling between pool, spa and beach. Come dinner time, lanterns are glowing, candles are lit and the resort takes on a romantic atmosphere. I dine at Cafe Nam Hai, which is piloting a set menu of Indian dishes inspired by the royal Mughlai cuisine – aromatic pickles and sambals, delicately spiced salmon tikka, Cham Island prawn komar with coconut rice and a cooling buttermilk lassi. The tandoori pineapple for dessert is unmissable. It's one of the most memorable meals of the trip.

Another night, I sample the Japanese omakase counter at NAYUU, where chef Alex Moranda and his team prepare exquisite dishes according to the principles of gomi – the five elemental tastes of Japanese cuisine. Sushi and sashimi are prepared with fish and seafood from Tokyo's Toyosu Market, and paired with tea that balances the flavours perfectly.

A new addition to the dining scene is Sol & Sao, which houses the largest collection of sherries in Vietnam. As I sip a dry fino, I chat to Maryia Kryshko, the resort's assistant director of food and beverage. Our conversation drifts from sherry production to wine-tasting in Santorini and the rigours of the industry's exams.

A regular shuttle runs from the resort into the old town of Hoi An, famous for its centuries-old architecture, tailoring shops and the Japanese Bridge. It's particularly atmospheric in the evenings when traffic is limited and the town is more pedestrian-friendly. After a few hours of wandering the night market, eating gelati and soaking up the thrum of pottering tourists and puttering lantern boats on the river, the calm and stillness of the resort feels even more pronounced when I return. I run a candlelit bath and soak in the silence. My love letter is still out there somewhere, floating on the lotus lake. Thich Nhat Hanh wrote that the present moment is the only one available to us. Here, at least, that feels true.

Katie was a guest of Four Seasons Resort The Nam Hai. From around £500 a night, visit fourseasons.com/hoian for details.

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Revolut will shift more than 13 million UK customers to its banking arm after securing a licence earlier this year.

The fintech firm acquired a full UK banking licence in March 2026 after a four-year battle with regulators.

Since then, it has been shifting its over 13 million UK customers to its banking arm.

Many existing customers and new Revolut customers already have current accounts with Revolut’s UK bank. 

While it has been popular with users who travel regularly due to perks such as zero FX fees when spending abroad, lounge access and travel insurance, this will be the first time Revolut will offer basic current accounts.

The move is expected to shake-up the banking sector, providing competition to the major high street names and challengers like Monzo.

Nik Storonsky, chief executive officer of Revolut, said in March that securing a banking licence was a “vital step in our mission to build the world’s first truly global bank”.

Existing customers’ accounts are still being transitioned to bank accounts in tranches. Revolut is contacting them one to two weeks ahead of being fully moved across.

In an email to customers, seen by MoneyWeek, Revolut said: "Becoming a licensed bank means we’ll be able to offer more banking products and features in the future.”

Kalpana Fitzpatrick, digital editor-in-chief on Moneyweek, said: “The good news for anyone using Revolut is that being part of a bank, your money is protected by the Financial Services Compensation Scheme and in future you could also benefit from competitive savings deals and mortgages.

"But the question is, do you want another current account? If you do not use your Revolut account much, then this will be another account you may have to manage.”

Here’s everything you need to know about what the changes mean for you.

What is changing?

Your account will switch from being an e-money account to a new current account.

Revolut customers can deposit money into the current accounts, with deposits protected under the Financial Services Compensation Scheme (FSCS) up to £120,000 per person.

If you have an account with travel insurance, available for premium accounts, the terms and conditions will stay the same.

However, travel insurance group policy numbers will change, which Revolut will send via email.

What is staying the same?

The account number you have with Revolut, as well as any sort codes, IBAN and BIC will stay the same when you move to a bank account.

You will be able to access transaction and statement history from before the start of the transition in March 2026.

Charges and fees for all Revolut plans will be unchanged while you can still trade in stocks and cryptocurrency via the app.

Can you close your account?

If you’re an existing Revolut customer and don’t want your account to be transitioned across to a current account, you can simply close your account via the app.

Do you dream of giving up the day job and enjoying the freedom that would bring? You’re not alone. But many don’t want to wait until retirement age winter years to kick back. Can the FIRE movement help?

FIRE - financial independence, retire early – is a personal finance strategy that involves extreme investing and frugality during your working life in order to enable early retirement and financial freedom. In theory.

The concept was first established in the US in the 1990s, and encourages a series of tactics that have the potential to allow someone to give up work in their 40s.

So, how does FIRE work and can it really help you stop work sooner and 'retire' comfortably?

What types of FIRE strategy are there?

There are number if ways you can approach a FIRE strategy. These include:

• ‘LeanFIRE’ requires strict frugality and living on a bare minimum budget to achieve your goals faster;
• ‘FatFIRE’ means putting significantly larger amounts away in the hope of a more luxurious retirement;
• ‘BaristaFIRE’ strives for an early retirement funded by a healthy income-generating investment pot, topped up with a part-time or low-stress job.

Katharine Photiou, managing director, workplace savings at Legal & General (L&G) says the approach that appeals to most people is likely the third, because it offers maximum choice for less sacrifice.

“We go from birth to nursery, into primary school, then secondary school, university or further education, then work... there’s all this structure and process. There’s no sense of freedom.”

She says the true benefit of FIRE-related movements is raising awareness of money matters.

“They shift the conversation from being one of ‘when can I retire’ to one of financial freedom. And anything that gets people thinking about their finances – especially encouraging youngsters to engage with their finances sooner – is positive.”

If FIRE taken to the letter feels extreme, she says thinking about the kind of life you want to live, what makes you happy or how much is enough are healthier conversations.

“At its heart, FIRE is about control, flexibility, choice and having options. Having a career break, reducing your hours, starting your own business or taking a sabbatical, these are all positive.”

What can the FIRE movement teach you?

Louise Matthews is an advertising copywriter who lives in North London. She stumbled upon the Rebel Finance School – which runs courses to help people better manage their money (and advocates the FIRE movement) – on Facebook.

“At first the group felt quite aspirational, and at times annoying,” she says. “People were talking about having a lot of money and it didn’t feel aligned to my situation. I almost left a couple of times. But since participating in the course, I’m finding it more helpful – plus a lot more people have joined who are just starting out and have debt questions.”

Matthews was self-employed for over a decade before taking a full-time job two years ago, seeking financial security as freelance life was looking more precarious.

“My partner started his own business about five years ago and hasn’t been able to contribute much to the household bills, so it’s pretty much all on my shoulders.

The couple doesn’t have a mortgage (they rent from a private landlord), nor any real savings besides a £3,000 nest egg set aside for their daughter. Matthews has around £50,000 saved into a pension.

“Finances-wise, we’re in quite a bit of debt, which was my impetus for doing the course. I have a personal loan with around £11,000 still outstanding (it was £25,000 so I’ve paid quite a bit off over the past two years), and another £14,000 on interest free credit cards.”

One lesson the course teaches is to try and put away £1,000 into an emergency fund before proactively paying off any debt.

Like many Brits, even though she’s only 42, she’s feeling the consequences of not starting sooner.

“I grew up with a mentality that money is fun money – ‘you only live once’ – that has made it hard to get out of debt. I used to say ‘yes’ to everything and worry about it later, hence having lots of interest-free credit cards,” she says.

Financial independence, or freedom, for Matthews isn’t about giving everything up to retire in her 40s, but about building better habits for a financially ‘freer’ future.

“What I’ve learnt is that [my lifestyle] isn’t sustainable. I don’t want to be in debt anymore. So my priority is to work hard to get out of it.”

Why investing earlier is so important

L&G’s Decades Ahead research estimates around nine million people aged 25-54 are currently not on track for an adequate retirement, taking into account basic needs, current income and housing costs.

Starting early and taking small steps beyond the bare minimum (like the 8% auto-enrolment through a workplace pension) has such a greater impact than thinking about saving huge amounts, says Photiou.

“A 27-year-old putting in just an extra £30 a month, at state pension age would have an additional £100,000. Just invest as early as you can, and stay invested.”

Alex King, founder of personal finance education platform Generation Money says it’s worth bearing in mind that, traditionally, the FIRE movement came from the US, so to beware guidance may be aimed at different audiences.

Done well, he says FIRE can deliver real freedom, but it relies on strong earnings, careful planning and navigating risks like inflation, market volatility and longevity.

Is FIRE for you?

There are limitations to such strategies.

Having a reliable income is a basic starting point. Being employed obviously helps, because of the employer contributions on offer.

It’s more challenging if you have dependants, be they children or elderly parents, says Photiou.

Anyone renting or paying off a mortgage has further outlay – especially high if they live in London or another major city.

“FIRE has clear appeal but works best for a specific group,” says King.

“In the UK, it favours higher earners who can save aggressively and benefit from higher pension tax relief, while keeping spending in check. At its core, it’s a simple mix of disciplined saving and smart use of tax wrappers like ISAs and pensions.”

So while the dream may be to kick back and relax for the next 40 years, the reality of ever achieving that looks quite different.

Recent years have thrown a series of cost-of-living challenges, with the majority of people undersaving and underinvesting.

Rules of thumb around optimal savings rates vary but assuming 8%-12% for a moderate retirement – based on a ‘normal’ retirement age, anyone hoping to retire sooner needs to do some serious budgeting.

In Australia, they suggest a 15% contribution rate, while in the US many suggest a ‘half your age’ savings rate (if you’re starting age 20, save 10% of your salary; if you’re starting at 30, 15%; those starting at 40 should save 20% and so on).

But these frameworks or ‘rules’ are blunt instruments, overlooking a multitude of factors.

Traditional retirement plans talk about a U-shaped expenditure path, with more outlay at the beginning, followed by a period of lower outgoings, which may pick up again if long-term care has to be factored in.

