The Bank of England is one of the most important financial institutions in the UK. The decisions the central bank makes echo across the country.

The Bank has a history that spans hundreds of years, and is the model on which many modern central banks are based on.

But how much do you know about the history of the UK’s central bank? Test your knowledge in our quiz.

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

• Will the Bank of England raise UK interest rates in 2026?
• UK inflation forecast: where are prices heading next?
• Inside the Bank of England: Gold vaults and ‘giant’ bank notes worth tens of thousands

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The Bank of England is the central bank of the UK. It is responsible for monetary policy and maintaining financial stability in the country.

The Bank of England is in charge of setting the base rate of interest. This impacts the UK economy in many ways, and can push your mortgage and savings rates up and down.

How much do you know about the Bank of England? Test your knowledge in our crossword.

Did you manage to finish the crossword? Share your results on social media.

• Will the Bank of England raise UK interest rates in 2026?
• When is the next Bank of England base rate meeting?
• What is inflation and how does it affect you?

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Interest rates have been held at 3.75% for all of 2026 so far as the Iran war has caused an economic shock for the UK.

Before the war broke out, the Bank of England’s Monetary Policy Committee (MPC), which meets every six weeks to set interest rates, had been poised to cut rates this year.

However, as it became increasingly clear the Iran war would lead to increased inflation, the MPC kept interest rates on ice.

The MPC’s latest interest rates decision will be announced on 5 November, with some economists expecting the committee to raise interest rates to help stave off inflation. Meanwhile, others believe the committee will keep rates at 3.75%.

What do you think the MPC should do? Tell us in the poll below.

• When is the next Bank of England base rate meeting?
• Will the Bank of England raise UK interest rates in 2026?
• UK inflation forecast: where are prices heading next?

For the latest news, analysis, and commentary, sign up to MoneyWeek’s free newsletters.

Picture two UK investors who bought SpaceX shares this summer.

The first applied in June and got them at the $135 initial public offering (IPO) price. The second missed out and bought at the end of the first day's trading, at $160.95. By the end of October, in dollar terms, the first had roughly broken even. The second was about 16% down. Same company, same shares, one day's trading apart.

Anthropic could be next. Its filing, published on 26 October, says the offering includes a public offer in the UK. Before you apply, it is worth knowing where the money in these deals is made, and who gets it.

Where is the money made in IPOs?

Jay Ritter, a finance professor at the University of Florida, has tracked US flotations since 1980, and his figures show the same gap between those two buyers, though a smaller one.

Take the biggest companies to float in that time: those with more than $1 billion of annual sales, adjusted for inflation. On average, their shares rose 9.8% on their first day of trading.

Anyone who bought at the end of that first day missed that gain. Over the next three years, the shares rose roughly in line with the US stock market, trailing it by about two percentage points on average. Smaller companies did far worse, falling 34 points behind it.

So for the biggest names, the gain has tended to arrive on day one and go to whoever got the offer price. After that, buyers got roughly the market's return while carrying the risk of a single company.

That gives you the first thing to work out. If you are scaled back (given fewer shares than you asked for) and tempted to top up once trading starts, compare the price on your screen with the offer price. The gap is a premium paid to earlier buyers, and Ritter's figures for big companies give no reason to expect it back as extra return.

Why do you get less of the good ones?

Shares at the offer price are now within reach, but they are rationed. SpaceX’s IPO was made available to UK investors under the FCA's new public offer platform rules, which let companies sell to private investors here without a UK prospectus. Demand came to almost $1 billion, so applications were filled in full only up to £2,013. Bigger ones were scaled back.

Jersey Mike's, the US sandwich chain, used the same route for its New York flotation in July. Its limit was higher: applications were filled in full up to about £3,190. The shares closed their first day six% below the offer price, and were about a fifth below it at the end of October. So the deal you could have more of is the one that fell on its first day.

Economists call this the winner's curse. Kevin Rock set out the mechanism in 1986. Better-informed investors pile into the attractive issues and stay away from the weak ones. Everyone else, including you, tends to be rationed in the good deals and filled in full in the bad ones. That is why, Rock argued, companies have to price new shares at a discount to keep ordinary investors applying.

Two deals prove nothing, but Rock's idea has been tested. In Israel, where every applicant was scaled back by the same proportion and the allocations were published, researchers studied flotations in the early 1990s. Applicants were given more shares in the deals that turned out to be overpriced. The average flotation made an initial return of 12%, but ordinary applicants, allowing for what they actually received, earned a negative one.

Who's next, and at what price?

Bloomberg has reported that Anthropic is working with RetailBook, another platform operator, to take UK orders through the usual investment platforms, and may set aside 15-20% of the shares for private investors worldwide. Neither is final, and no price has been set.

The price of the same business can move a long way. Starling's founder, Anne Boden, has sold her last shares at a valuation of £1.7 billion, Sky News reported in October. That is less than half the £4 billion the bank was reportedly seeking last year. Monzo, Sky also reported, is talking to private equity firms about selling a stake after takeover talks with Brazil's Nubank ended. Neither of these British neobank looks close to floating at present.

Shein shows why that matters. Reportedly valued at about $100 billion privately in 2022, the fast-fashion retailer listed in Hong Kong on 1 September at about a quarter of that price. Its public offer was 5.6 times subscribed, and only about half of applicants got shares. Those who did saw the price close its first day just below the offer and end October about a quarter lower. Rationing told them the deal was popular, not that it was good.

What should you check before applying?

• Decide the most you will put in before you apply. In the offers so far, each platform set its own minimum. As a rule of thumb, treat any allocation as a small, speculative holding.
• Apply only for an amount you would be happy to hold in full. In the deals other investors avoid, that is what you will get.
• Check your platform's currency conversion charge, and whether the shares can sit in your ISA or SIPP.
• Know that an accepted application is binding. Check the offer's terms, but usually you can withdraw only if significant new information comes out during the offer.
• Read the lock-up section of the prospectus, which says when insiders can sell. SpaceX releases its insiders in stages; Elon Musk's own shares are locked up until 12 June 2027.

The verdict

In a mega-IPO, the advantage lies with whoever buys at the offer price, and the better the deal, the fewer shares you are likely to get. If you want a stake, keep it small and treat it as a bet.

Paying up on day one has, on average, bought the market’s return, minus a little, plus one company’s risk. A low-cost index fund buys the market’s return without it.

Landlords have been given fresh reasons to consider exiting the buy-to-let sector after a new round of tax increases were unveiled in the Autumn Budget.

Chancellor John Healey used his debut fiscal update to reveal that a planned income tax rise on rental income next year will be higher than expected.

It is the latest blow for landlords who have been dealing with the first months of new rules and regulations under the Renters’ Rights Act.

On top of this, landlords have been hit in recent years with restrictions on mortgage interest relief, extra stamp duty charges and the responsibility for ensuring the homes they rent out meet minimum energy efficiency standards.

Chris Norris, chief policy officer for the National Residential Landlords Association (NRLA), told MoneyWeek: “Landlords were already questioning whether they could afford to remain in the sector. This further tax rise risks pushing even more landlords towards the exit, deepening the gap between supply and demand and driving rents up.”

What did the Autumn Budget announce for landlords?

Previous chancellor Rachel Reeves had already unveiled plans in the 2025 Budget to raise income tax on rental income, as well as on savings interest, by two percentage points from April 2027 to 22%, 42% and 47% depending on the individual’s tax band.

While landlords were preparing for this, Healey announced a further two percentage point hike in the 2026 Budget.

This means that from April 2027, landlords will pay 24% for the basic rate, 44% for the higher rate and 49% for those who are additional rate taxpayers.

How will higher property taxes affect landlord returns?

Property services provider Connells Group has crunched the numbers on the tax impact for landlords, including mortgage interest relief and allowing for other expenses.

The average annual rental income received by landlords, according to the estate agency brand, is £16,478. It also assumes expenses of £5,108 per year.

Assuming a mortgage rate of 5.25% and a typical mortgage payment of £7,875 per year, Connells Group estimates that landlords would have an annual profit of £3,495.

Currently, a basic rate taxpayer would owe £699 in tax on that, but that will rise to £839 from April 2027.

Higher rate taxpayers will pay £3,113 in tax, up from £2,973. This also includes mortgage interest relief, which is a 20% tax credit, based on mortgage interest payments.

This will leave a landlord on the basic rate with £2,656 of annual profit from the £3,495 instead of £2,796. A higher rate taxpayer would be left with £382 instead of £522 over the year.

That £140 difference may not look like a lot on paper, but Connells Group research director Aneisha Beveridge says it is the impact on sentiment that is important.

She says: “On its own, this is unlikely to fundamentally change the investment case, but it comes on top of higher borrowing, maintenance and regulatory costs alongside broader tax changes that have already squeezed returns.

“The increase also widens the divide between landlords who own personally and those operating through limited companies, whose rental profits are subject to corporation tax rather than these higher personal tax rates.”

Source: Connells Group

Not all landlords will have mortgages though.

Separate analysis for MoneyWeek by estate agency brand Boydens looked at a mortgage-free property renting for £1,200 a month (equivalent to £14,400 a year), with £2,400 a year in allowable running expenses. That leaves £12,000 in taxable rental profit.

Currently, a landlord on the basic rate would pay £2,400 in tax on this income and retain £9,600 per year. The amount retained drops to £9,120 under the new rates from April 2027 as the amount of tax paid will rise to £2,880.

A higher rate taxpayer would pay £4,800 tax on the rental income, holding on to £7,200 of the annual profit currently. But that will fall to £6,720 in 2027/28 after a tax bill of £5,280.

In either example, the latest Budget adds £480 a year of tax compared with current rates.

For the higher-rate landlord, that is a reduction in profit of around 6.7%, even with rent and running costs unchanged.

Is buy-to-let still worth it?

Many will see Healey's Budget as a “vindictive raid on landlords”, says Norris, from the (NRLA).

He adds: “This lands on top of pressures that are already mounting. The Renters’ Rights Act has brought a range of new costs, including a new annual registration fee for every property, and expected Ombudsman membership.

“Separately, the removal of tax relief for legitimate business costs has driven viability down and rents up. If that were not enough, borrowing costs have added around £1,100 a year to a typical new buy-to-let mortgage and mandated energy efficiency upgrades will cost many up to £10,000 per property.”

Landlords have also been battling with lower rental demand and tepid rental growth.

Average UK rents increased by 3.8%, to £1,406 in the 12 months to September 2026, according to the latest Office for National Statistics data – unchanged from August.

Philip Boyden, managing director of Boydens Estate Agents, suggests landlords will be looking more closely at the figures and exploring the alternatives.

He says: “Another tax increase becomes part of that calculation. It may affect what someone is prepared to pay, which properties they consider or whether they expand their portfolio. It does not automatically mean they will decide against investing, but the property has to justify the commitment.”

Some landlords may consider selling.

Research by Property118, a website for landlords, found that two thirds of landlords intend to sell properties or exit the rental market over the next three years.

But this isn’t necessarily “a simple response,” warns Beveridge, from Connells Group.

The Renters’ Rights’ Act has introduced longer notice periods of four months and restrictions on re-letting if a sale falls through, which could make some landlords more hesitant to start the process, even if their returns come under pressure.

There will also be capital gains tax to pay on any profits from the sale, plus there is no guarantee you will get the price you want in the current buyers’ market.

Instead, Beveridge says many landlords have already opted for moving their portfolio into company ownership where you pay corporation tax rather than income tax.

She warns: “The upfront tax costs of transferring existing properties mean it is not a straightforward solution for everyone.”

Ultimately, Nouran Moustafa, practice principal at Roxton Wealth, some landlords will absorb the costs, some will reconsider expansion and others may sell.

She adds: “The irony is that making private renting less attractive to investors doesn't automatically make renting more affordable for tenants.Property can still be a worthwhile investment, but the days of assuming any buy-to-let will generate attractive returns are long gone.”

Browse income funds in the specialist debt sector and you will find two investment trusts run by TwentyFour Asset Management, a fixed income specialist owned by the Swiss asset management group Vontobel that looks after £24 billion in assets under management.

TwentyFour specialises in asset-backed securities (ABS), so it is not surprising that the £1 billion TwentyFour Income Fund (LSE: TFIF) does exactly that. It invests in a diversified portfolio of securities, each of whose income comes from a pool of underlying assets (such as corporate loans and mortgages). The underlying assets are floating-rate – ie, payments vary with changes in interest rates. About 15% are investment grade, 52% sub-investment grade and 33% unrated.

TwentyFour Income Fund targeted a return of 6%-9% per year on the original 100p issue price, including a minimum annual dividend of 8p, paid quarterly. Its net asset value (NAV) total return has averaged just under 8% per year since inception in 2013.

Income funds taking advantage of premium yields

By contrast, TFIF's smaller stablemate TwentyFour Select Monthly Income Fund (LSE: SMIF) – worth £300 million – invests in a broader range of debt, with the aim of taking advantage of the “premium yields available in less liquid securities across the global credit markets”. That means Additional Tier 1 (AT1) capital securities issued by banks, payment-in-kind notes (often issued as part of private-equity transactions), and leveraged loans, as well as ABS and corporate bonds.

At the end of September, just under 40% of the portfolio was invested in AT1 securities, with about a third in ABS and 15% in securities issued by insurers. Roughly a third of the portfolio is rated BBB (the lowest investment grade rating), while most is sub-investment grade and 7% is unrated.

In some cases, the rating is more of a function of where the securities owned by the trust sit in a bank's capital structure than the borrower's quality. AT1 capital notes are specifically designed to absorb losses in the event of a bank failure and are generally graded three to five notches below each bank's senior capital.

Hence SMIF's second largest holding is Nationwide's 10.25% Core Capital Deferred Shares, which are similar to the AT1 debt issued by banks (building societies have different rules for what they can issue). Fitch Ratings puts Nationwide as a group at A (five notches away from its highest AAA rating), but has a BBB- rating on its AT1 capital (just above sub-investment grade).

Rising rates

SMIF targeted a higher return of 8%-10% per year on the 100p issue price, comprising a 6p per share annual dividend paid in monthly instalments and a capital return of 2p to 4p. While the trust has consistently met its annual dividend target, capital growth has remained elusive. It has delivered a NAV total return of 6.4% per year since 2014, mostly from income. SMIF's performance has been weighed down by exposure to longer-duration securities, which underperform when rates rise. The Nationwide holding illustrates this. These securities, which mature in 2049, are very sensitive to interest rates. They have fallen about 10% in 2026 as interest rate expectations have risen. Since the beginning of 2022, the face value of the securities has fallen 35%.

More than half of SMIF's portfolio matures in five years or more. It has an interest rate duration of 3.5, implying the portfolio would fall by 3.5% if rates rise by 1%. Conversely TFIF holds floating-rate debt, so benefits from higher rates.

SMIF pays out 0.5p per month, plus a top-up at the end of its fiscal year in October. This year, a final payout of 0.912p brings the total to 6.66p per share, or 8.4% on the current share price, which looks tempting . However, with rates set to stay high and TFIF's portfolio generating an underlying yield of over 10%, it may remain the better choice.

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.

Biotechnology companies are seeing record levels of innovation. Approvals of new medicines have held up despite staff turnover at the US Food and Drug Administration (FDA) regulator and large pharmaceutical companies, facing patent expiries on many of their biggest products, are acquiring biotech companies to replenish their pipelines. The catch is that the sector rewards specialist knowledge more than most others: a single trial result can move a share price by half in a day. The Biotech Growth Trust gives investors focused exposure to this theme by investing primarily in biotechnology.

We invest from the bottom up, favouring biotechnology companies developing first-in-class or best-in-class medicines, with a tilt towards small and mid-sized companies where much of the sector's innovation now originates. Our high active share (meaning that our holdings significantly differ from the benchmark index) means that our best ideas populate the portfolio, which is essential for navigating biotech's fast-moving, event-driven landscape. Below are three examples of our holdings, illustrating the breadth of our approach.

Three smaller biotechnology companies to consider

United Therapeutics (Nasdaq: UTHR) is an established player built largely on treatments for pulmonary arterial hypertension, a rare form of high blood pressure in the lungs, and pulmonary hypertension associated with interstitial lung disease (PH-ILD). It remains one of the most profitable firms in biotech. The company is now expanding into the much broader fibrosis market. Its lead product, Tyvaso, succeeded in late-stage trials in idiopathic pulmonary fibrosis (IPF) and the firm is expecting a US regulatory decision in spring 2027. If approved, it would be the first inhaled anti-fibrotic treatment for the disease. A legal settlement requiring that a rival withdraw from the market clears the path for the Tyvaso franchise to resume growth ahead of the IPF launch. The IPF launch, a return to growth in the company's core franchise and continued strong cash generation should mark an important inflection point.

In October, Vaxcyte (Nasdaq: PCVX) reported positive Phase III trial results in adults for its pneumococcal vaccine VAX-31, which surpasses the current market leaders, Pfizer's Prevnar 20 and Merck's Capvaxive, in strain coverage. Historically, this is a winner-take-all market where breadth of coverage decides the winner. The next milestone is Phase II data for the vaccine in infants, expected in the first half of 2027. Positive results would open the door to the paediatric market, which makes up the majority of the market opportunity. There is therefore a clear trajectory towards leadership in a pneumococcal market valued at more than $8 billion annually. It would also be an attractive asset for a large pharmaceutical company looking for vaccine exposure.

Palvella Therapeutics (Nasdaq: PVLA) is developing a topical gel form of rapamycin, an established immunosuppressant, for microcystic lymphatic malformations (mLM), a rare, lifelong condition that can cause persistent leaking, bleeding and infection. With no currently approved therapies and an estimated US patient population of 30,000, Palvella is targeting a launch of the drug in the first half of 2027 if approved. Building on positive Phase II trial results, Palvella is also starting a Phase III trial in cutaneous venous malformations (cVM), with data expected in 2028. Palvella is a first mover in an untapped market with big potential.

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.

Diamonds – and diamond rings in particular – have long been a symbol of the marital bond. But as attitudes to marriage shifted over the centuries, and the institution was no longer primarily seen as an arrangement cementing family ties and assets, rings came to symbolise romance.

Diamonds emerged as the jewel of choice in the 20th century, a result of increasing affluence after World War II, booming diamond mines in South Africa and, crucially, shrewd marketing.

In 1947, American copywriter Frances Gerety coined the phrase “A diamond is forever”, for mining giant De Beers, connecting the jewel's durability with the hope of a long-lasting marriage. This was hailed by Advertising Age as the greatest advertising slogan of the 20th century and turbocharged De Beers, which has had a near-monopoly on diamond production for most of the past 100 years.

How diamonds infiltrated popular culture

The notion of a diamond's romantic permanence infiltrated popular culture. In the 1953 film Gentlemen Prefer Blondes, Marilyn Monroe declared that a “kiss on the hand might feel good”, but a “diamond tiara is forever”. Dripping in jewels, she sang that “diamonds are a girl's best friend”. Ian Fleming named a James Bond novel Diamonds are Forever; it transferred to film with the same title. In 2026, the British singer Raye demanded a “big and shiny diamond ring” in her hit song Where is My Husband!.

De Beers' marketing also successfully spread the idea that men should spend a certain portion of their salary on an engagement ring to show their devotion. Hoping to counteract a slump in sales during the Great Depression, the group suggested that one month's earnings should be spent on a diamond ring; by the 1980s, diamonds apparently required two months' salary. Today, some people say three months. Before World War II, only 10% of engagement rings in Western countries contained a diamond, but by the end of the century, 80% did.

Today, however, the diamond industry is at a crossroads. Natural diamonds' prices have dropped more than 50% over the past five years, falling from an average of $8,007 per carat in 2021 to $3,898 per carat last month, says CNBC. A carat is a unit that measures the weight of a gemstone, with 200 milligrams equaling one carat.

Meanwhile, the Diamond Standard index, which tracks the market value of investment-grade natural loose diamonds, hit an all-time low of around $2,490 in August. The index is now at $2,460. This decline has been driven by the popularity of laboratory-grown diamonds since the artificial-gem market's inception more than a decade ago.

Laboratory-grown diamonds look uncannily similar to the natural thing. They are more economical to produce and 60%-85% cheaper than natural ones, according to Queensmith, a jeweller. A 0.3 carat laboratory-grown diamond can cost £390, while a natural version can set you back £980. A 1.2-carat man-made diamond can go for about £1,630, compared with £8,000 for a natural one. Laboratory-grown diamonds accounted for 61% of engagement ring sales in the US in 2025, up 239% from 2020, according to a 2026 study by The Knot, a wedding platform.

Unlike natural diamonds, which are formed over billions of years in the Earth's mantle and require mining, laboratory-grown ones are created using extreme pressure and heat, mimicking the natural stone's geological development in a matter of weeks. Synthetic diamonds can give shoppers more options over size, cut, style and price, with consumers buying diamonds with 1.9 carats on average, compared with 1.6 carats for natural ones, says The Knot.

An ethical alternative to ‘blood diamonds’

The study also noted that 40% of US couples said it was important that their diamond was laboratory-grown, suggesting that ethical concerns about the transparency of supply chains are also in play. Consumers know the origin of a diamond produced in a laboratory, but a natural diamond's provenance can be murkier.

Diamonds can be mined in conflict zones, funding military action (these are often known as “blood diamonds”); production through forced labour, or the exploitation of indigenous people are further concerns. The rough diamond industry has also been hit by weak demand from Chinese consumers since Covid, reflecting the trend in the broader luxury market.

Supplies are also dwindling. Some major mines are closing or have already closed, such as the Argyle mine in Australia and Diavik in Canada. De Beers slashed production 12% in 2025 and has $2 billion worth of unsold diamond inventory, while its 50/50 joint venture with Botswana's government, Debswana, has cut output 40% since 2023. Russian miner Alrosa, the world's biggest producer of rough diamonds by volume, has been hit by sanctions and is also lowering production.

There have been some big discoveries, such as the 2,488.32-carat Motswedi diamond from the Karowe Mine in Botswana by Canadian mining company Lucara in 2024. But finding new mines is a slow and costly process, so supply remains under strain. “Natural diamonds still have appeal, especially rare and high-quality stones,” says Lale Akoner, global market strategist at trading platform etoro.

However, “better jewellery sales do not automatically translate into better prices or profits for miners. De Beers' rough-diamond prices were still under pressure in the first half of 2026”. Low supply should have bolstered prices, but the shift to laboratory-grown diamonds has thwarted a recovery.

De Beers tried to jump on the laboratory-grown gem bandwagon, launching its own brand, Lightbox, in 2018, but amid a freefall in prices in synthetic gems for jewellery, it closed it down in May 2025. Lightbox was impeded by fierce competition from budget laboratory-grown brands from India and China, such as Power Diamond, Huanghe Whirlwind, Yasheng, and Caraxy. Lightbox initially sold gems at $800 per carat, but prices fell 90% by 2025, according to De Beers.

Duncan Wanblad, chief executive of De Beers's parent company, Anglo American (LSE: AAL), recently admitted to the Financial Times that the company could “have been a little bit more aggressive on the signals we were getting” from the competition from laboratory-grown gems.

De Beers' sparkle is dimming

De Beers was once the dominant player in the diamond industry, controlling up to 90% of the world's supply of rough diamonds. The company was formed in 1888 in South Africa via the merger of British colonists Cecil Rhodes and Barney Barnato's companies, backed by the Rothschild family. De Beers Consolidated Mines was created to act as a cartel to control diamond production and prices.

It was later owned by the Oppenheimer family, and mining giant Anglo American took control of De Beers in 2011. De Beers is now 85% owned by Anglo American and 15% by Botswana, the world's second-largest producer. Today its market share is 25%, and it has lost about $7 billion in value since 2023 from consecutive write-downs. Last year, it reported an underlying loss (before interest and tax) of $787 million and revenue of $3.5 billion. Anglo American has been trying to offload the company since 2024. Recent reports suggest that Cartier's owner Richemont could join a consortium led by De Beers's former CEO Gareth Penny to bid for Anglo American's stake. It could be sold for as little as $1 billion.

Meanwhile, a struggling natural-diamond industry will hamper growth in diamond-producing countries such as Botswana, whose economy is largely dependent on them. Diamonds made up 80% of exports, 33% of fiscal revenues, and 25% of GDP in 2024, according to the International Monetary Fund.

Collect, don't invest

De Beers's advertising campaign convinced people that diamonds are forever, but they may not necessarily make for a great investment or resell for much. Diamonds lack liquidity, a tradable market, and a transparent spot price like other commodities, says Russ Mould, investment director at broker and investment platform AJ Bell. The cost of production varies so widely due to the vast array of unpredictable geological conditions and yields that it is virtually impossible to establish a minimum baseline figure, which is not the case for other raw materials.

Although diamonds can be easy for investors physically to store and insure, jewellery comes with a “hefty retailer's mark-up”, which is an “obstacle to anyone hoping to use diamond jewellery as an investment”, says Mould. With Anglo American suffering from “buyer's remorse” over its De Beers investment and now struggling to sell the business, “investors should take the hint”.

Despite being a commodity, diamonds cannot be used as a hedge against inflation and market volatility, as gold can. “From a portfolio perspective, the test of a hedge is whether I can value and sell it when markets are stressed,” says Akoner.

“Gold passes that test much more readily than an individual diamond. Diamonds differ substantially in quality, trade infrequently and have a wide gap between what a consumer pays and what they may receive on resale. I would not [see] them as an inflation or crisis hedge.”

Akoner says that for investors seeking broad commodity exposure, she favours a diversified fund and “would consider a diamond miner only with a clear view on that company's balance sheet and a much higher tolerance for risk”.

