Oil giant Chevron (NYSE: CVX) has underperformed the broader energy sector by a significant margin, with a return of just 16% for the year. The company has greater exposure to oil prices than some peers – a $1-per-barrel drop in the price of Brent, for example, costs the company $600 million in cash flow.

Continued progress in the Middle East peace talks has had a positive impact on oil prices, however. Since the beginning of the month, the price of Brent crude has fallen by around $15 per barrel to $80, down from $95. This is good news for consumers and economies around the world, but it is bad news for oil producers. The S&P Commodity Producers Oil & Gas Exploration & Production index has fallen around 13% over the same period. The index, which was up 40% at one point this year, is now up just 19% year-to-date.

But now seems like an interesting time to buy into a business that's no longer just about oil. Indeed, Chevron is increasingly becoming a major player in the power business.

Chevron is branching out

Chevron is best known as an oil producer, but its most exciting business is the production of liquefied natural gas (LNG). The company does not break down exactly how much it earns from each facility and production line, but it does break down upstream (oil and gas production) and downstream (refining and trading) earnings. For 2026, UBS has pencilled in $20.4 billion of upstream and $4.3 billion of downstream earnings. Of this, analysts estimate that around 60% of upstream is liquids production, with the remainder gas and LNG.

LNG markets tend to operate differently from global oil markets. Due to the huge sums of capital investment required to set up and maintain LNG facilities, producers have to agree multi-year contracts with customers to guarantee a return. Chevron's flagship Gorgon LNG facility in Australia, for example, cost the company and its partners $55 billion in total.

Of the roughly 4.1 million barrels of oil equivalent the company is expected to produce in 2026, 80% is tied to long-term fixed contracts, with the remaining 20% sold on the spot market. These contracts are fixed, but still influenced by market prices. LNG contracts linked to Brent prices, for example, adjust with a three- to four-month lag. Analysts at UBS reckon that for every $10 rise in the price of Brent, Chevron gets $450 million in after-tax earnings from production from its two major Australian LNG facilities.

Crunching the numbers for LNG cargoes isn't easy for those outside the business. Prices are heavily influenced by natural-gas prices and demand. For example, prior to March, the profit on a single LNG cargo moving to Europe from the US jumped from about $25 million to $50 million as the spread between natural-gas prices in the US and prices for gas in Europe rose due to the Middle East supply shock, according to Energy Flux, an industry news site. While the world has been focused on Brent prices, it's US natural gas that's the important metric for Chevron. It estimates that a $1 move in price will add or subtract $700 million from its bottom line and, due to higher demand, prices have risen nearly 30% to $3.2 MMbtu since the beginning of April.

Chevron also has a smaller facility in Angola, which UBS estimates could generate a $180 million boost in Ebitda for every $2 increase in the price of the European gas benchmark, which is up around $5 per MMbtu in the past six months.

Ultimately, prices are linked to demand, and the LNG market cannot quickly adjust to demand as it can take decades to build an LNG facility. According to Shell, the world's largest LNG trader, demand is expected to rise by 68% by 2040 in the best-case scenario and by 85% by 2050, driven by stronger requirements for electricity. The IEA believes higher demand from electric vehicles and data centres and the like will add the equivalent of two European Unions to the global need for power by 2030 – only half of which will be met by increased renewable-energy and nuclear-power generation.

Chevron's new venture with Microsoft

Chevron has also launched a joint venture with Microsoft called Power Solutions, which will, for the first time, take it into the business of selling power. The first major deal was announced at the end of March and will see the partners develop a $7 billion, 2.5-gigawatt, natural-gas-fired power plant to support Microsoft's data centres. It will be powered by gas from Chevron's assets and will be built with room to double in size to meet demand.

Production should begin in 2027 and Chevron's bottom line is set to see the benefit from 2028 onwards. The business could become a significant contributor to profits over the coming decade, but this is not reflected in the share price. Chevron wants to build power plants producing seven gigawatts over the coming years. Selling power on long-term fixed contracts to the technology “hyperscalers” will add another predictable stream to Chevron's top and bottom lines, reducing the earnings volatility that's dogged the firm in the past.

That should justify a higher multiple and stronger cash returns. Based on current projections, UBS's analysts believe the shares are trading at a forward price/earnings (p/e) ratio of 16.6 for 2027, falling to 15.8 for 2028, assuming a 4% increase in production. The dividend yield is expected to come in at 4% this year and 4.2% next year. Recent declines in the share price could present a good opportunity for long-term investors.

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The SVS Baker Steel Electrum Fund invests in mining stocks that produce the metals and materials needed to power the global economy. While technology and consumer stocks receive significant attention from investors, the mining sector is often overlooked yet offers exposure to commodities that are essential for everything from electricity generation to renewable-energy infrastructure.

Metals have become strategic again, with demand growth driven by electrification, rising energy consumption and increasing concerns about energy security. At the same time, years of underinvestment in mining and resource development have resulted in tight supply across many markets. This combination of rising demand and constrained supply is creating compelling opportunities for investors. Here are three stocks that currently stand out.

Three promising mining stocks for your portfolio

A play on geopolitics

Century Aluminium (Nasdaq: CENX) is a play on both geopolitics and industrial demand. It produces aluminium in the US, a metal that is vital for construction, transport and technology. Aluminium is also a beneficiary of structural tailwinds from electrification, being increasingly used in energy infrastructure. The investment case for aluminium producers has strengthened as governments place greater emphasis on domestic manufacturing and secure supply chains. Trade tariffs have highlighted the strategic importance of producing key industrial materials closer to home and reshoring supply chains. The war in the Middle East has also reminded investors how quickly global supply routes can be disrupted. Aluminium prices have risen during the crisis.

Strong demand boosts silver

Pan American Silver (NYSE: PAAS) is a mining stock that offers exposure to silver and gold at a time when interest from investors in precious metals is on the rise. The company operates a portfolio of high-quality mining assets across the Americas and is one of the world's leading silver producers. The importance of world-class silver assets is growing amid strong demand from investors and a tight supply side, with the silver market having faced a supply deficit for several years now.

A part of silver's appeal is that it is both a precious metal and has industrial uses. Investors often buy it as a store of value, much like gold, but it is also used extensively in certain fast-growing technologies, notably solar panels and more broadly across electronics. These dual sources of demand are supportive for silver prices and miners.

A mining stock with exposure to nuclear energy

Cameco (NYSE: CCJ) is one of the largest uranium producers globally, with exposure to the development of reactors, offering investors a way in to the growth of nuclear energy globally. As demand for electricity rises, governments and companies are increasingly seeking reliable sources of low-carbon energy. Nuclear power is becoming a more important element in the energy mix as a reliable source of baseload power, without the intermittency issues associated with wind and solar generation.

We consider that his trend could support demand for uranium or many years to come. Countries are extending the lives of existing reactors, while others are planning new nuclear projects as they seek to improve energy security and reduce carbon emissions.

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The Gulf states have been crucial to the global economy ever since the first oil shock in 1974 broke the post-war monetary system and ushered in an era of high inflation. With the world's biggest concentrations of oil and gas in Saudi Arabia, Iran, Iraq, Kuwait and Qatar, and with producers locked into the Opec oil-exporters cartel, which could switch supplies on and off at will, the region held the world's energy supplies in its hands. That gave its rulers immense power and the wealth to buy up a vast range of assets. Interest rates, equity prices and inflation all over the globe were often determined by events in that one small region of the world. It mattered.

That looks to have changed. As the US and Israel attacked Iran, there were plenty of dire warnings that the oil price would go to $150 a barrel, or perhaps even $200. Flights would have to be cancelled as we ran short of jet fuel; petrol would have to be rationed. The closure of shipping lanes would send chemical and fertiliser prices soaring, triggering food shortages and factory closures. The global economy would be plunged into recession. Central banks started to consider an emergency response.

In the event, none of that happened. The price of oil did go up sharply, rising from $60 a barrel to close to $120 shortly after the conflict started. But rather than spiralling out of control, it steadied and then started to fall again, dropping below $80 as Iran and the US agreed a 60-day ceasefire at the start of this week. There is little sign of food shortages, or any basic commodities running low, and there are still plenty of cheap flights available. Most of the European economies are sluggish, but that is for a whole host of reasons. They have not collapsed and the US is still doing well, with strong growth, plenty of new jobs and the stock market hitting record highs. Inflation has ticked up a little, but should come back down again as the price of oil falls.

In reality, the Gulf states just do not matter as much as they used to. There are three big reasons for that. To start with, there is a lot more oil in the world than there used to be. Despite all the catastrophic warnings during the 1980s and 1990s that the world would have run out of the stuff by now, there seems to be more of it than ever. The US has turned itself into both the largest producer and net exporter of oil in the world, largely because of fracking. Despite all the fear-mongering, more countries, such as Argentina and Mexico, are developing their own shale oil and gas reserves. After the US strikes on the country, Venezuela will start to restore its oil fields and it has the largest reserves in the world. Far from running out, there will soon be too much oil. The Gulf can't hold the world to ransom when the global market is awash with oil.

Why the Gulf states' money is no longer so important

Second, alternative energy is rising in importance all the time. We can all debate whether the drive to achieve net-zero is too rapid, but there is no turning back the clock to the fossil-fuel era now. China's huge electric-vehicle industry is not going to disappear, and most open car markets will be electric within a decade or so. Renewables account for 45% of electricity generation across the EU and already for 25% in the US, the world's largest economy (and that share is rising fast, with solar last month overtaking coal as a source of power). Oil is a shrinking market.

Finally, Gulf states' money is no longer so important. Dubai and Qatar will take time to recover from the bombing campaign launched by Iran. A lot of money invested around the world will have to be brought home to pay for reconstruction and cover losses. The region's wealth funds won't be splashing billions on trophy assets as have done for the last 20 years. In a world where Wall Street is minting space- and AI trillionaires, there is a lot of spare capital around. The Gulf states won't matter so much. Add it all up and one point is clear. The main lesson from the Iran war is that the Gulf states' influence has evaporated. They are part of a small region, which no longer matters very much except to the people who live there. Investors will still have plenty of things to worry about – but the Gulf states and their oil resources can be dropped from the list.

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Historically, gold has been regarded as a safe store of value against the potential for fiat currency to depreciate in value – in other words, as a hedge against inflation.

But for much of 2026 so far, higher inflation has coincided with lower gold prices.

“Gold was still up 6% over the year to the end of May,” said Joseph Greif, investment director at wealth manager Evelyn Partners, “but its recent behaviour has been uncomfortable for investors who expected it to protect portfolios immediately.”

Inflation has run hotter since the Iran war broke out, especially in the US. The US is a critical market for gold; the metal is priced in dollars, so its usefulness as an inflation hedge is implicitly measured against US inflation.

But while the Iran conflict pushed inflation higher, the price of gold fell. Between 27 February – the day before the war broke out – and 10 June, the price of gold fell 23%. Annualised US CPI inflation rose from 2.7% in February to 4.2% in May.

Why the gold price fell during the Iran conflict

Inflation is not the only dynamic that gold prices interact with. One of the key ones is interest rates, particularly in the US.

Gold pays no interest. That matters less to investors when interest rates are low, because alternative assets like bonds aren’t offering much interest themselves.

But once interest rates increase – or when markets expect them to – then gold loses appeal relative to interest-paying investments.

This is the main reason gold prices fell, both before and during the conflict in Iran. The price of gold peaked on 29 January at $5,595, around a month before the war broke out. The catalyst for prices to start falling from then was Donald Trump’s nomination of Kevin Warsh as the new chairman of the Federal Reserve (Fed).

Until then, markets had assumed Trump would nominate a ‘dovish’ chair for the central bank and that this would result in relatively loose US monetary policy (i.e. lower interest rates) – a positive for gold.

By the time the Iran war broke out, markets had already spent weeks pricing in higher interest rate expectations. And the inflationary shock that the Strait of Hormuz’s closure prompted only amplified those expectations.

“The prolonged conflict sparked severe inflationary risks, pushing US inflation to 4.2% in May,” Benoît Harger, portfolio manager at private bank J. Safra Sarasin, told MoneyWeek. “This data forced markets to price in potential interest rate hikes instead of cuts. It boosted the appeal of yielding assets and triggered a 30% gold correction from its January high.”

This isn’t necessarily out of character with how gold has behaved in the past.

“What lots of people don’t realise about gold is it sells off in a crisis, often because of liquidity,” Cosmo Sturge, director of market strategy at metals fund manager Baker Steel, told MoneyWeek. “You had a lot of investors who had made a lot of money in the run-up to the [Iran] war, and suddenly that change in the outlook for inflation and the knock-on effect for interest rates [prompted them to] sell gold.”

Could gold still help hedge against inflation?

Despite the selloff, most experts agree that gold still has a role to play in portfolios, particularly as a hedge against inflation.

Central bankers are currently more constrained in how high they can push interest rates than they have been in the past.

The Fed hiked interest rates to as high as 19% in the early 1980s to combat rising inflation. This coincided with a steep decline in the gold price, from around $650 in January 1980 to around $320 in June 1982. But these high interest rates damaged the global economy and would be unworkable today.

“Rates clearly can rise, but could they rise to those levels again? Could the Fed really have the firepower to be able to fight true inflationary crises through monetary policy?” asks Sturge. “I'm not sure. Debt to GDP is four times higher than in 1980. You've had a huge increase in the money supply in the US, which has obviously been fueling inflation.”

If it reached a point where the Fed couldn’t control inflation through monetary policy, then financial repression – government policies that keep rates artificially low, at the expense of savers and private businesses – would result.

“That is a very positive environment for gold,” says Sturge.

Similarly, Harger believes that gold remains an effective inflation hedge because it protects against long-term structural fragility. He argues that interest rates will eventually have to fall: “The global economy cannot sustain permanently high financing costs without triggering a recession. Furthermore, under-pressure growth and massive public deficits… limit long-term rate hikes.”

Gold, he says, will likely be a beneficiary of this eventual reduction in interest rates. “A strategic allocation may provide protection against sovereign risk and currency devaluation as rising debts force loose monetary policies.”

“Over the long term, gold being an inflation protection, I think, has held very well, but it tends to be more in terms of protecting your purchasing power rather than necessarily shooting sky high every time there's inflationary scare,” said Sturge. “It's driven by persistent debt growth: the fiscal deficits of the world, long-term currency debasement – these are the reasons why people hold gold.”

ESG investing – which focuses on environmental, social and governance (ESG) metrics – is the latest iteration of ethical or sustainable investing, whereby investors aim for returns without compromising their principles. ESG considers a company's impact on the environment and society and operational matters such as transparency over leadership decisions, executives' pay, diversity, and shareholders' rights, alongside typical financial metrics.

The rise and fall of ESG investing

ESG investing peaked between 2020 and 2022 with a surge of fund launches and record asset flows driven by huge subsidies for clean energy and ultra-low interest rates, which encouraged investment in alternative assets. Covid also fostered a re-evaluation of priorities and a growing emphasis on ethics and sustainability. Investments in global ESG funds topped $645 billion in 2021.

The bubble burst when central banks began hiking interest rates to squeeze out inflation after the pandemic. Higher borrowing costs made speculative clean-energy projects more expensive and risky, exacerbating the impact of the broader flight to safety.

It was feared that ESG investing could go the way of socially responsible investing (SRI), its precursor in the 1990s. That trend saw investors focus on growth stocks as they filtered out the likes of tobacco, alcohol and defence stocks, which tended to be value and income stocks. Then the growth bubble burst and SRI withered on the vine. “What I call ESG 1.0 is really a resurrection of that [SRI] movement,” Alec Cutler, manager of the Orbis Global Balanced fund, told Citywire in 2023.

The ESG boom was also interrupted by the energy crisis after Russia invaded Ukraine in 2022, which pushed many nations to prioritise energy security – a concern reinforced by the war in Iran – and by a political and regulatory backlash in the US that has spilt over into Europe. ESG has been dismissed as “woke capitalism”.

US president Donald Trump has announced further drilling to bolster fossil-fuel production in the US. He also withdrew the US from the UN Framework Convention on Climate Change and pulled the US out of the Paris Climate Agreement for the second time. At the COP30 climate-change conference in Brazil last year, many were disappointed by the lack of agreement on moving away from fossil fuels.

Recently, former prime minister Tony Blair urged the government to drop its commitment to net-zero and focus on North Sea oil and gas exploration to generate energy for AI. Trump has also pushed back against diversity, equity and inclusion initiatives, with large US companies such as Amazon, Disney, Google, and Meta following suit.

The challenges of ESG investing

Against this backdrop, many asset managers have scaled back commitments to ESG, while funds have dropped the term from their names amid large outflows. Larry Fink, CEO of the world's largest asset manager, BlackRock, perhaps sensing the change in the mood music around ESG, announced in 2023 that he would stop using the term, despite having previously advocated the investment strategy.

