Income tax receipts make up more than a quarter of the government’s total income each year, making it a key tool for the government to cover its costs.

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But how much do you know about the vital tax? Test your knowledge in our quiz, which looks at income tax in England, Wales and Northern Ireland. Residents in Scotland pay Scottish income tax rates to the Scottish government.

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The rise of the so-called “experience economy” offers a welcome alternative to our increasingly digitised life. It promises highly curated, in-person experiences offering the sense of community and direct physical engagement with the world that has been stripped from the daily rhythms of life.

It is a truism that people's lives are increasingly digitalised, but the data still retains the capacity to shock. UK adults spent 4.5 hours per day online in 2025, according to Ofcom. For 18-to-24-year-olds, the figure was six hours and 20 minutes, mostly on their smartphones. And it's not as though we are spending these digitalised lives with others. A significant number of people work remotely, at least some of the time. Over 40% of UK workers spend part of their week working from home.

More unsettlingly, when we are online, we often consume content that isn't even generated by a fellow human being. The marketing platform Ahrefs recently conducted a remarkable study showing that almost 75% of new websites contained significant AI-generated content. The machines aren't just delivering entertainment; they're creating it.

But as investors, we know that when something becomes abundant – screen time, digital content, isolation – something else becomes scarcer, and, typically, more valuable. Today, some of that scarcity seems to be migrating towards the experience economy.

An “experience” might be a trip to a concert or a sports match. It might be dining at a restaurant whose kitchen offers a special menu, or taking a trip to a beach with the softest sand and the bluest water. This isn't new. Business strategists Joseph Pine and James Gilmore coined the phrase “experience economy” in 1998, with the idea that companies could command pricing power through events that engaged consumers on a memorable, emotional level. But the forces that created the need for such an economy have only become stronger over the last quarter of a century.

What is the experience economy?

The evidence for an experiential boom in spending is already widespread. In its 2026 State of the Consumer report, consultancy McKinsey highlighted that the global experiences market between 2023 and 2025 grew more than three times faster than spending on non-essential goods. Mastercard recently found that 88% of British consumers would be happy to redirect their spending on things towards experiences.

Michelle Evans, data group Euromonitor's Global Lead on Retail & Digital Consumer Insights, says there is a broad rotation among consumers from “owning more to experiencing more”. The trend has been building for over a decade, but has accelerated since Covid.

It seems to be a reaction to digital saturation: “In an increasingly digital world, consumers are placing greater importance on experiences that improve wellbeing, create memories, strengthen relationships and feel genuinely human.” And young consumers, those most exposed to digital lives, are leading the rotation.

Live music and sports are among the purest embodiments of these experiential urges. Think of Taylor Swift's Eras Tour, the 149-concert extravaganza in 2023 and 2024, which became an economic phenomenon in its own right. It was the most financially successful tour of all time, generating over $2 billion in direct box-office sales, more than twice its nearest rival.

How Swifties are fuelling the experience economy

Twenty-two million people joined the virtual queue to buy tickets for Swift's Singapore concert, almost four times the country's population. The vast majority of these would-be attendees were planning to fly in from overseas; they were going on a musical pilgrimage. The quasi-religious nature of this fandom is underlined again by the fact that in Philadelphia over 20,000 ticketless fans stood outside the stadium during the concerts, night after night, just to be physically close to the Swiftian phenomenon.

A similar devotion characterises live sports. According to entertainment analytics firm Two Circles, 79.4 million fans attended ticketed professional sports events in the UK in 2025, 1.7 million more than the year before, and this despite a 5% increase in ticket prices. Attendance levels are far above pre-Covid figures.

When the Premier League first started, in the early 1990s, stadium utilisation rates sat at 70%. In the 2024-2025 season, that had risen to 98.8%. There is a sense in which attending a concert, or a Premier League match, is not just entertainment; it is a way for people to forge their identities and feel part of something larger than themselves.

This matters economically. AI may be able to commoditise digital content, but it cannot replicate the experience of standing next to 60,000 people at Anfield. “Travel, wellness, live events and community-based experiences all benefit from the fact that they are difficult to replicate digitally and often become more valuable as consumers spend more of their lives online,” says Evans.

Economist Alex Imas has argued that as AI makes some forms of production abundant, scarcity will not disappear, but will relocate towards what he calls the “relational sector”, where the human element itself contributes to the value of the product. As investors, we want to be in the businesses of monetising this relocated scarcity.

There are several ways we can invest in the experiential economy. Live Nation Entertainment (NYSE: LYV) is the world's largest live-entertainment company, operating concert promotion, venues and ticketing services. It is positioned between consumers and the increasingly valuable experiences they are seeking. Concerns over competitive practices have dogged the stock. A federal jury earlier this year found it operated a monopoly, and it is unclear how this will be rectified.

The experience economy is safe from AI

However, the underlying business, protected by exclusive, multi-year venue and artist contracts, remains structurally difficult even for AI to disintermediate. The extraordinary demand for the sort of experiences it facilitates was illustrated by the collapse of Ticketmaster's system under the weight of 3.5 billion ticket enquiries for Taylor Swift's Eras Tour.

Airbnb (Nasdaq: ABNB), the world's largest platform for booking alternative accommodation, is another interesting play on the experiential economy. The company has a valuable set of inventory consisting of millions of homes across the world, which it has spent almost 20 years building. While its product (accommodation) isn't scarce, Airbnb's value lies in facilitating the increasingly valued experience of global travel, taking a healthy commission in the process.

A third way to play consumers' strong desire to invest in live experiences is TKO Group (NYSE: TKO), a firm roughly split between the UFC, the world's leading mixed martial-arts business, and WWE, the dominant player in the world of professional wrestling. These distinct, but related, businesses are near-monopolies in their respective domains.

TKO Group differs from Airbnb or Live Nation. It is not an intermediary; it owns the product itself. Live sports are perfectly placed to resist the commoditising effects of AI. Their essence is that they are unique and occur in real time; even if you cannot be there in person, you must be sitting in front of a screen as the event unfolds. The fact that there is no algorithmic substitute for their product gives them low price sensitivity.

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Judges Scientific (Aim: JDG) was once a favourite of the London market. Over the years from March 2004 to March 2024, the shares rose 10,300%, compared with a return of just 160% for the FTSE All-Share excluding dividends. But since reaching an all-time high in 2024, the shares have lost nearly two-thirds of their value. Investors have clearly lost patience with the group, which once commanded a valuation of 40-plus times forward earnings. However, the issues seem to be more cyclical than structural, and the underlying business model is far from broken.

How Judges Scientific profits from niche industries

Judges Scientific isn't really one single business. The group operates as a collection of businesses acquired over time and owned under one holding company. Former CEO David Cicurel founded and seeded the firm in 2002. It started as an activist investment company, but shifted direction shortly after its initial public offering in 2003 (priced at 95p per share vs the recent peak of 12,000p).

Rather than buying stakes in public equities, Cicurel decided the business would achieve better returns by acquiring whole companies, particularly small firms serving a niche in key scientific and testing end markets. The first entity acquired under this new regime was Fire Testing Technology, which specialises in measuring how different materials react to differing levels of fire and heat. With $3 million in annual sales and an earnings before interest and tax (Ebit) margin of 25%, the deal became the blueprint for further acquisitions.

Cicurel and his team continued to build Judges Scientific with similar acquisitions. The template they used and continued to use hasn't really changed. Judges acquires small, usually owner-operated entities, and leaves them to it. It provides the capital and funding to develop new technology or processes, while the underlying businesses continue to focus on what they do best – serving their customers with small, but vital tools and products.

A key metric for the group has always been return on tangible invested capital (ROTIC), a measure of profit for every £1 invested in tangible assets. For Cicurel, any business with a ROTIC below 20% was a no-go and, as a group, Judges has tended to earn a ROTIC of 20%+ across the 23 core businesses it owns today.

Why is Judges Scientific struggling?

After nearly two decades of near-continuous growth, Judges Scientific's growth story stalled in 2024. After its Geotek subsidiary reported delays to a key high-margin project, sales ended the year 2% lower. In November of that year, the firm also issued a profit warning, the only one in its history. Profit fell 21% for the full year. Still, three new businesses were acquired across the holding firm and via subsidiaries as the group continued to execute on its acquisition strategy.

In 2025, clouds continued to gather. These included the hit to global research spending following US budget cuts, higher operating expenses and a slowdown in orders from China. North American revenue fell 25% overall. Net profit declined from £22 million in 2024 to £21 million in 2025. At the end of November 2025, Cicurel also announced he would step down as head of the business in February 2026, to be succeeded by former group business development director Tim Prestidge. The group's long-standing CFO also said he would step down in September 2027. Investors didn't hang around to find out how Judges would navigate the transition. Stock sales pushed prices down 50% from their all-time high in 2024 to the end of 2025.

Unfortunately for the new CEO, the outlook doesn't look set to improve anytime soon. Revenue in the first half of the fiscal year fell 21% year on year to £55.7 million, with adjusted pre-tax profit down 75%. Order intake fell 12% in the first half, driven by lower demand from the US and China and softer sales from renewable energy customers. However, Judges says momentum has picked up since the period ended, with order intake running just 1% behind the levels of the prior year.

Judges Scientific is priced for perfection

Judges Scientific's underlying business performance tells one story, but it's also worth noting that the shares have rerated substantially over the past two years. In 2024, before the recent sell-off began, the shares traded at a forward price-to-earnings ratio (P/E) of around 43, a premium multiple by any yardstick. After the recent decline, the shares are trading at just 19 times forward earnings, a much more realistic multiple, but arguably still a bit high for a zero-growth business.

Still, it's clear the company is suffering from cyclical, not structural issues. Underlying end markets are robust and demand for scientific equipment hasn't vanished. Granted, it will take time for funding to return to the sector after budget cuts, but Judges' underlying businesses are still investing, developing the cutting-edge kit that'll be required when funding returns.

What's more, Judges Scientific has the cash to buy peers that might also be struggling and don't have access to the same capital reserves. The group has also extended its banking facilities to 2030, which will underpin its ability to keep growing through its buy-and-build strategy. Net debt of £41 million is equivalent to roughly 1.9 times earnings before interest, tax, depreciation and amortisation (Ebitda), giving headroom for further borrowing. Most of Judges' end markets are highly fragmented, served by smaller owner-operated businesses that may not survive alone.

Analysts at Berenberg say the group's margins will stabilise and sales will improve next year as funding and spending recover. They've then pencilled in a small recovery in 2028, before growth really returns in 2029. Based on these forecasts, now could be a good time to start accumulating shares in this one-of-a-kind business, which is going through a rough patch.

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“CryptoDad” J. Christopher Giancarlo is a lawyer who was chairman of the CFTC between 2017 and 2019. He is the author of CryptoDad: The Fight for the Future of Money, and his latest book, The New Adventures of CryptoDad: The Quest for Financial Freedom in the 21st Century, will be out in October.

Matthew Partridge: How did you became known as “CryptoDad”?

J. Christopher Giancarlo: When I first became chairman of the US Commodity Futures Trading Commission (CFTC), I felt that at some stage we would be called upon to make rules for cryptocurrencies, so I worked hard to understand the area, including doing some synthetic bitcoin mining in the chairman's conference room. Around that time, the Chicago Mercantile Exchange asked us about the listing and trading of crypto derivatives. While we gave it additional regulatory scrutiny, we eventually greenlit the launch of bitcoin futures in the face of furious opposition from Wall Street and global regulators.

I was therefore summoned to justify our decision in front of a US Senate committee. While I submitted a 60-page briefing document to the committee beforehand, I made a big show of pushing my papers away and telling the committee that I was approaching them as both a regulator and a father. I then explained that I had three college-age students whom I had tried to interest in the stock market. However, all they wanted to talk about was crypto, and I argued that we owed it to this generation to build a sensible regulatory regime so that they are not ripped off.

As a result, I was dubbed “CryptoDad” by the industry. The name stuck; I like it and use it. But what I'm most proud of is that eight years after we gave the go-ahead to bitcoin futures, that market is deep, liquid and, most importantly, well regulated by a competent federal regulator. There has been no market manipulation.

Matthew Partridge: You call Donald Trump the first crypto president. Why?

J. Christopher Giancarlo: Crypto is one example of his administration's belief that the only way for the US to cope with its debt mountain is through unleashing innovation and securing strong economic growth. So crypto is just one technological innovation, along with nanotechnology, biotechnology, drone technology, rocket technology and AI, that will help the US grow out of its debt load. Trump was also clever enough to recognise that the Biden administration had squandered its political advantage with the crypto generation by suppressing innovation in the field.

Matthew Partridge: Do you think the crypto industry has enough momentum to withstand a possible change in the balance of political power?

J. Christopher Giancarlo: The Trump administration's message to the crypto community is that if they stand by it, the president will do everything possible to ensure that even if the Republicans lose the White House in two years' time, the roots of crypto innovation will have become so deep that they can't be pulled up by the opposition. Whether this will actually happen is another matter. Still, I would say that crypto is no longer a political dividing line between the parties. Data centres and the development of AI are far more contentious.

Matthew Partridge: You talk about property records as being one of the “killer apps” of the crypto revolution. What exactly do you mean by this?

J. Christopher Giancarlo: Property is one of the most analogue financial assets. For one thing, many property records are still stored on physical paper. During the Great Chicago Fire, all the property records were housed in a building that went up in flames and it took decades to figure out who owned what. What's more, many systems have complicated rules, such as 100-year leaseholds in the United Kingdom. Even in the US, many property buyers have to take out insurance against ownership claims from other people. Establishing ownership of the title can be difficult, especially the further back you go.

Putting all these records on the blockchain [the digital ledger underpinning a cryptocurrency], as my county in New Jersey has done, will greatly reduce ambiguity around ownership, while speeding up the selling process by allowing for easy transfer of titles. It will even allow people to sell fractional shares in property. Most importantly, it will make it much less onerous for people to borrow money against their property, which will be transformational, given that property is one of the biggest assets in most people's portfolios.

Matthew Partridge: What is the Digital Dollar project?

J. Christopher Giancarlo: When I left government, I believed that eventually every major economy would put its currency on a blockchain-based system and tokenise the instrument [making a digital version of its currency, similar to bitcoin]. I therefore founded the Digital Dollar project to focus on the answers to three questions.

Firstly, how do we future-proof the dollar by putting it on the blockchain? Secondly, how do we do so while retaining, if not enhancing, the dollar's status as a reserve currency? But the third and perhaps most important mission is to make sure that the dollar is future-proof and put on a blockchain in a way that secures free enterprise, free trade and individual privacy.

This is important, as China's digital yuan is a digital modernisation, but it's also meant to be a way to control its population. The European approach to its digital euro doesn't purport to be an instrument of control, but does seem to be a surveillance tool. Agustin Carstens of the Bank for International Settlements has even talked about using a digital single currency to track every euro. By contrast, I believe that government shouldn't be able to know what you do with your money unless there is a probability that you're up to something illegal.

Getting that balance right is crucial, so we founded the Digital Dollar project to work on those three elements – and we've now secured continuous funding from our benefactors through 2028. We take no view as to whether that digital modernisation of money should be done by the private sector or the public sector. The Trump administration is clear that this modernisation will take place through private stablecoin operators. [Stablecoins are cryptocurrencies linked to real-world assets such as the US dollar or gold.] Congress has passed the Genius Act, which legalises the modernisation of the dollar through the private sector.

Matthew Partridge: Are there any countries other than the US that are doing interesting things with crypto?

J. Christopher Giancarlo: I think Japan will become a leader in private-sector, non-dollar-based stablecoins. Singapore and the United Arab Emirates have been very innovative in their licensing regimes. However, while Europe has passed the comprehensive Markets in Crypto-Assets Regulation (MICA), this has not unleased the wave of innovation that it hoped it would, and has largely been overlooked by other regulators. I'm also a bit disappointed by the UK, which was ahead of us ten years ago.

Matthew Partridge: What should the UK do to regain its position at the forefront of crypto?

J. Christopher Giancarlo: I would use an Italian word, coraggio, which means courage. I think that since Brexit, for whatever reason, the UK has been unwilling to take risks when it comes to financial innovation. My approach is to let innovation flourish, but make sure the regulator is just one step behind and well equipped with some of the best minds available to help it understand the sector's innovations.

Matthew Partridge: Bitcoin and crypto generally have become mainstream assets in recent years. Do you think that means the huge price gains we've seen in the last decade are much less likely in future? Is crypto likely to begin behaving more like a currency than an investment?

J. Christopher Giancarlo: I think the triple-digit percentage gains we've seen are probably a thing of the past. When it comes to a new technology, the outsized gains for investors often come early. So as the asset class matures, the scope for 100%-plus gains dwindles.

The same thing happened with the internet revolution 25 years ago. The big gains for companies such as Cisco Systems and Microsoft were in the early years. And you see that in all new technology revolutions; the biggest gains in the AI companies came about two years ago. That's why investors are always looking for the next new thing.

Matthew Partridge: What is the latest thing in financial technology (fintech) that could become the next crypto?

J. Christopher Giancarlo: Decentralised financial markets. Markets used to be closed on weekends, so if an event occurred on a Saturday, you couldn't hedge your position until Monday morning. Well, along comes a decentralised exchange called Hyperliquid, with its own specialised blockchain, and suddenly people are trading within minutes of a Saturday event. Traditional exchanges are now starting to operate 24/7, because the decentralised exchanges have revealed demand on weekends.

The same thing is happening with so-called perpetuals. Futures contracts used to be dated, with the parties settling up at a particular time. But now perpetual futures allow you to hedge a position indefinitely; you just continue to fund the margin. Again, that began in many offshore markets. Decentralised exchanges are forcing traditional markets to up their game.

Matthew Partridge: You've said that crypto is a young person's financial revolution. Do you think it still has a role to play in a low-risk portfolio of someone who is retired, or close to retirement?

J. Christopher Giancarlo: As you age, you move from equities to debt and ultimately cash, and the biggest risk becomes inflation. Since bitcoin is anti-inflationary, with many people seeing it as the equivalent of gold, it certainly has a place in such a portfolio. More broadly, I think the traditional financial system served the second half of the 20th century very well. But times are changing, and the current system has proved slow and expensive. Moreover, crypto is another element of how the internet has changed how we communicate with each other.

What I would say to the older generation is that the new generation, which grew up trading tokens on video games and has never set foot in the bank branch, is going to bring this new system with it, so there's no going back, and everything of value is ultimately going to be tokenised and put on a blockchain. Instead of fighting the trend, you should learn about it and consider putting some crypto in your portfolio to protect you against the one trend that, unfortunately, doesn't seem to be reversing: Western governments debasing their money.

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.

Sheikh Tahnoon is the younger brother of the UAE’s ruler, Sheikh Mohamed bin Zayed (MBZ). He combines his role as the emirates' top money man and dealmaker – he runs the UAE's largest sovereign wealth fund and the First Abu Dhabi Bank – with a vital position as head of national security. He is perhaps the individual who has done most to further his country’s relations with the US.

Twenty years ago, the United Arab Emirates was “at the centre of a political firestorm” when a bid to buy up six major US seaports, through the Dubai-owned logistics company DP World, triggered uproar, says the Financial Times. Alleging the oil-rich Gulf state was a financing hub for al-Qaeda, some in Congress warned of a dire threat to US security if the UAE was allowed to run strategic ports. DP World was forced to back out of the sale. It also proved “a watershed moment for the UAE – and its relationship with America”.

The ruling Al Nahyan dynasty, implacably opposed to Islamic extremism, decided it was time to fix this “fundamental misunderstanding”. And they did. Two decades on, the UAE is one of America's most capable allies and business partners in the Middle East.

Sheikh Tahnoon, who is rarely seen in public without his trademark dark glasses, cuts an enigmatic figure, says The Guardian. His influence is global. He presides over an economic empire worth roughly $1.5 trillion – equal to the entire output of Indonesia or Turkey – with an extraordinary breadth of investments. In the UK alone, he oversees healthcare providers and property giants and manages investments in public utilities such as Thames Water. This summer, the sheikh's investment conglomerate IHC bought a controlling stake in Richard Caring's Ivy hospitality empire.

Sheikh Tahnoon's race to global dominance with G42

But the business that has done most to cement relations with the Trump administration and Silicon Valley is Sheikh Tahnoon's AI and cybersecurity company G42, which has now successfully positioned itself at the heart of the global AI establishment. Microsoft has invested $1.5 billion and its vice-chair, Brad Smith, now has a seat on the G42 board. G42 is either a direct investor in or a major partner of Anthropic and OpenAI.

Donald Trump has “clutched Tahnoon and G42 close to his bosom”, and last year reversed a decision to restrict the export of AI chips to the UAE, paving the way for the construction of the biggest data centre in the world in a campus outside Abu Dhabi, says The Wall Street Journal. Dubbed “Stargate UAE”, the completed facility will have a 5GW power capacity, up to five times the size of today's largest hyperscale data centres. The US chip deal was announced two weeks after one of Tahnoon's investment vehicles acquired $2 billion worth of cryptocurrency issued by the Trump family's company, World Liberty.

Sheikh Tahnoon's father, Sheikh Zayed, who established the ruling dynasty following independence from Britain in 1971, is believed to have fathered 30 children, but it was the offspring of his third and favourite wife, Fatima, who emerged as the nation's powerbrokers. Tahnoon and his five brothers are known in the UAE as the bani Fatima, or “sons of Fatima”, says The Guardian, and grew up steeped in her “worldview that placed their family at the centre of the universe”.

Whether playing chess, video games or throwing Brazilian jiu-jitsu moves, Tahnoon, 57, is “obsessed with winning”. But his activities as the UAE's security chief reveal a darker streak, says The Guardian. “The UAE has a long history of enforced disappearances, secret detention sites and vicious reprisals against the family members of exiled dissidents.” Indeed, G42 is the “culmination of Tahnoon's dual identity as a financier and spymaster”. Much of its expertise derives from DarkMatter, a now-dissolved company renowned for its hacking and surveillance activities.

It may trouble some that the UAE is emerging as such a strong global force in AI and that Tahnoon is at the heart of it. Very few people outside the UAE even know his name. “He's quiet,” one former US national security official told The Guardian, “and he's always everywhere.” If he gets his way, his global reach has only just begun.

Manchester City football club has been found guilty of serious financial misconduct by an independent commission appointed by the Premier League, after years of investigations and legal wrangling.

It is a damning verdict. The panel found that the club artificially inflated its revenues by at least $1 billion, with sham contracts designed to get around the rules that are meant to ensure a roughly level playing field between the teams in the league.

The details are complex, but the bottom line is something that has been pretty obvious for years to anyone who follows the game: Manchester City was using the financial firepower of its oil-rich owners in the United Arab Emirates to outspend its rivals. It could offer the biggest transfer fees and the most lavish wages to secure any player it wanted. The club is appealing the decision, but faces significant punishment if it is upheld.

There is a bigger issue at stake here: “sportswashing” – engaging with high-level sport to spruce up a country's reputation – is now under threat. It has become a huge business. The Premier League has become one of the most obvious examples, with a whole series of teams owned either directly by foreign states, their investment funds, or by oligarchs closely linked to them.

But it does not stop there. Saudi Arabia has invested heavily in the LIV golf tournament. Qatar spent billions hosting the 2022 World Cup. Russia hosted the 2018 tournament. Formula One includes races in such well-known bastions of human rights and democracy as Bahrain and Azerbaijan.

It's not hard to see what is in it for the regimes. It raises their profile, boosts tourism and softens their image. For millions of viewers around the world, most of whom are not very interested in politics, the practice introduced them to a country they may not previously have been very aware of. It was all well worth the few billion you might have to spend on stadiums, sponsorship or prize money.

Manchester City's image tarnished beyond repair

The Manchester City scandal is going to change the equation dramatically. There are two major problems. To start with, entire investments can get wiped out in the space of a few days. No one really knows how much money was spent on turning Manchester City from a mid-table English club into one of the most successful teams in Europe. That, after all, is the whole point. We have no idea what was happening with the books. It was a lot, however, that much is for certain. If the team is relegated all the way down to League Two (what used to be the Fourth Division before they renamed it), it will be worth a whole lot less, and perhaps nothing at all. Billions will be lost, with very little chance of ever clawing it back.

Secondly, even if the allegations are proved inaccurate, the club's image has surely been tarnished beyond repair. No one blames the players or the manager for the scandal, even if they might have asked harder questions about where all the money was coming from. They will blame the owners. But sportswashing only makes sense if it actually improves your reputation. In the wake of this scandal, everyone who follows football, even if only casually, will have a far lower opinion of the regime that backed Manchester City than they did before – the opposite of what was meant to happen.

We don't yet know if all the money poured into sportswashing is about to dry up completely. The scandal may blow over, and many of the contracts that have been signed can't be unwound quickly. But in its wake, countries are likely to be more cautious about backing major global events. They will be aware that the money they sink into them may well be lost. They will realise that it may well backfire and make them look very, very bad.

The result is that the money machine will be switched off. Most major sporting events will have to go back to being more modestly financed. The salaries will be lower, existing stadiums will have to be made to work instead of building new ones, and the agents and hustlers who surround the whole circus will have to find something else to do. Sport itself may be much better for that – but a lot of money will have been lost forever.

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 Beacon, Countisbury Hill, Lynmouth, Devon

A house built in 1904 on a wooded hillside for a shipping magnate who wanted to observe his ships passing in the Bristol Channel. It has a lookout room offering 180-degree views towards the Welsh coast. 7 bedrooms, 5 bathrooms, 2 receptions, coach house, 10.2 acres.
Price: £2.5m Jackson-Stops 01271-325153

Glen Doll Lodge, Glen Clova, near Kirriemuir, Angus

A renovated Victorian former shooting lodge dating from 1872 on the edge of Glendoll Forest at the foot of Craig Mellon. It has open fireplaces with wood-burning stoves, 8 bedrooms, 7 bathrooms, 3 receptions, kitchen, 2-bed cottage, stone bothy, 0.7 acres.
Price: £875,000 Savills 01738-477525

High Mote, Elsdon, Northumberland

A renovated former farmhouse within walking distance of a village, set in large gardens with extensive views over the Northumberland National Park. It has beamed ceilings, wood-burning stoves, a kitchen with an Aga and a range of outbuildings. 4 bedrooms, 2 bathrooms, 2 receptions, conservatory, separate home office, outbuildings, 3.37 acres.
Price: £740,000 Finest Properties 0330-111 2266

Kirby Knowle Castle, Kirby Knowle, Thirsk, North Yorkshire

A renovated, Grade II-listed, 13th-century castle largely rebuilt in 1653 and set on high ground with far-reaching views across rural Yorkshire. It has ceilings with ornate mouldings, open fireplaces, a bespoke dining kitchen and grounds bordered by stone walls. 8 bedrooms, 9 bathrooms, 3 receptions, library, cinema, wine cellar, gym, 2-bed cottage, parkland, woodland, 65.6 acres.
Price: £7m Savills 01904-617820

Ty Fry & Ty Fry Isaf, Peniel, Denbigh, Denbighshire

Two independent residences with far-reaching views over the Vale of Clwyd. Each property has a wood-burning stove and a bespoke kitchen. Ty Fry: 3 bedrooms, 2 bathrooms, dining room, open-plan kitchen/living area. Ty Fry Isaf: 4 bedrooms, bathroom, reception, 2 loft rooms, barn, 26.24 acres.
Price: £950,000 Fisher German 01244-409660

Lower Carhullan, Askham, Cumbria

A renovated stone barn with striking views of the Lakeland Fells and the Pennines. The interiors include high ceilings, exposed stonework, underfloor heating, a wood-burning stove and a bespoke breakfast kitchen with an Aga. 3 bedrooms, 3 bathrooms, reception, dining kitchen, utility, store, laundry, boot room, detached 1-bedroom annexe, gardens, paddocks, 3 acres.
Price: £750,000 Finest Properties 01228-583109

Pollanaich, Nedd, Drumbeg, Sutherland

This traditional croft house is situated on a hillside overlooking a loch, an island and the surrounding mountains. It has been extended to include a tower room accessed by a spiral staircase, which commands panoramic views. The gardens lead down to a boat shed with a sedum roof. 4 bedrooms, 3 bathrooms, kitchen, dressing room, 3 receptions.
Price: £575,000+ Galbraith 01463-224343

Monte Cielo, Malvern, Worcestershire

A renovated, Italianate-style property dating from 1870 in a commanding position on the eastern slopes of the Malvern Hills. An external staircase leads to a roof terrace that affords panoramic views across the Severn Valley and Bredon Hill. It has feature fireplaces and terraced gardens leading down to an oak-framed hut that is currently used as a summer kitchen. 4 bedrooms, 3 bathrooms, 3 receptions, balconies, garage, gardens, 1 acre.
Price: £1.35m Knight Frank 01905-574 6884

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What are tax havens?

