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

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

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

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

Record pension withdrawals

In the 2025/26 tax year, £22.4 billion in taxable payments was withdrawn from pensions flexibly – marking a new record, according to HMRC.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

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

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

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

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

Gifting – things to consider

1. Care costs

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

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

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

2. Income tax

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

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

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

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

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

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

3. Inheritance tax

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

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

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

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

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

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

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

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

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

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

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

1. Not knowing the implications of cohabiting vs. marrying

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

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

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

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

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

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

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

2. Not making the most of exemptions during your lifetime

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

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

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

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

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

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

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

3. Not keeping records

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

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

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

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

4. Not having important conversations

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

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

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

5. Forgetting the £2 million taper

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

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

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

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

6. Not considering where inheritance tax should be paid from

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

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

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

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

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

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

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

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

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

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

How much can I give away free of inheritance tax?

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

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

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

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

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

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

Losing legal control

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

Legally there are a number of things to consider.

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

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

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

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

Inheritance tax property gifting rules

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

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

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

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

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

Capital gains tax problem

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

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

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

Care costs

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

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

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

Alternatives to grandparents giving away property

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

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

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

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

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

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

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

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

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

How Admiral Group is using AI to cut costs

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

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

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

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

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

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

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

Three European stocks to watch

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

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

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

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

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

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

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

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

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

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

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

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

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

Yang Zhilin heads to China's MIT

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

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

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

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

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

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

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

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

Funding Circle's business model and change of direction

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

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

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

The pandemic enabled Funding Circle to make the most of government lending schemes, allowing the business to drastically reduce costs. This is the model it still uses today. A combination of government financing and institutional-backed lending meets the group's funding needs.

The company reaped the benefits of this shift almost immediately. For the 2021 financial year, it booked a profit of £64 million, a sharp turnaround from the prior year's loss of £108 million. Most of this growth was driven by the government's Bounce Back Loan scheme during the pandemic. In the following two years, Funding Circle slumped back to a loss. Then, after two years of losses (totalling £40 million), it returned to profitability in 2024. This time it looks as if the lender has cracked the code.

Funding Circle is at inflection point

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

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

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

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

Funding Circle has an edge in information

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

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

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

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

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

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

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

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

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

London is the engine of the British economy

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

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

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

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What is the UK's new social media ban?

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

What platforms will be in the social media ban?

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

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

What's the rationale behind the social media ban?

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

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

What are the arguments against banning social media for children?

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

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

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

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

Is the social media ban working in Australia?

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

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

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

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

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

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

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

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Maynards, Little Sampford, Essex

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

Price: £1.5m Cheffins 01799 -23656

Pond Cottage, Wilton, Marlborough

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

Price: £995,000. Hamptons 01672-837178

The Mill, Arnesby, Leicester, Leicestershire

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

Price: £2.75m Fisher German 01858-410200

Bulkeley Grange, Malpas, Cheshire

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

Price: £2.25m Savills 01244-323232

Tinley Lodge, Shipbourne, Tonbridge, Kent

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

Price: £4.95m Knight Frank 020-3967 7176

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

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

Price: £1.65m Knight Frank 01935-812236

Loughbrow House, Hexham, Northumberland

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

Price: £2.1m+ Galbraith Group 01434-693693

Puddledock, Norden, Corfe, Dorset

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

Price: £2.25m Savills 01202-856873

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

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

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

Making the market see emerging art

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

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

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

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

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

What 22 years at New Blood Art taught me

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

The economics of early-stage work

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

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

Splitting New Blood Art in two

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

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

The cost of independence

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

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

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

Artists as infrastructure

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

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

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

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

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

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

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

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

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

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

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

Burnham vs the bond market

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

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

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

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

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

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

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

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

Why Mastercard and Visa's duopoly is so durable

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

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

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

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

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

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

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

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

Uniform standards for Mastercard and Visa

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

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

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

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

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

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

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

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

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

Mastercard and Visa's business model

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

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

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

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

Nobody wants to leave Mastercard and Visa's payments network

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

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

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

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

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

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

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

The geopolitics of payments

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

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

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

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

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

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

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

Mastercard and Visa's trust layer

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

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

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

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

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

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

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

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

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

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

A disappointing year for Fidelity European Trust

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

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

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

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

Should you invest in Fidelity European Trust?

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

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

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

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

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

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

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

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

Eat well at Four Seasons Resort The Nam Hai

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

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

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

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

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

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

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

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

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

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

What types of FIRE strategy are there?

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

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

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

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

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

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

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

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

What can the FIRE movement teach you?

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

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

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

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

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

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

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

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

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

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

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

Why investing earlier is so important

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

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

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

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

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

Is FIRE for you?

There are limitations to such strategies.

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

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

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

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

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

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

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

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

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

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

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

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

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

Like the sound of FIRE?

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

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

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

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

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

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

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

When will investors see a return on artificial intelligence spending?

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

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

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

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

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

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

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

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

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

Big tech paths are diverging

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

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

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

The other headwind to note is a looming profitability squeeze.

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

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

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

What can investors take from these results?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why does equal- versus market cap-weighted matter?

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

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

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

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

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

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

How does performance compare?

The growth potential can vary sharply between the two strategies.

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

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

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

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

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

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

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

Benefits of equal weighting

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Government reforms are driving growth

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

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

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

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

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

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

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

Vietnam’s stock market

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

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

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

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

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

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

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

Vietnam’s emerging market status confirmed

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

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

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

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

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

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

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

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

Finding value in Vietnam

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

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

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

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

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

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

How to invest in Vietnam

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

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

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

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

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

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

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

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

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

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

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

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

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

Big banking stocks get a lift from tailwinds

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

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

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

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

Banks reap the benefits of higher interest rates

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

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

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

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

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

Record highs for stock trading and deals

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

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

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

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

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

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

Britain's banks have their own attractions

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

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

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

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

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

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

The most promising global banking players

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

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

A shower of cash for shareholders

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

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

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

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

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

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

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

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

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

Cameco's four drivers of growth

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

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

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

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

Cameco's share price is on the rise

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

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

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

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

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

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

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

Asian stocks to watch

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

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

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

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

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

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

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

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

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

Why debt funds are highly misunderstood

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

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

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

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

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

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

EJF – a debt fund with solid fundamentals

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How Bending Spoons found success

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

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

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UK mid-cap stocks have a takeover problem – one that sums up the trouble with investing in anything from growth companies to turnaround plays in the UK stock market.

Take the bid by US firm Prologis for UK property company Segro. As a holder of both Prologis and Segro shares, I should not be too bothered. Yet in practice, this looks like a pretty rough deal for Segro shareholders who want to stay invested. They swap a focused UK and European logistics investor for part of a much larger group that has 84% of its business in the US, at a valuation that seems favourable to Prologis. To make it worse, the dividends – the key thing, since you buy a business like this for income – will then be subject to US withholding tax. Who gains here?

So we get the usual silly takeover dance as the target gets bullied into submission by short-term investors desperate for the sugar hit of a quick capital gain. The only thing more ludicrous than Prologis's faux-concern about Segro's ability to execute its ambitious growth plans is the way that an offer worth 993p is “highly opportunistic”, but one at 1,032p (not even 4% more) is something that the browbeaten board now “would be minded to recommend”.

The pool of opportunities is constantly shrinking, while the balance of risks and rewards get worse. Make the right call and you stand a good chance of seeing your winners bought out at a still-ungenerous valuation, capping your upside far lower than it should be. Meanwhile, the average quality of what remains behind is likely to decline – many of them will be stocks that do not attract buyers for good reasons.

The absence of good new listings coming to London is why this takeover wave is much more concerning than the one we saw in the mid-2000s, which I was relaxed about at the time. In hindsight, I should have been more concerned because that surely helped lay the foundations for what is happening today.

However, the real tipping point was the bewildering decision to allow SoftBank to buy Arm in 2016 – a call that almost no government anywhere else in the world would have made. That signalled everything was up for sale.

The true market for UK mid-cap stocks

This is a key reason why it is hard to be bullish on the FTSE 250, which has lagged the FTSE 100 for years after historically beating it. There are other factors, but the loss of roughly 150 mostly decent stocks (large, mid and small) from the UK market since 2023 must play a part.

The unhealthy combination of hollowing out and pitiful valuations means that while we think of the FTSE 250 as the benchmark for UK mid-cap stocks, it does not really look like one anymore. By modern size definitions, the true market for UK mid-cap stocks is roughly the bottom 40 of the FTSE 100 and the top 100 of the FTSE 250.

There are clearly opportunities in the UK. However, the best prospects lie with either an all-cap equity fund or specialist small-cap trusts such as Rockwood Strategic (LSE: RKW) instead of trying to earn any kind of intrinsic mid/small premium from such a neglected market.

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Cornwall is one of the poorest corners of northern Europe. Its output per head has sat at roughly two-thirds to three-quarters of the UK average for two decades. A typical full-time worker there earns around 84% of the national wage.

For 25 years the gap was cushioned by Europe. Cornwall and the Isles of Scilly took well over £1 billion in EU structural funds between 2000 and 2020, something like £100 million a year. That money has gone, its replacement is worth roughly half as much, and from April 2026 the successor to that replacement excludes Cornwall altogether.

But now something has changed the calculus entirely. That poor, peripheral region also happens to have hard-rock lithium and tin deposits, the largest tungsten resource in the West, Britain's first deep geothermal power station and a mineral-processing industry with two centuries of pedigree.

Forty miles away in Bridgwater, Somerset, Tata's Agratas is building a £4 billion, 40GWh factory that will be the largest in the country. Resources, low-carbon power, processing know-how and a battery end market, all in one economic-geographic area. Nowhere else in Britain has all four.

China accounts for about 80% of world tungsten mined production and an even larger share of the downstream conversion. From February 2025 it placed tungsten under export licensing on national security grounds and by late 2025 had restricted authorised exporters to around 15 firms for 2026 and 2027. Ammonium paratungstate, the key traded intermediate, went from roughly $300 to $940 per metric tonne unit in early 2025 to above $3,000 by this spring. That is why Devon's Hemerdon, the West's largest tungsten resource, and Cornwall's Redmoor, Europe's highest-grade undeveloped tungsten deposit, matter to people who have never heard of either.

The activity on the ground is real and, in places, world-leading. Cornish Lithium has sought regulatory permission to develop a former china clay pit at Trelavour and is pulling lithium from geothermal brine at Cross Lanes. Cornish Metals is developing South Crofty, closed since 1998, aiming at production in around 2028 and a company with an estimated net present value of nearly £500 million. Geothermal Engineering's plant at United Downs delivered the UK's first deep geothermal electricity in February this year, with lithium carbonate coming from the same well. Tungsten West at Hemerdon is hoping to start production by the end of this year.

This is not a thesis about the geology waiting to be proven – it has already been proved. What is missing is the next step, the chemistry that turns concentrate and brine into battery-grade or defence-grade material, and Britain is building most of that capacity at Teesside rather than in the region that actually holds the ore.

Cornwall's lithium project pipped at the post

Here is the part investors and ministers alike should pay attention to. In February this year, Imerys placed its St Austell lithium project on hold. It was not a bad project; it was simply not the project the company chose to go ahead with because the French state had just taken a €50 million stake in Imerys's rival venture in France, Emili. Capital did not leave because the geology failed. It left because a rival state turned up with a cheque and Britain did not. That single episode should worry anyone backing UK critical minerals more than any drilling result. Geology is necessary. It has never been sufficient.

Britain has the wherewithal. The National Wealth Fund has put £31 million into Cornish Lithium and £28million into Cornish Metals, real money into the right projects. But its remit now stretches from clean energy to defence to life sciences to the creative industries, and a fund asked to do everything risks losing focus.

France did something narrower and, I think, smarter: it took a direct stake in one named asset, through one named vehicle, and said plainly that this is the project the state has decided to back. The US has done similar. Britain's equivalent is, for now, an announcement of an up to £50 million fund and a set of sector programmes that may not add up to much.

The investment case follows from policy

None of this needs a white paper. It needs a decision. Back one properly scaled mid-stream processing hub in the South West rather than subsidising several plants that are too small to matter. Build a stockpile mechanism for defence-critical tungsten, given that Britain currently produces none and refines none. Speed up the permitting process that has seen

South Crofty take years to develop a mine before a tonne of tin comes out. And close the funding cliff-edge Cornwall now faces with an argument based on national security rather than regional deprivation, because the latter has manifestly not worked for 25 years and the former might.

The investment case follows from the policy case, not the other way round. Companies with permitted, de-risked, assets that have already been built, Cornish Metals and Tungsten West among them, are the ones best placed to benefit if Britain decides to act like it means what it says about supply-chain security.

The lesson from Imerys is that being right about the rock is not enough. Somebody, whether it's the government or private capital, has to be willing to be the anchor. Cornwall has spent 25 years waiting for a growth story. It's finally got one under its feet. The only question is whether Britain gets there before France, or Kazakhstan, or the next country willing to write the cheque.

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Indigo Point, Great Camanoe, British Virgin Islands

A modern estate with three properties surrounded by landscaped gardens. There are no corporate or personal income taxes, or capital gains or inheritance taxes to pay. 2-bedroom main villa, 1-bedroom owner’s cottage, 1-bedroom guest cottage, pool, 2 boat slips, 4.4 acres.

Price: $5.5m Hamptons 020-8618 4551

Bolivia Mount, The Dhoor, Lezayre, Isle of Man

A distinctive property built in 1820 and surrounded by formal gardens and woodland. The Isle of Man operates a low-tax regime with low fixed income-tax rates and no capital gains, inheritance or wealth taxes. 6 bedrooms, 3 bathrooms, 3 receptions, 42.3 acres.

Price: £6.95m Knight Frank 020-7861 1065

Seaside Drive, Guana Cay, Abaco, Bahamas

An ocean-side residence featuring bright interiors with vaulted beamed ceilings, wood floors, floor-to -ceiling windows and an open-plan living area. The Bahamas operates a zero-tax jurisdiction with no personal or corporate income taxes, capital gains, wealth or inheritance taxes. 3 bedrooms, 3 bathrooms, gardens, tennis court, 2.1 acres.