Another difficulty was that ESG, like SRI, had always struggled with ambiguity. The term is subjective, as ethics are personal. ESG strategies generally back companies developing renewable energy or prioritise capital-light firms with low carbon footprints. This could mean excluding tobacco, fossil fuels and defence companies to focus on firms tackling climate change.

However, as there is no universal, legal definition, ESG relies on differing interpretations of what it means to be ethical or sustainable. For instance, defence could be taboo for one investor or ESG-focused fund, but to another it could be deemed crucial to national security and social stability, and thus perfectly acceptable. Similarly, nuclear energy is considered costly and dangerous by some, as it produces radioactive waste. But to others, it is a vital source of low-carbon electricity and critical to the energy transition.

Furthermore, factors comprising ESG can change over time. For instance, governance was once the primary focus, but now environmental and social aspects, such as diversity, are more prominent. This subjectivity has led to differences in how rating agencies score a company's ESG characteristics and there can sometimes be conflicting scores and priorities.

This has triggered concerns about companies and funds “greenwashing” their environmental credentials: using marketing or advertising to make vague, misleading or false claims about their operational impact on the environment. In 2025, Environmental law charity ClientEarth filed a complaint against BlackRock, accusing the world's largest asset manager of calling its funds sustainable despite having invested over $1 billion in fossil-fuel companies, such as Shell and BP. BlackRock has since made changes to many of its funds.

According to a survey by Hargreaves Lansdown, 75% of its clients think it important that their investments reflect their values, with cybersecurity, anti-corruption, bribery and water security key issues. Meanwhile, 47% of women agreed that responsible investing, which includes ESG measures and companies that make a “positive, measurable impact”, is important, compared with 28% of men.

Other asset managers, such as Vanguard Investments Australia and UniSuper, have also been accused of mislabelling their funds.

Since 2022, markets have shifted towards AI or capital-intensive sectors, such as banks and oil. But ESG funds still manage $3.9 trillion in assets, says investment platform Morningstar.“While it may look like responsible investment is a busted flush,” says Darius McDermott, managing director at online research centre and fund ratings agency FundCalibre, “the reality is more nuanced. The atmosphere has changed, and... responsible strategies have had a difficult run of performance. But [the] urgent need to decarbonise our economy remains.”

Despite political scepticism over renewables in the US, the private sector is pressing ahead with investments, backing the energy transition. Several US Republican lawmakers still back the Biden-era Inflation Reduction Act, which provides $369 billion in spending and tax incentives to bolster clean energy and lower greenhouse-gas emissions. “Even if it is partially repealed, this won't necessarily affect the bottom line of all decarbonisation companies,” says McDermott.

Deregulation, such as changes to the US planning framework, could accelerate investment in renewable infrastructure, as occurred during Trump's first term. But McDermott's “biggest concern” is sticky inflation and interest rates that could stay high for longer than expected, potentially deterring the large capital investment needed to decarbonise economies.

ESG investing makes a comeback

Although the hype around ESG investing has subsided, “most mainstream fund managers integrate financially material environmental, social and governance risks and opportunities into their investment processes”, says Dominic Rowles, head of ESG at retail-investment platform Hargreaves Lansdown. Global sustainable funds enjoyed a modest recovery in the first quarter of this year, with $3.5 billion in net inflows thanks to a rebound in Europe, says Morningstar. The US, however, saw its 14th straight quarter of outflows at $4.3 billion. ESG investing is “not a fad, nor do the reasons for it delivering good long-term returns fade”, says Peter Michaelis, head of Liontrust's sustainable investment team. “The broad themes of improving resource efficiency, quality of life and resilience will persist, and companies delivering them will see strong growth.”

A source of future demand

There are also generational differences. According to a survey in April 2025 by Morgan Stanley, Millennials (those born between 1981 and 1996) and Generation Z (1997-2012) were more likely to be interested in sustainable investing than Generation X (1965-1980) and baby boomers (1946-1964). “As the largest living adult cohort, [Millennials'] preferences matter – and studies show that they are willing to change their buying habits based on their views of a company's sustainability credentials,” says Rowles.

Meanwhile, regulators are tackling greenwashing. The Financial Conduct Authority's (FCA) Sustainability Disclosure Requirements require claims relating to sustainability to be “fair, clear, and not misleading”. The EU has introduced the Corporate Sustainability Reporting Directive, which obliges 50,000 European companies to disclose information on a broad range of ESG issues, and the EU Circular Economy Action Plan to encourage capital toward green infrastructure.

FundCalibre's Darius McDermott says investors should not focus on labels when picking a sustainable fund, but consider holdings, exclusions, engagement policies, proxy voting records, and ESG metrics, as well as any third-party verification and the consistency of the fund's investment approach.

He points to the £623 million Janus Henderson UK Responsible Income Fund. “For investors seeking a sustainable yield, in both senses of the word, it remains an attractive option.” The fund avoids sectors it considers environmentally and socially harmful, such as alcohol, animal testing, weapons manufacturing, fossil fuels, nuclear power, gambling, and tobacco. Its top holdings include AstraZeneca, London Stock Exchange Group, HSBC, National Grid and Smith & Nephew.

“Most ESG themes are driven by long-term structural demand,” adds McDermott. The Regnan Sustainable Water and Waste Fund targets the need for improved water supply and waste management amid growing urbanisation and global wealth. The £240 million global fund consists largely of local operators that are less exposed to tariffs and geopolitical disruption than multinationals. Top holdings include Cia Saneamento Basico Do Estado de Sao Paolo, a Brazilian water and waste management company, and Watts Water Technologies, a US manufacturer of plumbing and heating products.

Liontrust's Peter Michaelis says that the challenge over the last few years has been that market leadership has been concentrated in the AI hyperscalers, defence, mining, and oil sectors, which Liontrust's Sustainable Future funds avoid completely, or are underweight in. “We have always favoured a multi-thematic approach focused on areas such as innovation in healthcare, renewable energy infrastructure, and cybersecurity.”

Although the heady days of ESG investing inflows are unlikely to return and political headwinds remain, the market is maturing. Demonstrating greater resilience than SRI, ESG remains a key tenet of the global investment landscape.

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Helium is a commodity that is key to every major growth theme in the global economy – space, AI, and healthcare. But almost nobody talks about it – and the helium supply picture has just become dramatically more complicated.

The launch of a single Falcon 9 rocket consumes roughly 14%-18% of the world's daily helium production in a single ignition sequence. SpaceX launches Falcon 9 rockets dozens of times a year, with ambitions that stretch well beyond that frequency. The satellite industry is preparing for annual launch volumes of between 3,700 and 5,000 by 2030, as mega-constellations reach full deployment. Goldman Sachs anticipates 70,000 low Earth orbit (the region between 160 and 2,000 kilometres into space) satellite launches globally between 2025 and 2031. Every single one of them needs helium. There is no alternative.

So surely someone is producing more of it? They are not, at least not at anything close to the rate the market requires. Helium is not manufactured. It is extracted as a by-product of natural-gas processing in a small number of locations where underground concentrations happen to be commercially viable. The US and Qatar together account for more than 75% of global supply. Russia produces a significant share, but that supply is unavailable to Western markets. Algeria contributes a modest fraction. Everyone else is a rounding error.

Qatar's share, 30% of global supply, flows out of a single industrial complex at Ras Laffan. In March 2026, Iranian strikes forced QatarEnergy to cease production of liquefied natural gas (LNG) and associated products, including helium. Almost one-third of the world's helium supply was removed from the market overnight. Spot prices doubled. The south site at Ras Laffan took direct hits and will not restart before late summer 2026. Permanent capacity reductions, analysts say, will take years to recover fully.

The Strait of Hormuz is a trigger, not the underlying problem. Even before the first missile flew, this market had endured four recognised major shortages over the past two decades, each lasting two to three years before any equilibrium was restored. The conflict simply made the market's structural deficit visible. Compounding the supply picture is the nature of helium itself. It is the second-lightest gas on Earth. It escapes containment at a rate that makes strategic stockpiling impossible. You cannot build a meaningful reserve. When supply breaks, the market has no buffer.

Now consider who is competing for that inelastic pool of supply. Semiconductor makers use helium at nearly every stage of wafer production, and there is no substitute for its role in extreme ultraviolet (EUV) lithography, the process that makes the most advanced AI chips. The AI-driven chip market is set to double by 2030 at a compound annual growth rate above 11%. MRI machines make up 20% of the global demand for helium, each requiring an initial fill of 2,000 litres of liquid helium and continuous top-ups throughout their operational life.

As India and other large emerging markets rapidly expand healthcare infrastructure, that demand grows structurally. And then there is the quantum-computing sector, scaling fast and entirely dependent on liquid helium cooling to reach the cryogenic temperatures that make quantum processors function at all.

Rocketry, AI chips, medical imaging, and quantum computing. The three or four fastest-growing sectors in the global economy all compete for the same gas from the same small group of producers, and one of those producers has just been taken off the board for an indeterminate period.

The best helium stocks to buy now

Investors should note that SpaceX's S-1 registration statement, filed ahead of what promises to be one of the most significant listings in a generation, conspicuously omits any reference to risk associated with helium – even though the company has already acknowledged, through its own CEO, that helium supply represents a binding operational constraint on its ambitions to grow. Elon Musk stated plainly that there is not enough helium produced on Earth to sustain a high-flight-rate Starship programme, a constraint significant enough that the vehicle had to be redesigned around it. That is not a footnote. That is a material operational risk.

Consider instead the industrial gas companies Linde (Nasdaq: LIN), Air Products & Chemicals (NYSE: APD) and Air Liquide (Paris: AI), the obvious primary beneficiaries of tighter supply and rising prices, with pricing power that will compound through long-term supply contracts. The UK angle deserves particular attention. Britain has no domestic helium production, no strategic reserve, and no formal critical-minerals designation for helium by the government. The NHS scanner estate, the National Quantum Computing Centre at Harwell and the defence-electronics supply chain are all exposed to a commodity that receives no policy attention in Whitehall. That is a gap waiting to be filled, and investors who identify it before policymakers do will have done so at the right time.

Helium has been treated as background infrastructure for too long, considered too cheap, too abundant, too boring to warrant serious analysis. That era is over. The commodity no one talks about is the one underpinning the launches everyone is watching, the chips powering the AI everyone is funding, and the scanners keeping hospitals operational. The question for investors is not whether helium matters. The question is how long the rest of the market takes to realise it.

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Kazakhstan may be the place that breaks the recurring pattern in critical minerals investing. The pattern tends to be that the West wakes up to a dependency, commissions reports, convenes summits, and then watches China quietly sign another joint venture while the paperwork is still being drafted in Brussels.

The numbers are not subtle. China controls 60% of global rare-earth mining, 91% of refining, and 94% of magnet production. In April 2025, Beijing weaponised that position by imposing export restrictions on rare-earth elements and by May, shipments of rare-earth magnets to the US had fallen 93% year on year. Ford idled its electric-vehicle plant in Chicago and German carmakers warned of production halts.

China has since extended the same logic to tungsten, where it controls 79% of global supply and has imposed export curbs on a market already stretched by demand for defence fuelled by the Ukraine war and disruption in the Persian Gulf.

The benchmark price for ammonium paratungstate – the white crystalline powder that is the standard intermediate stage that virtually all mined tungsten passes through before being refined into metal, carbide cutting tools, or missile-grade alloys – has risen 716% in a year. The price chart looks almost vertical. Russia, meanwhile, controls 46% of global uranium-enrichment capacity, a choke point that Western utilities are only now starting to engineer around.

Why invest in Kazakhstan?

Into this landscape steps Kazakhstan. The ninth-largest country in the world, sitting on one of the most extraordinary resource endowments on Earth and still, somehow, trading at a discount anchored in Cold War geography. That discount is the opportunity.

Kazakhstan produces 40% of the world's uranium. It produces 18% of the titanium used in global aerospace. It is a top-ten global producer of copper, gold, chromium, beryllium, niobium, tantalum, and tungsten. It has recently begun developing what is reportedly the world's largest manganese deposit and will shortly become the second-largest global producer of gallium, which is essential for semiconductors. Last year, it announced a rare-earth discovery that could put it third globally in that category too. All of this is before you consider that only 16% of its territory available for exploration has been licensed.

The geopolitical story is at least as interesting as the resource one. President Kassym-Jomart Tokayev has executed a genuinely remarkable balancing act. Kazakhstan has observed Western sanctions against Russia without drawing Moscow's ire.

It has maintained strong ties with both Washington and Beijing at a moment when those two are economically decoupling. It has joined Donald Trump's Board of Peace, secured a G-20 invitation to Florida, hosted the expansion of the Central Asia Five to include Azerbaijan and let China lead the recent mining investment league table, all simultaneously.

Economists call this kind of diplomatic optionality a free good. It rarely lasts and wise investors should not assume it will. But for now, it represents genuine strategic value in a world of hardening blocs. The transport picture has also shifted materially. The Trans-Caspian International Trade Route, the so-called Middle Corridor, has reduced transit times between Kazakhstan and Europe from 50 days in 2023 to 18 today, with a target of ten by 2030. Critically, this route has become the primary channel for Kazakh uranium reaching Western utilities, bypassing Russia.

The risks of investing in Kazakhstan

There are real risks and investors should not pretend otherwise. The Kazakh government is moving to mandate state-owned enterprise participation of at least 50% in new oil, gas, and uranium projects, and similar rules are under discussion for the mining sector more broadly. A Canadian investor recently withdrew from a series of uranium licences, citing a regulatory change that would have handed Kazatomprom a 75% stake in any new venture.

The $100 billion arbitration Kazakhstan's government launched against the Kashagan and Karachaganak oil projects over claims of lost revenue is a reminder that Kazakhstan has, in the past, rewritten the rules after the investment was made. Constitutional changes passed in March 2026 appear to strengthen the role of domestic law relative to international treaties.

Investment opportunities in Kazakhstan

The counterpoint is that newer investors, coming in with eyes open, are structuring around this reality rather than fighting it. One foreign investor quoted in Ocean Wall's recent Kazakhstan research noted that participation by state-owned enterprises (SOEs) in joint ventures was an advantage in practice, with the state partner handling licensing and regulatory navigation while the investor focused on operations.

The Cove Kaz Capital tungsten joint venture with Tau-Ken Samruk, financed by the US Export-Import Bank and Development Finance Corporation, is the model: US government finance backing the deal, Kazakh state equity alongside it and a Western mining company operating it; 15% of global tungsten output, secured for the West, against a price backdrop that makes the economics extraordinary.

The West needs Kazakhstan more than it has yet been willing to admit. For investors who recognise that before the consensus does, the window is open.

One name worth watching is Kaspi.kz (Nasdaq: KSPI), the most accessible entry point for global investors and the one requiring the least tolerance for frontier markets' complexity. Kazakhstan's dominant fintech and e-commerce platform, it combines a payments super-app with a marketplace and a banking operation in a country where digital adoption is accelerating rapidly. It is the closest thing Kazakhstan has to a blue-chip offering long-term growth in consumption.

Halyk Bank (LSE: HSBK, a global depositary receipt, or GDR) is the country's leading retail bank and has delivered strong returns over the past three years as Kazakhstan's economy grew. It offers investors exposure to domestic credit growth and benefits from the same story of rising household income that underpins Kaspi.

Kazatomprom (LSE: KAP, GDR) is the anchor of the uranium thesis. Controlling 40% of global supply, it is the most important company in the nuclear-renaissance trade. The sulphuric acid constraint on in-situ recovery production is a genuine medium-term risk worth tracking in results, but the structural demand picture from reactor buildout globally is compelling.

KazMunaiGaz (Almaty: KMGZ) is the national oil company and the vehicle through which the Kazakh state participates in Tengiz, Kashagan, and Karachaganak, the country's three major oil and gas projects. It is not a growth story in the conventional sense, but at current valuations, it offers meaningful hydrocarbon exposure with a state backstop, and contract renegotiations with the major oil companies over the coming years could prove a catalyst.

East Star Resources (LSE: EST) is the early-stage exploration name for investors with a longer time horizon and a higher risk appetite. Its copper and gold assets in Kazakhstan are genuinely prospective, and the stock has already delivered strong returns over the past year. The Kazakh exploration story is at an early stage, and East Star is positioned to benefit as the government's new geological mapping programme begins to define the resource base more clearly.

Air Astana (LSE: AIRA) rounds out the picture as a play on Kazakhstan's growing connectivity and its ambitions as a regional hub. The airline has benefited from increased transit traffic along the Middle Corridor and from the general expansion of central Asian trade flows. It listed in London in 2024 and remains below the radar of most Western investors.