While laboratory-grown diamonds are good value for consumers, “as an investment, the economics work against the buyer” because supply can grow as production improves and wholesale prices continue to fall. “I would see the lower purchase price as the benefit, rather than expect to make money on resale,” adds Akoner. According to jeweller Queensmith, sellers of second-hand laboratory-grown or natural diamonds could receive 30%-40% less than the price they paid for them.

Nonetheless, diamonds could appeal to collectors, but at the very top end of the market and for stones such as the Motswedi diamond or the “azure blue” 32-carat diamond, which sold for $8.4 million at auction this June. Serious collectors buy rare-coloured diamonds or jewellery with a recognised maker and documented history, says Akoner. They are “betting that another collector will pay more for that rarity in the future”. But she cautions that a “headline auction result is not the return every owner will achieve”.

“I would see such pieces as a specialist investment for someone who already has a diversified portfolio, while treating ordinary diamond jewellery primarily as something to enjoy.” Square-cut or pear-shaped, diamonds are not an investor's best friend.

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.

In late 2021, Sea Limited (NYSE: SE) was worth almost $200 billion. Its shares had soared above $350 as investors bet that the Singapore-based company could dominate online shopping across southeast Asia and beyond. Within a year, more than 80% of its stock market value had vanished. The extraordinary rise and fall of Sea is also the story of how a computer game helped build a shopping empire.

Sea Limited began in 2009, when entrepreneur Forrest Li founded Garena to distribute computer games across southeast Asia. Few households had reliable broadband or personal computers, so Garena built relationships with cybercafes, installing its software on thousands of machines and giving customers access to popular online games.

The approach reflected Li's understanding of the region. Southeast Asia has hundreds of millions of consumers, but its geography, languages and uneven infrastructure make it difficult for businesses to operate across national borders. Garena succeeded by finding ways around these obstacles.

Li soon recognised a much larger opportunity in online shopping. In 2015, he launched Shopee, a website and app where independent sellers offer clothing, cosmetics, household goods and much more. Shopee initially concentrated on small sellers offering inexpensive everyday goods. Customers could chat directly with merchants, while promotions, games and rewards encouraged them to return. The approach proved popular, but attracting buyers and building the delivery infrastructure to serve them required enormous investment. Fortunately, Garena was about to produce a remarkable success. In 2017, it released Free Fire, a game designed to work on inexpensive smartphones and unreliable internet connections. It became hugely popular, eventually attracting more than 100 million daily players. The game was free, but players could buy virtual items. These generated substantial profits without the costs associated with producing and distributing physical goods. Free Fire gave Sea a valuable source of cash to invest in Shopee.

Ups and downs for Sea Limited

Then came the Covid pandemic. Lockdowns encouraged people to spend more time playing computer games and shopping online. Both businesses benefited enormously. Low interest rates encouraged investors to finance fast-growing tech companies, even when they were losing money.

Sea seized the opportunity. Shopee subsidised deliveries, offered incentives to merchants and spent heavily on advertising. It expanded into India, Europe and Latin America, while building its own delivery network. It raised billions from investors, including almost $6 billion through a share and bond issue in 2021. Flush with cash, Sea could pursue growth without worrying too much about profitability. By late 2021, investors expected Shopee to become dominant. Yet it all depended on access to funding and profits from gaming.

The reversal was brutal. As inflation surged in 2022, interest rates went up and investors became less willing to finance loss-making businesses. Gaming declined as pandemic restrictions ended. Worse, India banned Free Fire on national-security grounds, removing one of the game's largest markets.

Sea Limited faced weaker gaming profits, heavy losses from Shopee and a collapse in investor confidence. Spending heavily today in pursuit of profits tomorrow was no longer sustainable. Li responded decisively. Shopee abandoned much of its international expansion, thousands of jobs were cut, spending was reduced and subsidies scaled back. Sea concentrated on making its remaining operations profitable.

It worked. Sea reported its first quarterly net profit in early 2023. The turnaround was striking because Shopee had depended on large subsidies to attract buyers and merchants. The retreat exposed mistakes made during the pandemic, particularly entering markets where Shopee had little established advantage. Nevertheless, Li showed he was willing to abandon unsuccessful investments rather than throw good money after bad.

Sea is a different beast now

Today, Sea Limited is a different business. In 2025, group revenue rose 36% to $22.9 billion; net profit hit $1.6 billion. Shopee handled $127.4 billion of merchandise, nearly 27% more than the previous year. Its scale creates opportunities to raise earnings without repeating the mistake of the spending spree of the pandemic years. Merchants can pay to advertise their products on Shopee, while greater delivery volumes should help spread the costs of its logistics network. Both could allow profits to grow faster than sales. Online shopping still has room to expand across the region and Shopee's delivery network may be difficult for smaller rivals to match.

Sea's third business, Monee, grew from a payments service launched in 2014 to help gamers without bank accounts buy digital products. It now provides loans and other financial services to consumers and small businesses. Shopee knows how much its merchants sell and how regularly customers make purchases. That information could help Monee assess borrowers whom conventional banks struggle to serve.

There are risks. TikTok Shop and Lazada compete fiercely, while lending exposes Monee to borrowers who may fail to repay. Garena also remains heavily dependent on Free Fire, whose popularity cannot be guaranteed indefinitely. Nevertheless, Li has proved adaptable and built substantial businesses in markets that still have room to develop. The attraction now is that Sea may be able to earn much more from the customers and infrastructure it already has. If Li can maintain that discipline, Sea could enjoy years of profitable growth.

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First there was the whisky market binge. Prices for rare single malt whiskies soared during the low-interest rate era of the pandemic. Stuck at home, collectors and speculators splashed out on bottles they hoped would continue to appreciate in value. The market in rare whiskies had, after all, already had a great decade in the lead-up to Covid. From just before the first lockdown in March 2020 until the market peaked in May 2022, valuations climbed 58%, according to the Icon 100 index, compiled by market watchers Rare Whisky 101 to track valuations of 100 sought-after bottles.

Then came the hangover. Interest rates rose with the end of lockdowns and investors could get better returns from more conventional investments. The index fell 42% to reach a post-pandemic low last month. The headache continues. Yet, just like at the pub, where top-shelf prices are out of reach for most of us, prices for trophy bottles have held up much better.

This month, another of the auction-record-breaking Macallan 1926 bottles sold for £2.1m at the Macallan distillery at an auction held by Sotheby's. It is the second-highest price fetched for a bottle of whisky in sterling terms. Another from the same batch of 40 bottles drawn from the same sherry seasoned oak cask in 1986 fetched slightly more in 2023. That one had sported a label with artwork by Italian painter Valerio Adami (one of 12), while the bottle that sold this month was one of the 14 that features a “Macallan Fine & Rare” label, first released in 2002. (Another dozen bottles were given labels with artwork by British artist Peter Blake and the remaining two had been left unlabelled.)

How is the rare whisky market faring?

Over time, bottles get drunk – especially when valuations are falling – and some inevitably get dropped. One of the Adami Macallan 1986 is reported to have perished during an earthquake in Japan, according to BBC News. That helps to support prices for the rarest bottles.

More broadly, the Scotch whisky industry has had a torrid time of late. That has been mainly down to younger drinkers drinking less due to health reasons and cost pressures, as well as changing tastes, tariffs and, above all, a surfeit of new spirit that was put into casks in the 2010s and that is now reaching maturity at the worst possible time. Small, independent distilleries are struggling especially. Bottles from makers that have closed – so-called “ghost distilleries” – can be highly prized by collectors.

As anyone who has ever woken up with a hangover will know, the day can pass in a sort of a haze. In like fashion, the Rare Whisky 101 Icon 100 index has stumbled along year-to-date – not bouncing, certainly, but not falling over either. Could the bottom be in? Who knows? But there are still at least some buyers out there prepared to spend big money on a trophy bottle such as the Macallan 1926. And tomorrow is, after all, another day.

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When Luca de Meo arrived at Kering a year ago with a mandate to shake up the ailing French luxury group, his arrival caused quite a stir in the fashion world. Handsome and soigné, he certainly looked the part. It was the provenance of the Italian now charged with restoring the fortunes of couture legends Gucci, Saint Laurent, Balenciaga and Alexander McQueen that raised eyebrows. Having spent most of his career in the car industry, de Meo arrived directly from Renault. Fashionistas swiftly dubbed him “the car guy”.

Luca de Meo set about introducing a strategic blueprint for the group – which is controlled by the billionaire Pinault family through their holding company Artemis – which appeared lifted from the car industry. His plan was “to fuse the operations of Kering's independently managed brands into a more integrated industrial machine by standardising production and centralising decision-making”, says the Financial Times – anathema in the gilded luxury business where there is “a commitment to artisanal craftsmanship as a way of justifying the hefty price tags of its products”.

Luca de Meo started as he meant to go on in his “trademark direct way”. When asked which executive car he wished to be chauffeured around in, he “opted for an electric van” because it would give him and his team more space to work on the road. In February, he declared that “the level of bullshit has diminished enormously” within the company. “We say things as they are and we attack them one after the other.”

Luca de Meo's ‘reconKering’ experiment

If de Meo's iconoclastic streak ruffled feathers at the atelier, his self-styled “ReconKering” experiment was seized upon with relief by investors who had seen Kering's market value shoot from around €20 billion in 2013 to almost €100 billion at its 2021 peak – before plunging back to a low of €20 billion last year. True, the rout was an industry-wide phenomenon primarily down to retrenchment in luxury's key Chinese market. But, at Kering, the decline was exacerbated by the fall from grace of its main revenue engine, Gucci, which was being “ghosted by shoppers”, says Bloomberg. De Meo “made an incredibly strong start”. Within weeks, he'd strengthened Kering's balance sheet, streamlining assets and cutting borrowing. There were signs of improvement at Gucci, too. But last week, he reported that Gucci sales had gone backwards again. Shares plunged 17% – their steepest one-day decline in a decade. “Almost all the gain since De Meo's arrival has now been erased.”

“As an Italian native, it's very easy for me to understand that Gucci is more than a brand. It's one of the most admired expressions of the culture of this country,” de Meo observed last year. Born in Milan in 1967, de Meo spent most of his childhood living abroad, says The Wall Street Journal. While living in Ivory Coast, the young Luca had an epiphany. He recalled “watching an Alfa Romeo tear through the Rallye Côte d'Ivoire”, igniting “a lifelong fascination with cars”. After graduating from Milan's Bocconi University in 1991 with a degree in business administration, he began a career that would take in most of Europe's leading carmakers – including Renault, where he cut his teeth, Fiat and Volkswagen. De Meo built his reputation “first as a marketer – credited with revitalising brands – and later as a turnaround specialist”.

‘Luca de Meo's honeymoon at Kering is over’

“The studio is the soul of a luxury house,” says de Meo. “There's an element of magic.” Can he reconjure it at Kering? It looks like a long battle ahead, says Bloomberg. Gucci – under creative director Demna Gvasalia – “is not yet firing on all cylinders” and the rest of Kering's fashion brands are all grappling with transitions. “Alexander McQueen and Balenciaga each look set to recruit their second couturier in three years.” It can take about 18 months for a designer to reach their full potential, pushing the results of de Meo's strategic blueprint further into the future.

De Meo may take these challenges in his stride. After all, he is used to dealing with the brutal competition and thin margins of the car industry. One thing is certain, however. “Luca de Meo's honeymoon at Kering is over.”

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In the last fortnight, stocks in the nuclear industry have seen their steepest decline for five years. Rising real yields have punished assets with a long duration whose value lies years away, and nuclear has been dragged down with the AI power trade it is now lumped in with.

The price of financing the AI build-out tells its own story. Anthropic is paying Blackstone a 10% coupon on a $60 billion chip financing, against 8.5% on a similar deal just four months ago and 7% for comparable credits in the public high-yield market. Lenders want a fatter premium for AI risk, and nuclear has been sold in sympathy. Yet that same deal pays for 1.5 gigawatts of new chips. Somebody has to power them.

Jim Reid at Deutsche Bank recently circulated a note that makes the point better than any argument. Over 80 years, power has become roughly 50 times cheaper. Computer chips got a hundred billion times cheaper in 60 years. AI has fallen some 200,000 times in barely five, the steepest cost curve ever recorded. Intelligence is now the fastest deflating good in history, and it runs on the slowest deflating input.

William Stanley Jevons taught us in 1865 that when a resource gets cheaper we don't use less of it; we find a thousand new uses and consume vastly more. Cheap intelligence won't shrink the power bill, it will explode it. Value migrates to whatever cannot be compressed, and nothing compresses less than firm, reliable power and the fuel that makes it. Whoever owns the electrons owns the toll road to superintelligence.

There is a second property of electricity that the market forgets in a panic. Demand for it is among the most price-inelastic of any good. Households and hospitals don't switch off when the bill rises, and a data centre training a frontier model will pay almost anything to keep running.

The same holds one link further up the chain. Uranium is a small fraction of the cost of running a nuclear reactor, so utilities will pay whatever it takes to keep their plants fuelled – 2006 and 2007 proved it. When the flooding of Cigar Lake knocked out expected supply, uranium rose sevenfold in six months. Consider the world in which that happened. Half of it was set against nuclear power. There was no iPhone in anyone's pocket, no AI and no data centres drawing a city's worth of power. Even then, with demand flat and politics hostile, a single supply shock was enough. When buyers cannot walk away, price is the only thing left to give, and it gave violently. Inelastic markets don't drift. They gap.

The nuclear industry has been hit by “gamified finance”

So why has the market priced the opposite for the nuclear industry? Look at who owns the shares. This rally was built by a new breed of investor. Finance has been gamified, put on a phone and turned into entertainment, with conviction sourced from Substack, StockTwits and X rather than from balance sheets.

The numbers are startling. Retail flows now account for roughly 20% of US equity volumes, and as much as 55% to 65% of daily turnover in South Korea and China. Seven in ten retail investors are under 45. In 2015 just 6% of 25-year-olds held an investment account; by 2024 it was 37%.

US exchange-traded funds (ETFs) took a record $1.5 trillion of net inflows in 2025. In Britain, retail equity and ETF flows reached £228 billion. This is a younger, less wealthy cohort with thin cushions against loss, and it has learned to borrow. Margin accounts, options and leveraged ETFs are now standard kit on trading apps.

Now the brokers are pulling the ladder away. Last week one of Europe's largest retail trading platforms asked for 110% collateral on positions. At that level, margin is no longer leverage at all, it is a demand for more than the position itself is worth. When the cost of carrying a position exceeds the position, holders don't sell because they have changed their minds. They sell because they have no choice. That is precisely what unravelled in 2008 and 2009. The leverage went first and prices followed, whatever sat underneath.

Which brings me to the nuclear industry trades I find most compelling. Lightbridge Corporation (Nasdaq: LTBR), ASP Isotopes (Nasdaq: ASPI) and Fermi America (Nasdaq: FRMI) are among a group of nuclear names now trading, in some instances, below the cash on their balance sheets: strip out the cash and the market is assigning the business itself a negative value. The technology, the enrichment capacity, the land, the permits, the people and years of regulatory work are being thrown in for less than nothing.

It's 2009 all over again

That price makes sense in only two ways. Either the board is about to set fire to the cash, or the seller doesn't care what he is selling. Any serious investor must ask how fast the money is being spent, what commitments sit against it and how much dilution lies ahead.

Here the answer is reassuring. None of these companies is burning cash at a reckless pace. Lightbridge spends $2 million a month, a modest sum against the cash it holds. When names across a whole sector slip below cash in the same fortnight, and none of them is squandering it, the explanation lies with the holders, not the businesses. The holders were forced.

That is the asymmetry. Buy below cash and the downside is cushioned by money already in the bank, while the upside is whatever the business turns out to be worth. In 2009 the market made that offer on housebuilders and miners that went on to multiply. Today it is making it on the companies building the fuel, enrichment and power that the age of cheap intelligence will depend on.

Nothing about nuclear reactors, fuel or enrichment has changed in a fortnight. What we are hearing is margin calls, momentum funds and macro traders crowding towards the same exit. I have heard that sound before. On that day in March 2009, it told me the equities business would be shut by the following day. It turned out to be the best buying opportunity of a generation.

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What are prediction markets?

Prediction markets are sites where users buy “yes” or “no” contracts on future real-world events. A contract pays $1 if it happens and $0 if not and its price is the implied probability.

Today, the biggest platforms are Kalshi and Polymarket. Both launched around the time of the pandemic but went mainstream during the 2024 US presidential race. In the week before that election, Kalshi processed around $750 million in trades.

Unlike a bookmaker, which sets the odds and takes the opposite side of every bet, prediction markets allow punters to trade against one another. You can bet on everything from the number of acres you think will get destroyed in wildfires and how often Donald Trump will say “Kamala” in a speech, to whether Jesus Christ will return this year.

Kalshi's valuation has quadrupled in under a year to £22 billion and has more than 10,000 live markets, although sport still makes up about 78% of volume.

Are prediction markets new?

The basic idea isn't. Americans have bet on elections since George Washington. However, the New York Stock Exchange banned such markets during Prohibition, when gambling flourished underground, and polling later replaced their use for predictive purposes. In 1988 the University of Iowa launched the first serious election market and developed a better record than Gallup at predicting future results. The non-profit PredictIt followed in 2014. Now polling is in crisis and the markets are back.

Who uses prediction markets?

Prediction markets are used by young men for the most part, says the BBC. According to Betterment, a US financial adviser, 52% of Gen Z investors diverted money intended for investment into sports betting last year. Firms target such investors through partnerships with celebrities and social-media accounts.

There have been attempts to court women too, considered more sceptical and risk-averse, by employing female “finfluencers”, hosting in-person events and offering bets on “female-friendly” topics such as pop culture. Kalshi told the BBC that women's share of its users rose from 13% to 26% between early 2025 and early this year.

It's not just a fad. Polymarket's boss, Shayne Coplan, calls his site a “global truth machine”, a nod to Friedrich Hayek's belief that markets aggregate dispersed, local and tacit knowledge better than any planner. Morgan Stanley found in August that Kalshi was more accurate at predicting CPI inflation than economist consensus forecasts compiled by Bloomberg.

This ability to harness the wisdom of crowds has seen Kalshi strike deals with CNBC, CNN and AP; Polymarket this year announced partnerships with Dow Jones and Substack.

Are people making money from prediction markets?

The founders pitch their platforms as being fairer than traditional bookies because there is no “house edge”. Polymarket and Kalshi together averaged some $1.6 billion of daily trading in August, up nearly 2,000% on a year earlier. Winning is another matter.

A study by the Centre for Economic Policy Research in June found that two-thirds of Polymarket users have lost money, with just 1% of profitable traders capturing more than three-quarters of profits, and 0.1% capturing half. The Wall Street Journal reported in May that nearly half a billion dollars went to fewer than 2,000 accounts, while the median loss last year was $94.

The reason is structural, says Jane McManus in The Guardian. The markets rely on “dumb money” users to supply the liquidity and mispriced odds that allow the “smart money” – professionals and increasingly AI tools – to take most of the profits.

Why do people still use prediction markets?

Ease is one reason. Prediction markets are always online, the financial commitment required is low, feedback is quick, positions are easily exited and – armed with AI tools – users can analyse markets themselves.

Other theories abound. Younger users have an underdeveloped pre-frontal cortex and a high appetite for risk. Other experts cite “financial nihilism”: the sense that the economy no longer rewards prudence or planning, and conventional pathways to wealth-building and stability have been cut off.

According to market researchers at The Harris Poll, nearly two-thirds of Gen Z and millennials think the only way to build wealth today is through gambling or crypto.

Aren't prediction markets illegal?

It's complicated. In the US, prediction markets are regulated not as gambling but as derivatives by the Commodity Futures Trading Commission (CFTC). That lets them sidestep state bans on sports wagering and means the influencers they pay needn't mention risk. Both Kalshi and Polymarket emerged after the Supreme Court lifted the ban on sports betting in 2018.

Under Donald Trump, the CFTC has gone from “watchdog to cheerleader”, says The Economist. Trump wants prediction markets to thrive; his son Donald Jr advises Polymarket and holds stakes in both platforms. Europe is less welcoming. Across the continent, the platforms remain largely unauthorised and the EU's markets regulator has warned of significant risks and insider trading.

And in the UK?

Since 2019, the Financial Conduct Authority (FCA) regulator has barred the kind of binary options offered by Kalshi and Polymarket for UK customers and regulates prediction markets covering financial or certain climatic events.

Political and sporting outcomes fall to the Gambling Commission, which says they are “akin to” betting exchanges, a model Britain has allowed since 2000. Betfair, Matchbook and Smarkets are the legal versions.

Savvy Britons determined to bypass regulation are using VPNs to access Kalshi and Polymarket to place binary bets on such things as by-elections. But the situation may change. The platforms have begun a “lobbying blitz”, says the Financial Times, and hope soon to be regulated as financial services. The FCA is considering reforming its rules.

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The Brexit debate was bitter and divisive – it is hard to believe that anyone has fond memories of it, or the even more furious arguments that dominated politics for the five years after the referendum. Families were split and friendships put at risk. Most of us are probably relieved it is now firmly in the past.

But not, it seems, the prime minister, Andy Burnham.

He has promised a “debate” on Britain's EU membership, opening up the possibility that we might well rejoin. Indeed, another referendum, or a straightforward promise to sign up for full membership if re-elected, may well be included in the next Labour manifesto.

It is not hard to see what Burnham is up to. A promise to reverse Brexit and rejoin the EU will unite the centre-left vote. With the right vote split between the Conservatives and Reform, if the PM can unite the left, he can probably secure an election victory. Less cynically, he probably believes that rejoining the EU is important, both for the economy and for national security. The polls suggest that most people now agree with him.

Brexit uncertainty will hurt the British economy

The trouble is, that is the last thing the British economy needs right now. There will be plenty of people in business, and especially in the City, who would like to rejoin.

Most of the business community never wanted to leave the EU in the first place. They believe it has damaged trade and hurt investment and confidence. Indeed, we are already witnessing the start of a campaign to rejoin, with Goldman Sachs putting out a report earlier this month predicting a 6% boost to growth if it happens.

It won't be long before the pro-EU think tanks are getting big donations to push their case. All the familiar arguments about jobs and trade will be rehashed, along with plenty of suspiciously precise statistics.

But a long debate over rejoining the EU is not going to help the economy. To start with, the EU is likely to demand stiff terms. We will certainly have to allow freedom of movement. We will have to rip up the trade agreements we have signed since we left. We will have to impose lots of new regulations introduced over the last few years, even in sectors such as AI, where Britain has been doing well precisely because we do not need to comply with Brussels. We may well have to join the euro. And we will have to start making large budget contributions, with little chance of reclaiming the Thatcher-era rebate. Perhaps most seriously of all, we will have to accept our share of the massive borrowing the EU took on to finance the Covid Recovery Fund, even though we did not benefit from any of it.

Next, revisiting the Brexit debate is going to create uncertainty. Leaving might have been painful, but that disruption is now in the past. Supply chains have reconfigured, exporters have figured out how to cope with the paperwork, and even the City, despite the dire warnings of collapse, has retained its status as Europe's main financial centre.

But a renewed debate will mean businesses have no idea what trading regime they will face in five or ten years' time. Worse, by the time we finally reach a deal, it may well be vetoed by France, or even by Germany if the AfD has taken power by then.

We spent much of the 1960s debating membership of what was then the Common Market, only to be told we were not allowed to join. The whole circus could easily be replayed in the 2030s. With rising taxes and sky-high energy prices, there is little incentive to invest in the UK. Burnham is about to make that even worse.

A huge distraction

In reality, the EU is just a distraction from the real issues. There is a growing consensus around what needs to be done. Planning rules have to be relaxed to let us build more homes. We need to restore energy independence, instead of always prioritising net-zero targets. We need to reform a bloated welfare system so that people are encouraged back into work. And we have to simplify a tax system that destroys incentives.

None of those have anything to do with the EU. Another decade spent arguing over membership will only keep us from focusing on what really matter.

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Chancellor John Healey’s first Budget was characterised by tweaks around the edges of policy, rather than big bang announcements. This was true for pensions too. But even the relatively small changes could have a big impact on your retirement income.

Giving Britain financial ‘breathing space’ was the theme of Labour’s 2026 Autumn Budget. Yet for pensioners relying on savings and rental income, there were some surprise tax hikes that will likely be unwelcome after similar raises last year.

Matthew Phillips, director of wealth planning at wealth manager Canaccord Wealth, said there was “relatively little in the Budget that should require people to fundamentally reconsider their financial plans”, from a wealth planning perspective.

“After several years of change, that relative stability is no bad thing,” he said.

“However, a fairly quiet Budget does not mean there is nothing for savers and investors to consider.”

Here’s all the key Budget changes for pensioners, the likely impact and what to do next.

Pension tax allowance

A new pension tax allowance is being introduced for low-earning pensioners, equal to the 2027/28 full new state pension rate of £13,037 per year.

This ensures pensioners won’t be dragged into paying income tax purely because the state pension will rise by 3.9% next April, in line with the triple lock guarantee, (which they otherwise would because that exceeds the frozen personal allowance of £12,570).

The pension tax allowance will gradually reduce as pensioners’ income increases. For every £3 of income above £13,037 (the full level of the new state pension), the pension tax allowance will reduce by £1.

So those whose total income is above £13,319 lose the pension tax allowance altogether.

Becky O’Connor, head of pensions at PensionBee, said: “Sparing pensioners the hassle of being chased by HMRC for small tax bills is welcome.

“But the pension tax allowance is worth around £93 in its first year and is withdrawn as soon as someone has a modest private pension or a bit of savings interest, so people who saved a little extra could really end up feeling penalised for it.”

Savings tax increase

Savings tax rates were due to increase, but the government is going further by adding an additional two percentage points of tax from April 2027, above what was planned. For pensioners, who often keep substantial cash balances on hand for day-to-day expenses, this will likely be unwelcome news.