Tax havens are small, well-governed, offshore financial centres that offer low or zero taxes, combined with secrecy – or at least strict privacy – regarding client and ownership information.

Many of them are islands connected in some way with Britain to exploit the country's legal frameworks, stability and access to the City of London, but with the convenience and flexibility of separate fiscal regimes. The islands have a massive incentive to take advantage of their position, and specialise, given financial services can generate vastly more income than other local industries.

Which British territories are tax havens?

Offshore financial centres linked to the UK fall into two categories: Crown Dependencies and British Overseas Territories. The first group is made up of Jersey, Guernsey and the Isle of Man, which have enjoyed varying degrees of fiscal and legislative independence for many centuries (and are not legally part of the UK). When international finance took off in the 20th century, these islands had the advantage of independent legal and tax systems, plus close links to one of the world's biggest financial centres.

By contrast, Overseas Territories (the Cayman Islands, Bermuda and the British Virgin Islands are the big three financial centres) are legacies of empire – self-governing microstates with their own tax and legal systems, but with the British monarch as head of state.

How big is the offshore financial centres industry?

The Cayman Islands is the legal domicile for 30,000 investment funds, with about $9.1 trillion in assets under management, according to its government's figures, with more than 75% of offshore hedge funds domiciled there.

The British Virgin Islands are specialists in company incorporation, holding companies and trusts – home to 352,000 registered companies, according to figures from the Organisation for Economic Co-operation and Development (OECD) for 2024. According to the Tax Justice Network, some $2.6 trillion of foreign direct investment passed through British Virgin Islands structures that year.

Bermuda's specialism is insurance and reinsurance, with 1,210 registered firms handling $2.17 trillion in total insurance assets and about $300 billion in assets under management through licensed investment businesses. In each case, the territories claim to provide an essential and legal tax-neutral framework that enables global commerce. Critics say they facilitate aggressive tax avoidance and profit shifting, allowing corporations and individuals to pay hundreds of billions of pounds less in tax.

Is being an offshore tax haven sustainable?

There's definitely increased pressure on low-tax jurisdictions, both from global trends towards greater transparency and from the UK itself. The Crown Dependencies and British Overseas Territories are part of the OECD's Common Reporting Standard (CRS), meaning they must exchange financial-account information with foreign tax authorities. They are also subject to the OECD's 15% global minimum tax for large multinational groups, meaning the likes of Bermuda and Jersey – which both had zero-rate regimes – have been obliged to meet that minimum.

Meanwhile, the UK has been gradually pushing for more transparency when it comes to “beneficial” (ultimate) ownership of assets, with the Sanctions and Anti-Money Laundering Act 2018. Progress is far from complete, however, and wrangling continues. The Cayman Islands, for example, finally agreed to allow “legitimate interest” access in 2025, but in practice the process is slow and subject to expensive appeals and delays that critics say are designed to discourage access requests.

Will Britain's tax havens survive?

Neither of these trends are set to lead to the collapse of the UK's offshore tax havens. But the picture is morphing from one of “tax haven” bank secrecy and zero or low tax, to one of offshore centres providing tax-neutral legal and financial infrastructure for global capital. Strikingly, in 2025 the Overseas Territories between them froze more than $11 billion of assets under sanctions regimes, on Foreign Office figures. In other words, they are well on the way to being integrated into international anti-money-laundering and sanctions enforcement.

The relationship between the UK and its dependencies and territories has sometimes been fraught, with Jersey occasionally threatening independence if London gets too heavy-handed. But they are a positive asset and shouldn't be taken for granted, says James Price in City AM. The Overseas Territories account for 4.4% of the UK's services exports – more than Spain or Italy, or any Asian country except China. And they entrench the City's global dominance, channelling “enormous sums of money into the country and fuelling finance with access to worldwide asset pools. In turn, this stimulates investment, drives productivity and more than offsets lost tax revenues”.

How is Jersey as an offshore financial centre?

It's still one of the world's leading offshore centres, says Simon Nixon on Bloomberg. But tougher competition from rivals such as Dubai, Singapore and the Cayman Islands means the island is “locked in an increasingly difficult battle to preserve a financial-services industry that accounts for 40% of its government revenues and 44% of gross value added”.

Brexit hasn't helped – EU rules mean that funds marketed to European investors must be administered on European soil and Jersey has lost business to Dublin and Luxembourg. London, the source of Jersey's deal flow, has lost business to the Middle East and Asia.

And the UK's post-financial-crisis ringfencing rules (surplus deposits can no longer be lucratively parked with UK banks) has seen the number of banks on Jersey shrink by a third since 2017. A Jersey government-commissioned review put it well earlier this year: that “the privilege has shifted”. For decades, Jersey operated on the assumption that “access to the island was itself a privilege; now, Jersey must go out and compete for business like everyone else”.

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Energy security is becoming one of the world’s hottest topics as constrained supply pushes oil prices higher.

You’d be forgiven for thinking US president Donald Trump’s return to the White House in January 2025 would have spelled the end of the sector. ‘Drill, baby, drill’ was a cornerstone of Trump’s re-election campaign, and he has been proactive in promoting fossil fuels over renewables – even going so far as to halt the development of several renewable energy projects that were already under construction, citing ‘security concerns’.

“The administration has directly paid developers to simply stop: close to $4 billion across deals with TotalEnergies, Golden State Wind, Bluepoint Wind, Invenergy and RWE since March 2026,” said Angeline Ong, senior investment analyst at trading platform IG. “The main aim, as it is understood by the markets, is to discourage the expansion of wind energy in favour of fossil fuels.”

This has led to corporate retreat from renewable energy projects. “BP cut annual transition spending to $1.5-2 billion, more than $5 billion below prior guidance, and scrapped its target to shrink oil and gas output by 2030,” said Ong. “Shell has leaned harder into liquid natural gas while holding oil output flat and trimming low-carbon spending.”

However, the S&P Global Clean Energy Transition Index returned 9.3% in the 12 months to 7 October, and 5.3% in 2026 to date. These figures mask a decline since 2 June, at which point the index was up 43.9% year-to-date, but the potential, at least, for a rally is there.

The International Energy Agency says renewables are on track to overtake coal and become the largest source of electricity generation in 2026, and projects that renewables’ share of global electricity generation will increase from 33% in 2025 to 37% in 2027.

So is the investment case for renewables over, or do its recent struggles present a buying opportunity?

Why have renewables risen this year?

Ironically, another Trump policy decision has put renewable energy back on the agenda this year.

“The conflict [in Iran] reminded everyone of how the theme has developed over the last few years,” said Charlie Wright, investment director at energy investment specialists Foresight Group.

“The primary objective of renewables is decarbonisation, and that is still obviously very important,” he continued. “But in the aftermath of the Ukraine conflict and now [the conflict in Iran] reminds everyone that building domestic renewables is also about energy security and reducing our reliance on imported fossil fuels, whose prices can be affected by events far outside our control.”

Energy prices have risen dramatically in the UK this year. Between 27 February (immediately before the Iran war) and 6 October, the price of Brent Crude oil rose by 38.8%. This has led to diesel prices breaching £2 per litre for the first time in recent days.

“Just from an energy security perspective, the more domestic, low-cost generation we have can only be a good thing,” said Wright.

Renewable energy is a broad category, and different components might be set differently from others. Solar power could, for example, be more resilient than other forms due to its centrality to artificial intelligence (AI) infrastructure.

“Solar and battery storage is likely to be built because they're the fastest thing to bolt onto a data centre that needs power yesterday,” said IG’s Ong. “This is why the S&P Global Clean Energy Transition Index is up over the past year even as US offshore wind developers are being paid to stop building.”

Is now a good time to invest in renewable energy?

The rally over the first five months of the year shows that there is still life in renewable energy. Since 2 June, though, the S&P Global Clean Energy Transition Index has fallen 26.8%.

Renewable energy is undoubtedly facing challenges, not least higher inflation and interest rates – which according to Ong are particularly challenging for capital-intensive projects like wind farms, which have long construction timelines. Ong added, though, that “solar and battery storage are comparatively insulated because build times are much shorter, which is part of why they're thriving on the AI-demand tailwind”.

Foresight’s Wright says that in the UK over the last two years “there have been more headwinds within core renewables (wind and solar) than at any time over the last 10-15 years”. These include lower power prices than had been assumed when many historical projects were assessed, as well as some weaker years for wind and solar generation.

“There’s been a combination of both project-specific underperformance issues as well as more macro, power price-related issues that have generally meant the asset classes perhaps haven’t performed as well as investors would have liked,” said Wright.

Regulatory changes have also provided headwinds. In January, the UK government announced that the renewables obligation (RO) scheme, which incentivises energy companies to use renewable energy sources, will account for inflation using the consumer prices index rather than the (usually higher) retail prices index it had previously used. This means the subsidies that renewable energy projects will receive will be lower over the long term.

Wright views these setbacks as minor though.

“Wind and solar are still absolutely fundamental asset classes for decarbonisation in the UK,” he said. “Whether it’s hitting net zero targets or getting anywhere near it, a lot of wind and solar still needs to be built.

“So it’s still an enormous investment opportunity, but along the way there will be some peaks and troughs in investor sentiment to those asset classes.”

How to invest in renewable energy

Renewable energy investments share many of the advantages of traditional infrastructure or utilities investments, but given the sector is still in a relatively early stage, there is the potential for greater growth over the long term than these sectors are known for.

Whether any given renewable energy project would function as an income investment or a growth investment depends, in Wright’s view, on the point at which you invest.

“If you’re buying into an operational wind or solar project, that would be a greater focus on income,” he said. “You’d be buying into the yield that asset is going to produce over a number of years, but I don’t think you would really look at that as a growth opportunity.”

Investing earlier in the project’s life cycle, though, offers greater opportunity for capital growth – though there is of course greater risk the earlier you invest.

If you decide to invest in renewable energy, there are two main routes in.

One of these is through listed companies directly involved in the sector. Some of the largest of these are Vestas Wind Systems (COPENHAGEN:VWS), First Solar (NASDAQ:FSLR) and Nextpower (NASDAQ:NXT).

You could alternatively invest in the renewable energy sector via funds or investment trusts that target it.

There are various tracker funds and exchange-traded funds (ETFs) that track the S&P Global Clean Energy Transition Index, such as the iShares Global Clean Energy Transition UCITS ETF (LON:INRG).

Actively-managed funds tracking the sector include Guinness Sustainable Energy or the Polar Capital Smart Energy Fund.

Wright is co-lead manager of Foresight Environmental Infrastructure (LON:FGEN), an investment trust that invests in private renewable energy infrastructure projects. It holds 39 assets located across the UK and mainland Europe.

Other investment trusts such as Greencoat UK Wind (LON:UKW) or NextEnergy Solar Fund (LON:NESF) can offer targeted exposure to specific forms of renewable energy.

Investors are contemplating a new eurozone debt crisis after the euro hit a 17-month low against the US dollar. Concern has focused on France, where public debt stands at €3.596 trillion, equivalent to 119% of GDP. The yield on ten-year government bonds, known as “OATs”, approached 5% for the first time since 2002. The gloom is weighing on the local CAC 40 share index, which is down 6% over the past month.

In Paris, the remaining optimists argue that France just needs to follow Italy's example, says Eric Mengus in Les Echos. After years of struggle, Rome is running primary budget surpluses (that is, before interest payments). But that consolidation rested on a political consensus that is lacking in France, where major parties continue to cling to “illusions”. Many believe that the problem can be solved through new wealth taxes. The radical left calls to cancel parts of the debt outright in order to “make the banks pay”.

Back in the real world, primary deficit reduction of three to four percentage points is probably required to rein in the situation, yet the current government is struggling to get support for a budget that reduces the deficit by 0.6%.

Eurozone at most risk since the 2012 crisis

The “old cliché” – that “France doesn't reform, it only has revolutions” – is being tested anew, says Simon Nixon on Substack. All eyes are on “Le Spread”, the gap between French and German government borrowing costs. This measure of eurozone risk has reached 1.4 percentage points, the highest level since the 2012 eurozone crisis. That remains far short of the levels seen by the likes of Italy and Greece during the eurozone crisis. And although rates have spiked, the legacy of years of ultra-cheap borrowing means interest expenses for Paris are still a modest 2% of GDP. But what is lacking is political will in a country that hasn't achieved an overall budget surplus since 1974.

It doesn't help that France is out protesting again, this time about the lack of money for high schools, says the Financial Times.

Debt has risen by more than a trillion euros since Emmanuel Macron took office in 2017. The president's pro-business reforms failed to raise enough revenue to curb runaway spending. The European Central Bank (ECB) has been reluctant to get involved, but with the way things are going some think that it is “just a matter of time”.

Still, talk of 2011-style “contagion” across the eurozone is unwarranted, argues a note from asset managers DWS. The ECB and member states have developed a series of monetary tools and procedures that would make fighting another debt crisis much more orderly than in 2011. The continent's banks are also much better capitalised today. “France's fiscal problems are real,” but trouble in the eurozone is not necessarily trouble for the eurozone.

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The MSCI Emerging Markets index has become distorted. Three tech heavyweights – Taiwan Semiconductor, Samsung Electronics and SK Hynix – now account for almost 30%. As a result, Taiwan and South Korea make up nearly half the index, and Asia totals 80%, while tech is 44%.

Returns have been strong lately, driven by the tech names – up 90%, 238% and 422% respectively in the last year. Still, this is not what investors think they are getting when they buy into emerging markets.

How to find domestic growth in emerging markets

Fortunately, there are trusts that offer more diversification. Utilico Emerging Markets (LSE: UEM) invests in infrastructure, utilities and related assets so it has no exposure to the tech giants. The geographic balance is also very different: Brazil is 22%, other Latin America 17% and Eastern Europe (including Greece) 9.5%. UEM is notably underweight China with just 9% there, mostly in Hong Kong, versus 20% in the index. “We find China very difficult, as regulations can change overnight,” says co-manager Charles Jillings.

Stock selection is key as “mismanagement can destroy a good asset”, he says. “If we can't find value in a country or sub-sector, we don't invest.”

The largest holding is Orizon Valorização de Resíduos, a Brazilian waste management company, followed by International Container Terminal Services, which is based in the Philippines but operates in 19 countries.

The spread of the portfolio is further shown by holdings that include internet infrastructure company Korea Internet Neutral Exchange, Grupo Aeroportuario del Pacífico, which operates airports on Mexico's Pacific coast, and Piraeus Port in Athens.

This gives UEM much higher exposure to domestic growth in emerging markets than the global, tech-focused index, often at attractive valuations.

Sonatel, a leading mobile phone company in West Africa, growing at 12%-13% a year thanks to rising customer spend but is trading at just 2.7 times cash flow, says Jillings.

The lack of tech means UEM has lagged the MSCI Emerging Markets over one and three years (though is still up by 14% and 34% respectively) but has returned 9.5% per year since 1995, ahead of its benchmark. The shares are on a 10% discount to net asset value (NAV) and yield 4.3%.

Back smaller stocks in emerging markets

Mobius Investment Trust (LSE: MMIT) offers a different angle, investing in “dynamic small and mid-sized companies” rather than the giants. The £136 million portfolio, which holds just 25-30 stocks, has minimal overlap with the MSCI Emerging Markets index.

While MMIT still has 38% of the portfolio invested in Taiwan and Korea and 31% in technology, this has been reduced in favour of industrials and financials. China accounts for less than 3% of the portfolio – an underweight that resulted in 22% underperformance of the MSCI Emerging Markets Mid Cap index last year but has been rewarded with 12% outperformance this year.

Meanwhile, India has risen to 28% this year. While foreign investors have been selling, domestic investors have been buying, notes lead manager Carlos von Hardenberg. The Nifty 50 index now trades 10% below its 2024 peak, even though economic growth is still 7.5%-8%, inflation is just 4% and interest rates are 5.25%. The rupee has lost 10% in the last year, but this is benefiting exports and import substitution.

Since mid caps have lagged large caps, returns of 33% over one year and 44% over three years are behind the MSCI Emerging Markets index, but mid caps are due a catch-up. The portfolio should offer 23% operating margins for the portfolio and annualised earnings growth of more than 45% over the next five years, estimates von Hardenberg. The shares trade on a 10% discount to NAV and yield 1%.

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If you can lock in near-6% income on a bond portfolio, why expose yourself to the risk of a nasty stock market sell-off ? A growing number of ordinary UK investors are concluding just that, with Hargreaves Lansdown reporting a 38% year-on-year rise in the number of users holding individual gilts – UK government bonds.

The great government bond yield blow-out has been most prominent in long-duration instruments such as the 30-year gilt, which now yields 5.94%. But don't let that lure you in. As James Baxter of Tideway Wealth notes, the government has avoided new issuance at such eye-watering rates.

Instead, you would have to buy a gilt that was issued a few years ago at a lower coupon and that is now trading at a discount to the par value. While the mathematics are slightly complicated, the takeaway is that a chunk of that tasty 6% return comes as a capital gain when the bond redeems at par value, say in 2055. Most of us will be long in the tooth by then.

While the state of the public finances might lead you to think that the UK is at risk of default, that isn't a realistic prospect; the Bank of England can always print more pounds. Instead, the real dangers for bond buyers are interest-rate risk (higher rates tank bond valuations in the secondary market) and the risk of inflation that erodes the real value of the fixed income.

Are index-linked gilts (linkers) a solution to the risk posed by inflation? Probably not, says Christian Mayes for Morningstar. Linkers tend to have longer maturities than nominal gilts, leaving them more sensitive to higher interest rates. Indeed, linkers got crushed in 2022 because the damage from higher interest rates outweighed the benefits of built-in inflation protection.

A niche strategy for bonds

The renewed popularity of gilts rests in part on a rather niche tax strategy. While coupon payments are subject to tax outside an individual savings account (ISA), gilts are exempt from capital gains tax (CGT). That makes short-dated bonds trading at a steep discount to par attractive. Anna Macdonald of Hargreaves Lansdown highlights a 0.125% coupon bond currently trading for £94.78 and maturing in January 2028. That gives a mostly tax-free yield to maturity of 4.2%. For higher-rate taxpayers who have already exhausted their other allowances, such gilts are a low-risk place to put surplus cash. An understandable impulse, given all the talk of stock market bubbles.

But there are opportunity costs. Avid gilt buyers may be passing up better opportunities in the stubbornly cheap UK stock market. True, for income-seekers the FTSE 100's 3% dividend yield is less appealing than the ten-year gilt. But at 7.4%, the earnings yield (the inverse of the price-to-earnings ratio) comfortably outstrips the ten-year gilt, notes Russ Mould in The Telegraph. Stocks still look the better value proposition.

Yes, markets can crash. But equities also offer the opportunity for capital gains and, perhaps crucially in the current setup, a degree of protection against inflation.

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Italy is a country of amazing landscapes, but few are as beautiful as the 50-kilometre stretch of the Amalfi coastline. One of its most iconic villages is Positano, its houses appearing to cling to the cliff, with its cobbled streets tumbling down to the sea. It's so picture-perfect that it has a starring role in many films and TV programmes, most recently as the location for Amazon Prime's crime drama, Hotel Costiera.

The luxurious hotel at the heart of the series is Treville Positano, built into the cliffs overlooking Positano and the sparkling Tyrrhenian Sea. Discreet and luxurious, it was originally the home of Franco Zeffirelli, now converted into a boutique hotel that remains true to the maestro's vision, surrounded by beautiful terraced gardens, including a vertiginous organic vegetable garden with fragrant lemon trees. Its 16 suites are spread across six houses over two hectares of gardens.

I stayed in the Callas suite, inspired by Zeffirelli's close friend and muse Maria Callas. With high, curved ceilings and tiled floors, it includes a luxurious bathroom with stained-glass windows adding flashes of colour. It goes without saying that the linens and toiletries were of the highest quality, right down to the plush slippers branded in the hotel colours with an embroidered logo. But the real highlight of the suite is the private terrace and garden with a pool overlooking Positano, where the staff will bring you wonderful cocktails while you fantasise about living the life of the rich and famous.

While the individual suites pay homage to Zeffirelli's influences, the public areas are almost exactly as he left them, complete with their original decorations, ceramics and photographs. It's a rare feat to have retained all the exotic charms of the original home without it feeling like a museum. Finding that balance between theatrical high camp and quiet luxury is quite the trick, but nothing feels overdone or out of place.

The Bianca Bar is a Moorish-inspired sanctuary all in white, with ornate moulded ceilings and the original tiled floors, almost exactly as Zeffirelli left it. But now this pristine place is home to a celebration of botanical marvels, where the bartenders distil herbs and botanicals straight from the gardens to create memorable cocktails.

The hotel's real showstopper is the dining terrace, part of restaurant Maestro's, with its sea views. It features heavily in Hotel Costiera and, as you sit out on the shaded terrace, you can see why. If you want, head chef Vincenzo Castaldo will take you through a cooking class where you can perfect the art of making pasta, shaping different varieties and then cooking simple sauces using produce from the gardens. His enthusiasm was encouraging, although I doubt any of the chefs were worried for their jobs. But the simple pleasure of kneading dough surrounded by the sea and sipping espresso martinis made for a delightful afternoon.

We made cheese-stuffed anolini with a simple sage and butter sauce and fettucine with fresh tomatoes and basil. Mainly it was a lesson in how a few simple ingredients harvested at peak ripeness create much more than the sum of their parts.

Relax and admire the view from Treville Positano

In the evening we gathered on the terrace to enjoy more of the delicious food, including a salt-baked fish, more truffle-covered pasta and wonderfully fresh baked breads with olive oil for dipping. Single estate, organic and extra virgin, it was frankly good enough to drink. But what really brings this place alive is the attention of the staff.

If you're looking to stretch yourself after all that food, there is a wonderful cliff-side gym with state-of-the-art equipment. For a more gentle workout, opt for the spa housed in a greenhouse transported from the set of Zeffirelli's staging of the opera La Traviata. Shielded by lush planting and overlooking the sea, what's left of any troubles you may have will be soothed by skilled hands using products from Dr. Barbara Sturm, whose cult brand harnesses science and nature to soothe all skin types, and who consulted on the spa's development.

Take the time to enjoy the hidden plunge pool and steam room, sit and watch the sea, or wander down to the shore with its private terraces of loungers and umbrellas and steps leading down into the water.

From there you can also take a trip on one of the hotel's boats. For instance, you could take a trip up the coast to Raito, near Vietri Sul Mare, a small town famous for its ceramics and home to Lucio Liguori the creator of much of the ceramic artwork on display at the hotel. His work is world renowned and exhibited in museums, but he took the time to give us a quick lesson on the terraces of Treville Positano, where we were even less skilled at throwing pots than we were at making pasta. But his joy in his craft was inspiring and his workshop is worth a visit.

Positano itself is full of shops selling local pottery, much of which is decorated with images of the local lemons. Once you've wandered through the bougainvillea-covered streets and visited the church, I suggest ending your trip at one of the beachside restaurants. We ate the freshest fish and seafood at Restaurant L'Incanto (lincantopositano.com).

Still, you may find it hard to leave the hotel. Treville Positano has been playing host to the stars since Zeffirelli bought it in 1969, including Leonard Bernstein, Liza Minnelli, Richard Burton and Elizabeth Taylor, who was a frequent visitor. Now is a great time to visit with the heat of the summer past and the crowds gone home – you can enjoy la dolce vita in peace.

Natasha was a guest of Treville Positano. Prices from €830 a night. Visit villatreville. com for details.

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High earners are being increasingly squeezed as fiscal drag, a cliff edge for support towards childcare, and a high tax burden bite.

Despite having a high salary, a growing group of professionals don’t have enough to enjoy the lifestyle of someone who is truly wealthy, with this cohort often being described as HENRYs (high earner, not rich yet).

HENRYs are relatively young – in their late 20s or 30s – and likely have a job in London, but will struggle to afford a nice home in a desirable part of the capital on a single salary. They may have children, but will struggle to afford private school fees and childcare.

High inflation and the cost of living crisis have eroded the amount HENRYs have left at the end of the month and fiscal drag means more of their earnings are being dragged into higher tax bands.

HENRYs are also being hit hard by a quirk of the UK’s tax system, where those earning over £100,000 can end up paying an effective tax rate of 60% on a portion of their income while getting certain benefits like some free childcare revoked at the same time.

How HENRYs are being hit by high tax

The highest earners in the UK are the most lucrative for the government, with 60% of the total income tax collected in the 2026/27 tax year expected to be paid by the top 10% of earners (those earning around £70,000 and above).

The average earner in the UK makes around £39,039 a year, and pays around £5,294 in income tax each year. However, someone earning £100,000 a year will pay around £27,422 in tax, over five times more than the average earner despite only earning around 2.5 times the average salary.

By the time you earn £120,000 a year, you will pay almost 7.5 times more tax (around £39,440 per year) than the average earner despite only earning just over three times more than the average.

High earners pay the higher rate of income tax (40%) on income over £50,271 to £125,140 and any income above that is taxed at 45%. But a quirk of the tax system means once you earn more than £100,000, you start paying a marginal tax rate of 60%.

This happens because your tax-free personal allowance starts to taper away at a rate of £1 for every £2 you earn above £100,000 until it is entirely removed at £125,140.

This means high earners end up paying an effective tax rate of 60% on income over £100,000 and up to £125,140 – and this can get to as high as 69% for those who are also paying off student loans.

More high earners are being pushed into this trap as their income rises each year but the £100,000 tax trap remains unchanged and tax thresholds haven’t risen since April 2021.

HENRYs with young children are penalised even more

There are other penalties that come when you earn a salary over £100,000.

Parents of children aged nine months to four years old get 30 free hours of childcare a week for 38 weeks of the year. But there's a cliff edge in eligibility – you automatically lose access to this government scheme if you earn a penny over £100,000 a year.

Tax-free childcare, which is worth £2,000 a year per child, is also removed when your earnings hit £100,000, although the universal 15 free hours of childcare a week for 38 weeks a year for 3 to 4 years olds is retained.

You also start losing some Child Benefit once a person’s individual income is over £60,000. It’s lost entirely at £80,000.

The structure of household income can make a difference.

For two-parent households with two nursery-aged children, with total income of £120,000, that difference can be as much as £9,800 a year, investment firm IG modelling shows. This is because of the removal of Child Benefit and funded childcare hours.

For example, where there’s a primary earner bringing in around £110,000 and the second person earns £10,575 (the minimum required to qualify for funded childcare), the household loses £2,300 in Child Benefit per year and £7,500 in funded childcare support.

Additionally, earning £110,000 a year means the high earner would be caught in the 60% tax trap.

In comparison, if there are two mid-earners in a household, who both earn £60,000 each, they wouldn’t lose Child Benefit, tax-free childcare or face the £100,000 tax trap.

What HENRYs can do to “become rich”

There are some steps you can take to reduce the pain of high taxation.