Price: $4.8m Bahamas Sotheby’s International Realty +1 242 367 5046

Courtil Brock, St Peter Port, Guernsey

A fine Regency villa built in 1810, surrounded by landscaped gardens that include an English oak planted by the first owner in 1812. It has 12-foot high ceilings, grand fireplaces, shuttered sash windows, panelled walls and French doors leading onto the south-facing terrace. Guernsey levies a flat 20% personal income tax, and there are no corporate, capital gains, inheritance or wealth taxes to pay. 5 bedrooms, 6 bathrooms, 3 receptions, library, cinema.

Price: £4.9m Savills 01481-713463

Ordino, Andorra

A mountain home in Ordino in the Pyrenees. Although not strictly a tax haven, there are no wealth, inheritance or capital gains taxes to pay. The house has beamed ceilings and a partly covered terrace for outdoor dining. 4 bedrooms, 4 bathrooms, wine cellar.

Price: €3.15m Lucas Fox +376 775 077

Derry Farm, La Route Du Francfief, St Brelade, Jersey

A restored country house with modern bright interiors that retain original features, including marble fireplaces. The gardens include a stream and a swimming pool. Jersey imposes no capital gains, inheritance or corporate taxes, and has a fixed income-tax rate of 20%. 4 bedrooms, 3 bathrooms, 2 receptions, library, 2-bedroom self-contained cottage, 1-bedroom flat.

Price: £7.75m Knight Frank 01534-877977

Shoreview Point, West Bay, Cayman Islands

A renovated home in a gated community, with its own dock on a canal leading out to the ocean. The interiors have marble floors, large picture windows and French doors leading onto the garden and pool. The Cayman Islands has a “tax neutral” status and levies no corporate, income, capital gains or property taxes. 4 bedrooms, 4 bathrooms, reception.

Price: $3.75m Savills 020-7016 3740

Lorne House, Castletown, Isle of Man

A grand Georgian estate, which was originally the official residence of the island’s lieutenant governor. The property has landscaped gardens, orchards and paddocks and a restored walled garden overlooking Castle Rushen, a medieval coastal castle. The Isle of Man operates a low-tax regime with low fixed income-tax rates and no capital gains, inheritance or wealth taxes. 8 bedrooms, 5 bathrooms, 4 receptions, 6.5 acres.

Price: £6.85m The London Broker 020-7193 9969

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Investors had an exciting April and May this year, when America's S&P 500 stock market index rose 19.5%. But June was a quiet month, with the index losing 1%. The third quarter is likely to be similarly quiet as earnings catch up with the market, and the fourth quarter might be too. Market analyst Ed Yardeni is still targeting a year-end level of 8,250, representing a forward multiple of 22 on his forecast of $375 of earnings per share in 2027.

That earnings forecast is well below the consensus, now standing above $400, but leaves room for continued growth thereafter. If the index makes no further progress this year, it will have de-rated to a forward multiple of 20, which would be reasonable even if ten-year US Treasury yields rose to 5% and would leave room for a further market advance in 2027.

Opportunities for investors in US stocks

The end-of-the-world crowd continue to believe the US stock market is overvalued. Dire warnings focus on the supposed bubble in AI-related stocks, including semiconductors. Christopher Watling at Longview Economics points out that food retailers Costco and Walmart trade on prospective multiples of 40, Caterpillar on 35 and GE Aerospace on 47. These multiples certainly look too high. This is definitely an argument for caution from investors and for modest expectations, but there are pockets of opportunity.

Discounts on investment trusts should continue to fall as rising interest in investment meets a net shrinkage of capital. Particularly attractive are the private equity, infrastructure and property sub-sectors, where generous discounts to net asset value and often attractive yields combine with an improving outlook.

The increase in flotations is giving private-equity funds an exit, freeing capital for new deals. Rising construction costs have increased the replacement cost of existing buildings, while rental demand is picking up. Infrastructure funds continue to deliver and even renewable energy is on an uptrend, thanks to asset sales, share buybacks and takeovers.

Among trusts investing in equities, discounts are often low, but those of RIT Capital, Hansa Trust and Pershing Square have scope to fall. The healthcare sector, notably Worldwide Healthcare Trust, is picking up as, at last, may the performance of Finsbury Growth Trust. Nervousness about the technology sector means that the two specialists, Allianz Technology and Polar Capital, trade on near-0% discounts, while the lagging performance of small caps has left attractive discounts in most regions.

Japanese government bonds look good value

The UK government would love people to buy more of the bonds they are issuing in huge volume, but market analyst Charles Gave points instead to the good value of Japanese government bonds, trading on a yield close to 3% for ten years and more than 4% for 30 years. As he argues, a structural growth rate of nominal GDP of 2.4% makes these yields attractive and the devaluation of the yen has made Japan highly competitive. A high national debt is matched by high domestic savings and the hugely successful government policy of investing in equities when the market was much lower.

The cheapness of the yen offers the prospect of currency gain, but for equities there is a risk that a rising yen would slow earnings growth. Japan still looks reasonable value, but a 30% advance in the last year is enough for now. Emerging markets, led by exposure to the Far Eastern technology giants, are up around 50%, which also looks far enough. The UK and Europe are up “only” 20% and appear good value, but are bedevilled by slow growth.

Cautiously bullish on the oil and gas sector

The pause in America's Gulf war has led to the oil price plummeting again, and the oil and gas sector losing a good deal of the first quarter's gain. The war has been far from a triumph for Iran. It is militarily crippled, diplomatically isolated and economically savaged, with its hope for regional hegemony shattered. The closure of the Strait of Hormuz led to the oil price going above $100 a barrel, but not to the $150-$200 that the doomsayers predicted.

As oil and gas increasingly bypass the strait, alternative sources are opened up and the rest of the world follows China in stock-building, future closures of the strait will be even less effective.

This may not be bullish for the prices of oil and gas, but it is bullish for the sector. Governments will want to encourage domestic supply and energy self-sufficiency. This means hands off the sector in terms of taxation, licensing and regulation. Governments will be equally keen to encourage the replacement of fossil fuels with renewable energy, as the Chinese have done. Buying into the recent sector setback looks an attractive option.

The best strategy for the rest of the year is to continue to ignore the bears and use the period of consolidation in markets to invest for the next market advance. That is far easier than chasing it when it again has upward momentum.

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Andy Burnham has taken power with remarkably little scrutiny – no general election, no contest for the leadership of his party, and no form of questioning in Parliament. A few sound bites aside, we have very little idea of what his plans are. Instead, over his first week, he made a series of small announcements, all of them to be financed by some form of creative accounting or financial conjuring trick.

On his first day, for example, Andy Burnham announced a plan to end rough sleeping, at an estimated cost of £340 million over five years. Where is the money to come from? Apparently from some “uncommitted” funds in the housing department – in other words, they found some cash down the back of the sofa.

Then the new PM announced a plan to cut VAT on electricity at an estimated cost of £840 million. This time, the money was found by scrapping the digital ID scheme. The only trouble is that the ID plan was never funded in the first place. In effect, one form of imaginary money was being replaced with another.

Then came a £2 cap on bus fares, reversing the decision taken by his predecessor to raise them. The cost is £500 million and the money to be found by replacing “grants” for international climate projects with “loans”, which might shift it to another part of the balance sheet, but won't make any difference to the amount of money that has to be spent over the next few years.

There is a common thread here. Each of the policies involves some clever-clever financial tricks. With a deft sleight of hand, money is shifted around, redesignated and reallocated. That might seem clever to a politician, but if it were happening at a listed firm, the shares would have crashed and the board would have been charged with fraud.

Financial trickery is the reddest of red flags. It may not matter for now because the sums are tiny. Andy Burnham's policies mean a commitment of slightly more than £1.6 billion of extra spending. Given that the government spends £1.3 trillion a year, that is a drop in the ocean. But it is the thought that counts. Andy Burnham has made it clear that he is happy to play games with the public finances if he thinks he can get away with it.

Andy Burnham's policies are making bond markets suspicious

That matters. There are two big problems. First, Britain's debts are already precarious. The government is set to borrow more than £140 billion a year, and the interest due on all the money we already owe has climbed over £120 billion a year. Yields on ten-year gilts have spiked past 5% and are rising faster than for any other major developed country. The bond markets are already treating the UK with well-justified suspicion.

Next, the government is going to have to borrow vast sums, not just to finance ambitious plans for taking utilities into public ownership or building more council houses, but simply to cover day-to-day spending. With the welfare bill spiralling out of control and with defence spending set to rise, Andy Burnham's policies will need more and more money every year, while a stagnant economy means that tax revenues will flatline at best, and may soon start to fall.

Add the two together and Andy Burnham's government is going to have to borrow £300 billion or more over the rest of its term, as well as persuading the markets to roll over all the existing debt. It was always going to be a tough sell, even with plenty of goodwill from investors. Now the markets have, in effect, been warned not to trust the government's figures.

It could have been more straightforward – finding the £1.6 billion needed by making serious savings elsewhere, for example. The completely pointless National Wealth Fund would have been an easy place to start. Instead, Burnham simply tried to pretend he could magic the money out of nowhere. At some point over the next year, the government may well have to spend some serious money. It might be for the debts of the newly nationalised British Steel, the collapse of several of the water companies, a spike in energy prices, or something else that no one is thinking about right now. Whatever it is, the government will need to tap the bond markets. And yet it has already thrown away the support of the markets by treating investors like idiots. A crash now looks all but certain – and it will be very messy when it happens.

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Three years ago, Chanel chose Manchester over London for its Métiers D'Art fashion show. Soho House opened its doors in November on the site of the former Granada Studios. And for the first time, the Brit Awards ventured beyond the capital for their star-studded ceremony earlier this year. For a city with industry at its heart, Manchester is certainly holding its own in the glamour and style stakes.

As you approach 100 King Street – the address of The Rex, Edwin Lutyens's white Portland stone Art-Deco masterpiece, opposite a Vivienne Westwood boutique – you know you're in for a treat.

The Grade II*-listed building that once housed Midland Bank's Manchester headquarters isn't nicknamed “The King of King Street” for nothing. Once among the city's tallest buildings, it still stands proud and majestic. The Rex is now a five-star luxury hotel and private members' club, formerly known as Hotel Gotham, having opened in April after a refurbishment.

No feature feels accidental, from period details to quirky eclectic touches that nod to the building's history. There is, for example, a ceiling of umbrellas hanging upside down in the foyer, a tongue-in-cheek reference to the Manchester weather. You're greeted on the fifth-floor reception by “Albert”, a life-size cardboard sculpture created by artist James Lake (and now the hotel's mascot). Elsewhere, vintage typewriters adorn a wall in one of the dining areas, having been discovered in the building's bank vaults during the renovation.

We sat down to afternoon tea (£35 per person), while a piano played in the background. The pretty wildflower and butterfly-patterned tea service was a bright and uplifting diversion from the overcast Sunday outside. From a 12-strong Ceylon tea menu, I chose a refreshing yet subtly distinctive white tea called “Silver Tips”, tempted as I was by “Planters' Mistress”, “a scandalous take on a much-cherished aristocratic classic”.

Walking down the hotel's iconic stairwell (which is as popular with bridal photographers as TV and film location scouts), you'll spot the initials “MB” for “Midland Bank” in the original ironwork – a stylish reminder of the building's origins.

As a lifelong Smiths fan, I couldn't help but smile on seeing that my room was called “The Morrissey”. Other rooms were called “The Burgess” and “The Sumner” – all named for iconic Mancunians who shaped the city's cultural scene. These rooms have toiletries by Urban Apothecary, retro-inspired Roberts radios and handmade biscuits, chocolate-covered strawberries and truffles from Slattery, a local, family-run chocolatier.

Deep in the foundations of the building are two rather special event spaces. “Treasury” is a sophisticated area, hidden in the former bank vaults, complete with a stage, a bar and its original tiling. It lends an air of exclusivity and character to any occasion. You can hire the former counting room for a private screening or cabaret performance, party or conference with a twist. The “Strongroom” is the other gem, secreted away behind the bank's original vault doors. The centrepiece of this playfully stylish interior is a dining table that seats 20 people and converts into a full-size snooker table.

Sample gin from the Western Isles

A highlight of my stay was the gin tasting, showcasing the sustainable practices and focus on craft that defines North Uist Distillery, a three-time Scottish Gin Distillery of the Year winner, based in the Outer Hebrides. Sara, our “ambassador”, explained the founders Jonny Ingledew and Kate Macdonald's philosophy as she talked us through their Downpour range of gins.

We sampled the Scottish Dry, featuring wild Hebridean heather that islanders forage and exchange for gin via the team's barter system. We tried the more citrus Coast & Croft, which relies on hand-gathered pepper-dulse seaweed to give it an umami flavour (great in a dirty martini). We also tasted a pink-grapefruit option and a delicious sloe gin, ideal for Christmas, or a negroni – or a drizzly Sunday evening.

Our evening feast still awaited us – a five-course tasting menu at Reign, The Rex's two-AA Rosette fine-dining restaurant (£65 per person, food only). Standout dishes included the Argentinian prawn with white crab and spicy Kewpie (Japanese mayonnaise), served with a delicious La Marimorena albariño wine from Galicia in northwest Spain; and a gorgeous lamb cannon on spinach, with barbecued grapes. Never really “a dessert person”, I was converted by the Fabergé yoghurt mousse, covered in finely sliced kumquat, with a delicate crushed almond crumb and red-berry coulis.

Upon waking up to a brighter morning, I took some fresh air on one of the three heated roof terraces. Each extends out from Reserve, a sixth-floor private members' club, and offers a different vantage point over the city. Ours looked out to the rolling hills of the Peak District.