The savings tax hike means that for basic rate taxpayers in receipt of more than £1,000 of savings interest, every extra pound of interest will be taxed at 24% rather than 20%.

Similarly, for higher rate taxpayers whose personal savings allowance is £500, any additional savings interest will be taxed at 44% rather than 40%.

For additional rate taxpayers the change is particularly painful, as every pound of savings interest is taxable but at 49% rather than 45%.

Neil Jones, tax and wealth planning specialist at Standard Life, said: “For those with significant cash balances or regular savings, the incentives have edged further towards ensuring money is directed towards an ISA.

“However, against a backdrop of inflation, it’s important those affected look carefully at whether their money is keeping pace with inflation and consider whether it would be better invested where there is the potential for higher returns, albeit without guarantees.”

Ways to avoid being hit by the savings tax trap include:

• Make the most of your £20,000 ISA allowance
• Transfer savings to your spouse
• Consider Premium Bonds
• Invest in low-coupon short-dated gilts

State pension triple lock

The Budget confirmed the adjustment to the triple lock from 2030. Rather than applying the highest of CPI inflation, 2.5% or average weekly earnings each year, the government will review increases over time to ensure the state pension keeps pace overall.

Claire Trott, head of advice at St. James’s Place, said: “This should smooth increases and potentially deliver significant savings for the Treasury. It also addresses the cumulative ‘ratchet effect’ seen during Covid, when a year of sharp earnings growth compounded with increases in subsequent years.”

Rental income tax increase

Many pensioners partly rely on income from buy-to-let property to help pay for their retirement. But like savings, it was announced in the Budget the rate of tax on income from property is being increased from April 2027 by two percentage points across each marginal tax band; to 24% for basic rate payers, 44% for higher rate taxpayers and 49% for additional rate payers.

Alex Pugh, financial planner and partner at wealth management firm Saltus, said the increase “lands on a group that already feels overtaxed, with 43% of high net worth individuals telling us they pay too much tax, and 56% concerned about higher taxes on investment property”.

“For many of our clients, savings and rental income are a key part of their retirement plans, so this isn’t a small change. Using ISA and pension allowances in full is now more important than ever, and anyone with significant savings interest or rental income should review how those assets are held before April 2027.”

Definition of terminal illness for pension access

Changes are being made to provide greater flexibility in the medical evidence requirements for serious ill-health pension lump sums, with the government deciding to change the definition of terminal illness to make pension savings easier to access.

Under the new rules a lump sum may be paid where the pension scheme member can be reasonably expected to die within 12 months and the supporting medical evidence may be provided additionally by a member’s medical practitioner based outside the UK.

Jon Greer, head of retirement policy at Quilter, said: “Prognoses are inherently uncertain. The revised definition needs to recognise that uncertainty and give patients, medical practitioners and pension providers a clear, workable test.

“The announcement does not yet specify the new wording or confirm whether it will align with the test used for DWP benefits, so the detail will be important.”

Pension death benefits

Pensioners, such as surviving spouses, will also benefit from the government decision to remove the requirement that pension scheme administrators must pay tax-free death benefits to beneficiaries within two years of learning of the death of a member aged under 75 (the ‘two-year rule’).

Under the change, a pension lump sum death benefit paid to a beneficiary more than two years after the pension scheme became aware of the member’s death will no longer be subject to an income tax charge.

The two-year limit is also being removed where beneficiary annuities are paid from the deceased member’s drawdown funds and where funds are designated for a UK resident under a pension scheme outside the UK.

O’Connor from PensionBee said: “Removing the two-year rule is a welcome fix: families shouldn’t face a tax bill simply because a pension payout was delayed by probate or paperwork outside their control.

“Greater certainty on how tax is collected when the lump sum death benefit allowance is exceeded should also make a difficult process less daunting for beneficiaries. In the run-up to pensions being included in estates for inheritance tax purposes, these changes are even more important.”

The annual MoneyWeek Wealth Summit takes place on Friday 6 November in central London. Our theme is The Age of Change: investing in a world of technological, political and financial revolutions. We look forward to meeting many of you there to discuss the implications.

The agenda gets underway with historian and geopolitical expert Peter Frankopan, professor of global history at Oxford University and best-selling author of The Silk Roads, The New Silk Roads and The World Transformed. He will sit down with MoneyWeek's Andrew Van Sickle to discuss how rising tensions between America, China, Russia and other powers will shape the new world order.

MoneyWeek's long-standing view is that we are heading into an era of less cooperation and more competition, and those tensions will only get worse. What does that mean for investors? There are reasons to be optimistic, but also reasons to be very cautious about anything that depends on the type of environment that prevailed a few years ago.

Our panel of Dominic Scriven (Dragon Capital and Vietnam Enterprise Investments), Jasmine Yeo (Ruffer) and Stephanie Kelly (Lombard Odier) will consider the implications for energy, security, inflation, interest rates, stocks, bonds, global trade, emerging markets and more.

Profit from top growth stories

Then we break for coffee and a chance to question Rory Stokes (Janus Henderson and European Smaller Companies) about the outlook for Europe. How does he find growth stocks in a region that is often criticised for lacking dynamism?

After that, it's time to get stuck into the big themes in today's markets. Richard Clode (Janus Henderson and Bankers Investment Trust) will consider the broader investment implications of the AI boom, which looks very different to past technology cycles. What are the opportunities and risks of this potential multi-decade investment trend?

Steady income can be a good anchor in changing markets. Martin Connaghan (Aberdeen and Murray International) runs one of the few trusts that invests in both developed and emerging markets. He'll be outlining his views on finding diversified, global income with growth.

Higher defence spending is sadly a reality in an unstable world. Investors need to face reality. So Tom Bailey (HANetf) is joining us to explain how technological changes and geopolitical threats will determine which companies benefit the most.

The new commodity supercycle seems to be under way, with prices of critical metals rising. Olivia Markham (BlackRock and BlackRock World Mining) will examine why supply is set to struggle to keep up with new sources of demand that range from AI data centres to electric vehicles.

We're stopping for lunch, but the ideas will keep coming. Our exchange-traded fund (ETF) masterclass will examine key trends in these products – which are no longer simply cheap trackers for major stock markets – and discuss how investors can best employ them in portfolios. Our expert guests for this session are Natali Monardo (IncomeShares), Dan Gold (Stratiphy) and Jamie Gordon (VettaFi).

Take a hard look at Britain

After lunch, we focus on the outlook for the UK for a few sessions. We will be recording a discussion about the implications of this week's Budget live episode of our MoneyWeek Talks podcast, hosted by MoneyWeek's Kalpana Fitzpatrick.

Independent economist Julian Jessop, multi-asset manager Emma Moriarty (Capital Gearing) and adviser Lisa Conway-Hughes (LCH Wealth) will discuss the prospects for “good growth in every postcode”, what the bond market makes of the government's spending plans, and the key implications for our own financial planning.

The UK stock market remains perennially unfashionable, yet the large-cap end of the market has performed relatively well in recent years. Ian Lance (Redwheel and Temple Bar) will examine how a focus on unfashionable value stocks of the type that now make up much of the UK offer valuable diversification from a global index increasingly driven by tech and growth, as well as giving some protection against geopolitical uncertainty.

The UK investment trust sector has been through difficult times, with discounts widening and activist investors putting pressure on boards. The trend now seems to be changing as trusts focus on improving performance, but share prices continue to lag in some parts of the market.

Tom Treanor and Charlotte Cuthbertson (Asset Value Investors and MIGO Opportunities) will discuss whether these offer value, and why investors should focus on situations where there is a catalyst for extracting value.

Our focus on Britain will continue into the afternoon coffee break, with a Q&A session for Ben Ritchie (Aberdeen and Dunedin Income Growth). We'll be asking him about foreign buyers snapping up UK firms on the cheap, and how investors should respond.

Invest for lift-off

The final session of the day focuses on ideas that are – in one way or another – looking for lift-off. We begin with a look at venture capital trusts (VCT) with Shane Gallwey (Guinness Ventures). These funds play a key role in providing capital for early-stage firms to scale up and grow. How will the changes to tax relief on VCT subscriptions affect demand from investors?

After that, it's time to discuss cryptocurrency tokenisation and related matters, with regular MoneyWeek contributor Charlie Morris (ByteTree) and early sceptic turned partial convert Izabella Kaminska (The Blind Spot). Are digital assets set to revolutionise the financial system? Or are they at most a new form of plumbing, like the switch from paper records and forms to electronic transactions that took place decades ago?

We wrap up the main agenda with a trip above and beyond. Space is one of the very few areas that can compete with AI for excitement right now. However, this is not simply a technology story – it's also about geopolitics and security, with countries that lack space capability set to lose strategic autonomy. Rob Desborough (Seraphim Space) will set out the opportunities and risks this poses for investors.

That wraps the main agenda, but not the event. We're holding an evening drinks reception to talk over the themes of the day with fellow attendees, MoneyWeek contributors and guests. Drinks are included in the ticket price, along with breakfast, coffee and lunch.

Book your place and join us at this year's venue, Together at 88 Wood Street in the City of London. Tickets are £219 for MoneyWeek subscribers and £299 for non-subscribers.

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.

Consumer brands used to be dependable outperformers. But quality companies that have consistently and reliably delivered compounding growth in value for shareholders over the long term – companies such as Diageo, Unilever and Reckitt Benckiser – have all struggled in recent years.

Their global consumer brands, including Johnnie Walker (Diageo), Dove (Unilever) and Dettol (Reckitt), generate the bulk of their sales outside the UK, so they can even benefit from a weak pound. But their international diversification and high gross margins have failed to deliver for investors, catching out high-profile professional fund managers such as Nick Train and Terry Smith.

In the period that saw the internet bubble bursting a quarter of a century ago and the financial crisis of 2007-2009, Unilever's share price quadrupled, Diageo was up six times and Reckitt Benckiser by almost 11 times from 2000 to 2020. That might sound pedestrian for investors in US technology stocks, but consider that the FTSE 100 trod water over those two decades, a time when blue-chip shares such as Lloyds Bank or Vodafone fell by between 75% and 95%.

Warren Buffett and the economics of consumer brands

Berkshire Hathaway's investment in See's Candies illustrates the economics of consumer brands. In the 1970s Warren Buffett received a phone call asking if he was prepared to pay three times book value to buy See's Candies, an unheard-of multiple for a value investor from the Benjamin Graham school, who would normally look to buy tangible assets with a “margin of safety” of 50p in the pound. Buffett almost dismissed the opportunity as too richly priced, but upon reflection he returned the phone call to do the deal.

The experience worked out well and taught the then middle-aged Sage of Omaha that much of a company's brand value is not recorded on the balance sheet. For a technology or pharmaceutical group, research and development (R&D) costs can be capitalised and recorded as “intangible assets”. Marketing costs, a key investment for consumer brands that often make up between 12% and 18% of revenue, are expensed as they are incurred through the income statement. Accountants take a cautious view of advertising expenses, assuming the costs are effectively wasted, or at least should not be counted as assets.

Analysts can add back marketing spending and capitalise it as an asset on the balance sheet, the same accounting treatment as for R&D. However, they would then need to form a view on the lifespan of that asset, when in reality cherished brands such as Diageo's Guinness maintain their value through the decades. Brands can wither, losing their appeal through lack of care, despite continued marketing spending. Tango, the fizzy drink famous for edgy, award-winning marketing, outselling Coca-Cola's Fanta two-to-one in the 1990s, is an example of the latter. Although Britvic continued to pour large sums of money into marketing, the brand failed to refresh. Organically generated brand value, such as that deriving from Diageo's Guinness, does not therefore feature on the balance sheet, whereas acquired brands and trademarks can be recorded as intangible assets. Examples for Unilever include Horlicks (€2.3 billion), Knorr (€1.8 billion) and Hellmann's (€1.2 billion). The latter two brands have been sold on to US food group McCormick in a $44 billion deal, announced in March this year, to create a group with $20 billion of revenue and an operating margin target of 23%-25%. Unilever's shareholders retain 55% ownership of the combined group and the shares will have a secondary listing in London, while Unilever itself will keep 9.9%.

Just how significant intangible assets can be is illustrated by Diageo's acquisition of the “super premium” Don Papa rum brand for £294 million in early 2023. Only £1 /millionof that was represented by property, plant and equipment, and £6 million by inventory. The brand was valued at £293 million. Just two years later, Diageo wrote down the value of the brand by $287 million. (Diageo had in the interim changed its reporting currency from pounds to dollars.) That write-down is dwarfed in comparison with Kraft Heinz, which announced a $15.4 billion write-down of its best-known brands in 2019, following a deal backed by Buffett and private-equity firm 3G five years earlier.

Unsurprisingly, many investors take a sceptical view of intangible assets because the value can disappear from the balance sheet at the stroke of a pen and management can be slow to write down the value of acquired brands. Casamigos, the tequila brand acquired by Diageo from George Clooney and others for $1 billion, saw an organic sales decline of 25% this year, but so far there has been no write-down. Yet the power of some brands to keep generating cash flows was demonstrated by this year's 12% sales growth of Guinness.

Struggling to keep pace with price rises

Around the time of his See's Candies deal, Buffett had a headache with his original Berkshire Hathaway acquisition. While See's was demonstrating pricing power in an inflationary environment, Berkshire itself, the textile factory based in Berkshire County, Massachusetts, had tangible assets such as machinery that were obsolete. To continue to generate cash flow, Buffett had to keep funding capital expenditure (capex) in new equipment, despite knowing he'd fail to achieve an acceptable return. It's all very well owning factory assets as inflation rises, but at some point the machines need to be replaced at a price greater than the original cost. Depreciation policies, which assume a finite useful life, implicitly assume that replacement costs don't increase with inflation. Thus Berkshire's tangible assets were a drag on returns, while the intangible assets, the See's Candies brand, unrecognised by the bean counters, was paying for itself many times over.

A second attraction of consumer brands is that they tend to report high gross margins (more than 60% in the case of Reckitt Benckiser and Diageo, just below 50% in the case of Unilever). A buttress against rising inflation is a relatively low cost of goods sold (CoGS) – making things for 40 and selling at 100 – meaning that a 10% rise in CoGS has much less impact than upon a group with lower margins. All three groups have been reporting stable gross margins, passing on rising input costs to consumers. The trouble has been revenue growth that has struggled to keep pace with inflation.

By contrast, supermarket groups Tesco and Sainsbury's, with gross margins below 10%, have seen their share prices do unexpectedly well in response to inflation. Although low margin, they have been able to pass on the rising cost of essential items to shoppers, with many consumers favouring supermarkets' own brands. In the 1970s these own brands were synonymous with low quality and cheapness, but recently supermarkets have become more sophisticated at marketing their own-label alternatives. Across the largest six markets in Europe, supermarket own-label brands are growing faster and have reached a 50% share of the grocery market.

The supermarkets have been winners since Russia's invasion of Ukraine, with Sainsbury's up by a third and Tesco up by 90%. By contrast, Diageo has halved in value over the same time period, as other global spirits groups such as Brown-Forman, Pernod and Rémy Cointreau have all struggled. Reckitt and Unilever, which sell everyday items, have also struggled to match the performance of the food retailers.

Some of that performance reflects the starting point, with investors in Reckitt, Unilever and Diageo prepared to pay 20 to 30 times earnings, a premium valuation. Brands are long-duration assets. Arthur Guinness began selling beer in 1759. Before the pandemic, investors were prepared to accept low dividend yields as the discount rate for long-lived assets was low. When “risk-free” UK ten-year gilt yields rose from around 1% five years ago to approach 5.5%, the low dividend yields of consumer staples groups lost their relative appeal.

In an inflationary environment, consumer brands should be able to raise dividends in line with nominal growth. Yet Diageo halved its dividend at the group's December half year to give management more financial flexibility as it struggled with falling sales and a 26% drop in reported earnings per share while burdened with $22 billion of net debt, equivalent to 3.4 times Ebitda.

This points to an essential difference between 1970s inflation and the 2020s version. Although the cause of the inflation was remarkably similar – energy-price shocks from conflict – the level of indebtedness has proved more significant for share-price performance. The corporates themselves are carrying more net debt: Diageo's interest costs have risen 2.3 times from 2022 to 2026. Customers who buy brands are more heavily mortgaged than in previous decades. Unlike in the 1970s, middle-class professionals have faced a severe wage squeeze relative to inflation and many carry far more household debt relative to disposable income. Following the financial crisis, real wages have stagnated in the UK, but those earning close to the minimum wage have seen their earnings outpace those earning the median – the so called “K-shaped recovery”, with the top 10% and the bottom 10% seeing gains, while workers in the middle of the pay distribution have been going backwards in real terms.

Thus, despite the expectation that consumer-brand groups would protect investors from inflation, the groups have lost market share and struggled to grow revenue. At €50.5 billion, Unilever's turnover remains below the €51.3 billion that the group reported in 2012. There are signs of recovery. At the first-half results in June, the group reported 4.8% underlying sales growth, and at £49 per share the group trades on a price/earnings (P/E) ratio of 16.9 times December 2027 forward earnings and an EV/Ebitda of 12 times the same year. That includes the food brands, with the McCormick deal expected to complete next year.

Some consumer brands groups have ‘lost the plot’

Some of the consumer-brands groups have also become unfocused and inefficient. Dave Lewis, the new CEO of Diageo, is targeting $1 billion (or 12% of administrative expenses) of annual savings and is aiming to reduce waste, duplication and inefficiency. In his 2021 letter to investors, Terry Smith questioned whether Unilever had “lost the plot” as management pondered the broader purpose of Hellmann's mayonnaise, trying to convince us that buying the condiment was a step towards sustainability and environmental friendliness.

Unilever responded to the criticism by restructuring its portfolio. First it demerged Magnum Ice Cream into a £9 billion spin-off, then combined its food brands with McCormick in the US. At its first half results in June, Magnum reported organic sales growth of 4.7%. The group trades on a P/E ratio of 16 times December 2027 forward earnings and an EV/Ebitda of 9.2 times.

Brands, by their nature, attempt to create a feeling of association, that they stand for values consumers identify with. This association should mean a brand occupies a place in the collective consciousness so a shopper feels good choosing their ice cream on criteria other than price. Yet as brands become more global and management fear offending anyone, they become anodyne. Reckitt Benckiser defines its purpose as being to “protect, heal and nurture in pursuit of a cleaner, healthier world”. Diageo says its purpose is celebrating life. Perhaps they're losing their edge?

Aside from existential angst over purpose, consumer brands have also created their own problems, not least with poor-value acquisitions. Reckitt is facing legal problems in the US over its infant formula feed. In March 2024, an Illinois state court jury awarded $60 million to a plaintiff. In June this year, the court overturned this verdict and ordered a re-trial. It remains unclear what the final liabilities will be. Management impaired £5 billion of goodwill from the Mead Johnson Nutrition acquisition in its 2019 fiscal year, primarily due to increased competition in China and weaker Chinese market growth, followed by further large impairments in 2023 and 2024 related to the infant formula specifically. Reckitt's acquisition of Mead Johnson for $16.6 billion (at the time £13 billion) in 2017 was an “unforced error” and represents one of the worst UK corporate acquisitions since Royal Bank of Scotland's bid for ABN Amro.

Investors must tread carefully

Investors have long accepted that hubristic bank management can make foolish acquisitions at the wrong point in the cycle. However, consumer-brand groups that sell household products and over-the-counter treatments such as Strepsils and Nurofen should not be causing investors headaches. Reckitt's first-half results in June 2026 showed that goodwill and intangible assets on the balance sheet stood at £15.9 billion, almost three times the group's shareholders' equity of £5.7 billion. Net debt stood at £9.4 billion (2.5 times adjusted Ebitda). Reckitt reported like-for-like revenue growth of 2.6% at its first-half results in June, below the level of inflation. The shares trade on a 15.2 times P/E based on 2027 forward earnings, or 11 times the same year's EV/ Ebita. Unlike Buffett's purchase of See's Candies in the 1970s, it has been the “goodwill” from the acquisition of Mead Johnson that has caused problems. That said, even Kraft-Heinz, backed by Buffett a decade ago, has seen its shares fall 70% since 2017. Investing in consumer brands can trip up even the best investors.

The case for buying Diageo

Diageo, owner of the Johnnie Walker whisky, Smirnoff vodka and Guinness brands, as well as of around 200 others, has seen its rating go from above 30 times P/E during the pandemic to 13 times now. Some of the exuberance five years ago was driven by a rise in demand from households stuck at home, which saw sales jump around 40% to £15.5 billion in the two years of the pandemic to the June 2022 financial year.

This was not sustainable, and sales are now forecast to remain below the $20 billion (£15 billion) level until the June 2029 financial year. Some of the derating has been driven by fears that GLP-1 weight-loss drugs will also reduce alcohol consumption. However, Diageo’s stalling revenue growth predates the advent of these drugs. Between 2013 and 2018, sales flat-lined. Management responded by suggesting that although alcohol consumption was on the decline, drinkers would pay up for quality – the trend towards so-called “premiumisation”.

Certainly, “Generation Z”, those born between 1997 and 2010, are drinking less. Yet premiumisation was a strategy that might have appealed to management and high-earning fund managers, but not to middle-class customers. Perhaps those who sit in the top half of the “K-shaped recovery” are out of touch with the challenges that consumer-brands groups’ customers have faced.

Effectively, the investment case in Diageo has shifted from being that of a “quality compounder” to becoming a classic turnaround story, with the new chief executive “kitchen sinking” his first set of results. In November last year, Diageo announced that Dave Lewis, former boss of Unilever and well regarded for his turnaround of Tesco, would become CEO from the start of this year. Lewis has wasted no time, first cutting the dividend in February, then hosting a Capital Markets Day (CMD) in August. At the CMD, management presented targeted cost savings of $1 billion per annum from group overheads, back-office operations ($850 million) and supply-chain efficiencies ($150 million). Results for the financial year to June showed that organic sales were down 2% across the group, and down 8% in North America. Management expects that negative trend to continue in North America, but the medium-term group target is for low single-digit organic sales growth.

Management hopes that its ready-to-drink (RTD) offerings – that is, pre-mixed gin and tonics and the like – could deliver growth and appeal more to younger generations. It is also walking back from the premiumisation strategy and will now put a greater emphasis on value brands to remain relevant to customers who are feeling squeezed.

Diageo’s shares are trading on a 13.3 times P/E based on June 2028 forward earnings or ten times EV/Ebitda the same year, well below historic averages. The yield is 2.5% as the dividend was cut to $0.50 (or 37p) in February, although the full-year dividend is now covered three times. The shares are down 60% from their peak in 2022, but have begun to recover this year. They are a buy.

Bruce owns shares in Diageo

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.

Equinix (Nasdaq: EQIX) is a real-estate investment trust that invests in data centres in order to rent them out to technology companies. It has amassed an impressive portfolio of 282 AI-ready data centres in more than 70 countries and has partnership agreements in place with a large number of tech giants, including Nvidia, Oracle, Amazon Web Services, Dell and Google.

AI is clearly a transformative technology. However, rather than opt for companies working on AI, many investors have adopted the indirect approach of buying firms facilitating the boom, notably those operating data centres. Data centres are used to store vast amounts of information collected by technology companies, which need the data to train their AI models.

At present, there is a huge demand from Big Tech, which is trying to build out capacity as quickly as possible. However, just because an industry is doing well doesn't mean that all the shares in it are worthwhile investments.

Equinix's shares seem to have lost momentum

All this sounds positive, but there are a few notable problems to bear in mind. All the tech companies have been expanding data-centre capacity on the assumption that the demand for them will continue to grow at a high rate. This supposition may be overoptimistic, especially given the mixed impact of AI on real-world productivity that many firms have experienced. Several major studies have highlighted a high failure rate of AI projects.

There has also been growing interest in AI models developed by technology firms in Asia that potentially require much less computing power and therefore need fewer data centres. Furthermore, a backlash against data centres – which are unsightly, noisy and wasteful as they consume a great deal of water and energy – has affected some projects that Equinix has been involved in (such as one in South Africa). The upshot is that demand could slow down, or even reverse.

However, even if appetite for data centres continues to grow, Equinix's extremely high valuation looks likely to hamper the stock's progress. The firm is expected to grow revenue at under 10% a year over the next few years, a solid but not spectacular pace, and it achieves a return on capital employed (ROCE) of only 6%. Yet the stock trades at 50 times estimated 2027 earnings, and nearly ten times current sales. While other data-centre firms also have high valuations, some of them are more modestly valued. Iron Mountain, for instance, is a similar business selling for a more modest (but still high) 40 times 2027 earnings.

From a technical perspective, moreover, Equinix's shares seem to have lost momentum. They have drifted downwards over the past six months and are trading below both their 50- and 200-day moving averages. I would therefore suggest shorting Equinix at the current price of $953 at £3 per $1. I would cover them if they hit $1,283, which gives you a total downside of £990.

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.

Life on a Caribbean island moves as fast as its resident population. On the island of Canouan in The Grenadines, that population mostly consists of tortoises. There are thousands of them. Not for nothing is Canouan known as “Turtle Island”.

Why “turtle” and not “tortoise”? I'm guessing that might have something to do with the island's history. Canouan, today part of Saint Vincent and The Grenadines, where King Charles is the head of state, was settled in the 18th century by the French before the British later wrested it off them. In French, they use the same word for both “tortoise” and “turtle” – tortue. I once asked a French friend why that was. They shrugged and said, “what's the difference?” The difference, I replied, is in what happens when you throw the wrong one back into the sea.