Increase your pension contributions

Fundamentally, the only way for HENRYs to escape the 60% tax trap is to reduce their taxable income.

Pensions are a powerful financial tool, as you get tax relief on contributions and this will push your annual income to below the £100,000 threshold, allowing you to avoid the tax trap and the removal of the 30 free hours of childcare.

Malvee Vaja, a financial planner at Rathbones, said: “If you're someone whose bonus plus salary takes them into that tax trap area, a really easy way to move yourself out again is by making a pension contribution.”

For example, if you earn £110,000, putting an extra £10,000 into your pension means your income would drop to £100,000.

This means you wouldn’t lose the personal allowance so wouldn’t be taxed at 60% on a portion of your income. Instead, the money is put tax-free into your pension for when you retire.

Beyond tax-efficiency, focusing on building up your pension pot while you are stuck in the tax trap zone can be hugely beneficial for your future – especially when you only expect to take money from your pension in 20 or 30 years time, according to Vaja.

“What [maximising your pension contributions] allows you to do is, when your salary gets to a certain level, and you're not able to use your pension allowance that much, you've still got a really stable base in your pension. That then, if invested correctly, will keep accumulating wealth for you in the background.”

She adds that having a strong base in your pension early on means that if at some point you need to reduce your pension contributions for any reason, your pension “will still work hard for you while your career and your salary goes up and up and up.”

Know your tax-free allowances

You should also make the most of your tax-free allowances to protect your savings and investments from even more taxation. But Vaja says many of her high-earning clients do not know much about how to maximise those allowances.

She said: “It’s a case of knowing what to do. They do some things like putting money in their pension or using their ISAs, but they're not thinking, ‘Am I maxing out my pension? Am I using the tools that I have most efficiently?’”

For example, you can put £20,000 per year into ISAs. You don’t have to pay any tax on any savings interest or investment returns you make on money in an ISA.

Meanwhile, the pensions allowance means you can contribute 100% of your salary up to £60,000 into your pension a year. You can also use the pensions carry forward allowance means you can use any unused annual allowance from the past three years.

This in particular can be helpful for HENRYs who are maximising their pension while in the tax trap zone, Vaja notes.

Beware lifestyle creep

Once you are earning a six-figure salary, you are firmly in the top 6% of earners. While it may mean you can afford to do your weekly shop at more expensive supermarkets, you are not yet at the point where you can spend money without thinking.

Vaja warns that lifestyle creep – the tendency for people to increase their spending on luxuries when their earnings increase – is one reason many of her clients still feel poor despite their high salaries.

She said: “Don't let lifestyle creep happen. Try and control the luxury items that you spend money on, like a luxury gym membership, or an expensive car if you don't really need them. If you're living in London, spending £300 to £600 a month on a car that you barely use doesn't seem worthwhile.”

Vaja recommends trying to keep lifestyle creep under control. This then gives you more surplus income that can be put into pensions, ISAs and general investment accounts, where you can make use of tax-efficient allowances.

You have time on your hands

While being stuck in the 60% tax trap and having benefits like childcare taken away can be painful, Vaja says that despite the doom and gloom there is hope on the horizon.

As younger earners, most HENRYs are not even halfway through their working lives and therefore have a lot of time on their hands to increase their earnings, get out of the tax trap zone, and build up their long-term finances to finally "become rich”.

“HENRYs have time on their side,” she said. “Getting a decent amount in your pension quite early on and using your carry forward allowance so you've got a sizable amount in your pension, means it can work in the background for you.

“Make sure it's invested and make sure it's invested in the right way with a diversified portfolio that’s aligned to your risk level.”

She adds that people in their 20s or 30s have a much longer time horizon for their investments to ride out volatility in the market so may be able to afford to take on a bit more risk in their pensions.

“Sometimes I think the danger for a lot of people is thinking, ‘This is my pension, therefore I need to be overly cautious with it’, but being overly cautious sometimes means not taking enough risk, and I think that's a big problem.”

It’s been a year since my partner and I had solar panels installed for free on the roof of our home.

In that time, I’ve learned a few unexpected things about the energy-saving tech, both good and bad.

The panels were installed at the start of October 2025 after our local council got in touch to tell us we were eligible through the Warm Homes: Local Grant.

Through the scheme, qualifying households can get carbon-reducing upgrades made to their home including insulation, heat pumps and solar panels.

The scheme is open to homes in England. Typically, the home must be privately owned by yourself or a landlord and have an Energy Performance Certificate (EPC) of D, E, F or G.

Household income must normally be £36,000 a year or under too, although you could still qualify if you earn more than this and live in a specific postcode or are on benefits.

My partner and I had the panels installed for free because the EPC rating of our home was D and we live in an eligible postcode.

Here’s what I’ve learned about solar panels after one year with them.

We’re virtually electricity self-sufficient over the summer months

When looking at electricity usage alone, the solar panels have enabled us to be virtually self-sufficient over the warmer, sunnier months.

From April to September this year we’ve had to pay less than £3 for our electricity per month, on top of our electricity standing charge.

We are paying more for consumption over the colder, gloomier months. In January, we paid £32, in February £25 and in March £12.

We’ve been able to sell electricity back to the grid

Part of the reason our energy bills have been so much lower is that we’re now selling power back to the grid when the solar panels generate more power than we’re using.

We could do this because we had a battery installed which, when full, offloads any excess electricity to the grid which we are paid for.

In total, we’ve sold £197 of power since January this year. Our best months were July and August where we earned £41 and £32, respectively.

We’ve got to see real-life examples of the environmental impact the solar panels are having

We’ve installed a smartphone app that tracks how many kilowatts of electricity the solar panels produce each day, as well as how many kilowatts we consume.

It also tells us when electricity is discharged from the battery and when energy from the panels is used to charge it up.

One particularly impactful feature of the app is the section which shows us how many kilograms of carbon dioxide and how many litres of oil we’ve saved since having the solar panels installed.

In total we’ve saved more than 2,700 kilograms of carbon dioxide and more than 337 litres of oil. It’s reassuring and empowering to see the positive difference we’ve made to the environment quantified.

The battery can be noisy and looks ugly

Not everything about the solar panels has been positive. The battery, while allowing us to store excess electricity, can be noisy at times.

During the summer months, it will produce a low humming noise as the internal fan tries to keep the unit cool.

It’s also not the prettiest thing to look at bolted onto the side of your house, although we have managed to get around this by installing a wooden trellis screen around it.

Would I have installed solar panels if they weren't free?

The solar panels have driven down our electricity bills and despite the initial logistical hassle of having them installed, they’ve since been extremely low maintenance.

That said, if we’d have had to pay up front, we may have put the money towards paying off some of the mortgage instead.

Landlords are leaving the market in their droves as a host of factors squeeze the buy-to-let (BTL) market.

Around 44,000 BTL homes were sold by landlords across the UK between the start of July and mid-September, according to property data company TwentyCi.

Per day, 562 homes left the sector on average, the highest rate since 2016, the analysis suggested.

Separately, a recent report by trade body the National Residential Landlords Association (NRLA) found 60% of single property landlords are no longer sure they will be in the market by the end of 2027.

The report said rising costs, government policy and an increasing administrative burden were dampening the mood across the market.

Chris Norris, chief policy officer at the NRLA, said: “Successive governments have assumed that landlords can permanently absorb costs and sustain losses whilst remaining in the market.

“This approach has led to one standout outcome: a reduced supply of available rented accommodation, narrowing choice for tenants across the private rented sector.”

There are still opportunities in the BTL market though, including for professional landlords willing to take a hands-on approach.

Why are so many landlords leaving the market?

For years, the buy-to-let market typically offered capital growth and a steady income that could outmatch any savings account – the Bank of England base rate stayed below 1% between 2009 and 2022.

But landlords have been hit with a number of legislative changes over the last 10 years which have made their lives harder.

From April 2017, tax relief that individual BTL landlords could claim on their mortgage interest was slowly eroded through section 24 of the Finance Act 2015. When mortgage rates started rising in 2022, this policy really started to hit.

Before the changes, landlords could deduct 100% of mortgage interest from rental income before paying tax.

However, between 2017 and 2020 landlords gradually had this tax relief reduced to nothing and they now get a tax credit of 20% on mortgage interest payments instead. The reduction in this tax relief has led to higher tax bills for landlords.

Suzanne Smith, former solicitor turned landlord and author of The Good Landlord Handbook, said: “If you were only paying 2% on a mortgage and you couldn’t offset all your financing costs against the rental income, it wasn’t a big issue for landlords.

“But with interest rates going up and people paying 5% or 6%, it has had more of an impact.”

More recently, the introduction of the Renters’ Rights Act, large parts of which came into effect in May, have made the logistics of being a landlord in England much harder.

This includes making it harder for landlords to evict tenants following the abolition of section 21 or so-called ‘no fault’ evictions.

Landlords also can’t say no to a tenant requesting to have a pet live with them and can only request one month’s rent in advance.

Meanwhile from April 2027, higher rates of tax will apply to income made from property in England, Wales and Northern Ireland. The basic rate will be 22%, the higher rate 42% and the additional rate 47%. Currently, income tax rates apply.

David Fell, lead analyst at estate agent Hamptons, said: “Each of these things on their own are not necessarily a deal-breaker for landlords, but, collectively, I think it’s a lot harder to make money than it was two years ago."

Are there still opportunities for landlords?

Despite the challenges, there are still opportunities for landlords in the BTL market.

Smith, who has four rental properties, said she focuses on getting families into her properties for long-term lets, which is one way to avoid periods without any rental income.

She also said long-term lets allow her to build up trust with tenants over time.

She properly references prospective tenants to make sure they can keep up with rent, as well as ensuring her properties are suitably renovated and have an EPC rating of at least C.

“People still need homes, and not everybody can afford to buy a home, and there’s not enough social housing,” Smith said.

“Tenant demand is what makes this asset resilient, because people need somewhere to live and [if] you can provide a good service, provide this need, and comply with the rules, then you’ll be fine.”

Research suggests other landlords are taking this hands-on approach. Polling by BTL lender Rely Mortgages found 55% of landlords are spending more time thinking about the tenant experience while 59% have spoken directly to tenants to better understand their needs.

Landlords could find joy in other parts of the housing market too.

Recent research by The Cumberland Building Society found 88% of mortgage brokers had seen an increase in holiday let mortgage enquiries over the previous 12 months.

A holiday let is different to a BTL as it’s used to offer shorter-term, rather than long-term, stays.

The benefit is that you can make money from holidaymakers staying in the property, potentially realise a capital gain when you sell up down the line and also have a place to stay if you need a holiday.

But there are drawbacks, for example you’ll generally need a bigger deposit for a holiday let than a BTL and may have to cover cleaning costs in between each guest.

Is it still worth being a landlord?

If you’re looking at BTLs from a purely financial perspective, you may find better gains elsewhere.

Analysis by wealth manager Quilter looked at how much you could have made from BTL versus the stock market over the last 20 years.

Its research suggests the net profit on a rental property bought for £154,927 in June 2006 would be £191,619 over 20 years. This is based on, as of June 2026, a capital gain after tax and costs of £83,170, and includes house price growth and net rental income of £108,448.

Over the same 20-year period, if someone had invested £154,927 into UK equities in June 2006, their investment would now be worth £592,130, according to Quilter, a gain of £437,203.

If someone had invested the same amount into global equities it would be worth £1,200,219, making for a capital gain of £1,045,292. Both these calculations are based on no deductions for fees and tax.

Investing comes with risk and returns are not guaranteed.

There is also the added financial and administrative burden that comes with being a landlord in the current market.

In this context, Smith said BTL is not something landlords can simply treat as passive income anymore.

“Anyone who thinks it is passive income should sell up when their tenants leave because being a landlord carries a lot of risk,” she said. “I recently had a six month void [on a property] because I was doing a kitchen and other work…it’s a lot more risk being a landlord than it is putting money in a bank.”

She added: “I think that the people who will do well in the future are those who treat it as a business. It means keeping proper records…doing repairs properly, using an accountant and of course providing a great service to tenants.”

What major changes do landlords need to deal with in the current market?

Renters’ Rights Act

The Renters’ Rights Act has added an administrative burden on landlords and local authorities now have the capacity to issue fines to those who break the rules.

However, there are ways to ease the logistical burden and ensure you’re following the new legislation.

Kim Lidbury, group director at trade body for estate agents Propertymark, said keeping accurate records was “particularly important” under the new rules and property management software could help with this.

New EPC ratings from 2030

Landlords will need to ensure rental properties have an EPC rating of C or above by 2030 under the Minimum Energy Efficiency Standard (MEES).

Landlords will also need to meet this C rating under a new framework that factors in multiple metrics instead of one. This new framework is set to be rolled out from the second half of 2027.

While the framework is changing, it’s worth getting ahead and trying to ensure your property meets a C rating under the current framework.

Making Tax Digital

HMRC is rolling out Making Tax Digital (MTD) for income tax in phases, with landlords earning over £50,000 a year from rental income now having to use the new system.

Landlords with an annual turnover of £30,000 or more have to start using the system from April 2027 while landlords with a yearly turnover of at least £20,000 will be affected from April 2028.

Lidbury said: “Those affected by Making Tax Digital should also ensure they have appropriate digital systems for maintaining accurate financial records.”

Flexjet’s new terminal is the first of its kind in Europe, providing ground-to-air hospitality, relaxation and a dedicated space for business owners.

As I walked into the new terminal, I was taken back by its spectacular design features – in particular the lounge which recreates a full size, ultra-long-range Flexjet cabin, the Gulfstream G700 jet.

Flexjet, which specialises in luxury private aviation, says the expansion taps nicely into the growth of private jet travel.

Flexjet CEO Mike Silvestro tells me private aviation is up 20% in the UK and Europe. According to The Wealth Report by Knight Frank, there has been rising activity across routes linking financial and lifestyle destinations.

Silvestro says Flexjet creates an environment “that people like to come to because of the attention to detail and the hospitality".

Starting out in comfort

While the 2,098m2 Flexjet terminal is top notch, the experience of luxury travel starts way before you get there via a Flexjet helicopter.

I arrive by a chauffeur-driven car to London Battersea's heliport, where I would travel in one of its luxury helicopters to the Farnborough terminal.

I was lucky to ride one of its latest helicopters – 9H-FXVE – complete with cream leather interior and notably spacious seating.

It was a pretty seamless and smooth trip, taking around 20 minutes.

FlexJet’s Farnborough terminal

As I arrived at its new terminal, I was greeted by Flexjet staff, who also train at the terminal at Flexjet’s ‘finishing school’ for cabin crew.

The terminal is situated in a new ramp side building, separate to the airport’s existing main terminal, and it is from here you would board one of its 350+ private jets.

Flexjet’s aim is to provide a personal ‘home from home’ environment for Flexjet’s aircraft owners compared to traditional fixed based operator terminal or lounge services at airports, which are open to all private or general aviation flyers.

As well as the standout lounge, for owners who want to fly in for an in-person meeting, they can choose to use one of the fully-equipped meeting rooms in the terminal, meaning they can simply fly in, have a meeting, and then fly back home.

And of course, like any good lounge, there is a bar, serving healthy food, snacks and even smoothies to help you on your travels.

The oval bar is a notable centrepiece where you can fully relax before setting off.

The FlexJet fleet

I was lucky enough to step onto one of FlexJet's private jets, which can get you from London to New York in just over five hours.

The jets live up to everything you can expect from Flexjet – luxury, attention to detail, impeccable service, safety and seamless travel.

For discerning travellers, Flexjet services will certainly move you.

Visit Flexjet.com to find out more.

Lifetime gifting can be an effective way to reduce the value of your estate and lower an inheritance tax (IHT) bill.

Larger gifts that fall outside other allowances, such as the £3,000 per year annual exemption and the £250 small gift allowance, are known as potentially exempt transfers (PETs).

How much inheritance tax is owed will depend on when the PETs were made.

Under the seven-year rule, if gifts were given at least seven years before death, they won’t be subject to inheritance tax.

If you die between three and seven years after giving a gift, a taper rate of IHT could apply on it.

But the way the seven-year rule is applied is misunderstood, according to Sean McCann, chartered financial planner at insurance firm NFU Mutual.

He said there is a “widely held misconception that if you make a gift and survive at least three but less than seven years, the inheritance tax due on the gift reduces on a sliding scale”, but the reality is different from this.

How does the seven-year rule work?

Gifts given between three and seven years before death may be taxed on a sliding scale, known as taper relief. These rates range from 32% to 8%.

Taper relief only applies if the total value of the gifts given during the seven year period before death exceeds the standard inheritance tax threshold, known as the nil-rate band.

The nil-rate band is an amount you can pass on to your beneficiaries tax-free and it’s currently £325,000.

Gifts made up to three years before your death face the standard 40% rate. No IHT is owed on gifts made more than seven years before your death.

The misconception is that the sliding scale always applies. In reality, the gift ‘eats’ your £325,000 nil-rate band first, with the taper relief applying to any part above that amount.

For example, a gift of £100,000 would leave someone with a nil-rate band of £225,000, if no other gifts were made within seven years of someone’s death. This would mean no tax would be owed on the gift.

If a gift of £425,000 was made within that period, there would be no nil-rate band left and the remaining £100,000 be subject to IHT. What rate it would need to be paid at would depend on when the gift was made.

The rest of the estate would then be subject to IHT at a rate of 40%. For example, if the remaining estate was valued at £100,000, £40,000 in IHT would be owed on that amount, in addition to the tax on the £425,000 gift.

If you leave your home to a child or grandchild, you get an extra £175,000 residence nil-rate band, taking your tax-free allowance to £500,000, provided your estate is worth less than £2 million.

However, this boosted allowance only applies to your remaining estate and not to lifetime gifts.

Chris Black, director of wealth management at RBC Brewin Dolphin, said: “For gifts made within seven years of death, the amount of IHT will be determined with reference only to the standard nil-rate band of £325,000 even if the deceased qualifies for the additional £175,000 residence nil-rate band.”

Source: Gov.uk

How does the seven-year rule work in practice?

Lifetime gifts use up your £325,000 nil-rate band if you die within seven years of giving them.

This means gifting sooner rather than later can be tax-effective, but it’s worth exploring this with a financial adviser to make sure you don’t run out of money.

Below are two scenarios of how it would work in practice.

Scenario A: Someone without children or a partner gives £500,000 to a nephew and survives more than seven years. Their remaining estate is worth £1 million.

The gift would fall outside the person’s estate for IHT purposes. IHT would be owed on £675,000 (the remaining £1 million minus the £325,000 nil-rate band) at a rate of 40%, meaning an IHT bill of £270,000.

Scenario B: Someone without children or a partner who gives £500,000 to a nephew and survives for three and a half years. The rest of their estate is worth £1 million.

The gift would fall inside the person’s estate for IHT purposes.

£325,000 of the gift would eat into the tax-free nil-rate band. The remaining £175,000 of the gift would get taper relief of 32%. This means the IHT charge on the gift would be £56,000. The remaining £1 million of the estate would be taxed at 40%, costing £400,000 in IHT. This means the total IHT bill would be £456,000.

The above calculations are based on no earlier gifts being made within seven years of death.

IHT is calculated on gifts in chronological order, so one that was made earlier will eat into your nil-rate band first.

Scenario C: Someone without children or a partner gives nothing in their lifetime and their estate is worth £1.5 million. The total IHT bill would be £470,000.

We last updated the MoneyWeek ETF portfolio in July, when we added one new position, bringing in WisdomTree True Emerging Markets (LSE: WEMP) to balance the growing technology tilt in our long-standing iShares Core MSCI Emerging Markets (LSE: EMIM) position.

We now have 15% in emerging markets, which sounds high – but the Korea and Taiwan element (which is around 50% of EMIM) is now a play on the AI investment cycle to such an extent that it no longer seems to make sense to think of them as subject to the classic emerging-market trends. Combined, we have about 10% in emerging markets and about 5% highly geared to AI capex. The latter is something to keep in mind if the AI boom ends and we want to cut exposure.

There has been plenty of volatility since then in geopolitics and in markets, especially in bonds. However, most of these developments have had relatively little bearing on the portfolio because we were already positioned cautiously towards them. For example, our bond holdings are very short-dated, precisely because we were concerned about the risk of longer-term yields getting untethered.

That said, our real-estate holding Xtrackers FTSE Developed Europe Real Estate (LSE: XDER) is struggling. Higher energy costs, higher inflation and higher interest rates over the medium term will harm sentiment and stall the wider economic recovery in general, while also pushing up refinancing costs and lowering valuations for this sector in particular. Four years from the point when rates began lifting off the floor, investors still seem to get rattled whenever they are reminded that today's rates are likely to be the new normal.

What we're changing in the MoneyWeek ETF portfolio

To my mind, there is value in European real estate – the number of takeovers in the sector (especially in the UK) suggests that trade buyers see opportunities where public markets don't. However, it's not at all clear when sentiment might change. We don't want to sell out entirely, but there is a case for taking it from 10% to 5% while we see how it develops. Like everything else in the MoneyWeek ETF portfolio, this is not a decision made in isolation: when you look at the positions, we are at the top end of medium risk at a time when caution may be wise.

We could consider adding a fund like iShares Global Infrastructure (LSE: INFR). There is much going on in this once-sleepy sector (see issue 1320). That said, this is also selling off as long bond yields rise. For now, what stands out is that the underlying bonds in iShares $ TIPS 0-5 GBP Hedged (LSE: TI5G) offer a 2.8% real yield with limited interest-rate risk at a time when higher inflation is a growing threat. So we will temporarily add 5% from XDER plus the remaining 5% from our uninvested cash to this, taking it to 20% in total.

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.

Our fund, JSS Sustainable Equity – Strategic Materials, invests across the whole value chain for strategic materials. Around 70% to 80% is invested in upstream mining companies. The remainder goes to recyclers, mining equipment manufacturers, battery producers and advanced materials companies. These businesses benefit from the same structural trends, but their earnings often swing less than those of miners.

I score every commodity each month on five factors: the marginal cost of production, inventory levels, the economic cycle, the supply-demand balance and trade barriers. This framework helps us to invest when prices are low. I then rank mining stock by operating cash costs, execution track record, jurisdictional risk, balance-sheet strength and valuation. This is augmented by detailed mine-by-mine valuation models, allowing us to stress-test valuations.

The fund is classified under Article 8 in the EU's SFDR sustainability regulations, meaning we promote environmental or social characteristics, which is relatively rare in the mining sector. For us, sustainability is closely linked to returns. Poor relationships with local communities, regulators, or governments can result in mine delays, higher costs, or loss of a licence to operate. Strict environmental and social standards therefore help protect returns. Here are three of the stocks we like.

Three strategic materials stocks for your portfolio

Acerinox (Madrid: ACX) is a Spanish stainless steel and speciality alloys producer. Through its Haynes International business, the company builds high-performance alloys designed to withstand extreme heat and pressure. These specialised strategic materials are used extensively in aircraft engines and industrial gas turbines. Furthermore, they serve critical aerospace applications such as rocket nozzles and pumps aboard vehicles exploring the frontiers of space.

Wheaton (LSE: WPM) is a streaming company rather than a traditional miner: it provides upfront financing to mining companies in exchange for the right to purchase a portion of their future gold and silver production at predetermined prices. The attraction is the business model. Wheaton does not operate mines itself, so it avoids much of the exposure to rising wages, energy prices, equipment costs and operational problems that can squeeze traditional miners. This gives it a structurally different and, in my view, lower-risk exposure to precious metals. I also see a robust pipeline of future growth.

Large copper projects often contain valuable gold and silver byproducts. These create opportunities for companies like Wheaton to provide financing through streaming agreements. Wheaton can participate in the growth of new mines without taking on the full operational risk of owning and running them.

Freeport-McMoRan (NYSE: FCX) is one of the world's largest copper producers, giving investors exposure to what I see as a critical commodity for the coming decade. Copper is essential for electrification, power grids, data centres and heavy industry. Demand is likely to rise, while supply is proving hard to bring online quickly. That gap between demand and supply could support prices. US trade policy may also favour domestic producers over time. Freeport's giant Grasberg mine in Indonesia is ramping back up. This follows a disruption last year that cut output. Restored production offers a path to growth. The company also carries meaningful gold exposure alongside copper.

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Just 4% of fully self-employed people currently save into a private pension, according to figures from the Pensions Commission, the inquiry set up by the government to investigate the state of the UK population’s retirement planning.

One problem is that self-employed people sit outside the auto-enrolment system, under which all employers must offer their staff access to a pension scheme and sign them up for it unless they explicitly opt out. This also means self-employed people miss out on pension contributions from employers, which members of occupational schemes enjoy.

Another issue is that self-employed people often don’t have the means to make pension contributions – or at least to commit to regular savings. When they’re building their businesses, spare cash may be short. And the earnings pattern of self-employed workers is often lumpy and unpredictable.

However, it’s not all bad news. The pensions system is more flexible than many self-employed people realise – it’s possible to make contributions in a way that reflects your shifting income streams.

Also, although you may not get an employer’s contribution, the government will top up your savings through tax relief at your highest marginal rate of income tax – making a £1,000 contribution, say, will cost basic-, higher- and additional-rate taxpayers only £800, £600 or £550.

To secure that tax relief, you will need to open an authorised pension plan – a self-invested personal pension (SIPP), available through online investment platforms, is a good option for many self-employed people. Once you’ve set up your SIPP, you don’t have to make fixed monthly payments if your income doesn’t make this easy, though doing so is good financial discipline. Instead, you can make one-off contributions as and when your finances allow – during higher-earning periods, say, or when you’re paid for a lucrative contract or project.

What self-employed savers need to consider

Self-employed savers need to consider the annual allowance rules that cap how much you can pay into your pension in any given tax year at 100% of your income for that year, or £60,000 if you earn more than this amount.

But again, there’s some flexibility – you can use the carry-forward rules to make use of any annual allowance you didn’t use in the previous three tax years in the current tax year. This can be a really useful feature for self-employed savers whose income fluctuates significantly from year to year.

Another possibility to consider for self-employed savers who set up a limited company – rather than working as sole traders – is to make an employer’s contribution to your pension through the business. Not only will this swell your pension savings, but pension contributions also come off your company profits before your corporation tax bill is calculated, reducing what you owe. There’s also no employer’s national insurance due on remuneration paid out this way.

Finally, remember that you don’t have to use designated pension plans to save for later in life. Alternative vehicles, including individual savings accounts (ISAs), also offer opportunities to save tax-efficiently, but come with more freedom to make withdrawals if you need to. This can provide an important safety net for self-employed workers worried they may need access to their savings – though money drawn down now is not, of course, available to you in retirement.

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ASML (Amsterdam: ASML) is the only commercial supplier of EUV lithography systems – machines that sit at the heart of the modern semiconductor industry. An extreme ultraviolet (EUV) lithography system is roughly the size of a double-decker bus, weighs roughly 180 tonnes and costs more than €180 million. It fires lasers at tens of thousands of microscopic droplets of molten tin every second, creating a plasma that emits light at a wavelength of 13.5 nanometres. That light is used to print the extraordinarily fine patterns from which the most advanced computer chips are made.

In 2025, ASML recognised revenue from 48 EUV systems and generated €32.7 billion of sales overall, including €8.2 billion from servicing and upgrading its installed base. The Dutch company does not manufacture every component itself. Instead, it coordinates a network of specialist suppliers that has taken decades to assemble. German company Carl Zeiss makes the mirrors at the heart of the optical system. Trumpf supplies the lasers used to generate the EUV light, while other specialists provide components ranging from wafer stages to sensors and software.

Its customers include TSMC, Samsung and Intel, companies with the scale and expertise to develop much of their own technology. Yet when it comes to leading-edge lithography, they have little choice but to buy from ASML. The machines are expensive because the economic cost of falling behind in semiconductor manufacturing is greater still. So how did a struggling Dutch start-up build a position that has become so difficult to challenge? And can that advantage survive the next stage of the industry’s development?