The Rex is conveniently located, irrespective of your reason for visiting Manchester. Many high-end boutiques and jewellers are on the doorstep, with the high street a few blocks away. If business draws you here, the financial district in Spinningfields is just around the corner. If you want to visit the boutiques of the Northern Quarter, or the trendy coffee shops and bars of Ancoats, or the various cultural must-sees, you can easily take a short walk to get there – 15 minutes or so – and you will arrive at one of the city centre's distinctive neighbourhoods.

Sam was a guest of The Rex. Private club membership starts from £900 a year. Nightly rates start from £179 on a B&B basis, visit rexhotel.co.uk.

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The average asking price of a home with a sea-view has increased by 27% since 2019, outpacing the national average (22%), new data shows.

A sea-view property in the UK now commands an asking price of £298,810 on average, up from £235,635 in 2019, Rightmove says.

The region with the highest growth in asking price among sea-view homes is the south east of England, where the average asking price for these properties is £416,375, up 24% since 2019.

Meanwhile, the regions with the fastest asking price growth for homes with sea-views are the East Midlands and Yorkshire & The Humber, where prices have surged by over 50% in the last seven years.

Colleen Babcock, property expert at Rightmove, said: “A sea-view has long been seen as one of the most desirable features a home can offer, and our latest analysis shows buyers are willing to pay a significant premium for one.”

She added that while the most sought-after coastal locations in the country still command high prices, there is strong growth in more affordable seaside areas, suggesting homes with sea-views are becoming "increasingly valuable across the wider market".

Which regions are seeing the strongest price growth for sea-view homes?

The East Midlands has seen the largest surge in asking prices for homes with sea-views, as prices have risen by 55% since 2019.

The region’s seaside towns include Skegness, Mablethorpe, and Cleethorpes.

The average home that overlooks the ocean in the region commands an average asking price of £352,789 today, up from £228,083 in 2019.

Yorkshire and the Humber is in close second place for strong asking price growth among sea-view properties. The average asking price for a sea-view home in the region has soared by 53% in the last seven years from £160,771 to £245,119.

The region includes popular seaside locations like Scarborough, Whitby, Bridlington and Redcar.

While these regions have seen strong growth, performance is not the same across the country.

Sea-view homes in Scotland have seen their average asking price rise by just 4% since 2019, increasing from £159,938 to £166,068.

Although sea-view homes in the South East command the highest asking prices overall of £416,375, growth has been slower than most regions of the country, increasing by just 16% in the last seven years.

Source: Rightmove, 29 July

The towns where the sea-view premium is highest

The coastal town which has been the biggest beneficiary of surging asking prices for homes with a sea-view is West Mersea in Essex.

Homes in the seaside town command a sea-view premium of £222,294. Average asking prices in the town are £433,185 but surge by 51% to £655,479 when you can see the sea from your window.

The second-highest premium in the country can be found in Frinton-on-Sea, also in Essex, where there is a £130,699 (36%) difference between the average asking price in the town and the average asking price for a home with a sea-view.

The table below shows the top 10 locations with the largest sea-view premiums.

Source: 29 July

Technology giants with an edge in artificial intelligence (AI) have dominated equity market returns in recent years, but enthusiasm is slowing down with chip stocks looking jittery as competition heats up.

There have also been warnings of a potential AI bubble, but as yet, the jury remains out over which companies will emerge the longer-term winners or losers. A recent survey by fund management group Natixis Investment Managers revealed that despite a number of global headwinds – ongoing US-Iran conflict, volatile energy markets and persistent inflation – 91% of the 33 strategists interviewed were optimistic that AI will be a driving force behind market performance in the second half of the year. It also found 88% expect the AI sector to accelerate with just 12% believing its bubble will burst in the second half of the year.

But should investors be seeing that disruption as an opportunity?

How to invest in AI beyond ‘big tech’

There are two distinct strategies the AI wave opens up. One is to aim to capture the growth potential of AI but without limiting yourself to the big names, such as the ‘Magnificent 7’ – Apple (NASDAQ:AAPL), Microsoft, Amazon, Alphabet (NASDAQ:GOOGL), Meta, Nvidia (NASDAQ:NVDA) and Tesla.

BlackRock’s Helen Jewell, international chief investment officer of fundamental equities, believes by looking at the AI story through a wider lens, investors could discover more upside with less of the volatility that comes with high valuations and market concentration.

One route is to look at infrastructure and the power investment needed to facilitate the AI boom and the broader shift towards electrification it has helped accelerate. Jewell said this trend is being “turbocharged” by governments focusing on energy independence.

“These sectors may offer exposure to structural growth trends while potentially providing more diversified return streams, attractive valuations and lower concentration risk than some of the most highly valued areas of the market,” she added.

Where are the next big opportunities in global equities?

In 2025, a handful of sectors led market gains – namely banks, aerospace and defence, and industrials.

All three areas are expected to continue to perform positively, as valuations are increasing. European banks in particular look promising; BlackRock's Jewell said they’ve shown resilient earnings despite interest rates calming down from recent highs.

She added that banks are increasingly adopting AI to modernise their own systems. Better integration across the European banking and capital markets system, alongside consolidation indicates a more profitable sector and, therefore, better likely returns for shareholders.

How to invest in contrast to AI

Another way to play the AI theme is in reverse. Concentration risk presents a problem if too high a share of your overall investments are gathered in one stock, region or sector – hence the ‘don’t have all your eggs in one basket’ analogy.

If there’s a correction in AI, and share prices fall (or the supposed bubble bursts), being exposed to different areas of the market that aren’t correlated will offer investors a degree of ballast to their portfolio.

Jewell cited healthcare as a strong diversification play, though it is also a sector that can benfit from AI. The sector has historically traded at a premium to the market but is now at a 15% discount, with earnings growth that has been second only to technology.

Elsewhere, she likes Latin America, which also has a low correlation to the AI trade. It’s trading at lower valuations than historical average, and while it makes up just 0.8% of the MSCI All Country World Index (ACWI), it accounts for 7% of global GDP.

In the UK, the FTSE 100 index has outperformed global stocks on a total return basis, without any direct AI exposure. Broadly, rising interest rates over the past five years and higher energy prices have boosted banks and oil companies, while defence has also returned to prominence amid the ongoing conflicts around the world.

The broadcasting industry has had an eventful time of it recently, having been "disrupted" by upstart streaming platforms. Just a few years ago, the wars for audiences and dominance between the streamers had triggered a production boom, and people were talking about a “golden era” of “peak TV”.

Yet just five years on, the future for the streaming industry looks a lot less rosy. The predicted imminent demise of traditional broadcasting failed to materialise and streaming shows signs of plateauing.

People are wondering if the wider broadcasting format can survive at all in the face of competition from social media – let alone from the seemingly relentless rise of artificial intelligence. Still, the evidence seems to suggest that, although people may be changing what they watch on the TV screen, “they are not abandoning it”, as Mark Browning, CEO of Zinc Media Group, puts it. The industry may have fallen out of fashion, agrees Matthew Dolgin, a senior equity analyst at Morningstar, but “things should generally get better” for the sector in the future.

Don't write off legacy broadcasting firms

There is no doubt that what is known as the “legacy media” – the traditional terrestrial broadcasting companies in the UK and the networks and cable companies in the US – is under pressure, from both streaming services and social media, especially YouTube and TikTok.

Indeed, the legacy broadcasters have gone through the five stages of grief, says Ben Barringer, head of technology research at Quilter Cheviot. First, they denied that the new formats posed a threat (denial), then blamed other factors such as sales strategies, the macroeconomic environment and regulatory moves for their woes (anger and blame). Then they started their own on-demand services (bargaining) or merged with competitors (depression). But managers proved to be too invested in a dying industry and lacked agility. Now we're at the final stage (acceptance): investors may have to be content with the companies being gradually run down while raking in what remains of the cash flows.

Others aren't quite so ready to write off the legacy broadcasters. The core business of the main TV and cable companies “is producing good content”, says Srinivasan (Srini) KA, co-founder and president of Global Business at Amagi, and although the way in which that is delivered may be changing, the underlying demand for it is not. So, provided broadcast companies are willing to evolve and embrace new methods, they should have a good future. ITV in the UK and NBC in the US have already changed how they distribute their content, says Srini, and have a strong presence on social media.

Such efforts are already having an impact, says Browning. Ofcom's sixth annual Media Nations report suggested that traditional broadcast television viewing fell by 4% in 2024, but the introduction of on-demand content through digital platforms has largely managed to stem the losses. Legacy media (that is, live channels plus broadcaster on-demand services) still accounted for 56% of all measured in-home viewing in 2024, only slightly down from 57% in 2023. The broadcasters that have a future are the ones with the “most developed on-demand platforms and with a highly diversified audience”, he says.

Streaming services know their audiences

Streaming services should also do better than people might expect. They may increase their revenue at a slower rate than the breakneck expansion they have experienced in the last decade, says Dolgin, and “the biggest services have become somewhat saturated in their biggest markets when it comes to subscribers”, but they nevertheless “definitely have room to grow” thanks to opportunities in international markets in Asia, Latin America, Africa or the Middle East.

As well as adding more subscribers, the big streamers can also boost their revenue by simply increasing prices. They have to date managed to do this without losing customers or hurting the bottom line. Advertising is of course another potentially lucrative source of revenue. Netflix has had a lot of success with its advertising-supported service. At the same time, the streamers should be able to raise profits higher than revenue by pushing down costs, by exploiting the scale they have achieved and by “being a little bit more disciplined”.

Streamers have one big advantage when it comes to advertising, says Sonia Baschez, founder of Bend Growth Co, a marketing consultancy for start-ups. They have developed advertising platforms that make it far easier for them to get to know much more precisely just who is watching each show, thus enabling advertisers to precisely target particular demographics in a way that legacy television companies weren't able to do. With the exception of large events such the World Cup or awards ceremonies, which still tend to attract high numbers across the board, Baschez's clients are increasingly spending their budgets with streaming services.

Cinemas are back

The cinema industry may still have some life left in it, too. It has obviously struggled in recent years, not least because the window of exclusivity (between films appearing on cinema and then on TV) has narrowed, as Randeep Somel, deputy fund manager at M&G Investments, points out. You can now get pretty much any film that you want on demand in the comfort of your own home without having to be tied down by the cinema's timings. Making the trek to the local cinema also looks less attractive during a cost-of-living crisis, and the decline of large American shopping centres mean that parents no longer leave their children at the cinema while they do their shopping.

Still, it's undeniable that you cannot get the same experience at home as you can on the big screen, and many cinemas have begun to recognise that they are now basically in the hospitality as much as the show business. The quality of the experience has thus improved, from better seats to cleaner venues. How we view films may have changed, but going to the cinema can still be a very good experience.

Indeed, “as our lives become more entrenched in the digital world, people are starting to crave that human interaction a bit more, and there's still something very magical about the cinema experience that a lot of people still really connect with”, says Matt Celia, co-founder and creative director of Light Sail VR. Cinema chains could draw a lot of inspiration (and comfort) from the growing popularity of music concerts and experiences such as the Las Vegas Sphere. If cinema chains are going to survive and thrive, then there must also be something worth going to see, of course. It's not up to audiences to save cinemas, but to the studios to make films that people want to watch, and it's becoming increasingly obvious that producing superhero films with special effects and big bangs is not going to be enough on its own going forward. Still, there are a lot of people who love cinema, as shown by the box office success of many independent films, and you can still find cinemas that have long queues of people waiting to watch classic films. Cinema has a future if it can get its offering right.

Some of the biggest streaming services are also able to leverage their technology to maximise the appeal of their in-house content, says Baschez. Apple, for example, spent around $300 million to make F1: The Movie, then made large sums selling advertising space on the cars in the film. Similarly, Amazon has used its knowledge of book sales to spot authors who are popular “and then directly approach them to see whether they would be willing to turn their bestsellers into a movie or TV series”.

The rise of AI

The big elephant in the room is the rise of artificial intelligence (AI). Some argue that it is already radically reshaping the film and television industry, especially at the lower end. Producers are already using AI to create all the backgrounds, says Amir Ahmed, operations manager at Sugarland, a London-based film and video equipment rental company. Film shoots that would once have cost a fortune in design, location permits, travel days and much more can now be done faster and cheaper with AI.

The technology has some way to go before it threatens the wider industry, however. M&G's Somel points out that AI in a broad sense has been around a long time. Pixar has been using CGI technology to replace animation in films such as Toy Story for many years already, without really taking away from the role of studios. That probably won't change. As Somel argues, would Sky have been willing to pay such a premium for ITV if it thought that the future was one of AI-generated content?

Evan Bogart, the CEO of Seeker Music, is similarly optimistic about the continued need for content that is professionally created by humans. His experience in the music industry, seen by many as the canary in the coal mine for television and film, says that, although AI can now produce music that is “quite good”, he has “never heard an AI-created track that has genuinely made me cry”. Given that he helped create award-winning hits for artists including Beyoncé, Rihanna and Eminem, he should know what he's talking about. The younger generation are also increasingly anti-AI and are saying that they don't want their music created by a computer. The future is bright.

The music and film industries learned from what happened with Napster and illegal downloads in the 2000s and are quickly working out how to deal with the disruption threatened by AI, says Bogart. This will involve defensive measures, such as “putting a stop to the bad actors and making sure that regulations and guardrails are in place and that artists and producers are protected”.

In the longer run, however, it will also involve striking agreements and partnerships with AI companies so that the technology can be channelled into areas where it can genuinely boost productivity.

Intellectual property will become more, not less, important in an AI-driven world, says Browning, especially if the property in question is in a format that is hard to copy. Brands will become more important, including those of the platform and production company. Companies with “strong and recognisable intellectual property” will be in a particularly strong position “to dictate the future of how AI is used within the entertainment industry”, agrees Beringer.