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You might expect the £219 million Guinness Sustainable Energy Fund to have performed poorly in recent years, given the dreadful performance of renewable-energy infrastructure funds. Far from it: the fund returned 18% in 2025 after losing 17% in the previous three years, but returning 150% in the three before that.

That is because its portfolio is much broader. While the renewable infrastructure funds invest in just a few energy-generation projects, the Guinness Sustainable Energy Fund is spread across quoted companies in the equipment, efficiency, electric vehicles, power generation, batteries and infrastructure sectors.

Last year's returns were due to improving policy clarity, lower interest rates and surging power demand, not just from data centres and digital infrastructure but also from transport, building, industry and the re-shoring to the US of manufacturing, says co-manager Jonathan Waghorn. “Global investment in clean energy in 2025 was $2.2 trillion, twice as much as in fossil fuels, reflecting the fact that renewable energy is the cheapest form of electricity in most situations,” he notes. “Growing power demand has taken over from decarbonisation as the central secular theme.”

Capitalise on the rising demand for electricity

The International Energy Agency forecasts that electricity demand will grow at 3.7% in 2026 – well above the 2015-2023 average of 2.6% – and at 4% per annum thereafter. AI and data centres currently account for 4%-5% of US power demand, but this will grow to around 12% by 2030. Electric vehicle (EV) sales are expected to increase by 4 million to 25 million in 2026 (when they will make up 29% of total sales). Battery prices fallen 93% since 2010, but are likely to drop significantly further by the 2030s. In China, which accounts for 60% of global sales, EV sales are already over half the total. In the US, they are just 10% (against 20%-25% in Europe) due to cheap gasoline and range anxiety in a country where driving distances are longer, but this is expected to increase to 45% by 2030. Policy support has been inconsistent but changes in Donald Trump's “One Big Beautiful Bill Act” last year were not as adverse as many feared.

China added 430GW of renewable capacity in 2025, more than the rest of the world put together, and hit its 2030 target six years early. Approvals for new coal-powered plants have slowed – Waghorn says that global coal-fired generation is at a peak and expects it to halve by 2050. He expects gas-fired generation to continue to grow until 2040, then decline slightly. Renewable energy's market share of energy demand will increase from 15% to 40% as electricity's share of total energy increases from 25% to 40% in 2045.

“Given the growth in electricity demand, it is no longer about renewables or fossil fuels, but about both,” says Waghorn. “Not only is renewable capacity cheaper but costs are falling and lead times for installation are shorter than for gas, whose costs are rising. Gas-fired generation will still have a very important role, providing base load capacity and smoothing out the intermittency of renewable energy. Nuclear power will be slower to expand as expertise needs to be built up.”

“There is significant scope for energy efficiency gains, enabling overall demand growth to slow from 2% to 1% per annum long term.” Growth in electricity demand requires a doubling in expenditure to $600 billion per annum by 2030 and a further increase to $800 billion by the 2040s. “Much of the Western world's power grid is 40-50 years old, and over half of US grid transformers are 30 years old. Estimates point to a doubling of the global power grid by 2040.”

All this adds to the investment opportunity, reflected in the breadth of the fund's portfolio. It makes the funds focused solely on renewable energy projects – with high sunk costs and facing falling wholesale prices – look stuck up a cul-de-sac. Despite this, the portfolio still trades on a 12% discount to the broader market – with higher earnings growth, estimated at 12.7% per annum in 2024-2027 and above that of global markets, there is surely plenty more upside to go for.

An energy fund for a world that still needs oil

The oil and gas sector was a popular contrarian tip for 2026, largely because it had performed so poorly for so long. With the Brent oil price stuck at $65 a barrel, the dollar weakening, demand weak and plenty of potential additional supply visible, the argument for the sector did not look compelling. Yet the Gulf war changed all that, with the oil price surging to over $100 a barrel. Oil and gas companies are back in favour, with the Guinness Global Energy Fund returning 41% in sterling in the first quarter. So is it too late to jump in?

Oil looks expensive relative to recent prices but it was a “cheap commodity and at a 100-year low relative to the gold price”, says co-manager Will Riley. “The world was paying just 2% of GDP for its oil compared with a 30-year average of 3%, and 5% in 2012.”

The International Energy Agency has reduced its estimate for growth in demand from 0.73 million barrels per day (bpd) in 2026 to an average fall of 80,000 bpd. In the longer-term, oil demand, which stood at 104 million bpd in 2025, was previously forecast to peak at 107 million bpd in the 2030s. That peak may be brought forward if higher prices now provide an incentive to shift from oil at the margin, but demand is expected to decline only slowly.

The closure of the Strait of Hormuz theoretically prevents 20 million bpd of oil and 10-11 billion cubic feet of gas per day reaching markets. Alternative pipelines can transport some of this oil, but only some. While high prices will stimulate new investment – both in new production and new transport infrastructure – that will take time. There is no simple alternative to replace Qatar's 20% of global liquefied natural gas (LNG) production, for example. On a longer time scale, there is potential for additional oil and gas supply around the world, which can partly offset the depletion of existing fields. This includes Venezuela, which has the world's largest oil reserves and whose heavy (and costly to extract) crude has a breakeven point of at $80 a barrel, estimates consultancy Wood Mackenzie. However, “under-investment, infrastructure decay, sanctions and loss of technical capacity will take years to rebuild even if political stability and foreign investment returns”, notes Riley.

The Guinness Global Energy Fund had returned a respectable 9% in sterling last year, before oil prices rose – comfortably ahead of the sector, though it had lagged badly over five and ten years. This explains why the fund had shrunk to £125 million, though it is now up to £240 million. Last year's performance was driven by the focus of companies on cash flow and returns on capital, says Riley. Integrated European majors, notably BP and Shell, have been good performers “as they tilted away from renewable energy to fossil fuels”. Canadian companies have also done well as the government U-turned towards fossil fuels.

At the start of the year, the Guinness Global Energy Fund portfolio was trading on a trailing price/earnings (p/e) ratio of 12.8, a 40% discount to global equities, with little prospect of growth in earnings and cash flow if prices remained flat. However, an $80-$90 Brent oil price will add 65% to earnings, says Riley. Even after recent share-price gains, that will bring the fund's p/e ratio back down to about 13 times, compared with a long-run average of 15. Rising earnings also enable firms to pay down debt while distributing higher dividends, making share buybacks and still funding more investment.

The crucial consequence of the Middle East crisis is that the world has been reminded of the risks of supply disruption. This is likely to result in significant investment in new production to reduce dependence on the Gulf, actively encouraged by governments. That is good news for oil and gas companies with the necessary capital and expertise. Professional investors, who neglected the sector for so long, will be looking for an opportunity to invest. So should retail investors.

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A global energy crisis is emerging, following a similar pattern to the Covid pandemic. Then, impending disaster could be seen approaching from a distance. In January 2020, the Chinese city of Wuhan was locked down. In early March, Italy followed suit. Two weeks later, Boris Johnson announced a nationwide lockdown in Britain.

Emerging Asia is already in the throes of an energy crisis. Sri Lanka and Bangladesh are rationing fuel. The Philippines has implemented a four-day work week for civil servants. Egypt has imposed a 9pm curfew for shops and restaurants. Could similar pain be heading for Britain?

For all the grumbling about more expensive petrol, daily life in Europe hasn't yet been much affected by the closure of the Strait of Hormuz, says The Economist. But the last tankers to leave the Persian Gulf before the war began have now reached their destinations. No more fuel is on the way. Strategic stockpiles are being drawn down. Even if Hormuz reopened today, a cumulative loss of about 5% of annual global oil output now looks baked in, a figure that could double if the strait remains closed. The last time oil demand fell by 10% was during the Covid-19 lockdowns of 2020.

How are markets reacting to the energy crisis?

Brent crude oil hit $115 a barrel on Wednesday, its highest level since the summer of 2022 and a 90% rise since the start of the year. While oil futures have risen, markets remain “strangely sanguine” given the huge scale of supply destruction, says Liam Denning on Bloomberg. Oil prices for 2027 delivery are up a modest 17% since the war began.

It could take years to undo the damage that has already been done to global inventories. And with “two blockades” in place and little progress on peace talks, it is still far from clear when the strait will reopen. A survey from the Federal Reserve Bank of Dallas reports that four-fifths of US oil executives now don't expect traffic in the strait to return to normal levels before August, with 40% thinking it won't happen until November or later.

Stock traders optimistically expect everything to be resolved soon, but energy experts and commodity traders are far more alarmed, says Robert Armstrong in the Financial Times. “Horror stories” about the prices paid to deliver diesel to Asia are rife. Those prices are sucking scarce global barrels away from European ports.

Uncertainty levels are through the roof – even the geopolitical “pointyheads” don't have a clue what the outcome will be from US-Iran negotiations. Energy traders, who usually profit from volatility, hate the uncertainty created by Donald Trump's Truth Social posts, which are impossible to predict and cause markets to swing wildly.

There is a growing “disconnect” between “buoyant” stock prices and a real economy suffering energy shocks, says an article by Edmond de Rothschild Asset Management. On a relative basis, the US and China look better placed to face the coming energy crisis than Europe or Japan. “Behind the facade of market rebounds, the “economic fundamentals” are slowly “deteriorating”. Investors “need to stay invested but without being led astray by illusions”.

How the energy crisis is affecting the Persian Gulf region

World markets have “lost their fairy godmother”, says Ambrose Evans-Pritchard in The Telegraph. The Gulf states boast vast sovereign-wealth funds – valued at $5 trillion – representing years of accumulated oil profits. Most of those funds have been invested in Western assets, keeping government borrowing costs low and “turbo-charging excesses in US private credit”. Yet with problems to solve closer to home, the region's monarchies are about to tap those rainy-day funds.

Signs of stress are apparent. The wealthy Emiratis have reportedly raised the topic of securing an “emergency dollar swap line” from US Treasury secretary Scott Bessent, to the “consternation” of those who believe in “America First”. Swap lines are a “backbone of the global dollar system”, says the Financial Times. They see central banks or finance ministries swapping currencies at times of financial stress, when demand for US dollars often surges. Swaps prevent financial panic from spreading and are reversed once the crisis passes.

Gulf states boast large foreign reserves and are unlikely to face liquidity stress. But swaps might help “avoid financial market disruption”, says Stephen Paduano of Oxford University. Gulf sovereign-wealth funds have ample stock and bond holdings, but selling those to raise quick cash “could cause a stock market rout” and stress the US Treasury market.

“Emirati officials haven't made a formal request for a swap line,” says The Wall Street Journal. Discussions are only “preliminary”. The idea may not be so much a request as an “implicit threat” to the global role of the US dollar. The US Treasury has been warned that if the Gulf runs short of dollars “it may be forced to use Chinese yuan” for oil sales instead.

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Charles Jillings, co-fund manager of Utilico Emerging Markets Trust, discusses the outlook for emerging markets and the long-term investment opportunities in infrastructure and utilities.

In this episode of MoneyWeek Talks, Andrew Van Sickle speaks to Charles about how emerging economies are dealing with Donald Trump's tariffs, the after-effects of the war in Iran, and why countries like Brazil and the Philippines are overlooked markets.

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick and Andrew Van Sickle are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

Subscribe to the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence.

What’s happening with UK energy prices?

Energy secretary Ed Miliband is set to approve the first major North Sea oil and gas project in almost ten years, says The Times. The licence to exploit the Jackdaw gas field, 150 miles east of Aberdeen, was granted under the previous Conservative government, but has been held up by legal wrangling.

Giving it the green light would not technically contravene Labour's ban on “new” drilling in the North Sea, but it would be a striking policy shift for Labour, and in particular for Miliband, a net-zero true believer.

Proponents say the energy shock caused by the Iran war has strengthened the case for drilling. Adura, the joint venture that owns the rights to the field, claims it could produce the equivalent of 6% of the UK's future gas supply.

Is that realistic?

Others are sceptical. Uplift, a lobby group, claims Jackdaw would have zero impact on our bills and do little to increase gas supply. Indeed, even if the UK extracted every last hydrocarbon from the North Sea, it “would not raise this country's long-term output of oil and gas by more than homeopathic amounts” and “would not move the needle on UK energy prices”, says Ambrose Evans-Pritchard in The Telegraph.

Oil is priced off the global market and the gas price would continue to track the international cost of liquefied natural gas – “unless we cut off our European inter-connectors, tore up our EU trade deal and retreated into energy autarky”.

Why are UK energy prices so high?

There are several reasons why UK energy prices are so high (we pay more for electricity than almost anywhere else in Europe). One is that, although the UK is getting good at producing renewable energy, it's terrible at scaling up its storage capacity. Despite improvements in battery technology, the UK's current capacity is negligible compared with the volume needed to affect electricity prices.

Another is geography and climate: while the price of solar power continues to plummet, wind power prices have plateaued, and the network costs of getting the power from the windy places (mostly northern and offshore) to the more populous ones are large. Green levies and other so-called “policy costs” make things worse, accounting for up to 11% of a typical bill for a dual-fuel household and 16% if it's electricity-only.

Another crucial factor is that we're a net importer of natural gas and highly vulnerable to external shocks. Moreover, our electricity prices are priced largely off the gas price, even though renewables now make up more than half the mix in terms of generating electricity.

Why is UK electricity priced off gas?

Because the UK – like almost all other developed, liberalised, economies – uses a “pay as clear” system of “marginal pricing” to match buyers with sellers so the market clears and overall demand is met by sufficient supply. In practice, that means that all power plants available to generate and sell electricity are continuously making “bids” to do so at a particular price. The bids are then arranged in a “merit order stack”, from the cheapest to the most expensive.

Because gas still makes up a big chunk of the mix, it is almost always the provider of the “marginal” unit of energy – the point at which the market clears and supply meets demand. One study found that in 2021, gas set the price of power 97% of the time, even though it generated only 37% of electricity. In France, where the market is dominated by nuclear, gas sets the price just 7% of the time.

Why not change the energy system?

We could, and there are various options. One is to move to a “pay as bid” model, where each power plant is paid the amount that it has bid to supply electricity, rather than the higher marginal price. But the risk there, says Simon Evans for Carbon Brief, is that all bidders (including cheap renewables) would seek to maximise their profit by bidding at the price they expect the market to clear, not at their own generation costs. As such, the system wouldn't lead to lower prices.

A second option would be to create two separate markets: a “green power pool” for renewables and another for conventional sources. This option was considered – and rejected as undeliverable – in the government's 2024 “review of electricity market arrangements”.

What other options are there for lowering UK energy prices?

A third, more radical, option for lowering UK energy prices would be to take gas out of the market completely. The sector would be managed as a strategic national reserve, receiving a regulated return for remaining open and available as a stand-by resource, while the rest of the market continues to use marginal pricing. It's doable, but would be politically very contentious.

The reality is that marginal pricing appears to be the “worst approach to clearing markets apart from all the others”, says Jon Ferris of consultancy LCP Delta. For the UK, where gas still sets the price, that leaves us stranded for now in a very expensive halfway house – bearing the capital costs of building a low-carbon system, while still paying the current fuel costs of the obsolescent fossil-fuel system.

What’s the solution to high UK energy prices?

In the absence of a new pricing mechanism for UK energy, some more pragmatism and less ideology would be a start, says The Economist. More than four-fifths of British homes still rely on gas for heating, far more than in the EU. So at some point, the commitment to hitting 95% clean electricity – renewables and nuclear – by 2030 is going to come unstuck.

In the long run, this is a sensible economic and geostrategic aim: the National Energy System Operator, which designs Britain's grid, projects that the country's energy-related costs (comprising transport, heating and electricity) could fall from 10% of GDP in 2025 to less than 6% by 2050 in a low-carbon world. We'd be much less vulnerable to external shocks. Yet even in 2050, the UK will still need gas as back-up. The government needs to recognise that and allow more North Sea exploration and drilling now. Even though it wouldn't bring down domestic prices, it would increase UK energy security and lend a fiscal hand, too.

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A few years back, Aliko Dangote, Africa's richest man and an ardent Arsenal FC fan, reluctantly abandoned his dream of buying the London club – saying he had no “excess liquidity” because he was channelling everything he had into his biggest project yet: the continent's largest oil refinery.

That act of self-discipline is now richly rewarding Dangote, says The Economist. Since the start of the war with Iran, his phone hasn't stopped ringing with offers for his gasoline, diesel and aviation fuel.

“People are ready to pay anything now,” he says. Aliko Dangote's $20 billion refinery complex, which spans “an area nearly half the size of Manhattan” outside Lagos in Nigeria, can process 650,000 barrels a day. It is by far the largest scheme owned by the Dangote Group, the cement-to-sugar conglomerate behind his estimated $28.5 billion fortune. But Dangote, 68, suggests it symbolises something more: seeing the plant as a clarion call for the continent to become more self-reliant. “If we Africans don't lead in the industrialisation of Africa, Africa will never industrialise.”