Photiou says: “The Australians call them the go-go years, the slow-go years and the no-go years.”

But if you’re looking at FIRE, you’ll likely be wanting more go-go, and less slow-go. So Photiou suggests a higher proportion of working life salary will be required.

Like the sound of FIRE?

L&G have kindly crunched some numbers for MoneyWeek using certain assumptions such as starting work age 22 and using the minimum, moderate and comfortable lifestyle costs as estimated by Pensions UK in its Retirement Living Standards.

Market reactions were mixed off the back of latest quarterly earnings for the US tech giants, raising a big question – when will these companies’ huge expenditures start to bear fruit?

It’s becoming clearer that the companies once thought of as a collective, the Magnificent 7 – Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA) – are no longer running on the same track at quite the same pace, but they’re not entirely divorced from each other either.

In recent weeks, Alphabet (22 July), Tesla (22 July), Microsoft (29 July), Meta (29 July), Apple (30 July) and Amazon (30 July) all reported quarterly updates. Nvidia is due to publish its comparable financial statement later this month (26 August).

While Microsoft and Amazon’s share prices surged by roughly 15% on their respective next trading days after the results (30 and 31 July), Alphabet, Meta and Apple suffered respective declines of roughly 7%, 8% and 7%, largely due to high capital expenditure (capex) and supply chain concerns. Alphabet, for example, raised its spending forecast to as high as $205 billion this year.

Tesla, meanwhile, saw its share price fall by more than 14% the day after its results. CEO Elon Musk called this a “massive capex year”, adding that Tesla “should be spending on capex as fast as we can – spend as fast as we can without it being too wasteful.”

Apple’s share price fell by 7% following a supply chain warning from outgoing chief executive Tim Cook, who said: “We’re seeing some very significant constraints currently with limited flexibility in the supply chain to remedy it.”

When will investors see a return on artificial intelligence spending?

Rather than blindly supporting companies based on promises (which burnt many when the dotcom bubble burst), today’s investors – conscious of those past mistakes – are more demanding.

Goldman Sachs has estimated that artificial intelligence (AI) capex is around $765 billion currently but is expected to grow to around $1.2 trillion next year. And the market is becoming concerned that it’s not yet seeing conversion – or hearing explanations why it’s not seeing conversions – into near-term cash flow.

So while the Mag 7 aren’t entirely running in tandem, there are links. While Alphabet and Tesla were first to publish and therefore first to spook the market, an index of all seven companies, the Bloomberg Magnificent 7 Total Return Index, fell 4.8% the next day, wiping off $797 billion in collective value.

Free cash flow, or lack of it, was a central theme from all these results – specifically, the impact from the level of capex. Alphabet reported its first ever negative cash flow, while Meta posted a 91% year-on-year drop in free cash flow. Amazon also reported a negative free cash flow of $7.6 billion.

Chris Elliott, portfolio manager of the Evenlode Global Equity fund, which lists Amazon as a top 10 holding, said Amazon’s CEO Andy Jassey was under no illusion over timeframes.

“Andy Jassey was clear-eyed on the break-even point for investment – it takes a little less than three years for the company to recoup the initial investment of buildings and chips,” he said. “Each data centre can then host four or five further generations of servers, which have higher returns.”

He praised the business’s ability to manage costs and drive efficiencies, which have been proven during multiple growth phases over the company’s lifecycle.

“Amazon has an excellent track record of investing in projects that require huge economies of scale to succeed. This was true with both its ecommerce and logistics network and the initial investment into cloud computing.

“In both cases, its cash flow declined substantially during the investment phase, and the company was careful to manage costs and drive efficiencies. This ‘muscle memory’ positions the company best out of all the hyperscalers to withstand the costs of scaling.”

Big tech paths are diverging

The companies that look more challenged appear to have a less clear path forward.

Nick Saunders, chief executive of online investment platform Webull UK, said where Amazon and Microsoft appear to already be monetising their AI capex, questions were being raised over Meta and Alphabet’s ability to continue to invest at current levels.

“How long can they justify these increased valuations, especially when many people think all they’re doing is using AI for advertising?” he said.

The other headwind to note is a looming profitability squeeze.

Saunders added: “If the hyperscalers are massively increasing their AI capex to the levels we’re hearing – $1.2 trillion or so next year – how long can [Meta and Alphabet] afford to stay in the race, particularly when they have reduced cash reserves?”

When all the big tech giants are investing so heavily, for those where the returns look less clear, a rational view might be to expect them to reduce capex, or focus more on core products.

“But how does the market treat any tech firm that says it’s putting less into AI? It would come across like an admission of failure, which could be dangerous from a pure optics point of view,” said Saunders.

What can investors take from these results?

While earnings are always important, the wider market sentiment around AI and the tech behemoths made this earnings season feel particularly significant.

Evenlode’s Elliott said all eyes were on the tech industry because it was facing a decision tree, with investors wanting to see which way they’d turn.

“Would the hyperscalers cross the Rubicon into negative free cash flow, or would they cut AI spend? Those with a clear, responsible plan were rewarded and those without were punished – evidence of a functioning stock market.

“Long-term investors must balance both the importance of the technology with the market exuberance of the past few years, and the importance of active and responsible capital allocation continues to increase.”

That responsible tone was striking from several of the hyperscalers, in relation to capex spend.

Elliott added:“[Amazon CEO Andy] Jassey was clear that ‘if the demand isn't there, we won’t spend the capital’ and the team at Microsoft went as far as to reference the US railroad buildout as a direct analogy.

“Investors are no longer simply rewarding management teams for ever-increasing AI spend – which is a good thing in our view – and management teams are adapting their message. The groundwork is being laid for a cut, if deemed necessary, in the coming quarters.”

If you’re buying an index fund or exchange-traded fund (ETF) that tracks a particular index, there are two main options you can choose.

An equal-weighted index fund is exactly that – a fund where all components (shares or bonds) are the same size.

Conversely, a market cap-weighted index fund allocates proportionately, so the larger companies’ stock or bonds make up a higher share of the index and the smaller companies’ stock or bonds comprise a smaller amount.

If the point of an index fund is to have diverse exposure to lots of different companies (100 in the flagship FTSE index, 500 if it’s the US’s S&P equivalent and so on) then some might say using market capitalisation to allocate each component of the index seems a little short-sighted.

If you’re a US index investor, buying a fund that tracks the S&P 500 index ought to give you access to 500 shares (it’s actually slightly over that – 505 at the end of July – because some companies, like Google’s parent Alphabet, list more than one share class of their stock). Yet the so-called Magnificent 7 (Mag 7) names account for around a third of the S&P’s value, with a combined market cap of around $22 trillion.

As a proxy for the wider US stock market, that concentration is reflective of the sector’s position in the market and role in the economy. But as an investment vehicle whose role is to give a one-stop shop to a diversified index, it raises the question of whether such an approach has some shortcomings.

Ultimately whether you favour one or other approach is a personal choice but there are arguments supporting both viewpoints.

Why does equal- versus market cap-weighted matter?

The main differences are about portfolio characteristics, rebalancing and performance.

When the Mag 7 were soaring, many investors might have welcomed their dominance. But now the performance of those stocks is slowing, it’s shining a light on the concentration risk they have presented.

According to ETF provider HANetf, all Mag 7 stocks have underperformed the index for the first time since 2022.

Mark Preskett, senior portfolio manager at Morningstar Wealth, said equal-weighted indices can look very different from market cap-weighted ones, with much lower tech exposure and more even allocation across the other sectors, such as healthcare, industrials, energy and financials. He added that they tilt away from megacap growth and towards a cheaper, less profitable part of the market.

The bigger a company becomes, the more of the index it comprises, inevitably attracting more money flows into it through the funds tracking the benchmark. In short, the winners keep getting bigger, because they are already the winners.

When those companies are outperforming, that makes for a strong investment case. But when things wobble, the opposite becomes true. This is referred to as concentration risk. A broad index may still contain hundreds of names but its performance depends on relatively few, large constituents.

How does performance compare?

The growth potential can vary sharply between the two strategies.

Morningstar compared its Global Target Market Exposure (TME) Equal Weighted index fund, which tracks gross returns of the top 85% largest mid- and large-cap global stocks (equal-weighted), in US dollars over 10 years (1 August 2016 to 1 August 2026). It took an initial value of $10,000, and with a cumulative return of 130.68%, turned that amount into $23,041.

The market cap-weighted peer generated a cumulative return of 224.68% over the same timeframe, turning $10,000 into $33,360.

This stark difference highlights the trade-off investors are making. Equal weighting can mean giving more exposure to mid-cap value characteristics and less to the megacap names driving the market-cap indices. But in the market cap-weighted index, its winners have generated significantly higher returns.

Rob Edwards, global head of product & research at Morningstar Indexes said this was not a new phenomenon. He pointed to long-run evidence that suggests a relatively small number of companies often drive returns.

A study by Hendrik Bessembinder from Arizona State University’s business school studied 29,754 stocks from 1926 to 2025, a time period over which $91 trillion of shareholder wealth was created. Just 46 companies accounted for half of that total wealth creation.

Yet Cameron MacDonald of HANetf said scepticism around artificial intelligence spending, a rotation into smaller companies and mixed recent results for the Mag 7 all support the case for equal weighting.

Citing FactSet data, Invesco (which also offers equal-weighted index strategies) pointed out that the equal-weight version of the S&P 500 index outperformed its market cap-weighted peer by an average of 1.05% annually between 1999 and 2023.

Benefits of equal weighting

If diversification is the point of investing in a broad index, then arguably the breadth of underlying company nuances is what you are seeking.

According to Morningstar, in the first quarter of the year, 65% of all European asset flows moved into passive funds, totalling €120 billion (£103 billion). With more money flowing into stocks via passive funds and exchange-traded funds (ETFs), there’s a risk that a market cap-weighted approach ends up rewarding the winners and inadvertently not backing the smaller companies (potentially the future winners) to the degree you might like to.