The death of the TV may have been exaggerated

So it seems that talk that we have passed through the era of “peak TV” into a period of managed decline is premature. “For the last 30 years people have predicted the death of television,” says Pat Murphy, founder and CEO of advertising firm Murphy Cobb & Associates. It would be more accurate to say that what happened is that video has won – it's video that is “everywhere on every screen and in every format”. We may have passed “peak channels”, but “we've not reached peak content and certainly not peak demand”. Indeed, people are consuming more video content today than they ever have before “and that's just going to keep on growing”.

People are in “constant search of community, and when the community building is real, the medium almost doesn't matter”, says Willie Roberson, managing director at FGS Global, which advises some of the world's leading media, entertainment and financial institutions. Broadcast sports, for example, continue to set new TV viewership records. So although the media landscape may be more “fragmented” than it used to be, this means that companies will just have to pursue a multi-channel approach, one which includes television. Overall, the companies that win “won't just have the biggest budgets, but will know how to build and sustain community no matter where it goes”.

The best investments to buy into now

We look at some of the best bets for investors in this sector.

Netflix (Nasdaq: NFLX) is not only one of the big winners in the television industry, or the broader entertainment sector, but is seen as a technology stock, part of the “FAANG” (Facebook, Apple, Amazon, Netflix and Google) phenomenon. Its shares have fallen by around a half over the last year, says Ben Barringer, head of Technology Research at Quilter Cheviot, but Netflix is “now a scaled player with a broad and strong content slate” which bodes well for the future. Netflix is “exploring new markets at the same time – such as sports, gaming and merchandise” – so there should be “further scope for Netflix to expand its subscriber base internationally”. Despite double-digit revenue growth, Netflix still trades at only 19 times projected 2027 earnings.

Disney (NYSE: DIS) has a huge amount of intellectual property, but is not a pure play media company, making around 40% of its money from theme parks and the like. It also owns a large number of channels, including its own streaming service, Disney+. The stock looks undervalued, says Matthew Dolgin, senior equity analyst at Morningstar, given that its parks business “is worth nearly as much as the market is pricing in for the entire company”. Disney's media and entertainment side of the business should also deliver much better growth than many people are expecting. Disney currently trades at 12.8 times expected 2027 earnings.

Dolgin also likes Fox Corporation (Nasdaq: FOXA). Until recently the company has been highly dependent on pay TV and traditional programming, both of which are in structural decline. Its decision to buy streaming service Roku caused the shares to plunge over concerns that it overpaid, but Dolgin thinks that the deal not only gives Fox access to a “great business”, but also diversifies Fox's revenue stream, while giving it a platform for distributing its broadcasting once pay TV is no longer economical. Fox trades at 9.6 times 2027 earnings and on a dividend yield of 1.1%.

Dolgin also likes Fox Corporation (Nasdaq: FOXA). Until recently the company has been highly dependent on pay TV and traditional programming, both of which are in structural decline. Its decision to buy streaming service Roku caused the shares to plunge over concerns that it overpaid, but Dolgin thinks that the deal not only gives Fox access to a “great business”, but also diversifies Fox's revenue stream, while giving it a platform for distributing its broadcasting once pay TV is no longer economical. Fox trades at 9.6 times 2027 earnings and on a dividend yield of 1.1%.

Another conglomerate worth considering is Comcast Corporation (Nasdaq: CMCSA). Comcast provides broadband, but also owns a media and entertainment business, including film studios, theme parks and various television companies, including Sky. Last month it announced plans to split the company into two separate firms: Comcast and NBCUniversal. This is a “logical move”, says Randeep Somel of M&G Investments, which could unlock value for shareholders, as the broadband business “has been seen as a drag on the rest of the company”. Even though Comcast's revenue has continued to grow, the shares trade at a bargain-basement 6.5 times 2027 earnings, and offer a dividend yield of 5.83%.

Film lovers' enthusiasm for spectacular films will be good for IMAX (NYSE: IMAX). It specialises in large, immersive cinema screens, appearing in 1,798 multiplex locations in 91 territories. Revenue has been growing at a strong rate of around 13% a year since 2021, and is expected to keep on growing thanks to the release of films such as Chris Nolan's The Odyssey, which was shot on an IMAX camera. After a rocky few years in the aftermath of the pandemic, IMAX is now profitable and trades at 19.7 times expected 2027 earnings.

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The three income stocks picked below demonstrate the diversity of opportunities in the Aberdeen Equity Income Trust portfolio and the combination of income and capital growth that we look for.

The trust takes a deliberately index-agnostic approach, searching for companies undergoing change that the market under-appreciates. The idea is simple: the most compelling opportunities are often found in overlooked or under-researched areas. This leads to a portfolio that looks very different from other traditional UK equity income strategies.

With no sector constraints and a flexible approach to size, the trust can access a broader universe of income stocks, many offering attractive yields and the prospect of dividend growth. As the businesses gain wider recognition, valuation re-ratings can follow, supporting capital appreciation. With the macro backdrop starting to improve and investor attention moving beyond the FTSE 100, this approach is increasingly relevant.

Three income stocks to consider

We have held Chesnara (LSE: CSN) since 2014, reflecting our long-standing confidence in its business model. It operates as a disciplined acquirer of legacy life insurance assets, completing £440 million of acquisitions over the past five years. As large financial institutions streamline operations and dispose of non-core assets (often at attractive discounts) and private equity focuses elsewhere, Chesnara has carved out a niche by pursuing overlooked deals and refusing to overpay. This disciplined approach has built a strong record of earnings-accretive transactions. At the same time, the steady flow of acquisitions replenishes the book as older policies run off. Scale has increased meaningfully, with assets under administration rising from £8.5 billion to more than £20 billion, alongside expansion into Europe. With more than £100 million of available firepower, management sees further opportunities ahead. Chesnara generates cash through efficient management of existing books and delivers investment returns above the risk-free assumptions embedded in its actuarial models.

GTT (Paris: GTT) is a global leader in containment systems for liquefied natural gas (LNG), a market set for structural growth. Demand for LNG is expected to rise by around 60% between 2025 and 2040 as economies transition away from coal, driving the need for additional tanker capacity. GTT's membrane technology is critical to the safe transport of LNG, and decades of research and development have secured it a dominant market position. Barriers to entry are high, with shipowners and insurers reluctant to risk unproven suppliers, thus supporting pricing power and consistently high margins. Core growth should benefit from increasingly global LNG flows and a replacement cycle for an ageing tanker fleet. GTT is also building a digital services platform, with technology already installed on more than 15,000 vessels. This creates a valuable opportunity to cross-sell software and consulting services – an area that remains under-monetised, but offers high returns. A new CEO may accelerate this focus, while robust cash generation underpins both dividends and reinvestment.

The sharp correction in software stocks in early 2026 created an opening for investors hunting for income. UK IT reseller Softcat (LSE: SCT) plays a key role in connecting businesses with complex IT, partnering with more than 200 global technology providers. It has delivered consistent organic growth, expanding market share and securing a highly loyal customer base – 95% of revenues come from repeat business. The rapid adoption of AI is driving demand for processing power, storage, networking and security infrastructure – areas where Softcat is well positioned. This structural tailwind is expected to support continued earnings growth for the business, resulting in rising dividends.

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Ten years ago, the directors of JPMorgan Global Growth & Income (LSE: JGGI) – then called the JPMorgan Overseas Investment Trust – adopted a new strategy to address the fund's persistent discount to net asset value (NAV). The trust would invest globally without regard to income but pay an annual dividend of at least 4% of net assets. The idea was to give investors an attractive income via an approach that wasn't held back by the hunt for yield.

The renamed fund was an instant success. Performance improved, and the discount to NAV disappeared. The trust grew – by absorbing two other trusts in 2021 and 2025 and by issuing new shares for cash – and achieved greater economies of scale. Today, JPMorgan Global Growth & Income has £3.4 billion of assets – up from £200 million a decade ago – and operating costs of just 0.42%.

JPMorgan Global Growth & Income's spell of weak returns

However, the shares returned to a discount amid the wider market setback for investment trusts in 2022 and the directors had to start buying back shares again. The discount shrank, but in August 2024, performance began to flag. A NAV return of 16.7% over one year and 50.9% over three lags the benchmark (the MSCI AC World index) by 11% and 13.4% respectively. However, manager James Cook points out that it is still nearly 2% per year (net of fees) ahead since the change of strategy.

“We have seen many similar drawdowns over the last 30 years for our style,” he says. “On average, they last a year and cost performance 9%.” The latest one has lasted longer and cost more, which reflects market trends. “It has been a market strongly based on momentum rather than on the long-term valuations and earnings growth, but a return to normal will be very good for fundamental investors, as it has been after previous such phases.”

Cook and his team look for firms with high-quality earnings that are growing 2% faster than average but valued similarly to the market based on free cash flow. “Less than 3% out of 2,500 stocks in the investment universe offer all three.”

Manager James Cook backs AI winners

Cook has been reducing exposure to “low growth cyclicals” and buying AI-related semiconductor stocks such as Nvidia, which is 6.3% of the portfolio. “It is back at a trough-level multiple, yet the AI market keeps accelerating, and its newest Rubin chip is five times more powerful than the Blackwell chip.”

AI “is bigger than the internet in 2000, with long duration growth. Semi-conductor manufacturers are booked out for years.” Hence TSMC is also in the top five holdings. “It is really attractive on valuation while producing over 90% of the world's leading-edge chips.”

Overall, the technology sector makes up 25% of the portfolio (excluding Alphabet and Amazon, which are classified elsewhere). Cook has also been buying payments network Mastercard – “widely regarded as an AI loser but the fraud detection and identity verification services it provides are increasingly important”.

Insurer Tokyo Marine was added for its “strong earnings growth” shortly before Berkshire Hathaway acquired a stake and pushed the share price up 30%. Vesta, a provider of assisted living in the US, is “the beneficiary of demographic change in a market with a structural supply shortage”. Oil major Shell has been bought on “a really attractive valuation”.

Few of these are high-yielding. Sizeable positions in Alphabet, Amazon, Apple, Microsoft, Nvidia and TSMC would be impossible if the 4% yield were paid solely from income, showing the flexibility of this strategy. Most of JPMorgan's other trusts and some other firms have followed JPMorgan Global Growth & Income's lead in paying an enhanced dividend out of capital, reducing its competitive advantage. But for yield-hungry investors unwilling to sacrifice capital returns for extra income, it is attractive, while Cook's case for the period of dull returns being near the end is compelling.

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The market in Old Masters paintings has been given a new lease of life. In the first half of this year, Christie's made $183 million from the sale of paintings created before 1850 – a 232% year-on-year increase after a long period of declining sales.

That's partly thanks to a new, younger cohort of collectors. Of the new clients of Christie's attending all sales in the first six months of 2026, the auction house described 47% as “millennial/Gen Z”, up from 45% a year earlier. At rivals Phillips, “nearly one-third” of new buyers were “millennial and Gen Z collectors”.

Earlier this month, Old Master artworks sold for a combined £51.3 million at Sotheby's in London, including £8 million for a rare, early Rembrandt. The “results represent a resounding endorsement of the power of Old Masters to captivate collectors across generations”, said Elisabeth Lobkowicz, head of Old Masters at Sotheby's.

Until recently, Old Masters paintings had been a “backwater for scholarly private collectors and institutions seeking to fill gaps”, says Emma Crichton-Miller in the Financial Times. Most of the “best pictures by all the best artists” had already been snapped up by museums and the market entered a lull due to the dearth of exciting, big-name artworks. Younger buyers are helping to solve that problem, because they are, as Crichton-Miller puts it, “untrammelled by tradition”. They are often seeking works by lesser-known or overlooked Old Masters, such as the 17th-century female painter Artemisia Gentileschi.

Why are Old Masters so popular?

Another attraction is that many of these artworks are relatively more affordable compared with modern and contemporary art. “For $250,000, you can buy a painting that could hang in the Louvre, but $10 million gets you a bad Picasso,” Patrick Williams, a gallerist in New York, tells The Economist. “Portraits and figurative art [in particular] are in vogue, because they are Instagrammable,” notes the paper. “People spend so much time looking at pictures of other people on social media that they are primed to connect to painted ones.” These younger buyers are attracted to the authenticity and simplicity of a bygone age – notwithstanding the “revolutions, plagues and awful dentistry”.

As for desired themes, religious and, as the FT puts it, examples of “Dutch Protestant domesticity” are out; the weird and wonderful are in – “‘difficult subjects' such as beheadings or martyrdoms,” for instance. On 30 June, a 17th-century Dutch painting by an unknown artist of two skulls sold for £431,000 with Christie's in London – 440% more than the low pre-sale estimate. Many wealthy younger collectors made their money in the ever-changing world of technology, and they have shown a propensity to mix and match eras and styles. As art advisor Evan Beard tells Margaret Carrigan on Artnet, “I can see the skull painting very at home in a collection with some [modern skull paintings by Gerhard Richter]”.

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This interview is an excerpt from Andrew’s recent filmed MoneyWeek Talks podcast episode with Jeremy, available on all podcast platforms and YouTube.

Jeremy Grantham, originally from Yorkshire, is the co-founder and long-term investment strategist of asset management group GMO, based in Boston. Jeremy’s reputation is based on his long-standing ability to spot bubbles. He called the Japanese bubble in the late 1980s, and rightly refused to rush into the tech bubble in the late 1990s, a strategy that earned him notoriety as a permabear. But he also turned bullish in March 2009, just as the market bottomed after the crisis.

These episodes, and a great deal else, are chronicled in his memoir, The Making of a PermaBear: The Perils of Long-Term Investing in a Short-Term World, published earlier this year.

Andrew Van Sickle: Jeremy, we learn in your book that you weren't always a patient value investor. I enjoyed the section about the late 1960s. You say you became a “gunslinging nitwit” in an expensive market, but you came a cropper with a couple of stocks. Will you tell us a bit about that episode and how it became a formative moment?

Jeremy Grantham: Just after I got my first job in the investment business, I came up to Boston and joined this lunch club of gunslinging kids, fresh out of business school. Every time we met, someone would have a hot story. And typically these stocks would go up and come down very quickly. One was American Raceways, a motor-sports group that had Stirling Moss on the board. It was going to introduce Formula One to the US. I thought it would work. It seemed desperately American: power, noise, blood and death.