“No one should confuse the tycoon with an altruist” – Dangote's many critics argue he milks state-backed monopolies in several essential sectors, now including oil. Still, the refinery is “a macroeconomic feat as well as an industrial one”. Last year the International Monetary Fund estimated that, if run at full capacity, it would boost Nigeria's non-oil GDP by 1.5% between 2025 and 2026, and boost official dollar reserves by $5.5 billion annually. Double that, says Business Day Nigeria: Dangote has just announced plans to expand capacity to 1.4 million barrels per day and is also scaling up the group's fertiliser and polypropylene plants. The refinery has blown apart a bad trade for Nigeria, says Business Insider. For decades, it was forced to export its crude – and then spend billions importing refined fuel.

How Aliko Dangote built his billions

Trading runs in the family. Aliko Dangote's great-grandfather, as he told Time in 2014, was “a kola nut trader, and the richest man in West Africa at the time of his death”. His own father was a businessman and politician, though he was raised by his grandfather. “It's traditional in my culture for the grandparents to take the first grandchild and raise it. I had a lot of love, and it gave me a lot of confidence.” After studying business at Al-Azhar University in Cairo, he started trading himself in the 1970s – eventually gaining “exclusive import rights” for cement, sugar and salt, says The Economist. Generations of influence helped. At the turn of the century he started making cement, and Dangote Cement “became the concrete foundation of his fortune”. The move into oil refining promises to be just as transformative.

Aliko Dangote is still the only African among the world's 100 richest people, according to Forbes. He has appointed his three daughters – Fatima, Mariya and Halima – to head key operations across his group, while honing his contacts at events such as Davos – Cherie Blair is an independent director of the group's board. Mild-mannered and courteous in person, Aliko Dangote has a tendency to lecture other wealthy Nigerians on their responsibilities, says Business Insider, especially those seduced by luxury consumption.

“If you have money for a Rolls-Royce, you should go and put up an industry in your locality… or wherever you feel there is a need.” No wonder he puts backs up.

But Aliko Dangote has done Nigerians a real service, says Feyi Fawehinmi in the FT. Since coming online in 2024, his refinery has saved the country “dollars and dignity”. Fuel shortages have long been an “obsession” in Nigeria. But “when supply is reliable “both the economy and the national mood shift”. Dangote's great contribution has been “the quiet revolution of availability”.

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Prices of commodities flatlined between January 2024 and the start of 2026 – now they are rocketing. The S&P GSCI index of 24 major raw materials has surged 29% since 1 January. That reflects a heavy weighting towards energy, which accounts for more than half of the index's composition. Higher oil and gas costs will also feed through into agriculture prices, the index's second-biggest component. US wheat futures have risen 15%.

The Middle East isn't just a source of hydrocarbons, says The Economist: 22% of the world's traded urea (a fertiliser), one third of its helium and 45% of its sulphur (used as a plant nutrient) comes from the region. The Gulf is also a major source of petrochemicals required for everything from basic pharmaceuticals to glycol (a paint ingredient). With spring planting “imminent” in the northern hemisphere, a squeeze on fertiliser supply that lasts another few weeks risks “catastrophic” consequences for global harvests later this year.

Commodities rise sees industrial metals miss out

The commodities uplift has not carried over into metals, with the S&P GSCI Industrial Metals index flat since the start of the year. Aluminium prices have risen 8% since 1 January; the Middle East accounts for 9% of global production. But nickel has gone nowhere, while copper (down 4% this year) has been behaving like gold, suffering a pullback after a multi-year boom. The prospect of global stagflation doesn't bode well for the industrial demand that underpins metals markets.

Copper entered the year with “a dose of the metals fever” amid dire warnings that soaring demand for electricity will cause shortages, says Andy Home on Reuters. Yet while traders bet on copper shortages later this decade, current supplies are ample. In the US, Chicago Mercantile Exchange warehouse stocks have rocketed from 85,000 tons at the start of 2025 to 536,000 tons today (US stockpiling has been turbocharged by attempts to beat import tariffs). “The gap between speculators' great expectations” and the “current reality” of well-supplied warehouses “yawns ever wider”.

The structural metals story could yet come true, says Alan Livsey in the Financial Times. Sluggish prices between 2015 and 2022 prompted major global miners to cut spending on new mines by “at least a third” and focus on paying dividends instead. While investment started rising again in 2023, mines have very long lead times. The consequences of historic underinvestment will soon loom large. Real assets enjoy other attractions. They provide a hedge, both against bouts of inflation and a prolonged fall in the dollar, which presently appears somewhat overvalued. And at a time of AI-driven concentration risk, investors are eager to diversify into other themes. “Commodities tend to go through cycles,” says Evy Hambro of BlackRock. “We appear to be in the foothills of the next cycle.”

Why gold has lost its shine

Investors looking to gold for relief from the energy shock have been left disappointed. Gold has fallen 16% in dollar terms (and 15% in sterling) since hostilities began on 28 February. You would expect gold to do well at a time of war and inflationary pressure.

So why the pullback? Firstly, gold had already been on a record-breaking rally that saw it reach an all-time high in late January. Having rocketed 174% over the previous two years, the yellow metal entered the conflict looking overextended. Secondly, gold is strongly influenced by real interest rates (interest rates adjusted for inflation). While inflation looks poised to rise, so are interest rates, reducing gold’s appeal relative to competitors such as government bonds.

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The view that utility companies are a safe haven for cautious investors is out of date. Today's market is far more active and complex than it was even five years ago. New regulations and a strong push from government to improve national resilience are driving this shift.

While headlines dwell on short-term political disputes, the bigger story is that the utility sector is being rebuilt. The drivers of this trend include a massive surge in demand for electricity driven by the digital economy, a regulatory overhaul of the water sector and a new partnership between private capital and the state with a view to lowering risk.

Utility companies come in two main flavours

You can divide the utility companies into two distinct groups. First are the companies that own and operate the heavy assets. They run the water pipes, electricity wires and pylons that keep the country functioning. Second are the service providers. These focus on data, billing and the technology that links the grid to the customer. Each group presents a different investment case.

The UK is at the start of a major, long-term infrastructure cycle and the work ahead is vast. The challenges range from meeting the energy demands of AI to modernising water networks. Both sides of the utilities sector are evolving in response and the market is recognising the growth potential of businesses once seen as dull.

Britain is currently overhauling its industrial strategy and utility companies have moved from the sidelines to the very centre of national-growth policy. For decades, investors treated the stocks in this sector as a set of bond proxies. The stocks were bought for their steady dividends and low volatility, but little else. A series of strategic shifts, driven by government policy, has changed that view.

The grid is the UK economy's main bottleneck

The first major shift is a crisis of capacity in our power networks. As John Pettigrew, the former chief executive of National Grid, has pointed out, the grid is becoming the main bottleneck for the economy. In 2023, he stated that the country needs to build seven times as much infrastructure in the next few years as it has in the past 30.

The problem is that the physical grid was not designed for the modern world. Engineers originally built most of this network to move power from large coal plants in the north down to the south. It was designed to serve houses and light up streets on a cold winter night. It cannot process the sudden, massive surge of electricity needed for the giant data centres that power the modern economy. This has created a backlog of projects waiting to be connected to the grid.

In 2026, the backlog of demand for data centres hit 50GW across 140 different sites. To put that number in perspective, the peak demand for electricity for the entire British grid is roughly 45GW. This means one single industry is now asking for more power than the entire nation uses on its coldest winter night when everyone is indoors using electricity. Global technology giants such as Amazon, Microsoft and Google are driving this demand. They have reclassified the UK as a primary growth zone, but they can't get the power they need because the old wires are at their breaking point.

National Grid has a multibillion-pound plan to reinforce the system. This includes building new substations and using advanced low-loss conductors. These technologies let the grid carry significantly more power without needing to put up entirely new pylons everywhere. This is a high-return path for growing assets because it avoids many of the planning headaches that come with new construction.

To handle the surge in demand, the government and the new National Energy System Operator have officially scrapped the old first-come, first-served model for grid connections. That old system let speculative projects sit on capacity for years, which stopped better-prepared data centres from getting online.

The new so-called Gate 2 reforms now prioritise projects based on how ready they are and how well they fit the national-energy plan. If a project misses its milestones, the operator immediately cancels its connection offer.

This allows National Grid to move from fixing things as they break to investing ahead of time and it can now justify building infrastructure before a data centre is even finished. This shortens the gap between spending money and earning a return, which is a clear win for shareholders.

The era of underinvestment in the water sector is over

A second major shift is happening in the water sector. The industry is moving away from a period of intense public and political tension. This was caused by years of underinvestment, resulting in frequent leakage and sewage spills that polluted rivers. The sector was essentially focusing on the short-term health of the pipes.

Adding to the pressure is the rise of AI; data centres do not just need electricity, they also require millions of gallons of water for cooling, making water companies a vital part of the tech infrastructure.

The 2026 White Paper, “A New Vision for Water”, is about making national infrastructure more resilient. The sector is starting a £104 billion investment programme for the five-year stretch that began in April 2025. This is nearly double what the companies spent in the previous five-year cycle. A single, integrated body that looks at both the environment and public health has replaced the previous fragmented oversight of Ofwat and the Environment Agency. This new regulator cares more about long-term results.

The Water Industry National Environment Programme is the main force behind this massive spending. It puts £24 billion specifically toward cutting sewage spills and cleaning up rivers. The programme requires companies to install thousands of monitors that track water quality around the clock. This ends the days when companies could essentially mark their own homework.

For investors, the focus has shifted from simple efficiency to whether these companies can actually finish such a mountain of work. The new rules introduce 25-year delivery plans to give pension funds the certainty they need by matching investment timelines to the long life of water pipes and plants.

Utility companies have a state-backed safety net

The third, and perhaps most important, shift is the emergence of a new partnership model between the state and utility companies. Historically, massive infrastructure projects were often considered too risky for private investors; if a project failed or stalled, the financial loss could be ruinous. To solve this, Great British Energy and the National Wealth Fund are now fully operational, reducing risk across the sector for investors.

With its £27.8 billion capital base, the National Wealth Fund has attracted more than £100 billion in private investment by offering debt guarantees and taking the first loss on higher-risk projects.

Essentially, the state acts as a buffer and makes projects safer for pension funds to back. This approach is especially valuable for emerging technologies such as long-duration energy storage and small nuclear reactors. Great British Energy also acts as a co-developer. It takes on the early risk of projects failing due to such things as environmental assessments. This leaves listed utilities free to focus on the high-margin work of building and running the assets. Because the state is now a partner in building core infrastructure, the investment risk to the whole system has dropped.

This state-backed safety net is also showing up in the retail energy market. The Great British Energy Local Power Plan provides cash for community energy projects that help keep the local grid in balance. This move toward decentralisation takes the weight off the distribution networks that the big utilities own. It lets these companies hold off on expensive physical upgrades and instead use digital tools to manage demand for power.

As more households pick up smart meters and tariffs that change based on the time of day, the whole system should work better. The shift to a data-heavy grid is turning the retail business into a high-margin tech platform. This change is a big reason why the outlook for the sector is better than it has been in years.

Key themes and plays for investors

The investment case for the listed companies is no longer just simply waiting for a dividend. It is about identifying which can most effectively turn this massive wave of state-backed capital into growing assets. For investors, the current market offers opportunities in companies that are becoming essential to the digital and green future of the country.

National Grid (LSE: NG) is the most obvious name to benefit from modernisation of the grid. As the sole owner of the transmission network across England and Wales, it is the physical gatekeeper of the emerging AI revolution. Under the RIIO-T3 regulatory framework that begins in April this year, the company has secured a real allowed return on equity of 6.12%. This is a decent improvement on the past, reflecting a need to attract more investment as well as the higher cost of funding the great grid upgrade.

Morgan Stanley recently pointed out that National Grid is moving away from being a low-growth utility and becoming a premium infrastructure investment. It highlighted that the company now has an asset growth target of 10% per year – well above the rate of inflation – and is heading toward earnings growth of 6%-8%. The firm is spending billions on 17 major projects to reinforce the north-to-south power corridors – essential for bringing power from offshore wind farms to the data-centre hubs.

The regulatory environment now allows for anticipatory investment. This means the firm can build ahead of demand. Doing so reduces the risk of stranded assets and ensures a steady stream of regulated income. As the asset base grows, the earnings potential of the company increases in a way that was not possible under previous rules. This shift from a yield-based valuation to a growth-based one is a key theme.

SSE (LSE: SSE) is another clear winner that has rebranded itself as a clean-energy champion. The firm is currently halfway through its ambitious investment plan, which involves spending £18 billion on offshore wind and transmission links. What makes SSE particularly interesting is how it has used the new state-utility partnership to lower its risk.

By working with Great British Energy, it can offload the early construction risks that used to weigh on its balance sheet, allowing it to maintain a strong credit rating while still pursuing aggressive expansion.

The partnership with the National Wealth Fund is also providing SSE with first-loss guarantees on complex projects. This is a significant advantage because it protects SSE from the cost overruns that often plague large infrastructure projects, lowering the overall cost of borrowing and raising returns for shareholders.

One could argue that SSE should be viewed as a high-quality infrastructure asset rather than a riskier power generator. This new reality hasn't escaped market attention – the shares have risen by 60% in just the last six months.

The winners in water and retail

In the water sector, the winners will be those who can navigate the new £104bn investment cycle. Severn Trent (LSE: SVT) and United Utilities (LSE: UU) are now working within a regulatory framework that puts long-term resilience ahead of short-term savings. This creates the potential for a large expansion in their regulated capital value, which is the base used to calculate their profits.

Severn Trent has already shown strong revenue growth following the latest tariff reset. The company is using a modular design for its assets, which helps keep construction costs low and delivery speeds high. This operational efficiency is a key driver of value.

United Utilities is also performing well, with a focus on its multi-billion-pound programme to reduce storm-overflow spills. Both companies are likely to benefit from outperformance payments if they hit their new environmental targets.

These companies offer a rare combination of inflation-linked returns and the security of a state-mandated investment cycle. The move to 25-year delivery plans provides the long-term visibility that institutional investors crave.

Centrica (LSE: CNA) and Telecom Plus (LSE: TEP) represent the technology-based, consumer-facing end of the sector. These companies do not own the heavy wires or pipes, rather the data and relationship with customers.

Centrica has moved far beyond its origins as a gas supplier. It is now a leader in flexible energy services, using smart data to help businesses and homes use power when it is cheapest. This capital-light model allows for high margins and strong cash flow without the debt burdens seen elsewhere in the industry. The company has a strong balance sheet and has been returning a lot back to shareholders through buybacks and dividends. Its move to a service-based model exposes it more to the economic cycle, but also provides the possibility of decent returns.

Telecom Plus, better known to consumers as Utility Warehouse, uses a similar approach by bundling energy with other home services. Its ability to use smart-meter data to lower wholesale costs has contributed to its higher levels of growth over the years.

By helping customers balance their own energy needs, it reduces the overall strain on the grid. This creates a win-win situation where the company earns higher margins and the customer pays lower bills. The scalability of this digital model is a significant advantage in a world where physical infrastructure is expensive and slow to build.

The heavy infrastructure is expensive and slow to build. The heavy infrastructure companies that form the core of this sector were stuck in a bit of a rut for a long time.

Over the last year or so, however, a clearer lead from the regulators has really lit a fire under their share prices. Because of that, most of the easy money has already been made, with some share prices rising by more than 50% in just a few months.

Still, we now have long investment horizons thanks to government policy. Patient investors who are happy to sit on these shares for years should see good rewards for the level of risk they are taking on.

National Grid is right at the front of this modernisation. It has gone from being a slow utility to becoming a much faster infrastructure business. It is never going to be a high-speed tech stock.

Nevertheless, its better growth outlook, along with those reliable dividends, offers a level of security that makes it one of the lower-risk stocks on the FTSE. It remains a vital part of Britain's energy future. For investors who wish to build a diverse portfolio of long-term, high-quality businesses, National Grid has a lot going for it.

The two big water companies, Severn Trent and United Utilities, have their own specific hurdles and opportunities to deal with. Both are updating their systems to meet new standards for clean water and service. They are getting a direct boost from the massive building phase the country is going through right now.

For investors looking for income, these are high-quality assets. They offer returns linked to inflation and benefit from a regulatory set-up that is far more predictable than the mess we saw in the early 2020s. There has always been little to choose from between the two as they tend to perform very similarly.

At the other end of the sector, Centrica and Telecom Plus offer a different mix of risks and rewards. These businesses depend much more on how good the management is and how the wider economy is doing. They also have to fight harder for customers in the retail market. However, they don't have to own all the heavy kit themselves.

