Government debt markets have been around since the city-state of Venice issued its first bonds in 1171, but public debt only became tradable in the English-speaking world six centuries later.

Contemporaries held conflicting views about the development. Several leading members of the Scottish Enlightenment were downbeat. As government debt across the developed world escalates, their concerns are proving timely.

In his book, A Fabulous Debt: The Epic Story of How Bonds Built the Modern World, Financial Times journalist Robin ‌Wigglesworth explains how Britain's geopolitical ascendancy was inexorably linked to its public finances, and in particular its ability to issue vast quantities of low-cost debt.

Thomas Mortimer, an 18th-century financial writer, described the nation's bond market as “the standing miracle in policies, which at once astonishes and overawes the state of Europe”.

Not everyone was sanguine. In his 1752 essay Of Public Credit, the Scottish philosopher David Hume fretted about Britain's newfound tendency to “mortgage the public revenues, and to trust that posterity will pay off the incumbrances contracted by our ancestors”.

Access to the bond market, said Hume, allowed politicians to behave extravagantly without having immediately to raise taxes. “The practice, therefore, of contracting debt will almost infallibly be abused, in every government.”

Adam Smith, the economist who wrote The Wealth of Nations, claimed the issuance of long-dated public debt “has gradually enfeebled every state that has adopted it… When national debts have once accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid.”

Another Scottish contemporary, Adam Ferguson, opined that a permanent and unproductive national debt was “to be reckoned among the causes of national ruin”. In the decades after these warnings were issued, Britain's national debt kept expanding. No crisis appeared, however, and the country's prosperity grew apace.

Looking on the bright side

In his History of England (1848), Thomas Babington Macaulay mocked the debt doomsayers. He hailed Britain's “fabulous debt” as “the greatest prodigy that ever perplexed… statesmen and philosophers.

At every stage in the growth of that debt, it was seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing; and still bankruptcy and ruin were as remote as ever.”

The error of the pessimists, said Macaulay, lay in their comparing national debt to that of an individual borrower. Since most of Britain's public debt was held by its countrymen, the nation was in effect borrowing from itself.

They also ignored that economic growth rendered the debt sustainable: “They greatly overrated the pressure of the burden; they greatly underrated the strength by which the burden was to be borne.”

The conditions that created a stable bond market in Macaulay's day have vanished, ‌however. Economic growth across much of the developed world has faltered. Excessive borrowing and spending by governments is partly responsible.

Bloated government spending is to blame for the collapse in productivity growth, according to Swedish economists Andreas Bergh and Magnus Henrekson. Hume expected that excessive debt would lead to debilitating taxes.

Government debt levels have risen inexorably since the financial crisis. Worldwide public debt has reached 94% of GDP, according to the International Monetary Fund. US federal debt is around 114% of GDP, reckons Fitch Ratings.

Economists Carmen Reinhart and Kenneth Rogoff concluded that when government debt breaches the 90% threshold, economic growth falters.

Hume would have agreed: “We have always found,” he wrote, “where a government has mortgaged all its revenues, that it necessarily sinks into a state of languor, inactivity and impotence.”

He cautioned that overseas investors owning big portions of a country's debt “render the public, in a manner, tributary to them”.

A large share of the national debt issued by the US, Britain and France is held abroad. For instance, a third of Washington's $40 trillion in borrowing comes from beyond its shores.

Whereas Britain in the 19th century was the world's top creditor, the US today is the world's largest debtor.

The Bank for International Settlements notes that rising geopolitical tensions could disrupt capital flows, threatening nations with large current account deficits.

After interest rates shot up four years ago, government borrowing costs soared. This wasn't a problem in Macaulay's Britain, where public debt was mostly financed with fixed-interest perpetual bonds.

By contrast, US public debt has a relatively short maturity profile, rendering it more sensitive to changes in short-term interest rates. Rising interest costs on a large stockpile of debt strain government finances.

The historian Niall Ferguson says the decline of a political superpower becomes evident when it spends more on servicing debt than on defence. The US breached this threshold two years ago.

Hume envisaged a day when an overburdened government would stop paying interest on its debt.

Since governments nowadays print the money in which their debt is denominated, an option not available in 18th-century Britain, formal default is unnecessary.

Instead, bondholders can be short-changed through inflation, financial repression and the management of long-term interest rates.

“The natural death of public credit,” said Hume, is inevitable when “overbalanced by a great debt”. The Scottish philosopher's timing was disastrous, but his principles remain sound.

A longer version of this article was first published on Reuters Breakingviews.

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Law Debenture (LSE:LWDB) is a unique investment trust. It is part equity income portfolio and part professional services company, all in one high-performing £1.7 billion wrapper.

It has been a stalwart of the MoneyWeek Investment Trust portfolio since September 2015, with the second-best performance of all the trusts selected. Over the past ten years the shares have produced a total return of 263%, versus 130% for the FTSE All-Share index. It has also outperformed its benchmark by a wide margin over one, three and five years.

This performance is by far and away the best of any trust in the UK equity income sector. The secret of its success is down to the independent professional services (IPS) business.

The success of Law Debenture’s IPS

The IPS business provides a selection of relatively mundane, but essential services focused around three groups: pension services, which provides pension trust services across the UK; corporate trust, a provider of trust and escrow services for transactions such as bonds and mergers and acquisitions (M&A); and corporate services, which provides company secretarial and entity management services.

Inflation-linked organic growth has been complemented by acquisitions – most recently the purchase of company secretarial unit Konexo in 2024 – have all helped IPS grow both top and bottom lines.

These businesses grew net revenue by 6% in the first half of 2026 – the ninth consecutive year of mid-to high-single-digit growth.

These businesses are relatively specialist, so they are difficult for customers to do in-house. They are also low-margin and only profitable at scale, giving incumbent providers a significant edge.

There are only a handful of peers: the four public comparables include London-listed JTC, which is in the process of going private.

Dividend support

IPS accounts for only 15% of Law Debenture's net asset value (NAV), but over the years, its profits have helped support around a third of the trust's dividend distributions to investors.

That gives James Henderson and Laura Foll, the managers of its equity portfolio, a huge advantage for their strategy.

While other UK equity income trusts need to prioritise owning dividend-paying shares to support their distributions, they can take a more flexible approach.

For example, in February 2020, Law Debenture built a position in Rolls-Royce, which then had to suspend its dividend during the pandemic. Other income trusts might have been forced to sell, but Henderson and Foll held on. The position has since generated a return of more than 1,100%.

Other examples include Marks & Spencer and Babcock. Both of these have been held for capital gains, despite their poor dividend credentials.

A strong first half

The portfolio – which accounts for 85% of NAV – is built around growth, income and value. There is also a higher percentage of smaller and medium-sized companies than you might usually find in a UK equity income trust, which reflects the solid foundation provided by IPS.

For example, in the first half, positive contributors in the investment portfolio included companies viewed as beneficiaries of AI, such as Ceres Power and Infineon Technologies. Henderson and Foll also added positions in LSEG and Relx, two previous winners that had sold off due to concerns about the threat of AI.

Strong performers during the period included Beazley, Senior, International Personal Finance, Schroders and Tate & Lyle – all of which received takeover offers, which is “further evidence of the valuation opportunity available in UK equities”, say the managers.

The trust's own shares have also been trading well. For the six months to the end of June, they produced a total return of 16.2%, as they moved from a 2.5% discount to a 1.7% premium on top of the underlying NAV return.

The quarterly dividend was increased by 6% to 8.875p. Based on the company's current target for the year, the shares currently yield around 2.9%.

Henderson is set to retire in June next year, with Foll taking over the portfolio as lead manager. Given her ten years' experience at Law Debenture – as well as 12 on the Global Equity Income team at Janus Henderson – it should be business as usual when she assumes sole command.

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The squabbling heirs running Delfin, one of Italy's biggest companies, have “trumped” the television series Succession, says The Times, proving that “truth can be stranger than fiction”.

The hit TV drama featured four siblings vying for control of their family empire. At Delfin – the €55 billion holding company behind Ray-Ban's owner EssilorLuxottica – there are eight heirs battling it out. And there's more at stake than fancy eyewear.

Delfin is a big financial power player and has substantial holdings in a slew of Italian banks and other financial institutions – including UniCredit, Mediobanca, Banca Monte dei Paschi di Siena and the insurer Generali – as well as de facto control of the international property group Covivio.

It is thus “one of corporate Italy's top power brokers”, says the Financial Times, and this paralysing family feud has sent ripples across the country's financial sector at a pivotal moment. Italian banks are currently waging an internecine chess game of consolidation. The outcome at Delfin could swing the balance.

Delfin founder’s best laid plans…

It wasn't supposed to end like this, says the Luxembourg Times. The family patriarch, Leonardo Del Vecchio – who built the largest eyewear company in the world from a small optical workshop in the Dolomite foothills – “spent years designing a governance structure” to protect his legacy before his death in 2022.