How ASML grew from humble beginnings to industry leader

ASML was established in 1984 as a joint venture between Philips and ASM International. The two companies brought different capabilities to the new business. Philips had already developed the PAS 2000 lithography system, while ASM International specialised in semiconductor manufacturing equipment. The timing was difficult. The company entered a competitive market dominated by established American and Japanese companies and initially had few customers. It also struggled financially. ASM International eventually withdrew after struggling to justify continued investment in a business that was consuming cash, while Philips was cutting costs. ASML survived because its management and shareholders continued to back the technology and because Philips provided further support.

ASML spent its first decade building the business and developing its technology. Rather than trying to make every critical component itself, ASML worked with specialist suppliers and concentrated on integrating their technologies into a complete lithography system. The breakthrough came in the 1990s with the development of the PAS 5500. Its productivity and resolution helped ASML win the customers it needed to become profitable. The company went public in 1995, giving it access to the capital needed to expand its research and manufacturing operations.

The approach mattered because lithography was becoming too complex for one company to master every discipline itself. ASML could concentrate on integrating the system while drawing on specialists in optics, lasers, metrology and other fields. The strategy eventually produced a decisive lead over its two big rivals, Nikon and Canon. But the biggest test was still to come. EUV had been discussed for years as the technology that might allow chipmakers to keep shrinking transistors, yet turning the idea into a machine capable of high-volume production proved difficult. ASML and its customers spent years developing the technology, with Intel, Samsung and TSMC helping to fund the effort.

In 2012, those customers committed €1.38 billion of research and development funding to ASML’s next-generation lithography programme and took minority stakes in the company. Intel alone committed €829 million of R&D funding alongside an investment of up to 15% in ASML. The arrangement illustrates how dependent ASML’s customers had become on its technology. They were helping finance development because the machines would determine how far their own manufacturing could advance. The result was to bring EUV into commercial production, but by then ASML had spent decades building the supplier network, engineering expertise and relationships needed to make it work.

ASML’s competitive moat

That combination forms ASML’s competitive moat – the technology, expertise and relationships that make the business difficult for rivals to challenge. Its position in EUV was therefore built long before the first commercial machines were sold. To understand why ASML can charge hundreds of millions of euros for a single machine, one must consider the economics of modern semiconductor manufacturing. A cutting-edge fabrication plant, or “fab”, can cost more than $20 billion to build and equip. Much of that investment goes on the machinery inside it, with lithography scanners among the most expensive tools.

For a company like TSMC, the economics of a fab come down to how many useful chips it can produce, how quickly, and for how much. Smaller transistors allow more computing power to be packed onto each wafer – a thin disc of silicon on which chips are made – while higher throughput and better yield improve the economics of the plant. This is why lithography matters. The machine prints the patterns that become the transistors and other structures on the chip. If those patterns cannot be printed accurately enough, the economics of the entire fab suffer.

That gives ASML an unusual position. Its customers include some of the world’s largest companies and most buyers of that size would have considerable bargaining power over suppliers. When it comes to leading-edge lithography, their options are much narrower. TSMC, Samsung and Intel cannot simply switch to another supplier offering an equivalent EUV system. A more capable machine can also allow a chipmaker to produce more wafers from an expensive fab, while improvements in accuracy and yield can increase the proportion of those wafers that become saleable chips. The return from a lithography investment therefore depends on the additional output and yield it enables, rather than simply on the purchase price. This helps explain why ASML’s customers have been prepared to commit capital years before they receive their machines.

The company now sells its low-NA EUV systems for roughly €180 million and high-NA ones for more than €350 million. NA means numerical aperture, a measure of the optical system’s ability to resolve very small features. The higher the NA, the more detail the machine can print. Customers continue to buy the machines because the cost has to be weighed against the price of falling behind. EUV system sales reached €11.6 billion in 2025, while ASML’s gross margin was 52.8%. Those figures suggest that customers have little choice but to accept the price of staying at the leading edge.

Customers cannot treat an ASML machine as a one-off purchase. Once a fab is built around its equipment, maintaining and upgrading that equipment becomes part of the production process. ASML continues to service its machines throughout their working lives, helping customers maintain performance and install upgrades. Its installed-base business therefore grows as the number of machines in operation increases, creating a source of revenue alongside new system sales.

How ASML stays ahead of the game

Why can’t another company simply build an EUV machine and compete with ASML? The answer lies in how much has to work together for a lithography system to operate in a semiconductor fab. ASML acts as the system architect, drawing on a network of specialist suppliers that has developed alongside the company. ASML then has to integrate all of the high-precision parts into a machine that can operate reliably in production. Precision matters because an error that would be invisible to the human eye could make a machine unusable for leading-edge production. This is very hard for a competitor to replicate. Roughly 80% of ASML’s bill of materials is sourced from its global supplier network. A rival would have to recreate that network, integrate thousands of precise components and persuade the world’s leading chipmakers to install an unproven machine in their most valuable factories.

ASML also has an advantage that is harder to see. Every machine it installs adds to its practical knowledge of how its technology behaves in a real production environment. ASML has about 10,000 customer-support employees working around the world to keep its systems running. That operation is a continuing relationship with customers after the initial sale; engineers work with chipmakers to maintain performance, solve problems and install improvements. A machine can be designed on a drawing board, but making it run reliably, at high throughput and with the precision required for commercial chip production, is a different problem. Each generation provides information that can be fed into the next one.

ASML therefore remains the company best placed to develop whatever lithography technology chipmakers require next. But that position does not make its earnings immune to disruption. Geopolitical restrictions can limit where it sells its machines. The semiconductor cycle can cause large swings in orders. Changes in chip design could reduce the industry’s reliance on successive generations of lithography.

Threats to ASML’s dominance

China accounted for 29.1% of ASML’s sales in 2025, although much of this was mainstream semiconductor equipment rather than the EUV systems at the centre of its monopoly. Export controls have already restricted the sale of some of ASML’s systems and the provision of certain services to Chinese customers. Losing access to part of the Chinese market reduces revenue, but avoids giving Chinese chipmakers access to an alternative source of EUV machines.

There is also geographic concentration beyond China. Taiwan accounted for 25.5% of ASML’s 2025 sales and South Korea another 25%. ASML has customers and suppliers in both markets, leaving the company exposed to tensions over Taiwan and the Korean peninsula. A serious disruption would affect semiconductor production well beyond ASML itself.

The nearer-term risk is more familiar. ASML sells relatively few machines at very high prices, making the timing of customer capital expenditure critical. It recognised revenue from 327 new and refurbished lithography systems in 2025, compared with 418 in 2024 and 449 in 2023. Its largest customer accounted for 23.9% of sales and its two largest customers for 38%. A major customer delaying a fab or moving its spending into a different year can therefore produce a significant swing in ASML’s results.

The more fundamental threat is technological. ASML’s business depends on chipmakers continuing to invest in new generations of process technology. The company itself acknowledges that customers could delay adoption of new technologies if the economics do not justify the cost, or shift towards architectures that rely less on lithography. The price of each technological advance is rising. High-NA EUV machines cost hundreds of millions of euros, while chipmakers can also improve computing performance through chiplets, advanced packaging and architectural changes. If these approaches deliver better returns than simply shrinking transistors, the industry could become less willing to pay for each successive generation of lithography.

For now, there is little evidence that this is displacing leading-edge lithography. AI is increasing demand for advanced logic and memory, and ASML says growth in both markets helped drive demand for its EUV systems in 2025. This remains the most important long-term question hanging over the investment case. Export controls can reduce sales, a semiconductor downturn can defer orders and customers can become more selective about expensive new technologies. So far, none has emerged at commercial scale as a way of displacing ASML’s leading-edge lithography technology.

The outlook for shareholders

For shareholders, ASML offers a combination of growth and recurring revenue. In 2025 it generated €32.7 billion of sales, a 52.8% gross margin and €9.6 billion of net income. Installed-base management revenue, mainly servicing and field options for machines already in customers’ fabs, reached €8.2 billion, up 26% on the previous year. The outlook has strengthened since then. ASML reported €9.3 billion of sales in the second quarter of 2026, with a 54% gross margin, and raised its full-year revenue guidance to €43 billion-€45 billion, up from €34 billion-€39 billion at the start of the year. It says AI-related investment is driving demand for advanced chips and customers are accelerating expansion plans.

The longer-term opportunity remains substantial. ASML’s modelling puts its 2030 annual revenue opportunity at between €44 billion and €60 billion, with gross margins of 56% to 60%. Those figures are an opportunity range rather than a forecast, but the rapid increase in 2026 guidance shows how quickly the business can scale. AI is helping to drive that growth.

AI should still be viewed as an accelerant rather than the foundation of the investment case. The more durable thesis is that computing demand continues to rise and chipmakers need increasingly capable manufacturing equipment. ASML does not need every future semiconductor application to be an AI application for its long-term case to work. ASML remains a capital-equipment company and its earnings are therefore exposed to the spending decisions of its customers. Even a customer convinced of the long-term need for additional capacity can delay an order for a year. The result is an earnings profile that is more cyclical than the competitive advantage might suggest.

Are ASML shares worth buying?

ASML shares have generally commanded a premium valuation because investors recognise the quality of the business. At roughly €1,700 a share, the stock trades on around 35 times consensus 2026 earnings and 25 times projected 2027 earnings. Those multiples can look reasonable if earnings grow rapidly. ASML is now aiming for €43 billion–€45 billion of revenue in 2026, up from €32.7 billion in 2025, while analysts expect further earnings growth in 2027. The valuation leaves less room for disappointment. A weaker semiconductor cycle, slower high-NA adoption or further restrictions on China could cause investors to reassess the multiple even if ASML’s competitive position remains intact.

The question for a long-term investor is whether earnings can grow fast enough to justify the high price. If growth falls short, the multiple provides another source of downside. More attractive entry points are likely to come when the semiconductor cycle turns down and investors focus on near-term orders rather than the decade ahead.

The investment question is whether the future earnings from ASML’s competitive position justify the price of the shares. A business can continue to compound while its shares fall if investors have already priced in too much of that growth. ASML has spent four decades building one of the most formidable competitive positions in the global economy. The investment case now depends on whether it can turn that position into enough future earnings to justify the premium investors are being asked to pay today.

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With Personal Assets Trust (LSE: PNL), Capital Gearing (LSE: CGT) and Ruffer (LSE: RICA) all losing value after inflation, many investors who turned to wealth preservation trusts over the past five years will have been disappointed.

In that time, UK inflation – as defined by the consumer price index (CPI) – has averaged 5% per year, or 27.5%. Meanwhile, Personal Assets is up 20.8% on a net asset value (NAV) basis to the end of August or 3.85% per year. Ruffer has gained 20% (3.7% per year) and Capital Gearing has returned 11.5% (2.2% per year).

The key selling point of these trusts is to protect wealth in all market environments. You would not expect them to outperform during such a strong bull market for stocks, but even so, these returns look underwhelming set alongside simple, low-risk alternatives. For example, the Royal London Short-Term Money Market Fund has returned 3.7% per year over the past five years.

Long-term readers will know that Personal Assets Trust has been a core holding in the MoneyWeek investment trust portfolio since its inception in 2012. It was included because its defensive mandate complemented the other, equity-heavy trusts in the portfolio. And historically, managers Sebastian Lyon and Charlotte Yonge of Troy Asset Management have done a good job of protecting capital. The trust has returned 62.7% on a NAV basis (versus inflation of 41.7%) over ten years, and 247.4% (versus inflation of 66.7%) since Troy took charge in March 2009. So why have recent returns been weaker?

Personal Assets Trust is trailing the bull market

Personal Assets Trust invests across a range of asset classes. At present, stocks are about 40% of the portfolio, inflation-linked bonds roughly 30%, conventional bonds about 20% and gold around 10%. This has varied significantly – in the latest quarterly report, the managers note that the percentage in stocks has varied between the low-seventies in 2009 and the low-twenties in 2022.

This points to the first headwind; the equity allocation has been relatively low at a time when stocks are booming. To make matters worse, the trust favours cash-generative, high-quality equities, but we are not in a market that favours such stocks or offers much help to stockpickers.

Instead, the top-ten tech stocks account for over 40% of the US S&P 500. US equities account for over 70% of the MSCI World. The result of this concentration is that big tech accounted for 53% of the market's return in 2025, says JPMorgan. It is all but impossible for Troy's strategy to keep up in this scenario.

A higher-for-longer interest rate environment

At the same time, we have moved into a higher-for-longer interest rate environment. Personal Assets Trust did well in the zero-interest-rate environment of the 2010s and early 2020s, but cash is now a higher hurdle to beat. To make things trickier for bond investors, longer-term bonds have plunged as long-term expectations for interest rates have risen. This applies to both conventional bonds and inflation-linked ones.

Personal Assets Trust currently holds very short-dated bonds with an average duration of 2.5 years (a bond's duration is the weighted average time to receive all the promised cash flows, both interest and principal). So its portfolio is far less exposed to higher rates than a typical bond fund. Still, this positioning may make it hard to earn much more than a near-cash return from its bonds in the short term (although short-dated inflation-linked bonds should quickly pass on any inflation spike).

The timing of the 2021-2022 inflation surge, rapid rate rises and unruly market adjustment in response means five-year records should be interpreted with caution. Three-year returns look better (22.7%, versus 8.8% for CPI). Still, investors – including us – need to watch these trusts to see if they will now bring what they promise to a portfolio again.

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Norwegian arms manufacturer Kongsberg Gruppen (Oslo: KOG) is likely to benefit from a big increase in defence spending. The Nato summit in Ankara in July 2026 reported that European allies and Canada had invested more than $139 billion in core defence requirements over the previous year, together with $50 billion of new procurements and a commitment to expand manufacturing capacity. In addition, the allies pledged $70 billion of military equipment, training and support to Ukraine for 2026, with at least that amount again for 2027.

At the 2025 financial year-end, Kongsberg’s order backlog was NKr157 billion (£12.4 billion); the chief executive officer said that, in his ten years in the job, he had never seen such high demand.

Kongsberg 's focus on growth

In February 2026, Kongsberg announced that it had spun off its maritime division as a separate listed company (Kongsberg Maritime) to concentrate business on the three higher-growth divisions. Defence Systems is the largest division (47% of revenue) with Missiles & Aerostructures (30%) and Discovery (23%) together accounting for 53% of revenue.

Then, in June 2026, Kongsberg announced it had completed the acquisition of Zone 5 Technologies, a Californian company that is the market leader in affordable, mass-producible munitions. These include long-range strike and interceptor missiles. Zone 5 will add to Kongsberg’s existing US business since Zone 5 has won US contract including one for the US Air Force’s AGM-188 FAMM (Family of Affordable Mass Missiles).

In September, Kongsberg also acquired Sonatech of California, an underwater acoustics specialist whose technology will be used in Kongsberg’s autonomous underwater vehicles. In July, Kongsberg won a $100 million contract from the US Air Force for stealth air-to-surface Joint Strike Missiles (JSMs), which can be carried internally in the F35-A fighter; deliveries are scheduled up to 2030. The JSM has also been selected by Australia, Canada, Germany, Japan and Norway.

Kongsberg’s results for the three months to the end of June 2026 were the first without the maritime division and showed revenues up 31% from the same period in 2025, rising to NKr10.4 billion. Earnings before interest and tax (Ebit) were up 48.9% to NKr1.67bn and the Ebit margin rose to 16.1%. The order intake for the second quarter rose by 164% of second-quarter revenue, taking the order backlog to NKr157 billion.

New growth drivers for Kongsberg

In the second quarter of the year the Defence Systems division saw strong demand for air defence and counterdrone systems. An agreement was reached with partner Raytheon to start deliveries of the NASAMS air defence system to Kuwait. The Missiles & Aerostructures division was awarded JSM missile contracts totalling NKr10.9 billion to Canada, Germany and the US. The Discovery division also won contracts, including one for the monitoring and protection of critical subsea infrastructure.

The growth drivers for Kongsberg are, firstly, the large and increasing order backlog, which is driving increased investment in new and expanded production facilities. Secondly, acquisitions, new product development and capacity expansion is supported by cash outflow of NKr3.7 billion in the second quarter.

The existing Norwegian missile plant is being supplemented by new factories in Australia and the US, with expanded production of subsea technology in Norway. The Australian and US missile facilities will be operational in late 2027, with full-rate production by 2028, so will contribute to the 2029 revenue target of NKr100 billion by 2029 – 2.3 times the projected revenue for 2026 – rising to NKr150 billion in 2033.

Kongsberg's earnings are on the rise

Kongsberg Gruppen has a market capitalisation of NKr275 billion at the recent share price of NKr312.7, with a one-year price target of NKr396.4. The forward dividend yield is 0.7%.

The balance sheet is strong with cash and equivalents of NKr4.9 billion at the end of the second quarter of this year, compared with loans and lease liabilities of NKr2.1 billion.

Analysts predict 2027 revenues of NKr64.2 billion, a 49% increase over 2026. Earnings per share are projected to rise to NKr11.2 in 2027, a 52% increase over 2026. The contributors to the projected revenue growth of more than three times by 2033 include the Zone 5 and Sonatech US acquisitions and new missile factories in Australia and the US.

There is also the NKr16b billion contract signed with Poland in January 2026 to provide counter-drone (C-UAS) batteries, forming a multi-layered anti-drone wall as part of Poland's East Shield initiative for protection against Russia. Further contracts for C-UAS could follow if other European nations follow this Polish initiative.

At the recent share price of NKr312.7, the price/earnings ratio for 2027 is 27.9. If Kongsberg hits its 2029 revenue target of NKr100 billion and earnings per share rise only proportionately to revenue, then the 2029 p/e would be 18.3.

Kongsberg is a growing defence company with a massive order backlog of 3.6 times annual revenue, substantial sales in the important US defence market, significant sales in Asia and is playing an important part in upgrading European defence capabilities to counter the threat of Russian aggression.

The company plans to more than treble turnover by 2033 and is investing in both acquisitions and new production facilities to achieve this. Directors have significant shareholdings. The chief executive officer holds 250,000 shares and two executive vice-presidents together hold 230,000 shares.

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The Office for National Statistics has changed how it measures productivity – economic output per hour worked – and it turns out we’ve been doing rather better than we realised. In particular, the government’s official statisticians now reckon the rate of growth in the decade following the global financial crisis, from 2009-2019, was 1.3% each year, on average, rather than the 0.7% they had previously thought.

Alas, this doesn’t mean the UK economic output was any higher. It simply means the statisticians have changed their minds about how many hours we worked – that is, they think it was far fewer than originally estimated. That same level of output, divided by a smaller number of hours, equals a higher resulting figure for productivity. It means the UK’s unique productivity puzzle may not have been so much of a puzzle all along – and places us in the top half of the G7 pack on productivity, rather than as an embarrassing outlier.

What did the ONS change when measuring productivity?

Previously, the ONS had largely calculated the total hours worked from the Labour Force Survey, in which respondents are asked how many hours they’ve worked in a particular week. However, for a variety of reasons (as covered in this space previously), that survey has become notoriously unreliable, with ever lower response rates.

People may report their usual or contracted hours rather than their actual hours, for example, as economist Jonathan Portes points out on his blog. Or when “respondents drop out temporarily, the survey may carry forward their previous answer – even if the reason they did not respond was that they were on holiday”. As response rates fell, the survey’s upward biases in estimating working hours worsened – with a corresponding downward bias in the calculation of productivity rates.

By contrast, the ONS’s new “component method”, already used by many other countries, draws on a wide variety of sources, including the Annual Survey of Hours and Earnings – deducting for annual leave and other absences, and adjusting for overtime – as well as other business surveys. The resulting picture is one of falling average hours per job, and much slower growth in total hours, after 2008.

Is the UK getting more productive?

Yes, the revised figures suggest that people are more productive when they are working (output per hour is higher), but they are putting in fewer hours (average weekly hours are lower). Over the period from 2008 to 2024, the latest year for which we have the new figures – the difference is stark. Total output grew by only 8.7% under the ONS’s existing (“current”) approach, but 15.8% on the revised (“component”) method. On the face of it, that’s good news.

Productivity is one of the most important drivers of economic growth, living standards and the public finances. The metric slowed across advanced economies after the financial crisis, “reflecting weaker investment, the fading of the information-technology boom and other common factors”, says Portes. The fact that the UK was not, in fact, an exceptionally weak performer is good news.

Are there any caveats?

Always. Importantly, the revision doesn’t mean that productivity has recovered to pre-crisis levels – the revised annualised figure of 1.3% remains well below the pre-crisis average of 2%. Indeed, Richard Heys, ONS deputy chief economist, argues that the new methodology does not change “the fundamental story of a slowdown in productivity” following the global financial crisis and that the UK had still experienced “the slowest growth since the Second World War and arguably since the Napoleonic period”. Sadly, he’s right, says David Smith in The Sunday Times. Since 1997, the ONS reckons output per hour is 40.7% higher on the new estimate, compared with 34% on the old one.

That’s not a giant gap. Also, output per worker-hour is not the only way to measure productivity. The ONS has also looked at two other measures – output per worker and output per job, which are a “more relevant gauge” than output per hour when it comes to the impact on real wages and the public finances. In both cases, the new way of measuring alters the picture far less than with the output-per-hour metric: there has still been a drastic slowdown following the financial crisis.

Arguably, then, the revision of the ONS statistics is a worrying development. If productivity is already rising at 1.3%, it will be much harder to improve on it significantly – “leaving us stuck with wage stagnation and big fiscal challenges”. And if the UK’s productivity was less disastrous than feared, by corollary, our supposedly resilient jobs market was less impressive than assumed.

What do the latest stats show?

There are promising signs. Last month, the Resolution Foundation think tank published its own analysis of UK productivity based not on the Labour Force Survey, but on RTI payroll data (the Real Time Information system employers use to send pay data to HMRC) and on self-employment tax return data. They concluded that productivity has grown by a respectable 1.1% on average since the third quarter of 2024, having fallen 0.7% on average over the two years prior. By contrast, the latest (incomplete) “old” ONS figures – based on the LFS – show a fall of 0.2% over the past two years and 0.1% before that.

This strong uptick is not the result, say the Resolution report’s authors, of disproportionate contraction in low-productivity sectors such as retail and hospitality, nor expansion in high-tech sectors or increased use of AI. Rather, this is “a broad-based recovery, with 12 of 19 sectors seeing improved productivity growth in the past two years – including in information and communications, retail, science, transport and health”. It’s early days, and higher productivity is not a panacea, but there are at least some reasons for optimism.

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Pennington House, Lymington, Hampshire

A Grade II-listed house dating from 1735 set in formal gardens and parkland. There is a large walled kitchen garden and a stable courtyard. 8 bedrooms, 5 bathrooms, 2 receptions, library, wine cellar, office, coach house, 2 cottages, 2 lakes, woodland, 42.4 acres.
Price: £8.25m Knight Frank 01962-834010

Alderton Hall, Montford Bridge, Shrewsbury, Shropshire

A Grade II-listed country house with formal gardens including a tennis court and a stable yard with an all-weather manège and paddocks. 6 bedrooms, 5 bathrooms, 2 receptions, study, garden room, wine cellar, swimming pool, 9.7 acres.
Price: £2.5m Savills 01952-239511

Castleton, Lexington, Kentucky, USA

An equestrian estate founded in 1793 by John Breckinridge, a US senator and attorney general under Thomas Jefferson. It has extensive stables, horse barns, indoor schools, fence-and-rail paddocks and prime land used to breed thoroughbred horses. 7-bed main house, formal gardens, further 9 dwellings, 952 acres.
Price: $57.5m Bluegrass Sotheby’s International Realty +1 859 983 9933

Ladyswood House, Malmesbury, Wiltshire

An Edwardian country house built in 1905 with large gardens and grounds and extensive equestrian facilities including stables, an indoor sand school and outdoor manège along with further outbuildings. The interiors have high ceilings, leaded-light windows and period fireplaces. 6 bedrooms, 4 bathrooms, 3 main receptions, garden rooms, 3-bed apartment, staff flat, swimming pool, 60 acres.
Price: £9.5m Strutt & Parker 01285-653101

Hoddern Farmhouse, East Sussex

A Grade II-listed property with equestrian facilities currently let out as a livery yard that include 28 boxes, a sand school and fenced paddocks. 7 bedrooms, 4 bathrooms, 3 receptions, office, cellar, barn, stores, workshop, mature gardens, 27 acres.
Price: £2.45m By Design Homes 07873-831564

The Sanctuary, Shobrooke, Crediton, Devon

A country house with equestrian facilities including an indoor sand school. The house has the original tiled floors in the entrance hall, grand fireplaces with carved wood surrounds, wood panelling, stone mullioned windows and a large breakfast kitchen with Aga. 11 bedrooms, 6 bathrooms, 2 receptions, billiards room, 3-bed lodge, indoor pool/gym, office, garden, pasture, woodland, 60 acres.
Price: £5.75m Strutt & Parker 01392-914200

Warenton Farm, Belford, Northumberland

A farmhouse with an attached cottage in landscaped gardens that include stables. Inside there are wood floors, the original fireplaces with wood-burning stoves and a large open-plan dining kitchen room with bespoke cabinetry and range cooker. 3 bedrooms, 2 bathrooms, 2 receptions, utility,garage, greenhouse, garden room, pasture, 5.6 acres.
Price: £950,000 Finest Properties 0330-111 2266

Craigluscar Farm, Dunfermline, Fife

A C-listed traditional stone farmhouse with equestrian facilities that include stables and a tack room and indoor riding arena. The restored farmhouse has beamed ceilings, exposed stonework, open fireplaces and a large dining kitchen with an Aga. 4 bedrooms, 2 bathrooms, 3 receptions, utility, 2 sun rooms, cloakroom, further outbuildings, gardens, paddocks, cattle-handling pens, grazing land, 56.1 acres.
Price: £1.25m+ Galbraith 01738-451111

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The relentless rise in government bond yields – the cost of countries’ borrowing and the pressure that puts on their finances – has become headline news. A crisis in which governments will be forced to slash public spending to reduce their deficits and stop the relentless rise in ratios of government debt to GDP is widely predicted.

But it is rare for crises to be widely predicted, and, if they are, they never unfold as expected. In the popular narrative, “the bond vigilantes”, a term coined by Ed Yardeni in the 1980s to describe investors who keep governments in check when deficits, debt and inflation threaten, will boycott government bond markets. This will force yields higher (reflecting falling prices) and trigger a fiscal crisis that forces governments to act.

“I used to think that if there was reincarnation, I wanted to come back as the President or the Pope... But now I would like to come back as the bond market. You can intimidate everyone”, quipped James Carville, the chief political adviser to Bill Clinton. In those days, bond investors had been battered by decades of persistent inflation and rising government bond yields.

Today, they are worried by four factors: rising inflation, led by rising oil and gas prices; the inability or refusal of governments to control budget deficits; escalating levels of national debt; and the impact of inflation, deficits and rising bond yields on the economy and markets, threatening a spiral of bond yields reminiscent of the 1970s.

In fact, oil prices in real terms are little higher than their average this century ($95 a barrel for Brent). The rise in petrol prices has been exacerbated by a shortage of refining capacity thanks not just to the Middle Eastern war but to the destruction of refineries in Russia and Ukraine. Wholesale natural gas prices have risen much more than the oil price, but new supplies of liquefied natural gas (LNG) are coming on-stream.

Oil exports are increasingly circumventing the blockade of the Strait of Hormuz which, in due course, is likely to be lifted, enabling LNG exports to resume. The best cure for higher oil and gas prices is higher prices, which encourage increased supply and discourage demand.