This capital-light approach has let them keep up very high returns for shareholders through both buybacks and dividends. Telecom Plus, in particular, has shown it can grow even when things get tough by bundling home services into one efficient package.

Forced evolution brings opportunity

The utilities sector is entering a period of forced evolution. By clearing the infrastructure bottlenecks and establishing a clear partnership with the state, the industry is transitioning from being a defensive shelter to becoming a central pillar of national growth. For the patient investor, these companies offer a rare blend of stability and compounding growth, underpinned by the structural demands of the 21st-century economy.

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There is an old story about a factory that grinds to a halt. Engineers spend days diagnosing the machinery. Eventually, a specialist is called. He walks the floor, listens, taps a single screw, and the plant roars back to life. His invoice reads: one screw tightened, £1. Knowing which screw, £9,999.

That is the investment problem of the moment. The fourth Industrial Revolution is generating enormous noise, almost all of it directed at software, platforms and AI. The golden screw, the thing that actually makes the whole machine run, is somewhere else. It is in the commodites, the materials layer.

The first Industrial Revolution was not won by James Watt. It was won by Matthew Boulton, who provided the capital and the manufacturing base, and by the Darby family, whose coke-fired furnace at Coalbrookdale made the steam engine scalable. The fortunes of the 18th and 19th centuries went to those who owned the feedstock, controlled the refining, and waited for the world to need what they had: Sheffield steel, Coalbrookdale iron, town gas infrastructure, canals. The inventors were celebrated; the owners of the enabling layer were the ones who compounded.

Commodities are where the scarcity lies

We are in the same moment now. The software layer of the fourth Industrial Revolution is commoditising rapidly. The hardware layer, – chips, data centres and power systems – is capital-intensive but replicable. The materials layer is where scarcity lives, scarcity is where pricing power lives, and pricing power is everything in a prolonged stagflationary environment. The golden screws we are focusing on for 2026 are uranium, tungsten, helium and, unfashionably, coal.

Uranium is the foundational fuel of the AI age. Data centres require baseload power that intermittent renewables cannot reliably provide. The global reactor-building programme is accelerating across the US, UK, France, Japan, South Korea, Poland and the UAE. The critical bottleneck is not mining; it is conversion and enrichment.

The Western world's dependence on Russian enrichment capacity is a strategic liability now being addressed at enormous cost, and the opportunity lies across the full value chain – conversion, enrichment, fuel fabrication, and the qualification of non-Russian fuel for Soviet-era reactors across Eastern Europe. The spot price cycle is still early. Term contracts between utilities and producers have only partially repriced.

Why tungsten is today's Sheffield steel

Tungsten has no substitute in its primary applications: cutting tools, armaments, superalloys and semiconductor manufacturing equipment. China controls 80% of global supply and has shown both the willingness and the capability to weaponise that through export restrictions. Western primary production is negligible. Demand from the defence sector is structural and inelastic. Nato's rearmament drives a decade-long demand cycle.

The refining bottleneck, the production of ammonium paratungstate (APT) – the main industrial intermediate and global benchmark for pricing tungsten – is where the real opportunity sits. Western APT capacity is close to zero. Sheffield in the 1780s controlled the world's precision metalworking because it controlled the refining of specialist steels. Tungsten is today's Sheffield steel.

Helium is irreplaceable, non-renewable on any practical timescale, and priced well below its strategic importance. It is essential for MRI machines, semiconductor lithography, rocket propulsion and as a quantum computing coolant. The US government reserve that backstopped global supply for decades is being wound down. Disruption to Russian supplies has already tightened the market. The value lies not in extraction but in the liquefaction and purification infrastructure, the golden screw of the helium value chain, which is nascent, capital-intensive and extremely difficult to replicate quickly.

Coal, particularly metallurgical coal, is the most stigmatised asset in the investment universe and, for that reason, is one of the most interesting. Green steel is real but distant. Blast-furnace steel remains dominant for structural and infrastructure applications through to 2040 at minimum.

Divestment driven by environmental and social governance (ESG) has concentrated ownership among private operators with longer time horizons and lower capital costs, starving the asset class of new supply while demand from India, Southeast Asia and Africa continues to grow. The British parallel is instructive: in the 1780s, coal was the despised fuel of the poor. Within 40 years, it was the foundation of the empire.

The macro context amplifies all of this. We are in a regime where rates stay higher for longer, while the combination of fiscal excess and supply constraints is structurally inflationary, regardless of central banks' intent.

Passive index exposure will not protect capital in this environment. Genuine conviction, expressed with concentration in businesses with pricing power, hard assets or irreplaceable niches, is the correct posture. Private-credit stress, already visible, will accelerate as liquidity mismatches surface. The Yale endowment model, built for a falling-rate, liquidity-abundant world, is not fit for purpose in this one.

Investors who understands this are not making a contrarian bet. They are making the same bet that built the great fortunes of the 18th and 19th centuries – own the feedstock, control the refining, and wait for the world to need what you have.

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The war in the Middle East has created a global oil and gas supply shock, similar in scale to the crisis unleashed in 2022 when Russia invaded Ukraine and cut off Europe's gas supply.

In some regards, this conflict threatens to have an even bigger impact on global hydrocarbon markets if it persists. As countries turned away from Russian gas supply in the months and years after the beginning of the Ukraine conflict, buyers turned to Middle Eastern suppliers of liquefied natural gas (LNG) to replace Russian imports.

At the beginning of the year, LNG shipments from Qatar and the United Arab Emirates (UAE) accounted for about 20% of global LNG supply, but these supplies have now been cut out of the market due to the de facto closure of the Strait of Hormuz.

As supply has been cut off, buyers have rushed to secure new cargoes, paying huge premiums. Building facilities to convert natural gas into the super-cooled liquid product isn't for the faint of heart. These plants can cost around $10 billion for a mid-sized facility, although most producers build as large as possible to achieve the best economies of scale.

As a result, price tags of $50 billion-plus are common. The scale of these projects means that most output is sold on long-term agreements before production even begins, so backers know they have a return on investment before committing billions.

About 70% of LNG output globally is sold on long-term contracts, making it hard for buyers who have now been forced to look elsewhere to secure the energy they need. Prices have spiralled as a result. The price of natural gas in Europe increased 70% in a week after the conflict began.

Venture Global is the fastest gun in the west

Enter Venture Global (NYSE: VG). Founded by former banker Mike Sabel and lawyer Bob Pender just over a decade ago, the company has grown from nothing into one of the largest LNG producers in the US, which itself has surpassed Australia and Qatar as the biggest exporter of the fuel.

Venture Global's founders (who still own around half of the company) looked at the cost of building traditional LNG facilities and set out to take a different approach. They modified the design to focus on smaller modular units, which allows factories to fabricate pieces off-site.

The industry was sceptical, but Venture soon proved its doubters wrong. Its inaugural project, Calcasieu Pass, went from a final investment decision in 2019 to exporting fuel in just 29 months, making it one of the fastest LNG plants ever constructed (although, like most LNG projects, it busted its budget to the tune of $1 billion).

Venture plans to become the second-largest LNG producer in the US, behind only peer Cheniere Energy, which produces around 60 million tonnes per annum (Venture has plans to produce a little over half of that). A total of 90% of this is sold on long-term contracts. The total global supply forecast is expected to rise between 460 and 484 million tonnes in 2026 due to new capacity from the US and Qatar.

Unlike Cheniere, Venture has only fixed 70% of its sales. That leaves 30% to sell at the spot market, which could produce a windfall for the business. Indeed, management has said that a $1.00/MMBtu change in fixed liquefaction fees – the spread between the cost of purchasing natural gas in the US and selling LNG abroad – will impact full-year 2026 adjusted Ebitda by $575 million-$625 million.

The company has said it expects full-year Ebitda of $5.2 billion-$5.8 billion, assuming a fixed liquefaction fee range of $5.00- $6.00/ MMBtu. Following the recent turbulence in the market, the spread between US Henry Hub (the US natural-gas benchmark) and European TTF/Asian JKM benchmarks has jumped to as much as $15/MMBtu.

Venture's decision to leave 30% of production available for sale on the spot market could prove profitable this year, but the market has not factored this windfall into the company's valuation. Based on estimates compiled by analysts at investment bank UBS, the stock is trading at a forward, 2026 price-to-earnings (p/e) multiple of just 9.6.

These figures were compiled alongside the company's results for the fourth quarter of 2025, released at the end of February, before the recent conflict began. Based on the company's fourth-quarter outlook and long-term output growth projections, UBS had pencilled in revenue rising from $11 billion in 2026 to nearly $19 billion by 2029, with net income roughly doubling over the same period. All of these numbers are out of date, but they provide a good indication of Venture's estimated growth in a “normal” market.

One of the reasons Venture is so cheap, and has always been since its IPO in early 2025, is related to lawsuits hanging over the firm. In 2022, after the Ukraine war sent gas prices skyrocketing globally, Venture rerouted some of the cargoes destined for its customers with long-term supply agreements, such as Shell, BP and Repsol, to other customers willing to pay higher prices on the spot market. Those traders left out of pocket sued, claiming as much as $6 billion. Over the past few months, after several years of arbitration, the clouds have started to clear. While Venture lost a case with BP, it has won cases against Shell and Repsol, removing a lot of uncertainty.

Don't fear the debt

Another factor that appears to be acting as an overhang on the stock is the company's debt. At the end of 2025, it had a net debt-to-Ebitda ratio of five, leaving little room for manoeuvre. However, with a cash injection expected this year, thanks to the impact of higher natural gas spreads, the company has the opportunity to make a material dent in these liabilities. The stock looks like a promising play on the brewing energy crisis.

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What's happened in the war on Iran?

The US-Israeli war on Iran, and Iran's military response – and the de facto closure of the critical Strait of Hormuz chokepoint – have shaken financial markets across the world. The war has sent oil and gas prices soaring and stocks falling (unless you're a big oil company; Shell hit record highs) and shaken up expectations of future growth (down), inflation (up) and interest rates (up). In the UK, consumers saw fuel prices jump and mortgage lenders scrambling to pull fixed-rate offers, while wholesale gas prices surged by two-thirds – soon to feed through into higher domestic bills. Even if the conflict remains relatively contained, it is already bad news for the global economy and will affect different regions in different ways, with net energy importers (such as the UK and Europe, and much of Asia) hit worse than net exporters (such as the US).

Why is the Strait of Hormuz so important?

The Persian Gulf and its immediately adjoining lands contain the world's greatest abundance of hydrocarbons and four of the world's five biggest oil fields (in Saudi Arabia, Kuwait and Iran) ship their product out through this narrow stretch of water. According to trade analysis firm Kpler, 31% of crude oil passed through Hormuz last year, along with 34% of global fertiliser supply and 32% of methanol, for example. The Strait's closure caused wild gyrations in the oil price this week. There were double-digit surges and falls according to events and to the latest capricious musing from the US president about his take on the war.

What about gas?

Arguably of even more pressing interest to the UK is the fact that 24% of natural-gas liquids and 19% of liquefied natural gas (LNG) also passes through the strait. Britain is at the start of a historic shift from reliance on domestic and Norwegian gas to far greater imports of Qatari gas (that is, from within the Persian Gulf, projected to make up a bigger chunk of the mix than North Sea gas by 2035). Prices of petrol and diesel have nudged up at the pumps, but wholesale gas prices are up around 60%, and will soon be feeding through into household bills and business costs. Nor is it just hydrocarbons and related products, says Neil Shearing on Capital Economics. Crises such as this have a habit of revealing chokepoints that were previously hidden. Qatar produces 40% of the world's helium, for example, crucial to the production of semiconductors.

Which economy will be worst affected?

The Middle East itself will be worst hit economically, as well as in lives lost and communities destroyed. During the 12-day war last summer, Israel's economy contracted by around 1% in the second quarter. If the present conflict is short-lived, a fall in output of a similar order of magnitude would seem plausible for both Israel and the Gulf economies. Iran itself might expect a fall in GDP of 10%. Otherwise, the region most exposed is the world's biggest growth engine, Asia. The Gulf supplies 40%-80% of the seaborne crude imports of China, India, Japan and South Korea, notes The Economist. It also accounts for nearly a third of China's LNG imports, more than half of India's and even more for some smaller Asian countries. Last year, 87% of the crude and 86% of the LNG passing through the Strait of Hormuz went to Asia, making any prolonged closure a grave threat to the region.

Will global GDP fall due to the war on Iran?

Yes, but unless the conflict spirals into a wider regional war in which oil supplies are severely disrupted for a prolonged period, then most forecasts cluster around a moderate global slowdown (of less than 1% of global GDP) rather than a catastrophic collapse. But the situation is extremely hard to predict. In the event of (say) a months-long closure of the Strait of Hormuz, major damage to Gulf oil infrastructure and oil prices rising towards $150 – unlikely, but not impossible – analysts suggest a knock to global GDP of up to 3%. While oil-sector experts are panicking, macroeconomists remain relatively sanguine, says Paul Krugman on Substack.

Partly that's because the US and other major economies have changed greatly since the 1970s. “They have become much less dependent on oil, and they are probably much less prone to experiencing inflationary spirals in the aftermath of an oil-price shock.”

How long might the war on Iran last?

“My bet: longer than you would wish,” says Rana Faroohar in the Financial Times. While Donald Trump has reason to want a quick end to the conflict, given the lack of clear objectives and the political damage from rising petrol prices, the Iranian regime has “arguably much to gain by prolonging the pain with drone strikes and attacks on neighbours in the Gulf. These would further disrupt energy markets, driving inflation higher across the world”. As analyst Luke Gromen put it in a recent newsletter, “Iran does not have to defeat the US military; it just has to defeat the US Treasury market”.

What should we expect next?

As the experience of the Ukraine war showed us, “inflation is not a single punch”: it hits first in fuel, then in food and other consumer sectors. Meanwhile, China, easily the largest purchaser of Iranian oil, may yet “leverage its own geo-economic advantage of having purchased ports all over the world” and of “controlling most of the ships on the planet”. Higher shipping costs spell more inflationary pain. And potential bond-market weakness is made worse by more government and corporate bonds being held by short-term, price-sensitive investors than in the past. All this makes it easy to imagine a rapidly unfolding US and global markets crisis. If the longer-term impact of Trump's foreign adventures is to “push up bond yields, inflation (which will only be partially mitigated by America's own domestic energy supply) and US deficits and ultimately trigger a big Treasury sell-off, the US and global economy will suffer mightily. I suspect, sadly, that this war and this market story will be with us for some time”.

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Where are the safe-haven assets in a crisis? The answer has rarely been murkier. Gold is the usual place to wait out market shocks, but it has struggled for direction since US-Israeli strikes began on Iran on 28 February.

Gold's problem is that it had already risen 20% this year, leaving it “overextended” heading into the conflict, says James Mackintosh in The Wall Street Journal. That made it “an obvious asset to sell” for traders looking to raise quick cash.

“It's hard to overstate just how unusual” trading has been during this war. When stocks fall, gold and bonds usually rise. This time all three assets have fallen, a historical rarity. Where else to hide? “Defensive” stocks (think utilities and consumer staples) usually outperform at times of market stress, says Niket Nishant for Reuters.

Not this time. European consumer staples fell 4.5% last week, worse than the 3% drop on the wider Stoxx 600 index. Traditional safe-haven currencies haven't fared any better. The Swiss franc and the Japanese yen both sold off as bombs dropped on Tehran.

So far, the only traditional safe-haven asset to have done its job is the US dollar, up nearly 2% against a basket of other currencies over the past month. That reflects the fact that as an energy-exporter the US is less exposed to oil shocks, but even this comes with an asterisk. Investors are loading up on “short-term dollar cash” but want nothing to do with long-term dollar assets such as US Treasury bonds, which also slid.

Gilts – traditional safe-haven assets – have been clobbered

UK gilts “suffered their worst week” since the 2022 pension fund debacle, says the Financial Times. Two-year German bonds had their worst week since 2023. That reflects two risks. Firstly, that higher energy costs will raise inflation and delay interest-rate cuts. Pricing shows that traders now put only a 50-50 chance on one Bank of England quarter-point rate cut before the end of the year, compared with the two cuts expected a few weeks ago.

Secondly, concern that a serious energy shock could pressure the Treasury to spend “billions of pounds in new support measures”. While all bonds have sold off, gilts have recently been underperforming French, German and US government paper, partly because the UK is especially dependent on imported energy. When investors took fright in March 2020, they thronged into US Treasuries (and other sovereign bonds) to wait out Covid, says Matt Zeigler in Panoptica Money.

But since then, the hierarchy of “safety assets” has been “fundamentally reordered”. The decisive event was the removal of key Russian banks from the SWIFT banking system in 2022. Holders of “surplus capital” in Asia and the Gulf realised that what “happened to Russia could happen to them”. They are now choosing to forego dollar-denominated assets such as Treasuries when choosing where to stash their wealth.