He hoped to head off disputes by dividing the family holding company equally between eight heirs: his six children by three different wives, his widow and her son Rocco Basilico.

Yet from the outset, there were squabbles over everything from dividends to the future of the group's portfolio.

Matters came to a head this year, when Del Vecchio's fourth child – 31-year-old Leonardo Maria – a “keen DJ… avid Ferrari collector” and “mainstay in gossip magazines” – started flexing his muscles, says The Times.

He proposed cementing his control over the group by buying out two of his siblings.

For a time it looked as though “Leonardino” might get his way, says The Observer. But he hadn't bargained on opposition from key members of the EssilorLuxottica board – notably chairman and CEO Francesco Milleri – and his LA-based stepbrother Rocco, who is “credited” with arranging “Ray-Ban's controversial smart-glasses partnership with Meta”.

Their critique, says the FT, was that the younger Leonardo was “not his father” and they warned against concentrating too much power in his hands.

The dispute rapidly reached courtrooms in Italy and Luxembourg.

While Rocco Basilico and another half-sibling challenged the proposed sale of Luca and Paola Del Vecchio's stakes, Leonardo Maria “contested Basilico's entitlement to his 12.5% holding”.

Beating a retreat

After a punishing stand-off, it looks as though Leonardo Maria has conceded defeat, says Il Sore 24 Ore.

This week, he quit as chairman of Ray-Ban and chief strategy officer of EssilorLuxottica – claiming he intended to devote himself to new entrepreneurial projects. His parting shot, says Euronews, is that the company his father founded has “lost its soul”.

“I keep talking to people in the company. I did it when I was a store manager and I have never stopped doing it,” wrote the founder's son. But today, “the enthusiasm is not what it was. The sense of belonging is not what it was. The distance can be felt. And people sense it before the markets. Always.”

The departure of LMDV, as he is known in the company, from his executive roles may or may not end “the infighting at Delfin”, says The Times. But it is “a warning to Italy's legions of family firms facing generational change”.

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Does a fresh lick of paint in the kitchen increase the value of the house? Or a heated towel rail in the bathroom? Or an attractive water feature at the back of the garden?

We learned this week that the government is planning to appoint teams of inspectors to visit people's homes, and decide whether the owner has to pay the new “mansion tax”.

An extra levy will be imposed on homes worth more than £2 million, on a sliding scale going up to beyond £5 million.

It is meant to come into force in April 2028, but it is already proving a lot trickier than ministers seem to have realised.

Earlier this year, HMRC said it was hiring hundreds of inspectors to help with the valuation of everyone's home.

They will all have powers to enter a property to assess what it might be worth.

We can see what the authorities are getting at. If you simply rely on previous sale prices, it takes no account of how a house might have been improved, and lots of homes may well slip through the net.

There is a catch, however. It illustrates that while a mansion tax might appeal to the class warriors on the Labour backbenches, it is going to be very difficult to implement in practice.

There are three big problems. Firstly, going through a large house and trying to figure out how much each “improvement” or “feature” has added to its value is a huge task, and one that will take several years, at a minimum, of training before the “value police” are ready to start work.

It is a huge undertaking, from a state machine that can't build a new railway, or reservoir, or any extra houses. It is hard to believe it is all actually going to happen, and even if it does there will be years of delays as there is with every other government project.

A mansion tax could create a legal quagmire

Next, many of the valuations, quite rightly, will be taken to court.

The Office for Budget Responsibility (OBR) gave us a glimpse into the legal train wreck heading towards us earlier this year with a forecast that 20% of valuations would be challenged in court and that 40% of the legal cases would be successful.

The courts are going to be clogged up for years deciding how much individual homes are worth, creating huge backlogs and crowding out time that should be spent on far more serious issues.

Even worse, the top end of the British housing market is now in freefall, in part because of the looming mansion tax.

In Westminster, prices are down by 25%; in Kensington and Chelsea, 15%. Those falls are starting to ripple out into other boroughs and into the leafy commuter suburbs as well.

With those kinds of price declines, homes are going to drop below the £2 million threshold in huge numbers. The inspectors will have to change valuations constantly, and some owners are going to be heading back to court every year to try and get the tax removed.

Finally, the tax will only raise tiny sums anyway. The OBR has already downgraded its forecasts for the amount of revenue it will raise from £400 million in its first year, rising to £435 million by 2030-2031.

But it also warned that revenue would fall by £370 million before April 2028 because of reduced stamp duty, capital gains tax and inheritance tax receipts as households sold or downsized.

In other words, once all the costs are taken into account, the mansion tax may not end up raising any money at all.

All those expensive inspectors, with generous holiday allowances and gold-plated public-sector pensions that will stay on the government's books forever, will have been employed for absolutely nothing.

Those are just the practical details. The government still needs to deal with the moral issues.

What will it do about elderly homeowners, for example, who might not be able to sell a big house, but also can't afford to pay the extra tax on it?

Will it be able to face down the inevitable political backlash?

And given that the top 10% of earners already pay 60% of all the income tax collected in Britain, how can it justify yet more taxes on people who are already paying for most of what the state does?

And if the tax does cost more to implement than it raises in revenues, as it almost certainly will, how can it justify the drain on public finances at a time when the deficit is already soaring out of control?

The tax has not come into force yet. But it is already turning into a disaster.

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Targa Resources owns and operates natural gas pipelines, gas plants, liquefied petroleum gas (LPG) export facilities and crude oil terminals across the US. In mid-August, its shares rose 10% after it announced a 20-year midstream deal with ExxonMobil to build and operate a portfolio of energy infrastructure assets for the oil and gas giant.

Targa's deal is the latest in a series of multibillion-dollar projects recently commissioned by oil giants and governments to help move oil and gas around the world.

Targa Resources (NYSE:TRGP) is a midstream energy group, playing a vital role in the energy sector. These businesses link upstream companies, which drill and extract the raw product, and downstream businesses, which refine and sell it to consumers.

Most oil and gas majors manage this part of the process themselves, but in markets such as the US, where thousands of smaller producers in oil fields need to connect to major refining and storage hubs, midstream firms are a vital part of the chain.

Growth in the pipeline market

The $65 billion Targa is just one such company in the industry. The firm was founded in 2003 and has grown steadily through organic growth and acquisitions. In 2004, it purchased midstream natural-gas operations from oil major ConocoPhillips and in 2005, it acquired an asset from energy supply business Dynegy. In 2007, the company listed as Targa Resources Partners LP, using the money from the initial public offering (IPO) to seal more deals.

Over the following two decades, Targa secured 20 further agreements, encompassing joint ventures, partnerships, asset sales and stake sales in key infrastructure assets.

Today, the group owns and operates assets across New Mexico, Oklahoma, Texas and Louisiana. It is active in the key oil-production regions of the Permian, the Bakken Three Forks Shale, Eagle Ford Shale and Fort Worth Basin.

The Permian has become one of the most important oil-producing regions in ExxonMobil's portfolio. When the group sealed the $60 billion deal to buy Pioneer Natural Resources in May 2024, it doubled its footprint in the region and laid out plans to drive production to two million oil-equivalent barrels per day (boepd) by 2030, up from the 612,000 barrels Exxon produced from the region in 2023.

Production hit a record boepd in the second quarter and is now close to 1.8 million as the group continues to grow at a breathtaking pace.

Exxon's total Permian production consists of between 70% and 75% liquid hydrocarbons (crude oil and natural gas liquids) and 25%-30% natural gas. This needs somewhere to go, and that's where the deal with Targa comes into play.

Exxon has agreed to so-called natural gas liquids (NGL) dedications with Targa, whereby it is legally committed to using the company's midstream assets for transport, processing, or fractionation (a physical and chemical separation process) of NGL production from its key fields in the Permian region.

Following these commitments, Targa has announced three new natural-gas processing plants in the Permian Delaware: Wrangler, Ranger, and Ranger II, with a combined capacity of approximately 825 million cubic feet per day.

The plants are expected to be operational in the first half of 2028, with scope for up to five additional processing plants. It also announced plans to build a new, approximately 70-mile, natural-gas pipeline called Bull Run II, supported by take-or-pay commitments (whereby producers buy a fixed amount of capacity and pay whether they use it or not).

To meet these commitments, Targa has upgraded its expected capital spending for the year from $4.5 billion to $5 billion. The business spent $2.1 billion on growth and maintenance capital in the first half of 2026, up 23% from the same period in 2025.

A new gold rush

Despite substantial efforts by policymakers over the past two decades to wean the world off its addiction to hydrocarbons, there has been no let-up in the relentless march of the oil and gas industry.

Pipelines and midstream assets are an often overlooked part of this market, but the conflict in the Middle East has highlighted their importance to the global economy.