American Raceways bought one track in the middle of the country and everyone showed up. Expecting the races to catch on nationwide, I bought 300 shares at $7. I went to England and Germany for three weeks to get married; we came back and the stock was at $21. So I like to say that I did what any good value manager would do. I sold everything else I had and tripled up. I had 900 shares, a lot of them on borrowed money, at $21. And fate always teases you and wants to get you fully committed to a bull market, so the price was $100 by Christmas. All I had to do was sell and run. While my wife and were deciding whether to make a higher bid on a house we had our eye on, the market started to break and pretty soon American Raceways was slumping. And I scrambled out and got into another company equally far ahead of its time (Formula One is now doing well in the US).

This company was going to put a monitor on everyone's desk, which back then was hugely high-tech. And on this little screen they were going to have the option price of individual stocks. But the idea, a forerunner of Bloomberg terminals and the internet, didn't catch on at that stage, and the company never took off. It went belly up and I was lucky to scramble out with enough money to pay the banks back. From then on I thought I'd better revert to my Yorkshire instincts and be a cheapskate and a value manager.

Andrew Van Sickle: Having had your fingers quite badly burnt, you decided to take a very thorough look at stock market history and how human nature always ended up in these situations. And you constructed by hand, as part of your research, the first index for small-cap stocks?

Jeremy Grantham: Yes. We had to go back into the archives and put together an index going back to 1925. And what we saw were long periods of small-cap domination and long periods of large-cap domination. They ebbed and flowed in these multi-year cycles. And the interesting thing to me was that we were in a big “nifty-fifty” blue-chip cycle and small stocks' valuations had become extremely depressed relative to the rest of the market. And so we put 100% of our money into small caps, which was so original as to be totally unique back in the day. Institutions didn't dabble in small caps back then. They were beneath contempt.

And so we had a very strange portfolio that was difficult to sell. There were 99 rivals selling Coca Cola and there was one of us selling companies that no one had ever heard of. So it was at least entertaining. It amused the clients rather than anything else.

Andrew Van Sickle: So the idea was to seek out investments that people had overlooked, and you clearly enjoyed the number crunching – later your asset management group was one of the first to use a computer to keep doing so, wasn't it?

Jeremy Grantham: Yes, it was painfully expensive, filled the whole room and created a lot of heat. But it did give us a little advantage for a year or two. And what we found, by the way, was that the numbers we'd hand-crunched were pretty accurate. And what was nice about hand-crunching numbers was that no one else did it. Whereas once we got a computer, everybody else did. Pretty soon, a computer was simply a cost of doing business.

And no one made a killing by having one, you just had to have it and pay for it, whether you liked it or not. This is, incidentally, getting ahead of myself, very analogous to AI. In five or ten years AI will be a cost of doing business. But it won't be a way you get ahead. It will be a case of falling irretrievably behind rivals if you don't use it. New technologies confer an advantage on the early adopters. And when it's clear that they have an edge, everyone copies them and it goes away. But we'll come to AI later.

Andrew Van Sickle: The notion of an early lead being eroded brings us to the issue of mean reversion, one of the principal themes to emerge from your research. What goes up must come down. This applies to corporate profits, which get competed away. Similarly, asset markets get euphoric, human nature being what it is; we overdo things on the way up and on the way down.

Bubbles blow up and burst, but one can never really tell when things will revert to the mean. What did it feel like in late Japan and late 1990s America, knowing that you were right to be bearish – because mean reversion is something unavoidable – but standing practically alone for years on end?

Jeremy Grantham: Well, it gave you lots of time to do more research, particularly in 1998 and 1999. We didn't start to lighten up on US stocks until the end of 1997, when the trailing price/earnings (p/e) ratio reached 21, the same as at the peak in 1929. So it was an emotional point to reach. By the end of 1998, we were as light as we could get. And the p/e went all the way up to 35 by the peak. Japan was even worse, of course: the mother and father of all bubbles. The p/e had never eclipsed 25, and in 1989 it soared to 65.

Of course 35 wasn't 65, thank heavens, or we would definitely have gone out of business. But conveniently at 35 the market beat a magnificent retreat and we were positioned for it, having doubled and redoubled our ante until there was nothing left to do, and we actually made good money.

To give you an example of how much of a bargain value stocks were around the market peak, consider real estate investment trusts (REITs). Properties were selling at a discount to replacement cost, and Reits were yielding 9.1%. The overall S&P 500 yielded just 1.5%, a record low. When the overall market slumped, Reits jumped by 30% amid a flight to safety and value.

Andrew Van Sickle: For your business it sounds like a race against time, with clients no doubt increasingly frustrated that you were sitting out the big technology-led gains of 1998 and 1999. They would have had the same perspective as Chuck Prince, CEO of Citigroup, in the credit bubble in 2007: “[As] long as the music is playing, you've got to get up and dance.” Do you think that if the bubble had burst a year later, you would have gone bust?

Jeremy Grantham: Yes, I think so. Incidentally, coming back to Mr Prince, George Soros' take was that “Actually, the music had stopped, he just hadn't noticed,” which was typically cruel.

Andrew Van Sickle: Did lots of people you spoke to at the time think it was a bubble, too, but just didn't want to say so publicly?

Jeremy Grantham: That's exactly right. We were a purely institutional firm dealing with lots of big pension funds. The hired guns in the pension funds usually had a lively understanding of how risky the market was. But their committees – made up of private equity and VC investors, and all manner of people who'd made lots of money and were very, very confident – insisted on going with the flow, and that anyone who didn't was stuck in the past and should be fired.

The upshot is that the uncertainty surrounding the timing of bubbles is greater than the typical client's patience. And that is all you need to know about institutional investing. Most of the engine-room players saw the bubble. It's just that the marketing people and the bosses realised that scepticism was not a good business strategy.

If you are a big firm, you simply mustn't bet on the bursting of a bubble. You have to go with everybody else, you have to be willing to run off the cliff, and you have to be willing to be professional and slick and quick, saving some money on the way down and redeploying it. If you do that, you will thrive. If you try to fight the bubble, well, you may get lucky, you may win one. We, in a sense, won the great financial crash. We explained it in quarterly letters. We prepared for it and we got out in a timely fashion and everything worked well. But if you get it wrong, watch out.

Keynes, just about my solitary hero in the economics business, said the key to investment life is never be wrong on your own. So you can be wrong in company and you don't lose your job. Even being right on your own, he said, was dangerous in that they would pat you on the head if you won, but then describe you as an eccentric when you'd left the room. That's not a great reputation to have. And he said that if you're wrong on the downside, if the market doesn't break and you were positioned for a bear market, “you will not receive much mercy”.

Andrew Van Sickle: Turning to the bubble of the moment, what is your take on AI and the market's view of it?

Jeremy Grantham: In 100 years they'll be writing about this point in stock market history as they write about the South Sea bubble. It is simply magnificent. The SpaceX prospectus was of the order of the famous South Sea bubble equivalent: “An undertaking of such profound importance but cannot at this time be revealed.” Just give us your money.

Andrew Van Sickle: I was horrified to read that Isaac Newton went for the South Sea bubble. He should really have known that what goes up comes down.

Jeremy Grantham: He said something along the lines of: “I know a lot about the movements of heavenly bodies but nothing about human nature.” The SpaceX prospectus is unbelievable – mining asteroids and colonies on Mars and moving through space and a projection of revenue streams, 90% of which seem to relate to AI. And it's not clear, of course, that SpaceX's version of AI, which is at the moment having its bottom kicked around the block by Anthropic and the rest of the boys, is going to be around in the long term. Talk about tulips.

Andrew Van Sickle: You've said that you think excitement over the advent of AI essentially stopped the bubble of late 2021 deflating fully.

Jeremy Grantham: Yes, December 2021 met all the conditions of a bubble, we thought, and there was a slump in 2022. But for the first time in history, halfway through a bubble breaking, you come out with an idea that is so colossal and accompanied by so much capital expenditure that you change the game.

On that infamous day in late 2022, ChatGPT appeared and someone rang the bell and said: “All change.” And the rest of the market didn't believe it for ten months, drifting down a bit. But by then the Magnificent Seven had doubled, and it dragged the rest of the market up.

I used ChatGPT, telling it to please summarise War and Peace in ten points, and then do it in German. And that was enough to make me realise that this was going to be impressive. It's clearly better than anything else other than the railroads.

People don't realise that the more obvious and important the idea, the more likely you are to attract too much capital and have a capital bust and a market bust. The railroads transformed our lives, they added enormous productivity, and yet they were so obviously going to do that, that everyone built too many railroads, and everybody lost their money. And that will happen in AI.

At present there are seven companies plus another 15 snapping at their heels. All are aiming at the same market, AI. The one that gets there first, they believe, has a licence to make more money than you could shake a stick at. More than anyone has ever made on anything. And they are all saying the main risk is not spending enough. We will spend our vast cash flows, they are saying.

They're going to fight until someone survives. This could be the most vicious fight to the end that we have ever seen, starting now. In that sort of fight, they do not make lots of money and the stocks get crushed. And then they emerge out of the wreckage. Like the internet. Amazon declined 92% in the tech slump. And yet it then rose and inherited the Earth. The railroads rose from the ashes. And this will rise from the ashes.

Andrew Van Sickle: While investors take bets on who might survive, where are you finding value outside the US?

Jeremy Grantham: That was an easier question to answer at the beginning of last year. At that stage, valuations looked unremarkable and therefore priced to make a decent return. Since then, the S&P has gone up another 23% but that is nothing like the rest of the world, led by emerging markets. Emerging markets are up 60%. And value in Europe is up 45%. And these are very big gains over the S&P. The rest of the world now begins to look a tad overpriced, while the US has moved into “read all about it in 100 years” territory.

Andrew Van Sickle: We get the impression that Japan is certainly no longer cheap, although it's probably reasonable.

Jeremy Grantham: Yes, reasonable, and it's done very well. And again, it has handsomely beaten the S&P since the start of last year. The main thing that impresses a lot of people, however, is that even though the S&P may have been at the back of the pack in the last 18 months, it still went up handsomely, and so it's created the impression that, therefore, it defies the pull of gravity.

And this feeling that it will go on forever is, of course, absolutely classic. That's exactly how people wrote and thought in 1929 and how they wrote and thought in 2000. This time is not different.

Of course, people hate you if you say this. They are so involved in making money they loathe the notion that the whole thing is a mass delusion. Perhaps they hated me more in 2000, but it's getting close. In the comment section of a recent podcast, three people said that my ears were big. And of course they are big. It's just that people don't usually say so after the age of seven or eight.

Andrew Van Sickle: I don't suppose the boy pointing out the emperor was naked was very popular either.

Jeremy Grantham: I don't know. The episode wasn't recorded.

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Lionel Messi may have failed to win a second World Cup, but his legend seems destined to endure. He'll go down as a global star in the tradition of Pelé, Maradona and Ronaldo, but also as an Argentinian national icon. He's also done very well financially from the sport.

Argentina's football fan culture is especially famous for its “creative chants that evolve from one tournament to the next”, the Spanish magazine Hola informed its readers halfway through the World Cup. This year's La Cuarta Estrella (The Fourth Star) included the rousing line Por Malvinas, por el Diego, por la última de Leo – referencing the Falklands, the country's footballing patron saint Maradona, and Lionel Messi's last World Cup. The anthem gained “global traction” when the team was filmed “passionately singing it in the dressing room during their tournament run”, says the Buenos Aires Herald.

When Messi was 13, his father signed a contract with FC Barcelona on a napkin, says the Financial Times. It covered the family's move from Rosario in Argentina to Spain. The Messis, who were joining the diaspora fleeing Argentina's long economic decline, “wept in the taxi to the airport”.

Lionel Messi, now 39, has never lived in his country since: after 20 years in Barcelona, he now plays for Inter Miami. “Yet this émigré has become the face of Argentina.” It may be because, like many émigrés, “he identifies with the place he left”. Spain wooed him to play for youth teams, but “the kid with the flowerpot haircut” only wanted to play for Argentina. He was raised in Spain by Argentinians – eventually marrying a girl he knew from childhood.

Always something of an outsider, Messi is “a taciturn introvert” who lacks the “wild poetry” that Maradona had off the field, but has nonetheless gained an emotional hold on his homeland. “Crucially for his legend, he has learnt to express emotion” – often crying on the field out of joy or disappointment.

The key point, though, is that “his brilliance was unmissable”. He was what Argentines call a “pibe” – a natural dribbler whose “preternatural anticipation and short steps allowed him to change direction faster than opponents”. Messi sees everything. “He spends almost the entire game walking and scanning. When he breaks into a run, his teammates know he has seen an opening. They play to serve him.”

What is Lionel Messi's net worth?

Over the years, the hero worship has translated into big profits, says Forbes. Now a billionaire, Messi is one of just four athletes to have joined “the three-comma club” while still active in their sport. Much of Messi's estimated $1.1 billion net worth stems from “cash accumulation and appreciation” of earnings throughout his career – in his last years with Barcelona, he had a four-year contract worth $675 million. He earned “a massive salary” at Paris Saint-Germain (PSG) and now reportedly pulls in an estimated $70 million-$80 million annually with Inter Miami – “plus an option to acquire an equity stake” in the club when he retires.

Off the pitch, Lionel Messi has made more than $600 million from corporate sponsorships. His most notable deal is a lifetime contract with Adidas (signed in 2017), along with longstanding partnerships with brands such as Mastercard, Michelob Ultra and Lay's.

A measure of Messi's legend is the prices commanded by his memorabilia. In 2023, a set of six shirts he wore during Argentina's winning World Cup run in 2022 fetched $7.8 million at a Sotheby's auction – making them “the second most valuable football jerseys ever auctioned”.