That is the argument made by proponents of equal-weighted funds. They give the smaller constituents a bigger role in the portfolio and reduce the influence of the biggest names. In practice, that often means less concentration in technology and more exposure to financials, healthcare, industrials and energy.

“You’re getting materially different outcomes and sector biases, about 10 times the market cap and almost a mid-cap value as a style rather than megacap growth”, said Preskett.

Further, those smaller stocks are cheaper; they have lower P/E multiples, lower price-to-book, but are often less profitable.

He does see how equal-weighted strategies can be used more tactically. “As markets got more concentrated [earlier this year] there seemed to be some more interest [by peers] in equally weighted portfolios. They were seen as a way of dialling down the risk, almost smoothing returns in a way as you’re bringing in a much more diversified subset.”

But beyond such tactical use, it wasn’t a long-term strategy his team would recommend for mainstream clients.

Edwards also said he disagreed with the idea that surging passive flows distorts long-term outcomes.

“I’m aware there’s been a narrative for academic summaries on this but I think in the long run, the reality is that if a company doesn’t have solid fundamentals, financials, growth characteristics, they're not going to keep growing.”

The winners are the winners because they have incredibly large moats; incredible scale, cost efficiencies, network effects of their businesses.

“Index construction plays very little part in terms of long-term share price growth. I don’t think you can point to index construction or the rise of passive investing because the reality is there's always going to be active management.”

Active management can play the role of countering the momentum when stocks get too expensive.

Ultimately the choice between equal- or market cap-weighted funds depends on what you want to achieve. They’re two very different strategies. To capture the market ‘as is’, market cap-weighting remains the default. If you’re hoping to reduce concentration and spread risk more evenly across the index, that makes a case for equal weighting.

Having smashed through the record for the largest initial public offering (IPO) in history back in June, SpaceX (NASDAQ:SPCX) announced results for the first time as a public company on 4 August.

SpaceX’s IPO saw its shares skyrocket, gaining 19% on their first day and a further 25% over the following two sessions.

But by market close on 4 August, ahead of the earnings release, they had fallen to $125.33 – 7% below the IPO price of $135 and 44% below the $225.64 peak they reached on 16 June.

And the reaction following results exacerbated this crash-landing. The stock opened more than 10% lower on 5 August, the day after the results, despite some impressive headline figures. Increased spending seems to have spooked many investors.

“Part of a SpaceX rocket crashing into the moon this morning is probably a good metaphor for the share price performance so far,” said Chris Beauchamp, chief market analyst at investing and trading platform IG.

Revenue was encouraging, increasing 92% year-on-year to $7.8 billion. Analysts polled by LSEG had yielded a consensus forecast of $6.9 billion, so this represented a healthy beat – at least in theory.

“It’s so early in [SpaceX’s] life as a public company, that beating consensus carries little real weight,” said Matt Britzman, senior equity analyst at investment platform Hargreaves Lansdown. “Analysts are still trying to work out what the business should look like.”

Rather than these estimates, investors appear to have focused on the negatives, including rising costs across all segments – particularly artificial intelligence, where spending rose by $1.6 billion.

Across the business, losses narrowed to $541 million from $1 billion, and Elon Musk moved the company’s target date to achieve $1 trillion in annual revenue forward by a year, from 2031 to 2030.

The initial success of SpaceX’s IPO made Musk a trillionaire, though the subsequent share price declines have brought his nominal wealth back below the threshold.

But could there be complications when Musk, and other long-standing investors, try to realise this wealth?

How might lock-up expiries impact SpaceX shares?

On 6 August, the first of a series of lock-up periods for longstanding SpaceX shareholders expired.

Investment research firm Morningstar predicted these lock-up expiries could lead to waves of selling.

Lock-up periods are a period of time following an IPO during which pre-existing shareholders cannot sell their shares (for the most part, these are company insiders and any investment trusts or other institutional investors that invested in the company when it was private).

In theory this protects new investors from a sharp sell-off once the company goes public – because these pre-existing shareholders are, in theory, heavily incentivised to realise some of the value or profits from their shareholdings when a company lists. Staggering the periods at which they can sell gives the share price a chance to stabilise on the public market.

SpaceX’s lock-up periods expire in multiple tranches between 6 August and the one-year anniversary of the IPO.

Each lock-up window expiry provides an opportunity for longstanding shareholders to bank profits, and the expectation is that many of them will.

This usually sees a dip in a company’s share price as there is a sudden influx of sellers.

The 911 million SpaceX shares that became available for trading on 6 August is more than the amount that were sold in the IPO.

Musk himself won’t be able to sell his shares until June 2027, though he has previously said that he won’t sell his shares even then.

Matthew Kennedy, senior strategist at investment bank Renaissance Capital, told Morningstar that “SpaceX has the longest series of lock-up releases we’ve ever seen”.

In the event, there was no sudden deluge of selling when the first expiry hit. SpaceX shares actually rose more than 6% on 6 August.

But with more unlocks approaching in August, September and October, SpaceX’s share price could continue to fluctuate over coming weeks.

“[In the near term] lock-up expiries, a growing public float and upcoming Starship launches are likely to keep the shares volatile,” said Britzman.

There’s a huge growth story going on in Vietnam that investors would be well-advised to pay heed to.

Its economy grew by 8% last year, making it the 13th-fastest growing in the world according to World Bank.

While much of the rest of Southeast Asia’s stock markets are heavily dominated by artificial intelligence (AI) hardware makers, Vietnam’s has a much more broad-based composition, including a relatively high weighting towards more ‘traditional’ industries, meaning it can offer genuine diversification.

“The combination of economic growth, reform and attractive valuations creates a compelling long-term environment for active investors,” said Tung Dang, chief economist at Dragon Capital – an asset manager that specialises in investing in Vietnam.

It isn’t yet an emerging market – but its reclassification has been confirmed, and is only weeks away. The redesignation will immediately add substantial amounts of passive fund flows into the country’s stock market, and over the following years this could be followed by billions of additional capital from active managers, adding to the many reasons why, of all the regions to invest in, Vietnam is well worth consideration at the present time.

Government reforms are driving growth

Strong growth is one of the most compelling reasons to invest in Vietnam, and government policies are underpinning the story.

Craig Martin, co-chairman of Dynam Capital, says that Vietnam is one of the few markets in the world that offers investors the combination of structural economic growth, political stability and attractive valuations.

“Over the past three decades, Vietnam has transformed itself into one of Asia's most dynamic manufacturing and export economies,” he said. “Today it is moving into a new phase of development, driven not only by exports but increasingly by domestic consumption, rising household wealth, financial deepening and technology adoption. This is being driven by government reforms.”

These reforms are explicitly focused on empowering Vietnam’s private sector, for example by boosting R&D spending and foreign investment. Entrepreneurship is also at the core, with Resolution 68 describing entrepreneurs as “new warriors on the economic front”.

“The government has now set an ambitious target of 10% annual growth over the next decade and has rolled out a new wave of domestic reforms – dubbed Doi Moi 2.0 – to help get there,” said Khanh Vu, lead portfolio manager of Vinacapital Vietnam Opportunity Fund.

“The original Doi Moi reforms in the late 1980s lifted Vietnam from poverty to middle-income status,” Vu added. “This second wave aims for a similar step-change to a high-income economy, similar in the path to what we have seen in other developed Asian economies.”

As with many emerging markets, there is also a strong demographic trend underpinning this – including a young, expanding and consumption-driven middle class, alongside rapid urbanisation and rising productivity.

Vietnam’s stock market

The Vietnamese market, as characterised by the MSCI Vietnam Index, is dominated by the real estate and financials sectors, which account for 44.4% and 24.6% of the market respectively (as of 30 June).

This is slightly skewed because two real estate stocks – Vingroup and its former subsidiary Vinhomes – account for more than 38% of the index between them.

But this dominance of real estate and finance is to be expected in an emerging economy, says Vu.

“Banks remain the primary source of funding and the backbone of economic growth, while real estate developers play a key role in driving urbanisation — a rate that stands at only ~40% in Vietnam, compared to 67% in China, 63% in Thailand, and 75% in Malaysia,” he said.

Vu also highlighted the importance of hard asset-linked sectors (industrials, construction materials, energy and utilities) within the Vietnam market and picked out Hoa Phat, the country’s largest steel producer, as a key beneficiary of urbanisation and infrastructure spending.

“Consumer businesses are another important theme, benefiting from rising incomes, urbanisation and an expanding middle class,” said Martin. “Retailers, food producers and consumer services continue to enjoy long-term structural growth.”

Vietnam is also conspicuous among emerging markets for the relative lack of state-owned enterprises in its largest stocks. “Many of the leading companies were started by entrepreneurs,” Martin points out. There is some state investment in the financial sector, but this tends to happen alongside specialist foreign investors.

Vietnam’s emerging market status confirmed

In April 2026, FTSE Russell confirmed that it will reclassify Vietnam from a frontier market to an emerging market, a process that will begin on 21 September and be implemented in four tranches over the following 12 months.

This could potentially mark a step-change from recent years during which, as Vu points out, foreign investors have been net sellers of Vietnamese stocks.

“The higher interest rate environment in the US and the AI-related frenzy [have been] pulling capital elsewhere,” he said.

Emerging market classification could reverse this trend, because the market will be accessible to a wider pool of institutional investors and passive funds whose mandates currently prevent them from investing in Vietnam.

“The most immediate effect will be passive investment from funds that track emerging-market indices,” said Dragon Capital’s Dang.

But the impact is unlikely to happen overnight – especially as most of the anticipated new capital is likely to come from active investors.