With the Strait of Hormuz closed to shipping, pipelines across the Middle East have become critically important for the region's oil and gas producers.

In the past two months, the United Arab Emirates has announced plans to open a new pipeline alongside its existing Habshan-Fujairah pipeline, doubling its capacity.

Meanwhile, America, Iraq and Qatar have also announced plans to upgrade a pipeline from Iraq to Syria, and Chevron is in talks to build a series of them from Iraq to Syria and Turkey.

According to The Economist, citing information from Global Energy Monitor, an oil data and research firm, 12,300 kilometres of pipelines are currently under construction worldwide, with an additional 20,100 kilometres proposed.

Taken together, these additions represent nearly a 10% increase over the 350,000 kilometres of pipelines currently in operation worldwide.

The most cost-effective way to get oil and gas from production fields (usually located inland or in deep water) to refineries and key export markets is by tanker.

Transporting each barrel of oil on the world's largest seagoing tankers can cost as little as a few dollars a barrel. But when it is impossible to use tankers to transport them, producers have no choice but to turn to other methods such as rail, road or pipelines.

A large-diameter pipeline that can carry around one millions barrels of oil per day costs, on average, about $5 million per kilometre, or $5 billion for a 1,000 kilometre pipeline.

That's assuming the pipeline is laid over relatively flat terrain. If mountains, rivers and lakes get in the way, costs can rise significantly.

The significant upfront capital cost is why midstream companies and pipeline owners turn to take-or-pay agreements.

Under these agreements, customers purchase a minimum amount of transport capacity on the pipeline and pay a fee for this capacity, often indexed to the price of oil over an extended period (frequently a decade or more).

The company has to pay to use this capacity whether or not it has oil to transport. This dramatically reduces the risk inherent in the project for the pipeline-operating company and its lenders.

Pipelines require a lot of capital to start, but the long-term economics are hard to argue with.

Data compiled by The Economist shows that the cost of transporting oil via a pipeline is, on average, around $5 per barrel. The cost rises to $18 per barrel when oil is transported via road or rail.

At the height of the US-Iran conflict earlier this year, some reports emerged of companies in central Africa paying as much as $200 a barrel, with $50 of that covering transport costs alone.

No wonder, then, that there is heavy investment in expanding pipeline networks to cut costs and improve reliability. In East Africa, for example, a 1,500 kilometre pipeline is under construction to transport oil from Uganda to the Tanzanian coast.

Argentina is building a 440 kilometre pipeline to connect its key oil fields in the centre of the country to the Atlantic.

There is a growing opportunity for investors. Because returns from pipelines are relatively stable and predictable, thanks to pre-agreed take-or-pay contracts, private infrastructure funds have flooded into the market.

According to McKenzie, a consultancy, assets under management across private infrastructure funds have rocketed to $1.6 trillion in recent years.

This year, global investment group KKR finished raising money for its largest-ever infrastructure fund with a total value of $19 billion. It's almost certain a large chunk of this will go to pipeline projects. Blackstone and Brookfield are also getting in on the action. KKR, Blackstone and Brookfield have signed a $16 billion deal with Kuwait's oil company for a stake in the country's pipeline network.

Don't be tempted by partnerships

The midstream sector is particularly strong in the United States thanks to a quirk of US tax law.

Midstream firms can be structured as master limited partnerships (MLPs), which are pass-through entities much like real-estate investment trusts (REITs).

MLPs pay no taxes, so they can distribute much more of their cash flow to investors. Investors then pay tax on these distributions. Over the past decade, many former MLPs have transitioned to C-corporations (a standard limited company) following a change introduced by the 2017 Tax Cuts and Jobs Act.

The changes have opened these companies to a wider range of investors, but yields have fallen because dividends are now paid out after corporate tax; in the partnership model the tax liability falls on the investor.

As a rough guide, the Alerian MLP ETF currently yields 7.4% on a trailing 12-month basis, while the Alerian Midstream Energy Dividend UCITS ETF, which has strict limits on MLP exposure, yields just 3.6%.

The Alerian Midstream Energy Dividend UCITS ETF has enforced limits on exposure to MLPs owing to K-1 tax constraints – the reason why these MLPs are unsuitable for all but the most sophisticated investors. A Schedule K-1 Federal Tax Form is issued by US partnerships to report a partner's share of its income, losses, capital gains and dividends.

In short, they are a nightmare for non-US investors. Even smaller domestic US investors generally avoid partnerships to avoid the added administration these tax requirements create. Very sophisticated investors who want exposure to these businesses may use total return swaps or other synthetic instruments instead, rather than becoming entangled in the web of compliance. Don't be tempted by a high yield on a US midstream MLP.

Fortunately, plenty of other options exist for investors to play this theme. Kinder Morgan (NYSE: KMI), the largest natural gas-pipeline operator in the United States (and a former division of Enron) consolidated its various MLPs into a single traditional C-corporation in 2014 in order to lower its cost of capital and appeal to a broader range of local and international investors. Many of the company's peers have since followed suit.

A tailwind from AI

Kinder Morgan reported record net income of $867 million in the second quarter, up 21% from the same period last year.

Around $660 million of new projects coming on stream helped boost the company's top and bottom lines, including Tennessee Gas Pipeline's (TGP) Cumberland Project, designed to serve a new gas-fired power plant in Tennessee.

The company said it had a construction backlog of $9.7 billion at the end of the quarter, with an additional $400 million of projects not included in the official backlog, but sanctioned to proceed.

Natural-gas projects made up 92% of the backlog, and 60% of those projects are designed to support local power generation and distribution. The company believes it will outperform expectations by 5% for the year, with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $9 billion and a 12% rise in adjusted earnings per share.

Kinder Morgan, like other US midstream companies, is benefiting from increasing demand for power across the US driven by the AI boom. According to Goldman Sachs Research, domestic power demand from data centres is projected to more than double from 31 gigawatts (GW) to 66 GW by 2027, consuming over 8.5% of total US peak summer electricity.

To keep up, companies are commissioning new natural-gas power plants, which can be brought online in a few years and located next to data centres; pipelines are needed to connect these facilities to production zones.

Kinder Morgan may be the largest natural-gas pipeline operator in the sector, but peer Enbridge (Toronto: ENB) is worth nearly twice as much.

It plans to spend between C$10 billion (£5.3 billion) and C$11 billion this year, with half of that already spent in the first six months. It is constructing the $4 billion Sunrise expansion of its British Columbia pipeline (adding 140 kilometres of new pipeline in addition to upgrading the capacity of the existing pipeline) and spending $1 billion relocating a pipeline in Wisconsin.

Williams Companies (NYSE: WMB), the second-largest pipeline group after Enbridge in market value, has raised its spending guidance for the acquisition of Momentum Midstream. It is now projecting spending between $7.3 billion and $7.9 billion in 2026.

Enterprise Product Partners is spending around half as much, with capital spending earmarked at between $2.9 billion and $3.4 billion, net of asset sale proceeds.

Key projects include two new gas-processing plants in the Permian Basin, illustrating the growing importance of natural-gas processing and transportation.

Enterprise Product Partners is the fastest-growing of the large midstream companies, but it is also still structured as a partnership. It reported a 19% increase in adjusted cash flow from operations in the first half to $2.5 billion, as well as a 28% increase in net income, thanks primarily international demand for US natural-gas liquids and crude oil.

Energy Transfer also set several all-time record volumes, notably in natural-gas liquids transportation volumes, which increased 13%, and exports, which increased 25%. Distributable cash flow rose 32% to $2.6 billion. Enbridge, Williams and Kingdom Morgan are all trading at roughly the same valuation, with a price/ earnings ratio (p/e) in the low 20s and a yield between 3% and 5.5%.

The Alerian Midstream Energy Dividend UCITS ETF (LSE: MMLP) offers exposure to all three companies, plus 16 others, with Kinder Morgan, Williams, Enbridge and Targa comprising around 40% of the fund. Investors also get synthetic exposure to the Alerian MLP index.

The picks-and-shovels plays

Infrastructure provides a steady, predictable return. But if you want something offering a bit more excitement, consider the companies providing the picks and shovels to help build future pipelines. Companies worthy of research include Caterpillar (NYSE: CAT), Tenaris (NYSE: TS), MasTec (NYSE: MTZ) and Primoris Services Corporation (NYSE: PRIM). Caterpillar is a broad-based play on the health of the US economy. The company reported record revenue of $20.5 billion in the second quarter, up 24% year on year – the first time Caterpillar has reported more than $20 billion of revenue in a single quarter.

Meanwhile, the company's order backlog hit a record of $72.1 billion, that's not just related to its diggers. While Caterpillar is widely associated with earth-moving and construction equipment, it also operates the SPM oil and gas brand and manufactures equipment for gas power plants. This energy and transportation division increased sales by 17% year on year. While the stock has dipped recently, it is still trading at 25 times projected 2027 earnings.