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The price of heating oil has risen sharply following the US and Israel’s strikes on Iran, meaning many homeowners face the prospect of much higher heating bills.

An estimated 1.7 million UK households, typically in rural areas, use heating oil to warm their homes. The price has surged by more than 113% in recent weeks, leaping from around 60p per litre on 28 February to more than £1.28 per litre on 18 March.

Heating oil is manufactured by processing crude oil, meaning the price is tied to the price of oil – much in the same way that the price of petrol or diesel is.

The majority of households in the UK get their energy and gas from the mains, with millions of people protected by the Ofgem energy price cap. This is set quarterly. The next price cap, in place from April to the end of June, had been confirmed prior to the conflict in the Middle East, meaning energy prices will fall by around 7% for most UK households for the second quarter of the year.

However, as those who use heating oil do not get their fuel from the mains, they will not enjoy the same degree of protection and are particularly vulnerable to market forces during an economic shock.

On Monday, the government confirmed it would step in and offer help to some households that are struggling to keep up with the increased prices, unveiling over £50 million in support.

Chancellor Rachel Reeves said:  “Heating oil prices have spiked sharply, and I know that for families in rural communities that is a real and urgent problem. 

 "That's why we're putting over £50 million of support to help the people who need it most, including funding for the Northern Ireland Executive to deliver support in Northern Ireland where this issue hits hardest.” 

Why are heating oil prices increasing?

When oil prices rise or fall, the price of heating oil soon follows suit.

At the end of February, the US and Israel’s strikes on Iran led to an escalation of conflict in the Middle East, where much of the world’s oil supply is sourced, resulting in large disruption to global oil supply lines.

War in the region makes transporting oil much riskier, as attacks from either side could target ships. Ships carrying oil are not passing through the Strait of Hormuz, through which around 20% of the world’s oil is transported, as the strait is just off the coast of Iran.

This has meant that the supply of crude oil has taken a huge hit and become much more constrained. However, demand for oil has remained the same, meaning that, due to the laws of supply and demand, prices for oil and its derivatives have increased sharply.

The impact of the war will not just be felt in the energy market. Experts have warned that hikes to energy prices may lead to increased inflation, which could lead the Bank of England to pause future interest rate cuts.

Will the government step in to help households?

Households are set to benefit from an over £50 million targeted support package to help with the soaring cost of heating oil, the government confirmed on 16 March.

The scheme is designed to help households who have had no choice but to top up their heating oil tanks during this time of heightened prices to maintain their heating and hot water.

The funds will be distributed through local authorities via the Crisis and Resilience Fund, starting from 1 April, with the scheme targeting areas with higher rates of heating oil usage.

The new scheme will replace the existing Household Support Fund, which will run until 31 March.

Households who are able to demonstrate hardship will be able to benefit from the extra funding by contacting their local authority.

The government also announced it will impose greater regulation on the heating oil market, which it says does not have the same consumer protections as the mains energy market.

Firms that supply energy to households through the mains are regulated by Ofgem, but there is no such protection for those reliant on heating oil.

Moving forward, the government says it intends to do more to protect households reliant on heating oil, including agreeing a stronger code of practice with the industry, and exploring the creation of a new ombudsman or regulator.

Ministers have also said the government will not allow price gouging, and asked the Competition and Markets Authority (CMA) to gather evidence on whether customers are being treated fairly in current market conditions.

If any evidence emerges that customers have been exploited, the government will take action. Prime minister Keir Starmer said: “I will not tolerate companies trying to exploit this crisis. If the companies have broken the law, there will be legal action.”

What other support is available if you can’t afford to buy heating oil?

Alongside the new measures, there are some other forms of support if you are struggling to afford to warm your home after the hike in heating oil prices.

If you can’t afford to buy fuel – or may not be able to in the near future – and can prove it, you may be able to get some help through Citizens Advice.

Support may be available through your local council, as some offer local grants or schemes for people who are reliant on heating oil – this is the initiative that the government’s new “Crisis and Resilience Fund” will replace.

As the new fund will only launch on 1 April, it may be worth checking to see if you are eligible for already-existing support through your local authority.

Meanwhile, the UK and Ireland Fuel Distributors Association (UKIFDA) says if your tank is running low, the best approach currently is to order your fuel as normal, but they add that if you are able to delay purchasing you may consider waiting to see if prices return to normal soon.

More broadly, it is good practice to shop around for your heating oil to make sure you are getting the best deal. Citizens Advice says you should try to get at least three quotes from different suppliers so you can find the best option.

It is also normally more expensive to get an urgent delivery of oil, so it is a good idea to plan your delivery well in advance. You may also get a better deal if you get one large delivery rather than multiple smaller deliveries.

If you are over 75, you should be getting priority deliveries if your supplier is a member of UKIFDA. If you don’t think this is the case, you should check with your supplier that you are on the “Cold Weather Priority Initiative”.

When will heating oil prices go down?

Disruption to the supply of oil, which heating oil is derived from, is the main driver to the price rises we are currently seeing.

That, paired with the fact there is no central regulator that determines prices of heating oil, means households using the fuel are particularly vulnerable to market forces.

To add more complexity, kerosene, which is the chemical most commonly used as heating oil in the UK, is also used as aeroplane fuel, meaning the aviation industry has strong price-setting power over the heating oil market.

Because the oil market is so volatile at the minute, and there is no price cap set in advance, it is difficult to predict where the price of heating oil will go in the future.

This being said, one way to get a rough idea of where the price of heating oil may go in the future is by looking at where the wider oil market will go.

Where prices go next will largely depend on how long the Iran war will go on for, and how safely oil can be transported through the Middle East, but most forecasts expect prices to remain higher than before the conflict for the remainder of 2026.

One key factor for this is that traffic through the Strait of Hormuz is expected to be heavily disrupted for some time, pushing oil prices up.

Economists at the bank ING on 16 March suggested this disruption will keep oil prices high for the rest of the year.

Their forecast is based on the assumption that intensive combat will end by the end of March but will be followed by lower intensity strikes that linger on for several months.

Because of this, they expect 100% disruption in the Strait until the end of March, then 50% in April, 25% in May, 10% in June, and negligible disruption thereafter.

Disruption of this scale would bring the average price of a barrel of oil to around $91 in the second quarter of 2026, $85 in Q3, and $77 in Q4.

If ING are correct, increases in the price of oil to this scale would be seen in the heating oil market, keeping prices higher than they were before the conflict until at least the end of the year.

Bear in mind that making accurate predictions about the price of oil is incredibly difficult at the moment due to the volatility of the situation, so take this forecast with a grain of salt.

I have been bullish on bitcoin and gold for many years and continue to be. I created the Bold index, which combines the two on a risk-weighted basis.

Bitcoin is on the floor, and the bulls are few, whereas gold is riding high and bulls are plentiful. What does the contrarian investor do?

I pair them because they are the world’s two most liquid alternative assets. Both have limited supply and share the notion that the world is eternally printing money, and it stands to reason that scarce assets will perform over time.

They are both neutral assets – they are accepted around the world.

They are also both rebel assets.

Bitcoin came from the grass roots of the computing world, and the authorities cannot control it.

Gold is also a rebel asset, because it holds governments to account.

If the gold price is going up too fast in a currency, it means capital is leaving the system.

I say that despite the central banks investing in gold. Let us be clear that it is not the G7 buying gold. It is the non-OECD states that are trying to diversify their reserves away from G7 bonds.

In the physical sense, bitcoin and gold have little in common, because bitcoin is not physical, it is virtual. At least, that is the “boomer” view.

Young people are much more comfortable with the idea of digital property, and the future is whatever they will make it to be.

Indeed, it comes with many advantages, such as the ability to transact instantaneously, securely and seamlessly across borders. It’s not just bitcoin, they say, this is the future of the financial system.

After bitcoin comes Ethereum, which underpins the $310 billion stablecoin market – much of which uses its network.

Stablecoins allow you to transact digital cash without using a bank.

A future without banks collecting fees from the payment system? Absolutely. Ethereum also enables transactions in pretty much anything and could be the basis of future stock and bond markets. Its operating system has been upgraded yet again, and it can deliver scale at low cost.

Bitcoin and gold: what’s the sentiment?

It’s all very exciting, but then again, so is technology. Bitcoin is, in some ways a tech stock and has always been correlated with the tech sector. Prices have been tumbling in tech, and it should come as no surprise that bitcoin has followed.

Fear drives more fear, and a falling price is always glee for the permabears. The bears point to the four-year cycle, which is currently in the dip phase. But tech is also in the dip phase, and does that have a four-year cycle? If there is a cycle, this one started early.

There is also the threat of quantum computing, which will have enough computing power to break the early bitcoins “mined” (released electronically into circulation) in 2009 and 2010.

It is possible that this could happen in the coming decade, but such powerful computers will surely be in the hands of tech companies before bad actors, and in any case, they will have other priorities should that come about.

In the meantime, all bitcoin needs to do is lengthen the private keys (passwords) with a network upgrade, and that will keep even these powerful computers at bay. The threat of quantum is overstated, but if people are worried about it, the price will feel it.

The miners operate at a speed 1 ZH/s (zetta hash per second). That is 1 followed by 21 zeros. That is a vast amount of computing power that needs to be broken. Still worried about quantum?

While the bear stories are well known for bitcoin, what are they for gold? There aren’t any, which is why contrarians should be wondering when the top is coming. The bulls say gold can do no wrong, as it is driven by infinite buying from central banks, who are prompted by geopolitical and macroeconomic fear, which is only rising. I agree, the world is unstable in parts, but nothing goes on forever.

I created Bold because these assets have similar long-term goals, exhibit low correlation, and are a natural pairing. That means they are both monetary assets, and when one is going up, the other is often going down. That is perfect for diversification.

Consider that you could have two assets, and they moved together. Alternatively, you could hold two assets that acted independently. The latter choice means you will have a less stressful life, and if you took the time to rebalance them when the prices had moved apart, you’d make even higher returns.

That is what Bold does with bitcoin and gold. Each month, we calculate their risk weights, which are driven by the past year’s volatility. The less volatile asset, gold, gets a higher weight. Then, at the end of each month, they are rebalanced, returning the weaker asset to its prescribed weight. By repeatedly buying low and selling high, good things happen.

Bitcoin is a globally recognised, highly liquid alternative asset with a unique position in the world of digital assets.

Following the Financial Conduct Authority’s policy shift last year, Bold is available to UK investors in the form of an exchange-traded product (ETP): my 21Shares Bitcoin Gold ETP (LSE: BOLD).

Today, bitcoin is more oversold relative to gold than at any point in its history. For those looking to bank some gold gains and diversify, Bold offers an intelligent solution.

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.

Investing in mining stocks is one of many approaches to boost your portfolio’s exposure to gold and other precious and industrial metals.

Shares in miners – companies that dig commodities like gold, silver or rare earth materials out of the ground – are becoming increasingly popular investments. FTSE 100 mining giants Glencore (LON:GLEN) and Fresnillo (LON:FRES) were the second and third most popular stocks among Interactive Investor’s users during January, coinciding with an eye-catching month for the price of gold and silver.

There are three ways of tapping into changes in commodity prices.

You can buy the physical commodity (such as a gold bar) or a physically-backed product like an exchange-traded commodity (ETC, which is similar to an exchange-traded fund or ETF). This approach gives you direct exposure to changes in commodity prices.

Or you can invest in futures contracts. These rise in value when markets expect commodity prices to rise in future. But they are time-limited, and rolling over these contracts beyond their term (usually 3-12 months) incurs additional costs.

The third approach is to buy shares in mining companies. While these come with their own risks, they often lead to greater returns than you’d get simply by investing in the physical commodity.

“A gold bar will perform like the price of gold,” says Evy Hambro, portfolio manager at BlackRock World Mining Trust (LON:BRWM). “Whereas with gold [mining] companies, you’ve got a bit more volatility, but you’ve got the chance of fantastic returns through dividends, M&A, exploration success and production growth.”

How does investing in mining stocks work?

Mining stocks are shares in the businesses that take commodities out of the ground.

Very simply, the profit a mining company makes is the value of the commodity they sell minus the cost of producing it. Owning their shares entitles you to some of those profits.

Mining stocks come with risks both positive and negative compared to physical commodities, says Hambro. “On the negative side, you could have an operational issue. The mine could flood, or there could be strikes,” he says. There is also the risk that their operating costs could increase because of price rises in their inputs, such as a spike in the oil price. And while physical gold just sits there getting more or less valuable as the price changes, a mining company’s performance is subject to the decision-making skill of its management team, which can vary.

But mining stocks could benefit from all sorts of tailwinds; a mine’s life could be extended by new discoveries, or an acquisition by a competitor could suddenly boost the share price. And unlike physical gold (or silver, copper, or any other commodity), mining stocks can and do pay income in the form of dividends.

How do commodity prices affect mining stocks?

Rising commodity prices can dramatically increase the profits that mining companies can make, assuming their underlying costs stay relatively constant.

On 5 February, Barrick Mining (NYSE:B), one of the world’s largest gold mining companies, announced a 79% increase in adjusted earnings per share to $1.04 in Q4 2025. Management increased its quarterly dividend by more than 140% over the previous quarter.

In the 12 months to 11 February, Barrick’s share price increased by 210%. Shares in Fresnillo increased 390% over the same period; but the spot price of physical gold gained a relatively modest 75% (silver, which Fresnillo also mines lots of, gained 162%).

This is a roundabout way of saying that mining stocks are more volatile (and as such, riskier) investments than physical commodities, but the additional risk can be compensated by far greater rewards when things go well.

Can commodity prices keep rising?

Mining stocks have benefitted from a dramatic rise in precious and industrial metals prices over the last year. As ever within investing, this prompts concerns over whether prices can continue to rise.

Hambro believes that the volatility seen in precious metals prices through late January and early February 2026 reflects a pattern of metals prices stabilising at a higher level following a period of rapid gains.

“[Metals prices] have gone up a lot, and some people think they might come down… there is caution about such a big rise,” he said. “People might want to take some profits.

“But as time goes on, and the prices don’t retreat, people become more comfortable with that price range. They will start to reflect that price range in their assumptions.” That eventually leads to further buying of metals and related assets, as buyers start to move back into the market.

What are mining royalties?

One interesting aspect of mining stocks compared to other equities is their potential to return capital through royalties, rather than dividends.

Dividends are paid out of equity, which is accumulated through profits – that is, at the bottom of the balance sheet. But royalties are payments made as a percentage of a mining company’s top line.

Accessing mining royalties usually requires a substantial investment into a mining company at the start of its project. For that reason, they are fairly inaccessible for most retail investors, but they entitle the investor to a percentage of sales from the mine for the duration of its operations.

This offers two main advantages: firstly, you’re paid out of sales, not profits. If the miner’s costs go up, you still get paid the same percentage of sales – as opposed to equity and dividends, which only come about after all operating expenses and taxes have been paid.

Secondly, if the life of the mine is extended, the length of time that you will receive royalty payments is increased, without any extra cost.

While it isn’t straightforward for most individual investors to access royalties, some investment trusts, like BlackRock World Mining Trust, own royalties contracts.

How to invest in mining stocks

The most basic way to invest in mining stocks is to buy the shares directly, which you’ll be able to do through most brokers. But because of the specific risks involved in mining stocks compared to physical commodities, it can make sense to diversify your exposure rather than putting your entire commodities allocation into a particular miner.

There are some funds that are focused on mining stocks, such as SVS Baker Steel Gold and Precious Metals Fund or Jupiter Gold and Silver Fund.

There are countless ETFs focused on mining stocks, including the WisdomTree Strategic Metals and Rare Earths Miners UCITS ETF (LON:WREE), which holds companies involved in producing the rare earths and other key materials used in the energy transition; the HANetf ICAV Sprott Copper Miners ESG Screened UCITS ETF (LON:COPP), which primarily holds copper mining stocks; or L&G Gold Mining UCITS ETF (LON:AUCP) which focuses on gold miners.

Or, besides BlackRock World Mining, there are investment trusts such as Golden Prospect Precious Metals (LON:GPM) and CQS Natural Resources (LON:CYN); both have the same management, but Golden Prospect focuses primarily on precious metals miners while CQS Natural Resources is more diversified across both precious and industrial metals (and includes some exposure to non-mined commodities like oil and gas).

Do you plan to use gold to help to fund your golden years? If not, you may want to reconsider.

With the gold price gaining 65% in 2025 and 7.6% in 2026 through to 2 February (despite a recent pullback) it is clear that gold has a role to play in investors’ portfolios. And one expert thinks that also applies to pensions.