Suffice it to say, no tortoises were harmed during my stay on Canouan – at least not by me. So careful are the people who live on the island of the animals that they will actually stop their cars, buses and vans to scoop them up from the middle of the road and cart them off to the side. Slow-moving sleeping policemen, they are not. But it also means it can take a little longer than you might have expected to get anywhere, which brings me back to my initial observation – life on Canouan is slow. And that is exactly the point. You come to Canouan to relax.

Silver Turtle: a residence for a prince

My room at the six-bedroom Silver Turtle residence, part of Canouan Estate Resort & Villas, is set just down the hill from the villa proper. I come to think of it as a cosy annex, tucked away within its own little secret garden. I have a large bathroom with a shower and sleeping is comfortable beneath the mosquito net.

On the grass outside my door, a gang of tortoises loiter. They must have been there for quite some time – possibly longer than the villa has been standing – because some of them have two humps on their shells. This, it is explained to me, means they are very old. You could be forgiven for wondering why they even need shells given the lack of threats on Canouan. There isn't much to worry them – and that goes for human visitors too. Most tortoises retract their heads as you walk past. The more cantankerous among them may give a little hiss, but the chase is over before it has begun. I've made the short hop up the hill to the infinity pool, which overlooks the barrier reef and the Caribbean Sea.

The residence could be described as colonial in style – dark-wood floors in the bedrooms, ceiling fans and cane furniture. It's also big. There is a proper kitchen and a living room with a huge telly. On the wall is a framed letter from Prince Harry thanking the owners for letting him stay there in 2016. But you don't come to the Caribbean to sit inside watching the box. Outside, beyond the sliding doors, is a large seating area and a dining table, both under cover. The estate has four of these palatial residences and there are various smaller villas and suites, suitable for families and groups of all sizes.

On the estate, you will find an 18-hole golf course designed by the legendary Tom Fazio, along with tennis courts, a children's club and a spa and gym. Close by, there is also the 17th-century Anglican “Estate Chapel”. If its Norman architecture looks out of place among the Bougainvillea and palm trees, that's because it is. The chapel was actually built in England and shipped over to Canouan stone by stone. It is still used by the local community, but it is also a popular place for weddings and it's not hard to see why.

While on Canouan, you also have the choice of staying at the Mandarin Oriental and Soho Beach House hotels. All three properties operate an “invisible key” scheme that gives you the option of using the facilities at each. The island is sufficiently petite that you can fly between the various properties by the seat of your golf buggy, swerving for tortoises, of course. That's particularly handy when you get a bit peckish in your residence and you don't feel like cooking.

Mandarin Oriental Canouan: laid-back luxury

At the Mandarin Oriental, for instance, there's the Lagoon Café for a relaxed bite and the Tides Bar + Grill for fine-dining. That there is a Mandarin out here at all, in the Caribbean, is marvellous. It's certainly the most far-flung of the upmarket chain that I've visited, including the flagship hotel in Hong Kong. And yet, the brand has made the island its home. The decor has, for example, certain Asian influences which blend in with the tropical flowers beside the swimming pools and other Caribbean flourishes. Hong Kong can be pretty hot and steamy, too, after all.

That said, Canouan is certainly no stranger to well-heeled visitors. The island is home to the fancy Sandy Lane Yacht Club and there is an airstrip big enough to accommodate private jets. Most British visitors to Canouan will arrive by air via a short 45-minute hop from Barbados.

While everyone has heard of Mustique, which is also in The Grenadines, to the north, it's a wonder Canouan isn't better known. Maybe that has always been on purpose. Those who know want to keep it a secret. So much for that!

Soho Beach Hotel Canouan: a lost outpost

The Mandarin Oriental, Canouan, sits on beautiful Godahl Beach on the Atlantic side of the island. Over on the west-facing Caribbean side, you have Soho Beach Hotel Canouan – another “lost” outpost, this time of the popular London-based chain of private members' clubs.

You don't, however, need to be a member to enjoy its laid-back atmosphere. Anyone can stay at this pocket-sized boutique resort. Much like Soho House's members, the interior design in the rooms has that carefully curated air of not really trying down to a tee. The desk, tables and chest of drawers in my room have that lived-in quality and the wardrobe is an imposing, almost Gothic dark-wood edifice. It all feels very Sohoboho. There is a wide balcony and the room is flooded with golden light through the white window slats, especially in the evenings when the sun sets over the sea, making silhouettes of the yachts.

In the living room, there are arty coffee-table books parked here and there and a bar with a proper selection of English teas and freshly baked biscuits. In the bathroom, there is a very wide selection of bathroom products from fashionable, Somerset-based Cowshed. The idea that you might make do with refillable plastic bottles of shampoo and shower gel, screwed to the wall, is laughable at Soho Beach House Canouan. You have a choice of each depending on your mood. Similar products can be found in the Cowshed spa, just down the beach from your room.

The original Soho House on Greek Street was famously the club for “creative types” and here, on Canouan, the first Soho House in the Caribbean, you can give new meaning to the term “remote working”. I would be happy to call this corner of Canouan my office. Then, when it's time for the sundowners to come out at the bar, housed in a large open-sided thatched structure known as a palapa, it's also time for the laptops to get put away. House rules. The restaurant menu is a list of local favourites, including baked snapper from the clay oven.

From the jetty the next morning after breakfast, we take a yacht around some of the southern Grenadine islands and enjoy a lobster lunch on Union Island, which, like Canouan, is thankfully now recovering from Hurricane Beryl. The storm did terrible damage to the southern Grenadines in 2024. And we also stop off at Tobago Cays for a spot of snorkelling with our hard-shell friends – the turtles are fleet of flipper this time and most definitely not lumbering land tortoises, no matter what the French may tell you.

Chris was a guest of Canouan Estate Resort & Villas (Silver Turtle costs from $14,000 a night, canouanestateresortandvillas.com), Mandarin Oriental Canouan (from $1,400 per night for a one-bedroom suite, including breakfast, mandarinoriental.com/en) and Soho Beach House Canouan (from $815 a night, sohohouse.com).

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.

The latest battery pack from Chinese company CATL promises to put range anxiety to bed for good, with the potential for 1,500km on a single charge. When they finally come to top up, electric car drivers can add 520km of range in just five minutes. Chinese car maker BYD has introduced a vehicle-mounted drone platform. In theory, the average Chinese electric car driver could drive from Beijing to Shanghai on a single charge, receiving food deliveries on the way.

This is just one way Chinese manufacturers are reshaping industries and a clear sign of China’s extraordinary innovation impulse. China is leading the way on patents, currently submitting around 4x the level of patents as the US. It is a global leader in areas such as robotics, clean energy technology and electric vehicles (EVs), and is increasingly competitive with the US on artificial intelligence (AI).

Yet many conventional economic indicators for China look depressing. Retail sales, for example, have barely grown over the last 12 months. The housing market, long a drag on household wealth, continues to go backwards. Deflation is a spectre looming over the economy. There is huge over-supply in certain industries thanks to inefficient government subsidies and difficulties in key export markets, such as the US.

Potential investors in China must deal with these competing realities. The Chinese stock market has real breadth and encompasses the good and bad of its economy. On the one hand are innovation powerhouses, on the other are sclerotic state-owned enterprises run for the good of the country rather than the good of shareholders.

Shifting sources of growth

For Will Mackintosh-Whyte, fund manager of asset manager Rathbones’ multi-asset portfolios, this is the sign of an economy in transition.

“We believe that the growth model in China is changing,” he says. “Property and infrastructure are no longer doing the heavy lifting they once did. Increasingly advanced manufacturing – semiconductors, automation, robotics, machine tools, EVs, batteries – and increasingly sophisticated capital goods, technology and AI… are the new growth drivers.

“China's manufacturing competitiveness remains an important source of support to the economy, and is likely to be a bigger driver of growth than the consumer,” he added. Domestic consumption, by contrast, “while strategically important, is currently weaker, weighed down by the continuing softness in property impacting consumer confidence”.

This dual-speed economy is evident in funds investing in the region. While returns from the Chinese stock market have, as a whole, been pretty miserable over the last 12 months, some funds have delivered excellent returns. The gap between the top and bottom performing funds in the IA China sector is 64% over three years. Top-performing funds such as the T. Rowe Price China Evolution Equity Fund or JPM Greater China Fund have risen more than 50% over that period, but the weakest funds are under water.

Targeting innovation

China has seen the same boom in AI infrastructure spending as the US. It is now becoming increasingly competitive with the US, albeit with a different model. Its AI is open-source, meaning it can be used and adapted by anyone. This makes it different from US AI, which is owned by individual companies. China doesn’t have the sophisticated ‘frontier’ models for AI, such as those from Anthropic, but these aren’t necessary for many of the hoped-for productivity gains from the new technology.

Mackintosh-Whyte, for example, is gaining exposure to AI growth through cloud provider Alibaba (NYSE:BABA).

“It gives exposure to Chinese cloud, enterprise AI and model adoption, which has its own chips and around 10,000 enterprise large language model (LLM) clients,” he says.

He also has exposure through non-US listed companies with significant Chinese businesses. “ASML (AMSTERDAM:ASML) and Applied Materials (NASDAQ: AMAT) are names we own who produce products which are part of the semiconductor supply chain where China is an important end market. We have copper exposure – directly and via owning Freeport-McMoRan (NYSE:FCX) – where the Chinese investment in the electricity grid is driving significant demand for the metal.”

Dale Nicholls, portfolio manager of Fidelity China Special Situations (LON:FCSS), says it is still early days on AI investment and there will be winners and losers, but initial signs for many of the large platforms – TenCent (HK:700), Alibaba and Bytedance - is positive.

“Encouragingly, we are seeing them become more disciplined elsewhere, reducing losses in highly competitive areas such as food delivery while directing more capital towards AI infrastructure, cloud and applications that could strengthen their long-term competitive position,” said Nicholls.

Nevertheless, as in the US there are some worries over the potential for an AI bubble. Valuations in AI companies in China may not be as stretched as their US peers, but they have been subject to similar excitement. With that in mind, Nicholls is seeking less obvious routes into the Chinese innovation trade.

He expects the next phase of adoption to extend beyond digital applications into physical or ‘edge AI’.

“Robotics, autonomous driving, smart devices and wearables should become increasingly important as intelligence is embedded directly into products and services,” he says. He holds robotaxi group Pony.ai (HK:2026) in the portfolio.

Looking beyond AI, Nicholls also holds battery pioneer CATL (HK:3750). While the electric car market looks saturated and most companies are unprofitable, CATL should be a major beneficiary of the electrification trend. It is also moving beyond cars, leveraging its capabilities in energy storage systems to capture growing demand from the AI infrastructure buildout.

“As AI deployment increases electricity requirements, we see opportunities across the wider power ecosystem,” said Nicholls.

Roderick Snell, manager of the Baillie Gifford Pacific Fund, is investing in some direct AI beneficiaries, such as Mech-Mind (HK:9615), a company that develops 3D machine-vision systems – effectively the eyes of robots. However, he is also investing in energy, resources and construction companies that will benefit from demand for power infrastructure and critical materials, both from AI and from the electrification of China’s economy.

How can you invest in China?

A low cost route to access China’s stock market would be through an index-tracking fund or exchange-traded fund (ETF). The HSBC MSCI China UCITS ETF (LON:HCHA), for example, would give investors a decent weighting in Alibaba and TenCent. The problem is that it also gives access to a lot of ‘old economy’ Chinese companies. It has just 11% of assets invested in technology as of 30 September, with higher weightings in consumer and financial companies. Like the broader Chinese stock market, it has fallen over the past 12 months.

Paul O’Neill, chief investment officer at Bentley Reid outlines a possible alternative: “We own the Amundi Core MSCI China A Swap ETF (LON:C027). It tracks the MSCI China A index, which covers large and liquid A-shares listed in Shanghai and Shenzhen, priced in RMB.” The ETF’s top holdings include CATL and chipmaker Cambricon (SHANGHAI:688256). The ETF mixes battery and AI hardware leaders with banks, insurers and utilities.

“The top ten are only about 18.5% of the fund, and it is diversified across roughly 400 stocks,” said O’Neill.

Active funds may provide more targeted exposure to China’s new innovation economy. The Baillie Gifford Pacific fund, for example, has 48% of assets invested in technology, with only negligible amounts in areas such as real estate. The Allianz China A-Shares Equity Fund focuses on ‘created in China’ industrial and technological advances.

The innovation story in China is every bit as powerful as that of the US. There are industries where China is leading the world and it looks increasingly competitive in areas such as AI. Investors have plenty of options to target this part of China’s economic growth story, while ignoring its sluggish, legacy industries.

AI and technology stocks perked up early this week following the publication of the IPO prospectus for Anthropic. Investors took heart from news that the Claude chatbot maker pulled in more than $16 billion in revenue in the first half, says Ipek Ozkardeskaya of Swissquote.

But cracks have begun to emerge in parts of the AI landscape. The cost of insuring debt issued by CoreWeave, a “neocloud” data-centre business, recently rose to allow for “a more than 60% chance of default within the next five years”, according to Bloomberg. CoreWeave is a highly leveraged owner-operator of potentially fast-depreciating assets, says Victor Balfour of Rothschild & Co. It's little surprise the shares have plunged 67% since their peak in June 2025.

That doesn't necessarily spell doom for AI more generally. The technology “hyperscalers” are much more robust – Microsoft shares have risen 38% since the start of July. These companies are issuing a lot of debt to pay for their AI investments, but their strong operating cash flows and balance sheets are “reassuring”.

Stijn Van Nieuwerburgh of Columbia University estimates that spending on AI data centres, power systems, networking infrastructure and specialised chips will hit $10.3 trillion in 2025-2032. On an annual basis, investment will run at 3.63% of US GDP. For comparison, the late 1990s dotcom boom saw capital spending equivalent to 1.1% of annual GDP; the 1870-1890 US railroad mania was previously the historical leader at 2.24% of GDP.

As the credit boom goes on, Van Nieuwerburgh warns financing is moving into an opaque world of “joint ventures, private credit, securitisation, special-purpose vehicles, lease commitments and loan guarantees”. That makes it much harder to keep track of where dangerous credit risks are accumulating.

AI profits bubble?

The Nasdaq 100 trades on a forward price-to-earnings ratio a little over 20 times, a premium rating but not obviously bubbly. That's because the “bubble is in profits, not valuations”, says Edward Chancellor on Breakingviews. Big American blue-chips have reported breathtaking earnings growth; S&P 500 earnings per share rose 26% in the 12 months to July, far above the long-term average of 7%. Morgan Stanley predicts the 42 most AI-exposed firms will grow profits by 67% this year.

But the AI profit boom is something of an accounting “mirage”. When a hyperscaler such as Microsoft buys a chip from Nvidia, the latter is able to book an immediate sale, but the former acquires an “asset” that depreciates slowly over a number of years. Unless the chips deliver the promised earnings bonanza, an earnings hangover will eventually catch up with the hyperscalers – “by the end of the decade… annual depreciation charges will range between $500 billion and $1 trillion”.

Earnings bubbles have occurred before, notably in US housebuilders at the 2006 peak of the property bubble. Should US profit growth revert to the historical mean and losses emerge at data-centre operators and AI frontier labs, then the damage could “metastasise through the financial system”.

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Chancellor John Healey has delivered his first Autumn Budget, with tax rises for some and help for others.

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A host of policies were announced in the 2026 Autumn Budget, bringing tax hikes for landlords and savers, and support for those on lower incomes.

The fiscal event was the first test of new chancellor John Healey as the government continued to react to the economic damage from the Iran war.

The price of energy was a major focus, as standing charges were removed from gas bills, and £100 cash payments will be given to people in council tax bands A to D this winter.

Meanwhile, cash savers breathed a sigh of relief after Healey reversed the previous government’s plan to cut the cash ISA limit to £12,000 per year.

There was less positive news for landlords, who are now set to pay an additional two percentage points in tax on their property income from April 2027, on top of an already announced tax hike. The same can be said for those who draw income from savings interest.

What did you think of Labour’s third Autumn Budget since winning the 2024 general election? Tell us in the poll below.

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The number of people living alone is rising. The latest data from the Office for National Statistics (ONS) reveals 8.6 million lived by themselves in the UK in 2025, up from 7.7 million in 2015. This equated to 29.5% of households in 2025 and 28.6% in 2015.

If you live alone, you’re more exposed to rising essential costs such as food, energy bills and transport.

Single people spend £8,100 a year on housing, bills and groceries, compared to £7,800 per person for couples, according to research by investment platform Hargreaves Lansdown.

But it’s not just ongoing costs that can be more expensive for singletons.

When it comes to inheritance tax (IHT), single people can miss out on significant tax breaks, potentially leading to higher bills for their beneficiaries. Divorcees and cohabitees suffer from a similar treatment too.

Ed Wood, financial planning director at wealth management firm Rathbones, said: “The inheritance tax system can produce very different outcomes depending on an individual's relationship status.

“Single people, divorcees and cohabiting couples may face a larger inheritance tax bill than married couples with comparable assets because they do not benefit from some of the same allowances and exemptions.”

How inheritance tax can be higher for singletons, cohabitees and divorcees

Whether an inheritance tax bill is due depends on the value of your estate – your property, possessions and money – when you die.

If the value of your estate is worth less than £325,000, known as the nil-rate band, there’s no tax liability, however some people are entitled to extra allowances.

If you give away your home to your children (including stepchildren, adopted children and foster children) or grandchildren, you receive an additional residence nil-rate band worth up to £175,000, taking your nil-rate band up to £500,000, if the estate is worth less than £2 million.

If you’re married or in a civil partnership, you can transfer any unused nil-rate band, as well as the residence nil-rate band, to a surviving husband, wife or civil partner.

This means, in some cases, estates worth up to £1 million can be passed on IHT-free.

On top of this, you can pass your estate to your partner when you die free from IHT through the spousal exemption.

These benefits aren’t afforded to single people, divorcees or cohabitees though.

How it works in practice

If you’re single

It effectively means single people miss out on a significant boost in the amount they can pass to beneficiaries without them having to pay IHT.

For example, a single person without a child, stepchild or foster child, receives just the basic £325,000 nil-rate band upon death.

Anything in their estate worth over this figure will usually be taxed at the standard 40% inheritance tax rate.

Meanwhile, a single person with children would only be able to pass on £500,000 free from IHT.

Cohabitees

Cohabiting couples can also miss out on increased IHT allowances.

If a person in a cohabiting couple without children dies and wants to pass their estate to the other, as laid out in their will, IHT would typically be owed on anything over the first £325,000.

This is because the surviving partner does not benefit from the spousal exemption and any unused nil-rate bands.

This tax treatment can leave the surviving cohabitee facing a significant IHT bill, potentially needing to sell the family home to pay for it.

Ben Glassman, head of family and managing partner at leading UK wealth management firm Evelyn Partners, explained: “If an unmarried partner is left a property, or a share of a property, worth significantly more than the deceased’s available nil-rate band, they could potentially have to sell or borrow against the home to meet the tax.

“While IHT can in some circumstances be paid by instalments where property is involved, the need to calculate and arrange payment of the liability as part of the estate administration process – in order to obtain probate – can still create considerable financial and emotional pressure for a cash-poor family.”

Changes to the tax landscape from April 2027 will make the situation worse for single people, cohabitees and divorcees.

Unused pensions are set to form part of estates for IHT purposes from this date. Any leftover pension funds left to spouses or civil partners will benefit from the spousal exemption. Cohabitees, however, won’t.

What can you do to lower your inheritance tax bill?

There are two things single people and divorcees can do to mitigate the IHT blow – lifetime gifting and making a will.

Lifetime gifting, when used correctly, can lower the value of your estate and give loved ones a financial boost while you’re still alive to see them enjoy it.

However, beware of the seven-year rule and the common misconception around how it applies, if your gifts exceed inheritance tax gifting allowances.

Wills can also ensure assets go to the right beneficiaries, which can lower your IHT bill in certain circumstances.

For example, if you name a charity as one of the beneficiaries on your will and leave at least 10% of your net estate to it, the IHT rate on the remaining estate can decrease from 40% to 36%.

Cohabiting couples can get married or enter into a civil partnership to benefit from the tax advantages that come with it, explore lifetime gifting and ensure they have wills set up.

It’s recommended you ensure your nomination of beneficiary forms, sometimes known as expression of wish forms, have been returned to your pension providers and are up to date.

These forms tell providers who you want to inherit your pension, rather than leaving it to the discretion of the pension trustees or administrators.

Wood, from Rathbones, said: “Proactive estate planning is especially important.

“Many choose to focus on gifting during their lifetime, supporting wider family members, or incorporating charitable giving into their plans.

“Taking a deliberate approach can help ensure your wealth is distributed according to your wishes while minimising unnecessary tax.”

The utilities and infrastructure sector has seen new structural growth drivers in the last few years. And the Ecofin Global Utilities & Infrastructure Trust (LSE: EGL), launched just ten years ago, gives exposure to the sector's long-term trends, solid protection from inflation and high degrees of predictability of future cash flows.

The bulk of our infrastructure was built in the era following World War II and now significant capital expenditure is required to renovate it after decades of under-investment. The US's Inflation Reduction Act of 2022 and Germany's €500 billion infrastructure programme aim to address the issue.

Furthermore, demand for electricity is accelerating after 25 years of decline and is expected to rise by about 50% in the next decade. Energy-intensive AI data centres are securing their power supplies through multi-decade procurement contracts, which are proving highly profitable for utilities. Such fundamental drivers are yet fully to be appreciated by equity markets and there are attractive entry points for undervalued companies with solid earnings outlooks. Three shares stand out to me as particularly compelling.

Three utilities and infrastructure stocks to consider

One of the most unfairly hit infrastructure stocks is Canadian developer Brookfield Renewable Partners (NYSE: BEP), down more than 20% since its highs at the end of May. The group operates a portfolio of high-quality renewable assets in North America and across the world and its strategy is to gather assets essential to energy security to meet growing demand worldwide. This includes nuclear assets in the US through Westinghouse, acquired in 2023. The group has developed a major franchise in batteries, with an 80GW development pipeline, reinforced by the 2024 acquisition of Neoen, and is well positioned to supply data centres. The firm also has one of the strongest balance sheets in the sector and we expect it to deliver earnings growth of about 15% a year over the next three years, with 90% generated from long-term contracts and with 70% of revenues inflation-linked. The stock offers a 5.5% dividend yield.

Greece's power transmission operator ADMIE (Athens: ADMIE) provides exposure to one of the fastest-growing markets in Europe. Its subsidiary, IPTO, Greece's sole transmission system operator, plans to double its regulated asset base by 2029. A $530 million equity issuance earlier this year provided the finance for this ambitious capital-expenditure programme. The regulatory framework provides a pre-tax return on equity of 9.8%, at the top end of the range of its European peers. The stock, down by more than 10% since late June, trades on a price/earnings ratio (P/E) of 14 times, with a 2.7% dividend yield. This looks attractive and growth in earnings per share (EPS) over the medium-term is expected to be 25%-30% a year.

Through its combination of flexible renewable-power generation and transmission assets, SSE (LSE: SSE), the UK-listed energy group, is well positioned to benefit from the energy transition. By 2030, 80% of group revenues are bound to be either regulated or fully contracted. SSE expects 25% annual growth in its regulated asset base over the 2025-2030 period via a fully funded £33 billion capital-expenditure programme. The stock trades on a p/e of less than 12 times and annual growth in EPS solidly in the double digits. Annual dividend growth is expected to be 5%-10% over the medium term. SSE looks like one of the cheapest stocks in the pan-European utilities sector.

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British engineering firm Tek4 is joining London's junior market, Aim. It’s particularly welcome, as the London stock market has spent much of the past decade shrinking. British companies have been taken private or, in some cases, tempted to list in New York instead. Too few new arrivals have replaced them, leaving investors with a dwindling choice of growing domestic businesses.

Tek4 is a small engineering company based in Leicestershire. It makes highly specialised equipment for some of the world's biggest manufacturers of jet engines and power-generating turbines. Its shares will begin trading on 26 October. But is Tek4 worth buying?

Tek4 helps solve tough engineering problems

Modern jet engines operate at extraordinary temperatures. The gases flowing through their turbines can be hotter than the melting point of the metal blades inside them. Nonetheless, those blades must survive thousands of hours of service without failure. The solution is ingenious. Engineers pump relatively cool air through hollow passages inside each blade. Thousands of tiny holes allow that air to escape across the blade's surface, forming a protective film between the metal and the scorching gases. This lets engines run hotter, improving efficiency and reducing fuel consumption. Making those holes is extremely difficult. Turbine blades are made from exceptionally tough alloys and protected by ceramic coatings. The holes must be drilled at precise angles, sometimes through walls barely a millimetre thick. Drill too far and the tool can damage the opposite wall inside the hollow blade, ruining an expensive component.

This is where Tek4 comes in. Its equipment uses electrical sparks to remove tiny amounts of metal with extraordinary precision, a technique known as electrical discharge machining (EDM). Sophisticated controls detect when the tool breaks through the blade wall and stop it before it causes damage. Other systems combine lasers with EDM, allowing manufacturers to drill through ceramic-coated blades without moving them between machines. For an engine manufacturer, the purchase price of such equipment is less important than its ability to produce thousands of accurate holes without damaging valuable components.

Tek4 was founded in 2002 by Jason Duffin, an engineer who had already spent years developing machinery for the turbine industry. He previously helped establish MJ Technologies, another specialist engineering business. Drawing on that experience, Duffin concentrated on solving the difficult manufacturing problems faced by turbine makers rather than competing in the crowded market for general-purpose machine tools.

That focus has given Tek4 an international customer base. Its customers include aerospace and power-generation companies such as Rolls-Royce, GE Vernova and Siemens Energy. Although based in Leicestershire, much of its sales go overseas, principally to America and Europe.