Tenaris is one of the more interesting companies in the area. It supplies tubular steel used to make pipelines worldwide. Sales fell 4% in the second quarter, mainly because shipments to customers in the Middle East were postponed owing to the conflict.

Lower deliveries to Kuwait and Iraq were, however, offset by higher sales to Venezuela and Argentina, along with the start of delivery of offshore line pipes to the Sakarya Black Sea development in Europe.

The company reported a $3.6 billion net cash position at the end of June, compared with a $19bn market capitalisation. The stock is on a forward p/e of 13.9.

MasTec and Primoris are two of the largest engineering construction contractors in North America. The latter is more focused on utilities, while the former has a big pipeline and energy business. Still, both recently reported record second-quarter sales and record order backlogs.

MasTec reported a record 18-month backlog of $21.4 billion; of this total, $1.8 billion was allocated to its pipeline segment, while Primoris achieved a record total backlog of $13.9 billion (comprising $7.7 billion in the utilities segment and $6.2 billion in energy).

MasTec recently acquired The Superior Group to expand its services into datacentre infrastructure and trades at the higher valuation of the two (21 times 2027 earnings versus 14 for Primoris). That's because Primoris reported a loss for the second quarter, despite record sales. The losses stemmed from cost overruns on six renewable-energy projects. All of these will be complete by the end of the year, which should draw a line under the situation.

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

The Old Mill, Linztford, Rowlands Gill, County Durham

A Grade II-listed former paper mill on the banks of the River Derwent. It has exposed stonework, wood floors, a wood-burning stove and a large kitchen with an Aga. 3 bedrooms, 2 bathrooms, reception, double garage, studio, riverside terrace, gardens, 0.34 acre.

Price: £700,000 Finest Properties 0330-111 2266

The Stack, Trelyon, Truro, Cornwall

A five-storey, Grade II-listed former engine house dating from the 1800s overlooking a valley. It has granite walls with arched doorways and a wood-burning stove. 3 bedrooms, 2 bathrooms, dining kitchen, reception, terrace, workshop, studio, gardens, 0.6 acres.

Price: £895,000 Rohrs & Rowe 01872-306360

Lakeland Cottage, Spark Bridge, The Lake District

This converted 1850s bobbin mill was originally one of the oldest continuously operating industrial sites in the country. The gardens include a pond and a bridge over the river that leads to a pavilion. 4 bedrooms, 3 bathrooms, 3 receptions, study, orangery, dining kitchen, balconies, garages, gym, greenhouse, outbuildings, workshop, private riverside jetty, grounds.

Price: £1.995 million Fine & Country 01539-733500

Rhydlewis, Llandysul, Ceredigion

A mid 17th-century mill in west Wales that was rebuilt in 1811. The former mill has solid stone walls and a full-height living area with a vaulted ceiling with exposed wooden rafters, timber panelling, a Danish wood-burning stove and large glass doors that open onto a substantial balcony that overlooks the garden. 2 bedrooms, bathroom, open-plan kitchen/living area, mezzanine, parking, gardens, grounds.

Price: £350,000 Savills 0292036-8915

The Old Foundry, Panxworth, Norfolk

A former iron foundry and smithy dating from 1869 on the edge of a village. It has double-height ceilings with a mezzanine, exposed beams and a large fitted kitchen. 4 bedrooms, 3 bathrooms, reception, study, office, roof terrace, gardens.

Price: £550,000 Sowerbys 01603-761441

Royal Mint Street, London E1

A penthouse apartment in a converted Victorian factory originally constructed in 1890 for the tobacco manufacturers Thomas Bear & Sons. It has a dual-aspect kitchen and reception with double-height vaulted ceilings, exposed brickwork, the original cast-iron columns, timber floors and Crittal windows. 3 bedrooms, 2 bathrooms, office/bedroom 4, open-plan kitchen/dining room, share of freehold.

Price: £2.25 million Knight Frank 0203-597 7687

The Old Fire Station, Worcester

A top-floor apartment in the award-winning Old Fire Station development in the centre of Worcester. The flat has an open-plan interior with wood floors and modern fittings. It comes with its own private balcony that commands views over Worcester Cathedral and also has access to a communal roof garden. 2 bedrooms, bathroom, open-plan kitchen/ living area, parking.

Price: £260,000 Allan Morris 01905-612266

The Wheelhouse, Canterbury, Kent

A Grade II-listed former industrial building dating from the 18th century just outside the city walls in the Nunnery Fields conservation area. It has a 32ft vaulted drawing room with a log-burning stove and a 36ft sitting room with a vaulted ceiling, exposed timber beams and a Juliet balcony. 6 bedrooms, 3 bathrooms, 4 receptions, study, conservatory, breakfast kitchen, greenhouse, garage, courtyard garden.

Price: £900,000 Strutt & Parker 01227-473700

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CVS Group (LSE:CVSG) is an example of how temporary uncertainty can create attractive investment opportunities.

For the past three years, the UK's largest listed veterinary services group has traded under the shadow of the Competition and Markets Authority's (CMA) investigation into the sector.

Investors feared the regulator would impose remedies severe enough to undermine the industry's profitability, pushing the shares down to 13 times earnings – a ten-year low.

Yet during that period, the business continued to compound earnings at an attractive rate. Revenue and profits kept growing, the firm expanded internationally and management kept investing in the business.

With the CMA's process now largely complete, investors have a chance to judge CVS Group on its operating performance rather than regulatory uncertainty.

Since listing in 2007, CVS Group has delivered uninterrupted revenue and Ebitda growth, a record few UK-listed companies can match, and one that helps explain why the shares historically commanded a premium valuation.

Few industries offer the resilience of veterinary care. People may postpone replacing a car or renovating the kitchen when finances come under pressure, but pet owners are unlikely to delay treatment for a sick pet. Demand therefore tends to remain resilient through economic downturns.

The industry's long-term outlook also remains favourable. Advances in veterinary medicine mean treatments once confined to specialist centres – including MRI scans, orthopaedic surgery and oncology – are becoming increasingly commonplace.

Add the millions of puppies and kittens acquired during Covid now reaching the age where healthcare spending accelerates, average spending per pet looks set to continue rising.

CVS Group has spent more than two decades building a business designed to benefit from those trends.

What started as a consolidator of independent veterinary practices has evolved into an integrated healthcare network spanning 500 sites, including general veterinary practices, specialist referral hospitals, diagnostic laboratories and an online pharmacy.

That integrated model creates meaningful competitive advantages. A routine consultation can lead to specialist diagnostics, orthopaedic surgery or oncology treatment without the patient leaving the CVS Group network.

Rather than referring work elsewhere, the company retains a greater share of each pet's lifetime healthcare spending while improving utilisation of its specialist facilities. It also makes the network more attractive to both clients and clinicians, reinforcing the advantages that scale already provides.

How CVS Group is cementing loyalty

Roughly 500,000 owners pay monthly subscriptions via The Healthy Pet Club, covering vaccinations, parasite treatments and routine health checks.

The subscriptions provide recurring revenue, and encourage owners to visit their vet more regularly – increasing customer loyalty while creating opportunities for higher-value diagnostics and treatment.

CVS Group has also invested heavily in recruitment, training and retaining veterinary professionals.

While labour shortages affect much of the sector, the firm's scale enables it to offer clearer career progression and more opportunities for clinical specialisation than independent practices can provide.

That should help support future growth and reinforce its competitive position.

The story does not end in the UK. Australia today resembles the UK veterinary market of 15 years ago – fragmented, independently owned and offering considerable scope for consolidation.

In three years, CVS Group has acquired 57 practices generating £80 million of annual sales, with the same disciplined acquisition strategy that proved successful in the UK.

Since the CMA announced its investigation, the company's valuation has steadily fallen even as the underlying business has continued to grow.

Australia has emerged as a meaningful contributor to earnings, the group has strengthened its market position and sales have continued to rise.

Management used the period to strengthen the business and diversify future sources of growth. CVS appears stronger today than when the regulatory review began, yet the share price continues to reflect much of the uncertainty.

That valuation gap is difficult to justify. Businesses capable of generating resilient cash flows, delivering consistent double-digit earnings growth and reinvesting capital over long periods rarely trade on just 13 times earnings. For much of the past decade, investors were prepared to value CVS Group at more than 20 times.

That premium was not simply a reflection of optimism. CVS Group combined resilient end-market demand with dependable double-digit growth, strong cash generation and repeated opportunities to reinvest capital at attractive returns.

Those characteristics remain largely intact today. If anything, the Australian expansion has broadened the opportunity to deploy capital at attractive returns.

Wage inflation remains a challenge across the veterinary profession and continued investment in clinicians may weigh on margins in the near term. Australia must still demonstrate that it can replicate the success of the UK business over a longer period. A rerating may therefore take time.