“Gold’s unique characteristics, including its scarcity, liquidity and long-standing role as a store of value, all make a strong case for its inclusion in pension portfolios as markets become more volatile and traditional protections weaken,” said Maike Currie, vice president of personal finance at PensionBee.

So if you like to manage your pension actively, perhaps through a self-invested personal pension (Sipp), what are the main benefits that gold could add to your pension pot? And how much of your pension should you allocate to gold?

Gold could protect your pension through diversification

The key advantage to holding gold in your pension is that it offers a degree of protection through diversification.

It is crucial that your pension is as resilient as possible. You don’t want your golden years to be ruined by a stock market crash wiping out the value of your pot.

As such, most pension funds are diversified between stocks and traditionally safer investments like bonds.

However, that logic is starting to unwind. In recent years, bonds and equities have been more positively correlated with each other, thanks largely to persistent inflation (which erodes the real value of bonds over time).

“Investors are increasingly questioning the reliability and diversification benefits of traditional safe havens such as government bonds,” said Currie.

Gold is, in many people’s view, a better diversifier. Its low correlation with both bonds and equities means it can help to cushion pension savings during periods of market stress.

How much gold should you put in your pension?

The caveat is that, as gold price movements in late January and early February showed, it can be volatile. It also pays no interest, so is something of a dead weight in your portfolio outside of periods when its price is rising. Historically, gold prices have often traded flat for long periods of time (such as from the 1980s to the early 2000s).

For these reasons, you shouldn’t put too much gold in your pension.

“Understanding how much gold fits into your pension has never been more important, particularly for time-poor savers nearing retirement and looking to access their pension,” said Currie.

Currie recommends that gold should comprise around 5% of a well-diversified pension portfolio.

How you hold this gold is also important. While you could invest in gold mining stocks, these are often more volatile than the metal itself. You’ll get a more direct correlation with the gold price by buying a gold exchange-traded commodity ETC, such as the iShares Physical Gold ETC (LON:SGLN).

As of 2006, you can hold physical gold in a Sipp – but only in the form of gold bars, not gold coins.

We explain how to invest in gold in a separate article.

Silver trades above $110 per ounce. It famously touched $50 in 1980, and then not again until 2011. Then last October, it finally broke through after a 45-year wait. Little wonder the silver bulls are so excited.

Silver is a friend of gold. It is a precious metal, but less precious than gold. While gold is prominent in jewellery, its primary role is as an investment. Silver, on the other hand, has industrial uses in electronics, solar panels, the car industry and catalysts, as well as being used for decorative purposes. In that sense, silver has a dual role, part industrial and part precious metal.

According to the Silver Institute, 1,030 million ounces of silver were supplied last year (around six times the quantity of gold), less than was consumed. The silver market has been in deficit for five years in a row, and as inventories have been wound down, silver is feeling the pinch.

The total supply of gold above ground, sitting in vaults and jewellery boxes, is estimated to be worth around $35trillion. There is much more silver held above ground, with an estimated worth of around $6trillion, a figure that has quadrupled over the past year due to the price surge. These metals have been part of the global monetary system since it began. Today, one ounce of gold buys 45 ounces of silver, half the amount of a year ago: silver is on a tear.

Why is silver rallying?

The gold-to-silver ratio is how most metal watchers think about the relationship between them. The price of both metals generally moves in sync, and so the ratio expresses relative value. In March 2020, during the market crash, silver was dirt cheap, as an ounce of gold bought 110 ounces of silver. Contrast that with April 2011, when that same gold ounce only bought 35 ounces of silver.

These swings can see silver beat gold by three times in bull markets and then give back the gains much faster in the bears. Little wonder silver was once described by a trader as “gold on crack”.

To understand why silver is rallying we should first understand gold, where the main source of demand has come from the non-OECD central banks who are diversifying their reserves. These economies have come a long way since the Asian crisis of the late 1990s, as they have grown along with their reserves. According to the International Monetary Fund, central banks’ reserves stand at $12.9trillion.

Historically, these reserves had been invested in government bonds, mainly US Treasuries, but ever since the war in Ukraine saw Russia’s assets confiscated, central banks have been seeking to diversify, and gold fits the bill. It is a timeless constant and a highly liquid asset that comes to the fore at times of financial stress. There are other reasons for this gold bull market, including the debasement of the US dollar.

When a savvy investor spots a gold bull market, they dash in front and buy the miners and silver, in the knowledge that they are likely to outperform. The miners win because they have additional gearing to higher prices, and silver because it is a smaller market. A surge in demand causes a squeeze.

This silver bull market has been underpinned by gold, but since the central banks are buying gold and not silver, who is? You would normally expect to see a stampede of retail investors. However, the quantity of silver held by exchange-traded funds (ETFs) is still below where it was five years ago, when silver traded below $30. Moreover, the hedge funds have been lightly positioned, according to data from the futures market.

The real bulls are in China, where the price trades at a 14% premium to the price in London, at $129. What do the Chinese see that we don’t? China manufactures the world’s solar panels and needs much of the annual new supply to do so. China also refines two-thirds of global silver and has raised export controls.

They have reclassified silver as a strategic metal, putting it in the same category as rare earths. An unintended consequence of Donald Trump’s tariffs has been the hoarding of commodities, especially metals. Out goes the free market, in come strategic reserves.

In the meantime, some investors have demanded physical delivery from the Commodity Exchange (COMEX) warehouses, where inventories have dropped by 22% since October. Then we hear that Goldman Sachs’s head of precious-metals trading, Benjamin Binet-Laisne, is leaving the bank, with no explanation. Market rumours suggest that someone out there has a very large short position in silver. Why else would the price surge so sharply?

While Western investors are only just starting to catch silver fever, the Chinese are going at full pace. They are worried about economic uncertainty, just as we are. But unlike us, and owing to capital controls, they have fewer investment choices. Now that property in China is out of favour, their primary choices are between cash, local stocks, gold, and silver.

This silver rally is one for the history books. Knowing how badly the silver booms have ended in the past, scepticism has become the consensus. But the world needs silver, the market remains in deficit, nation-states are hoarding, free trade has been suppressed, and mined supply hasn’t grown in a decade. It feels late to buy silver today, and for those who already own it, it is an easy decision to lighten up. But you never know, maybe it really is different this time.

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

It is a bizarre legal action. Jerome Powell, the chairman of the Federal Reserve, the US central bank, has been prosecuted over renovations of the Fed’s headquarters and may now face criminal charges. Given that it manages an economy worth $30trillion and the world’s reserve currency, it is hard to see that the $2.5billion spent on improving the Fed’s offices really matters much. Even so, Donald Trump has clearly decided to use it as a weapon for a full-scale assault on a Fed chairman he would prefer to get rid of.

Powell himself was clear that the legal attack was just a way of bringing the Fed to heel. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preference of the president,” he said in a statement. In other words, it is a political attack on the Fed and an attempt to allow the president to control monetary policy. If Powell is removed from office by the courts, whoever is appointed to replace him will clearly be taking instructions directly from the White House.

That is a dramatic and dangerous development. This is not to deny that independent central banks are worthy of criticism. Over the past 30 years, they have become too powerful, too confident in their own abilities and too quick to print money. You can make a case that, instead of ensuring greater stability, which is what they were meant to do, independent banks have inflated a series of asset bubbles, indulged spendthrift politicians and prioritised trendy causes while allowing industry to be hollowed out. There is a case for reform. Still, there is a big difference between that and a power grab to hand the right to set rates to the White House.

There are two big problems with that. First, it looks as if Trump is determined to control interest rates himself, either directly, or else through a tame proxy at the Fed. That is not without precedent. In Britain, interest rates used to be set by the chancellor, but the result was that the UK had one of the worst records on inflation in the world before Gordon Brown made the Bank of England independent in 1997. And it is hard to think of a worse person to set rates than Trump. He is temperamental, he constantly changes his mind, he doesn’t listen to advice, and his falling approval ratings mean he will constantly try to cut rates to boost short-term demand. Even more seriously, if the president acquires the right to set rates, it’s hard to see how it will ever be given up. It is too major a power to surrender. The US will have a politicised monetary policy permanently.

How bad will it get under Trump?

Everything else the president is doing appears designed to stop the free market working and drive up prices. The US has already imposed the steepest tariffs since the 1930s, with an average levy on imports of 18%. Closing off its markets to global competition will only drive prices higher and quality down. Only last weekend, Trump promised to cap credit-card interest at 10%, the kind of populist policy you would expect from the far left. Trump has also started capping corporate investment in the housing market. He is directing the oil companies to invest in Venezuela regardless of whether there is an investment case for it or not (with oil at $50 a barrel, there probably isn’t). There does not appear to be a coherent plan, but a whole series of interventions to create markets rigged by the government. State-controlled economies always end up with higher prices.

Add it all up, and one thing is clear – sooner or later the US will see a major rise in inflation. How bad will it get? There is no way of knowing for certain, and it will depend on what else is happening in the global economy. But once prices start to rise we know they are very hard to bring under control again. And if US prices rise, that will drive global prices higher. We can expect inflation to spread to Britain and the rest of Europe very quickly. Investors are already positioning themselves for that, with the price of gold hitting record highs every week. Prices of defensive assets will inevitably go a lot higher.

How did the protests in Iran start?

The latest protests in Iran started with the bazaaris – the normally conservative Tehran merchant class who, two generations ago, were the financial backbone of the 1979 Revolution. On 28 December, shopkeepers in the capital’s Grand Bazaar went on strike in protest at the government’s handling of the nation’s collapsing economy – and their own inability to trade due to the volatility of the currency and inflation. Other businesses swiftly followed, and protestors took to the streets in a wave of protest that rapidly spread to all parts of Iran. Thousands have since been killed in a brutal crackdown by the regime. After a year of economic crisis made worse by the wave of US and Israeli air strikes in the summer, president Masoud Pezeshkian had nothing to ease the sense of a failing government and state when he gave a candid speech in December admitting that he had no solutions and the country was “stuck”. “If someone can do something, by all means go for it,” he told students in a speech that went viral.

What’s happening in Iran's economy?

Last year, the rial lost 45% of its value (crashing to an all-time low against the US dollar), destroying the purchasing power of Iranians. The official inflation rate was 43% (higher than anywhere except Sudan and Venezuela) – taking the price of everyday staples such as bread beyond the reach of some, and hitting even relatively well-off Iranians hard. The economy shrank last year by 1.7%, battered by lower consumption and interrupted oil output from the 12-day war with Israel, with a sharp 2.8% drop expected this year (according to World Bank forecasts). Unemployment is very high in a country of 90 million people, with some estimates putting the employment rate at just 41%. Around a fifth of the population is living below the World Bank’s poverty threshold. Parts of society are experiencing food shortages, due to poverty, while chronic water shortages after five years of drought have added to the sense of desperation – as has the blow to national prestige from the fall of Shia allies and clients such as Assad in Syria and Hezbollah in Lebanon.

What does this mean for Iranians?

All this created the conditions for urban youth and rural workers – frustrated by stagnant wages, lack of jobs and declining life prospects – to join the expanding protests. There is still notable support for the regime and a very divided opposition, which makes imminent state collapse or revolution unlikely, according to most analysts. However, the economic crisis is viewed by most Iranians as part of a wider systemic failure – combining mismanagement, entrenched corruption, a bloated public sector and lack of private investment, elite capture of key sectors (especially by state security actors), and the effects of long-running sanctions.

How have sanctions affected Iran?

The economy has been strangled by ever-tightening Western sanctions since 2012, when then-US president Barack Obama ramped up the pressure over Tehran’s nuclear programme and convinced the EU to follow suit. With Iran cut off from the Swift global payments system, the rial slumped, inflation soared, investment declined, and Iranians felt worse off. That year saw Iran’s first significant contraction since the early 1990s, and since then “growth has been essentially half the rate it was up until that point”, says Esfandyar Batmanghelidj of the Bourse & Bazaar Foundation think tank. Between 2000 and 2012, average annual growth remained steady at 4.4%. Since then, it’s been 1.9%.

What about Iran's oil?

Since the 1979 revolution, Iran has relied heavily on oil and gas exports. They have long funded the state, paid for imports and sustained social spending. In good years, when oil prices were high and exports flowed, growth followed. In bad years, the economy contracted sharply. This dependence leaves Iran unusually exposed to geopolitics. As such, Iran’s fortunes have tended to rise and fall with sanctions regimes and diplomatic turns rather than domestic productivity gains. Each major shift in foreign policy – whether a nuclear agreement or its collapse – ripples through household incomes.

How does foreign policy affect Iran's economy?

After Iran signed its nuclear deal with the US and other world powers in 2015 – sanctions relief in exchange for tight restrictions on nuclear activity – growth rebounded, inflation fell to single-digits, and oil exports rose to a peak of 2.8 million barrels a day (b/d) in 2018, for example. But when Donald Trump pulled the plug on the deal, Iran was once more cut off from Swift and oil exports fell to just 300,000 b/d in 2019. Moreover, sanctions did not simply shrink the economy; they distorted it, creating parallel markets favouring those with connections to the elite, and deepening inequality. More recently, Iran’s vulnerability to external events has also been clear. In the seven months since Israel launched its 12-day war against Iran in June, the rial lost 40% of its value. Annual inflation hit 43% in December, while food inflation soared to 72%, and the price of bread rose 113%. Corruption, on an epic and almost shameless scale, further distorts the economy. The Islamic Revolutionary Guard Corps, the country’s security service loyal to the supreme leader Ayatollah Khamenei, for example, controls a vast commercial and financial sector that “benefits from measures that hammer the wider economy”, says The Economist.

Will Iran's regime survive?

As MoneyWeek went to press, it looked as though the protests were ebbing in the face of the exceptionally brutal and bloody state response. Donald Trump has warned repeatedly that the US would strike Iran again if the government kills peaceful protesters, but as yet, that killing has progressed and intensified with impunity. A crucial factor is the lack of a united opposition. This is certainly a desperate moment for Iran. But while anger and misery are abundant, the lack of coordination – and common ground on what the future should look like – means that it may not yet be a revolutionary one.

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How big is Venezuela’s oil industry?

Venezuela’s oil industry is about a quarter of the size it used to be. Venezuela has the world’s biggest proven reserves of oil, estimated at more than 300 billion barrels, or around 17% of the global total. The oil lies onshore, and the vast majority is in the central Orinoco belt – south of the Orinoco River – in a well-mapped 50,000 sq km zone that’s probably the biggest single hydrocarbon deposit on Earth. But in recent decades, Venezuela’s once-surging stream of oil has dwindled to a trickle. Production peaked in the 1960s and 1970s, when US and British oil companies dominated, producing 3.5 million barrels a day, or around 7% of global output at the time. Following nationalisation (in January 1976) production fell, but then rose again until a late-1990s peak. Since the turn of the century, it has slumped, from more than three million barrels/day to a trough of under 700,000 in 2021 and 960,000 in 2024. That’s less than 1% of global supply and most of it goes to China.

What happened under Chávez?

Venezuela's oil production fell slightly under the socialist president Hugo Chávez (1999-2013), but under his chosen successor – the incompetent, corrupt and increasingly authoritarian Nicolás Maduro – production has cratered as the economy tanked. Decades of corruption, mismanagement, underinvestment and a lack of, or botched, maintenance at PDVSA (the state oil company) have severely degraded Venezuela’s infrastructure and capacity. As Maduro tightened his grip by rigging elections and crushing protests, sanctions imposed by the US (and Europe), especially after they were tightened in 2019, have restricted Venezuela’s access to financing, many international markets and vital new technology. More basically, Venezuela’s heavy crude must be blended with diluents such as naphtha, which is hard to source due to sanctions and related supply issues, thus constraining production. Meanwhile, many skilled workers left the industry – indeed, millions of Venezuelans left the country altogether – compounding technical challenges.

What is Donald Trump’s plan in Venezuela?

To take over and revitalise Venezuela’s oil industry, while “ruling” Venezuela from Washington, with Marco Rubio as the absentee viceroy and the current government still in place. For months, Trump touted his military build-up against Venezuela as an anti-narcotics operation. Within hours of Maduro’s removal, Trump announced, “We are in the oil business”. The oil business in Venezuela “has been a bust, a total bust for a long period of time”, Trump said. “We are going to have our very large United States oil companies… spend billions of dollars, fix the badly broken infrastructure… and start making money for the country.” Having decapitated the regime, the US is apparently content to leave the rest of the regime and state apparatus in place – a strategy that has raised questions about exactly how involved Maduro’s deputy (and new interim president) Delcy Rodríguez was in the US mission.

Was Maduro's capture an inside job, then?