“While passive inflows receive most of the attention, I think the bigger story is that an upgrade raises Vietnam's visibility among global investors,” said Martin. “Once institutions begin researching the market, many active managers also become interested, creating more durable sources of capital.”

Dang quantifies the potential passive tracker inflows at around $1.5-2 billion once inclusion completes (expected to be September 2027). Active allocations following after this are expected to raise total foreign inflows to $5-10 billion.

Finding value in Vietnam

For one reason or another, Vietnam’s market – despite impressive growth rates – is often overlooked, and this means that it offers remarkable value.

“Currently, the market trades at around 13x forward P/E — and if we exclude some anomalies, closer to below 10x,” said Vinacapital’s Vu. “That's a valuation typically associated with a period of economic stress, not an economy growing at one of the fastest rates in Asia.”

Dang argues that valuations for Vietnamese stocks remain attractive compared to historical levels despite rising earnings and the country’s strong economic growth.

“We expect profit growth across the larger companies to remain robust, yet the market continues to trade at a discount to many regional peers and below its own historical valuation ranges,” he said. “Earnings expectations have also held up well despite geopolitical uncertainty, higher oil prices and tighter global financial conditions.”

Vietnam can also offer diversification for the typical portfolio, which is frequently dominated by a handful of large-cap US technology companies.

“Investing in Vietnam means investing in the ‘traditional’ sectors but experiencing tremendous growth potentials, following the same pattern as developed markets experienced 20-30 years ago,” said Vu.

How to invest in Vietnam

Given its small size, lack of investment coverage and the outsize weighting of the index’s two largest stocks, passive investment isn’t generally seen as the best way to invest in Vietnam.

“Vietnam is not simply an index story,” said Martin. “There are very significant differences in quality, governance and capital allocation between companies. Stock selection remains critical.”

There aren’t many passive funds available to UK-based investors tracking Vietnam’s market either. It is also difficult to buy the country’s stocks directly, but fortunately there are a handful of investment trusts focusing on the country.

The largest of these by market capitalisation is Vietnam Enterprise Investments (LON:VEIL), managed by Dragon Capital. This targets Vietnamese companies with attractive growth and value potential, good corporate governance and an alignment with the country’s underlying economic growth drivers. Vingroup is the top holding as of 30 June (though VEIL is significantly underweight compared to the index), followed by state-owned bank BIDV and consumer retail chain Mobile World.

Vinacapital Vietnam Opportunity Fund (LON:VOF) invests in privately-held Vietnamese companies as well as publicly-listed ones, and is sector-agnostic. As well as Vinhomes and Mobile World, top holdings (as of 30 June) include real estate development firm Khang Dien House, commercial bank (and Vietnamese Ministry of National Defence subsidiary) MB Bank, and port operation and logistics firm Gemadept.

Finally, Vietnam Holding Ltd (LON:VNH), managed by Dynam Capital, focuses on high-growth companies in Vietnam particularly in domestic consumption, industrialisation and urbanisation.

For more information on each of these Vietnam-focused investment trusts, see our article on The best funds to buy as Vietnam evolves.

Almost half of all adults in the UK struggle with financial literacy. Many do not understand the three key concepts – compounding returns, inflation, and risk.

Without understanding these concepts, building financial independence becomes harder. Indeed the rising levels of young people not in education, employment or training can be linked back to poor numeracy skills in schools.

A landmark report by former minister Alan Milburn found around one million young people (one in eight) are NEETs, and this number is rising.

That presents a “huge national challenge”, says Lizzie Gaisman, chief executive of The Richmond Project, a charity founded by former prime minister Rishi Sunak to champion numeracy.

One of the factors contributing to this rise is a lack of confidence with numeracy, Gaisman tells Kalpana Fitzpatrick, digital editor-in-chief, on the MoneyWeek Talks podcast.

“We all believe – and now hopefully our research underscores – that confidence with numbers and what that means in terms of people’s daily life and finances, is an absolutely critical driver of social mobility for people.

“Without it, it’s really hard to find opportunities, to make the most of opportunities, and the downside risk is also really strong for those who don’t have that core conceptual understanding [of finance].”

Gaisman says issues like the rising number of NEETs in the country are always complex with many different root causes, but adds: “I do feel very strongly – and I wouldn’t be in this job if I didn’t – that numeracy and financial literacy are sitting really at the heart of that web for our young people.”

Why do Brits have poor financial literacy?

There are major disparities between the financial literacy of different groups in the UK. Research by The Richmond Project shows there are large socioeconomic, age, and gender gaps that are leaving people without the financial education they need.

Gaisman says: “We’ve got quite a big challenge in front of us as a country, and that’s particularly acute for groups who have already got quite a lot to contend with.”

There can be many reasons people do not have the financial education they need. Gaisman notes that a lack of confidence in maths plays a key role.

“Our research shows if you’ve got poor financial literacy, you are four times as likely to say maths was your least favourite subject at school. There is an element of what we know to be quite a negative emotional association with maths or with your confidence around maths that’s playing a role here.”

She adds that for things to change, there needs to be a cultural shift to make people more comfortable with basic numerical concepts to boost financial confidence and literacy.

There is also an inter-generational challenge. “We know that if your parents don’t feel that they have the tools that they need to manage their financial life, it is really hard for you as a child to absorb those skills in your home life because you're not seeing the role-modelling.”

One way to help bridge this gap is by introducing more financial education in schools. The Richmond Project has already partnered with the Department for Education to help children learn more about these concepts in their classrooms.

“The big three things [compounding returns, inflation, and risk diversification] are transformational for people to learn and we’ll be testing the curriculum because it’s not only the ‘what’, it’s also the ‘how’ you’re taught as a child that makes a big difference.”

For more on why Britain needs higher levels of financial literacy and more, listen to the full episode of MoneyWeek Talks with Lizzie Gaisman on YouTube or wherever you get your podcasts. You can also catch up with our previous podcast episode with Rishi Sunak, talking about how his charity wants to help change financial education.

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 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.

Santander has launched a new range of fixed-rate cash ISAs paying inflation-beating rates.

With potential base rate cuts next year and changes to the ISA rules, fixed-rate savings accounts could offer an opportunity to lock in rates now for those with short term savings goals.

From the tax year 2027/28, the annual cash ISA allowance will be reduced from £20,000 to £12,000 for under-65s.

Santander’s fixed cash ISA range includes one, two, three and five-year accounts offering interest rates of up to 4.7% annual equivalent rate (AER).

The one and two-year ISAs pay 4.5% AER and the three and five-year ISAs pay 4.65% and 4.7% AER, respectively.

Analysis by Paragon Bank shows fixed and instant-access cash ISA balances grew by £38 billion to £478 billion across 25.6 million accounts between January and May.

Who can open Santander’s new fixed ISAs?

You can open an account if you’re 18 or over with a minimum deposit of £500.

Interest is paid into the accounts annually and at the end of the term. Deposits for the 2026/27 year must be made by the end of 30 September 2026.

You can withdraw money from the ISAs, but you must take out the entire balance and you’ll be charged a fee equal to 120 days’ interest.

Can I transfer an old ISA into Santander's ISAs?

If you have an ISA elsewhere with a much lower rate, and are happy to lock money away for a few years, then it is possible you can transfer it into one of Santander's new fixed deals.

Just ask the provider for the correct form so that you do not lose the tax free status of the savings.

Santander said it will also pay a hotel voucher of up to £400 when transferring in.

Santander will email you a link and registration code within 28 days of your ISA transfer completing which you need to activate within 60 days to receive the voucher(s).

It is worth noting that some providers are also paying up to £1,500 cash bonuses when transferring into a stocks and shares ISA.

How do Santander’s cash ISAs compare to the rest of the market?

Based on a deposit of £500, none of Santander’s fixed-rate cash ISAs are top of the market, but only by a small amount.

All four are also paying the highest rates out of the major high street banks, if you prefer a bank with an established name.

If the very top rate is your priority, then the one-year fixed-rate cash ISA can be beaten by Cynergy Bank paying 4.7%.

The two-year fixed-rate cash ISA by Cynergy Bank pays 4.75%. Coventry Building Society has a two-year fixed-rate deal paying 4.63%.

Its three-year fixed-rate deal is beaten by Tandem Bank, paying 4.78%. Meanwhile its five-year fixed-rate cash ISA can be beaten only by Hinckley & Rugby Building Society (4.82%).

Though, if you have a large sum and do not think you need it for five years or more, investing it could make better sense.

If you’ve sold a house recently and it felt like it took an age, you aren't alone. It currently takes 216 days on average to find a buyer and complete the sale of a property across Great Britain.

The average time it takes to find a buyer across England, Wales and Scotland was 62 days and the time taken to complete a purchase was 154 days in June, Rightmove finds.

Sellers with flats who have found a buyer are facing the longest wait to complete – an average of 169 days. In contrast, owners of terraced and semi-detached houses are waiting 149 days on average to complete a purchase after finding a buyer.

Johan Svanstrom, Rightmove’s CEO said this was the longest summer wait on record.

"An average 154 day wait to complete the transaction process itself is simply far too long. Rightmove data shows that in some parts of the country the delays are even more significant. Housing mobility is closely linked to economic growth. We believe greater digitisation of moving journey processes, stronger information standards and transparency to all stakeholders is key," he said.

Delays in the house-selling process were caused by a number of factors including longer chains, legal hold-ups and complications involved with selling leasehold properties.

Rightmove also said a big driver of long competition times was conveyancing solicitors dealing with high caseloads. It comes with £205 billion worth of residential property currently on sale on the Rightmove website, according to the portal's own figures, which, if sold, it said could stimulate UK economic growth.

The regions where properties are selling the fastest and slowest

The analysis reveals homes are generally much quicker to sell in the north of England and Scotland than the south of England and Wales.