Why government bond yields have risen

Higher energy prices have pushed up the rate of inflation but without a wage-price spiral, of which there is no sign even in the UK, inflation will soon drop down again. Wage pressures are muted in the UK’s private sector and everywhere in the US and Europe. In the US, strong productivity growth is keeping labour costs down. The difference between the yields on conventional and index-linked government bonds shows that expectations of inflation for the years ahead remain moderate, and the inflation data supports this.

So why have bond yields risen? Real interest rates were negative between 2019 and 2022 but have now risen above 2%, against a long-term norm of 1%. Perhaps there is an inflation-risk premium or an insolvency-risk premium. More plausibly, the investment boom in the US has increased the demand for capital relative to supply, pushing up the cost of debt while governments are also borrowing heavily. In time, real yields should revert to the long-term average.

If the yield on medium-term government bonds is higher than the growth rate of nominal GDP (inflation plus real growth), the ratio of debt to GDP is falling. That is the case in the US, but not in the UK, where inflation is higher and growth lower. The ratio of government debt to GDP in most developed countries rose sharply in the aftermath of the 2008 financial crisis and again during Covid. As economies recovered from Covid lockdowns, the ratio fell and the trend has been broadly flat or gently rising since.

Meanwhile, private-sector debt relative to GDP has fallen, so total debt-to-GDP ratios are either flat (US and France) or falling (UK and Germany). Rising budget deficits with no attempts at restraint would mean that debt ratios would rise remorselessly and lead, eventually, to a fiscal crisis, but that is not inevitable. As the Greek solvency crisis of 2010 showed, a crisis in one country can have a salutary effect on other threatened countries; “bond vigilantes” may not be needed.

The current level of pessimism suggests that the sell-off in bond markets is overdone. Oil and gas prices will come down, inflation will fall, capital spending in the US will tail off, real interest rates will subside, fiscal deficits will be brought under control and indebtedness relative to GDP will fall.

A straw in the wind is that the recent increase in interest rates in the US led to a fall in bond yields – reliable bullish indicator. The US Federal Reserve, but not the Bank of England, realises that raising short term rates demonstrates inflation-fighting credibility and will thereby bring down bond yields. That is positive for the housing market as US house buyers (and, increasingly, those in the UK) borrow long term.

UK ten-year gilts yielding over 5% and, especially, 30-year gilts yielding nearly 6% look good value, but with one caveat. Every period of Labour government in the last 100 years has resulted in a devaluation of sterling. Is this time really different? Charles Gave of Gavekal advocates instead 30-year Japanese bonds, yielding 4% with a seriously undervalued currency.

The ratio of Japanese government debt to GDP looks intimidating at 230% but 90% of it is domestically owned. Moreover, research co-authored by Stanford professor Hanno Lustig says that the government’s liabilities net of its massive holdings of domestic and foreign equities and bonds have fallen to just 65% of GDP. A good alternative is to buy shares: lower bond yields will boost equity markets and even the UK stock market derives 70% of its earnings from overseas, providing protection against devaluation.

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Aim, the London Stock Exchange's market for smaller or growing companies, is in the doldrums. Hit by negative sentiment towards UK small caps, plus tax reforms that have reduced the attractiveness of many Aim stocks, London's junior stock market has struggled to keep its head above water. The FTSE Aim 100 index, which charts the share-price performance of the largest companies on the market, currently stands at around 3,650. That compares with a peak of almost 6,550 in September 2021.

In fact, the malaise goes back even further. Looking across the whole of Aim, returns over the past ten years are near zero, compared with a 60% gain from the FTSE All-Share index over the same period. And it's not only investors who feel disenchanted; far fewer companies now see a compelling case to list their shares on Aim. In 2007, some 1,700 businesses had Aim quotes, while today the figure is barely above 600.

For all that, “I remain an Aim bull,” says Alex Game, a fund manager in the Economic Advantage team at Liontrust. “We like to back businesses with high levels of founder and manager ownership. These are entrepreneurial companies focused on [growth] and many of them are high-quality businesses, in market leading positions with well-capitalised balance sheets.”

“There's also a diversification angle,” adds Eustace Santa Barbara, co-manager of the IFSL Marlborough Special Situations, UK Micro-Cap Growth, Multi-Cap Growth and Nano-Cap Growth funds. “We're now seeing… the potential perils of holding just a handful of household-name, mega-cap businesses that dominate their indexes and can leave investors at the mercy of market shocks.”

Aim is under domestic pressure

To decide whether you share such optimism, you must first understand why Aim has underperformed in recent times. That is partly explained by the difficult macro environment the UK has faced, with ongoing challenges such as elevated inflation, driven by higher food and energy prices, depressed domestic demand amid the cost-of-living crisis, and political instability. Smaller companies, which tend to have less international activity, are more exposed to these domestic pressures.

It is also a reflection of the bias in the smaller companies sector towards growth stocks. These are companies where investors are betting on the long-term prospects of the business, rather than performance right now. When interest rates rise – and the rapid climb from a base rate of near zero five years ago to above 5% was unprecedented – investors tend to avoid such stocks. They calculate they will need much higher returns to compensate them as they wait for jam tomorrow.

Such worries have prompted a flight of capital. Funds investing in UK small caps have seen withdrawals of £6.1 billion, according to analysis by Hargreaves Lansdown. Most of that cash has gone overseas. Aim, moreover, is at the sharp end of this perfect storm. It's home to many of the smallest listed companies in the UK and features a disproportionate number of growth stocks. No wonder investors have steered clear. That said, Aim has also been hit by problems specific to it.

Above all, the decision by the government in its first budget in 2024 to reduce the value of a key tax incentive for Aim investors has had a significant impact. Many Aim shares qualify for Business Property Relief (BPR), a tax break intended to encourage investment in small businesses – by entrepreneurs starting their own companies, but also by investors backing the ventures. Until April, BPR meant that once you had held qualifying Aim shares for two years, there would be no inheritance tax (IHT) to pay on the assets following your death. This was a powerful incentive to consider Aim stocks, particularly since they can be held inside an individual savings account (ISA), sheltering them from all tax charges on income and capital growth.

Since April, however, BPR has fallen from 100% to 50%. This means the value of Aim shares bequeathed to your heirs could now attract an IHT charge, assuming your estate is valued above the £325,000 threshold at which the tax becomes payable. The rate charged would be 20%, rather than the usual 40%, but the tax bill could still be significant. Importantly, the change applies both to any new investments you make on Aim and to Aim assets you already hold. This has seen some investors opt to sell out – the Tax Efficient Review says investors in specialist Aim portfolio services have sold roughly £170 million worth of shares this year, around 10% of the value of assets held in these services overall. Such sales represent a brake on Aim's potential, even before you factor in reduced future demand for stocks now the IHT tax break is no longer so attractive.

Aim shares are going cheap

Other Aim-specific concerns include something of a dearth of exciting new businesses coming to the market. In today's investment environment, there are more sources of growth capital available to early-stage businesses than when Aim launched 30 years ago. The plentiful supply of venture capital, private equity and even debt finance means companies don't necessarily need to jump through the administrative and regulatory hoops required for a stock market listing to raise money. Corporate governance concerns still worry some potential Aim investors, too. The point of a junior market is to enable less mature companies to secure a public listing even if they are not ready to meet all the requirements of a traditional stock exchange. The London Stock Exchange therefore imposes fewer responsibilities on would-be Aim businesses. Unfortunately, this light-touch approach also increases the potential for governance failures and criminality. The LSE has periodically tightened the rules, but scandals at firms such as Langbar International, Globo and African Minerals continue to cast a long shadow.

All of which explains why Aim has struggled. But as Game points out, the market has been through difficult periods before – and then bounced back. “Aim does go through these spells and right now we're at the nadir of the market,” he says. “But performance is cyclical: throughout its history, there have also been times when Aim has performed really well.”

Santa Barbara adds: “It's easy to claim Aim's glory days are long gone, but it's impossible to argue with Aim's proven track record as an engine of growth. The founding principle of the market – to provide the most promising smaller companies with access to capital and ongoing finance – still applies.”

It's certainly possible to make the case that Aim now looks very cheap. Valuations of UK small caps generally look attractive. The price/earnings ratio on the FTSE Small Cap index is currently 10.6, compared with 15.0 for the FTSE 100 index of large companies, for example. Comparative data for Aim is not available, given issues such as the lack of revenues and profits at some businesses, but many stocks are on low valuations by all historical comparisons. “Private equity has been acquiring Aim companies at quite a pace, suggesting sophisticated investors believe many of these businesses are fundamentally undervalued,” says Jonathan Moyes, head of research at investment platform Wealth Club. What the market needs, then, is a catalyst for a change of sentiment. Investors need a reason to look at Aim afresh – and to decide whether those valuations now represent opportunity. One such catalyst could be lower interest rates. The Bank of England's Monetary Policy Committee cut rates six times during 2024 and 2025 and was widely expected to make further cuts before the Iran war saw energy prices spike.

That prompted the MPC to step back from cuts, but a decisive end to the crisis could prompt looser monetary policy. It helps that early expectations of an inflation spike have so far proved overly-pessimistic.

Another potential game changer would be an influx of new companies that excites investors to return to the market. Initial public offerings (IPOs) have been in short supply on all markets in recent times, but more private companies do now appear to be thinking about going public. That includes potential new entrants to Aim, adds Moyes. “Companies raised around £3.3 billion in the first seven months of 2026, compared with just £1.6bn during the whole of 2024,” he points out. “A significant proportion of this year's fundraising came from one very large transaction, and that activity has been driven by secondary raises rather than new listings; nevertheless, capital is flowing again.”

The LSE is trying to do its bit. It has already unveiled plans aimed at reducing the costs of listing on Aim and at making it easier to raise capital. Greater political stability, particularly once the fiscal and monetary plans of the Andy Burnham-led government become clearer following next month's Budget, could also support an increase in Aim IPOs. Aim may not need seismic shifts in sentiment to change the direction of travel. The market for shares in many Aim companies is illiquid – there are fewer buyers and sellers – so even small shifts in mood can have a significant impact. This is one reason why Aim has often proved volatile, but that can work in investors' favour as well as against.

Aim is a stock-picker's market

One other important point is that Aim investors don't need the whole market to change gear – just the companies in which they are interested. Investment experts agree Aim is an active stock-pickers' market. It's natural to focus on the performance of the market overall, but the qualities of individual firms vary enormously; the dispersion of returns at a stock-specific level is much wider than on other markets. The focus on flat returns over ten years overlooks individual success stories. Indeed, says Game, “Aim has probably generated more ten-baggers than most other developed markets.” Recent examples include healthcare software company Craneware, which joined Aim almost 20 years ago and has since delivered total returns of around 1,500% – an annualised return of about 16%. Defence technology business Cohort has generated annualised returns of roughly 14% over the same period.

Mortgage Advice Bureau is another example. It moved to the main market earlier this year having listed on Aim in 2014. Over its 12 years on Aim, the business returned more than 400%, or roughly 15% a year.

None of which is to suggest Aim, as a market in general, is guaranteed to rebound from its current lows. And there is certainly plenty of scepticism. “The problem in the UK is that very few investors are interested in smaller companies – and even fewer are interested in the spicier end of small cap that Aim represents,” says Ben Yearsley, a director of Fairview Investing. “Some exciting IPOs in the small-cap space might help, but companies are staying private for longer; and while there have been Aim floats, managers who invest in the market say quality has often been lacking.”

The counter argument is that in an improving interest-rate environment and a market where IPO activity seems to be picking up, IHT reforms could clear the decks for a new conversation about the merits of Aim. “Tax relief was never enough on its own to sustain a healthy market,” argues Moyes. “If valuations start to recover, investors will be coming for the investment story first, with a bit of inheritance tax relief as the icing on the cake, rather than the other way round.”

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On Monday, the average price of diesel in the UK crossed the £2 per litre threshold and is set to go a lot higher still. The cost of diesel has risen by 54% since the start of the Iran war and is climbing higher all the time. Motorists stuck with diesel cars are starting to feel the full effect of the shortage of the fuel and so will all the haulage companies who rely on it to fuel their vehicles.

Why? The Strait of Hormuz has been largely closed to traffic, putting a squeeze on oil supplies. Refining capacity across the Persian Gulf has been badly hit by the conflict, with shipments of refined products falling by up to half over the past few months.

Ukrainian drone strikes deep within Russia have taken out a lot of that country’s capacity, and while the main purpose has been to knock out supplies to Russia’s army and inflict maximum economic damage, it means the world has less diesel than ever. Russian oil might be officially sanctioned in the West, but a lot of it was finding its way onto the world market.

Add all that up and supplies were already getting squeezed. It may be about to get a whole lot worse. With prices soaring in the US as much as anywhere else, Donald Trump is coming under pressure from Republican congressmen and senators to impose a 90-day ban on US diesel exports. It’s understandable that political leaders think keeping the domestic market supplied should be the priority. But if that happens it could escalate into a global diesel crisis.

Britain would then be facing a very bleak winter. We have only an estimated 42 days’ supply of diesel in storage to cope with any kind of emergency, the lowest buffer of any major developed country. We import a third of the diesel we consume from the US. It’s hard to see how we can buy much more on the open market. Our European neighbours have only slightly higher reserves than we do and are unlikely to want to help out.

Britain may run out of diesel

The harsh truth is that we may simply run out of diesel. If so, the price will soar and the government may well have to step in, with a ruinously expensive subsidy scheme and probably some form of rationing as well. It will have to make sure the emergency services are supplied and that the most important industrial users stay open.

The bigger problem, though, is that the diesel crisis will painfully expose how far we have run down our industrial resilience and capacity. As recently as 1995, Britain was a net exporter of diesel. We had our own oil wells and our own refineries, allowing us to export to the rest of Europe, and indeed the world. Unfortunately, that is no longer the case. We are down to only four refineries. Over the past 15 years, five have closed, with diesel imported instead. The North Sea oil industry has been relentlessly run down, with licences refused for new drilling and environmental activists allowed to tie up developers in constant legal battles. Windfall taxes make it very difficult to make any money in the oil industry anyway.

That makes a difference. North Sea output won’t affect the global price of oil by itself. But in an emergency, a country with its own oil and its own refineries can always ensure it is supplied with fuel. It can place restrictions on exports and ensure the domestic market keeps running. You can’t do that when both the oil and products refined from it are imported from abroad.

Britain has been steadily deindustrialising for the past 20 years. Punitive taxes, an obsession with net-zero targets and some of the most restrictive planning laws in the world have made this a very hard country to make things in. We can see the evidence for that across a whole range of industries. Cement production is back down to levels last seen in the 1950s. Car production is down to early 1960s levels. Much of the petrochemicals industry has closed down. The list goes on. Domestic capacity has been steadily replaced by imports because it is simply too expensive to operate in the UK.

If we face severe shortages this winter, and perhaps even rationing, it will expose the folly of 20 years of running down basic industrial capacity. If you can’t make stuff any more, then you are left completely exposed to whatever crisis may erupt in another part of the world. The price for that will be very high.

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Relaxing and enjoying retirement is the ultimate life goal for many – but not everyone is comfortable spending the money needed to achieve it.

Almost two thirds (63%) of UK adults are concerned about running out of money in retirement, according to research from investment and retirement firm LV=.

And anxiety is particularly prevalent among older people, financial experts have told MoneyWeek.

The reasons for this fear can be multi-faceted, said money psychotherapist Vicky Reynal, but they are in part an “emotional defence”.

“As people become more conscious of ageing, physical decline, and mortality, which are frightening prospects that feel outside of one’s control, they may cling more tightly to the areas of life in which they still feel they have some sense of agency,” Reynal said.

Reynal has previously discussed the reasons why some people feel guilty about spending their money on the MoneyWeek Talks podcast. But there are reasons why this appears to be a particularly acute issue for those in retirement.

Why do retirees find it hard to spend money?

It isn’t just emotions holding retirees back from spending their money – there are also cognitive and behavioural reasons.

Reynal said a lot of people struggle to transition from spending a salary to drawing down on savings.

“It’s money [they] worked hard to protect and have up-to-this point, focused on growing,” she said.

Others may be fearful of spending money because of embedded cultural traits.

Money coach Dennis Harhalakis said a lot of Brits feel proud about being thrifty and frugal and identify with the feeling that “self-denial is virtuous”.

“There’s that whole stuff around ‘oh, look at so and so, flashing his money around with that new car and that big TV’. Those messages still exist in our culture.”

Generational attitudes towards money also have an influence on spending habits, Harhalakis said.

A lot of people reaching retirement now will have had parents who grew up in a post-World War Two bubble when lives were more austere and “part of peoples’ ethos was saving, making do”, he said.

Lucie Spencer, partner at wealth manager Evelyn Partners, said retirees often need “permission” to spend money in retirement.

“A lot of clients who are coming up to retirement now, they lived through some really tough times in the 70s and 80s and they’re frightened of going back to those tough times where they had mortgage rates around 15% or 17%.

“They’re just inbuilt with that mindset of ‘must save, must save’, and switching that to ‘okay, it’s alright to spend’, that’s quite a difficult mental shift to make.”

What to do if you’re worried about spending money in retirement

Financial advisers can help map out your retirement spending based on factors such as your desired lifestyle and savings.

You will have to pay for the service, which costs between £100 to £350 per hour, according to government advice website MoneyHelper.

Evelyn Partners’ Spencer said she draws up cash flow models with clients which are revisited at regular periods, for example once per year.

Cash flow models can be used to project your income, spending, savings and investment over time and how they might be impacted by lifestyle choices.

Effectively, they offer you a tangible sense of how much you have to live on in retirement and how certain financial decisions will impact your pot.

Reynal said having this type of structured financial plan in place can provide reassurance. If, after this point, you’re still feeling anxious, it could be worth seeking help.

Reynal said: “In some cases…therapy can help: having a space to talk about and face fears of dependency and ageing can help them not be located in the material or financial.

“It’s helpful to ask oneself questions like: ‘what was the money accumulated for? What amount can one allow oneself to spend without feeling too much fear or guilt instead of just defaulting to “spend the least amount possible”? What might I regret not doing while I still had the health, energy or opportunity? Am I protecting myself from a realistic risk, or trying to eliminate uncertainty altogether?’”

How much do you need in retirement?

This will depend on a range of variables including how long you expect to live, how much you have saved and what type of lifestyle you want.

For a basic sense of how much income you’ll need to live on, you could start by looking at Pension UK’s Retirement Living Standards.

These standards factor in the income one or two people might need to sustain three different standards of living, excluding rent and mortgage costs.

Jon Doyle, founder and financial planner at financial planning firm Juniper Wealth Management, also said he encourages clients to hold a "Sleep at Night" fund: an emergency savings pot covering six to 12 months of essential living costs in a worst-case scenario.

If you're looking for a get-away-from-it-all holiday with an ample helping of nature, let me suggest Chablé Yucatán, a charming five-star boutique hotel in the heart of the Mexican jungle, 45 minutes from Mérida airport. This is the first hotel from Mexican-owned company, Chablé. There's a second hotel on the coast near Playa del Carmen and a third, which will focus on the farm-to-table experience and local wines, is due to open on the west coast (Baja, California) in the next few months.

From the moment you arrive at the sunny yellow casita (cottage) at the entrance to Chablé, everything about your stay is carefully curated to your personal likes and dislikes, yet it never feels stuffy or overly formal. After the friendly check-in process, you're whisked through the vast grounds in a buggy to your own casita. If you're lucky, as you pass by, you will get to see some of the cute white-tailed deer that make their home in the woods surrounding the hotel.

These private casitas (think Chateau Marmont bungalows) are nestled among the trees, each with its own winding path leading from the central road that circles the property. Bikes are left outside for you to use (although the buggies are always available) and there's a handy privacy rope to mark yourself as do/do not disturb. The casitas come with their own private patio – split into a shaded area with a table and comfortable chairs, perfect for breakfast or after-dinner drinks, and a larger limestone sun terrace complete with a hammock and your very own plunge pool.

They are light, airy and capacious, with floor-to-ceiling glass windows and wooden doors that open onto the patio. There's a huge indoor shower as well as an optional rain shower that's open to the elements, if you fancy baring your skin to the jungle life (not me) and more useful toiletries than you could possibly get through in a short stay.

Family villas have two bedrooms and sleep up to six guests. There are also the top-of-the-range Presidential and Royal Villas, which sleep up to eight and have larger terraces with communal areas.

Food at Chablé Yucatán is focused on heritage

Chablé is a foodie's delight. There's a focus on local, seasonal cuisine, with much of the delicious fresh produce grown and then made from scratch on-site. A lovely example is the welcome gift of freshly-baked tartas margarita (tiny tequila and lemon tarts decorated with edible flowers) that were waiting for me when I arrived. Those lovely customised touches are seen everywhere, from bedside turn-down chocolate truffles to the daily hand-made warm pastry, madeleines or other sweet treats that appeared, as if by magic, on my patio table along with a fresh pot of tea or coffee every morning before breakfast.

Chablé's Ixi'im restaurant (“corn” in Mayan) and Ki'ol, its (“healthy”) open-air, poolside eatery, both focus on foods from the Yucatán peninsula – corn, pumpkins (grown at Chablé), peppers, tomatoes, pork, and mezcal – a traditional Mexican spirit made from the agave plant, similar to tequila. Wines from the Baja California region of Mexico make an appearance on the menus in the various bars and restaurants. Pride in local heritage is woven into every part of the hotel experience.

The farm-to-table Ixi'im restaurant is Chablé's Michelin-starred flagship. It has the world's largest collection of tequila (3,600 bottles), some of which form part of an unusual but delicious pairing menu. Think spicy pumpkin soup with octopus, paired with an amber Mexican beer. Then a fresh fish taco followed by the most tender short-rib tamale paired with smoky mezcal (Real Minero Cuishe) and a venison risotto matched with an earthy red wine (Sic Itur Ad Astra). And to finish, a light-as-a-feather melon cream dish perfectly matched with a Mexican sparkling white (Vinaltura GW).

Activities and wellness

There's a daily schedule of activities from the more usual mini golf, yoga and pilates classes to workshops on Mayan cooking, pressed flowers, breathwork and, lest it get too healthy, tequila tasting.

Of the activities not to be missed, there is the four-course Mayan breakfast prepared by local cook Doña Tere. The breakfast is not just delicious but also an absorbing cultural experience, as she makes everything from scratch using traditional methods in a small outdoor kitchen in the grounds. From fresh fruits to empanadas to tacos, the dishes kept coming. Huevos motuleños, a spicy egg, tomato and black bean concoction, was a particular favourite.

Another fun activity is the “Dimensions Experience” – a slightly confusing name for what turns out to be a delightful bike tour of the vast grounds, taking in the vegetable and flower gardens and the meliponarium – a walled sanctuary that houses the stingless Yucatán bees that make the delicious honey you get to sample at breakfast.

Just a short stroll or bike ride from your casita is the beautifully laid out wellness centre. There are daily exercise classes, two state-of-the-art fitness areas and an outdoor pool with ample loungers for relaxing after your exertions. There's also an extensive menu of spa treatments – everything from open-air hydrotherapy pools, multi-temperature steam rooms, saunas and icy cold plunge pools, all set around the hotel's cenote (a large natural water pool linked to an underground cave system common on the Yucatán peninsula). I wish I could go into more detail about the massage I had, but I was out cold from the moment the first drop of (specially curated) aromatherapy oil hit my skin. Absolute bliss.

Louise was a guest of Chablé Yucatán. From $1,019 a night for a casita with private pool, including breakfast and taxes, visit yucatan.chablehotels.com

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

MoneyWeek has always been a strong supporter of investment trusts, largely because they offer their managers freedom to take a longer-term view when constructing their portfolios. Other characteristics such as the ability to use gearing (borrowed money) or the chance for investors to buy at a discount to the value of their assets can help to improve returns, but it’s their “permanent capital” that is most valuable.

If you are investing directly into sectors such as property, infrastructure and private equity – where you can’t simply sell assets in a few days because your investors suddenly want their money back – the need for permanent capital speaks for itself.

However, even with listed investments, sectors such as smaller companies often suffer from high volatility and limits on how quickly you can buy and sell holdings. No high-conviction investor wants to be at the mercy of rapid inflows and outflows, so investment trusts are a natural structure for such portfolios. And in today’s short-term markets – where sentiment hinges on quarterly results, monthly data and what feels like daily geopolitical upheavals – there’s much to be said for a structure that encourages a long view, whatever you are investing in.

Investment trusts have been around since 1868, with all the ups and downs that implies; they can surely help investors navigate this age of rapid change as well. That said, the past few years have been difficult. Discounts soared, bringing pressure both from opportunistic activists and disgruntled shareholders. This was partly due to external factors, but it’s fair to say the sector was due a shake-up. Some boards had been too complacent. There was a clear need for consolidation. The failure to reach new investors was becoming critical.

Thankfully the outlook is now improving, and we hope this special supplement makes clear why the diversity of investment trusts to choose from should ensure a bright future.

~ Cris Sholto Heaton

Saving for your retirement is one of the most important financial goals of your working life as you build up enough money to cover you later in life.

Most people build up their retirement pots through their workplace pensions, but you could use a self-invested personal pension (SIPP). If you're self-employed, you might decide a SIPP is a good option.

But when building up a retirement fund in a SIPP, you should be aware of the fees involved, which over the long term could cost you tens or even hundreds of thousands of pounds.

Although fee amounts can look like incredibly small percentages, even a small increase can take a large chunk out of your retirement savings.

If you contribute £250 to your pension each month from age 25 to 66, you would build up a pension pot of £392,000 by the time you reach retirement, assuming a 5.5% average annual return and a 0.5% fee.

But if those fees were twice as high, at 1%, £47,000 would be lost from your pension pot, leaving you with just £345,000, according to analysis by investment manager Vanguard.

If the fee was 1.25%, you'd be £66,000 worse-off compared to a 0.5% fee, and you'd miss out on £87,000 if the fee was 1.5%.

Do higher fees affect your pension returns?

As fees are often taken as percentages, the amount you lose to them is proportionate to the amount you have saved in your pension, meaning if your pension pot is large you can expect to lose more of your pension to fees.

James Norton, head of retirement and investments at Vanguard Europe, said pension investors should look at the fees they are paying on their retirement pots and take control of the investment costs they pay.

He warned: “When buying a car, it’s common for a more expensive vehicle to perform better than a cheaper one. So, you may think that higher fees should lead to better investment outcomes. But the higher the fees you pay the less returns you get to keep for yourself.”

Put simply, higher fees mean lower returns.

“Our analysis shows that if you keep your pension pot with a low-cost provider, in the long term you could keep significantly more of your returns and significantly improve your retirement," Norton said.

"It is your money and you’re taking the investment risk, so make sure you keep as much of your returns as possible.”

How to reduce fees on your pension

If you contribute to a workplace pension, you likely do not have the power to get your employer to move to a different provider with lower fees. However, if you contribute to a private pension, shop around for providers to find the best deal.

However, fees are not the only thing you should consider.

For example, while Vanguard’s fees are low, they only give access to Vanguard’s own funds so you have a more limited range of investments than provided by other platforms.

Below is a list of some popular SIPP providers and the fees they charge.

For years, cash had to apologise for itself. It was safe, certainly, but the return was miserable.

Cash can now look investors in the eye with a promise of return that beats inflation.

The best one-year savings accounts pay about 5%, with no stock market drama and no risk of waking up to find your investment has fallen sharply. It is a fair question to ask: are shares worth the risk at all, or is saving better than investing?

The answer starts with time. Cash is for money you may need soon and shares are for money you can leave invested for years, accepting short-term falls in pursuit of greater long-term growth.

What does the evidence show?

Some of the best-known historical evidence gives surprisingly different answers. Barclays Private Bank says UK shares beat cash in 91% of rolling 10-year periods since 1899, meaning every possible 10-year stretch, each starting a month or year apart.