Things haven't always gone smoothly for Messi, says Sky Sports. In 2016, he was found guilty, along with his father Jorge, of defrauding the Spanish government of €4.2 million between 2007 and 2009 over income earned from image rights. But resilience and patience are his watchwords, noted The Profile in 2021. For Messi, who has been playing football every single day since he was five years old, “the overnight success story” is a myth. “I start early and I stay late, day after day, year after year,” he once observed. “It took me 17 years and 114 days to be an overnight success.”

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Two oil stocks are among the cheapest equities on the London market today. Harbour Energy (LSE: HBR) and Serica Energy (LSE: SQZ) are trading at price-to-earnings (p/e) ratios of 5.3 and 2.7, respectively, for 2026 based on figures compiled by Peel Hunt. On a cash flow basis, the companies look even cheaper. The shares are trading at free cash flow yields of 35% and 29.9%, respectively, and a large chunk of this cash is flowing right back to investors. Harbour is trading with a forward dividend yield of 9.9%, rising to 15.4% next year, and Serica is expected to yield 7% for 2026 and 2027 at the current share price, according to Peel Hunt.

It's clear why investors are steering clear of these businesses. Both are UK-focused oil and gas companies, and they're highly exposed to the country's unhinged energy and tax policies. But in the words of billionaire distressed-debt investor Howard Marks, there are no bad assets, only bad prices, and at current prices, the market is valuing these oil stocks at such a deep discount that it's going to be hard for the market to continue to ignore them.

Investors should buy these oil stocks together

I view Harbour and Serica as a deeply discounted pair that should be acquired together rather than individually. While both are cheap (Serica is half the price of Harbour), buying the two helps spread management execution risk. Harbour Energy is the largest London-listed independent oil and gas company. It used to be entirely UK-focused, but after a series of deals it now has a global presence, with assets in the UK, Norway, Germany, North Africa and the Americas. It also holds a 15% stake in Southern Energy SA, Argentina's first large-scale floating liquefied natural gas (FLNG) export project.

The group started the year with production of 506,000 barrels of oil equivalent per day (boepd) in the first quarter, thanks to higher output from the recently acquired US LLOG assets in the Gulf of Mexico. Its Norwegian assets also helped boost output and, combined with new wells, management is now looking for between 480,000 and 500,000 boepd for the rest of the year, with average operating costs of $14.5 per boe.

Based on these costs, the company is modelling free cash flow generation of $1.4 billion for 2026, up from $600 million at the beginning of the year, assuming an average oil price of $80 and $13 for gas. These numbers don't look too outrageous for the rest of the year. While the Brent benchmark trended down to the low $70s per barrel at the beginning of July, when it looked as if the US and Iran would sign a lasting peace agreement and the Strait of Hormuz would reopen, the recommencement of hostilities has sent oil back up to $88 at the time of writing.

Analysts at Canaccord Genuity have modelled Brent averaging $83 in 2026 and $75 in 2027 before falling to $70 in 2028. Based on these estimates, they have Harbour generating free cash flow of $1.9 billion in 2026, $0.7 billion in 2027 and $1.1 billion in 2028. Analysts at Zeus are a bit more cautious, forecasting a Brent price of $75 for the rest of the year.

Even on this lower target, based on Harbour's goal to pay out 45% to 75% of free cash flow to shareholders every year, the analysts believe the company will return in the region of $500 million to shareholders at the low end of this target, giving a dividend yield of 6.9%. Canaccord has pencilled in a yield of 8.3%, and Peel Hunt's is the most optimistic at 9.9%. The yield will probably land somewhere in the middle, but whichever way you look at it, it's clear Harbour is cheap and throwing off cash.

Serica's valuation is a bargain

Serica's production profile is predominantly UK-based, and the company is listed on the Aim market, which goes some way to explaining its bargain-basement valuation. The first point it can't do much about, but on the second point, Serica is working to remove some of the uncertainty by moving to the main market in the third quarter of 2026.

Despite its UK focus, Serica's management believes the company can maintain production at over 50,000 boed into the 2030s (it aims to exit 2026 with production in the 65,000 boed range) based on its existing portfolio with well-executed capital spending.

Capital spending is expected to rise through to the end of the decade, which will crimp free cash flow. Still, management has outlined plans to pay out 30% of cash flow from operations over the coming years, which, Berenberg estimates, delivers a dividend yield of 11% in 2027 and then averages 7% through to 2030 based on an average oil price of $75.

Unlike Harbour, which has accumulated a large pile of debt following a series of mergers and acquisitions, Serica is expected to move from a net debt position of –$203 million in 2025 to +$91 million in 2026 and +$192 million by 2027. This, analysts at Berenberg believe, will allow management to begin considering bolt-on acquisitions of increasing size. Last year, it completed mergers with Prax, One Dyas and Spirit Energy, which added production from 25 fields in the North Sea.

As other companies have decided to flee the UK-owned section of the North Sea, Serica has been able to step in as a buyer of last resort. These deals were done at between $2 and $4 per barrel of reserves. By comparison, Harbour paid around $12 for the US LLOG assets at the end of last year. When it comes to further deals, Serica is following Harbour's lead and looking for deals outside of the UK. In conversations with analysts, Serica has highlighted Southeast Asia as a region of potential interest.

As the company moves forward with these growth plans, it may only be a matter of time before the market catches on and re-rates the stock.

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What is a land value tax?

A land value tax is an annual levy paid on the value of the land upon which a property – or no property – sits, rather than a tax on the property itself. The basic idea is that land gets its value from location, rather than the calibre of the development that sits on it. And what gives a location value is what is going on around it. Is it close to the centre of a city? Is it in an area with great transport links, good schools, beautiful parks, hospitals and so on? Generations of taxpayers paid for all that civic infrastructure and a land value tax is a fair and efficient way of taxing what economists have called the “unearned betterment” part of the value of a property – that is, the rise in value that has nothing to do with the owner's efforts and everything to do with the state and community.

Is a land value tax a new idea?

Not at all. Land value taxes have their roots in the ancient principle that people enclosing common land for agricultural use had a duty to share some of the resulting crops. In Anglo-Saxon England, the unit of land measurement called the hide (around 120 acres) was used to assess people's liabilities and obligations for such things as the maintenance and repair of bridges, fortifications and manpower for the army. A thousand years later, in The Wealth of Nations (Book V, chapter 2), Adam Smith argued in favour of a land tax on the grounds that it would fall on the owner of the land and not harm other economic activity. “Nothing could be more reasonable,” he concluded. David Ricardo, too, was a strong advocate. More recently, the most famous proponent of a land value tax was the late 19th-century US journalist and free-trade campaigner Henry George. Winston Churchill was a big fan, too.

Why is a land value tax so popular?

It's one of those interesting ideas (such as universal basic income or congestion pricing) that attracts support from a strikingly broad range of voices. Left-wingers are attracted to land value taxes because they capture unearned rents and reduce inequality from land ownership. Free-market liberals are keen because land value taxes are seen as highly efficient and tax a fixed resource without discouraging work or investment. The key point in favour is that such a tax “allows us to raise more money from the unproductive rich without disincentivising the productive rich”, says David Goodhart on Substack. Andy Burnham, during his first bid for the Labour leadership in 2010, backed the policy as “aspirational socialism”. Milton Friedman – guru of the “neoliberalism” so disdained by the new PM – also supported it as the “least bad tax”.

Why did Milton Friedman call it the 'least bad tax'?

Because if states must tax – and they must – then it's best that they do as little damage as possible to incentives that promote growth and enterprise. Income taxes disincentivise employment. Taxes on profits make businesses invest and trade less. But the supply of land is fixed: no tax increase will result in there being less of it. And “even the most tax-shy landlords cannot take their acres offshore or dodge the tax with legal jiggery-pokery”, says Edward Lucas in The Times. Moreover, a land value tax “stimulates growth by penalising inactivity. Landlords pay the tax anyway, so they had better make use of their land, or sell it, dropping the price if necessary” – and selling to more productive owners. Land value tax, in other words, helps tackle “grey belt” decay and discourages land hoarding and speculation, smoothing out booms and busts.

How high should the land value tax be?

Another proponent is Dan Neidle, the City lawyer turned tax reform campaigner. He supports scrapping stamp duty (which harms growth and labour flexibility by discouraging people from moving house); council tax (out of date, unfair and under-taxes the very rich); and business rates (arbitrary, stifle growth and stoke perverse incentives). To replace the £100 billion these three dreadfully designed property taxes bring in, Neidle's Tax Policy Associates think tank proposes a land value tax set at around 1.3%. Other groups have proposed models at between 0.48% and 1%. Stamp duty and council tax between them account for roughly £57 billion. At the 1.3% rate, at least 63% of people would be better off immediately (compared with council-tax payments), and in the long run the boost to the economy would make it a win-win for all.

What would a land value tax mean for homeowners?

In the short run, millions of homeowners in southern England would be looking at gigantic new annual tax bills. And that's not the only reason why land value taxes are a tough sell, politically. Initial implementation is tough, since the scope for disputes and legal challenges against a levy on a hypothetical value is clear. And opponents worry the tax would be unfair on asset-rich but low-income homeowners, especially the elderly. Without some kind of lengthy phasing in, a land value tax would constitute a one-off windfall tax on the current generation of land owners, since once they are introduced, land values would fall to reflect future tax liabilities. And letting cash-poor pensioners pay the land value tax from their estates risks turning it into a disguised inheritance tax.

Will Britain get a land value tax?

This week Andy Burnham appeared to back away from a far milder form of tax reform that he espoused as recently as last week – a big rise in the personal allowance to take more low earners out of income tax. So it's highly unlikely he would have the political capital – or mandate – to push through such a radical move this side of a general election. But it may be an idea whose time has come. An early attempt at a land value tax in Britain – under Lloyd George's Liberals – collapsed under the weight of the administrative burden involved and trenchant opposition from landowners. But today's technologies mean the task is not insurmountable, given the political will. Versions of a land value tax have been introduced in jurisdictions including Australia, Canada, Denmark, Estonia, Singapore and Taiwan. “Burnham has been right about this for 16 years,” says Neidle in The Sunday Times. “The question is whether he's willing to be right today.”

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Barton Olivers, Burton Bradstock, Bridport, Dorset

A Victorian villa with uninterrupted views over the sea and a garden with a gate opening onto the coastal path. It has open fireplaces and a kitchen with French doors leading onto a terrace. 5 bedrooms, 5 bathrooms, 2 receptions, indoor swimming pool, 2.96 acres.

Price: £3m Knight Frank 01935-810064

Harbour Island, Crinan, Lochgilphead, Argyll & Bute

A renovated, contemporary house and cabin on a private island off the coast of Lochgilphead. It has floor-to-ceiling windows, an open-plan dining kitchen and a raised deck. 3 bedrooms, 3 bathrooms, office, 2 receptions, conservatory, 9.7 acres.

Price: £1.25m+ Savills 0141-222 5875

Mount Severn, Freshwater East, Pembrokeshire

A modernist house situated in the woods above Freshwater East Beach. It has floor-to-ceiling windows, wood-burning stoves, an open-plan dining kitchen and living area with bi-fold doors leading onto a terrace and a two-bedroomroom apartment. 4 bedrooms, 4 bathrooms, receptiontion, office, garden room, studio, heated swimming pool.

Price: £1.5m Country Living Group 01437-616101

Rosebank, Dartmouth, Devon

A renovated house in a commanding position on the banks of the River Dart. It comes with its own boat house. The house has vaulted, beamed ceilings, arched sash windows, wood floors, period fireplace and a sun room with far-reaching views over the Dart Estuary. The gardens include a terrace and a decked area. 3 bedrooms, 2 bathrooms, dining kitchen/living area, sun room, porch, balcony, boat house, terraces, gardens.

Price: £1.75m Savills 01548-800462

Malindi, Eastcliff, Cornwall

An energy-efficient house surrounded by gardens that include steps leading down to Porthtowan Beach. It has floor-to-ceiling windows, bi-fold doors, polished concrete floors and an open-plan kitchen. 2 bedrooms, bathroom, dressing room.

Price: £1.55m The Modern House 020-3795 5920

Aline Estate, Isle of Lewis, Outer Hebrides

An 18th-century lodge on a sporting estate overlooking Loch Seaforth and the Isle of Skye. It comes with its own island, fishing rights and red-deer stalking. 6 bedrooms, 5 bathrooms, 2 receptions, study, staff bedroom, kitchen, sunroom, 3 cottages, cottage occupied by the estate gamekeeper, outbuildings, boathouse and slipway, industrial pier, woodland, 8,202 acres.

Price: £4m+ Strutt & Parker 0131-226 2500

King Street, Aldeburgh, Suffolk

A renovated, four-storey townhouse situated on the seafront overlooking the beach. It has exposed brickwork, arched windows, period fireplaces, modern wood-burning stoves, a plywood staircase, bespoke kitchen and a balcony on the top floor that commands wide-ranging views over the North Sea. 2 bedrooms, bathroom, receptiontion, dining kitchen, study.

Price: £775,000 The Modern House 020-3795 5920

Sea Road, Westgate-on-Sea, Kent

A four-storey, New England-style house situated on the seafront on the North Kent coast in the centre of West Bay, overlooking the sandy beach. The house has a central oak staircase, a large dining kitchen and a south-facing garden with a heated swimming pool and pool house with bi-fold doors and a kitchen area. 6 bedrooms, 4 bathrooms, 3 receptions, cinema room, laundry, gym, double garage, terraces, heated swimming pool.

Price: £1.75m Miles & Barr 01843-844899

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Travel firm Expedia has experienced the rough and the smooth of recent turbulence in the travel industry.

America’s war on Iran has raised the price of jet fuel, and higher prices at the pumps have compounded a cost-of-living crisis that has prompted many to wonder whether they can even afford to take a holiday.

More broadly, however, the industry continues to enjoy a post-pandemic boom, while a further tailwind is the increasing propensity (among younger people in particular) to prioritise experiences over possessions.