It’s currently quickest to sell a home in Scotland with the time to find a buyer combined with the time to complete a purchase sitting at 127 days on average – over four months.

The second quickest place to sell a home is in the North East of England, where the total time to move home is 194 days on average.

The third quickest is Yorkshire and the Humber, with the total time to move home taking on average 207 days.

Homes take the longest to sell across Great Britain in London. It takes 70 days on average to find a buyer and 174 days to complete a purchase, a total wait of 244 days (or over eight months), Rightmove found.

Source: Rightmove

The local authorities where it’s fastest and slowest to sell a home

The 10 local authorities where it’s quickest to sell a home after finding a buyer are all in Scotland, according to Rightmove.

It is quickest to complete the sale of a property in Clackmannanshire where the average wait time is 76 days, then Angus and Dumfries and Galloway where it takes 77 days on average.

The local authority where it takes the least amount of time to complete a house sale outside of Scotland is in North East Derbyshire (120 days), then North East Lincolnshire (122 days) and Chesterfield (124 days).

The time taken to complete a sale is longest in Slough (229 days), Brentwood (209 days) and Colchester (205 days).

Source: Rightmove

How to speed up the house-selling process

Getting paperwork ready and in order can shave weeks of the house-selling process, said Nick Mendes, mortgage technical manager at broker John Charcol.

“Title deeds, Energy Performance Certificate, leasehold info, planning or building regulation certificates, all of it should be sat with your conveyancer on day one, not chased up after an offer lands," he said.

It’s also worth getting a conveyancer involved before you’ve got a buyer, not after.

“Too many sellers wait until an offer's accepted to start looking for a solicitor, and that's time you never get back. Get the ID checks, source of funds and initial searches moving early so things can progress the second a sale is agreed.”

If you’re selling a leasehold property, you can speed up the process by extending a lease through your landlord and requesting management packs as soon as possible.

It can be harder to sell a leasehold property with less time left on a lease while lenders may be reluctant to issue a mortgage to a buyer, which can also delay the house-selling process.

Management packs contain details on what the buyer is purchasing, such as service charges and insurance costs, but can take weeks to arrive.

Mendes added that it’s crucial to set a realistic asking price on your home when putting it on the market. Recent research from Zoopla found many people are setting the initial price too high which means it takes longer for a property to sell, sometimes years.

“Go in too high and have to correct it later, and you've just added time on market and given any chain a chance to fall apart,” Mendes said.

Two Premium Bonds holders have bagged the jackpot in the August National Savings & Investment prize draw - one of which only purchased their winning bond seven months ago.

The latest £1 million jackpot winners come from Kent and Hampshire and the Isle of Wight and won with bond numbers 664BF890888 and 491KF169443, respectively.

The Kent winner bought their bond in February 2026 and has a total holding of £21,000.

The winner from Hampshire and the Isle of Wight purchased their bond in March 2022 and holds £49,850 overall in Premium Bonds, close to the maximum of £50,000.

How many prizes will be issued in August’s draw?

Roughly 6.2 million tax-free prizes worth a total of £433 million will be paid to Premium Bond prize draw winners in the August draw.

This month, there were 136 billion £1 bonds eligible for the draw.

The total value of the prizes dished out since the first draw in June 1957 is £42.3 billion.

The table below shows the breakdown of prizes in August:

Credit: NS&I

How to check if you've won in August's prize draw

NS&I’s Agent Million will inform the £1 million jackpot winners in person.

Premium Bond holders can check if they have won the smaller prizes of £25 to £100,000 the day after the first working day of each month. For August 2026, the date you can check from is 4 August.

You can do this by using the Premium Bonds prize checker app, visiting the NS&I website or asking Alexa.

The prize checker app and website will show you prizes you’ve won that month, anything you’ve won in the previous six draws and any older prizes you haven’t claimed yet.

You will need your bond number or NS&I number to access your account.

As Premium Bonds do not expire, it’s worth checking if you have any prizes waiting for you even if you bought them years ago.

NS&I says over 99% of prizes have been paid to winners since draws began in 1957, but there are still 2.8 million left unclaimed.

We look at the alternatives to Premium Bonds in a separate piece.

Banking stocks are back. Towards the end of January 2026, Deutsche Bank (Frankfurt: DBK), the perennially struggling German lender, told investors it had booked record profits in 2025 and was trading ahead of management's long-term profitability targets.

This was a landmark not only for the company, but also for the wider global banking sector. Financial institutions generated a total shareholder return of 30.2% last year, according to the latest report from the Boston Consulting Group, ahead of information technology and all other major sectors. Yet most financial institutions still trade at roughly a 40% discount to the market.

If there's one bank that reflects the issues that have affected the sector for the past two decades, it's Deutsche Bank. The bank aggressively chased growth pre-2007 and became one of the world's most influential financial institutions, but quickly fell apart in the financial crisis. It initially avoided a direct German government bailout, but relied heavily on emergency loans from the US Federal Reserve to stay afloat.

As management boasted about not taking cash from any government, it had over the next 15 years to raise capital on four occasions for a collective total of more than €30 billion. The bank also paid approximately $10 billion to settle long-running investigations into its sales practices before the financial crisis. It has also been raided by the German authorities on multiple occasions due to tax probes and money laundering. The lender has paid around $20 billion in fines over the past two decades.

In many respects, it is amazing the bank is still around, but it has struggled on and this year's earnings release seemed to represent a high-water mark. The company reported a post-tax return on tangible equity – a key measure of banking profitability – of 10.3% with a profit before tax of €9.7 billion, up 84% year on year.

Costs fell across the business and it reported a strong rise in fees from its asset-management and private-bank arms. It has also started returning cash to investors. Management outlined plans to return up to €2.9 billion to shareholders in January, comprising a €1 per share dividend and a €1 billion share buyback authority.

Big banking stocks get a lift from tailwinds

Deutsche Bank isn't the only global lender that has reported a surge in profitability over the past couple of years. The entire banking sector is reporting some of the best profit and earnings figures since before the financial crisis and shareholders are reaping the benefits.

The UK's Metro Bank (LSE: MTRO) is another example. It came close to collapse in 2023 before securing a rescue refinancing and has spent the last three years refocusing the business. In the first quarter, it reported a record level of income, delivering a return on tangible equity of 6.4%; management wants to increase that to 18% by 2028.

Metro Bank and Deutsche Bank are two very different institutions, but they are benefiting from the same underlying trends that are acting as significant tailwinds for banking stocks. In its latest set of results, Metro reported a 22% rise in net interest income, as its net interest margin – a measure of lending profitability – came in at 3.17%. Lending to small businesses rose by 67% and the bank cut costs by 7%. All big financial institutions are making significant cost reductions as they embrace and adopt AI. According to US employment data, payrolls in the financial services and information technology sectors have declined by 28,000 per month on average in 2026 as AI adoption has accelerated.

US banks such as JPMorgan Chase (NYSE: JPM), Citigroup (NYSE: C) and Goldman Sachs (NYSE: GS) have all said they will use AI to help employees crunch more data, and that will lead to job losses. Standard Chartered (LSE: STAN) announced in May that it would cut more than 7,000 jobs over the next four years as the bank accelerates the use of AI. Morgan Stanley (NYSE: MS) has also said that it will cut 3% of its workforce as AI takes on more work.

Banks reap the benefits of higher interest rates

Falling costs are only part of the equation for banking stocks. They've also been able to take advantage of the stronger interest-rate environment over the past five years. At its core, banking is all about how much lenders can earn on the spread between deposits received from savers and the money they lend out either to businesses or consumers. This spread between the cost of capital and interest received is called net interest margin – one of the most significant metrics in banking. The global bank net interest margin was 1.65% in 2024 and 1.63% in 2025, according to McKinsey's 2026 Global Banking Annual Review. But while the global rate declined, the margin in the US rose by nine basis points, in Japan by seven and in the UK by six.

Banking stocks are still reaping the benefits of higher interest rates even as central banks the world over have started to bring rates down from the highs seen in the years immediately after the pandemic. Most banks borrow in the short-term lending market and then lend on a longer-term time horizon to consumers or businesses. This helps manage risk and means it can take time for interest-rate changes to filter through the system. Banks also make the most of so-called structural hedges, using stable low- or zero-rate customer deposits as long-term funding and executing interest-rate swaps to convert exposure to floating rates into fixed yields.

For example, Lloyds Bank (LSE: LLOY), the UK's largest mortgage lender, reported a net interest margin of 2.95% in 2024, 3.06% in 2025, and 3.17% in the first three months of 2026. The company has been able to earn more even as interest rates have fallen from a high of 5.25% in the first few months of 2024 to today's rate of 3.75%, as consumers have rolled off long-term fixed mortgages at low rates and have had to fix at a higher rate.

Costs and higher interest rates have helped banking stocks, but so has the economic environment. Despite concerns that higher rates globally would lead to an increase in defaults as companies struggled with a higher cost of debt, in reality the outcome has been very different. All six major US banks that have reported results so far reduced the amount of money they have set aside to cover bad loans. Goldman Sachs reported a 73% decline for the same period last year, Morgan Stanley cut its credit provisions by 50%, while Bank of America (NYSE: BAC), JPMorgan, Citigroup and Wells Fargo (NYSE: WFC) all reduced provisions by 9%-14%.

At the same time, demand for loans has increased. A strong economic recovery in the US has driven demand for business and consumer borrowing. Analysis of the major US lenders' results conducted by Fitch Ratings found that commercial loan growth has now exceeded 7% year on year for 14 straight weeks. All of the largest major lenders reported double-digit loan growth for the second quarter and some smaller banks have reported the strongest growth since 2012. In the UK, too, demand has picked up despite cost-of-living pressures. Across Europe, demand for loans and credit lines has increased in every quarter since the second quarter of 2024 (apart from the first quarter of 2026), according to data from the European Central Bank. In the second quarter of the year, the requirement for loans increased by 3% overall.