Paul Lewis, presenter of BBC Radio 4's Money Box, found something very different in research published in 2016. Across rolling ten-year periods between 1995 and 2016, a FTSE 100 tracker beat the best savings accounts only half the time.

Lewis set shares a harder test than Barclays does. He used the actual returns from a FTSE 100 tracker after charges and compared them with the best one-year savings account available each year. Barclays uses three-month Treasury bills instead, partly because they provide a consistent measure of cash stretching back more than a century.

Using the best available savings rates, rather than Treasury bills, gives cash a stronger showing. Timing matters too. For investments starting on the first of any month from October 1999 to September 2001, cash beat the tracker over every holding period Lewis could measure, up to 15 or 16 years.

What happens with more recent data?

I applied a similarly demanding test over a different period. My own analysis starts in December 2000, as far back as the relevant MSCI sterling total-return data go. I compared the MSCI UK and MSCI World indices, after a 0.2% annual charge, with cash rolled into a new one-year fix each year. For cash, I used the Bank of England's average one-year fixed savings rate plus an allowance for best-buy accounts.

Over rolling ten-year periods to August 2026, UK shares beat cash 91% of the time. Global shares did so 90% of the time, so going global barely changed the odds.

The period contains only two non-overlapping decades, the same limitation as Lewis's data. The analysis confirms Barclays' result on fresh data rather than replacing it.

Why does time matter?

Ten years is only one horizon. Barclays found that UK shares beat cash in 70% of rolling two-year periods since 1899, rising to 91% over ten years. A 70% chance of beating cash is also a 30% chance of falling behind, which is exactly the risk that makes cash the safer home for money with a date on it.

Even ten years offered no guarantee. Cash still came out ahead in about one period in 11. The percentages are historical frequencies, not forecasts.

And cash has a time problem of its own.

In July 2008, the Bank of England's average one-year fixed savings rate was 6.06%. A one-year fix guarantees that rate for one year only. After that, you take whatever rate is available when you renew.

For money held over 15 or 20 years, that means renewing again and again at rates nobody can know in advance. The same Bank of England average stayed below 2% every month from January 2013 to August 2022. Best-buy savers did better, but faced the same broad decline.

Rates may rise as well as fall. Today's rate cannot be locked in for decades.

How much cash do you need?

When Lewis published his research in 2016, I was sceptical. Cash paid next to nothing then, and I saw little reason to hold more of it than necessary.

My view has shifted. My wife and I are very likely to move house within the next two years, probably to a more expensive area. We also want to travel much more than we have and already have several destinations in mind. Those are foreseeable calls on our money, even if we cannot put exact dates or amounts on them yet.

So I now keep more in cash, though most of my wealth remains invested in shares. This is not a retreat from equities so much as a clearer division of labour.

MoneyHelper, a UK government-backed financial guidance service, suggests three to six months' essential outgoings as a rule of thumb, while wealth manager Hargreaves Lansdown says money you may need within five years should generally be kept in savings rather than invested. Investing that money is a real risk: from December 2000, global shares fell 41% and did not regain their starting level until March 2006.

For retirees, Hargreaves Lansdown suggests keeping one to three years' essential spending in cash. These rules of thumb give you two useful buckets: money for emergencies, and money for foreseeable spending. The harder question is what to do with everything left over.

What is the cost of staying in cash?

In my test, £10,000 invested in a global tracker from December 2000 to August 2026 grew to about £67,600 after charges. Rolled through one-year fixes over the same period, including an allowance for best-buy rates, it reached about £25,000. The global tracker ended with more than two and a half times as much as cash.

A UK tracker reached about £41,800 – or around 1.7 times as much as cash despite no exposure to US shares. US strength helped widen the gap between the UK and global results, while sterling weakness also gave the global result a modest boost.

The lesson is not that cash is bad. It is that once your needs are covered, holding more of it has an opportunity cost that compounds.

Work out what you are likely to need soon and keep that in cash. For money you will not touch for many years, accept the short-term falls that come with shares.

Then look at what is left. If it is still sitting in cash, ask why. If the only answer is that today's rate feels reassuring, that is not enough.

The mistake is letting a one-year rate decide where long-term money belongs.

Investing in property has been a popular strategy since the first buy-to-let (BTL) mortgages came to market 30 years ago, as landlords receive rental income as well as asset appreciation.

When BTL mortgages began, buying a home was much more affordable than it is now. The average home cost just £54,900 in 1996 – adjusted for inflation, this is around £114,400 today.

That is much less than the average house price in the UK today of just over £270,000, according to HM Land Registry.

Aneisha Beveridge, head of research at Hamptons, said: “When the buy-to-let mortgage was launched in 1996, few predicted it would become one of the largest wealth-creation engines of modern British history.

“It opened the door to a new breed of middle-class investor seeking bricks-and-mortar security when buying property outright was out of reach.”

The returns that BTL landlords have made in that time beat those of stock market investors.

After 30 years of buy-to-let, landlords have enjoyed average returns of 2,130%, according to new research from estate agency Hamptons, meaning every £1 invested in buy-to-let in 1996 is now worth £22.30.

Every £1 invested in the S&P 500, the flagship US index, in September 1996 is now worth £22.05 as of September 2026, up 2,105% in the last 30 years (assuming dividends were reinvested).

The data shows that, on paper, investing in buy-to-let has delivered more growth than investing in the S&P 500. But landlords have to work hard for those extra 25 percentage points of growth.

Buy-to-let returns have historically outpaced stock markets

While BTL only narrowly beat investing in the S&P 500, a much larger gap emerges between other stock market metrics.

Since 1996, the FTSE 100 index, which comprises 100 of the largest firms listed on the London Stock Exchange, has returned just 796%.

It means every £1 invested in the FTSE 100 in 1996 is worth only £8.96, far less than the £22.30 from investing in BTL.

BTL returns are also more than triple the returns from investing in gold. Every £1 invested in gold 30 years ago is now worth just £7.36.

During that period, 62% of total BTL returns have come from rents paid by tenants, while the remaining 38% came from rising property prices, according to Hamptons’ analysis.

Stock markets are now bringing faster growth than BTL

Although BTL returns have outpaced those of the stock market in the last 30 years, the tide has turned more recently.

Over the last five years, cumulative returns from residential buy-to-let have been just 41% compared to 75% from the S&P 500 and 73% from the FTSE 100.

It means being a landlord has become far less lucrative than it once was, especially for those who are just purchasing their buy-to-let properties now.

Landlords now have to contend with an increased regulatory burden from the Renters’ Rights Act which has given much stronger powers to tenants.

Meanwhile, house price growth has been slow in recent years. House prices exploded during the pandemic, but fell shortly after, even dipping into negative growth in 2023 and 2024.

Is it worth being a buy-to-let landlord?

While renting out a property has, on average, brought better returns than investing in the stock market over the last 30 years, it also involves a lot more work.

Whereas putting your money into a low-cost index fund takes very little time and effort – you can simply put your money into an ISA and wait – being a landlord is much more time-consuming.

Unless you want to fork out for a property management agency, landlords will need to do all the work associated with renting out a flat like fixing faulty appliances or organising a flat cleaning before new tenants move in, and there is always the risk of having to deal with destructive tenants.

While this may be manageable if your property portfolio is small, it can quickly become a full-time job if you rent out multiple homes.

That is before even considering extra expenses, like having to organise repairs or having to renovate your property to keep it desirable. What is more, if you have trouble finding new tenants when your current ones move out, you will be stuck earning no rental income.

Jessica Sheldon, MoneyWeek’s deputy digital editor, said: “When choosing between a buy-to-let or investing the money in the stock market, make sure you factor in other expenses.

“Landlords will need to ensure the rental property is habitable and be prepared for unexpected maintenance costs, and there may be periods when the property might be empty, and therefore not bringing in any rent. Plus, the market has become tougher for landlords after new Renters' Rights Act rules came into force in May 2026."

In comparison, putting money into the stock market is easy and cheap, although investing in stocks is not risk-free.

When picking emerging market stocks at Fidelity Emerging Markets, our approach is a flexible one. We have a variety of tools to exploit the best opportunities across the full breadth of the emerging market universe – taking both long and short positions, investing in companies ranging from the very largest to small caps and off-benchmark stocks, and using gearing to extend high-conviction long positions.

We select emerging market stocks based on fundamentals and quality. We look to go long on the stocks of companies that we believe can generate sustainably higher returns, with strong corporate governance and under-leveraged balance sheets. We short those that are the opposite: companies in structural or cyclical decline and that are flying red flags. This approach is made possible by Fidelity's analysts, who help us uncover opportunities across the breadth of emerging markets, including those lesser-known names off the beaten track. Here are three companies that we think bring this approach to life.

Emerging market stocks to watch

The rise in popularity of Korean beauty products, or “K-beauty”, has taken the global cosmetics world by storm, propelled by innovative products and fast-growing beauty trends. But behind many of the best-known brands sit more under-the-radar specialist manufacturers, such as Cosmecca Korea (Seoul: 241710), which develops and produces skincare products on these brands' behalf. As Korea's third-largest manufacturer of its kind, Cosmecca is well-positioned to ride the wave of strong demand for Korean cosmetics. Its scale gives it an advantage over smaller rivals, helping keep costs down while investing more in research and product development. That has helped Cosmecca build a competitive edge in areas such as sunscreen, allowing it to increasingly attract US brands in addition to its Korean clients.

Think of Sinotruk (Hong Kong: 3808) as China's equivalent of Volvo Trucks or Scania – a dominant producer of heavy-duty trucks with a leading position in the domestic market. However, what makes the investment story particularly interesting is that it is increasingly taking Chinese manufacturing capability overseas, selling trucks into more than 150 countries and benefiting from compelling demand trends across emerging markets. Africa is an especially important growth market, where structural growth in mining and infrastructure investment is supporting strong truck sales. Sinotruk also benefits from a competitive edge through its comprehensive service system, which has helped it defend market share from competitors.

Tin might seem an unlikely beneficiary of the artificial intelligence (AI) boom, but growing demand for the metal for use in AI servers and semiconductors, as well as for other technologies such as solar panels, is adding to demand in a market where supply is already tight. Stricter regulations and low inventories have constrained supply, leaving tin as an increasingly important bottleneck in the technology supply chain. We gain exposure to this theme through small-cap and off-benchmark tin producer Alphamin (Vancouver: AFM), based in the Democratic Republic of Congo. The company has a strong market position in tin production, operating two of the world's highest-grade tin mines and producing about 7% of mined tin globally. With high-quality assets and low production costs, it meets the quality criteria we look for and is trading at a very cheap multiple.

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

What to do with a dud investment trust is a dilemma that we all face, and there is no easy answer. Sell and risk a dramatic recovery? Hold on and see poor performance continue? Double down and risk throwing good money after bad? Reduce and wish you had sold all?

Patience can pay off. Scottish Mortgage (LSE: SMT) went from the top of the table to the bottom, but is now at the top again over three years. Conversely, European Opportunities was the star of its sector but never recovered from the collapse of Wirecard, its largest investment, in 2020. It has since merged away.

If poor performance is the result of a sector, style or geography being out of favour, then a trust is usually worth sticking with. However, poor performance when there is no excuse, the manager has been inflexible or an investment thesis was flawed should be a reason to sell.

Can dud investment trusts be turned around?

So which are the dud investment trusts now? In the global sector, Mid Wynd (LSE: MWY) – once a MoneyWeek favourite – moved from Artemis to Lazard three years ago. The subsequent performance of just 17% against 63% for the MSCI World index has been dreadful. Surely the board will move it again?

STS Global Income and Growth (LSE: STS), run by Troy, has returned only 16%. It excuses this under an avowedly defensive strategy, which has been wrong. Troy's wealth-preservation-focused Personal Assets (LSE: PNL) has performed little better, as have Ruffer (LSE: RICA) and Capital Gearing (LSE: CGT). Maybe the Great Bear Market is just around the corner but they have been waiting for it for years. They have made no secret of their bearishness so their investors are presumably happy with their strategy.

AVI Global (LSE: AGT) has also lagged (36% over three years), but this is a firmly value-orientated trust in a market that favours growth. It could easily return to the top of the table, especially if the 20% allocation to Korea – made on the strength of corporate reforms that mirror those in Japan – pays off spectacularly.

A bigger question mark hangs over Alliance Witan (LSE: ALW), up 38% over three years. It has selected 11 “elite” managers from around the world with “distinct but complementary” investment styles, each investing in “no more than 20 high conviction stocks”. The returns suggest this approach isn't working. Investors should think about switching to F&C (LSE: FCIT), which up 60%, or Monks (LSE: MNKS).

The income orientation of Scottish American (LSE: SAIN) – widely known as SAINTS – hardly fits the Baillie Gifford investment style, so its dismal performance (up 25% in three years) should not be a surprise. It boasts 52 consecutive years of dividend increases, all paid from income, but its shares still yield below 3%. It has missed strong recoveries in banking, oil and gas, and utilities, as these companies “have not much control” over their fortunes. Murray International (LSE: MYI), Invesco Global Equity Income (LSE: IGET) and JP Morgan Global Growth & Income (LSE: JGGI) have far out-performed it.

Give Nick Train the benefit of the doubt

In the oversupplied UK sectors, Finsbury Growth & Income (LSE: FGT) has dismal returns over three and five years, up just 6%, but it was a star performer for many years previously. Manager Nick Train has evolved but not changed his investment approach and tells a compelling story about the opportunities he sees. He deserves the benefit of the doubt.

BlackRock Smaller Companies (LSE: BRSC) has gone from near the top of the UK small-cap table to near the bottom in the last five years, while CT UK Capital & Income (LSE: CTUK) lags way behind the All-Share index over all time periods. There is no shortage of better UK trusts: take Murray Income (LSE: MUT), which has moved managers from Aberdeen to Artemis and is already showing improved performance.

In Europe, BlackRock Greater Europe (LSE: BRGE) is now the weakest performer over all time periods up to five years, though it performed very well in the 17 years from launch until then. The board is surely reading the Riot Act to BlackRock.

Pacific Assets (LSE: PAC), the laggard in Asia, is being absorbed by Schroder Asian Total Return (LSE: ATR). Yet Scottish Oriental (LSE: SST), formerly its sister trust, has an even worse record, although it was once a star performer. Aberdeen Asia Focus (LSE: AAS), which has returned 73% against SST's 8% over three years, is an obvious alternative.

Technology and resources trusts have been standout performers among sector specialists, although Herald (LSE: HRI) has been left way behind by focus on small caps. Those who supported the Battle Against Cancer Investment Trust (BACIT) and saw it change into Syncona (LSE: SYNC) – investing in biotech start-ups – will wonder if it is too late to sell, especially given the 35% discount. Probably not.

Pershing Square (LSE: PSH) has been dismal over one and three years but previous periods of poor performance have been followed by spectacular recoveries. The 33% discount to net asset value (NAV) is surely a severe embarrassment to founder Bill Ackman, so this might be one of those rare examples of poor returns providing an opportunity to add to holdings rather than a reason to sell.

Get free tickets for the AIC Company Showcase

The Association of Investment Companies (AIC) will host its annual Investment Company Showcase on Friday 9 October in London. The event – now in its fifth year – is an excellent opportunity to gain insights into more than 30 investment trusts covering regions including the UK, Europe, Japan, India and emerging markets, as well as sectors including real estate and infrastructure. Attendees will also get the chance to put questions to many of the managers in the exhibition area, meet hundreds of fellow investors and probably run into some MoneyWeek contributors. Presentations will be livestreamed for those unable to make it to London. Book tickets and use the code MW26 for free entry.

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.

A few years ago we might have assumed that the Revolut IPO would happen in London. It's a British company that built its business here, so why wouldn't it? London was one of the major global stock markets and a natural home for a fast-growing company. Sadly, that is no longer true.

Revolut confirmed last week that it was exploring a “dual listing” IPO, split between the Nasdaq stock exchange in New York and the London Stock Exchange. It is a measure of how far the City has fallen that it will come as a relief to those working in British finance that London is being considered at all.

Back in 2024, CEO Nikolay Storonsky dismissed a London listing as “not rational”, citing the lack of liquidity and the 0.5% stamp duty on every trade as reasons why only New York would make sense. He has now softened that view, suggesting a dual listing between the two cities, even if New York is the senior of the pair. It's better than nothing.

Revolut is a prize worth having. It is one of a handful of genuine successes the British economy has managed to create in the last decade. Its latest results reported $6 billion in revenues and more than $2 billion in profits. It has more than 75 million customers worldwide and has established itself as a leading brand in digital finance. It has a robust business model, at least for what is still basically a bank, with subscription and trading fees, instead of far-riskier loans, accounting for the bulk of its revenues. It is already valued at $115 billion and for an IPO it may well target significantly more than that. Indeed, if it is listed in London, Revolut is likely to be bigger than BP, GSK or Unilever, taking its place at the very top of the FTSE 100.

It could also start to change perceptions. London has turned into a global backwater. In 2024, it had fewer IPOs than Malaysia or Oman. Companies keep leaving the market and there is almost nothing coming through to replace them. In the first half of this year there were only seven new listings, raising less than £600 million between them. Meanwhile, the major companies that are still listed here are mostly a collection of banks, oil giants, and pharmaceutical conglomerates, which are hardly likely to set any pulses racing.

How the government can make the Revolut IPO a success

Revolut will be very different. It is a tech company, is expanding rapidly and has a well-known brand. If it is listed in London, global investors might be willing to take a look at the wider market again. But it will only make a difference if the float goes well. What can be done to make it a success? The chancellor has already suspended stamp duty for the Revolut IPO and for the first three years of trading as well, and that may well have helped sway Revolut's decision. That will give a huge boost to trading and liquidity. Without it anyone with any sense would simply buy the shares in New York, where they are tax free. But why not extend the period to ten years, perhaps as a prelude to abolishing the tax entirely?

At the same time, why not offer investors in the Revolut IPO an exemption from capital-gains tax? That would build a base of “buy and hold” investors that would give the company a great platform. And perhaps add an extra IPO allowance of £5,000 to existing ISAs to tempt small investors into the new-issue market. It would all make the London listing more attractive and persuade companies the City was as good as, if not even better than, New York. A Revolut IPO in the next year or so may well be the last chance to prove that the City still matters.

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.

Private equity, and increasingly now private credit , portray themselves as a superior and more exclusive version of stock and bond markets. A curious artefact of financial services is that adding the word “private” in front of an asset class can magically convey the perception of higher returns. Like a Louis Vuitton handbag or Rolex watch, these returns are hard to access, only available to favoured institutions and high net worth individuals (HNWIs). The price of admission to a hot “private” fund can sometimes be a minimum investment as high as $1 million.

Yet private credit assets under management (AUM) have grown from less than $200 billion globally before the 2008 financial crisis to around $1.5 trillion during the covid pandemic and to $2.5 trillion today, according to the Bank for International Settlements (BIS).

Unlike publicly traded bonds, which pay fixed coupons, the bulk of private credit is floating-rate, meaning payments rise when interest rates do. This has accelerated the growth of the asset class, and that $2.5 trillion today is now greater than the size of the US high-yield bond market. AUM could reach $4.5 trillion by 2030, according to the BIS.

Much of this growth has been aided by post-2008 crisis regulation. Various reforms forced banks to fund their balance sheets with more equity, while giving favourable risk weightings to mortgages and government bonds. That penalised banks for holding corporate debt. Meanwhile, quantitative easing (QE), which suppressed the yield on government bonds and lowered discount rates, indirectly encouraged life assurers and pension funds to seek out higher-yielding assets. When sovereign bond yields plummeted, institutions with long-term liabilities could no longer generate sufficient returns on government debt to cover their obligations. So institutional asset allocators turned to the promise of private credit, in an attempt to capture a theoretical “illiquidity premium” – earning a higher return in exchange for locking up capital in assets that had no secondary market.

The post-crisis regulation was well-intentioned, but the seeds of the next financial crisis are often planted in the roots of the previous one. Banks take short-term liabilities – customer current accounts and overnight interbank funding – and lend it out for longer. This is known as maturity transformation. When private credit stepped into the vacuum created by banks' reluctance to lend to corporates, it came with a seductive story. Funds raise money from the insurance and pension industry with decade-long time horizons, who believe that they are paying high fees and locking up their money in return for higher returns. This structure of long-term commitments funding long-term lending means there is no maturity transformation, and so no possibility of bank runs.

However, to expand the pool of available money, the private credit industry in the US invented business development companies (BDCs). These funds promised quarterly redemptions capped at 5% of net asset value (NAV). This re-introduced the liquidity mismatch that private credit claimed to eliminate as soon as nervous investors wanted to get their money out – which is what has happened over the past year.

The $82 billion Blackstone Private Credit Fund (known as BCRED) has seen redemption requests running at roughly 10% of the fund in both the last two quarters. BlackRock's $27 billion HPS Corporate Lending Fund (HLEND) saw low-teens percentage redemption requests. Blue Owl Technology Income (OTIC), which has high exposure to software-as-a-service (SaaS) debt, has seen requests rise above 38% of shares.

BDCs are a relatively small area of private credit, representing under 15% of the $2.5 trillion market, according to the IMF (although that is still large in absolute terms at $400 billion). However, the BIS and the IMF point out that trends in BDCs provide an unusually clear “window” into the otherwise opaque disclosure coming from the sector. Indeed, one of the events that drew more attention to private credit last year was when Blue Owl tried unsuccessfully to ease its redemption problems in an unlisted BDC called OBDC II by merging it into a publicly traded BDC (OBDC) that was trading at a 20% discount to NAV. OBDC II investors revolted, as this would have resulted in an immediate mark down.

Private credit's opaque defaults and symbiotic deals

In theory, rising interest rates can be a positive for private credit funds, as they will earn higher returns on money they lend out. On the other hand, borrowers may struggle and funds suffer from bad debts as interest rates rise. The opacity of the sector means this is hard to quantify. Default rates reached 6.3% for private credit borrowers in the third quarter of 2026, according to ratings agency Fitch. That default rate is an order of magnitude higher than estimates from Houlihan Lokey, an investment bank that specialises in restructuring. It says the figure is less than 1% of outstanding principal, but 2.5% by borrower count. In other words, the numbers are skewed by smaller borrowers in distress. On the other hand, Pimco, the giant California-based investor with over $2 trillion AUM, suggests the default number is three times higher than Fitch's number at 19%, based on analysis of $500 billion of assets held in retail BDCs.

The feedback loop between private equity, and private credit is another potential problem. While private equity has come to rely on private credit funds to finance the debt component of deals – rather than banks – the relationship is symbiotic and also functions in the opposite direction. Apollo, Blackstone and KKR realised the life-insurance sector was a rich source of “permanent capital” – that is, insurance money is genuinely long-term funding, unlike BDCs. Thus private-equity firms bought life assurers and have used policyholder premiums as a stable funding source for their own deals. Instead of buying government bonds, these insurers began funnelling money into their own private credit vehicles, which have lent to affiliates in the private equity industry.

Mark Walter's Guggenheim Partners is a high-profile example. Long before he led a consortium to buy Chelsea FC after Roman Abramovich became a forced seller, Walter was using policyholder premiums to buy US sports teams: first the Los Angeles Dodgers (baseball) in 2012 and later the Los Angeles Lakers (basketball). This is now under scrutiny. Federal prosecutors in the US are investigating how tens of billions of dollars in private-credit portfolios were used to fund deals for these trophy assets. After receiving grand jury subpoenas, Delaware Life, an insurance company controlled by Walter, restated its disclosures to reveal that affiliated investments tied to other Walter entities comprised $17 billion (roughly 40% of invested assets), up from the previously reported $1.4 billion. Walter's holding company TWG Global has denied wrongdoing. He faces a civil fraud case, but no criminal charges have been laid against him.

Best home for long-term capital

At this point, we should ponder whether the promise of private credit to produce higher returns in illiquid assets – including football clubs – is a mirage. The word “private” suggests an exclusivity, which helps to justify illiquid, opaque funds that charge high fees. These attributes are very attractive for fund firms. “A critical goal of the financial industry in 2026 is to invest more of people's retirement savings in ‘private assets', because it is still possible to charge fees on the order of 1% (or higher!) for private investments,” as Matt Levine of Bloomberg puts it.

There is the nub. All the analysis of long-term performance suggests there is one asset class with the best record when time horizons are measured in decades. This is public equities. Triumph of the Optimists: 101 Years of Global Investment Returns, by Elroy Dimson, Paul Marsh and Mike Staunton made this argument in 2002, but the advantages of equities have been increasingly well understood since the 1950s when George Ross Goobey switched the Imperial Tobacco pension fund from 2.5% consolidated annuities (“consols”) into 100% equity.

Ross Goobey argued that dividends were likely to grow in-line with GDP and so equities were a safer asset class than gilts for investors with a long time horizon. Back in 1957, he quoted data from the Economist Intelligence Unit showing that £1 million invested in 1919 would have grown to £3.7 million if invested in gilts with proceeds reinvested, versus more than £28 million if invested in equities with dividends reinvested each year. His analysis proved prescient: 2.5% consols fell in value by 75% in real terms, while equities enjoyed a bull market from the 1950s until the secondary banking crisis of the mid-1970s.

Hence the institutional push into private credit ignores a fundamental and long-established truth of investment. For any investor or institutional fiduciary with a multi-decade horizon, equity ownership is the natural asset class because shareholders participate in compound economic growth. The push into private credit turns logic on its head. Lenders take asymmetric risk: they absorb full downside default losses without participating in any corporate equity upside.

Institutional asset allocators and HNWIs have forgotten this timeless message. Ironically, private credit funds have locked up investors' money at a time when global stockmarkets, as measured by the MSCI World index, have increased in value more than seven-fold over the past 20 years in sterling terms with dividends reinvested, and have trebled in the last ten years. If amateur investors are pouring their money into global index trackers while sophisticated investors choose private credit funds, which of them is opting for the dumb money?

Private credit may nonetheless create opportunities for investors – just not in the illiquid, opaque, costly products the industry would like us to buy. Consider the disconnect between market narrative and balance-sheet reality in UK-listed life assurers such as Legal & General (LSE: LGEN), Aviva (LSE: AV) and Standard Life (LSE: SDLF) that has emerged due to private credit jitters. Equity investors have sold off the sector – pushing dividend yields up to 6% to 9% – yet much of this anxiety stems from conflating the UK framework with the US. The US lacks a federal life insurance regulator. All 50 states have their own regulator, hence it is Delaware that is investigating Mark Walter's empire. The UK is closely overseen by one regulator.

Stress tests by ratings agency S&P have concluded that UK insurers – who hold illiquid assets (including private credit) as part of the assets backing their bulk-purchase annuity liabilities – hold sufficient capital to absorb a repeat of the 2008 financial crisis with an 11% default rate on illiquid holdings without breaching regulatory requirements. Note, too, that private credit accounts for only about 9% of UK life assurer portfolios and exposure is concentrated in long-dated, secured infrastructure and social housing rather than speculative leveraged buyout (LBO) loans. For investors with the stomach for risk, fears about the sector could represent a good time to buy.

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.

What's happening with British schools?

British schools – and English schools in particular – are doing remarkably well. Results from the OECD's 2025 Programme for International Student Assessment (PISA) were published earlier this month, and the UK is close to the top of the class among European peers.

The closely watched comparative survey, which began in 2000, is conducted every three years, assessing the educational skill levels of 15-year-olds around the world, with an emphasis on critical thinking, problem solving and the application of skills to real-world contexts. It now covers 91 rich and middle-income nations.

For the first time, the UK was in the top ten countries globally for each of the three subjects covered – reading, maths and science. The highest reaches of the combined league table are dominated by East Asian nations: China, Singapore, Macao, Taiwan and Japan are the top five; South Korea is seventh. Of countries outside that region, the UK, eighth in the table, lies behind only Estonia, ranked at number six.

Are education standards rising globally?