Expedia (Nasdaq: EXPE) has two main businesses. Around two-thirds of the group's revenues come from a range of consumer-facing websites that help customers book hotel rooms and car rentals, including Expedia.com, Hotels.com, Vrbo.com and CarRentals.com. However, in recent years, a growing proportion of its revenue has come from supplying the technical infrastructure that allows hotels, car-hire companies and other firms to manage their bookings.

Expedia isn't threatened by AI

After tripling in three years, Expedia's shares swooned at the start of this year. Markets were buffeted by the current conflict in the Gulf and concerned that AI could carry out much of Expedia's work automatically. In the worst-case scenario, developments in “agentic AI” would allow people to type a few prompts into a chatbot, which would then automatically book a holiday with the best prices, completely bypassing the need for comparison websites such as the one Expedia runs.

However, such fears seem overblown. While an increasing number of people seem willing to rely on chatbots to provide advice about what to see, few would trust it enough to allow it to book hotel rooms on their behalf, even if such software merged. Large companies are even less likely to trust a chatbot to oversee the distribution of hotel rooms and flights for their staff. At the same time, Expedia's exclusivity agreements with several hotel chains and airlines such as no-frills carrier Allegiant Travel provide a degree of security. Expedia is also examining how it can use AI to enhance its own operations.

The group has a strong record, with profits more than quadrupling since 2022. Expedia also has strong operating margins, with a return on capital employed of more than 30%, allowing it to raise dividends and buy back $5 billion of shares while growing sales at a double-digit pace. Despite this fast growth, Expedia appears relatively cheap, with the shares on only 12 times 2027 earnings.

Investors' confidence in Expedia seems to have recovered: the stock is up 33% from its low of early 2026, and is now close to its 52-week high. It is are also above both its 50-and 200-day moving averages. I would therefore go long on Expedia at the current price of $268 at £9 per $1. Put the stop-loss at $168, giving you a total downside of £900.

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Andy Burnham has appointed John Healey, the former defence secretary, as chancellor. It was certainly a surprise. Home secretary Shabana Mahmood had been seen as a certainty for the job at No. 11, but at the last moment The incoming prime minister, appointed Healey instead. The markets were relieved. Given that the potential alternatives were Ed Miliband or Angela Rayner, that is not saying very much.

Still, at defence, and as a former minister in Gordon Brown's Treasury, John Healey carved out a reputation as a tough and effective minister. For now investors will trust him to stick to the fiscal rules and at least make some efforts to control the huge rise in public spending. The choice is better than could have been hoped for a few weeks ago.

The trouble is, Rachel Reeves has left behind a dismal inheritance. After less than two years in office, growth has stagnated, real wages are stuck, investment has been crushed, retail, hospitality and manufacturing have been suffocated by higher taxes, and unemployment has begun to steadily rise. Meanwhile, borrowing is starting to run out of control, overshooting even the £70 billion increase planned in Reeves's first Budget, and the cost is rising all the time, with the country now spending £125 billion a year on debt interest alone.

If Healey is to have any hope of fixing that and saving the government from a financial crisis, he will have to make it clear he is making some decisive changes and is willing to make them right away. It won't be easy. But here are three places he could start.

1. Schedule an early Budget

To begin with, he should schedule a Budget for early September. Parliament can always be recalled for a few days if necessary. One of the worst mistakes Reeves made was to allow months of speculation about which taxes might go up. It will be even worse under Burnham, who is at his happiest when pandering to the free-spending wing of his party. A wealth tax? A steep rise in capital gains tax? A lower threshold for the mansion tax? A land value tax? Each time one or other option is floated in the media, assets are sold or reorganised to try and minimise the impact. It damages the economy, and you don't even raise any revenue. The best thing John Healey could do is to set out what his plans are as quickly as possible. At least that way, all the damaging speculation would be brought to an end.

2. Stop battering businesses

Next, John Healey should call off the war on wealth creators. He should make a big speech within the next few weeks praising entrepreneurs, start-ups and small businesses. Another big mistake Reeves made was to relentlessly batter businesses, and new small businesses in particular, with an endless series of levies, charges and new rules. She made them feel that their staying in business was not worth the effort, and increasingly that feeling was unfortunately justified. Apart from the increase in employers' national insurance, none of them raised very much money, and they all crushed the life out of companies. Instead, Healey should offer one major concession such as restoring the 10% rate of CGT for entrepreneurs or exempting family businesses from inheritance tax. It would hardly cost anything and would send out a signal that enterprise was back in favour.

3. Reform welfare spending

Finally, John Healey must start making serious cuts to welfare spending. We don't have any real idea what Burnham's plans are, but they will be expensive. A lot more money will have to be found from somewhere – not least for defence given Healey's previous stand on this issue – at a time when the government is already breaking through its borrowing limits. Welfare spending is already projected by the Office for Budget Responsibility to go above £400 billion by 2030, and given the rate at which it is rising, may well go much higher.

Unless that can be controlled, the country faces endless tax rises, with no improvement in services and with no money left to do anything else. Welfare will simply consume every spare penny. At defence, John Healey showed he is capable of tough decisions and doesn't mind confronting his party. He will have to do the same as chancellor – he had better make a start from the very first week.

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The ‘active versus passive’ debate has raged for over two decades, with one investment style broadly dominating the other at any given time.

Investing platform AJ Bell’s latest Manager vs Machine report, found that just 42% of active funds outperformed a passive alternative during the first half of the year – despite typically charging higher fees than passive counterparts.

Analysis from investment research company Morningstar has backed up the notion that active managers underperformed passives during the first six months of 2026. Morningstar analysed the performance of around 32,000 active and passive Europe-domiciled funds (accounting for around half the assets in the European fund market).

It found that, during the first six months of 2026, the one-year success rate for active equity managers (the percentage of active funds that both survive and outperform comparable passive alternatives over the last year) fell to 28.4%, from 30.5% at the end of 2025. Active managers’ success rates fall further over longer time periods, too: the figure stands at 20.3% over three years, 15.2% over five years and 11.9% over 10 years.

“We’ve had yet another six-month period where a large chunk of professional stock pickers failed to deliver the outperformance they’re being paid to do,” said Dan Coatsworth, head of markets at AJ Bell.

Given that active funds usually charge higher fees, why are they underperforming compared to passives?

Which active funds struggle to keep pace?

AJ Bell identified certain areas where the performance divergence between active and passive funds was especially marked.

While only 22% of global active funds beat their average passive equivalent, UK-focused actively managed funds fared even worse; just 19% beat their passive peers in the first half of 2026.

Coatsworth said the handful of global equity managers that outperformed did so by a significant margin, but overall the data was a “huge embarrassment for the active fund management industry”.

Global trackers, according to Coatsworth, have become the default choice for first-time investors. “Low costs and broad exposure to companies around the world make them easy-to-understand investment products. For some people, that’s all they need.”

But this has led to heavy market concentration, particularly in large US technology companies.

The MSCI World index, for example, has more than 1,200 constituents but the top 10 account for more than 25% of its total assets.

“Part of the problem is down to market concentration, with global indices heavily driven by a handful of stocks dominated by the technology sector,” said Coatsworth. “Any manager with less exposure to these blockbuster names than the global benchmark might have struggled to outperform.”

Similarly, Eugene Gorbatikov, passive strategies analyst at Morningstar, said that high concentration had made it “difficult for active managers to keep pace with the momentum generated by the technology sector”.

Why are active managers underperforming?

Coatsworth pointed out that certain sectors – such as gold mining, defence, pharmaceuticals and biotechnology – that were stronger in 2025 lost momentum in the first half of 2026. “Active managers might have been caught out by the rotation and didn’t move fast enough, or they were simply parked in the wrong sectors to beat their passive counterparts,” he said.

There is an argument that active managers’ underperformance isn’t related to skill, but is to some extent inevitable given the rise in popularity of passive funds.

By definition, market cap-weighted index funds (which are a natural choice for most inexperienced investors) act to boost the market caps of larger companies when their share price is rising.

An academic study by Hannah Unterberg of the University of California’s Paul Merage School of Business, published in June, attributed the decline in active manager performance to the rise of passive funds, especially after 2010.

It made the case that any time money leaves an active fund and goes into passive funds, this hampers an active manager’s performance – because they are forced to sell holdings, especially the stocks that are least popular but in which the manager has high conviction. In other words, the ones that are supposed to give them an ‘edge’.

Perhaps it’s not about picking either active or passive, but about recognising the potential advantages and shortcomings of each.

“We champion a blended approach,” said Dan Cartridge, fund manager at Hawksmoor Fund Managers. “No one has solved investment, and styles and approaches come in and out of favour.

“Despite the 15-odd years where passive has performed well, that doesn’t mean it will continue indefinitely. There have been long windows over the past 15 years where active funds have performed well.”

His team’s flagship multi-asset fund, Hawksmoor Vanbrugh, launched in 2009 and has beaten a typical 60/40 equity/bond passive mix since inception.

Does the asset class matter when choosing active or passive?

Cartridge added that it is worth making sure that your active positions are used to gain exposure to something you don’t already have via passive investments – otherwise you’re just doubling down and duplicating positions.

There are also discrepancies in the relative performance of active and passive funds in different asset classes.

Morningstar’s analysis found that active bond managers tend to outperform active equity managers – though even in this category, one-year success rate fell to 46.8%, from 54.8% at the end of 2025.

There is also some discrepancy within equity funds. AJ Bell found that almost two-thirds of active funds from the Asia Pacific ex-Japan (65%) and Global Emerging Markets (63%) sectors beat their passive counterparts.

Certain markets generally lend themselves better to index investing. The larger, more liquid, more widely researched a market is, the less chance an active manager has to discover price discrepancies or hidden gems that aren’t widely known by their peer group.

Active managers typically struggle to beat a US large-cap index, whereas smaller and mid-cap stocks tend to offer a better hunting ground for active stock pickers – in any market, not just the US.

“These mountains to the right are the northern tip of the Alps, and they are actually in Germany. And over there is the Eagle's Nest, a chalet perched on a mountaintop, which was Hitler's 50th birthday present.” We are getting a history and geography lesson from our taxi driver as we set off from Salzburg airport. Our children, aged seven and nine, have never seen the Alps before or visited Austria or Germany, so this is a triple whammy of excitement. The scenery and clean mountain air as our people carrier climbs ever higher is a welcome break from the London heatwave we have escaped.

Our destination is Moar Gut, a family resort an hour from Salzburg, set against the breathtaking backdrop of the Hohe Tauern National Park. It's early summer, and my husband and I take in the big blue sky, lush green mountains, traditional chalets, the sound of cow bells as livestock wander around, and pretty wildflowers. Look closer and you'll spot ponies, tractors, rivers and waterfalls – a rural idyll if you will.

The hotel continues this theme with its swimming lake, riding stable and organic farm. Family-run by the Kendlbacher family since 1995, Moar Gut is a ten-hectare, car-free resort, blending luxury with nature. It offers activities all year round. In the warmer months, that means swimming, cycling, hiking, archery, horse riding and tennis.

We check into our stylish suite, which has a Scandinavian feel with wooden ceiling and floor, and a kids' bedroom with bunk beds. And then, we're off to explore. First, a swim. We jump into the lake. It's certainly refreshing. Our daughter spots tadpoles, and I take a moment to admire the yellow irises, woodland geraniums and sea thrifts growing nearby.

To warm up, there are two heated pools – one inside and one outside. Our son enjoys the family sauna and the steep, metal wasserrutsche – a pure adrenaline rush of a water slide. Later, we sign the kids up for archery, and my husband and I relax in the adults-only spa, switching between the whirlpool and steam room.

Family friendly fun at Moar Gut

There's plenty to do here, and the resort feels friendly and safe, meaning our children wander off to pet the rabbits, play basketball or hang out in the teenagers' den with video games. There's trampolining too, and a gym plus yoga and reformer pilates classes for the grown-ups.

Moar Gut aims to be perfect for intergenerational families and we meet one from southeast England with three generations ranging in age from five to 85. It is their third visit. It has got busier each time, they tell me, and now there are more British families (the secret is out, perhaps!), but they still love it.

It is our first time, and I think it feels exclusive with impeccable service. There are 46 family rooms and two double rooms and 110 staff. This means whether you want to ask someone about the best hiking routes, find out whether there's peanut in the dessert (our daughter has an allergy), or order an Austrian sparkling wine or even a cigar in the evening, you can always ask.

The resort is full-board with breakfast and lunch buffets, and a gourmet à la carte dinner for the adults (the kids get a buffet). Guests can order extras at a price, such as escargots, oysters and fondue.

At lunch we try traditional fare such as mushroom goulash and beef broth. Our son loved the beetroot dumplings with pesto and goat's cheese, while our daughter had second helpings of the farmhouse doughnuts with apricot jam. There's also fish fingers and pizza, which should suit the fussier kids, and a baby bar with freshly prepared purées.

The childcare is excellent. The kids' club is open from 9am to 9pm for those ranging from 30 days' old to teenagers. Our kids make some friends on an afternoon picnic for those aged seven and up, and meet up again the next evening for a mocktail-making session.

There's enough to do in Moar Gut, but we were keen to see more of the national park (Austria's oldest and biggest), so we headed out on a 1.5-hour guided waterfall hike. My smartphone quickly filled up as I took dozens of photos of the eye-popping scenery. If our holiday had been a film, it would surely be The Sound of Music with a dash of James Bond. The hills were, indeed, alive, and very beautiful. But inside Moar Gut there were 007 moments, such as the underground labyrinth connecting the buildings and some of the interior design. Think masculine luxury with sweeping curves, charcoal walls and expansive floor-to-ceiling glass. The car park full of black Audis added a certain Bond villain touch too.

Our stay was drawing to a close, and we all felt well-rested and well-fed, but also energised by the magic of Moar Gut and its extraordinary Alpine setting. If you're looking for somewhere a bit fresher this summer, a respite from hot, sticky cities and sweltering beaches, this is a first-class choice for a family holiday.