Customers also have good reasons to stay. Manufacturing processes for critical engine components must meet exacting standards. Once equipment and its operating procedures have been approved, switching suppliers can require expensive testing and disrupt production.

Tek4 also supplies maintenance, upgrades and specialist tooling. These relationships give it more durable earnings than investors might expect from a small machinery manufacturer.

Tek4 still has room to grow

Tek4 generated about £16 million in revenue in 2025, almost twice the previous year's figure, while reported profit more than tripled to around £4.2 million. It sold more than 40 machines during the year, with individual systems typically costing between £300,000 and £750,000. Such expensive equipment makes annual results inherently uneven. A handful of additional sales can transform revenue and profit, particularly given the fixed costs of running a factory. Equally, delays to a few orders can have a disproportionate impact on earnings.

New equipment accounts for most of the business, but servicing, maintenance and upgrades contribute a meaningful amount of revenue. This provides a more dependable income stream, as customers need to maintain their machines throughout their working lives. It also strengthens Tek4's relationships with customers and creates opportunities to sell additional equipment as their requirements evolve.

Demand is supported by rising aircraft production and investment in electricity generation. Modern engines require increasingly sophisticated cooling systems, while manufacturers are seeking ways to improve productivity and reduce waste. Tek4 plans to add a second assembly line at its Leicestershire factory, increasing production capacity substantially.

The company is also broadening its capabilities. In April it acquired Rugby-based InnoLas, a British specialist in advanced laser technology. This could strengthen its existing equipment and eventually open opportunities in other precision industries, including medical devices and semiconductors. But for now, its prospects rest chiefly on turbine manufacturing.

Why investors should buy Tek4

The listing will also give existing investors an opportunity to sell shares. Robin Womersley, a corporate financier and early investor, currently owns 56% of the business, while Duffin holds 34.5%. Duffin is expected to retain a substantial stake after the listing. His interests will therefore remain closely aligned with those of other shareholders.

Once trading on Aim, investors will need to assess the valuation alongside the company's earnings, growth prospects and the amount of capital, if any, raised for the business itself. There are risks. Tek4 operates in a narrow market, depends on a relatively small number of major customers and sells expensive equipment that buyers can postpone ordering. Its recent results have been impressive, but investors should not assume sales and profits will keep rising at the same pace.

Nevertheless, Tek4 has built a profitable international business around a difficult engineering problem, supported by specialist expertise that competitors cannot easily reproduce.

One flotation will not reverse years of decline in London's equity market. But Tek4 is a reminder that Britain still produces successful engineering businesses capable of competing internationally. The company looks a promising addition to the Aim market. Whether it becomes an attractive investment will depend on the price shareholders are asked to pay.

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The Budget is one of the biggest days in politics, with the policies announced affecting everyone in the country.

Depending on the priorities of the current chancellor, some people may find they will start paying higher taxes, while others may enjoy a tax cut.

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JCDecaux (Paris: DEC) has become an unexpected winner of the global AI boom. The company, which owns thousands of billboards and other advertising assets worldwide, isn't the most obvious AI play. But thanks to its vast real-world estate, it's reaping the benefits of a shift in spending by advertisers. As the market has woken up to this potential, the shares have charged higher, rising more than 70% this year alone.

Why JCDecaux's advertising strategy is a success

JCDecaux operates in the so-called out-of-home (OOH) advertising market. As I mentioned in a recent feature, this is one of the few traditional advertising mediums that have seen demand from advertisers rise over the past decade. According to WPP, one of the world's leading advertising companies, OOH advertising revenue is expected to grow 5% to $57.5 billion globally in 2026, then grow another 5.3% in 2027. By 2031, the group has pencilled in a total market size of $73.7 billion. WPP calls this growth a “structural anomaly”: while other traditional advertising mediums, such as radio, TV and print, are shrinking as a percentage of global spending, OOH is holding its own.

In the $720 billion-a-year global advertising market, digital platforms get the largest share of spending. Platforms such as Facebook and Google account for half the market. These are designed to get users to click through to websites and buy products or services. Alongside these are AI platforms, such as ChatGPT and Gemini, that have started embedding advertisements into responses, a market expected to exceed $100 billion by 2031, up from only $5 billion today.

The thing is, no one really knows whether people are seeing the advertisements displayed on these platforms. Fraud is rife and more than half of all online traffic is now just AI bots. Estimates vary, but on average, figures suggest that as much as $1 of every $3 advertisers spend online is lost to fraud or non-human engagement. In some cases, that rises to $1.5 of every $3.

Advertising has always had some level of such “leakage”, but this level is unprecedented. OOH fills in this gap nicely. Advertisers can pick one location, say Bank Underground station in the City of London, and know they're in one place, with tens of thousands of people passing through every day. It's straightforward to target a particular audience in a given place with digital advertising, but there's never a guarantee that that person or digital device is where it says it is. It's hard to move a station, airport, or shopping centre, where the most lucrative OOH billboards tend to be located. Stadiums are another top play.

That's not to say OOH is winning at digital's expense. It's part of a toolkit. OOH is mainly used for visibility and brand building and helps drive awareness of the brand, increasing the likelihood you'll click a similar advertisement the next time you see it online. As analysts at Berenberg note, OOH enables the “critical need for brand differentiation as AI rapidly commoditises content”.

JCDecaux is a family success story

JCDecaux effectively created the market for outdoor advertising. In 1964, Jean-Claude Decaux invented the concept of “street furniture”, with bus shelters financed by advertising in Lyon (France). Two years later, it started rolling out the same concept across Europe. Since then, the business has grown alongside the advertising industry. It has worked with local governments, advertising agencies, clients, and world-leading designers, such as Norman Foster, to create street furniture and OOH advertisement placements that fit the environment, using space that would otherwise go unused.

Today, the founding Decaux family still owns a majority of the business (66% via JCDecaux Holding SAS) and it holds a 12% share of the global OOH market, making it the largest single player. France is still its largest single market with 17% of revenue generated in the country, followed by the UK (11%) and US (8%). The rest of Europe accounts for 30% of revenue, Asia-Pacific for 21% and the rest of the world 14%. Street furniture is the group's biggest revenue segment, making up just over 50% of sales and 66% of earnings before interest, tax, depreciation and amortisation (Ebitda).

Should you invest in JCDecaux?

Operating OOH assets is not particularly capital- or resource-intensive. The company has reported near 20% Ebitda margins for the past few years and Berenberg has pencilled in margin growth to 22.2% by 2028. While the group has some debt, it's manageable at 1.1x Ebitda. What's more, with free cash flow of €336 million in 2025, rising to €354 million by 2028, analysts believe the company is on track to wipe out its debt within the next three years.

However, that's unlikely as the group is hunting for deals in multiple markets, in the range of around €100 million – or around 50% of annual free cash flow after dividends. Even without these deals, Berenberg believes the group can grow its top line in line with the market over the coming years, with adjusted Ebitda rising faster – 6%-9% thanks to margin growth.

Even after running 70% higher this year, the shares trade at a relatively undemanding valuation of 17.1 times forward earnings and a free cash-flow yield of 6.6%. That does not appear to give any account for its growth or possible bolt-on deals. On Berenberg's 2028 estimates, JCDecaux is selling at 14.4 times earnings and a free cash-flow yield of 7.2%. The shares also yield 3%.

JCDecaux stands out for its rock-solid balance sheet, free cash flow and presence in a market that is full of AI-related risk, and seems to be holding its own against the digital onslaught.

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Our ETF portfolio has become a little over-exposed to tech, so it's time to introduce a new fund.

“Unprecedented” is a word that gets thrown around too easily, but make no mistake: the AI infrastructure boom that many investors are betting on would be unprecedented in scale – if it materialises.

Total spending based on the announced data-centre pipeline could amount to $10 trillion in the US between 2025 and 2032, according to a paper by Stijn Van Nieuwerburgh of Columbia Business School, which would be 3.6% of GDP. The previous record was the 2.2% of GDP spent on railways between 1870-1890.

This doesn't mean that it's impossible, but if expectations are not met, makers of chips and other hardware – who are earning huge profits from an incredibly tight market – may not enjoy as many years of limitless demand as forecasts currently suggest. And the recent jitters in data-centre and memory stocks are a sign that the cost of disappointment could be severe.

The most unexpected downside could be in emerging markets; almost 45% of the MSCI Emerging Markets is now in tech, mostly in hardware suppliers. At present, we have 10% of our MoneyWeek ETF portfolio in the iShares MSCI Emerging Markets ETF (LSE: EMIM). We also have 5% in WisdomTree True Emerging Markets ETF (LSE: WEMP) to tilt to traditional emerging markets (there's no China, Korea or Taiwan in that fund).

I have often said that if we start to worry more about the sustainability of the AI cycle, we need to keep an eye on our ETF portfolio's tech exposure via EMIM. Increasingly, we feel the urge to act on that, so we are going to cut the 10% in EMIM to 5%. This brings our headline emerging-markets exposure to 10%, but the real effect is to bring down the total tech exposure that is hidden in our overall emerging-markets position.

We can still have higher tech exposure if we want, but do so in a way that becomes explicit – eg, hold something like iShares MSCI Global Semiconductors (LSE: SEMI). Or we can dial it down altogether. Either are valid – the key is that we can see more clearly what we have chosen to do.

When we look at how different sectors are performing, it is clear the market's top anti-AI or risk-off trade is healthcare. You can see in the chart how it has moved broadly inversely to the tech-influenced markets indemerging-ex over the past year.

A change to the MoneyWeek ETF portfolio

This makes sense. Other defensives such as consumer staples are battling a number of problems, including changing tastes and weaker pricing power. Of course, healthcare is not risk-free either. Medical costs are a political issue. The patent cliff never goes away. Concentration is not low: Eli Lilly is 11% of the sector index. It is not cheap: on a forecast price/earnings ratio of 17.5, the MSCI World Health Care is at the same valuation as the overall MSCI World. However, demographics bode well for demand and earnings should be steady. It is attractive in its own way, as well as diversifying us from AI. So we will add 5% in Xtrackers MSCI World Health Care ETF (LSE: XWHS) to our portfolio.

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Italian arch dealmaker Stefano Pessina has finally found “the right shopkeeper” for Boots, four years after The Economist predicted there might be a long wait.

The Canadian branch of the Weston family, which once owned Selfridges, has bought the 177-year-old pharmacy and beauty chain for $8.9 billion.

After 20 years of steering what Pessina called “an iconic brand and a British institution” through various ownership structures and makeovers, with mixed success, he can finally close his medicine cabinet. “We are delighted to be passing on a thriving Boots,” he said.

It's been a “tortuous” process for Stefano Pessina and his wife Ornella Barra, who “through more than a thousand deals” once sought to dominate global pharmacy, says the Financial Times.

Pessina, who took Boots private with the backing of investment firm KKR in 2007, kept a stake under different private-equity owners, and merged and de-merged the business with a US peer, Walgreens. A plan to re-float Boots was dropped in 2024.

But at least the Nottingham-based chain's future now seems secure. Pessina, 85, said he's now working “just 12” hours a day instead of the usual 18 he used to clock up. Yet clearly, “he hasn't lost his touch”, says Bloomberg. The entrepreneur and his latest private-equity partner, Sycamore, won't get the $10 billion they hoped for. But with sales driven up by a resurgence in beauty and the wild popularity of weight-loss jabs, the price fetched isn't “too far off”.

The Monaco-based power couple have been entwined romantically and commercially since the 1980s, when they combined their pharmaceutical businesses in their native Italy. They proved a winning double act: “Pessina as the methodical empire builder and Barra the hard-driving operator”. One former colleague recalls how “it was not uncommon for Barra to juggle closing a deal while packing Pessina's suitcase for their next trip”. He may be the strategist, but she is the engine room.

Stefano Pessina's life-changing decision

Stefano Pessina was born in 1941 in Pescara, and is a graduate of Milan's Polytechnic university. He started out in academia but, reportedly turned off by its left-wing politics, quit to join the market-research firm ACNielsen, says the Monaco Tribune.

In the mid-1970s, as Italy was struggling through a lengthy period of political and economic turmoil known as “the years of lead”, Pessina made the life-changing decision of attempting to salvage his family's failing wholesale pharmaceutical business. His “ability with numbers” came up trumps, says The Times. He repeated the trick for some of his father's business associates “in return for small stakes in their companies” and his deal-making career began.

There followed a whirlwind of takeover activity as Pessina's Alleanza Farmaceutica (shortly renamed Alleanza Salute Italia) became the country's undisputed leader in pharmaceutical distribution. France, Greece and Portugal followed. In 1997, Pessina broke new ground in Britain by acquiring Unichem, which had retail as well as wholesale and distribution operations. That gave him the scale to rise still higher, says The Guardian. Having “stalked” Boots for six years, Pessina flamboyantly invited its management for merger talks on his yacht off Sardinia in 2006. A year later, he teamed up with private-equity firm KKR to take the combined Alliance Boots private for around £11bn in what was then Europe's largest leveraged buyout.

The deal cast Pessina as an international predator. Yet from an investment standpoint it was hugely successful, says the FT. While most of the cheap credit-fuelled “mega-buyouts” of 2006-2007 crashed in flames, Boots was “a rare example of the alchemy coming good”. By 2012, when merger plans with the US drugstore giant Walgreens were announced, Pessina and his KKR partners had “almost tripled” their 2007 investment. That historic deal resulted in a truly global behemoth, with turnover close to $140bn by 2023.

Pessina, who is known for his “long, meditative periods of silence”, bestrode the world, says the Monaco Tribune. Times have changed. “Globalisation as we have known it is over,” he told the Italian daily La Stampa in 2024. It seems timely that he is now handing over the baton. Still, he will go down in business history as the “Italian alchemist” who turned deals into gold.

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So-called frontier markets account for about a quarter of the world's population today, but only 5% of global GDP. A little over half of the world's eight billion people are in emerging economies and about 12% of the world's population lives in developed countries.

The US and North America as a whole account for only about 4.7% of the world's population. But the US stock market makes up around 73% of the MSCI World index. And, while the World Federation of Exchanges tracks about 58,200 listed companies worldwide, the Magnificent Seven technology stocks (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla) account for about 22% of global equity benchmarks.

Those figures speak volumes about the global influence of the US economy and financial system, but it also reminds us that there are other options out there for investors. Many frontier markets are chalking up growth rates in the mid- to high single digits and economies are opening up. Investors generally overlook these countries. But they really shouldn't.

One of the biggest success stories recently has been Vietnam. Its economy has been on a tear over the past five years as the trade war between China and the US has drawn in producers attracted by the country's low-cost labour and healthy infrastructure investment. GDP growth in the first nine months of the year hit 9%. To sustain growth, the government aims to invest $1.5 trillion in infrastructure by the end of the decade. Index providers didn't allow it to join emerging-market indices until the country pushed through major trade-settlement reforms and opened its markets to foreign investors. But on 21 September 2026, Vietnam officially became an emerging market when 27 Vietnamese stocks entered the FTSE Global All Cap index, with full integration phased in over 12 months.

Vietnam's growth and graduation underline one of the key trends that is set to shape the global economy over the next decade. As the Western world ages, emerging and frontier markets will play a crucial role in global economic expansion, contributing about 65% of global economic growth by 2035, according to S&P Global. Notably, frontier markets, particularly those in sub-Saharan Africa, will play a prominent role in this growth due to their favourable demographics.

What is a frontier market?

The term “frontier markets” was coined by the International Finance Corporation, the World Bank Group's private-sector arm, in the early 1990s, to serve as shorthand for the next generation of emerging markets. What constitutes a frontier market varies by the bank or NGO conducting the research, but generally, markets in this category have meaningful but still limited access to international financial markets and GDP per capita around one-third of the median level of emerging markets. That's not to say all frontier markets are low-income countries. Barbados and Bahrain are both classed as frontier markets by rating agency S&P Global and have estimated GDP per capita figures of around $30,000 (about 15% below Spain and Japan).

At the end of 2025, there were 56 frontier markets, up from 39 in 2012. The list has added previously unclassified countries as they've issued debt or made efforts to unlock capital markets. Four frontier markets (Bulgaria, Costa Rica, Panama and Romania) have become emerging markets since 2012 by attaining high-income status, but as the World Bank notes, only Vietnam has actually graduated from frontier market to developing market in the eyes of equity-index providers.

Around a third of frontier markets are located in Africa, which has long drawn investors seeking exciting, underdeveloped growth markets. But its reliance on the volatile commodity industry, along with limited internal investment and unsustainable growth, has often left investors disappointed. Now, it could be about to turn a corner, thanks to one man's vision.

One person lifts Africa's prospects as a frontier market

Africa holds about 30% of the world's mineral reserves, 8% of its natural gas and 12% of its oil reserves. It holds 40% of the world's gold and the largest reserves of cobalt, platinum and uranium, all key to the global energy transition, not to mention 60% of the world's uncultivated arable land. However, the continent has never really controlled its own resources. Money has flowed in to develop mines, then flowed right back out to shareholders in London and New York. Nigeria is a great case study. The US Energy Information Administration (EIA) notes that the country was one of Africa's top crude-oil producers in the 2000s, producing two million barrels a day. However, it lacked the refining capacity to turn this into usable fuel. Nigeria exported oil and then imported it back at market rates, losing wealth and exposing consumers to global oil-market volatility.

Africa's richest person, Aliko Dangote, has changed all that with his 700,000-barrel-a-day oil refinery in Nigeria. The $20 billion project keeps oil in Nigeria and lets it export refined products to other countries (its jet-fuel exports helped ease a global crisis following the closure of the Strait of Hormuz). The continent's largest oil refinery is listing its shares across Africa (on exchanges in Nigeria and Botswana), seeking to raise $1.6 billion from investors, with demand exceeding the offer by three or four times.

Dangote is looking to replicate this with a new refinery in Lamu, a coastal town in southeastern Kenya. Construction on the $16 billion refinery began in September. Tanzanian billionaire Mohammed Dewji has said he intends to invest $100 million in the project. Others are also moving into the region. Canada's Zimar Group signed a deal in August with Niger to build a $1.9 billion oil refinery and a petrochemical complex. France's TotalEnergies SE and its partners say they plan to invest $10 billion in Angola's oil sector over the next five years. China alone committed $33.5 billion to the region in the first half of 2026 under its Belt and Road Initiative.

Another example is fertiliser. It's no help having 60% of the world's uncultivated arable land if you don't have fertiliser to grow crops on it. The African Development Bank (AfDB) estimates that 80% of the fertiliser used on the continent is imported. Despite $15 billion invested in recent years to boost production, it's still not enough. Governments have now committed to tripling domestic fertiliser production and distribution by 2034.

This internal investment, driven partly by supply chains reconfiguring away from China, is fuelling the growth of the middle class in these countries. Rami Sidani, head of Frontier Investments at Schroders, notes that many companies “are benefiting from this expansion in the middle class, from this wealth effect that's trickling down and fuelling this domestic-consumption story”.

“Financial inclusion” is also a big part of the story. In many frontier markets, the vast majority of the population has historically been excluded from the banking system. That's changing rapidly with the adoption of financial technologies (fintech). Sidani cites the example of GCash in the Philippines. The company, which recently floated on the stock exchange with a $7 billion valuation, has become the country's go-to banking app. “Around 70% of the population in the Philippines has an e-wallet compared with around 40% who have deposits with banks,” he explains.

In Africa, the trend is even more pronounced. It used to take 18-24 months to open a branch in a rural area, says Sidani, but now consumers can access their money from their beds anywhere in the country.

Ahmed Awny, head of investments and portfolio manager of the Templeton Frontier Market Strategy, points to Safaricom and Vodafone, which launched M-Pesa, a mobile-phone-based financial services and money-transfer platform, in 2007 to piggyback on text-message technology for sending money. Nearly 20 years later, the technology has revolutionised financial services in Africa, and peers have sprung up all over the world: dLocal in Latin America; GCash in the Philippines; M-Pesa in Kenya; MoMo in Vietnam; Kaspi in Kazakhstan; and Airtel across Africa. The adoption of this technology has been as fast in frontier as in emerging and developed markets, if not even faster, because it has been taken up by younger generations, who are more aspirational, quick to adapt and to learn, says Awny.

How frontier markets are leapfrogging developed peers

Consumers in frontier markets are also leapfrogging their developed- and emerging-market peers in the rollout of AI. Cavan Osborne, a portfolio manager for Old Mutual in South Africa, notes that for this reason one of the most interesting sectors in Africa right now is telecoms. Five years ago, consumers sent messages and searched online using only a few bits of information per request; now, with AI search and AI tools, each request requires many more bits of data.

Sub-Saharan Africa is projected to see the fastest global 5G subscription growth, rising from roughly 30 million in 2025 to 370 million by 2031, according to the Ericsson Mobility Report. Mobile devices account for the vast majority of web traffic across African networks, driven by lower costs and a lack of fixed-line desktop infrastructure. In Nigeria, which has the most mobile users on the continent at more than 100 million, monthly mobile-data consumption surged from about 518,000 terabytes in early 2023 to more than 1.23 million terabytes by November 2025, an increase of roughly 140% in less than three years.

Airtel Money (LSE: AMC), the largest London initial public offering (IPO) since 2021, is one success story, says Osborne. The fintech was spun off from FTSE 100 firm Airtel Africa (LSE: AAF), one of the larger telecoms groups operating in Africa (others are South Africa's MTN, Vodafone, Orange and Dubai Etisalat). Osborne says it is growing by around 30% per year and most of the growth comes from “fees on payments, driven by new users as people switch to smartphones”. The mobile money business is “very capital light” and, despite growing at about 25%, pays out around 80%-90% of its earnings as dividends.

Osborne also highlights the opportunity in Africa's banking sector. “The [African] banks generally are quite simple,” he explains. “A lot of them just gather deposits and put them into government treasuries…where you could be getting 10%, 15%, 20% yields.” With a low cost base thanks to the rollout of technology and a lack of a need for a vast branch network, most lenders are quite profitable. From the bank's perspective, risk is also limited because the currency is hedged and default risk is generally low. That has helped make the banking sector one of Africa's best performers.

Such embedded structural hedges are vital for managing risk, says Awny. Take Vietnamese exporters. Vietnam's currency has been mildly depreciating over time, but for exporters, with a Vietnamese Dong-denominated cost base and exporting into a US dollar market, this has been a structural tailwind; or take Bank of Georgia, a subsidiary of Lion Finance (LSE: BGEO), which, like its peers in Africa, can adjust loan pricing to offset political and economic uncertainty.

Other markets are growing up too

Africa is seeing the most notable economic shift, but investors shouldn't overlook other regions. Awny points to central Asia, to Georgia, which is “now offering Eastern European governance, but at frontier valuations”, and Kazakhstan, home to world-class fintech platform Kaspi (Nasdaq: KSPI). Kaspi has 13 million active users in Kazakhstan out of a total population of around 18 million-19 million. The UAE is another example. It is technically an emerging market, but Sidani believes it's being “disregarded by the big global funds” and offers exposure to “multiple themes on the liberalisation and transformation of the economy”, including data centres and AI infrastructure.

Ten to 20 years ago, investing in frontier markets required a lot of legwork. Investors had to be on the ground, speak the language and be willing to do the work to find the best opportunities. That's no longer the case. Awny notes that many of these businesses are operated by managers of comparable quality to peers in New York or London. CEOs and their teams have also “cracked the manual on how to bring the equity story up to the level of the emerging markets”. “Today, if I take you to a company meeting in Ho Chi Minh City or in Hanoi in Vietnam, you will have the same level of spoken English, same level of detailed PDF presentation, as the one that you would have from Alibaba or from any company that you sit in front of in India or some of the developed markets,” says Awny. “The same is the case with Kenyan banks, Peru and Colombia, Morocco and Oman.”

Because operating in less efficient, less financialised economies adds friction, these companies also tend to have stronger balance sheets and higher returns, Awny notes. “Credit is not that easy; credit is costly,” he says, meaning most businesses must rely on internally generated cash flows. As a result, returns on equity and capital employed can be 300 or 400 basis points higher than the typical emerging-market company.

Much of the opportunity in frontier markets stems from their inefficiency and under-reporting compared with developed or emerging markets. But that opportunity also adds risk. Stocks in frontier markets are typically much less liquid than those in developed or even emerging markets. And while it has become easier to find information on businesses listed in these markets, transparency for the average investor is still poor. That's without considering trading restrictions. Hargreaves Lansdown and Interactive Investor, two of the UK's biggest trading platforms, don't offer direct share trading on any frontier markets, and only offer two or three emerging markets. Many of these countries themselves also place restrictions on international investors.

How to invest in frontier markets

For investors who want to invest directly, London offers a handful of names previously mentioned, such as Lion Finance and Airtel. Dangote Oil Refinery is pursuing a secondary listing in London, while Dangote Cement (the billionaire's first business) has appointed Goldman Sachs and UBS to offer about 10% of its shares in London via a secondary listing. Data from the LSE shows there are 110 African companies listed in London with a combined market value of $200 billion, but these include the likes of Old Mutual and Investec, both of which are based in South Africa. They offer frontier exposure, but you're also taking on extra risk. The National Investment Fund of the Republic of Uzbekistan (UzNIF) also listed in London this year.

Closed-ended vehicles are well suited to navigating the challenges of investing in frontier markets because managers don't face the risk of having to sell illiquid holdings at short notice to meet withdrawals. Jean-Baptiste Andrieux, an analyst at Kepler Trust Intelligence & Expert Investor, highlights BlackRock Frontiers (LSE: BRFI), which specialises in frontier markets and smaller emerging markets, excluding the largest markets by capitalisation (that is, Taiwan, South Korea, China, India, Brazil, Mexico and South Africa). Managers Sam Vecht and Emily Fletcher analyse macroeconomic cycles across the countries, then position the portfolio according to where they see the best stock opportunities.