However, those risks appear broadly reflected in the current valuation. The CMA investigation depressed CVS's valuation for much of the past three years. It did not stop the business from growing.

If the market begins to focus on the latter rather than the former, today's valuation may prove an attractive entry point.

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What's the current situation with adult social care?

A few years ago a parliamentary committee memorably summed up the adult social care system in England as “unfair, confusing, demeaning and frightening” – and that remains a good summary.

A central problem is the “care lottery” involved in a complicated patchwork of funding rules, means-testing, local-authority decisions and private providers – with families taking up the slack.

Whereas a patient with cancer receives free state-funded treatment on the NHS, someone with dementia must fund long-term care costs themselves if they have assets worth more than £23,250 – so even modestly wealthy individuals can be forced to sell their homes to fund residential-care costs, which can easily top £100,000, or indeed multiples of that for the most unfortunate.

Addressing that unfairness in a way that's acceptable to taxpayers, those requiring care and those eager to protect hard-gained assets is a problem that has so far proved unsolvable.

What about quality of adult social care?

The squeeze on funding for local authorities, which provide social care, has led to a “fragile and fragmented market of providers”, says the Financial Times– leading to even lower pay levels, problems in recruiting and retaining staff and huge variations in quality.

As the population ages, demand is growing – at present only 42% of requests for help can be met. But it's not just about age: half of council care budgets go toward care for working-age adults, whose care needs can last much longer.

Overall, two million people have unmet care needs because they can't afford help, while more than 30,000 died last year while waiting for a social-care package, such as residential care, to be provided.

Under this badly functioning system, unpaid family carers absorb enormous personal costs, while delayed discharges owing to gaps in social care account for almost one in ten hospital beds, adding costs and stress onto the NHS.

What has Andy Burnham announced?

Andy Burnham has reconfirmed Labour's pledge to reform and rebuild adult social care in England via the creation of a National Care Service.

So far, though, that is very much an aspiration, with no fixed plan on how to achieve it – nor a clear picture of what that service will look like.

Burnham has also begun cross-party talks, and last month launched a “big conversation” with the public to get buy-in for whatever funding model is ultimately proposed.

And he has asked Louise Casey, a cross-bench peer, to bring forward delivery of her Independent Commission, begun under Starmer, to the summer of 2027.

Haven't we been here before?

Many times. Ominously, even Andy Burnham himself has been here before. As health secretary in 2009, Burnham floated a national-care scheme to revitalise and fund social care in England.

The Conservatives promptly branded the funding model – a levy on estates – a “death tax”, a label that stuck. But even so, Labour went into the 2010 election with a very familiar sounding policy – the creation of a National Care Service implemented in phased stages.

Under the Conservatives, a series of white papers were promised, but successive PMs failed to take action, with Theresa May's attempt at the 2017 election backfiring spectacularly with voters.

Labour accused her of planning a “dementia tax”; in fact she'd proposed a rather promising state-sponsored equity-release scheme that protected assets up to £100,000.

What are the funding options?

The phrase “National Care Service” suggests a universal NHS-style service free at the point of use and paid for out of general taxation. But the Health Foundation estimates the costs at £18.5 billion a year – and the UK's delicate fiscal position, demographics and low-growth economy make such a scenario highly unlikely.

More money will be needed, either via some form of hypothecated tax, or some form of compulsory social insurance that caps liabilities and pools risks – a model that works well in Germany and Japan. Here, civil servants have produced a model where workers over 34 pay an extra 1.8% income tax (above a £6,240) threshold to fund a national Later Life Care Fund.

Separately, Burnham has mooted scrapping inheritance tax and introducing a 10% levy on all estates, not just the largest 5% or so. Such a system would be simple and potentially raise large sums, but it's a tough sell politically and open to the “death tax” accusation.

So what's the solution?

Britain can't afford a “blank cheque” National Care Service that pours resources into a “taxpayer money hole”, says Eamonn Butler on CapX. But it urgently needs a “targeted safety net against genuine catastrophe”.

The first stage of any resolution will surely draw on the 2011 Dilnot report, says the FT: impose a lifetime cap on individuals' contribution to care costs and raise the assets threshold for making them pay. Such a cap would remove the threat of crushing expense that would overwhelm all but the very wealthy. And it would “create an insurable risk against which consumers could take out private insurance, avoiding having to sell their homes in their lifetime”.

The second plank, says Bloomberg, should be to “make more private provision workable”, for example by more stringent regulation that facilitates transparency and comparability, and by ensuring no one is penalised insuring themselves. “New financial instruments – from auto-enrolment pensions with a social-care component to annuities attached to home equity – could play a role if carefully regulated.”

In terms of funding, there “will be fights over thresholds, taxes and who gets what. So be it. The option Burnham can't afford is the one governments have been choosing for decades: pretending the bill disappears if nobody opens it.”

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During Covid, Halfords (LSE:HFD), briefly benefited from the expectation that everyone would become a cyclist. Many people were making changes to their lives, such as adopting a pet, buying an exercise machine, or taking up a new hobby.

Shares in the firms that served these sectors surged, but once the lockdowns ended, many of these interests dwindled, causing the shares to fall back.

Even today, Halfords’ share price is still down 50% from its record peak in May 2021. But recently it has started to take off again and this time the increase could prove sustainable.

Halfords makes its money from selling accessories and providing repair services for bicycles and cars; it accounts for about half of all bicycles sold in the UK. It operates 370 stores, 496 garages, 21 mobile hubs and 92 commercial depots in the UK and Ireland.

Although overall sales have grown at a solid rate, increasing by around 40% since 2021, this conceals the fact that profitability has been far less consistent, due to higher costs and the overstocking of bicycles.

Normalised earnings per share are now less than half the level reached in 2021.

Halfords brings in a new broom

The good news is that Halfords' problems led to the appointment of new CEO Henry Birch last year. Birch has come up with a turnaround strategy based on three ideas.

In the short term, Halfords has worked hard to boost margins by keeping costs under control. It has also taken steps to improve its digital platform, making it easier for its customers to book services and sign up for regular plans.

However, the most interesting part of the new strategy is that Birch has been trying to shift Halfords' business more towards cars, which now comprise around 80% of sales.

He wants Halfords to focus on car repair and maintenance. One reason for this is that this part of the company has more growth potential than the stores owing to the greater opportunities for upselling (offering customers more and pricier products and services).

Another big advantage is that it is much harder for drivers to delay essential repairs than the purchase of accessories, making the division more resilient to the economic cycle.

Already this strategy seems to be paying off, with last year's pre-tax loss becoming a comfortable profit in the year to April 2026. Like-for-like sales (those from existing business units) are also growing at a healthy rate, while gross margins have improved too; Halfords recently upgraded its profit guidance for the next year.

Despite all this, the stock's valuation remains cheap at 12 times 2028 earnings and barely the value of the company's net assets.

The shares also offer a very solid dividend yield of 4.4%. Furthermore, they have soared 75% since 1 May, and they trade above both their 50-day and 200-day moving averages.

Go long at the current price of 232p at £15 per 1p. Put the stop-loss at 167p, which gives you a stop loss of £975.

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Skiing made easy

Wellness, luxury and indulgence come together at Hotel Nesslerhof. This five-star Austrian retreat is ideally located for hiking year-round. But its location within the Alpine valley of Großarl also makes it particularly well-situated for skiing.

Guests can pre-order their ski equipment online before they arrive and find it waiting for them in their personal locker after check-in. They can then cross the road to the Kieserlbahn cable car that will take them up to the Grossarltal-Dorfgastein ski area – part of the vast Ski amadé network (Europe’s largest), with 70km of immaculate slopes and 18 modern lifts. The ski area, where snow is guaranteed from December to April, is suitable for skiers of all levels.

Afterwards, guests should head to restaurant Sky Lounge Wolke 7 for panoramic views at the top of the Kieserlbahn or unwind at the Nesslerhof’s 1,800-square-metre wellness area and spa.

From £428 a night, including breakfast, visit nesslerhof.at/en.

Autumn food festival

The Culinary autumn food festival is returning to Schlosshotel Fiss, high in the Tyrolean Alps, from 5-25 September. Guests can take part in wine tastings and cooking workshops, as well as outdoor activities such as food-themed hikes through the mountains and events at the local distillery.

While the festival is bound to be indulgent, Schlosshotel Fiss has tied it in with its wellness programme so that guests can, for instance, go on guided walks through the hotel’s herb garden to learn about the Alpine plants that go into seasonal dishes.

There will also be yoga sessions beside Lake Wolfsee and sauna sessions in the evenings, accompanied by singing bowls.

Schlosshotel Fiss is situated in the sunny little village of Fiss, at an altitude of 1,438m. In the warmer months, it is ideally located for hiking and mountain biking, and in the winter guests are able to go skiing and snowboarding.