No, most countries' results continued to decline, while in the UK they held steady in England, and only dropped a little in Scotland and Northern Ireland and a bit more in Wales (the exception being science, where they improved across the UK).

That flatlining doesn't necessarily take away from the UK's success. “Staying still, in the face of headwinds, while nearly everyone else drops back precipitously, is still an achievement,” says Sam Freedman on Substack.

But it obviously raises questions about what is going on globally, with potential factors including a pandemic hangover and decreasing levels of concentration in line with higher screen usage among children. In reading in particular, school pupils are struggling with skills such as interpreting information and assessing evidence, with an increase in “hasty reading” (quick but inaccurate). The OECD suggests this may be an effect of technological distraction and more reading happening on screens.

Is this good news for British schools?

Yes, and for England in particular. The PISA scores are also broken down in line with the separate school systems within the UK and show England now significantly outperforming Scotland and Northern Ireland, with Wales the weakest of the four. The results also show England has pulled further ahead since the last three-year PISA cycle compared with the rest of the UK, and with European peers more widely.

These striking results have been widely reported, says Freedman, but the extent of the gap between England and the rest of Western Europe has been underplayed. For example, in reading, the 25% most disadvantaged young people in England outperformed the average for all pupils in Germany, France, the Netherlands, Norway and many other countries. “The overall gap has gone from nothing to significant in a decade.”

Where did it all go right for England?

England's increasingly impressive record over the past decade has its roots in stable and sensible long-term policymaking under successive governments, says Iain Martin on Reaction – dating back to the creation of the national curriculum under Conservative education secretary Kenneth Baker in 1988. In the late 1990s and 2000s, the Blair governments did “fantastic work” expanding the Tories' reforms, sharpening teaching and giving schools more autonomy.

Then the coalition government, with Michael Gove as education secretary, “supercharged the raising of standards”. The basic planks of England's educational strategy are a curriculum focused on core knowledge, greater emphasis on behaviour, more high-stakes assessment, the use of synthetic phonics in early reading and a strong culture of professional development.

Is Britain’s old-school approach to learning paying dividends?

Indeed. England's model of curriculum and assessment is often “mischaracterised” as “rote-learning” and a “factory model” of schooling, says Freedman. Sceptics argue it might lead to good test results, but, compared with more modern “competency-based” approaches, is of little relevance to real life and less engaging for pupils.

Yet the PISA test results, which focus on creative problem-solving and critical thinking, are a big vote of confidence in England's education reforms. There are two other factors that may well have contributed to our success – namely a more sceptical attitude towards screen-learning and smartphones, and greater success at integrating the children of immigrants.

According to PISA, distraction from digital devices in class is far lower in England than most European countries. And in England, immigrants outperform non-immigrant 15-year-olds, whereas in France and Germany they lag far behind. That reflects greater success in integrating new arrivals.

What has Labour got planned?

Since coming back to power in 2024, Labour has passed the Children's Wellbeing and Schools Act 2026, which was concerned with free school meals, safeguarding and professional standards. This year, it has also announced an overhaul of SEND provision (for children with special educational needs and disabilities) in its Education for All Bill.

Alas, the new education secretary, Lucy Powell, is now making ominous noises about in effect copying the Scottish approach that has led to Scotland falling far behind England, says Fraser Nelson on Substack.

Powell says she wants to replace the “exam factory with the talent factory” – a very Nicola Sturgeon-like soundbite. She's proposed a broader curriculum and qualifications, fewer written examinations and more coursework and practical assessment, alongside “stepping-stone” qualifications for pupils who fail English or maths. “But why? The experiments have been done. The answers are in. Her way was pioneered by Scotland, and it leads over a cliff.”

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.

One of London's most visible pieces of advertising has greeted railway passengers arriving at London Bridge station for the best part of 100 years. Emblazoned on a Grade II-listed building next to the track on Park Street is the slogan, “Take Courage”, the motto of the Courage Brewery.

This is considered one of the largest and most memorable so-called “ghost adverts” in London, although it's unclear when it was first painted. The Anchor Brewery originally built the property in 1820 and it remained a central location for brewing and operations until 1981, when it was acquired by the local authority. These ghost adverts can be seen all over London and remind us that advertising has been a core part of the UK economy for hundreds, if not thousands, of years.

A brief history of advertising

No ghost adverts in London are more than 300 years old (most of the city has since been rebuilt), but there are older examples elsewhere. Some of the earliest date from ancient Egypt and Mesopotamia, where traders and market vendors used clay tablets and papyrus posters. Archaeologists have also found examples of adverts chiselled out of stone dating back 3,000 years in ancient Babylon. Similar examples appear in ancient Greece, Rome, China and across the Middle East.

In ancient Rome, owners would commission a designer and manufacturer to produce a signboard that served as the business's primary street advertisement. This, it could be argued, was the beginning of what we now know as the advertising industry.

Advertising took another step forward in the 16th century with the advent of newspapers and magazines. The first weekly gazettes appeared in Venice in the early 16th century and in Britain the first weekly publications appeared in the 1620s. From the very beginning, newspapers, magazines and pamphlets carried advertising that helped foot the bill for printing and distribution. However, it wasn't until the mid-1800s that a confluence of factors accelerated the growth of the advertising industry into what we recognise today.

Early print advertisements were primarily in books, mainly due to each printer's desire to cross-sell. Quack medicines also commanded a lot of page space. That began to change in the 1850s and 1860s, when advances in mass production lowered manufacturing costs and an increasingly affluent middle class emerged around the world for the first time in modern history. This new wealthy class had discretionary income and sought out a variety of new produce.

Advances in technology, health and the growing demands of the affluent middle class produced a windfall for companies that could capitalise on these trends. Forward-thinking business owners accelerated growth with pioneering marketing campaigns. Thomas J. Barratt, the chairman of Pears Soap, was one of the first executives to build a brand around an advertising campaign. Barratt has been called one of the fathers of modern advertising in London thanks to the campaigns he created in the first few years of the 20th century. Barratt sought to position Pears as one of the country's highest-quality soap brands. To do so, he created an advertising campaign to drive consumer purchases. One of his most memorable slogans was, “Good morning. Have you used Pears' soap?” He also ran a series of adverts featuring well-groomed middle-class children, linking the product to domestic comfort, high-society aspirations and daily cleanliness. Barratt's approach focused on aspiration and a strong, exclusive brand image, backed by a robust supply chain to meet demand.

Companies were developing similar approaches across the pond. In the last decade of the 1800s, companies such as Procter & Gamble and Quaker Oats drove sales across the United States through national advertising campaigns. Tobacco producers were particularly prevalent in all markets.

Through the first few decades of the 1900s, the first global advertising agencies grew out of local offices. Advertisers began refining strategies across different media, such as print, radio and out-of-home billboards. In the 1920s, psychologists turned their attention to advertising, developing concepts of behaviourism and the consumer's basic emotions, such as love, hate, and fear, refining the strategies Barrett pioneered in London ten years earlier. Exploiting the insights of behavioural psychology became the calling card of one particular agency in Chicago: Lord and Thomas. Founded in 1873 and now known as FCB, it is the third-oldest advertising agency in the US still operating today. Albert Lasker bought the firm in 1912 and devised a copywriting technique that appealed directly to consumer psychology.

One of his most famous campaigns was for Lucky Strike cigarettes. The company wanted to encourage more women to smoke its cigarettes and so Lasker developed a series of ads encouraging women to smoke cigarettes rather than eating high-calorie snacks, using phrases such as “reach for a Lucky instead of a sweet”. The strategy helped Lucky Strike increase market share by more than 200% in its first year.

How the advertising industry became the money machine

Over the past 100 years, advertising spending has tracked global GDP growth. While spending is higher in some countries than others (the UK has the highest relative spend among major economies as a percentage of GDP), the global average has risen from roughly 0.3% of global GDP in the 2000s to around 0.8% today. According to WPP, that figure could hit 1% of global GDP by the end of the decade.

Despite this growth, the industry has often faced criticism for wasteful spending and poor returns on investment. One of the best-known criticisms of the industry is encapsulated in the quote: “I know that half the money I spend on advertising is wasted. My only problem is that I don't know which half” – a saying usually attributed to Henry Ford or the founder of Unilever and later the first Viscount Leverhulme. However, there's no evidence of either of these fathers of industry making such a comment. Ford was in fact highly committed to advertising, stating: “A man who stops advertising to save money is like a man who stops a clock to save time.”

The advertising industry has changed significantly since its early days, but the basic principles the early pioneers developed still apply. Advertising should be designed to capture attention and inform as directly as possible. Today, the industry can be divided into two parts. On the one hand, there are the businesses that sell space to advertisers. This market is dominated by the big four: Alphabet, owner of Google and YouTube; Meta, the owner of Facebook; ByteDance, the Chinese owner of TikTok; and Amazon. Together, these account for around 60% of global advertising revenue throughput, up from around 50% a few years ago. These are all digital-native or digital-dominant platforms that have leveraged their global exposure and creator content to build massive advertising operations. Outside these top four, the rest of the top 25 global advertising sellers include more traditional firms such as Fox, Walmart and JCDecaux.

The second part of the industry is made up of the agencies that design, plan and coordinate advertising across platforms. The biggest fish in this pond in the UK is WPP. Originally called Wire and Plastic Products, the company originally manufactured wire shopping baskets before it became an advertising holding company in the 1980s under the stewardship of Martin Sorrell. Today the group operates a sort of one-stop shop for companies and organisations that want to communicate their message to the outside world.

This process of coordinating campaigns and advertising spending is becoming increasingly challenging. We've long moved on from a world where advertisers only had to worry about painting signboards. Today, advertisers have a plethora of media to consider and the fastest-growing market is, unsurprisingly, generative search (AI). WPP Media's mid-year market forecast notes that advertising revenue on generative search platforms such as ChatGPT is expected to reach $5.1 billion globally in 2026, representing roughly 0.4% of total advertising revenue.

However, the media agency forecasts the market will grow at a compound annual growth rate of nearly 100% over the five years to 2031. This puts it on track to become the fastest advertising segment to reach $100 billion in annualised revenue in recent years. It took 22 years for traditional search (the adverts you might see when you search on Google) to reach this benchmark. It took 14 years for revenue on social media platforms such as Facebook to reach $100 billion, and spending on streaming TV platforms such as YouTube and Netflix has yet to exceed $60 billion annually, despite rapid consumption growth. The expansion of advertising on generative AI platforms is expected to drive much of the industry's growth in the coming years.

Billboards have not gone out of fashion

One medium seemingly benefiting from the growth of AI-based search is the so-called out-of-home advertising market. Out-of-home is one of the oldest forms of advertising. It generally refers to posters or signs located outside a user's property or premises, such as the ghost signs dotted across London. While spending on other forms of traditional media such as TV, print, and radio continues to decline, out-of-home spending is holding its own. According to WPP, that's because the medium is virtually guaranteed to deliver its message directly to humans, unlike digital platforms.

Indeed, earlier this year, we passed the point where more than half of the internet is now made up of machine-to-machine interactions (think AI agents filling in forms, or bots “liking” AI-generated videos), meaning there's an increasing chance human eyeballs will never see the ads that have been paid for. With out-of-home, advertisers can deliver their message to large numbers in physical environments simultaneously, the sort of scale and visibility that digital channels such as social-media platforms increasingly struggle to match.

One of the most prominent operators in this space in the UK is Global Media. The private company manages more than 253,000 outdoor advertising sites across the UK, as well as radio stations. It is one of the most important partners for the London Underground and operates billboards across some of the UK's most important transport hubs and across Europe. In the company's most recent fiscal year, out-of-home advertising revenue rose from £379.9 million to £425.9 million, and adjusted profits for the outdoor business rose 25% to roughly £155 million.

Alongside Global, JCDecaux (Paris: DEC) leads the world in this space. The Paris-based company accounts for around 12% of the global out-of-home advertising market, twice that of its closest competitor. Most of its assets are in Europe (30%), 8% in the US, 21% in the Asia-Pacific and 14% in the rest of the world. More than half of its revenue comes from out-of-home placements on the street, with 13% coming from billboard sales. In addition, 36% of sales come from adverts placed on public transport or around stations.

Analysts at Berenberg expect the company to grow 5.5% this year, faster than the wider market, thanks to growth in Asia and the US, which is underrepresented in the portfolio. While the company earns a healthy Ebitda margin of 21.4%, roughly 60% to 70% of group costs are fixed, meaning the capital structure has significant operational gearing. Still, the business is managed very conservatively, with near-zero debt and a 66% institutional shareholder in the form of the Decaux family. The shares trade at a forward p/e ratio of 15 with a free cash-flow yield of 7.3%.

The best advertising agencies to invest in

Then there are the advertising agencies. This market is really dominated by five major players: Publicis (Paris: PUB), WPP (LSE: WPP), Havas (Amsterdam: HAVAS), Omnicom (NYSE: OMC) and Dentsu (Tokyo: 4324).

Publicis is widely described as the best operator in the sector. Over the past five years, the company has won key contracts from competitors and poached top talent. It has focused on expanding its data and consumer-identity capabilities to gain an edge in the digital advertising market and capitalise on AI-driven market growth. Following a major restructuring and repositioning, growth is accelerating and is expected to rise from around 2.2% in 2026 to nearly 7% by 2028, according to Berenberg. The company is also generating strong cash flow. It is set to end 2026 with a net cash position of roughly €1.7 billion and the stock trades at a free cash-flow yield of 10.3% and a forward P/E of 11.

Once the leader of the group, WPP is now the laggard – and by a wide margin. Since the company lost its visionary CEO Martin Sorrell in 2018, it has really struggled to find its feet. Multiple rounds of job losses, re-organisations and rebranding have left the business gasping for air. Revenue this year is expected to come in at about £9.5 billion, down from £11.4 billion in 2024. However, following the arrival of new CEO Cindy Rose, green shoots have started to emerge. A year into her tenure and the former CEO of Microsoft UK has managed to stem the bleeding. According to numbers gathered by COMvergence, WPP Media has won around $3 billion in new business so far in 2026, versus $2.8 billion in losses last year. Account retention is now running at 43%, up from 16% in 2025. Still, the company has a lot of work to do to prove it is back in business. Analysts forecast revenue declines until 2028. In the meantime, the company is expected to cut jobs further to improve cash generation. It carries debt of around £2.5 billion, excluding leases, against Ebitda of £1.5 billion. A lot of bad news is baked into the valuation, with the shares trading at a forward p/e multiple of 4.9 and a dividend yield of 5.9%. The stock is trading at a free cash-flow yield of 5.2%.

Investing beyond the top tech players in advertising

The big tech players might dominate the ranks of the biggest advertising sellers, but they are no longer the pure-plays they once were. Alphabet, Meta and Amazon are funnelling hundreds of billions of dollars of advertising revenue back into the ground to expand their AI operations. This is turning businesses once touted for high returns on capital and asset-light models into capital-intensive infrastructure plays. Still, there's no denying they remain at the top of the pyramid for advertising spending. Alphabet, Meta and Amazon generated a combined $160.8 billion in advertising revenue in the second quarter of 2026, with Alphabet leading the way. Overall ad revenue rose 14.5% thanks primarily to the group's dominance in AI-powered search. Revenue from search rose 17%. YouTube advertising revenue rose 12.6% year on year as it continued to grab market share from TV budgets. The platform's annual advertising revenue has surpassed the combined spending of traditional legacy giants such as Disney, NBCUniversal, Paramount and Warner Bros. Discovery.

Beyond the top tech players, it may be worth a look at Pinterest (NYSE: PINS). This company has risen to become one of the top 25 advertising platforms in the world over the past decade thanks to its rich pool of ever-growing user content. Part social-media platform, part scrapbook, the platform is designed to help users find ideas, such as for home decor and fashion, and drive them to stores. More than half of the platform's users say they use it to shop. In a world where brands are focused on user-generated content to drive sales, this is a huge edge. The platform has logged 11 consecutive quarters of user growth (there are 640 million in total) and revenue expanded 18% in the second quarter. Pinterest has had a tough time as a public business, with the shares down 65% in the past five years. However, it's on track to generate around $1bn of free cash flow this year, against a market cap of $10.5 billion. It has net cash on the balance sheet and management has spent $2 billion buying back stock. It could be worth a look.

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Back in 2016, French insurance giant Axa (Paris: CS) was known for its complexity. The majority of the company's earnings came from its life insurance and long-term savings business, the health of which was tied directly to interest rates. That began to change under CEO Thomas Buberl, who took over the group in 2016. Buberl's vision for the company was simple. The new boss wanted to turn Axa into a leading global insurer in the “short-tail”, relatively capital-light business of property and casualty insurance (P&C).

One of the main issues with life insurance is its “long tail” business – once the insurer has written the life insurance or annuity policy, it's stuck with the contract for decades, even if it becomes unprofitable. As a result, regulators tend to demand that these firms hold high levels of capital reserves to meet upcoming liabilities and unforeseen developments.

How Axa freed up billions in capital

One of Buberl's first moves was to carve off its US life-insurance arm, Axa Equitable, which freed up billions of dollars in capital for the group to go shopping. Almost as soon as the company announced the transaction, it launched an offer for XL Group, a leading global P&C insurer. Axa paid $15.3 billion for its peer and was instantly catapulted into the ranks of the world's largest P&C insurers. As part of its Vision 2020 growth plan, management continued to exit non-core businesses, de-risking the group's exposure to highly volatile and loss-making segments of the global insurance and reinsurance market and cutting costs.

As a result, the group's revenue mix has changed markedly since 2026. In 2016, before the transformation began, the group reported total revenue of €100 billion, with 50% coming from life and health insurance, and net income of €5.8 billion. By 2022, revenue had fallen 34% to €66.6 billion. However, net income fell just 13% to €5 billion.

Around this time, the group also started to benefit from the dramatic upswing in global insurance and reinsurance prices. Starting around 2019, a combination of inflation and losses has pushed insurers to raise insurance prices globally to offset the added cost of claims.

At the same time, higher interest rates have boosted the returns insurers can earn on the investment portfolios they hold to back up underwriting. Thanks to this double tailwind, insurers have reaped the benefits. Axa's combined ratio, a measure of underwriting profit, fell to just 90.6% in its 2025 financial year, from 99.5% in 2020. Anything below 100% signifies an underwriting profit while anything above signifies a loss. Thanks to this tailwind, Axa's net income rose to €9.8 billion in 2025, on a total revenue of €75 billion. Of that total, €58 billion comprised revenue from P&C underwriting.

The company's next move was to sell its asset-management business. Axa sold this division, Axa Investment Managers (Axa IM), to BNP Paribas for €5.4 billion – 15 times earnings at the time of the deal. The combination of Axa IM and BNP Paribas created an asset manager with total assets under management of €1.5 trillion, giving it the scale to compete in the increasingly competitive asset-management market. Axa immediately gave the bulk of the proceeds from this deal back to shareholders via a share buyback.

Axa's new plan for growth

Axa has changed completely since 2016 and, on 15 September, the group published its new plan for 2027-2029. The new plan builds on the work management has done over the past decade to get the business to where it is today, and the focus is earnings growth. Management wants Axa to reach earnings growth of 7% to 9% on a compound annual basis over the next three years, above the top end of the 6% to 8% target in the previous plan.

To do this, analysts believe the company will have to broaden its base in Europe, notably in the small and medium-sized enterprise sector, while seeking up to €7million a year in cost savings. Overall, analysts at investment bank Berenberg believe cost savings (mostly from AI) will add 1% a year in earnings across the group, a significant figure.

Management is also forecasting higher cash generation from the group's subsidiaries. The plan is to generate €25 billion of cumulative cash over the three-year period, up from €21 billion in the 2024-2026 period. A good chunk of this will flow straight back to investors. Berenberg has the group returning €5.4 billion in 2027 and €5.8 billion in 2028, with the stock trading at a 5.8% dividend yield. Buybacks between 2024 and 2028 could shrink the share count by more than 10%. The total shareholder yield, including dividends and buybacks, is pencilled in at 7.8% for 2027 and 8.4% for 2028.

Based on the bank's estimate of future earnings growth, Axa shares are trading at a forward price-to-earnings (P/E) ratio of eight and a price-to-book ratio (P/B) of 1.59. That looks cheap compared with the group's earnings outlook and plans to return cash.

There is, of course, risk. A soft insurance market, where prices start to fall, could wipe out growth across the business, and a jump in losses could vaporise profit and force the group to postpone returning cash. All insurers face similar risks, which is why they generally carry a lower rating than the rest of the market.

In Axa's case, however, its rating seems too low. Indeed, because Axa's insurance policies are short-tail and reprice every year, the group could quickly adjust to a new environment. As one of the largest players in the global P&C and health-insurance market, Axa shares are worth a closer look at their current valuation.

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It has been a challenging few years for investment trusts. Rising interest rates, cost-disclosure problems and the dominance of markets by large US tech firms led to wide discounts and the re-emergence of activist shareholders. Yet there is now a series of signals that indicate there is light at the end of the tunnel.

Discounts are narrowing. Fundraising is picking up. A solution to the cost-disclosure issue is in place. There are proposals to address loopholes exposed by activists. Investment trusts have been included in the Pensions Scheme Bill, and more marketing to increase awareness of investing and investment trusts is on its way.

Discounts rose from 2.5% at the end of December 2021 to a peak of 18.8% at the end of October 2023. Since then, discounts have narrowed to 11% at the end of July. The sector has radically reshaped itself with unprecedented levels of mergers and share buybacks, as well as mandate changes and fee cuts. Boards have worked hard to give shareholders a better deal.

Fundraising is also starting to come back. In the first half of the year, Seraphim Space Investment Trust raised £137 million, while TwentyFour Income Fund and Invesco Bond Income Plus raised £98 million and £85 million respectively.

Cost-disclosure rules had artificially made investment trusts look expensive, which deterred wealth managers from buying them. This has now changed, with the unique characteristics of investment trusts being recognised by the Financial Conduct Authority (FCA) in its new cost disclosure regime. Other funds no longer have to pull through the costs of investment trusts when investing in them. This positive outcome could well lead to more wealth managers and open-ended funds buying investment trusts next year.

Positives ahead for investment trusts

When discounts widened, activist investors became buyers. This is not unusual; activists have long been a feature of this industry. They usually aim to narrow discounts and secure an exit. So long as their objectives are shared by other shareholders, they are seen as a healthy feature of capital markets.

However, Saba Capital also had another agenda – in some cases it wanted to replace the board and become the investment trust’s manager. The FCA has now put forward proposals to strengthen investor protection and address this gap in the rules. This should prevent a substantial shareholder like Saba, who wants to manage the company, from seizing control of the board to promote its own interests at the expense of other shareholders.

Other positives include investment trusts’ inclusion in the new Pension Schemes Act. Pension schemes will now be able to use investment trusts to meet any requirement to invest in private assets. It’s very early days, but this could result in them investing more in investment trusts in sectors such as infrastructure, renewable energy, private companies and property.

Investment trusts are particularly suitable for these hard-to-sell assets. Since they are listed companies, investors buy and sell their shares on the stock market without altering the capital in the investment trust. Unlike open-ended funds, managers are not forced to sell holdings to meet redemptions, and this allows them to take a long-term view. This also enables investment trusts to give investors access to exciting private companies before they list, such as SpaceX and Anthropic.

The government-backed “Take The Next Step. Invest” campaign should also be helpful. This aims to persuade people with spare cash to start investing. The Association of Investment Companies (AIC) will launch a marketing campaign next year to increase awareness of investment trusts amongst millennials and Gen Z.

Most importantly, investment trusts’ performance over the long term remains strong. The average investment trust has returned 15%, 26% and 148% over one, five and ten years respectively to the end of July 2026. Performance also compares well with open-ended funds. Our “sister funds” research finds that where the same managers run similar investment trusts and open-ended funds, the investment trusts have beaten the sister fund over ten years in 77% of cases.

When it comes to income investing, investment trusts have special advantages. There are 20 “dividend hero” investment trusts that have raised their dividends every year for over 20 years. A trust can do this because it can retain up to 15% of its income, and this revenue reserve can be used to boost dividends when markets are tough. It can also offer an enhanced dividend by paying a percentage of its capital profits as income.

Attend the AIC Investment Company Showcase

To find out more about investment trusts, come to our flagship event, The Investment Company Showcase, on 9 October. You can attend in person at 133 Houndsditch in London or online. We have 30 investment trust managers presenting, including our keynote speaker Job Curtis, manager of City of London Investment Trust. This trust is approaching a record 60 years of dividend increases – an impressive record.

Managers are flying over from Japan and India to speak, covering a wide range of themes from emerging markets and the hunt for yield to property and infrastructure. Presentations include BlackRock World Mining, Monks, Mercantile, Invesco Bond Income Plus, Cordiant Digital Infrastructure and more.

The Showcase is free to register for private investors who use the special MoneyWeek code MW26. We look forward to seeing you there.

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 MoneyWeek portfolio of investment trusts was created in June 2012 as an easy-to-follow, set-and-forget, all-weather portfolio. Investment trusts were chosen on the grounds of their long-term performance, flexibility, cost, as well as other factors such as their ability to use gearing and for investors to trade in and out of positions with relative ease.

The initial six holdings were chosen to cover a range of different strategies, with the aim of changing them as infrequently as possible. Over the past 14 years, there have only been six changes, with two of the original trusts still in the portfolio today. Our changes have added value about 50% of the time; that is to say, around half of them ended up generating worse returns than staying put. This is a valuable example of the benefits of not tinkering too much.

Overall, the portfolio has returned a satisfactory 248% (9.2% per year) in share-price terms, assuming no rebalancing between holdings (which may not be entirely realistic). The FTSE UK All-Share index has returned 5.2% per year over the same time, while US-heavy FTSE All-World index has returned 9.7%. Dividends would have further topped up returns, although this is not an income portfolio – the average yield (weighting each trust equally) is around 2%.

How our investment trust portfolio looked at the beginning

The original trusts were picked with diversification in mind, with each falling in a different sub-sector of the investment trust universe. Personal Assets (LSE: PNL) – still in the portfolio today – was selected for its emphasis on absolute returns, wealth preservation and a zero-discount policy, which made it the perfect “core defensive holding”.

At the other end of the risk spectrum, Scottish Mortgage (LSE: SMT) was the key “growth equity” in the portfolio. After a long run of market-beating returns, the trust also remains a core holding of the current portfolio.

Finsbury Growth & Income (LSE: FGT) was initially picked in 2012 for its focus on high-quality global businesses and a “disregard for benchmark strictures”. Lead manager Nick Train had a strong record in 2012, having outperformed the FTSE All-Share Index over the previous ten years.

BH Macro (LSE: BHMG) invests all its assets into the Brevan Howard Master Fund, a global macro hedge fund that had outperformed during the turbulent years of the 2008-2009 financial crisis. The thinking here was to include a trust whose “fortunes tend to be inversely correlated with the equity markets”.

3i Infrastructure (LSE: 3IN) was added as an “absolute return income-generating pick”. The trust was selected over some sector peers for its preference on “operating assets rather than contracts whose values will fall over time”.

Finally, RIT Capital Partners (LSE: RCP), chaired at the time by Jacob Rothschild, was “an old industry favourite”. It offered a diverse portfolio of public, private, hedge fund and real assets.

Changes to the investment trust portfolio

The first change came in a little over a year, when Caledonia Investments (LSE: CLDN) replaced BH Macro. In hindsight, BH Macro may have been a weak choice in the first place. Yes, it gave investors access to a type of investing that’s usually off-limits to those with less than £1 million of assets. However, hedge funds are expensive (BH Macro’s charges vary between 1.5% and 2% per annum depending on performance fees), and returns at the time did not justify that.

Caledonia is a family investment company, with a diversified, global portfolio and long-term outlook. It was added to the portfolio at a 20% discount to NAV. This is one of the trades that’s worked best. Since the portfolio was first constructed, BH Macro has returned 114% to the end of July 2026. By switching to Caledonia, the portfolio has earned a 124% return.