Record highs for stock trading and deals

Buoyant global equity markets have also helped the world's largest investment banks report a jump in trading revenue this year. Bank of America reported a record $3.6 billion dollars in equity trading revenue during the second quarter of 2026 (up 70%) and $3.5 billion in fixed-income trading revenue. Goldman Sachs reported a record $7.2 billion dollars in equity trading revenue for the quarter, up 72% from last year. JPMorgan Chase's equities traders posted an 86% gain to $6 billion.

These numbers follow a record 2025. Banks generated $271 billion of revenues from global markets last year, according to strategic benchmarking firm BCG Expand. That's $11 billion above their 2009 total – the highest level in recent memory. The big five US banks generated $134 billion of revenues from markets between them last year, 16% above 2024's levels.

As traders trade, deal makers are raking in cash for these financial behemoths as well. There have been about $1.7 trillion of deals announced so far this year, according to data compiled by Bloomberg, which excludes SpaceX's combination with xAI. That's the fastest pace since 2021, the high-water mark of the past few decades. Goldman Sachs has established a clear lead. The Wall Street bank has advised on more than $1 trillion of mergers and acquisitions this year already, according to data from Dealogic. Some of the deals the bank has helped advise on include Unilever's $44.8 billion sale of its food business to McCormick and Dominion Energy's $118 billion sale to NextEra Energy.

These Wall Street banks tend to eat the lion's share of revenue from global equity trading and investment banking, but European banks tend to be stronger in wealth management, which has also seen a significant increase in profitability, particularly among high-net-worth and ultra-high-net-worth individuals. Swiss bank UBS (Zurich: UBSG) reported an 80% increase in net profit for the first quarter of the year thanks to an increase in income from its investment bank and its Global Wealth Management arm. Net new assets in Global Wealth Management totalled $37.4 billion, equivalent to annualised growth of 3.1% in transaction-based income, and the bank's asset-management unit added $14 billion in net new money. Overall, UBS reported $7.1 billion in revenue from global wealth management for the first quarter of 2026, an 11% rise year-over-year. Group invested assets stood at $6.9 trillion at the end of the quarter.

Deutsche Bank, too, has reported a robust performance by its asset and wealth-management arm. The bank reported topline net revenue growth of 2% for the first three months of the year and a rise in profit before tax of 7%. Revenue at the asset-management arm rose by 10% and profit before tax was up 37% as assets under management increased €84 billion year on year, with further net inflows of €11 billion during the quarter. A near-4% rise in client assets at Deutsche's private bank also helped this division outperform. Profit before tax at the private bank rose 39% overall.

These two banks are both very Western-focused. HSBC (LSE: HSBA) and Standard Chartered, on the other hand, have a stronger reputation for wealth management and investment banking in emerging and developing markets, such as China and India.

Britain's banks have their own attractions

Unlike their counterparts on Wall Street and in Europe, UK banks don't tend to have large footprints in wealth management, private client and investment banking, or trading. This goes back to the financial crisis when banks such as Royal Bank of Scotland – now NatWest (LSE: NWG) – and Lloyds used to have large trading businesses and international operations. These were sold off in the aftermath of the financial crisis as the lenders doubled down on the core business of making loans and taking savers' money.

That said, lenders such as Barclays (LSE: BARC) and HSBC do have large trading arms, although they've never been able to compete in the same arena as the Wall Street giants. Still, despite their lack of exposure to the Wall Street world, UK banks have their own attractive qualities. According to analysts at Berenberg, banks' rolling structural hedges should guarantee around 50% of income for the sector through to the end of the decade, generating steady returns for the industry.

There's also plenty of scope for consumers and businesses in the UK to increase borrowing. Household and corporate debt ratios are at the lowest levels of the past 25 to 30 years, while UK banks' average loan-to-deposit ratios sit at 90%, giving the sector plenty of headroom to increase borrowing. UK banks are trading at just 7.5 times their two-year forward price-to-earnings (p/e) ratio, a level not seen since late 2021 and a 20% discount to the sector. There's a lot of political and economic uncertainty hanging over the market, but this discount seems unwarranted.

There's also plenty of cash to return to investors. Berenberg believes the average total yield of UK banks will rise to 10%-11% by 2028 compared with 7%-8% today, the total comprising a combination of dividends and share buybacks.

Berenberg likes Barclays, for its exposure to the US investment banking and trading world, and NatWest. Barclays has made substantial progress at its investment bank, improving profitability and keeping costs low. Investment banking and trading revenues have grown steadily since 2022, with the teams keeping up with peers at the Wall Street majors. Despite this progress, the bank trades at just 1.2 times tangible net asset value at the lower end of its European peer group. Berenberg estimates that, based on its return on tangible equity of 14.3%, it should be trading closer to 1.6 times net asset value, suggesting an upside of 40%. Earlier this year, the bank pledged to return £15 billion to shareholders as part of its growth plans.

NatWest, meanwhile, is trading at a 25% discount to the average in the European banking sector. The lender is earning a 20% return on tangible equity and is reporting strong organic capital generation. Organic capital generation is expected to exceed 200 basis points per annum over the next few years, which should help fund growth, distributions and potential bolt-on acquisitions. The shares are currently trading at a 2028 p/e of just 6.5 and offer a potential forward dividend yield of 7.5%. The recent acquisition of Evelyn Partners will also help the company expand its footprint in the lucrative wealth-management business.

The most promising global banking players

One of the more interesting global opportunities is Santander (LSE: BNC). This lender has a presence in the US, Europe, the UK and Southern and Central America, making it one of the few genuine global banking opportunities. The bank has 180 million customers around the world and wants to exceed 210 million by 2028. At the same time, it has laid out plans to generate €20 billion (growth of around 40%) in profit by 2028, to be helped by recent acquisitions such as Webster Financial in the US for $12 billion earlier this year and the TSB Bank in the UK. It expects all divisions, loans, wealth management and cross-border finance to contribute to this growth. Growth is just one part of the story. The other side is shareholder returns. The lender is nearing the end of a programme to return €10 billion through share buybacks for 2025 and 2026 and analysts believe it will rebuild this pipeline when the current authorisation has come to an end.

UBS is another global player that analysts believe is undervalued. Now the group has fully completed the merger of Credit Suisse and removed unnecessary costs, it can concentrate on executing its strategy, growing the wealth-management business and its private bank. According to analysts' consensus estimates compiled by UBS, the bank is expected to post $10.7 billion of net income for 2026, rising to $14.4 billion in 2028. The wealth-management arm is projected to increase assets under management by around $1 trillion and see profit before tax nearly double from $5 billion to $10 billion by 2028. Based on these estimates, the shares are trading at a 2028 forward p/e ratio of around 9.5. Analysts have also pencilled in a reduction in outstanding share capital of around 10% and expect the dividend per share to rise 40% to $1.58 over the same period.

A shower of cash for shareholders

Of the large US banks, the cheapest is Citigroup. Trading at 1.2 times book value, the bank has long struggled to live up to the lofty expectations of the market. Its peers, Goldman and Morgan Stanley, are trading at 2.8 and 3.3 times book value, respectively. Still, the bank is benefiting from many of the tailwinds helping its peers. Markets and equities trading revenues were up 17% and 45% respectively in the second quarter, while the group's cost-to-income ratio came in at 57.4% compared to a full-year target of 60%.

In the first half, Citi booked a 13% return on tangible capital employed and is saying it expects 10%-11% for the full year, which suggests it's around a third less profitable than major peers such as Goldman Sachs based on this measure. That deserves a lower valuation, but a discount of more than 50% seems too steep. With a solid Tier-1 capital ratio of 12%, the bank was able to declare a $30 billion multi-year share repurchase programme following the successful completion of the Federal Reserve's supervisory test earlier this year.

Citi's cash returns are emblematic of the sector. In the first quarter of this year, the eight largest US banks showered shareholders with $46 billion in dividends and buybacks, up a third from last year. European banks are expected to return €123 billion this year. It's time for investors to sit up and take notice.

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.

Cameco (Toronto: CCO, or NYSE: CCJ) is a C$54 billion (£28.8 billion) nuclear-industry supplier covering the whole spectrum from uranium exploration, mining, refining, enrichment and fuel fabrication to designing, developing and servicing reactors.

The Iran war and resulting interruption of oil and gas supplies shows how geopolitical tensions can disrupt supply chains and affect share prices. Markets would drop precipitately should China invade Taiwan or Russia attack the Baltic states. Given these uncertainties, there is a strong case for investing in secure, reliable, zero-carbon baseload power. The construction of data centres for AI is also adding to demand for such power.

The renaissance in nuclear for zero-carbon baseload electricity meets these needs. There are already 436 nuclear reactors in the world with 70 new reactors under construction and another 115 planned. And 38 countries have signed a declaration to triple nuclear generating capacity by 2050.

Cameco's reserves of uranium are in Canada, Australia, the US and Kazakhstan, with the majority of its proven and probable reserves in Canada. In 2025, Cameco was the second-largest producer with 15% (Kazatomprom was the largest at 20%). Planned production is expected to fall below demand in 2033 and be only 50% of demand by 2041. Cameco's strategy is to build a portfolio of long-term supply contracts with utilities rather than to rely on the spot market. Current contracts run into the 2030s.

Cameco also has a 49% interest in Global Laser Enrichment (GLE) (and the option to attain 75% ownership); GLE has a worldwide exclusive licence on separation of isotopes by laser excitation (SILEX) – a third-generation enrichment technology.

Cameco's reactor design, development, construction and servicing activities are provided by Westinghouse Electric Company, which is a Cameco/ Brookfield Asset Management strategic partnership, with Cameco holding a 49% stake.