From €746 A night in winter, full board, schlosshotel-fiss.com/en.

Family fun on the slopes

Specialist ski operator Powder Byrne has been organising high-end holidays for families for 40 years. A range of ski programmes is available for children of all ages and abilities and, new for this year, Powder Byrne is introducing a ski clinic for adults to master their form.

The highlights this winter in Austria and Switzerland include Christmas in Arosa. Guests will be able to enjoy reliable early-season snow at Hotel Valsana – a refined hideaway in the Swiss Alps with a focus on staying healthy.

From £19,146 for a family of four for seven nights, with first-class train transfers.

And you can spend Easter at Hotel Maiensee in the Austrian Arlberg at an altitude of 1,800m, which has access to the Arlberg ski area. The pretty little resort of St Christoph is part of the bigger and better-known St Anton ski circuit.

From £19,256 for a family of four for seven nights, visit powderbyrne.com.

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“What should I do if there's a AI crash?” a friend asked me recently. It is a very sensible question – we don't know there will be an AI crash, but having a clear plan to follow when you start to worry is better than waiting and panicking.

However, it's also a very difficult question, because the AI theme is such a huge part of the market: tech is over 35% of the MSCI World index (once you allow for firms such as Amazon and Alphabet assigned to non-tech sectors), while the trillions of AI capital expenditure is also buoying other sectors.

My first suggestion is to look at what wealth preservation trusts such as Capital Gearing (LSE: CGT), Personal Assets Trusts (LSE:PNL)and Ruffer Investment Company (LSE: RICA) hold.

These have diversified portfolios intended to cushion a market downturn, while still achieving growth. You could put some of your portfolio directly into these trusts, or you could look at how they allocate to cash, bonds, gold and other assets such as infrastructure as a template.

Even if you are a growth investor who is comfortable with high volatility to earn higher long-term returns, portfolios like these give you ideas for temporarily reducing risk that may be better than holding cash.

If you prefer open-ended funds, Orbis Global Balanced stands out for an active approach with more of a bottom-up value philosophy than most multi-asset funds.

Hedge against an AI crash with value stocks

If you want to stay entirely in stocks yet still dial down risk, you need to consider what kind of stocks are not caught up in the AI boom and may sell off less or rebound more quickly.

Think about this top down – by region (eg, UK and Europe) or sector (eg, pharmaceuticals and financials). Or you could look for value-focused stockpickers who favour other sectors.

That said, keep in mind that a European industrial that makes power equipment held in a value portfolio may still be a play on data-centre construction.

So it is difficult to anticipate how widely any pain from an AI crash may spread.

The most value-focused global trust is AVI Global (LSE:AGT), while most UK trusts have a value bias.

Among open-ended funds, Ranmore Global Equity has consistent returns from a portfolio that is very different to a typical global fund.

Some niche funds to consider

A third option is to look at very niche strategies whose medium-term returns should hopefully be unrelated to the AI-heavy global index.

Majedie Investments (LSE:MAJE) is now centred around such investments. It's an interesting holding in its own right, while looking at its strategy may help shape your own.

There are many specialist investment trusts and funds such as BH Macro (LSE:BHMG), BioPharma Credit (LSE:BPCR), BlackRock Frontiers (LSE:BRFI), Nippon Active Value Fund (LSE:NAVF) and Rockwood Strategic (LSE:RKW) or Polar Capital Global Insurance.

However, picking such funds is an approach for experienced investors who clearly understand what they are buying.

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Putting money in the S&P 500 is popular among those who want to start investing as well as experienced investors.

The S&P 500 is an index that tracks the performance of 500 of the largest companies in the United States, and is therefore one of the most effective proxies for the US stock market.

If you put your money in the index, you are effectively backing large US companies to continue to perform and grow in the future. Historically, this has brought about large returns.

Between 1 January 2000 and 1 January 2026, the S&P 500 increased by around 386%, and in the year to 17 August 2026 alone, the index rose by around 20%.

Given the index’s historically strong performance, it’s a popular one for people to track – often using an exchange-traded fund (ETF).

ETFs are one of the “the simplest ways to start investing,” says Kate Marshall, investment analyst at Hargreaves Lansdown.

“They can offer a great entry point into investing because they provide exposure to a diversified mix of investments, such as shares or bonds, rather than relying on the fortunes of a single company or asset. This helps to spread risk and can smooth some of the ups and downs that come with investing.”

But with so many options, how do you choose the one that’s right for you?

What are the most popular ETFs that track the S&P 500?

The most popular S&P 500 ETF is the Vanguard S&P 500 UCITS ETF USD ACC (GBP), according to Hargreaves Lansdown.

That title has several components, each of which says something about the ETF:

• Vanguard is the name of the company that issues the ETF and S&P 500 refers to the index the ETF tracks.
• UCITS stands for “Undertakings for Collective Investment in Transferable Securities”, a regulatory framework that governs how ETFs in the UK and European Union operate. It effectively means the fund can be sold to UK and European investors.
• USD refers to the base currency of the ETF – in this case US dollars. Some ETFs hedge against the possible impact of currency fluctuations between their holdings’ domestic currencies and another currency.
• ACC means the fund accumulates and reinvests dividends.
• (GBP) at the end refers to the trading currency of the fund. As this particular ETF is listed on the London Stock Exchange (LSE), you can buy and sell it in British pounds, meaning you do not need to manually convert currency.

This particular fund is listed on the London Stock Exchange (LSE) with the ticker “VUAG”.

The second-most popular ETF on Hargreaves Lansdown’s list is also from Vanguard – it is nearly identical to the one detailed above, but the only difference is that this one distributes your dividends. It trades on the LSE with the ticker “VUSA”.

A list of the top ten most popular S&P 500 ETFs among Hargreaves Lansdown’s investors can be found below.

^{Source: Hargreaves Lansdown, 31 July}

How much does an S&P 500 ETF cost?

When comparing S&P 500 ETFs, one of your biggest considerations should be the fund’s fees as they can eat into your returns.

The main one is the expense ratio, an annual fee charged by the fund provider for managing the fund. These are typically levied as a percentage of your holding in the fund.

For example, VUAG has an expense ratio of 0.07% which is relatively low. In contrast, HSBC's S&P 500 ETF has slightly higher fees of 0.09%.

That means that while both ETFs track the performance of the same basket of companies, you will pay higher fees with HSBC.

You should also look out for other types of general fees involved with investing, like platform fees. These are also usually levied as a percentage by the platform you use to make your investments.

Should I pick an accumulating or distributing ETF?

ETFs often have two variants: accumulating (ACC) or distributing (Dist).

The two labels refer to dividends – payments some companies make to investors – and what happens to them when they are paid out.

An accumulating ETF will automatically reinvest dividends back into the fund. This has the benefit of adding more money directly into your investments, meaning your position may grow faster.

Meanwhile, a distributing ETF will pay dividends into a bank account of your choice to do whatever you want with.

Which ETF to pick will depend on your priorities. Afolabi Thomas, equity specialist, Vanguard said: "Investors focused on long-term growth may prefer accumulation shares, while those looking for an income stream may prefer distribution shares."

One rule of thumb is the further you are away from retirement, the more likely an accumulation fund is right for you, as they allow your investments to grow faster.

“A distribution fund might suit someone who wants their investments to provide a regular income, which could become more relevant as they approach or enter retirement”, Lynn Hutchinson, head of ETF and Index Solutions at wealth manager Raymond James added.

“Though it doesn’t have to be a case of accumulation for younger investors and income for retirees. It really comes down to what you want the income to do. Someone in retirement could quite happily continue using accumulation funds and sell some of their investment when they need cash. Likewise, an investor who is still building their portfolio might prefer to receive the income”.

Why does performance differ between ETFs if they all track the S&P 500?

The performance of S&P 500 ETFs can vary slightly from one another.

This is known as tracking difference. Marshall explains: “Tracking difference shows how much an ETF has outperformed or underperformed its benchmark over a given period and is often the more important measure for investors, as it reflects the return they have actually received.”

There are many reasons an ETF may lag its benchmark, like fees, tax rates or securities lending (where the ETF issuer lends holdings out in exchange for a fee).

“Tracking difference gives you a broader view of what actually happened to the ETF's return once the various costs - and potential benefits - of running the ETF came into play,” said Hutchinson.

“That doesn't mean fees aren't important, they are. But when comparing two ETFs tracking the same index, looking at the OCF alone only tells part of the story. Looking at cost alongside historical tracking difference can give a much better idea of how efficiently an ETF has actually done its job: tracking the index.”

Small cap stocks are often overlooked but, for that reason, they can reward patient investors over the long term.