Andrieux recommends combining frontier with smaller emerging markets, which are often underrepresented in emerging-market indices and funds. Redwheel Next Generation Emerging Markets, managed by James Johnstone and Victor Erch, is one option. There's also the Templeton Frontier Markets Fund, managed by Ahmed Awny and Bassel Khatoun, and the Schroder International Selection Fund Frontier Markets Equity, managed by Rami Sidani.

Neither the quality of management nor the quality of these companies' balance sheets is reflected in valuations. At the end of September, the MSCI World index traded at a trailing 12-month price/earnings ratio of 22.7, a price-to-book-value ratio of 4.1 and a yield of 1.5%. By comparison, the Templon Frontier's portfolio is trading at a book ratio of 2.1, and a 12-month trailing P/E of 10.2. Schroder Frontiers has a valuation of 9.9 times earnings. According to Morningstar, Redwheel's fund has the cheapest portfolio, trading at just 8.3 times historic earnings.

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Shareholders of Scottish Mortgage Investment Trust (LSE: SMT) have been on an extraordinary roller coaster. In the five years to November 2021, the share price almost quintupled before falling nearly 60% in the next 18 months. Since then, they have risen 150% to a new all-time high, putting them easily at the top of the performance table of global funds over three years.

Recent attention has focused on SpaceX, in which Scottish Mortgage invested in 2018 at a valuation of $31 billion. Following an initial public offering (IPO) in June, its market value is over $2 trillion and Scottish Mortgage has sold it down from more than 25% of the portfolio to 15%. Still, “we have no intention of selling out and expect to hold the shares for ten years”, says Lawrence Burns, who manages the trust with Tom Slater.

AI firm Anthropic is also heading for an IPO. It was 3.9% of the portfolio at 22 September but likely to rise to over 5% at the target valuation. TikTok owner ByteDance, which accounts for 4.4%, is likely to stay private, while payments firm Stripe, which also has no plans to float, is 2.9%. Overall, Scottish Mortgage’s decision in 2012 to invest in private companies has been amply vindicated. (The unlisted limit was later set at 30% of the portfolio, but the actual proportion is currently 22%.)

Why Scottish Mortgage Investment Trust cut exposure to Tesla

Scottish Mortgage also has a strong record in listed companies, including Nvidia and TSMC. It did well from Tesla, but sold out this year. “Tesla paved the way for decarbonisation in a key sector, forcing incumbents to keep up in the EV race,” says Slater.

“However, the competitive environment for Tesla has intensified significantly, particularly in China. There are long-term opportunities in Tesla's autonomous driving software and robotics businesses, but though these areas have the potential to be very large and profitable in the future, we believe we are being asked to pay too much for them.”

Moderna, which soared 22-fold between the end of 2019 and September 2021, was once Scottish Mortgage’s largest investment before it collapsed by 94% in the next four years. The company had developed a novel technology for the discovery of vaccines against a variety of conditions, including cancer. But it was the success of its Covid vaccine that sent revenues rocketing from $60 million in 2019 to $18.5 billion in 2021. However, sales collapsed as Covid demand fell away. Profits of $12 billion in 2021 turned into losses, while the company also became embroiled in a series of patent disputes.

Investors stampeded for the exit, but Slater and Burns held their nerve. The shares started to recover as progress in its respiratory vaccines gained momentum. Then in August this year, a phase III trial for a vaccine for late-stage skin cancer in combination with Merck's Keytruda drug produced very promising results, though experts advise caution. Moderna doubled on the news and is now nearly 4% of the portfolio.

Scottish Mortgage Trust embraces AI

The managers are optimistic about AI. “The companies leaning into AI are seeing greater and greater value,” says Burns. “The demand drivers will only get stronger; hyper-scalers (builders of data centres) can't afford to miss out. Companies are thinking about redirecting their entire processes around AI. The returns on hardware are fantastic and the technology keeps getting better. We are going to need a lot more compute if the potential continues to grow.”

At the cutting edge, the trust also has a small holding in PsiQuantum. But “we invest in growth, not pure technology so will have a small holding till our conviction in quantum computing increases”, says Burns. However, “there are lots of natural phenomena that are very hard to model with conventional computing”, so this area has huge potential.

After a strong run, holders of Scottish Mortgage Trust may want to trim their holdings, but the shares could have much further to go.

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In 2000, the UK stock market was the second largest in the world, accounting for 10% of the global total. Now, it constitutes just 3% and is either the sixth or ninth largest, depending on the source of measurement.

With an absence of growth stocks (technology accounts for just 1% of the All-Share index), an absence of issuance either from existing companies or new flotations, and a relentless stream of takeovers and emigrations, there is no doubt that the UK's position will drop further.

Floatations on North America's stock markets raised $138 billion in the first half of 2026, including $86 billion from SpaceX. A total of $30 billion was raised in the Asia-Pacific region and €7.6 billion in Europe, but just £577 million in the UK. This was treble the total for the first half of 2025, but three-quarters of it came from the National Investment Fund of the Republic of Uzbekistan. The imminent flotation of Airtel Money will raise more, but this is a spin-off from FTSE 100 constituent Airtel Africa.

Meanwhile, six FTSE 100 firms (Schroders, Intertek, Beazley, DCC, easyJet and Segro) have disappeared through takeovers this year, as have numerous FTSE 250 companies, including Tate & Lyle, Bodycote and Senior. Flutter Entertainment has moved its listing to New York as have Carnival and AstraZeneca, although the latter maintains a secondary listing in London. There have been persistent rumours that Shell will follow.

The UK stock market's cultural aversion to risk

The causes of the decline of the UK stock market go back to the late 1990s and the relentless programme of taxation, regulation and intimidation initiated by the Blair government, but continued by its successors. Gordon Brown's first Budget removed the tax credit on dividends from UK companies, then worth £5 billion a year, while privatised utilities were chased into ownership by private equity, foreign companies or both. Pension regulators pushed pension funds into reducing equity exposure and solvency rules introduced after the 2008 crisis removed insurance firms from equity markets.

At the same time, globalisation encouraged investors to invest overseas while the UK had much less to offer overseas investors. The long bull market in bonds provided investors with an attractive alternative to equities and many larger UK companies, following the mega-mergers of the late 1990s, became complacent.

For a while, London's stock market shrugged off these problems. Flotations continued. In the fall out from the bust in the technology, media and telecoms sectors and the subsequent commodities boom, Britain's “old-economy” companies prospered. The prospect of a more market-friendly government in 2010 appeared to promise better times after a decade in which the UK had suffered two of its worst four bear markets in a century.

Unfortunately, while the technology sector in the US started to recover with the flotation of Google in 2004, it continued to decline in the UK. DeepMind chose to sell out to Google in 2014 rather than float and UK investors rushed to cash out of ARM in 2016 and of Imagination Technologies in 2017. With pension funds and insurance companies “de-risking”, the pool of long-term capital available for backing new companies or supporting established ones disappeared.

Yet as Julia Hoggett, CEO of the London Stock Exchange, points out, Britain has no shortage of capital – the fourth-largest source in the world – of which £2 trillion is in cash deposits. The problem is that it is not allocated to generate growth. “We don't have an innovation problem,” she says, “we have a capital-allocation problem.” The UK has developed a cultural aversion to risk-taking and a persistent scepticism about technology, innovation and the market economy.

There are other problems, as Tim Campbell, CEO of Baillie Gifford, points out. More than 50% of UK-listed company shares are owned by passive funds, which take no interest in the companies in which they are invested. A further block is held by traders and hedge funds focused on short-term results. The lack of long-term shareholders makes a stock market listing unattractive. Companies prefer private equity, which offers more flexible financing, gives better incentives for management, lower taxation and lower corporate costs. Hence the UK is not the only market in which the number of companies is shrinking; the Wilshire 5000 index in the US has shrunk to around 3,500 companies from a peak of around 7,500 in the late 1990s.

The UK is waking up to the problem

The UK has at last recognised the issue. Listing regulations have been relaxed, pension funds have committed to invest more in the UK and the Treasury has made some minor tax concessions. However, this is tinkering and there is neither the appetite nor the funding from the government to go further.

The global bull market in equities rolls on, with the UK market keeping pace, thanks to takeovers, share buybacks and sharper management, yet UK investors continue to sell out. The Investment Association reports only one month of inflows into UK equity funds since July 2021, with outflows of £561 million in June, £1.6 billion in July and £615 million in August. Flows to the rest of the world, where investors see opportunities, are positive.

It's taken a generation to wreck the UK stock market and it will take a generation to rebuild it. Tax and regulatory concessions will help, but changing the anti-equity investment culture in the UK is a monumental task, not helped by the lack of growth-orientated listed companies. Average house prices peaked in real terms 20 years ago, while even the underperforming FTSE 100 has doubled relative to housing, but the UK public is in denial. Maybe with inflation and taxation eroding the value of bank deposits and the relentless hostility of governments towards the private rental markets the pendulum, in the absence of another bear market, will swing back towards equity investment in the UK. But there is no quick fix.

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The Autumn Budget is days away, with chancellor John Healey due to set out the Burnham government's fiscal plans on 28 October.

While the upcoming Budget will be Labour’s third since they won the 2024 general election, it will be the first fiscal test of prime minister Andy Burnham’s new government which has promised to help those struggling with the cost of living and devolve power out of Westminster.

It will also be the first time new chancellor John Healey delivers the fiscal statement after he replaced Rachel Reeves in the summer.

Although Burnham and Healey have indicated that they want to increase public spending, the Budget comes at a time when the public purse is under pressure, meaning many are worried that taxes will need to rise.

What do you think? Are you dreading the Budget and its potential tax rises, or are you excited to see what the new government will do to help with the cost of living?

Tell us what you think in the poll below.

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What was the Big Bang?

The “Big Bang” was the sweeping deregulatory overhaul of the London Stock Exchange that took effect 40 years ago this coming week, on Monday, 27 October 1986. The Big Bang reforms were part of a programme of financial liberalisation pushed through by the Conservative government under Margaret Thatcher. They led to the transformation of the City over subsequent years and decades, making it more open, more competitive, more international and much richer. The reforms were driven by the realisation that the City had to change and modernise in order to survive and prosper – and they resulted in a radical and permanent cultural shift.

What did Margaret Thatcher change?

First, fixed commissions were abolished, meaning brokers were allowed to compete on price when it came to fees. Second, the centuries-old “single capacity” distinction between brokers and “jobbers” (market-making intermediaries) disappeared, allowing brokerage firms to become “dual capacity” stockbrokers and “stockjobbing” market makers, licensed to act both for clients and as dealers trading on their own account. Third, foreign ownership rules were relaxed, opening the way for major international banks to enter the market and/or buy existing British brokers. And fourth, the trading floor itself was transformed, with the old system of face-to-face dealing and “open outcry” trading (shouted prices) replaced by electronic systems. That allowed more business to be conducted more quickly, with greater volumes and across a wider range of markets. And all these big changes took place over a single weekend.

Did the Big Bang work?

Yes. In the short term the changes led to a surge in the volume of trading in UK equities and an influx of international banks into London. Traditional British stockbroking and market-making firms, often organised as partnerships, were bought up by much larger American, European and Japanese banks – a takeover boom that paved the way for London's growth into a financial centre to rival New York. Competition increased, transaction costs fell and market liquidity improved. At the same time, salaries for traders and investment bankers soared as institutions competed for scarce talent. In the longer term, the reforms drove a broader expansion far beyond stock trading, as the internationalisation of the City strengthened its position as a major centre for foreign exchange, international banking, bonds, derivatives, asset management and specialist insurance.

Was the Big Bang a success?

Broadly, yes. The UK's expanded financial sector generated well-paid finance jobs, vast pipelines of business for lawyers, accountants and consultants, and substantial tax revenues. It attracted overseas investment and enhanced Britain's international influence. The Big Bang reforms threw out old rules that meant bank bosses had to work from offices within ten minutes' walk of the Bank of England, paving the way for the City's eastern outpost at Canary Wharf. The regulatory revolution also boosted the democratisation and demystification that made it far easier for ordinary punters to access investment for a sensible cost. No Big Bang, no MoneyWeek. At the same time, the Big Bang undoubtedly helped entrench a model of British economic success, and uneven economic geography, that has always had its critics – that of a world-class financial centre sitting awkwardly alongside a broader economy characterised by persistently low levels of investment and productivity. Others argue that the deregulation and internationalisation of finance in the 1980s and 1990s sowed the seeds for the global financial crisis of 2007-2009.

How is the City of London doing now?

Pretty well. Famously, London has suffered a slump in initial public offerings on the stock exchange since the last flotation boom in 2021. By market capitalisation, the London stock market is now, at best, sixth in the world – though on some calculations, it's not even in the top ten. But doom-mongers should remember that stock trading is far from being the City's only suit, says David Smith in The Sunday Times. London leads in other financial sectors – notably foreign-exchange trading, interest-rate derivatives and speciality insurance – where no other centre comes close. Across a range of metrics and specialisms, it comes a very close second to New York and remains – post-Brexit – the “undisputed financial capital of Europe, with no other continental financial centre in the top ten”.

Is there any need to panic?

The City retains many core strengths that mean its pre-eminence is likely to persist: language, legal system, depth in accounting and consulting services, communication facilities and handy time zone (between Asia and America), diversity of markets and their infrastructures, diversity of counterparties, and institutional tradition, combined with continuing regulatory evolution. Important, too, is the diverse talent pool of people who would rather live in London than in Frankfurt or Amsterdam. Brexit knocked London's appeal as a place to float businesses, but in lots of other ways the City looks like “it's getting its mojo back” after a few years of uncertainty, says The Economist. Overall, the UK has the same number of people working in financial services now – about 1.1 million – as it did in 2017, accounting for a slightly bigger chunk of GDP (8% rather than 7%). As for the City (where the “EU decided not to take an axe to Europe's financial plumbing after all”), some 225,000 people worked in finance in 2024 – 36,000 more than in 2019. Another 181,000 worked in related fields such as law and accountancy, up by 51,000 over the same period. If that's what decline looks like, it's a decline worth celebrating.

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A bond crisis is heading France’s way, adding to Emmanuel Macron’s troubles as rioting sweeps through the country. However, if you're feeling particularly brave, French bonds do look like a bargain.

The French bond crisis has been simmering for years. The country has not run a primary budget surplus since the mid-1970s, it has been spending way more than it collects in tax revenues and a stagnating economy can no longer sustain the debt burden. Even from the UK, where the debt load is also hard to afford, the numbers are sobering. The deficit is expected to run at 5.4% of GDP this year even though there is no immediate crisis for the government to deal with.

The debt-to-GDP ratio has hit 121% and it would be higher if its share of all the money owed by the EU were added in. It will have to issue more than €300 billion of bonds in the coming year simply to keep the show on the road. The state already accounts for 57% of GDP, one of the highest levels of spending in the world, and there is little prospect of that coming down any time soon. The government already squeezes 45% of GDP out of its long-suffering taxpayers, again one of the highest rates in the developed world, meaning there is very little scope to push taxes any higher.

Meanwhile, the country is politically paralysed, with a divided parliament unlikely to pass a Budget, and with a presidential election due next year in which all the leading candidates are committed to yet more spending. It is a mess. So it is hardly surprising that the yield on French bonds has risen sharply. The ten-year yield is close to 5% and the spread with Germany, the key measure of country risk, has risen to levels not seen since the height of the eurozone crisis in 2011-2012.

Against that backdrop, the important question is whether the European Central Bank (ECB) will intervene. The treaties suggest it won't be able to. The ECB has mechanisms in place to calm “disorderly markets”, but before they can be implemented, a country needs to commit to a credible deficit-reduction plan. There is little sign of that, and it is hard to see a country like France putting up with the humiliation of using tools designed to rescue Greece and Portugal. ECB officials insist their hands are tied. France will have to sort itself out.

The ECB will intervene if the bond crisis escalates

They have to say that. In reality, in the midst of a serious crisis, the ECB will intervene. France is too important to the eurozone to be allowed to fail. It is still the second-largest economy within the zone, it is home to two of its largest banks and Paris is a major financial centre. If France were forced to restructure its debts, then the credit of the entire zone would collapse, plunging the whole of Europe into financial turmoil. It would be far too damaging to all the other countries inside the single currency to be allowed to happen. The ECB's own survival would also be at stake. If France fails, the euro fails, and the independent national central banks would reassert their authority.

So what will the ECB do? A “whatever it takes” speech from the bank's president is not likely to work a second time. Instead, the bank will probably come up with a new “support mechanism”. My best guess is that it will be in the form of loans to the French banks, which in turn buy government bonds. If the market senses the French banks are buying junk because they have been told to, they will sell them off instead and a bond crisis will have been turned into a banking crisis. There are no guarantees of success. But it may well be the best of a whole series of bad options.

That doesn't make French bonds a good investment. There is too much uncertainty and the economic outlook is bleak. But at some point the ECB will step into the market to start buying and bring yields back down again. It won't have any choice – it is just a question of when and how it happens.

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What do Charles Darwin, Elizabeth Gaskell and the Mitford sisters have in common? At some point in their lives, they all spent time at the lavish Dumbleton Hall, located on the border of Worcestershire and Gloucestershire.

Built in 1830 on the wealth of the Cotswolds wool trade, this Grade II-listed hotel was constructed as an elegant country house that became a refuge for some of the Victorian era's most notable thinkers, writers and artists. Now, after an extensive two-year restoration, it has opened its doors to a new generation of discerning guests.

As I arrived to check in, what caught my eye was how much of the original estate remained intact. Ancient cedars line the driveway, and water lilies thrive in a pond beneath a canopy of mature trees. On a sunny day, the hall's honey-coloured facade is illuminated against the foliage of the grounds that are spread across 16 acres of woodland and open countryside.

It is tempting to spend an entire afternoon doing little more than wandering around. Before long, it becomes clear why Dumbleton Hall attracted generations of intellectuals. The mood is tranquil and idyllic.

Dumbleton Hall is an antiques haven

The sense of calm extends into the bedrooms. My suite had olive and khaki tones that complemented a beautiful Queen Anne secrétaire chest in walnut and mahogany. It looked less like hotel furniture than an heirloom treasure. William Morris's prints nodded to the designer's strong connections to the Cotswolds and brought vibrancy to the rooms' antiques, which sit alongside all the contemporary comforts you would expect from a luxury hotel.

Dumbleton Hall was built on the wealth from the wool trade comforts you would expect from a luxury hotel in this day and age.

However, the property's history isn't just evident in the decor. Guests receive an autographed copy of Dumbleton Hall: The Story of a Victorian Country House by John Hodges, which chronicles the many families and visitors who have passed through the estate since the 19th century. It is the sort of book that is just asking to be read outside, beneath one of the ancient trees in the estate's gardens.

A culinary highlight at Cedar 1905

Dinner at restaurant Cedar 1905 is another highlight. The menu is distinctly English, but there is enough imagination to keep things interesting. Chalk-stream trout gravlax was paired with melon gazpacho, lime and lovage (£16), and the Cornish crab came with a crumpet, cucumber and watercress (£26). For something more substantial, the nine-ounce ribeye steak is served with pickled shallots, “Dumbleton butter” and fries (£44).

Dessert was no afterthought either. There is a peach and lemon-thyme pavlova, served with peach-nectarine sorbet and vanilla chantilly – a light yet decadent way to end an evening (£15). Breakfast is a similarly sumptuous affair, comprising a full English and a selection of English cheeses and Cobble Lane cured meats.

Enjoy country walks and pretty villages in the Cotswolds

Dumbleton Hall is well situated for exploring the Cotswolds. It is located between the village of Broadway, the towns of Winchcombe and Stratford-upon-Avon, which makes it ideally placed for embarking on long country walks and visiting the pretty nearby villages and historic towns. That said, there is little need to venture far from your room to find the landscape that draws so many visitors to this part of the country. Wonderful views of the surrounding countryside can be enjoyed from Dumbleton Hall.

For a change of pace, Broadway is close enough for an afternoon of visiting independent shops, galleries and cafes, while the market town of Winchcombe offers a more traditional feel, with its medieval streets and stone cottages. If Dumbleton Hall's history and literary connections inspires you, Stratford-upon-Avon, the birthplace of William Shakespeare, is within easy reach. The beauty of the hall is that you can spend the morning exploring, return for some quiet time, enjoy a drink or two at the Library Bar, and then take a walk around the lake before dinner.

Perhaps the best indication of what Dumbleton Hall embodies came from another guest I met during my stay. She mentioned, almost in passing, that she had got married here more than 20 years ago and still finds reasons to return. That feels fitting for a grand house that is curating new experiences for guests, who themselves may return decades from now.

Oojal was a guest at Dumbleton Hall. From £380 per night, dumbletonhall.co.uk/.

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The Autumn Budget is one of the most important dates in the political calendar, and is certainly the most important day for fiscal policy.

On the day, the chancellor lays out the government’s plans for the economy in the House of Commons.

But how much do you know about the history and traditions of the Budget? Test yourself in our quiz.

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

Do you have a question about the Budget which you’d like to put to our financial experts? Email editor@moneyweek.com and your question may feature in our Budget coverage.

• When is the Autumn Budget?
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• Why you shouldn't act on Budget rumours

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Nearly a quarter of people who started claiming the state pension in the 2024/25 tax year didn’t get the full amount, according to new figures obtained by MoneyWeek.

Of the 776,330 people who began getting the new state pension that financial year, 76% (591,530) were entitled to the maximum weekly rate at the time of £221.20, according to a Freedom of Information (FOI) request submitted to the Department for Work and Pensions (DWP). This suggests around 24% (184,800) qualified for less.

Some 16% (124,860) of the people who started claiming the new state pension in 2024/25 received less than £200 a week. Just over 26,400 received less than £100 a week – equating to around 3% of people who began getting the payment that tax year.

Full figures for the 2025/26 year are not yet available, but the most recent data provided by the DWP via the FOI showed 489,730 people claimed the new state pension between April 2025 and November 2025.

Of this amount, 71% (349,490) received the full new state pension, which was £230.25 per week in 2025/26. This suggests 140,240 (29%) did not.

Sarah Pennells, consumer finance specialist at retirement firm Royal London, said: “We often talk about the full state pension amount, but as these figures show, approximately one in four pensioners claiming last year got less."

Steve Webb, partner at pension consultants LCP and former pensions minister, added: “There will always be people short of the full rate.

“In some cases this will be because of years when they were paying a lower, contracted out, rate of NI contributions, or because they simply have gaps in their record when they were not working or getting NI credits.”

How to top up your state pension

Your state pension entitlement is based on your NI record.

You need at least 10 qualifying years to receive the minimum new state pension amount, currently £68.90 a week, and 35 to get the full amount, which is £241.30 a week in 2026/27.

The number of qualifying years and the weekly rate is different for people getting the old state pension.

You can get a state pension forecast to see if there are any gaps in your National Insurance (NI) record.

If you’re not receiving the full amount, or want to top up what you’re currently getting, you may be able to fill gaps in your National Insurance record through credits or voluntary contributions.

Claim credits

Before paying for National Insurance contributions (NICs), it’s worth seeing if you’re eligible for free credits first.

You might be eligible for Specific Adult Childcare Credits if you have previously taken on childcare responsibilities.

You can claim these credits both before and after claiming your state pension.

The credits are available to grandparents or other family members who have cared for a child under the age of 12 if the parents are working and receiving Child Benefit.

If the parent makes National Insurance contributions through their work, they will get qualifying years on their National Insurance record. They therefore wouldn’t need the credits from the Child Benefit so can transfer them.

You can apply for the credits if you’ve taken on caring responsibilities since April 2011, were aged 16 and over but under state pension age when you provided care for the child, and were a UK resident.

To apply, you need to fill in a CA9176 form online via gov.uk, then print it and post it to HMRC using the address shown on the form.

Buy missing National Insurance years

If you want to fill gaps in your National Insurance record and can’t claim credits, you could buy Class 3 National Insurance contributions (NICs). You can do this before or after you begin claiming the state pension.

For the 2026/27 tax year, Class 3 contributions cost £18.40 a week, or £956.80 a year.

You can backdate filling in gaps in your NI record by six tax years and the deadline is 5 April each year. For example, if you wanted to make up gaps for the 2025/26 tax year, you would have until 5 April 2032 to do so. The deadline to top up 2020/21 is 5 April 2027.

You can buy Class 3 contributions a number of ways including through the gov.uk state pension forecast tool if you’re below state pension age, through your Personal Tax Account or over the phone. You can find out more via gov.uk.

Some people will have gaps in their NI record because they weren’t working or weren’t earning enough in a given year, however others may have gaps because they were ‘contracted out’ under the old state pension system in place pre-2016.

Those who were contracted out would have seen more of their NI contribution go towards a private pension instead of the state pension.

If being contracted out has left you with a less than full new state pension, you can top it up by filling in missing NI years from the previous six tax years.

Charlene Young, head of technical at investment platform AJ Bell, said: “Although it was abolished in 2016, three quarters of people reaching state pension age between 2016 and 2036 would have been members of contracted out schemes at some point in their working lives, particularly those in a final salary or career average scheme.”

Is it always worth topping up your state pension?

It’s not always worth topping up your state pension.

Topping up can push you over a threshold making you ineligible for benefits, while those not likely to live long won’t get much value out of filling gaps in their NI record.

If you have reached state pension age, you should contact the Pension Service to see whether it makes sense to buy voluntary contributions.

Webb, from LCP, said the main groups of people who should be “careful” about filling missing National Insurance years are “those who think they are at risk of being on benefits in retirement, because a higher pension could simply mean less benefit, and those who sadly have a short life expectancy”.

“For those who reached pension age before 2016 it will be hard to boost their pension because the deadline for voluntary contributions has passed,” he added.