Late 2015 and early 2017 brought two more changes: the removal of 3i Infrastructure, replaced by Law Debenture (LSE: LWDB), followed by the sale of Finsbury Growth & Income for Temple Bar (LSE: TMPL). 3i Infrastructure was sold after management reset its target return objectives. Finsbury Growth was removed on valuation grounds – after gaining 98% in five years, the underlying holdings appeared expensive compared with the rest of the market.

Both Law Debenture and Temple Bar were selected for their low costs and contrarian, UK-focused value strategies. Law Debenture was trading at a 14% discount to NAV – a discount that has now all but disappeared. This turned out to be an astute decision: 3i Infrastructure’s share price has returned 118% over the 14 years, versus the 200% achieved by switching.

The Temple Bar position worked out less well. This holding was sold in May 2020 (at a loss of 42%) and replaced with Mid Wynd International (LSE: MWY) following the severe underperformance of UK value stocks (partly due to the effect of the pandemic) and the departure of manager Alastair Mundy. This meant the portfolio did not benefit from its strong recent returns under Ian Lance of Redwheel.

Mid Wynd was added as a “resilient, quality-growth global compounder to balance Scottish Mortgage” but failed to live up to expectations. It was removed in April 2025, after a change in management, and replaced by JPMorgan Global Growth & Income (LSE: JGGI). The inability to stick with one trust for this part of the portfolio has hurt returns. Switching from Finsbury to Temple Bar to Mid Wynd and finally JGGI produced a return of 65% to the end of July.

In comparison, even though Finsbury has drastically underperformed over the past five years, it has returned 142% since June 2012. Switching from Finsbury to Temple Bar and then sticking with that would have been an even better decision, with a return of 236%.

The final major change in the portfolio was the sale of RIT for AVI Global (LSE: AGT) in March 2023. RIT’s exposure to private equity and venture capital had increased from 24% in 2012 to 45%, which didn’t sit so well with the rest of the portfolio. Meanwhile, AVI’s “global value remit, exposure to family holding companies, discounted trusts, and Japanese equities” seemed attractive in comparison to the wider valuation of global markets. So far, the returns from both RIT and AVI have been fairly similar.

What could the investment trust portfolio look like in the future?

So what could the next 14 years hold for the portfolio? Are the six trusts still the right ones for today’s markets? What other trusts might work in a similar strategy?

Personal Assets is one of the best ultra-defensive plays around, helped recently by its exposure to gold. Its closest peers are Capital Gearing Trust (LSE: CGT) and Ruffer (LSE: RICA), both of which follow similar strategies to protect and grow capital in excess of inflation over the long term. The inflation spike in 2021-2023 and the timing of how markets adjusted to interest-rate hikes mean that Personal Assets’ returns over the last five years are lagging inflation. However, it is still ahead over ten years and back ahead over three.

While JGGI has hardly blown the lights out since it was added to the portfolio, previous trading suggests it would be a mistake to tinker further with this holding. This is the largest trust in the global equity income sector, with the best record and highest dividend yield (3.9%). It pays dividends out of both income and capital growth, with a target of 4% of NAV out every year. While in theory this means the payout could fall, management has so far avoided this by being overweight growth stocks. The approach gives it more flexibility than peers such as Murray International (LSE: MYI) or Scottish American (LSE: SAIN).

Law Debenture has by far the best record of any UK equity income trust over the past ten years, with a performance gap of around 100% over closest rival Temple Bar (although the latter has done well lately under its new manager). That’s partly because it is both an investment portfolio and a professional services business. The latter arm carries out mundane but essential tasks such as pension-scheme management, escrow services and paperwork for issuing corporate bonds. Income from this has generally met about a third of the trust’s annual cash dividend requirement.

That gives the managers flexibility to invest in both income and non-income-producing equities (ie, growth stocks). The approach is clearly working, but for investors who prefer a straightforward UK equity fund, there are many peers with a range of styles: Temple Bar, Aberdeen Equity Income (LSE: AEI), City of London (LSE: CTY), Edinburgh (LSE: EDIN), Fidelity Special Values (LSE: FSV), Merchants (LSE: MRCH) and Murray Income (LSE: MUT) to name a few. Note that Lowland (LSE: LWI) is run by Laura Foll and James Henderson, who look after Law Deb’s investments.

Caledonia’s shares have lagged the market over the last five years as its discount to NAV has remained stubbornly high, averaging 30% to 40%. The trust has tried to remedy this by splitting the stock to improve liquidity, buying back shares and pushing the dividend higher, but the big block of stock (48%) owned by the Cayzer shipping family clearly weighs on it. Still, we bought Caledonia as a family-controlled trust, liking it due to its mixed exposure to private equity funds, direct private company holdings and public equities. It is still one of the best in the space for this combination. The higher weight to direct investments still gives it the nod over its main peer RIT for our purposes.

Scottish Mortgage has been the portfolio’s biggest winner by far, with a return of 940% since 2012. The trust’s edge has been its ability to pick winners and act with conviction, something no other trust has managed to replicate with success across private and public markets. Yes, there has been some volatility along the way, as any shareholders who held through the 2021- 2023 peak-to-trough decline of nearly 56% will attest. However, the rewards from this style of investing don’t come without risks.

Finally, AVI Global. The reasons for adding this trust still stand. Its focus on value is highly attractive in what one might argue is a frothy market, and it offers significant exposure to Japan (23%). With look-through exposure to the US of just 13%, the fund has missed out on some of the recent tech boom, but it is intended to offer something very different to the global index. Peers Alliance Witan (LSE: ALW), Brunner (LSE: BUT), F&C (LSE: FCIT), and Monks (LSE: MNKS) may be simpler options for a one-stop global trust, but AVI’s blend of global value and activism remains attractive as a complement to the rest of our portfolio.

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.

Vivienne Westwood, the late doyenne of punk fashion, may not have been the most obvious bedfellow for the elegant Mandarin Oriental brand. But the Hong Kong-based hotel group needed someone to design the signature fan for its latest opening in Mayfair, and only Westwood would do. It would be her last project before she passed away in 2022, aged 81.

Each Mandarin Oriental property gets its own fan, which then becomes that hotel's emblem. The fan for the Mandarin Oriental Mayfair would have to be extra special because, aside from being the group's newest property in London, it would also be the first fan to be designed and made entirely in Britain in 70 years.

It shows the blue and red silhouettes of a man and woman dancing before the sketched outline of Hanover Square, where the Mandarin Oriental Mayfair opened in 2024 (and a short stroll from the Vivienne Westwood boutique on Conduit Street). Look closely and you will see that, actually, Hanover Square is upside-down. That was a necessary but happy concession to the shape of the fan – and it works. The design is imbued with energy and it is easily the loudest and most chaotic fan of the Mandarin Oriental family. Would you really expect anything less from a designer who was as happy creating a bondage suit in the 1970s as she was a silk fan for an elegant Asian brand? When you walk in the entrance, you will find it on the wall, next to the concierge desk.

What makes Mandarin Oriental Mayfair special

But why did London need a second Mandarin Oriental in the first place? It already had the rather grand-looking Mandarin Oriental Hyde Park not too far away. The Mayfair property, it was explained to me, was to have more of a “boutique” feel to it. Unlike its noble Victorian sibling to the west, the Mayfair hotel is a new build – one designed to settle in quietly among its wealthy neighbours rather than to stand out as an architectural statement. As for Hanover Square, it is a relatively quiet corner, tucked into the busy intersection that is Oxford Circus.

Consider, too, that the hotel has 77 residences, but only 50 rooms and suites for visitors and you begin to get a sense of its raison d'être. This is no grande dame of London, but rather a luxury hotel for everyday life – “everyday”, that is, if life is nipping out to Savile Row around the corner and popping into the scattering of upmarket boutiques. So, it may sound like a bit of a cliché, but the Mandarin Oriental Mayfair was created to be a home from home. It feels very much like a sanctuary.

For starters, there's the spa downstairs in the basement. The dark tiles of the long swimming pool are stylishly lit, and off to the sides, you will find the vitality pools, steam room and sauna. Moving upstairs, you come to the Atrium Restaurant, with its iconic spiral staircase and large overhanging sculpture on the wall by Charlie Whinney. The Mandarin Oriental Mayfair is even home to its own late-night jazz den in the form of Esmeralda's. There is no shortage of nooks in which to relax.

Several floors further up, our “Mayfair” signature suite was massive. It had floor-to-ceiling windows all the way along, and it certainly felt light and airy. But it struck me there wasn't actually a view from the windows – nothing of note at any rate. Then, it dawned on me. The view is within, not without. The eye is drawn to the polished red marble in the kitchen and the large bathroom with a separate double shower and a tub (home to “Doug”, the rubber Mandarin duck).

The spectacle is in the arty chandelier above the round dining table. Most impressively, it is in the hand-painted silk wallpaper, created by London design house de Gournay in the bedroom and especially the dressing room. It is magnificent – a tableau of birds and butterflies on floral branches. How often can you say the walk-in wardrobe was one of your favourite spaces? To commit the crime of using a second cliché, the Mayfair suite is your own cosy nest.

Home never tasted as good as dinner at Mazarine

I say there wasn't a view outside, but that isn't entirely true. You just need to go to the rooftop. Here, you will find the Hanover Bar and its cocktail menu inspired by the local area. Naturally, I gravitated towards The Hanover – a concoction of plum-infused whiskey, umeshu sake and vanilla amontillado sherry. “When in Rome…” The Hanover Bar has an outside terrace with a view of the London skyline – it is an elegant spot to come for an aperitif.

Dinner was to be found at street level, at Mazarine. This is a stylish, upmarket French restaurant serving classic dishes centred around seafood, with a contemporary twist. It is, for instance, home to the famous Croque Mazarine, made with black truffle and blue lobster. The blue-fin tuna tartare, served with a drizzle of ten-year-old olive oil (£24), was a particular highlight of the meal, as was the grilled red mullet, served with a light and bright Provençal artichoke barigoule sauce (£33). A posh take on familiar favourites, then – what says Mayfair more than that?

Chris was a guest of Mandarin Oriental Mayfair. From £1,000 a night; visit mandarinoriental.com.

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To like silver, first you must love gold. One of HSBC's gold traders once described silver as “gold on crack”. It sums it up beautifully. Silver is highly correlated with gold, around 80%, which means the two metals generally move in sync. But silver has a “beta” of 1.4 times compared with gold – in other words, it is 1.4 times more volatile. That means silver wins on the way up and causes mayhem on the way down.

The key chart to keep in mind is the gold-to-silver ratio (GSR). An ounce of gold currently buys 66 ounces of silver. In 2020, at the depths of the Covid crash, the gold-to-silver ratio touched 124, the cheapest recorded price in history. That was $12 an ounce of silver, when gold was $1,486; hence a gold-to-silver ratio of 124.

The lowest gold-to-silver ratio in recent years, at 46, occurred on 27 January 2026, the day before prices peaked. Gold managed $5,417 per ounce while silver hit $117, the highest prices in history. A smart investor who bought precious metals at the gold-to-silver ratio high would have made 264% in gold, and a whopping 874% in silver.

The average gold-to-silver ratio over 30 years has been 68. When the gold-to-silver ratio is above average, then a patient investor is very likely to win and outperform gold at some point in the future. By contrast, a gold-to-silver ratio below average may lead to disappointment. With the current gold-to-silver ratio at 64, the reason to hold silver, as my clients at ByteTree do, is because I am bullish on gold.

After all, the gold-to-silver ratio touched 33 in 2011, on the back of a gold surge and a solar boom. If that happened again, silver would double versus gold. Better yet, in 1699, Sir Isaac Newton was the Master of the Royal Mint. At that stage, the gold-to-silver ratio was 15.2. With that kind of gravity, silver would need to quadruple compared with gold. You can see what drives the bulls.

From cutlery to cutting edge: where silver shines

From 1816, gold became the monetary standard, while silver remained in use for smaller transactions. It was also popular in jewellery and tableware. But as technology advanced, demand for silver grew with new applications owing to its extreme qualities.

First, there was photography, because silver halide salts darken when light hits them. Demand in this field peaked in 1999 at around 228 million ounces and has been in decline since. Silver lost out as digital photography blossomed, but surprisingly, photography still accounts for 24 million ounces per year.

Photovoltaic silver demand has also been significant, and was a key driver of the 2011 boom. At that time, demand growth was exponential, but manufacturers soon found ways to consume less silver, using thinner layers and switching to copper electroplating. As the saying goes in commodities, the best cure for high prices is high prices. Substitution kicked in, and despite record PV installation, demand has been falling since 2024.

Yet there are other uses well. Silver is the best electrical and thermal conductor among metals and is the most reflective metal in visible light. It is found in telescope mirrors and in advanced electronic circuitry. It is also malleable and can be beaten thinner than paper.

Silver disrupts bacteria and kills microbes. In times past, people would store their water and wine in silver jugs, not just because they looked nice, but because they were hygienic. Today, silver is used in filters and wound dressings, which are popular with the armed forces. In that sense, silver is part industrial metal and part precious metal, which explains why its price behaviour combines the monetary properties of gold with the industrial demand of copper.

Despite falling demand from photography and solar applications, the market remains in deficit of approximately 46 million ounces, according to the Silver Institute, having peaked in 2022 at 254 million ounces. Higher prices have motivated the producers, but not overly so, as silver is generally a by-product of mining other metals.

Is silver better than gold as an investment?

The real driver stems from investor demand. While the central banks accumulate gold during times of uncertainty, the public looks to silver. It has more upside, and people can afford to buy more of it. ByteTree's clients have held silver since 2019, topping up in 2020. We trimmed last October, and again in January and March. I turned bullish again in August as the correction appeared to be over. We hold the iShares Physical Silver ETC (LSE: SSLN), an exchange-traded fund tracking the spot price.

I reiterate that an investment in silver is a means of expressing a bullish view on gold, which remains a long-term hold in our portfolios. We also own gold-mining shares, which have a beta of 1.9 in relation to gold, making them even more sensitive than silver. In the post-January 2026 correction, silver lagged the miners significantly.

Gold is down 20% since the January 2026 high. The gold miners are down just 13% and silver 43%. On that basis, silver has been beaten down the most, but has turned the corner. I like them all, but one senses that as the gold bull market resumes, silver will have the most to give.

But with bitcoin now available in the UK as an ETF, and now on Hargreaves Lansdown, don't dismiss that opportunity either. Bitcoin is down 37% from its high last October and is responsive to similar macroeconomic arguments. The next bull cycle looks promising, especially from these levels.

As I mentioned in MoneyWeek two weeks ago, I created the BOLD Index, which combines bitcoin and gold on a risk-weighted basis. The 21Shares Bitcoin Gold ETP (LSE: BOLD) gives you the best of both worlds. BOLD is less than half as volatile as silver, and marginally less volatile than gold.

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Investment trusts are one of three main types of funds, with the other two being exchange-traded funds (ETFs) and what are variously called open-ended investment companies (OEICs) or unit trusts (depending on their exact structure). Each of these has advantages and disadvantages. To see why, let's look at how they work and where investment trusts win out.

Investment trusts are closed-ended, which means that they have a fixed amount of shares. They are listed on the stock market, so when you invest, you buy the shares from another investor who wants to sell (via your broker). If you want to cash out, you sell to another investor who wants to buy. These trades do not affect the money within the trust.

OEICs are open-ended and are not listed on a stock exchange. If you want to invest, you send your money to the fund manager (via your broker) and more shares are created for you. If you redeem, the manager cancels your shares and sends you the cash. Each of these trades changes the amount of money held in the fund.

ETFs are listed on the stock market, but are open-ended. This may not be obvious to you, since you will trade one in the same way as an investment trust. However, institutional investors, known as authorised participants, also trade directly with the manager to create and redeem shares. When they do this, money flows in or out of the fund.

Investment trusts have a permanent capital structure

One strength of an investment trust is that buying and selling shares has no effect on its portfolio, because the manager does not need to invest fresh cash or sell assets to fund redemptions. Having this permanent capital is important for investing in assets that can't be sold quickly – infrastructure, private equity, real estate or small caps – or certain long-term investment strategies. On the other hand, the price that investors pay or receive for shares in a trust is the prevailing market price. This can be at a discount or a premium to the trust's underlying net asset value (NAV) – the value of its assets minus its liabilities. There is no automatic mechanism for keeping them in line.

Conversely, an OEIC always trades at NAV, while the price of an ETF should also be very close to NAV because the authorised participants will quickly trade away any discount or premium. This makes them good for tracking an index or investing in liquid assets. You should be able to cash out your holding at full market value at any time.

Investment trusts help create long-term value

So ETFs and OEICs are simpler – but investment trusts offer more ways to boost returns. For example, if you buy a trust's shares at a discount to NAV, this will amplify your gains if the discount shrinks on top of the underlying investment return. An unusually wide discount should reduce over time if performance is good, although this is not guaranteed. A trust can use share buybacks or tender offers to try to raise the price and close the discount faster, but this won't always work. Sometimes discounts can last longer than expected because of weak demand among investors for a certain sector or style, or even investment trusts as a whole. Still, when a trust buys back shares at below their fundamental value, that should create value for its remaining investors over the long term.

And the long term is what trusts are about. A trust is a listed company whose role is to make investments. The investors are shareholders, with a board to look after their interests, and an external manager to run the portfolio. They have options that open-ended funds don't have. They can borrow to buy extra assets up to a limit set by the board (often 20%). This gearing has the potential to increase returns, although it can also amplify losses. They can hold back some income to keep dividends steady. If returns are poor, they can replace the manager. And if weak performance or a wide discount persists, shareholders may vote to sell some assets and take back some capital, or wind up altogether. In short, it is a very different relationship with investors compared to OEICs – and, in MoneyWeek's view, a solid basis for building wealth.

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Diversification is often said to be ‘the only free lunch’ when it comes to investing, and funds are perhaps the simplest way to achieve this.

Any investment fund represents a bundle of stocks, adding instant diversification to your portfolio. So, does it follow that more funds means more diversification and better returns, or is there a limit to how many funds it is sensible to hold?

“The key is to build a diversified portfolio because this helps you weather different market conditions,” said Clare Francis, savings and investments director, Barclays Private Bank and Wealth Management. “Diversification means spreading your money so it’s invested globally, giving you exposure to different countries and sectors, with a mix of shares and bonds.”

This can be achieved, Francis added, by using a single fund, which some platforms offer as ‘ready-made’ options.

“They invest in a mixture of bonds, shares and cash and they invest globally,” she explained. “The way they differ is the level of risk each fund takes, so all you need to do is pick a fund that best suits the level of risk you feel comfortable with.”

But it sometimes makes sense to hold more than one fund or investment trust in your portfolio. What are the benefits, and what is the ideal number of funds to hold?

Why might you want to hold more funds?

If you are a beginner investor, it can make sense to start out small and diversify your fund holdings from there.

“We see many investors start with a ready-made fund and add additional funds, or even buy shares in individual companies, once they get more confident,” said Francis. “If you don’t want to go down the ready-made route you can create a diversified portfolio yourself by buying individual funds that each invest in a different part of the market such as the UK, US, Europe, Asia and emerging markets.”

Some funds are more suitable for beginners just starting to build their portfolio. If you feel less confident, keep it simple to begin with – there is very little to be gained from adding a fund that you don’t understand to your portfolio when there are ready-made options out there that can take a lot of the decision-making off your plate.

Once you are more confident, you might want to add more funds to your portfolio in order to gain exposure to specific investment themes or sectors.

“If you prefer to build your own diversified portfolio, around 10 well selected funds can be more than sufficient to provide diversification across different asset classes, regions, market capitalisation and styles,” said Dzmitry Lipski, head of funds research at investing platform Interactive Investor.

The disadvantages of holding more funds

Adding more funds to your portfolio doesn’t necessarily mean you’re increasing your level of diversification.

“Holding too many funds can create unnecessary complexity and may result in investors owning overlapping investments without realising it,” said Barclays’ Francis.

Realistically, the more funds you hold, the less each is going to contribute to your overall returns.

“If you hold more than 20 funds, it is probably worth reviewing whether each one has a clear role and is genuinely adding something different to the portfolio,” said ii’s Lipski. “Too many funds can make a portfolio unnecessarily complicated and harder to monitor and rebalance.”

The more funds you hold, the higher the likelihood that several of them are duplicating exposure to the same stocks or assets – so holding more funds, beyond a certain level, doesn’t necessarily mean greater diversification.

“Rather than focusing purely on the number of funds, investors should ask what role each holding plays and whether it adds something genuinely different,” said Lipski.

Does the size of your portfolio impact the number of funds you should hold?

There’s no real reason why the size of your portfolio should dictate the number of funds you hold. Regardless of size, your portfolio is likely to be allocated based on percentages of the total. Your risk appetite and other factors will dictate what percentage of the whole you allocate to different sectors and asset classes.

“The size of the portfolio matters less than its overall asset allocation and the role of each fund. A large portfolio does not automatically need more funds,” said Lipski. “Someone with a relatively small portfolio can obtain broad diversification through one multi asset fund, while investors who want greater control over their asset allocation may choose several funds.

“If a fund represents less than around 2% of your portfolio, it is worth asking whether it is large enough to make a meaningful difference to overall returns or risk,” he added. “There may be good reasons for a small specialist allocation, but very small holdings can otherwise add complexity without materially changing the portfolio.”

Most people expect that if they still have money left in their pension pots when they die, their spouse or children will inherit it.

While you can pass on a pension, you cannot do so solely through your will.

Instead, most people will need to tell their pension provider who to pay their pension to when they die through a form.

Why you can’t leave your pension in a will

Under current rules, you are not able to leave a pension in your will.

This is because pensions are not treated as part of your estate in the same way as your other assets and are therefore not included in the remit of your will.

That means if you mention your pension in your will, your provider is not legally bound by the request. Instead, you will need to fill out an ‘expression of wish’ or ‘nomination of beneficiary’ form with your provider to choose an inheritor.

Pensions will be treated as part of your estate for inheritance tax purposes from April 2027, but you will still not be able to leave it in your will.

That doesn’t mean you shouldn’t mention your pension in your will though.

It is still good practice to name who you want your pension to be inherited by in your will, as well as an expression of wish form, as your pension provider will likely take this into account despite not being legally required to.

How to pass on your pension

To pass on your pension, first and foremost you should check what the specific procedure used by your pension provider is, as some may have slightly different arrangements.

However, broadly speaking, pension providers will usually have a ‘nomination of beneficiary’ or ‘expression of wish’ form that you fill out to tell them who you want your remaining pension wealth to be inherited by.

Your beneficiary can be one person (for example, your spouse), multiple people (like your children or grandchildren), or even an organisation like a charity.

For a defined contribution pension, the beneficiaries will usually be given the choice of what to do with the money. Depending on your pension scheme, they may choose whether they take it as a lump sum or leave it invested and draw an income from it.

If you have a defined benefit pension, you will not have a pot of money left after you die. Instead your specific pension scheme will decide what is paid to your beneficiaries.

Sarah Pennells, consumer finance specialist at Royal London, warned that as pension beneficiaries are worked out from your nomination form, it can be easy to forget who your pension will be paid out to when you die.

“It's important to keep these forms up to date, especially after major life events such as marriage, divorce, having children or entering a new relationship. A form that you filled in 20 years ago may not reflect your current situation,” she said.

Note that this only applies to private or workplace pensions. Under most circumstances, you cannot pass on your state pension after you die.

What happens to an annuity after you die?

Some people choose to buy an annuity with their pension wealth to get guaranteed income in retirement.

If you have an annuity, you should be aware that there are different rules for what happens to it after you die – some annuities pay money out to beneficiaries while others do not.

Pennells said: "If you've already used your pension savings to buy an annuity, what can be passed on will depend on the type of annuity you chose.

“For example, a joint-life annuity can continue paying an income to a spouse or partner after your death, whereas income from a single-life annuity will normally stop when you die unless it includes features such as a guarantee period.”

To make sure you and your loved ones are prepared, you should check what your annuity’s policy on inheritance is and plan accordingly.

It could be useful to produce a short document containing useful information about your financial affairs, which your executor and heirs can easily find after you die.

Pension provider Royal London has put together a template document called “When I’m Gone”. You can include details about which pension provider(s) to contact, as well as the location of your will and your funeral wishes.

As the investing truism goes, time in the market is better than timing the market. The spirit of this adage is that it’s generally better to sit tight and hold onto your investments rather than frequently buying and selling.

It’s impossible to know, without the benefit of hindsight, whether you’re selling one of your top stocks or funds at its peak price, or if in doing so you’re potentially missing out on future gains – so the best thing to do is usually to sit tight and let the tendency of the stock market to rise over time do its thing.

“Knowing when to sell a share can be one of the most difficult decisions an investor can face,” said Richard Hunter, head of markets at investing platform Interactive Investor (ii).

After all, when you first bought the stock, you hopefully did thorough research on the company and its prospects, and had conviction that it was set for success in the long run.

“The position becomes less clear as human psychology kicks in,” said Hunter. “If the share price has declined, there is a natural reticence to hold on to the shares rather than sell and admit defeat, even if prospects have obviously deteriorated.

“On the other hand, if the shares have risen as had been hoped, there is a fear of missing out on further gains if the investor crystallises the profit.”

Selling a stock can sometimes be sensible when there are good reasons and you do it in an informed and considered way rather than impulse or in an attempt to time the market.

Profit-taking (selling a winner)

The first reason to sell might be that the stock has performed well and you want to bank some of the profits.

“One strategy which some investors use is known in the parlance as ‘top-slicing,’” said ii’s Hunter. “Imagine that an investment of £10,000 had fortunately come good and doubled to £20,000. By selling £10,000 worth of shares, the investor would be breaking even. The remaining £10,000 would then leave skin in the game as well as representing pure profit.”

How much profit you take is of course up to you – you don’t have to sell your entire allocation, or even half of it. Remember, though, that a profit (or loss) is only on paper until you sell.

Consider also the timing of selling a stock. If the shares are held outside an ISA, selling at a profit could make you liable for capital gains tax.

Loss-limiting (selling a loser)

On the other hand, a stock that is underperforming is a very tempting target to sell, especially if you’ve lost faith in the company’s ability to turn things around.

You’ll have noticed that this is the opposite of profit-taking, but despite appearing contradictory, both approaches “make perfect sense” according to Hunter.

“While it is ‘never wrong to take a profit’, traders will point to ‘running your winners and cutting your losers,’” he said.

Be sure to check whether your initial thesis for buying the stock is no longer intact before you sell, though. Some investors might view a share price decline in a stock they still believe in as evidence that the market has overlooked something; value investors might even consider the decline an opportunity to buy more of the stock on the cheap.

Portfolio rebalancing

It’s generally considered good practice to reset your portfolio at certain intervals – maybe quarterly or twice-yearly.

When you do so, assuming that you reallocate your investments so that each carries the same weight as it did when you last rebalanced, you will sell some of your top-performing stocks, as these will now constitute a larger percentage of your portfolio than they did before.

Risk profiling

Similarly, you might sell a stock because your own risk appetite has changed since you bought it.

Perhaps you bought a high-growth stock 10 years ago when your priority was portfolio growth. You’re now 10 years closer to retirement and wealth preservation is likely to be a higher priority for you than capital growth, so you may feel the right decision is to sell this stock and use the profits to invest in a more defensive alternative, or one that offers a higher dividend yield.

“Consider the reasons you bought the shares in the first place,” said Hunter. “Are they still intact? Does the holding still fit into your investment objectives?”

Ultimately, he added, there is no definitive answer to whether and when it’s right to sell a stock, and the decision will vary from person to person.

“As long as the investor is comfortable with the rationale, there is no right or wrong time to sell,” he said.