Ruth was a guest of Moar Gut. From €630 for a double room and €2,800 for a luxury suite, including full board and childcare. Visit moargut.com.

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Andy Burnham, the UK’s new prime minister, is never going to be popular with everyone – but this may well be his hardest lesson.

It’s clear he wants to be a superhero prime minister – the hero of UK politics who speaks without a lectern (signifying no barriers) and someone who wants to give power to local authorities rather than just the Number 10 powerhouse. In his words, he “wants to bring back hope” as he attempts to fix the broken political system and the UK economy.

And as such, welfare appears to be at the core of what Burnham wants to achieve by putting an end to rough sleeping, introducing more council homes, and providing more help for young people to end the growing NEET (Not in Employment, Education or Training) crisis. In recognising the cost of living pressures, he pledged breathing space, which has included axing the 5% VAT from electricity bills from October and capping bus fares outside the capital at £2. He’s also announced a 20% cut in business rates for pubs, clubs and music venues from April, though not all hospitality venues are included.

But are his moves bold enough? Removing VAT on electricity bills is estimated to save families around £45 a year, but amounts to a 12p saving per day. The reality is most people will not feel the benefit, especially as average household energy bills are around £2,000 per year.

The bus fare cap is useful for regular bus users, saving around a third off single journeys for many. But households that rely on their own transport are still subject to high prices at the pumps – petrol prices have shot up from around 133p at the start of this year to 151p on average now, the RAC Foundation shows. In the meantime, there is uproar over the £26.2 billion in profits made by energy companies since the start of 2026, according to the End Fuel Poverty Coalition.

You’d be forgiven for calling these measures tokenism, and perhaps that’s all it really is as he figures out how to tackle the bigger problem of reducing government debt, improving the economy and making Britain a great place for investors once again.

But what can we expect to see, and can he, alongside his new chancellor John Healey, deliver on the big issues?

What can Burnham do to boost the UK economy?

Tackling labour productivity would be key. UK productivity has been at a low since 2008, but it is the foundation of economic growth and can improve living standards as it promotes stronger wage growth, too.

Hear more about the UK's growth problem as economist Julian Jessop talks to MoneyWeek’s Andrew Van Sickle about the UK's productivity problem in our latest podcast.

Related to productivity and growth is the burgeoning NEETs issue. We cannot afford to let the young generation become a lost generation. Financial advice and wealth management firm St James’s Place estimates that youth unemployment costs the government £125 billion. It is an area Burnham must absolutely focus on. Plus, let’s not forget, without young people in the work system, there is no one funding future state pension payments – today's workers pay for today's pensions.

Speaking of pensions, there are also heavy calls for Burnham to scrap the changes to salary sacrifice pension rules. As of next year, only the first £2,000 of salary sacrifice contributions per employee will be exempt from National Insurance contributions.

That, plus changes to inheritance tax (IHT) rules which will bring pensions into an estate for IHT purposes from April 6, 2027, do little to encourage pension saving.

Age UK claims 1.9 million pensions live in relative poverty and is estimated to cost the government around £10-£15 billion, according to Pensions UK. Simplifying pensions and encouraging savings will be vital, rather than adding barriers that undermine retirement savings.

Care should also be on his mind as an ageing population is also looming and quite possibly the next big crisis to face the UK.

Taxes

While Burnham has ruled against making any changes to the frozen tax allowance, which has stood at £12,570 since 2021, there are calls for the new chancellor to address this in the Autumn Budget.

A £500 increase in the personal allowance would cut income tax bills by £100 for basic rate taxpayers, and could cost the government £5 billion, AJ Bell estimates. Resoring it to £16,000, which is where it could be without the freeze, would cost the government around £35 billion, the investment platform says.

Could a cut to the National Insurance rate be a better alternative to take the pressure off household finances? Employees currently pay 8% in National Insurance on earnings between £12,570 and £50,270 (the rate is 6% for self-employed profits) and the rate is 2% above the upper earnings limit.

AJ Bell says that cutting each main rate by 1% would cost the government £5.8 billion, but would give workers more breathing space and it would certainly not be seen as just a token gesture; someone earning £35,000 a year could save around £225, compared with a £100 tax saving from a £500 increase in the personal allowance.

Backing British

Former chancellor Rachel Reeves was incredibly keen to get investors backing British companies, so much so, she reduced the cash ISA allowance to £12,000 for under 65s in a bid to shift savers into investing instead. This limit, taking effect in April 2027, will only apply to cash ISAs – and the overall £20,000 ISA allowance remains. Reeves even decided that cash holdings of any kind, such as money market funds, could not be part of a stocks and shares ISA. If any cash is parked in a stocks and shares ISA, interest earned will be taxed.

While in government in the past, the Conservatives proposed a British ISA, an idea that never truly came to fruition.

I don’t think either of these policies would encourage savers to suddenly invest more and in British companies specifically. So, what will Burnham do? Can he save the UK stock market?

I think policies that undermine saving, instead of encouraging it, are bound for failure.

Addressing speculation about hikes to capital gains tax is needed if he is to encourage investors, and if he can also restore political stability, there is a chance the UK stock market could thrive. But to do this, he will have to find a fine balance between public spending and fiscal policies.

Can he do it? It is early days as we wait to see his final 10 year plan. That and Healey’s Autumn Budget will be ones to watch closely as this could really be Labour’s final opportunity to show it can change fortunes, fix politics and bring back stability to the UK.

Technology, and its ever-present subsector artificial intelligence (AI), are perhaps the hottest topics in investment – and have been for several years.

Information technology officially accounts for 32% of the MSCI ACWI Index. Yet in reality, what we’d all intuitively think of as ‘tech’ companies account for a greater proportion of this, since MSCI officially designates companies like Alphabet, Amazon, Meta and Tesla into industry sectors other than information technology.

This concentration brings risks with it. Passive tracker funds act to condense stock markets into the biggest names, and investors therefore run the risk of being over-exposed to the sector – which can exhibit volatility when times get tough.

There is also the intensely competitive nature of tech growth to contend with. Nascent, disruptive technologies like AI can create as many losers as winners, if not more. Knowing which stocks to invest in can be difficult, even for the professionals.

An investment trust – which is by definition actively managed – has the potential to mitigate some of these risks, and the vehicles offer some structural advantages too.

“The closed-ended nature of investment trusts makes them well-suited to technology investing,” said Alex Trett, investment trust research analyst at Winterflood Securities.

“The permanent capital allows managers to take a genuinely long-term approach, supporting investments in private companies and giving them the patience to see investment theses play out over time.

“The structure can also facilitate exposure to smaller-cap technology businesses, where liquidity can be a constraint for other investment vehicles. In addition, it enables managers to build concentrated, high-conviction portfolios, allowing them to express their strongest investment ideas.”

Here’s six of the best-known investment trusts that can offer you exposure to some of the world’s most innovative technology companies.

Scottish Mortgage

Just as many ‘big tech’ companies aren’t designated tech, one of the biggest investment trusts that many people think of as ‘tech-focused’ isn’t actually a technology trust.

Scottish Mortgage (LON:SMT) aims to own “the world’s most exceptional public and private growth companies”. As it happens, a lot of these are tech companies, but the trust emphasises that its focus is on long-term growth potential, whatever sector that may be in.

Still, buy Scottish Mortgage now and you’ll get a lot of tech. As of 30 June, SpaceX accounted for over 25% of the portfolio, followed by Taiwan Semiconductor (6.4%), Nvidia (5.0%) and TikTok’s owner Bytedance (4.2%).

ByteDance and, until recently, SpaceX have exemplified part of the appeal of SMT: its ability to hold private companies alongside publicly listed ones, tapping into the future growth potential they offer. The heavy weighting towards SpaceX is largely a consequence of this and its recent initial public offering (IPO); Trett expects the position to be trimmed once lock-up periods permit.

^{Source: Association of Investment Companies, as of 21/07/26.}

Polar Capital Technology

Polar Capital (LON:PCT) has focused its approach on the hardware and infrastructure underpinning the buildout of artificial intelligence (AI).

“The managers believe these areas offer greater earnings visibility and forecastability, with semiconductors representing the largest exposure at 44% of the portfolio, followed by equipment, components and storage including Advanced Micro Devices and LAM Research,” said Trett.

^{Source: Association of Investment Companies, as of 21/07/26.}

Allianz Technology Trust

All of these trusts are listed in the UK, but Allianz Technology (LON:ATT) is distinctive in having its management team based in San Francisco, giving it close access to many of the companies in its portfolio – approximately 90% of which is allocated to North America, as of 30 June.

“The portfolio provides broad exposure across the technology and AI ecosystem,” said Trett.

“The managers have highlighted the role of technology in creating differentiation across a wide range of industries [and] believe the AI opportunity is continuing to broaden beyond the initial infrastructure buildout, supporting a more diversified and durable phase of growth across the technology sector”.

^{Source: Association of Investment Companies, as of 21/07/26.}

Schiehallion

Like Scottish Mortgage, Schiehallion (LON:MNTN) is managed by Baillie Gifford and, depending on how pedantic you’re feeling, isn’t technically a technology investment trust.

But it has an interesting focus on early-stage companies – even more so than SMT, given that it invests in later-stage private companies.

“While not a dedicated technology fund, technology represents around 47% of the portfolio, with holdings including Anthropic, Bending Spoons, SpaceX, ByteDance and Databricks,” said Trett.

^{Source: Association of Investment Companies, as of 21/07/26.}

Herald Investment Trust

Again, Herald Investment Trust (LON:HRI) technically belongs in the Global Smaller Companies category, but it has a strong focus on technology and communications companies.

It was the subject of a bid from Saba Capital Management to displace its board, which led to a tender offer and for the trust to become part of Aberdeen.

Trett picks out Super Micro Computer, BE Semiconductor Industries, Celestica and Fabrinet as among its key holdings.

^{Source: Association of Investment Companies, as of 21/07/26.}

Manchester and London

Some people use investment trusts to diversify away from big tech concentration. Manchester & London (LON:MNL) is an investment trust for people that want to lean into it.

The fund takes a concentrated approach to investing and predominantly holds large-cap stocks, with AI a high-conviction play for the managers.

“The fund’s concentrated portfolio allows it to hold significant positions in its preferred ideas; Nvidia represented 43.6% of net assets in January before being subsequently reduced to 9.0% as at 30 June,” said Trett.

^{Source: Association of Investment Companies, as of 21/07/26.}

High street banks and building societies have been battling it out with challenger banks such as Monzo and Starling, but Nationwide is fighting back by leveraging traditional roots with more presence on the high street as it pledges to open more branches with customer facing services.

Plus, its attractive Fairer Share scheme, which has consistently paid a £100 bonus to loyal customers for four years and shares profits with members, is popular.

You’ve more than likely seen the Nationwide adverts of Dominic West playing the pompous and out-of-touch chief executive of A.N.Y. Bank.

But behind the light-hearted campaign, Nationwide is winning the hearts of current account holders, bagging 65,000 new customers in the first quarter of this year, according to the latest available figures from the Current Account Switch Service.

In comparison, Barclays, which plans to close 166 branches in 2026 and 2027, bagged 18,500 new customers. Lloyds netted just 12,000 new customers; it has closed 397 branches since March 2022.

At its annual general meeting earlier this month, Dame Debbie Crosbie, chief executive officer of Nationwide, said the building society was “thinking carefully about whether there are any spots where it would make sense for us to open new branches”.

“I can say that it's currently under review, and there may be a few locations that we identify the need for a new branch,” she said.

Tom Riley, group director of retail products at Nationwide added that customers were deciding to switch because “they can see the difference a large-scale mutual is making”.

Nationwide’s £175 switching sweetener, paid to eligible new customers when they move current accounts, has also helped the bank gain new customers.

Nationwide’s pledge to keep bank branches open

Banks have justified closures saying customers are increasingly carrying out transactions online, but charities have warned they risk leaving the elderly and those living in rural communities in danger of financial exclusion.

Nationwide is bucking this trend and through its “Branch Promise” has pledged to not close any more branches until 2030 at the earliest.

The building society had initially committed to keeping its nearly 700 branches open until 2028, but extended the pledge in November 2025.

Martyn James, personal finance and consumer rights expert, said Nationwide’s commitment to the high street was an “astute move”.

He said: “Vast numbers of people need an actual branch to go into, including the millions of carers for vulnerable people, small businesses that take cash, people with specific needs or vulnerabilities and people who just don't like online services.”

How other building societies and banks are pledging to keep branches open

Other building societies are also following Nationwide’s ambitions.

Newcastle Building Society is growing its branch network, opening a new site in Guisborough, North Yorkshire, in April.

The building society says it has invested more than £12 million to grow and improve its network of branches since 2015.

In July, Cumberland Building Society pledged to keep all its 31 branches open as it looks to prevent the decline in the high street.

Andrew Gall, head of savings, consumer and insight at the Building Society Association, said: “Building society branches continue to play an important role because they offer something many customers still value: trusted, face-to-face support alongside digital and telephone services.”

In recent months, major banks have also made pledges to keep bank branches open and invest in their existing branch networks, recognising that customers possibly value it more than previously thought.

In July, Santander, which owns TSB, announced it would not close any more of its 480 branches before 2028 at the earliest.

In December 2025, HSBC promised to keep all its remaining sites open until at least 2027.

Fairer Share payment

Nationwide paid over four million customers a £100 “Fairer Share” payment in June this year – the fourth consecutive year it had made the payment since 2023.

When the building society launched it for the first time four years ago, Crosbie said it was “part of our enduring commitment to rewarding our members”.

Vicky Reynal, financial psychotherapist and recent guest on the MoneyWeek Talks Podcast, said the appeal behind the Fairer Share payment was the surprise element, but also that it makes customers feel like they are part of something bigger in an “increasingly lonely and disconnected world”.

Reynal said: “The financial services industry has often suffered a perception from customers that their interests are with shareholders rather than account holders, so this handout feels to customers like a different positioning, like a bank that cares about its account holders.”