“Small caps offer a rare combination of attractive valuations, growth, and diversification,” said Abby Glennie, co-manager, Aberdeen UK Smaller Companies Growth Trust. “We’ve also gone through market periods globally where the dominant tech themes have driven handfuls of mega caps to lead markets, but perhaps now is the time for market strength to broaden out. Or at least for investor allocations to broaden out from mega caps for risk diversification, as they become increasingly nervous on the artificial intelligence (AI) trade.”

Glennie highlighted that small cap stocks have held up surprisingly well this year in the face of the conflict in the Middle East – which, on paper, could have looked like a major headwind for smaller businesses.

The MSCI World Small Cap Index returned 13.8% in 2026 through to 31 July, outperforming the core MSCI World Index which gained 10.3% in the same period.

“We aren’t seeing risk-off market performance in the way many would expect,” said Glennie. “Part of this driver is that smaller companies are trading at significant discounts to their historical valuation levels.”

What are small cap stocks?

Investment bank Saxo Group defines a small cap stock as one with a market capitalisation (market cap) ranging between $250 million and $2 billion.

Not everyone categorises small caps in this way. The major index provider, MSCI, groups stocks into size categories according to the percentage of the investable market they cover in each individual country, rather than using an absolute figure as a threshold.

“When constructing the MSCI World Small Cap Index, MSCI looks separately at each developed market, such as the US, Japan, UK and Australia,” said Lynn Hutchinson, head of ETF and index solutions at Raymond James. “The large and mid-cap companies might make up around the first 85% of each country's investable stock market.” Small caps then become the rest, and MSCI then combines the small cap stocks from each country into a single, market cap-weighted index.

Generally, though, the $250 million to $2 billion range is a good rule of thumb for thinking about small caps.

With exceptions, their smaller size means small caps are less globalised than larger stocks – they may, for example, be more tapped-in to the domestic economy of their home country than larger cap stocks.

Why invest in small caps?

Small caps can offer diversification, especially in the current environment where momentum investing has concentrated lots of portfolios into the world’s largest stocks.

“Small caps provide exposure to a much broader range of businesses, sectors, and growth drivers,” said Glennie. “Small cap benchmarks and portfolios tend to be very diverse in that way, not dominated by handfuls of stocks or one overarching theme.”

They also offer the potential for higher returns, though this comes with the caveat that you might need to be prepared to ride out periods of volatility.

“In my view, small caps shouldn’t be treated with fear but with healthy curiosity,” said Angeline Ong, senior investment analyst at trading platform IG.

Small caps also offer good value to investors at the moment. The MSCI World Small Cap Index has an average trailing price/earnings (P/E) ratio of 18.4, as of July 2026 – compared to 23.1 for the MSCI World Index, according to data from investment research firm Morningstar.

Are UK small caps good value?

The UK’s small cap sector in particular offers good value. It trades even lower – at just 15.6 times trailing earnings, according to Morningstar.

“We see opportunities across global small caps, but the UK remains especially compelling on valuations,” said Glennie. “UK smaller companies have experienced a prolonged period of investor neglect, and the asset class has been unloved.

“This has left valuations substantially below both their own history and many international peers,” Glennie continued. “At the same time, many UK listed small caps generate revenues overseas, giving investors access to international growth opportunities but at a discounted price awarded for its headline UK listing tag.”

UK stocks are widely undervalued, across the market cap spectrum. But its small caps are weathering the economic storms that 2026 has thrown. The FTSE 250 index (which is made up of mid-cap stocks) gained 10.6% in 2026 through to 25 August, while the FTSE AIM All Share Index (comprising the country’s smallest stocks) gained 6.4%.

“While macroeconomic uncertainty remains, this isn’t holding back the asset class in the way many market participants might fear,” said Glennie. “Many high quality UK small caps continue to deliver strong earnings growth, maintain strong balance sheets, and generate strong cashflows, as well as support shares through ongoing share buybacks.”

The risks of investing in small caps

MSCI highlights the fact that small caps can be more volatile than larger stocks. Additionally, they might be less liquid, which can make trading them more costly.

“If you’ve not done your homework, your due diligence… you could be caught offside and end up nursing quite large losses,” said Ong.

The lack of liquidity, Ong said, could mean you can’t sell a position you want to exit quickly enough just because there aren’t enough buyers on the other side.

“The risk with small caps is you might not have the flexibility if you want to get in and out quickly,” she said.

How to invest in small caps

It’s tempting to try to pick the small cap stocks you want to invest in, particularly as many of these might be businesses you’re familiar with yourself.

But this approach can exacerbate the risks of small cap investing. “We’d suggest [small cap investing] is best approached through a portfolio holding, rather than direct individual equities,” said Glennie. “This is because of the benefit of risk adjusted returns that you get through a managed portfolio, whereas at individual stock levels the risk level is much higher- so that strategy is perhaps only suitable for a certain type of investor.”

Tracker funds replicating some of the major small cap indices include the iShares MSCI World Small Cap UCITS ETF (LON:WLDS) or the Vanguard FTSE Global Small-Cap UCITS ETF (LON:VSML).

Active funds tracking global small caps include the Janus Henderson Horizon Global Smaller Companies Fund or the Invesco Global Smaller Companies Fund.

Investment trusts that focus on small caps include The Global Smaller Companies Trust (LON:GSCT) and Edinburgh Worldwide (LON:EWI).

For a focus on UK smaller companies, you could select Aberdeen UK Smaller Companies Growth (LON:AUSC). Top holdings as of 31 July include investment platform AJ Bell (LON:AJB) and construction firms Morgan Sindall (LON:MGNS) and Galliford Try (LON:GFRD).

If you do want to pick your own small cap stocks, Ong stresses the importance of sticking to companies, or at least sectors, that you understand very well.

“It’s not like buying Microsoft,” she said. “You really need to know what you’re buying.”

Having sufficient savings is an important step towards financial independence.

To ensure your nest egg is working hard for you, it’s a good idea to understand tax-free allowances, how inflation affects your finances, and the rules around how different savings accounts operate.

Can you get full marks in our savings quiz? Test yourself below.

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

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• Best easy-access savings accounts
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• What is an ISA? How they work and what you need to know

Almost one in 10 people in the UK own cryptoassets, but HMRC suspects tens of thousands are failing to pay tax on them properly.

According to the Financial Conduct Authority (FCA), 8% of UK adults held cryptoassets in 2025, up from 4% in 2021.

However, there’s concern some crypto investors don’t understand the tax implications of receiving, holding and selling these assets.

HMRC sent out 81,000 warning letters to crypto investors it suspected of underpaying tax in 2025/26, according to a Freedom of Information (FOI) request by accountancy firm UHY Hacker Young, up from 65,000 in 2024/25 and 27,700 in 2023/24.

Neela Chauhan, a partner at the firm, said: “A lot of the traders are young, have had little previous exposure to HMRC and often work under the assumption that HMRC has limited visibility over their activities.”

Recent FCA research found UK-based crypto investors tend to be younger, with 15% of 18 to 34-year-olds owning cryptoassets versus 9% of 35 to 54-year-olds.

Chauhan added: “The tax treatment of cryptocurrency in the UK is complex, and many individuals do not fully understand their reporting obligations or recognise when transactions give rise to taxable income or gains that must be disclosed to HMRC.

“Crypto investors often forget that you may still have made a taxable gain even when you are swapping one cryptocurrency for another and might not be aware that the income you can earn by lending cryptocurrencies is taxable.”

When you might owe capital gains tax cryptoassets

You may be taxed when you dispose of cryptoassets for gain or profit, as is the case with other assets like stocks or shares.

Disposing of a cryptoasset involves selling it, exchanging it for another type of cryptoasset, using it to pay for goods or services or giving it to another person, unless that person is a spouse, civil partner or you are giving it to charity.

Different types of cryptoasset, such as Bitcoin and Dogecoin, are typically treated as separate assets and gains need to be calculated on each type individually.

Everyone receives a capital gains tax (CGT) allowance of £3,000 each financial year. This means you can make up to £3,000 in capital gains without owing any CGT.

If you make more than this allowance in gains when disposing of assets, including cryptoassets, you will likely owe CGT.

Typically, the gain made is calculated by working out the difference between what you paid for the asset and what it sold for.

However, sometimes you have to use the market value to work out a gain, for example if you have cryptoassets that have been transferred between ‘connected persons’ – such as a spouse or civil partner.

How to report and pay cryptoasset capital gains

You can report gains on cryptoassets by either completing a self-assessment tax return at the end of the tax year or by using the CGT ‘real time’ service.

If you’re reporting your gain on a self-assessment return, you should complete it in pound sterling within the cryptoasset section.

You can use the real time CGT service to report assets sold in the current or previous tax year.

When working out your gain you can deduct certain allowable costs. This includes transaction fees (exchange or trading fees) and costs incurred for advertising a cryptoasset for sale.

You can also offset capital gains made from cryptoassets with capital losses, but you must report these losses to HMRC.