Cameco's four drivers of growth

Four factors are expected to drive growth. Firstly, the expected shortfall of supply from 2030-2031 onwards (rapidly increasing the shortfall from 2033), which will lead to stronger pricing and enable the firm to raise production from its reserves. Uranium prices are already rising. Cameco's fuel-manufacturing division enables it to capture more of the value added than it would as a miner.

Secondly, there's the growing global fleet of nuclear reactors that Westinghouse inspects, services and provides for. The third factor is the 185 new reactors planned or under construction. Westinghouse already has six of its AP1000 reactors in operation, another 30 under construction and 16 planned. The fourth is the potential of SILEX technology for the re-enrichment of depleted uranium and for making low-enriched fuel for future light-water reactors.

Cameco's 2025 results to the end of December showed revenue up 11% to $3.5 billion, adjusted EBITDA up 26% to C$1.93 billion and adjusted diluted earnings per share up 321% to C$1.44. First-quarter results show revenue up 7% and adjusted earnings per share up by more than 100% to $0.47. It says committed sales volumes for 2026 are 29 million pounds (mlbs) to 32mlbs of uranium compared to 33mlbs in 2025. But prices are rising, with an average price in the fourth quarter of 2025 of C$91.3 per pound compared with C$80.9 for same period in 2024. Long-term contract prices in 2026 are around C$131 and 2033 prices are anticipated to be in a range with a ceiling of C$200.

Cameco focuses on securing long-term contracts that anticipate increasing demand and shortfall of supply rather than serving the spot market. For example, in March 2026 Cameco signed a nine-year agreement with India to supply nearly 22 million pounds of uranium ore at market prices. This contract has an estimated value of C$2.6 billion.

Cameco's share price is on the rise

Cameco enjoys stability thanks to long-term contracts and growth potential in all divisions. With respect to the mining of uranium, it has large reserves in stable countries, most being in Canada. The fuel services division refines, converts and manufactures fuels, and benefits from the increasing demand for nuclear reactors to provide zero-carbon baseload electricity.

Cameco’s interest in GLE’s third-generation laser-enrichment technology and its option to take majority ownership provides an extra growth driver for this division. Then there is its 49% stake in Westinghouse (WH), which has the proven AP1000 and AP300 reactors, 30 more under construction and others planned. Westinghouse is also developing small modular reactors.

In October 2025, WH signed an agreement whereby the US government will facilitate the financing and building of new reactors in the US to the value of at least $80 billion to power AI-heavy data centres. This raises the prospect of a separate initial public offering (IPO) for WH that could value it at $15 billion-$35 billion or more (compared with the $8.2 billion Cameco/ Brookfield paid for it in 2023) and yield a capital gain. The UK government sold to Toshiba in 2006 for only $5.4 billion.

Cameco’s recent share price is C$123, with a one-year target of C$185, a forward yield of 0.19% and a strong balance sheet with net cash of C$0.2 billion. The forward price-earnings ratio is 46 for 2027 falling to 36.3 for 2028 and, over one year, the shares are up 13.6%. It is vertically integrated (mining to reactor construction and maintenance) and will be a key supplier in the renaissance of clean, reliable nuclear power. The rising price of uranium and new reactors planned globally suggest a long-term rising share price, with the possibility of a capital return from a Westinghouse initial public offering.

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.

When looking for Asian stocks, I look for good businesses run by competent management teams, available at a price that leaves a margin of safety. I focus on managing absolute risk and losing little money during market downturns, which should help compound returns at higher rates over the long term.

This discipline leads the portfolio away from popular thematic investments, start-ups, highly geared companies, cyclical businesses earning peak margins and stocks on high multiples to earnings.

As a result of this approach, the Fidelity Asian Values trust is primarily invested in mispriced small and medium-sized companies – the “winners of tomorrow”, before they become well known. Here are three examples.

Asian stocks to watch

Orion Corporation (Seoul: 271560) is a South Korean snacks and confectionery business that owns the well-known brand Choco Pie. It is a good-quality franchise with about a 25% market share in the domestic market as well as notable international revenues, supported by its production bases in China, India and Vietnam. Its international operations continue to grow and China makes a sizeable revenue contribution.

Choco Pie is its largest growing category, but Orion is using the recognisability of its brand to branch out into premium snacks as well as targeting a health-conscious demographic as a future driver of growth. Management has been focusing on enhancing shareholder value –it reported a 40% year-on-year rise in its dividend in 2025. The business is debt-free; the stock is valued at a 12-month forward price-earnings (p/e) ratio of nine times and offers a return on equity of more than 12%.

ManpowerGroup Greater China (Hong Kong: 2180) serves businesses that require workers for a limited time or a specific project, or those who wish to manage their own direct headcount. It also offers its clients headhunting and recruitment services, payroll outsourcing and training services. It is an asset-light business model and the company earns higher margins in its headhunting and recruitment division.

ManpowerGroup Greater China was spun off from ManpowerGroup, a world leader in its field, and therefore has the reliable operational processes of its erstwhile parent and retains a strong emphasis on risk management. Given the highly unorganised nature of the recruitment market in China, ManpowerGroup's scale and geographical spread is advantageous.

Our research on the ground indicates that the recruitment business in China is at its lowest ebb in the business cycle. The stock trades at a 2026 forward p/e of six times, offers a dividend yield of more than 7% and about 95% of its market capitalisation is in net cash on its balance sheet.

JW Life Science (Seoul: 234080) is the largest producer of intravenous (IV) fluids in South Korea, with a 45% market share. Demand for IV fluids is stable as the products are essential components in surgery, intensive care, hydration and patients' nutrition. The company faces competition from three to four players, but there are high barriers to entry given strict quality criteria, the need for strong brands and distribution capabilities, and for high levels of capital expenditure.

An ageing demographic in South Korea is supportive of revenue growth prospects for JW Life Science. The company has robust operating cash flows and a net cash balance sheet, a sustained mid-single-digit earnings growth profile, and offers a return on equity of an about 15%. It is valued at six times 2026 earnings.

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.

When looking to buy a debt fund, investment trusts are the perfect vehicle. Their closed-ended structure means they are ideal for owning complex and less-liquid debt. It gives them permanent capital, allowing them to hold assets that would be impossible for any open-ended fund that needs to be able to buy and sell quickly in response to inflows and redemptions.

There are a number of specialist trusts that allow UK private investors to access areas that would usually be available only to institutional and high-net-worth investors. What's more, shares in the trusts can be traded at any time regardless of the liquidity of the underlying assets. This means that investors are not subject to the risk of “gating” – limitation or suspension of withdrawals when redemption requests are high – that affects the vehicles these investors typically use.

Why debt funds are highly misunderstood

Despite these strengths, debt funds make up one of the most misunderstood segments of the investment trust sector. There are 16 trusts with total capitalisation of £5.2 billion, split across three sub-sectors: direct lending, loans and bonds, and structured finance.

The average dividend yield today sits in the region of 10%, which in part reflects the fact that the majority of trusts are trading at double-digit discounts to net asset value (NAV). This reflects a lack of awareness of these vehicles, as well as worries around the global private credit market.

For the most part, concerns about the impact of high-profile private credit wobbles are overdone, since most of these debt funds do not own the type of debt under scrutiny. Instead, they hold bonds, asset-backed securities (ABSs) and collateralised debt obligations (CDOs), and much of this is actually relatively liquid.

As an example, let's look at EJF Investments (LSE: EJFI), one of the more esoteric debt funds in the sector. It has a market value of just £76 million and trades at a 24% discount to NAV.

The trust's assets are mostly loans made to smaller banks and insurance companies in the US that have been packaged up as CDOs. It also invests in some other forms of bank debt and in credit-risk transfers (being paid to take on the credit risk on some of a bank's portfolio of loans). At the end of June, it also had around 23% invested in money-market funds and other cash-like instruments, giving it plenty of liquidity to take advantage of opportunities when they emerge.

EJF Investments also owns 50% of EJF CDO Manager, the firm that manages many of the transactions behind these CDOs. In a recent deal, the firm deployed $13.3 million (10% of NAV) into a CDO with the descriptive name of TFINS 2026-2, which is made up of debts issued by 64 US financial institutions. The estimated lifetime yield on the asset is 15%. Since EJF CDO Manager is one of the managers on the deal, it will receive 0.30% per year in fees on the $300 million total value of the CDO.

EJF – a debt fund with solid fundamentals

Broker Panmure Liberum thinks the best way to assess the health of EJF's portfolio is to look at the performance of the underlying issuers. US regional banks have performed well this year, with the KBW Nasdaq Regional Banking index up 19%.

Lenders are benefiting from improving balance sheets, a better regulatory environment and solid demand for borrowing, says analyst Shonil Chande, while rates are supportive. “Banks fund short and lend longer, and while policy rates have fallen from their 2025 peaks, lending rates remain higher further out on the curve.”

Smaller US lenders are also attracting bids from larger peers. Outstanding credits are usually redeemed in these transactions as the buyer can often refinance at lower rates. That reduces income from management fees, but delivers immediate capital gains when credits are called at a premium.

EJF is a specialist debt fund and it will not be suitable for all investors. What's more, fees are high. Investors are being asked to cough up 1.9% per year for access to this niche credit market. But with a yield of 8.5%, the shares look like an attractive income play trading at one of the deepest discounts in the sector.

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Andrew Van Sickle: Canada is always overshadowed by its larger neighbour, so your fund is rarely in the spotlight. Tell us a bit about it.

Greg Eckel: It's a general Canadian equity investment trust, North America's second-oldest closed-end fund. It was set up in 1930, and listed in London in 1995. Think of it as a one-stop shop for investing in Canada. Up to 25% of the trust's assets are allocated to the US (at present the figure is around 20%), typically to gain access to something you wouldn't find in the Canadian market, or for the added liquidity you can get from America.