It could be worth speaking to a financial advisor to assess whether increasing your state pension entitlement is worth it.

Separately, you could increase the amount of state pension you get by deferring it, meaning you don’t claim it when you reach state pension age.

What to do if you have a low state pension and are on a low income

If your state pension entitlement is low, you may be able to claim Pension Credit. Hundreds of thousands of pensioners are believed to be eligible but missing out on the benefit.

There are two parts to Pension Credit, but essentially it tops up your income if you're on a low amount.

The average claim is worth £4,500 a year and entitlement to the benefit also gives you access to a host of other benefits such as Cold Weather Payments and the Warm Home Discount.

You can claim Pension Credit up to four months before reaching state pension age. You can apply any time after reaching state pension age, but your application can only be backdated by three months.

For investors in healthcare stocks, the Worldwide Healthcare Trust is a one-stop shop. It is run by experienced academic and industry professionals, all with scientific and healthcare backgrounds. We take a bottom-up approach to stock selection, focusing on innovation and growth, resulting in a portfolio of “best ideas”.

Three healthcare stocks to consider

Nothing has been more innovative or had a greater impact on human health recently than the 20-year-old class of drugs known as the GLP-1s. Years of pioneering work by Eli Lilly (NYSE: LLY) has resulted in a metabolic medicine that is better, stronger and safer than ever before. The weight loss and blood-sugar control offered by tirzepatide (brand names Mounjaro and Zepbound) are best in class, but that is not what we are excited about. It is the multitude of other health benefits that is likely to drive future growth. These include relieving cardiovascular, kidney and liver disease, sleep apnea and arthritic pain, and perhaps will extend to cognitive benefits, mood disorders, addiction, cancer, inflammatory disorders and even disease prevention.

Eli Lilly remains at the forefront of this innovation and its offerings include recently launched oral versions, next-generation injectables that should increase efficacy (retatrutide) and tolerability (eloralintide). We are at the dawn of an era of new “super medicines” that will treat and prevent disease, ease ageing and promote longevity.

Bayer (Frankfurt: BAYN) may be best known for aspirin, but for investors the company has become synonymous with the long-running legal issues hanging over it due to its Roundup (glyphosate) product. This may be obscuring a significant transformation in Bayer's underlying businesses. In pharmaceuticals, Bayer is entering a new period of growth. Demand for newer products for prostate cancer (Nubeqa – darolutamide) and kidney disease (Kerendia – finerenone) continues to grow strongly. The lead asset in its pipeline of new drugs, asundexian, has been shown to reduce the risk of recurrent stroke by 26% in patients who are at risk and is now under regulatory review. Bayer also operates one of the world's largest agricultural businesses and has a pipeline of innovative new products. Importantly, the Roundup saga may finally be approaching a resolution and a proposed settlement could remove much of the uncertainty that has weighed on the shares for years.

CareDx (Nasdaq: CDNA) is evolving from a transplant-focused diagnostics company into a broader, high-growth precision-medicine platform. Its core “AlloSure” franchise is the leader in donor-derived, cell-free DNA testing for organ-transplant surveillance and is benefiting from increasing clinical adoption and expanding testing volumes. Growth momentum is already visible, with second-quarter revenues up by more than 50% and earnings by over 500%.

Importantly, CareDx is now leveraging its expertise in highly sensitive molecular diagnostics. The acquisition of Naveris brings “NavDx”, a blood-based test for viral-mediated cancers, opening a speciality oncology opportunity that management estimates represents a $5 billion addressable market. With accelerating organic growth, expanding margins, new opportunities in oncology and cell therapy, and a streamlined portfolio following the divestiture of its Lab Products business, we believe CareDx is at a turning point and has the potential to compound revenue and earnings at attractive rates for years to come.

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US insurance company Lemonade (NYSE: LMND) was founded just over a decade ago. It uses AI at every stage of the insurance process, from selling policies to dealing with claims, though it still employs human staff, arguing that this helps cut administrative costs.

While it is true that AI is undoubtedly going to change the world, not every AI-related share is a compelling investment. To make a success of AI, a company must pass several tests.

First, it has to come up with a way of doing something more efficiently. Next, it must find a way to make money. It will need to fend off competition, both from incumbents and new entrants into the sector. Finally, even firms that meet all these criteria can become poor investments if the shares rise so far that they become overvalued.

Lemonade is still losing money

Lemonade says it spends approximately 5% of the money it earns from premiums on handling claims, as opposed to the 9% figure typical for the industry as a whole in the US.

Lemonade also believes that AI can significantly accelerate operations, with over half of claims paid out instantly and most policies sold in under 90 seconds. Lemonade is undergoing a period of rapid growth, with sales increasing from $94 million in 2020 to $738 million in 2025. Revenue is expected to keep expanding at around 30% a year.

But the company continues to lose money, with estimates suggesting that – at the very least – it will be in the red both this year and in 2027 (though management believes that the firm may start to achieve positive earnings before interest, taxes, depreciation and amortisation – Ebitda – in 2027).

The competition is catching up to Lemonade

Another difficulty is that while Lemonade may be ahead of the technology curve today, other companies are catching up by pouring large sums into AI. For example, rival Allstate announced this summer that it is launching ALLIE (Allstate's large language intelligent ecosystem), while other major competitors such as State Farm plan to use AI too.

And while Lemonade argues that its status as an AI-driven company will always give it an advantage over companies built around legacy systems, it also has to compete with other AI-driven companies, notably Root.

Lemonade could begin to turn a consistent profit and fend off competition from both new and old rivals. But investors still have to acknowledge that its valuation is relatively expensive.

It trades at 3.7 times sales, more than four times the 0.83 times sales that Allstate, a profitable and fast-growing company, sells for. Moreover, Root, which operates a similar tech-driven model but manages to turn a profit, only trades at 0.48 times sales. Furthermore, Lemonade's recent share-price performance suggests that investors are starting to sour on it. The stock has fallen by more than 50% from its 52-week high and has lagged the wider market over one, three, six and 12 months.

It is also below both its 50- and 200- day moving average. I would therefore go short at the current price of $46.46 at $45 a share. Put the stop-loss at $67.46, which gives you a total downside of £945.

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Coupang (NYSE: CPNG) was founded by South Korean-born, US-raised entrepreneur Bom Kim. Having experienced America's customer-focused retail culture, he believed South Korea's dense cities and digitally connected population made it an ideal market for a modern logistics network.

South Korea may be a technological powerhouse, yet for a long time its retail sector lagged behind. The blame lay with the chaebols, the family-controlled conglomerates such as Hyundai that emerged after the Korean War and came to dominate the economy. Protected from foreign competition for years, they faced little pressure to improve service or convenience. That left a gap for Coupang.

Kim initially founded a Groupon-style business in 2010, but in 2012 he abandoned the online-coupon model in favour of logistics. The company began building warehouses and acquiring its own delivery fleet. At the time, venture-capital investors preferred asset-light software companies to capital-intensive infrastructure projects, leaving Kim struggling to secure funding.

The strategy required immense scale to become viable, resulting in years of heavy losses. Rather than relying on third-party couriers, Coupang adopted a direct-inventory model. It buys inventory outright and stores it within its own network. To make this work, Coupang developed proprietary software to predict localised demand, positioning inventory close to consumers before orders had even been placed. That reduced delivery times, improved efficiency and made rapid delivery economical in densely populated cities.

How Coupang went global

For the first few years, Coupang burned through cash and at times looked as though it might not survive. But in 2015, the investment firm SoftBank invested $1 billion, giving it the breathing space to keep operating for several years despite its mounting losses. The funding allowed Coupang to continue building fulfilment centres and refining its software. SoftBank's investment encouraged further backers before Coupang listed in New York in 2021. By then, the logistics network had reached sufficient scale for revenues to outgrow costs. Annual losses became progressively more manageable before the business turned profitable in 2023. This demonstrated that an automated infrastructure platform could generate attractive returns once the investment phase was complete.

Coupang now has more than 100 fulfilment facilities supported by proprietary software. Management has shifted its focus from building the network to increasing its utilisation by layering new services on top of the existing infrastructure. With the warehouses, software and delivery fleet already in place, additional transactions carry relatively little incremental cost. Every extra order offers the potential for higher profitability.

The first major extension was the WOW membership programme. Similar to Amazon Prime, it offers unlimited deliveries and free returns for a modest monthly fee. Members also receive Coupang Play, including live sport. The combination encourages customers to concentrate a greater share of their spending on the Coupang app, strengthening loyalty and encouraging repeat purchases.

Other expansions include Coupang Eats, launched in 2019, using the group's logistics for restaurant delivery. Fulfilment and Logistics by Coupang, introduced in 2022, allows third-party merchants to use the company's distribution network. Rather than simply selling goods, Coupang increasingly earns service revenues from businesses that depend on its infrastructure. In 2024 it acquired luxury marketplace Farfetch. The deal gives Coupang access to affluent consumers and the high-margin luxury segment, while extending its reach beyond South Korea and its core mass-market retail business.

Coupang faces headwinds – can it bounce back?

Building infrastructure on this scale also creates vulnerabilities. When millions of households depend on a single platform, failures can become costly. In 2021, a fire destroyed Coupang's Deokpyeong fulfilment centre, wiping out 16 million items. Regulatory problems have also emerged. In 2024, the Korea Fair Trade Commission imposed a 162.8 billion won (£92.4 million) fine after finding Coupang had manipulated search algorithms to favour its private-label products over third-party merchants.

The most damaging blow came in 2025 with South Korea's largest data breaches. A former employee gained unauthorised access to personal data affecting more than 33 million customers. The incident prompted management changes and a 1.7 trillion won (£1.2 billion) customer-compensation programme through platform credits and vouchers, rather than cash payments. In June, regulators imposed fines totalling £300 million over the breach and separate data-handling violations. The penalties were lower than feared.

The fallout extends beyond cybersecurity. In April, South Korea designated Bom Kim as Coupang's controlling shareholder, potentially subjecting it to stricter rules applied to conglomerates such as Samsung. The financial impact is now evident. Second-quarter sales rose 4%, but the firm fell to a loss of $160 million even excluding fines. Its shares have lost more than 60% since last year's highs. Political tension and weaker profitability have overshadowed a sophisticated e-commerce business. Coupang trades on an enterprise value-to-sales ratio of just 0.7, reflecting legitimate concerns over corporate governance, regulatory uncertainty and profitability, but placing little value on a logistics network that would be extremely difficult to replicate. If management can restore trust and recover margins, today's valuation could prove unduly pessimistic.

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US market analyst Harry Browne developed a simple portfolio strategy in the 1980s that he believed would generate returns in all market conditions. The strategy – which he called the Permanent Portfolio – allocates equal portions to stocks, long-dated bonds, gold and cash. Holdings are rebalanced back to their target weights annually.

Browne developed this idea at a time when inflation was running hot and yields on Treasuries were hitting all-time highs. Gold was hovering near record levels and US stocks were also setting records. There are obviously some similarities to the world we're in today.

The assets were designed to add protection in all possible economic scenarios. Cash provides the liquidity buffer for the portfolio and reacts quickly to rising interest rates. Long bonds will underperform when rates rise, but should provide a hedge against recession scenarios, deflation and falling rates. Gold is the traditional chaos hedge, while equities provide exposure to economic growth and, alongside gold, act as an inflation hedge.

Browne's thesis for his portfolio was relatively simple. By combining four uncorrelated assets into a simple portfolio structure, everyday investors should find it easy to manage without paying for outside help or racking up additional fees. Automatic rebalancing also means investors buy more exposure to assets when they become cheaper and then benefit from the recovery. At the same time, expensive assets are sold, top-slicing to remove exposure and take profit.

Does the Permanent Portfolio strategy work?

Exchange-traded fund (ETF) research firm JustETF has a back-test of Browne's strategy on its website, with some tweaks to the holdings to adapt it for European investors. The stock component is any MSCI World ETF (the index is over 70% US stocks these days anyway). The long bond component is in the iShares Euro Government Bond 15-30yr ETF (Amsterdam: IBGL). Cash is the short-term euro cash rate, via the Xtrackers II EUR Overnight Rate Swap ETF (Frankfurt: XEON), while gold is the Gold Bullion Securities (LSE: GBSS).

From January 2007 to June 2026, the portfolio produced a cumulative return of 234% compared with 434% for a 100% equity portfolio and 279% for a traditional 60% stocks and 40% bonds portfolio. That's around 6.4% annualised versus 9% and 7.1% respectively. However, the Permanent Portfolio achieved this return with volatility of just 6.3% compared to 8.6% for the 60/40 portfolio and 13.5% for the equity portfolio.

In 2008, when equity markets lost nearly 50%, the portfolio's drawdown barely touched 5%. The worst performance came in 2022, as inflation rocketed. During the year, the portfolio had its worst drawdown in two decades, falling just over 10% as central banks belatedly began to raise interest rates and long bonds sold off. In short, the portfolio has protected holders from short-term losses quite well, although with lower long-term returns than from stocks (as financial theory would dictate).

A UK spin on the Permanent Portfolio strategy

A UK version of the portfolio has also fairly well, particularly during the market- regime shift we've seen over the past five years. Using the Royal London Short-Term Money Market Fund as a proxy for cash, the Vanguard UK Long Duration Gilt Index Fund for long bonds, Vanguard FTSE All Share Index for shares and GBSS for gold, the portfolio has returned a compound annual growth rate of 5.8% over the period. Long gilts have declined around 48%, but a 132% jump in gold prices has offset that. Cash has added a nice buffer due to rising interest rates and the FTSE All Share has added around 70% including dividends. The portfolio's weighted average cost is 0.17%. Both those returns and fees compare quite favourably to many ready-made and actively-managed wealth-preservation funds on the market.

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TikTok is full of chartists performing technical analysis. Investment banks used to employ them. Robert Edwards's and John Magee's Technical Analysis of Stock Trends, a book first released in 1948, is still going strong with its eleventh edition. It is considered by some to be the Bible of the discipline, yet today, an aspiring graduate interview candidate would be advised not to mention having read it.

Institutional certification numbers tell a similar story. The Chartered Market Technician Association, a body dedicated to the art of chart reading, counts about 2,500 active charterholders. Meanwhile, the CFA Institute is a global organisation setting standards for investment professionals; it runs the Chartered Financial Analyst (CFA) programme.

The group's syllabus has become the de facto industry standard and it has 200,000 charterholders. It dropped technical analysis as a standalone chapter, although not for lack of space; the famously extensive curriculum spans thousands of pages.

Nevertheless, millions of individuals, amateurs and professionals alike, continue to rely on charts. Here we ask what led the finance industry to fall out of love with them and whether old-school technical analysis still has anything to offer.

Why technical analysis fell out of favour

Technical analysis in its purest form means making buy and sell decisions based on the trading behaviour of others. The guiding premise is that the market for anything is like a shoal of fish. Price ticks and volume bars are clues around the edges that, when used wisely, can give valuable insights into the probable direction of the next move.

The received wisdom on why the practice gradually lost relevance is that computers took over. Nobody had to look at charts any longer because flicking through screens and printouts had become obsolete. Desktop computers proliferated. The Python programming language appeared in 1991 and began to make data science widely accessible.

Charts are limited to two, or possibly three, dimensions of data. Statistical techniques were able to cope with as many as the available computing power supported. People now had a choice when it came to seeking alpha (a return on investment on top of the performance of a benchmark index); they could hire a chartist to hand-draw lines, or they could have a “codesmith” mix and match a bewildering number of factors in near-infinite combinations across thousands of instruments through innumerable time periods.

The first serious limitation of this theory is oversimplification. Horses and the car coexisted for decades until World War I reshaped logistics. E-mails and self-service have similarly not done away with legions of white-collar relationship managers. Why only the chartists?

Second, it is of limited value. Not every investor has access to data pipelines, computer models and a team of statisticians. If technical analysis is better than a placebo, many people would still have a use for that information because in getting from A to B, someone else's Ferrari does not make it pointless to own a Ford Fiesta.

History supports this principle. Jesse Livermore, the thinly veiled subject of Edwin Lefevre's best-selling fiction Reminiscences of a Stock Operator, made (and lost) his fortune several times over between the 1890s and the 1920s. His final winning streak came during the Wall Street Crash of 1929, when, as millions lost their shirts, he made enormous profits from correctly calling the top.

So envious were some that Livermore became a hate figure with a need for bodyguards. More importantly, he was often able to trade successfully using little more than ticker tape – the same price and volume information that forms the bedrock of contemporary technical analysis.

Academics versus the chart

Wisconsin is the world's single-largest source of cranberries. Illinois is home to 85% of American canned-pumpkin production. It was decades after Livermore's time, from these agricultural heartlands of the American Midwest, that peer-reviewed validation of chart-based trading strategies would arrive. In 1992, William Brock, Josef Lakonishok, and Blake LeBaron published a paper with a troubling conclusion for the efficient-market hypothesis.

The price history of the Dow Jones index from 1897 to 1986 provided surprising support for some very simple technical-analysis strategies based on moving averages and trading-range breakouts. Predictive chart reading was supposed to be one notch above newspaper horoscopes. Their analysis of just under a century's worth of data begged to differ.

A year later, a separate and now landmark study by Narasimhan Jegadeesh and Sheridan Titman of UCLA determined that momentum also matters. Financial disclaimers were wrong. The idea spread and the citations piled up. Past performance was a direct predictor of future returns, or so it seemed.

The main reason the argument was never fully settled to everyone's satisfaction was data dredging. Try enough infinitely configurable combinations of useless moving averages, trend patterns, Bollinger bands, or breakout windows, and something will eventually back-test to perfection.

Academics grappled with this issue until, in September 2000, the economist Halbert White invented a measure of data-mining bias which he called the Reality Check method. The drawback was that it relied on an accurate record of all the failed attempts to find a profitable strategy.

It went against self-interest to do this, however, because each dead end documented would make any final breakthroughs seem less profound, and therein lay the problem. Computing had become cheap and the maths was solid. The incentives for honesty remained unchanged.

More fundamentally, it was quickly becoming apparent that if so many different studies were possible, then there was clearly no unified concept of “technical analysis” to begin with. How long was a moving average, a holding period, or a piece of string? Some technical indicators are in fact subjective to the point that even committed proponents lovingly mock their likeness to psychiatric Rorschach ink-blot tests. The classic head-and-shoulders pattern is a case in point.

It appears everywhere and nowhere; sometimes the right way up, other times upside down. The researchers of the 1990s were using rigid models to assess the inherently flexible, inconsistent and at times contradictory behaviour of chartists. It was the parable of the blind men and the elephant, only with trades.

Time horizons also remained a topic of disagreement. Where the shoal of fish might be ten seconds from now seemed more predictable than where it may end up in a year, but some proponents argued the contrary. They cited long-term trends as being far less random and more powerful than short-term volatility.

In practice, forecasters tend to play it safe by wording their prophecies loosely. Gold, for instance, formed a triple top between 2011 and early 2022. The monthly MACD indicator was in negative divergence. In chart speak, this means a sell-off was imminent. The reports were circulated. The big calls were made. They were correct over six months, pointless after a year and horrendous beyond.

After counting the votes and correcting for data-mining biases, mainstream finance did reach a tentative consensus. With the requisite ifs and buts, technical analysis, used well and in the short term can outperform buy-and-hold in the pockets of the market that are immature and inefficient. A simple near-term momentum capture strategy in niche small-caps might do something useful. Calling the top of the market based on Elliott Waves covering a forty-year plot of the S&P 500 is impossible to test against an apples-to-apples sample of similarly long time periods throughout history.

Enter the quants

The computational forces that enabled the analysis of large datasets in academia throughout the 1990s had another, more ostentatious effect. They triggered a golden age for hedge funds. Before its spectacular collapse became the subject of several books, Long-Term Capital Management (LTCM) commenced operations with what, in today's money, was seed funding of around $2.2 billion.

The elevator pitch was that Myron Scholes and Robert Merton were involved. These soon-to-be Nobel laureates were two out of the three names who both literally and figuratively wrote the book on the hitherto intractable challenge of how mathematically to model the value of convoluted financial derivatives. Charts were out. Parabolic partial differential equations and elaborate arbitrage trades were in. The first three years together delivered annualised returns of around 35%.

Finance did not, however, divide neatly into econometric wizardry on one side and dusty charting on the other. The prestigious likes of LTCM were risky products that remained restricted to an exclusive set of institutional and ultra-high-net-worth clients. For everyone else, the rapid spread of internet connectivity made public participation in financial markets easier than ever. Gone were large minimum account sizes and unaffordable commission rates.

Online brokerage platforms had arrived and with them mass-market access both to charts and questionable dotcom stocks alike. Now investors could make their own decisions about trading ranges and breakouts. Financial-services firms had to find new ways to demonstrate value and justify their existence, let alone their fees. Fate was on standby, about to lend them a hand.

The revenge of the analysts

First came the Asian financial crisis of 1997. It was bundled with the hallmarks of crony capitalism, specifically eye-watering leverage, absurd cross-holdings and wafer-thin bank capital reserves. Its economic fallout was a key driver of the Russian sovereign-debt crisis one year later, which in turn blew up LTCM.

There followed the dotcom crash of 2000, then catastrophic accounting scandals at Enron in 2001, WorldCom in 2002 and Parmalat in 2003. Each episode meant the unravelling of a popular blind belief, whether in the Asian Tigers, automatic post-communism prosperity, visionary CEOs, or the vast riches that would flow from anything being put online.

This short calamity-rich period highlighted the importance of both financial analysis and due diligence – something neither lines on a chart nor a catchy jingle could ever be a substitute for. Quality-oriented fund managers talked about how their portfolios had weathered the storm through resilient and well-proven business models. Value-focused ones were proud of not having bought things at any price.

There was a macabre parallel with the academic debate on data trawling; put all of finance through a series of crises and there will always, by definition, be survivors. In his 2001 bestseller Fooled by Randomness, Nassim Nicholas Taleb was at pains to point out that they may not necessarily all be geniuses.

A strange new afterlife for technical analysis

Much of what technical analysis was invented to do lives on today under different umbrellas. Testable momentum signals, for example, are integral to quantitative finance and factor investing. The more discretionary aspects of chart reading, however, were never rebranded. They are today to finance what Reddit has become to cutting-edge AI – full of nonsense, inappropriate to quote in the boardroom, but nevertheless a source of knowledge too valuable to discard. Were such charting tools truly redundant, they might long since have been retired as a feature of the expensive Bloomberg terminals that power the industry.

A glossary of key terms in technical analysis

Basic chart mechanics

Volume Bars

Vertical bars showing how many shares or contracts were traded during a given period. Chartists use volume to gauge the market's conviction behind a price change or a specific trading level.

Trading Range

Over time, a financial instrument might fluctuate in price between relatively consistent upper and lower boundaries. The lower boundary is support, where increased buying tends to emerge; the upper is resistance, where additional selling tends to appear. A move beyond either boundary is called a breakout or a breakdown.

Mathematical indicators

Moving Average

The rolling average price of a security over a specified number of periods. This smooths short-term fluctuations, making trends easier to identify. Crossovers between moving averages of different lengths are often treated as trading signals.

Bollinger Bands

A moving average with upper and lower bands, all calculated from recent prices and overlaid onto a chart. The bands widen when price volatility increases and narrow when trading is calm. This helps to identify prices that are unusually high or low relative to prevailing levels of volatility.

Momentum

The tendency of prices to keep moving in their existing direction. Momentum indicators measure the strength or rate of price changes. This helps to distinguish persistent trends from those losing force.

MACD Indicator

Short for Moving Average Convergence Divergence. This indicator, typically shown in a separate but aligned panel below the price chart, consists of two fluctuating lines. The MACD line represents the difference between short- and long-term moving averages of the price. The signal line is a moving average of the MACD line itself, smoothing out its fluctuations. Crossings between the lines are read as signs of strengthening or weakening momentum.

Chart patterns and theories

Triple Top

When prices reach approximately the same high three times without breaking through. Traditionally, this is interpreted as a bearish reversal, especially if the price then breaks down through recent support levels.

Divergence

A pattern in which price and a technical indicator move in conflicting directions. Bearish divergence occurs when prices make higher highs while a momentum indicator makes lower highs, suggesting that the upward trend may be weakening.

Head and Shoulders

A reversal pattern featuring three successive peaks, with the middle peak higher than the other two. A fall below the line joining the intervening troughs, known as the neckline, is traditionally seen as bearish. Turned upside down, the pattern is an inverse head and shoulders. A break above its neckline is deemed bullish.

Elliott Waves

A theory proposing that market prices move in recurring sequences driven by investors' collective psychology. Its classic formulation identifies five waves in the direction of the prevailing trend followed by three corrective waves. Identifying and counting them involves considerable interpretation.

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Demand among Star Wars memorabilia collectors for the franchise's screen-matched lightsabres has gone galactic.

In September of last year, the lightsabre from the original Star Wars film from 1977 broke the record for a prop from the franchise, when it sold for $3.6 million with Propstore in Los Angeles. Fittingly, that record was in turn broken by (spoiler alert) his son Luke Skywalker's lightsabre, still held in the (prosthetic) hand Darth Vader cut off in The Empire Strikes Back, the sequel from 1980. It sold for almost $3.8 million earlier this summer with Dallas-based Heritage Auctions.

The auction duel of the lightsabres isn't over yet. Now, it's the turn of Darth Vader's weapon from The Empire Strikes Back (1980) and Return of the Jedi (1983). The prop used in the making of both films is headlining Heritage Auctions' The Ultimate Star Wars Auction sale on 12 November, where the starting bid, including the 25% buyer's premium, is $1 million. In fact, the prop leads a whole line of lightsabres spanning the various sequels and spin-offs that followed over the years since the early 1980s – along with Boba Fett's carbine blaster (starting bid $125,000) and various other props, scripts, drawings, toys and posters.