Meanwhile, if you’ve paid income tax on a cryptoasset, you won’t pay CGT on that amount. You may have to pay CGT when you come to dispose of that asset though.

Once you’ve reported any gains, HMRC will send you a letter or email with a payment reference number starting with ‘X’.

You use this reference when paying the tax, either through the online tax payment service or through online banking or cheque.

You have to report any gains by 31 December in the tax year after you made them, and pay by 31 January.

For example, if you made a gain in the 2025/26 tax year, you would need to report it by 31 December 2026 and pay the gain by 31 January 2027.

When you might owe income tax on a cryptoasset

You may also owe income tax on cryptoassets if you received them in a specific way.

Mining

‘Mining’ involves helping to solve difficult mathematical problems and maintaining a cryptoasset network, for which you can earn rewards.

HMRC generally treats income made from mining as trading or miscellaneous income which means it’s subject to income tax.

Staking

‘Staking’ is when you temporarily lock up your cryptoassets to keep a blockchain network running. In return, you can earn extra cryptoassets as a reward.

Like mining, you have to pay income tax on these earned cryptoassets.

Airdrops

A cryptocurrency airdrop is when someone is given free tokens, sometimes as part of a market or advertising strategy to raise awareness of a new digital currency.

You may also receive airdrops for answering a survey or helping promote a digital currency through social media.

Typically, if you received airdropped cryptoassets in return for a service, you will owe income tax.

Employment income

If you receive cryptoassets as income from an employer, they count as ‘money’s worth’ and the value of the asset will be subject to income tax.

Allowance for money earned through trading income and miscellaneous income

You receive a £1,000 allowance per year for trading income or miscellaneous income.

This can apply to income earned through mining, staking and airdropping, so income tax would only apply on income above this threshold.

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

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

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

Where PensionBee comes into the picture

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

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

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

How PensionBee consolidates retirement pots

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

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

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

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

Profitability is in sight for PensionBee

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

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

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

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

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

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

Three Hong Kong stocks for your portfolio

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

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

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

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

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

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

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

Friedrich Merz stretched the mandate

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

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

The problems facing Burnham

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

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

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

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

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

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

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

Win-win investing from INPP

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

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

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

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

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

INPP’s shift to higher returns

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

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

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

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

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

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

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

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

Matthew Partridge: Which guardrails in particular are being eroded?

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

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

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

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

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

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

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

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

Matthew Partridge: What is the most likely outcome?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

But the Magnificent 7 no longer ride together and their performances this year are very different. The S&P 500 has returned 13.4% year to date. Amazon has returned 21%, but Tesla -25%. In between are Nvidia (19%), Apple (16%), Alphabet (12%), Microsoft (6%) and Meta (0.4%). As a result, Meta and Tesla have been pushed down the list of the world's largest companies by TSMC, Broadcom, SpaceX and Saudi Aramco, now in sixth, seventh, eighth, and ninth place, respectively.

Fifteen companies in the S&P 500 have more than doubled in value this year, led by Sandisk (+413%), Dell (+255%) and Micron (+207%). None of the Magnificent 7 come in the top 150; Tesla is near the bottom. As strategist Ed Yardeni notes, the Magnificent 7 are up just 4.8% this year against 16% for the remaining “impressive 493”. Information technology is still the S&P's second-best-performing sector (up 23.6% against +28.4% for energy), but the Magnificent 7 no longer lead it.

The Magnificent 7 have invested heavily in AI

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

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

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

How other markets are faring

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

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

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

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

This is not the end for the bull market

The outperformance of the Magnificent 7 in recent years looks like having been a passing phase. Its end does not signal the end of the bull market, much less an imminent collapse, but a healthy return to the traditional pattern whereby mega-caps lag a broadly advancing market.

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

Why are UK housebuilders struggling?

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

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

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

Hoarding land and restrictive planning rules

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

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

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

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

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

A blizzard of other problems for UK housebuilders

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

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

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

Andy Burnham's challenge

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

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

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

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

Signs of an uptick in the housebuilding sector

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

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

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

The housebuilding market may be about to turn

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

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

The most promising housebuilding investments to buy now

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

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

If you're willing to take on a bit more risk, then Vistry (LSE: VTY) is even more of a bargain, trading at an even greater discount of more than 70% to its book value, and at only 6.4 times its 2027 earnings, following a series of scandals over understated costs, followed by poor results. The company has a unique model, says ClearBridge's Jo Rands. It partners with local authorities on projects and so “could possibly do well from a greater emphasis on affordable housing” (though Rands emphasises that she doesn’t have an overall view on the company).

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

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

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

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

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

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

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

Does your land have development value?

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

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

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

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

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

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

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

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

How does it work?

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

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

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

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

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

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

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

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

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

Will selling your land devalue your home?

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

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

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

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

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

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

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

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

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

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

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

What to consider before selling your land

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What’s driving India’s stock market?

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

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

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

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

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

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

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

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

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

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

IT services

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

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

Financial services and banking

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

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

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

Pharma and healthcare

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

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

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

Consumer discretionary spending

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

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

Are Indian stocks overpriced?

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

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

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

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

How to invest in India

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

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

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

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

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

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

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

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

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

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

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

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

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

The London Stock Exchange is trapped in a vicious circle

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

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

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

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

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

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

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

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

Source: ONS

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

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

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

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

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

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

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

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

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

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

How much do you need for a comfortable retirement?

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

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

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

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

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

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

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

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

But what about if your state pension was reduced?

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

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

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

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

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

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

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

Increasing pension contributions

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

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

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

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

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

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

Consider building other investment pots

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

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

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

Can you boost your savings?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What is momentum investing?

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

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

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

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

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

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

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

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

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

What are the drawbacks of momentum investing?

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

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

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

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

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

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

Momentum is arguably better-suited towards shorter term approaches.

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

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

How can you adopt a momentum investing strategy?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Will Noel Tata win Tata Group's succession drama?

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

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

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

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

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

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

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

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

Three hotels in the Chia Laguna Nature Resort

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

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

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

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

Drink the elixir of life at the Conrad Chia Laguna

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

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

The triumph over mass tourism

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

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

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

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

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

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

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

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

ISA allowances

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

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

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

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

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

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

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

Savings allowance

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

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

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

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

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

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

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

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

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

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

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

Pensions allowance

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

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

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

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

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

Capital gains tax allowance

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

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

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

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

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

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

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

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

Dividend allowance

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

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

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

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

Transfer money to spouse

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

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

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

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

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

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

IHT gifting allowance

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

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

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

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

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

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

Children's ISA allowance

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

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

Consider Venture Capital Trusts (VCTs)

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

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

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

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

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

Three quality stocks for your portfolio

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

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

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

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

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

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

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

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

Why do companies rely on shrinkflation instead of raising prices?

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

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

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

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

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

A changing environment around shrinkflation

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

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

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

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

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

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

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

Anthony Fauci – America's fall guy

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

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

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

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

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

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

JPMorgan UK Small Cap Growth & Income trust pays dividends

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

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

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

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

JPMorgan UK Small Cap Growth & Income is deeply undervalued

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

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

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

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

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

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

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

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

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

John Healey appears to have pressed the “repeat” button

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

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

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

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

Uranium fundamentals remain strong despite volatility

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

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

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

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

Uranium supply keeps arriving late and light

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

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

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

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

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

Uranium is ready to roll

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

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

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

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

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

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

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

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

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

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

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

Clarkson is a hidden growth engine

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

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

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

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

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

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

Clarkson has formidable defences

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

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

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

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

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

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

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

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Is the UK too centralised and will devolution help?

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

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

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

What is Labour doing?

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

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

What has Andy Burnham added?

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

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

Is this good news?

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

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

The challenges to devolution

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

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

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

Is there any hope of genuine change with devolution?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Average stamp duty costs by region for first-time buyers

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

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

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

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

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

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

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

Average stamp duty costs by region for home movers

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

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

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

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

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

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

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

How stamp duty is paid

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

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

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

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

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

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

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

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

What’s going on in the bond markets?

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

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

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

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

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

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

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

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

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

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

Where does volatility come from?

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

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

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

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

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

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

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

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

What are some less volatile sectors?

Consumer staples, utilities and healthcare

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

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

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

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

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

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

Financials

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

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

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

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

Automotive

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

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

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

The case for balance and value

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

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

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

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

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

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

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

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

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

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

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

Matthew Jukes's legacy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Restoring the iconic Hilton Istanbul Bosphorus

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

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

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

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

Turkish delights with a twist

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

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

What to see in Istanbul

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

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

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

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

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

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

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

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

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

Record pension withdrawals

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

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

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

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

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

Gifting – things to consider

1. Care costs

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

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

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

2. Income tax

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

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

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

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

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

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

3. Inheritance tax

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

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

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

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

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

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

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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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