Canadian General Investments is more diversified than the overall Canadian stock market, which skews heavily towards the financial sector. That contains solid businesses, but they aren't the fastest growers; we want to maintain our long record of beating the index (it's been more than 50 years now), so we look beyond the banks. Financials are 31% of the index; add energy and materials, and we're up to 70%.

AVS: I understand you adopt a largely bottom-up approach, but these are unusually fraught times geopolitically, with mercantilism on the rise and supply chains fracturing. How is Canada placed in this context, do you think, geopolitically and economically?

Greg Eckel: Canada has always had a reputation for geopolitical stability; we are considered pragmatic and centrist. Mark Carney appears to have reinforced this reputation at an important time, proving to be a key driver of trade initiatives and internal spending, which should improve our prospects and help gradually loosen our relationship with the US.

Andrew Van Sickle: What's the latest on trade?

Greg Eckel: We have been carrying on negotiations on what used to be NAFTA, the trade deal with Canada and Mexico. It is known as CUSMA, the Canada-United States-Mexico Agreement. This was supposed to protect around 90% of our goods from US tariffs, but the US recently threatened Canada with extra import levies. There is still considerable uncertainty and the issue hangs over the market like a cloud. About 75% of our exports still go to the US.

Andrew Van Sickle: A long-term plus point, however, is that Canada is amply endowed with raw materials.

Greg Eckel: We have critical minerals too, and currently own a company that refines and purifies them. It's still small, but it's a step towards tackling China's dominance in the field. We have huge deposits of potash, which the US doesn't have. The US, India and China buy nitrogen and phosphate, the other key ingredients in fertiliser, from us too.

Copper and gold are also promising thanks to the energy transition and central-bank buying, respectively, while a commodity we've certainly played to a great extent is uranium. The Athabasca Basin in Saskatchewan contains the highest-grade uranium deposits in the world, with ore concentrations between ten and 100 times the global average.

Uranium is looking especially promising thanks to the revival in demand for nuclear power. Canada's Cameco, a core holding, is the number-one player in this field. Uranium and fertiliser are available from Russia and eastern Europe too, but sanctions are playing havoc with supply chains, so it's easier for Western countries to buy it from us. We have a comprehensive supply chain, so it's easy to ship it around.

Then, of course, there's oil and gas. It's mostly in Alberta, not near the coasts, so we have traditionally shipped it to the US via pipelines. There is now a drive to construct pipelines to the coasts. Finally, we also have abundant soft commodities: fresh water, corn and maple syrup are some of the main ones. We can help feed the world.

Andrew Van Sickle: One of MoneyWeek's key concerns for the next decade or so is what we call “stagflation-lite”: lacklustre growth in the Western world and high prices. Canada seems set fair in this regard given that you have plenty of natural-resources companies; they will tend to have pricing power because raw materials are in everything. You also seem to have plenty of firms in other sectors with pricing power. You've mentioned Canadian Pacific Kansas City in this regard.

Greg Eckel: Yes, there are several companies this applies to. Canadian Pacific has a firm grip on supply chains, which provides the pricing power, and it connects Canada, the US and Mexico, so it is ideally placed to profit from the new trade agreement if it comes to fruition. The company boasts the best operating management team in the North American rail-company sphere.

Meanwhile, the Canadian National Railway Company connects the two Canadian coasts and the Gulf of Mexico. We also have a company among our top-ten holdings called TFI International. That's one of the largest trucking companies. So it's a different play on transportation, but it's been a good grower too. It has a huge US presence as well. So we have circled the wagons on transport, as it were. The US economy still looks strong, and we try to tap into it through these firms. That should bolster their pricing power.

Andrew Van Sickle: Are all these solid prospects fairly priced into the Canadian stockmarket? Is there still relative and absolute value?

Greg Eckel: The benchmark index, the TSX, has outstripped other major developed markets for much of this year. The energy and financial sectors have risen by a quarter. But the fundamentals remain solid. Earnings growth should reach the low teens this year. Inflation remains in check, interest rates are steady and employment is stable. Trouble on the trading front could cause a wobble, however.

Andrew Van Sickle: What sort of price-earnings ratio are we talking about?

Greg Eckel: A forward price-earnings ratio of around 16.4. The US is at 21.5. The spread between the two markets has rarely been this wide. Our dividend yield is around 2.1%, and America's is half that.

Andrew Van Sickle: You have said that the economy is still closely linked to its southern neighbour's, and the stock market presumably is too. There is always something of a “Wall Street leash effect” on other equity indices. Do you think that this could loosen now that Canada is becoming more self-sufficient?

Greg Eckel: Prime minister Carney is leading the charge to reduce Canada's dependence on the US, but this kind of thing takes time. It has taken decades for supply chains to become as integrated as they are, so disentangling them will be laborious.

But clearly, the initiative is there now that we have seen what disruption one person can create. With 75% of exports still going to the US, there is some way to go, of course. Consider too that the average car part can cross either the Canada-US border or the Mexico-US one seven times before finally being installed in a completed vehicle.

Andrew Van Sickle: Your second-biggest sector is IT. This is largely because of your holding in Nvidia, which you are dipping into the US market for – it's your second-biggest holding – and Celestica, your top stock position. Is Celestica Canadian?

Greg Eckel: Yes. We bought Celestica in 2024. We were quite lucky to find it at an early stage. It is a so-called electronics-manufacturing services (EMS) company. Until recently the business made pieces and parts for the likes of Nokia and Cisco.

However, it turns out that the company's products are very helpful for data centres, and so the Big Tech hyperscalers have come straight to Celestica and demanded more and more of the firm's networking switches and related offerings. When we bought the stock, it comprised about 1% of the portfolio. It has been worth 5% at various times in the past two years. We have taken profits on it.

Andrew Van Sickle: Your biggest sector is industrials. That includes the transport giants such as the railways, which will be the heavyweights. What else are you dabbling in?

Greg Eckel: Aerospace and defence is a subsector of industrials, and we found a company called MDA Space in 2024, a space robotics and infrastructure group. That has profited from the excitement about the space economy.

We also recently established a position in a business called Aecon Group, which is a large construction company. The firm builds bridges, water-treatment facilities and nuclear reactors, among many other things. Aecon is a key beneficiary of the drive variously to construct or rebuild nuclear reactors.

AtkinsRéalis is another company cashing in on the nuclear renaissance. It is an engineering group with the rights to the CANDU technology, the intellectual property covering the design and manufacture of nuclear reactors in Canada.

We have also long been impressed with Stantec, an engineering group with a presence in energy, water and transport. That means it is perfectly placed to profit from the drive towards boosting infrastructure across North America.

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.

Bending spoons is a parlour trick popularised in the 1970s by illusionist Uri Geller. It's also the name of Italy's most valuable technology firm, which earlier this summer staged a triumphant Wall Street initial public offering that saw its shares soar by 40% in a day – taking the value to $26 billion and “minting” the fortunes of its founders and a bevy of backers, ranging from US tech grandee Eric Schmidt and French telecoms billionaire Xavier Niel, to celebrities such as Andre Agassi.

The wider technology sell-off has since knocked around 20% off that valuation. But Bending Spoons's ascent is nonetheless remarkable, says the Financial Times. The Milan-based outfit, founded in 2013, has made a virtue of scouring “the digital graveyard” in search of “paranormal returns”.

Most American investors had never heard of it before its market debut, says The Street. But many use its products. Among the 50 struggling apps and dusty vintage names this polished scavenger has acquired to overhaul are Evernote, a once hyped note-taking app; the ticket-buying site Eventbrite; WeTransfer, Vimeo, and that old internet has-been AOL.

Bending Spoons has been described as a “hybrid” of a private-equity investor and a technology firm. Yet it “operates more like a conglomerate from the mid-1900s”, says The Wall Street Journal.

The outfit's driving force, CEO and co-founder Luca Ferrari, is no relation to the Italian car-making dynasty. But he has made no bones about his intention to go places, says The Economist. He wants to “shake up” Italy's business culture by building a company of “international calibre”.

Ferrari was born in 1985 and took an IT degree at Padua University before heading to Copenhagen to study telecommunications engineering. There he met two compatriots – Matteo Danieli and Francesco Patarnello. In 2010, the trio came up with an idea for a diary app. Dubbed Evertale, it raised $1 million, but folded within three years, notes the FT – a failure Ferrari describes as “liberating”.

Taking two Evertale stalwarts and their remaining $40,000 with them, they founded Bending Spoons. The name was suggested by Danieli who'd been inspired by the cult film The Matrix and its central idea that the mind can bend the apparent rules of reality. “We liked the silliness” of the name, says Ferrari – and it seemed apt.

How Bending Spoons found success

The firm's Nasdaq listing tops a decade of dealmaking and word-of-mouth exposure that eventually attracted institutional investors including Baillie Gifford and Fidelity. Bending Spoons's strategy hasn't changed: from the start, it sought to buy struggling firms, often using debt, before gutting and fixing them – and then ploughing the earnings into new acquisitions. “Our way to generate value is to buy companies where there's a core of greatness,” says Ferrari: whether it's a brand, customer base, a good product or a team.

But what has always singled this operation out, says The Economist, is “the quality of execution”. Its success is down to a 700-strong army of youthful “Spooners” who infiltrate acquisitions and inject new life into them. And the selection process, as The Wall Street Journal notes, is beyond thorough. Last year, it received 800,000 applications and hired just 286 – a 0.04% acceptance rate that makes getting into Harvard or a top Wall Street firm look easy. But these go-getting graduates – given top positions early in their careers – are the firm's heart blood. Critics may carp at the methods and “lack of financial disclosure”, says the FT. And one day all that debt might become a problem. But for now, Ferrari and his fellow Spooners are a European inspiration – and the toast of Wall Street.

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.