A museum of Star Wars memorabilia

The spate of Star Wars sales is hardly surprising. Collecting film memorabilia has morphed from being a slightly nerdy fan obsession to becoming serious business. The broader market is expected to grow at a compound annual growth rate (CAGR) of 5.6% to 2030 – from $3.1 billion in 2024 to $4.4 billion, according to a report last year from Strategic Market Research. At the end of August, Propstore featured several Star Wars items as part of its Entertainment Memorabilia sale and, last spring, the auction house sold C-3PO's head from The Empire Strikes Back for just over $1 million, including the buyer's premium.

Perhaps the real question ought to be, where do you put it all? George Lucas, the creator of Star Wars, has come up with the answer – at least as far as his collection goes. Last month, the sprawling, futuristic-looking Lucas Museum of Narrative Art opened in Los Angeles. It cost a reported $1 billion and took 15 years to build “one of the most conspicuous and intriguing museums to launch this decade anywhere in the galaxy”, says The Economist. The way the market is going, should Lucas ever find he needs to build a new wing, he could simply sell a few more items from his Star Wars collection to fund the expansion.

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In September 2008, just days after Lehman Brothers collapsed, Abu Dhabi finalised its purchase of Manchester City Football Club in a deal that came “to define the use of sport as a platform for projecting soft power”, says the Financial Times. The club, chaired by Khaldoon Al Mubarak, went on to win eight Premier League titles.

Yet it now faces “an existential crisis”, having been found guilty by an independent panel of artificially inflating its financial position by more than £900 million, in breach of financial fair play rules, via “sham” commercial deals that overstated its income. The club's proud Abu Dhabi royal owners find themselves in the dishonourable position of presiding over “one of the biggest scandals in Premier League history”.

The debacle, and City's initial “aggressive, confrontational stance” against the football authorities, is a “rare mis-step” for Khaldoon Al Mubarak – a smooth operator with a reputation for tightrope-walking his way through tricky politics, says The Guardian. He appears to have broken the “cardinal law” of ambassadors: “don't embarrass the boss”.

Khaldoon Al Mubarak, 50, is one of Abu Dhabi's most powerful non-royals. He more usually “straddles global finance, diplomacy and football with a polished assurance that mirrors the emirate's meticulously managed image”, notes an FT profile. That has made him a leading power broker in the emirate's international relations. He is “diplomatically in charge of the UK file as well as the China file… and the main liaison with the US administration”.

As group CEO of Mubadala, he is also “the world's longest-serving head of a sovereign investment fund” – a key figure overseeing oil-rich Abu Dhabi's $1.5 trillion in wealth.

Who is Khaldoon Al Mubarak?

Khaldoon Al Mubarak learned the tough realities of politics the hard way, says Sky News. In 1984, when he was eight, his father Khalifa Al Mubarak – a diplomat serving as the UAE's ambassador to France – was gunned down in Paris by the Abu Nidal terrorist group, a forerunner to Hamas. Their justification was that the UAE had become too seduced by “American imperialism”. The young Khaldoon was “mentored” by the Abu Dhabi royal family in the wake of the killing. Indeed, he became a “quasi-adopted son”, says The Guardian.

The royal family hired Al Mubarak when he graduated from Tufts University in Massachusetts. In 2002, he was selected to lead the newly founded Mubadala Development Company, which was “charged with helping diversify Abu Dhabi's oil-dependent economy and investing its hydrocarbon wealth in new industries and infrastructure”, says the FT.

He enjoyed such success – including negotiating an annual Formula One Grand Prix in 2007 – that he was the shoo-in to lead the revival of Manchester City. There are plenty of people with good things to say about him – including “suave” and “incredibly capable”. One Dubai business associate goes further. “He's a good human being… he's funny, he's probably the best friend you can get if you are lucky. And he's clean.” Certainly, Al Mubarak has avoided personal association with controversies that have dogged the emirate. Until now.

The saga is far from over. Manchester City has rejected the ruling and lodged an appeal. Meanwhile, the UK government is fretting over the possible fallout if sanctions imposed on the club prompt Abu Dhabi to turn off its massive investment spigots. Ultimately, the Emiratis may be forced to sell Manchester City.

Al Mubarak, who has UK diplomatic immunity, “could well emerge from this fiasco largely untarnished”, says The Guardian, because City is such “a tiny part of his portfolio”. Still, these are uncomfortable times.

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When did we start changing the clocks?

We started changing the clocks during the First World War, as a way of conserving energy. The original idea for British Summer Time (BST) had come from a politically connected Edwardian builder, William Willett. He argued – in a 1907 pamphlet called The Waste of Daylight – that moving daylight hours from morning to evening in summer by putting the clocks forward would improve health, happiness and productivity. The idea made it as far as parliament, where a Daylight Saving Bill was defeated in 1909.

But the idea of daylight saving time was taken up by Germany in the spring of 1916, with the aim of cutting the use of electric lights in the evenings and thus reducing energy consumption during wartime. Britain followed within a month, as did several more European countries. Two years later, so did the US.

Which countries change the clocks now?

About 70 countries lie far enough away from the equator to make it worth the hassle. Most of Europe, the whole of North America, and New Zealand all spring forward and fall back. But hardly any countries in Africa, Asia or South America bother, while Australia is split; different states go their own way.

The reason days are longer in the summer and shorter in winter is that the Earth spins on a tilted axis, which sits at a relatively constant 23.4 degree angle to the planet's path around the sun. For that reason, the further you go from the equator, the greater the difference – in terms of daylight hours – between winter and summer.

In Britain, the longest day falls on 21 June with 16 hours and 38 minutes of daylight in London (and about 19 hours in Shetland). The shortest day, 21 December, lasts just seven hours and 49 minutes in the capital (and less than six hours in Shetland). In Ecuador, Uganda or Singapore, by contrast, days and nights are of equal length year-round, so there's no point in changing the clocks.

Why is changing the clocks in the news again?

Firstly, because proponents of changing the clocks argue that the case for scrapping the change and instead moving to permanent Daylight Saving Time, or Greenwich Mean Time (GMT) +1, has been boosted by the energy crisis. And secondly, because the case for permanent summer time has a powerful and committed advocate in president Donald Trump.

In terms of energy, the extra daylight in the afternoon and evening would mean people put their lights and heating on later. In the UK, daily demand for energy peaks between 5pm and 7pm, with demand in winter starting to rise sharply just before 4pm. So the extra hour would make a big difference. By contrast, the darker mornings would have a negligible impact on energy, since households tend to use lights and heating on winter mornings anyway.

According to 2022 research from Aoife Foley of Queen's University Belfast, sticking to BST could save households between £1.2 billion and £2.3 billion a year, while the Republic of Ireland could cut its carbon emissions by 3.5% due to the decrease in residential usage. The shift to permanent daylight saving time is an easy way of helping ease the energy crisis, proponents say.

Didn't we shift to permanent daylight saving time before?

Yes. During the Second World War, the UK moved the clocks forward by an hour all year-round in a drive to save energy – so using GMT+1 in the winter and even moving to GMT+2 (or “British Double Summer Time”) in the summer.

The experiment was repeated in 1947 because of severe fuel shortages. Then in the late 1960s the UK adopted permanent BST for three years, before returning to the spring-forward fall-back system. Part of the reason for switching back was the effect in Scotland, where year-round BST means horribly dark mornings in winter. Even on GMT, the sun won't rise until 8.42am in Edinburgh on 21 December. A shift to permanent daylight saving time looks unlikely. But other countries may take the plunge.

Which countries could shift to permanent daylight saving time?

Most prominently the US. In July the House of Representatives passed the Sunshine Protection Act, which – if passed by the Senate – would move the whole of the US to permanent Daylight Year-round summer time. President Trump strongly backs the legislation.

Why does Trump back the Sunshine Protection Act?

The strong suspicion, said Matt Vizer in The Atlantic, is that Trump's motivation is not national well-being, but golf. PGA Tour chief executive Brian Rolapp met Trump and discussed daylight saving a few weeks ago. He calculates that switching to year-round daylight saving time would generate 23 million additional rounds of golf each year and pump $1 billion into the golf industry. Trump, the owner of multiple golf clubs, has clearly taken note. In fact, in terms of well-being, there's a far stronger case for making standard time permanent, rather than daylight saving,

What's the rationale for permanent standard time?

Because standard time – ie, GMT – more closely aligns with the natural light-dark cycles of day and night and the human body's circadian rhythms. Choosing to shift an hour of natural light from the start to the end of the day makes light summer evenings longer – but the price of dark mornings in winter is too high, says Beth Ann Malow on The Conversation. “Morning light is essential for helping to set the body's natural rhythms. It wakes us up, and improves alertness and boosts mood.”

Meanwhile, extending evening light delays the brain's release of melatonin, the hormone that promotes drowsiness, thus interfering with sleep. This goes far beyond mere inconvenience – “springing forward” each March is connected to serious negative effects, including an uptick in heart attacks and cardiovascular disease, metabolic syndrome and poorer academic performance owing to less sleep. The question, said The Economist, is not whether we should be putting the clocks back next weekend. We should. The question is rather whether we should put them forward again next spring.

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“The gambling known as business looks down on the business known as gambling”, said the American author and journalist, Ambrose Bierce. Yet gambling is a big business: the gambling sector could achieve global annual sales of $700 billion by 2028, according to the World Health Organisation (WHO). At the same time, it is undergoing unprecedented disruption.

A key positive change is the rapid liberalisation of gambling laws in the US. But while demand may be growing, “the problem is who keeps the money, as more of every dollar goes to the state, and the most profitable bets are moving to prediction markets”, says Joao Mourato, former professional gambler and now head of iGaming Product at VIP-Grinders, a poker and iGaming affiliate. However, investors should not overlook the industry.

The gambling industry is booming in the US

There are several pockets of strong growth in the gambling industry around the world, such as in Turkey and Eastern Europe. But “by far and away the biggest story in the global gambling industry has been the decade-long boom in the United States”, says Dan Wasiolek, a senior equity analyst for investment platform Morningstar. Ashley Akin, senior contributor at proprietary trading group Prop Firm App, says US commercial gambling revenue reached $78.7 billion in 2025, with sports betting up 22.8% to $17 billion and online casinos 27.6% to $10.7 billion.

Jamie Gold, who won the 2006 World Series of Poker (WSOP) Main Event, argues that while there “has always been a massive interest in gambling” in the US, it was restrained by the fact that “there were just not that many legal or seemingly legal opportunities for betting, especially online”. Yet when the US Supreme Court effectively struck down the federal ban on sports betting in 2018, leaving the matter up to individual states, a large number of them quickly bowed to public pressure and legalised betting. The upshot? People “now have instant access on devices and unlimited markets to place a wager on”.

Adam Small, founder of digital media group Third Planet Media, thinks the explosion in demand was also driven by the fact that once gambling became legal, the mainstream media, “particularly sports media, felt empowered to put gambling content into broadcasts at an unprecedented level”. So, now when “you watch a baseball game, you can track your bets on screen and are regularly shown betting odds on not just the game outcomes, but also what will happen [when the next player bats]”. This has created a cycle where more betting means more coverage, leading to more betting.

How long can this boom continue and how far can it go? Gold argues that “we're not even close to the peak”. While the vast majority of states now allow some form of gambling, far fewer have no restrictions at all. At the same time, a few major holdouts, notably California and Texas (which together account for 20% of the US population), still also ban most betting, including sports betting. If those two states changed their mind, however, “it would mean major growth for the industry”.

Overall, Wasiolek is moderately bullish, although he admits that there is considerable uncertainty about how the industry will grow. However, even in the US states where gambling is now legal, you would expect “good, or even single-digit, growth”. So, if you then add to this the “handful of additional states that are expected to allow online casinos or sports betting in the near future”, the industry's medium-term prospects in North America look very encouraging.

Competition from prediction markets

One big reason investors have soured on many gambling stocks, especially those related to US online bookmakers, is down to the uncertainty generated by competition from prediction markets. Prediction markets are essentially a new form of betting exchange, which match punters on either side of the bet.

However, unlike British betting exchanges such as Betfair, they are regulated as financial products by the Commodity Futures Trading Commission (CFTC). This allows them to bypass state regulations and “gain direct access to America's financial infrastructure, including integration with every broker, every trading platform, every fintech app”, says Edwin Dorsey, founder of investment newsletter The Bear Cave.

While this designation is being contested, with a coalition of 39 states supporting a legal challenge arguing that prediction markets should be regulated at the state level, Dorsey argues that they have the potential to bring genuine economic benefits. For example, instead of insuring your property against hurricanes, which can be “very expensive and very inefficient and lead to disputes involving adjusters, lawyers, and potentially litigation”, residents in a state such as Florida could simply bet on whether a hurricane will occur in their own area.

J. Christopher Giancarlo, the Chair of the CFTC between 2017 and 2019, argues that prediction markets can also bring other benefits. For example, he thinks that the incentive it gives those taking part to be right “gives [these markets] the potential to be more accurate in predicting the outcome of events like elections than polling” does. While he acknowledges that while they aren't infallible, and will need to be regulated properly, they are so accurate that “once prediction markets catch on, we'll be using them to judge the probability of events, just as we use weather forecasts to predict the weather”.

Of course, the big question is how prediction markets will affect more conventional betting companies. Some people are pessimistic about the latter. “If running a sports-betting operator means paying high ‘sin' taxes and dealing with heavy regulatory burdens, while running a prediction market means relatively little oversight and being taxed as a financial-services provider, it's hard to see how the former can compete with the latter,” says Small. Mourato says prediction markets offer a better experience, including not limiting successful gamblers' bets (something bookies in general are notorious for).

There is increasing evidence that prediction markets are already starting to steal customers from betting outlets (known as sportsbooks in the US), says Mourato. Betting consultancy H2 Gambling Capital estimated that prediction markets took about 27% of legal US sports-betting volume in the first month of the World Cup, up from 9% at the start of the year. Worse, they are also starting to make inroads into the more profitable areas, such as parlay bets (bets that only pay out if two or more events happen), “which typically yield sportsbooks 22 cents on each dollar wagered, compared with only six cents for straight bets”.

However, others are more optimistic that prediction markets and traditional betting firms can coexist. Russ Mould of investment platform AJ Bell thinks that most of the people attracted by prediction markets “tend to be those who were more used to spread betting on CFDs or financial markets”, and is less convinced that they can attract people “more interested in a wager on a three-mile horse race”. Wasiolek notes that while the major US sports-betting companies briefly saw their revenue fall at the start of the year, possibly due to competition from prediction markets, revenue has managed to bounce back. He also notes that some, such as DraftKings, are even launching their own prediction markets. Overall, he expects them to keep growing, but at a slower rate than previously.

Leo Barker, VP Commercial-EMEA of OpticOdds, one of America's leading sports-data providers, thinks “it's too simplistic to view prediction markets purely as a threat to sportsbooks, as [they] are also introducing an entirely new audience to the idea of trading on real-world outcomes”. He thinks the bigger story is convergence, whereby “consumers increasingly expect to move seamlessly between sports, financial markets, entertainment and other real-world events”. So, the question “is less whether prediction markets replace sportsbooks and more how the two categories evolve alongside each other, particularly as regulators determine where the lines between them ultimately sit”.

Regulation is on the rise

Another factor weighing on gambling shares has been a sense that while the US may be loosening regulation, elsewhere the regulatory tide is shifting against the sector. Darragh McGee, an associate professor in the Department for Health at the University of Bath, thinks this is long overdue. In his view, the gambling industry has been able to rebrand itself “as just another leisure activity”, while aggressively promoting products that encourage addiction. This doesn't just affect the increasing number of problem gamblers, but also those around them. McGee cites research claiming that every gambling addict has a negative effect on up to eight people around them, and that the total costs to society far outweigh the tax revenue generated by the sector.

Rather than an outright ban, McGee hopes for an approach “that would permit gambling, but not rapaciously promote it in the manner that we currently see”. However, whether you agree with him or not – Mould thinks “it is easy to see why the industry's behaviour has upset some people” – McGee believes that the mood has definitely changed. So investors need to be aware that “ineffective disclaimers” on bookies' websites won't be enough to satisfy public opinion and the amount of tax and regulation will only increase. Government action isn't the only risk. Several Facebook-style class-action suits against the leading US gambling companies are in the pipeline.

“[Heavy] regulation doesn't stop people gambling, but just moves them to unlicensed sites that offer worse value and fewer protections,” according to Mourato. Still, he agrees about the overall direction of travel in the regulatory backdrop. He notes that the UK increased the rate of remote-gaming duty from 21% to 40% in April 2026, while online-betting duty will rise from 15% to 25% in April 2027. In 2023, Australia introduced a National Self-Exclusion Register, whereby people concerned about their gambling can block themselves from online-betting outlets for at least three months. Online gambling with credit cards was banned a year later.

Mourato even thinks that outright bans of certain betting products aren't off the cards. For example, European regulators have launched action against prediction markets (which remain banned in the UK), while Brazil banned gambling by presidential order a few weeks ago. Overall, he thinks that regulation represents the biggest threat to the industry outside the US. He is so worried about further changes “that I don't own any gambling shares myself”.

However, others think the risk of regulatory crackdowns has been overstated. Sergio Paulino, founder and CEO of All Bettors, a prediction platform, says that Brazilian president Lula's decision to ban gambling was a “political stunt” that didn't prevent (and might well have caused) his poor showing in the first round of the presidential election, demonstrating that such moves have limited electoral appeal. Wasiolek suggests that while both additional regulations and tax rises “may hit revenue for a few quarters”, their long-term impact will be limited. Gambling companies are increasingly geographically diversified, allowing them to shift investment towards expanding operations in more friendly jurisdictions.

Regulation could even create opportunities for systems that can help companies and platforms detect problem-gambling behaviours, says Marc Fernandez, chief strategy officer of Neurologyca, a neuroscience and AI firm. For example, since technology “can now pick up on signs that someone's stressed or not thinking clearly, a platform could step in at the right moment, maybe with a quick ‘take a breather' prompt or a temporary limit, just for the person who needs it, and leave everyone else alone”. The same signals can “also help spot people trying to game or manipulate the markets, which is another big worry for regulators”.

Casinos will continue to cash in

Whatever happens to online gambling, there is a general agreement among experts that physical casinos won't disappear any time soon. It's “been proved that online availability of gaming does not take away from the profitability of live gaming”, says Jamie Gold. As an avid poker player, sports bettor and casual casino player, Gold still enjoys “all ways of playing” and his trips to live casinos “have not gone down because of online” casinos.

Christina Lindley, a former professional poker player and founder of VPRG Consulting, similarly “does not see online gambling eliminating physical casinos”. She was recently at G2E (the global gaming expo) in Las Vegas “and the floor was full of technology designed to improve casino operations, retention, and customers' experience”. At the very least, this suggests casinos are optimistic enough about their future to keep investing in new equipment.

Casinos will remain attractive, even in a digital age, because “many people go to casinos for entirely different reasons than they gamble online”, says Adam Small of Third Planet Media. Modern casinos are not just about gambling, “you can get a meal, have some drinks, see a show and, at the nicer casinos, you can even go shopping and go to the spa”. Las Vegas's casinos have shifted their business model from gambling towards general entertainment. They now make so much money from the latter and convention activity “that gambling now only accounts for a third of revenue” – a model that regional casinos are also looking to emulate. While this doesn't make them recession-proof, as there is evidence that higher fuel prices are leading people to cut back on trips, he thinks the casino industry “should roughly follow the growth of the US economy”.

Gambling investments to buy now

One of the big winners from the US gambling boom has been DraftKings (Nasdaq: DKNG). Originally, it focused on fantasy sports leagues (where people would predict which players would do best in return for cash prizes). However, after the regulatory changes in the US, the group pivoted to online betting, running digital sportsbooks and online casinos.

Sales grew nearly tenfold between 2020 and 2025. While the share price has recently taken a beating owing to fears about prediction markets, it now offers its own, and Wasiolek thinks the stock is underpriced at 22 times expected 2027 earnings.

While Wasiolek prefers DraftKings, he also thinks that there is value in Flutter Entertainment (NYSE: FLUT), which has seen its share price fall by 66% in a year. Like DraftKings, Flutter has also experienced strong growth, with revenue nearly tripling since 2020.

While Flutter admits that it sees prediction markets as a net negative, it has engaged with the sector by acting as a market maker (it also owns the UK betting exchange Betfair). Even though both its revenue and earnings are expected to continue growing strongly in the short term, Flutter trades at a bargain-basement level of 10.5 times 2027 earnings.

Value investors may also like Entain (LSE: ENT). Sports betting makes up around 75% of sales, with the rest from online casinos. Entain's share price has fallen by half in the last year, pushing the company out of the FTSE 100, owing to concerns about tax rises and regulatory changes in the UK.

However, while AJ Bell's Russ Mould doesn't have an overall view on the company, he thinks that it “certainly has [the] potential to be a cash-generative business”. It currently trades on a 2027 price/ earnings (P/E) ratio of seven and offers a dividend yield of 5%.

When it comes to physical casinos, Wasiolek is very positive about Las Vegas Sands (NYSE: LVS). Contrary to what its name implies, Las Vegas Sands does not in fact operate any casinos in the US, instead focusing on the Chinese region of Macao and on Singapore.

Wasiolek acknowledges that both areas can be very volatile, but their relatively high rates of medium-term growth, as well as restrictions on the numbers of overall licences (and therefore potential competitors), should ensure healthy long-term prospects. Even though revenue is still growing strongly, Las Vegas Sands trades on a 2027 P/E of 11 with a yield of 3.5%.

MGM Resorts International (NYSE: MGM) owns at least 17 gambling resorts in the US and elsewhere, including properties in Brazil, the UK, China and Japan. But unlike Las Vegas Sands it also has exposure to the sports-betting and online-gaming markets through BetMGM and MGM Digital.

Revenue continues to grow strongly, while there is still a chance that it could become an acquisition target again. MGM also looks promising from a value perspective, as it trades as just under 15 times 2027 earnings.

Many of the operators of prediction markets, such as Kalshi, are currently unlisted. However, online-trading platform RobinHood (Nasdaq: HOOD) recently branched out into prediction markets. Although these account for only a small portion of revenue, they are growing at a rapid pace.

Sales grew tenfold year on year in the second quarter. While RobinHood is priced aggressively at 38 time 2027 earnings, revenue has grown fourfold since 2020 and is expected to keep expanding by double-digits.

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.

Greece is bouncing back from its crippling sovereign debt crisis of 2009-2018. The Greek economy is starting to perform a lot better and the government has just upgraded its growth forecast for this year from 2% to 2.3%. Unemployment fell from 7.9% last month to 7.4%; it reached 27% at the peak of the debt crisis in 2013. Investment is starting to flow into the country. The government says it is running a primary budget surplus and the debt-to-GDP ratio, close to 200% at the peak, is now 136% and it is set to fall to 128% next year.

The bond markets like the look of all those figures and are charging Greece less and less to borrow money. The yield on its ten-year bonds has fallen to just 4.4%, a lot less than in France or Britain. The days when Greece was about to go bust and threatened to take down the eurozone as it collapsed are now firmly in the past.

Greece has welcomed foreign capital

At the same time, Greece is starting to acquire a reputation as the “new Dubai”. The British hedge-fund billionaire Chris Rokos, the country's third-largest individual taxpayer, recently moved there. US hedge fund Millennium Management is opening its first office there. Skyscrapers are going up along the Athens Riviera, a stretch of coastline just outside the capital.

You can see why. The Greek government has offered a series of tax incentives to bring money into the country. Executives who relocate their tax residency to Greece pay only 5% on their bonuses and carried interest, far less than they would in London, Paris, or even New York. And there is a flat-tax regime that caps tax on foreign income at €100,000, with foreign assets exempt from Greek inheritance tax. A similar deal in Italy helped turn Milan into a booming financial centre, at least until the government increased the flat-rate payment to €300,000, and now it is doing the same for Athens. With the war in the Persian Gulf, there is a space in the global market for a low-tax, trading and financial centre, and Greece looks willing to take the prize.

It has, however, been a long, hard slog for Greece to get itself back on track. At the height of the eurozone crisis, it could have left the single currency and massively devalued, while defaulting on its debts. That would have been one way out of the mess. In the end, the country resolved to knuckle down and work its way back to financial stability. Over five painful years, GDP fell by almost 30%, a collapse on the scale of the Great Depression of the 1930s, and it has still not managed to get back to its pre-crisis level of output. Public spending was cut by 25%. The civil service was slashed from one million to slightly over 600,000, while wages were frozen.

Unemployment soared, wages fell by 25% or more and up to 50% in sectors such as tourism. Pensions were cut 11 times to keep pace with the austerity programme. Most of the toughest cuts were imposed by the so-called “troika”, made up of the European Union, the European Central Bank and the International Monetary Fund, and that gave the local politicians the space to make some very hard decisions. Even so, eventually spending was brought down and the public finances started to stabilise.

There is a lesson in that. More and more countries are starting to come under sustained attacks from the bond markets. France is right in the firing line, but so is Britain, and perhaps Italy as well. Yields are starting to soar as investors become more and more nervous of the deadly combination of rising debt and sluggish or non-existent growth. They may find themselves caught up in a full-scale sovereign-debt crisis at any moment.

Greece shows that there is eventually a path to recovery. The trouble is, it takes a long time, deep cuts to the size of the state, and a willingness among the voters to make a lot of sacrifices to restore the country's competitiveness. The outlook for Greece is bright again. But it was a very tough slog. It is hard to imagine countries such as France and Britain putting up with the same kind of austerity – even though, just like Greece, it may be the only way finally to bring their debts under control.

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.