It seems Rodríguez was made an offer she couldn’t refuse, or chose not to. As well as being vice-president, Rodríguez was also Venezuela’s oil minister from 2024 and head of the intelligence service from 2018. According to Bloomberg, US oil-industry executives and lawyers saw her as an impressive figure who was navigating Venezuela’s industry through international sanctions, economic pressures and internal mismanagement. In recent months, the US oil industry reportedly lobbied for her as Maduro’s replacement – and Trump’s team came to the same conclusion. Both groups decided that Rodríguez, long seen as a “bridge between the government and private sector, could stabilise Venezuela’s oil-based economy, and facilitate American business faster” than the opposition leader, María Corina Machado, could.

Hasn’t the US got plenty of oil?

Indeed, the US is the world’s biggest oil producer. What it hasn’t got much of these days is the kind of heavy crude produced in Venezuela. That matters because of a structural tension within the US oil industry as a whole; namely, that its big Gulf Coast refineries, built decades ago, are no longer compatible with the type of oil it now produces. The US’s supremacy in oil has been built on the shale-oil revolution: light crude, most of which gets exported. But “if America is going to keep its cars fed with gasoline, it needs heavy, gloopy crude”, says Ed Conway on his Sky News blog. “And since it costs many, many billions of dollars to overhaul refineries, no one particularly wants to do that anytime soon.” The US might be producing more oil overall, but it’s also importing far more heavy oil. In 1978, only 12% of US imports were heavy. Now it’s 70% – mostly from Canada and a small slice (sanctions notwithstanding) from Chevron’s joint venture in Venezuela.

Was the Venezuelan oil grab an easy win for the US?

Hardly. For starters, there’s the sheer scale of the investment required to repair and retool Venezuela’s crumbling infrastructure. According to analyst Jorge Leon of Rystad Energy, roughly doubling production to two million barrels by the early 2030s will cost an estimated $115billion. That’s three times the combined capital expenditure of ExxonMobil and Chevron last year. At current oil prices, around $60 a barrel, and with the world already oversupplied, there’d have to be a truly compelling case for major investment in Venezuela, with its relatively low-quality, cheap oil that’s pricey to refine. Right now, that’s just not there.

Why not?

Because not much has changed except the president, and the economics doesn’t stack up. Venezuela has not suddenly become a better place for the likes of Chevron and Exxon to invest billions, says Yawen Chen on Breakingviews. “It’s the same military-dominated petrostate with corruption issues as before, plus a potentially even worse security situation” – and certainly a more unpredictable one. The country is awash with guns, as Ambrose Evans-Pritchard points out in The Telegraph, and paramilitary “colectivos” exact fees before letting a single barrel move. For oil companies to invest would require the kind of political stability and respect for property rights that once helped make Venezuela one of the richest countries in the world. Trump’s snatching of Maduro was “spectacular and swift”, says The Economist. “The economic reward from it will be neither.”

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In 1874, the Scottish-American industrialist Andrew Carnegie completed the mile-long Eads Bridge, made of steel and crossing the River Mississippi into St. Louis. At the time, nobody believed that steel was strong enough to be suitable for such a project. Carnegie made an elephant walk along it to show that it was strong enough, as Vivek Koncherry, the CEO of Graphene Innovations Manchester, recounts. Carnegie thus ensured that mass-produced steel would become the backbone of the later industrial revolution, “leading to the rise of the skyscrapers”.

Graphene, a sheet of which is strong enough to bear an elephant standing on a pencil, is set to transform the world today in the same way that steel did then, says Koncherry. As well as being an example of groundbreaking British science, it may also prove to be lucrative for investors. Koncherry predicts that graphene and similar nanomaterials will enable the rise of “some of the biggest companies of the future”.

Where did graphene come from?

The story of graphene began more than two decades ago in 2004, with two scientists, Professors Andre Geim and Konstantin Novoselov of the University of Manchester, some graphite and some sticky tape, says James Baker, the CEO of Graphene@Manchester. They found that it was possible to use a modified version of the sticky tape to isolate a single two-dimensional atomic layer of carbon from the graphite. This material, a crystallised single layer of carbon atoms arranged in a flat honeycomb or hexagonal lattice pattern, occurs naturally, if very rarely, and is called graphene. It has some “unique properties”: it is stronger than steel, more conductive than copper, and can act as a membrane that allows some molecules through but blocks others.

The most interesting uses of the material occur when you “add it to things to complement them” and improve their functioning, says Baker. Scientists have already established that it can usefully complement materials used in batteries, energy storage, water filtration, the storing of hydrogen, in coatings for metals to prevent corrosion, for membranes and water desalination, and even inks used in wearable technologies. Baker notes that researchers at Manchester have already built graphene sensors that have been inserted into patients’ brains, opening up the possibility that the material could even be used to treat conditions such as Parkinson’s and strokes.

Graphene’s “exceptional qualities” are that it is “lightweight, while having high tensile strength and electrical conductivity” and “enhances the performance and durability of products”, says Asad Farid, portfolio manager of JSS Sustainable Equity – Strategic Materials at J. Safra Sarasin Sustainable Asset Management. Another factor which makes it different is its “simplicity” – graphene “is not a new compound and doesn’t use any exotic materials in its manufacturing” and can be extracted from graphite, an everyday substance.

The trouble with meeting expectations

Predictions that the discovery of graphene was about to change the world proved to be overly optimistic. But this was, argues Baker, the fault of unrealistic expectations, not with any thing to do with the material itself. Indeed, the gap between Geim and Novoselov’s discovery in 2004, their being awarded the Nobel Prize in 2010, and not finding commercial applications until around the present day, is not that unusual. After all, it was 25 years between discovery and the first carbon-fibre products hitting the marketplace, and that was for upscale, high-quality products such as Formula One cars, tennis rackets and golf clubs. In fact, it is usual for new materials to take ten years to get to market and even longer to reach a mass market. So graphene is still a “relatively young material”.

The biggest barriers standing in the way of mass adoption are a lack of standardisation, production costs and problems with scalability, says Aneeka Gupta, director of macroeconomic research at WisdomTree. Industry wants materials to be cheap, consistent and scalable, and that isn’t yet the case with graphene. Indeed, until very recently “there weren’t even any widely adopted standards” for the material. This matters to large industrial companies as they won’t want to redesign a process around a material unless they can be sure that other suppliers are going to be able to produce equivalent materials.

The good news is that, despite these “headwinds”, there has been progress in addressing all three issues, says Gupta, even if in a “very quiet incremental way”. Graphene hasn’t yet quite reached the point where it is being widely used across industry, but it is starting to gain a foothold in “niche, high-value components”. Terrance Barkan of the Advanced Carbons Council trade association is more bullish, noting that a lot of companies have been spending the last five years doing experiments with incorporating graphene into their product and are now ready to start rolling them out.

Setting global standards

The Advanced Carbons Council has been at the forefront of trying to get product quality standards in place, and has produced the graphene classification framework, which has now become an ISO standard – a universal benchmark for consistency across industries globally. The council also carries out work to help companies inspect and audit the supplies of graphene that they use. This is important, emphasises Barkan. “If a company uses a material that they’re told is graphene and it’s not, and it doesn’t work as they expect, then that damages the credibility of the entire market.”

There has also been progress on the key problem of manufacturing graphene cheaply at scale. Traditionally, the approach has been to make it by “exfoliating graphite”, essentially the same approach Geim and Novoselov used back in 2004, says Kjirstin Breure, CEO of HydroGraph. Her company has developed an alternative process, based on research carried out at Kansas State University, which involves exploding hydrocarbon gases.

This approach may not necessarily be the cheapest by weight, but because the result is of such high quality compared with other methods, “it works out as much cheaper for our customers as they have to use much less of it”. Costs are set to come down further as HydroGraph starts to move its operations to a large-scale production facility in Houston, Texas, which Breure predicts will be capable of producing hundreds of metric tonnes of graphene annually. She expects the amount produced to rise even further as demand explodes.

HydroGraph isn’t the only company leading a revolution in the way that graphene is produced. Mike Harrison, CEO of Concretene, points to the work of Levidian Nanosystems, a spinout from the University of Cambridge, which has devised its own process for manufacturing high-quality graphene from methane. Like Breure, Harrison thinks we have reached the point where reductions in cost and increases in quality will make more companies interested in using the material, which in turn is enabling those making graphene to benefit from economies of scale, further reducing the price.

Graphene in construction

One industry that is starting to enthusiastically embrace graphene is construction. By putting the material graphene into concrete (sometimes called “graphene doping”), for example, Concretene claims a 10% to 20% improvement in the material’s performance. This, in turn, means construction companies can reduce the amount of cement they need to put in the concrete, which reduces the environmental impact of their construction projects. Every 50g of graphene added can lead to a saving in terms of cement used of 7kg-9kg.

At the moment, most of Concretene’s customers – United Utilities, for example – are firms that are interested in the product for the boost it will give to their green credentials. There has also been interest from the Middle East. But Harrison reckons that, in a few years, graphene in concrete will be the best solution on economic as well as environmental grounds.

Graphene is set to play an important role in other parts of the building industry, too. Nathan Feddy and Liam Britnell of Vector Labs, for example, are already working with a range of partners, including large builders, to roll out a range of products that use graphene to improve home insulation. They are also particularly impressed with graphene’s potential for reducing the risk of fires, noting that graphene-enhanced materials “can reduce the spread of flames in the event of fire by up to 80%, without impacting on the performance of the original material, which is one of the weaknesses of existing materials”.

A growing market for graphene

Construction may be at the forefront of the graphene revolution, but other sectors are not far behind. There is currently no “single killer application”, but Barkan identifies no fewer than 45 separate vertical markets where graphene is set to play a major role. The paints and coatings industries, for example, are already using graphene to protect against corrosion. The textile industry is embracing the material, too – “more than a dozen companies now make graphene-enhanced clothes”. Koncherry highlights the fact that graphene is starting to be used “to make smaller and more efficient semiconductors, for use in a wide range of electronics and batteries”. Recent reports suggest that photonic chips produced with graphene by Cambridge Graphics can “deliver not only much higher data throughput, but also 80% lower energy use than equivalent silicon chips”, says Gupta. This could have big implications for AI data centres and telecoms firms, as “they are exactly the kind of niche, high-value market where graphene’s speed and optical properties matter more than its lack of scale”.

In short, we’re now seeing the emergence of hundreds of graphene-related companies worldwide. So although “the hype that we saw a few years ago has died down, a slightly slower, but more realistic, revolution has taken its place”, says Gupta, with graphene being used to improve concrete, plastics, coatings, filters and batteries. Research from IDTechEx suggests that the global market for graphene is “estimated to grow by around 27% a year over the next decade to 2036”, as Ivan Buckley, director of business development at Graphene@Manchester, points out.

An exciting times for materials

Perhaps the clearest sign of change in the world of materials is that, encouraged by the success of graphene, researchers and companies are also “developing a whole family of other 2D materials”, says Baker. One group of materials he thinks people will be hearing a lot more about in the future is the MXenes, a metal-based family of 2D materials. They have a “potentially huge” range of applications for energy storage and for aircraft, and are sometimes used in combination with graphene.

MXenes also outperform all other materials in certain properties that make them ideal for use in insulation and wearable electronics, says Yury Gogotsi of Drexel University. MXenes have tended to live “in the shadow of graphene”, but interest in them is taking off, especially in Asia. Companies such as Murata and Samsung hold “dozens of patents” in the area, and there are now “more than a dozen” Chinese companies that produce and sell MXenes, as well as in the US, Korea and Europe, too.

Another graphene-like material that has potential is Gii. Discovered in 2014, and coming out of research into graphene, Gii has a lot of similar properties to graphene. But while the former takes the form of a single 2D layer, Gii “can be grown in three dimensions, without losing performance”, says Marco Caffio, co-founder and chief scientific officer of iGii (formerly Integrated Graphene). It can also be manufactured at scale, at low cost and “anywhere where there’s electricity”, says iGii’s CEO Jean-Christophe Granier. Both Granier and Caffio emphasise that they have already received a huge amount of interest from industry, especially in terms of developing “faster, more accessible ways to detect disease or water contaminants, as well as the creation of flexible printed batteries the size of a fingernail”. Given such developments, it’s no surprise that Granier and Caffio consider it to be an “exciting” time for the materials industry.

How to invest in graphene

No safe way into graphene

There is no exchange-traded fund (ETF) or other collective investment that gives diversified exposure to the graphene theme. And the individual companies operating in the area must be considered high risk. Some of the very early public companies have struggled to get to commercial sales, and their stock prices have suffered because investors have lost patience with them, having gone through “year after year of fundraising”, says Terrance Barkan of the Advanced Carbons Council. Still, those companies able to achieve both profitability and critical mass could see investor interest return as “sales cure all ills”.

A catalyst for wider adoption

One company that is currently starting to see its revenue go up in leaps and bounds is HydroGraph Clean Power (Vancouver: HG). The company has developed a method of extracting graphene from gases. CEO Kjirstin Breure says the firm is now building a major production plant in Texas, which could cut costs and expand production so much that “we alone could serve as a sort of catalyst for wider adoption of graphene by industry”. Indeed, HydroGraph is so confident about the future that it is planning to move its share listing Stateside to the Nasdaq.

Better batteries and cement

Aneeka Gupta, director of macroeconomic research at WisdomTree, is optimistic about the prospects for the Graphene Manufacturing Group (Toronto: GMG), a Canadian company that makes graphene-based batteries. Two years ago, the company agreed a partnership with mining company Rio Tinto to develop a battery that uses graphene to improve the safety of batteries and reduce the need for cooling. This is useful in rugged environments where batteries may need to be charged and discharged quickly. Gupta is particularly positive about GMG’s graphene spray products, which can be applied to improve the conductivity of metals while maintaining performance.

Australian firm First Graphene (Sydney: FGR) is starting to bring products to market, and its graphene-enhanced cement has moved from the trial phase to mass production, says Gupta. The company is now beginning to receive contracts from major construction firms such as Breeden and Morgan Sindall. Indeed, earlier this month First Graphene announced the production of 600 tonnes of graphene-enhanced cement at Breedon Group’s works in Derbyshire for use in new projects that are expected to be rolled out in the UK.

Two alternative plays

A slightly different way to play the graphene revolution, as well as the development of similar materials, is through companies that supply equipment to manufacturers. CVD Equipment Corporation (Nasdaq: CVV), for example, makes systems used to grow graphene and other 2D materials. Its revenue is growing by roughly 7% a year, yet it still trades at a discount of around 18% to its net assets.

Those who are especially adventurous when it comes to risk might want to consider London-listed micro-cap Directa Plus (Aim: DCTA). The company is a producer and supplier of graphene nanoplatelet-based products. These are being used in textiles (including trainers) and filters. Like all of the above companies, it is not currently making any profit, but revenue is expected to rise by more than 50% this year from 2024 and then quadruple again in 2026.

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Following three consecutive years of above-average returns from the S&P 500 index, if there is to be a fourth the stock market will have to climb a steep mountain. From my recent market observations, I have come to the conclusion that two current booms will come to an end.

Firstly, capital spending on anything to do with AI will prove no different from previous bubbles fuelled by investors following the zeitgeist. Excessive capital spending caused by a supply shortage is almost always followed by a downturn once supply is satisfied. Die-hard AI enthusiasts can simply look to CoreWeave’s recent collapse or the market’s incredulous response to Open AI’s forecast for capital expenditure (capex) and revenue: the sums just don’t add up.

Secondly, the burgeoning demand for private credit or equity assets over their public equivalents is another trend whose days appear numbered. While light-touch regulatory oversight was fine when the asset class was outside the mainstream, such a hands-off approach to regulation just won’t wash for a pension fund and retail audience.

With greater scrutiny comes better price discovery and, at least for some operators, discrepancy and conflict on the value of assets. Against this backdrop of uncertainty for 2026, here are three stocks that could climb the proverbial stock-market mountain next year.

Three US stocks taking on Goliath

The skilled climber takes the riskiest direct route, straight up the north face. If he doesn’t fall, he will be in his deckchair at the summit swigging a beer long before his companions join him. MongoDB (Nasdaq: MDB) is a $30 billion-software provider of databases for unstructured data (such as emails, telephone-call recordings and social-media posts, which don’t fit neatly into traditional databases). Unstructured databases are a rich source of information for advanced AI programs.

From its $2 billion-revenue base camp, Mongo will attack Oracle, a giant of the sector that’s 50 times larger. A new CEO and a better product should help it chip large chunks off the old block of the competition.

The hiker, a well-prepared adventurer, takes a more cautious approach, avoiding the trickier parts of the climb. The US former Dow Jones constituent, aluminium producer Alcoa (NYSE: AA), is my choice in this regard.

The balance between demand and supply is becoming more favourable, with China curtailing supply. Expect asset sales to act as levers to pull, in addition to relying upon the demand cycle: what do you think goes in all those data centres?

Taking the easiest long route and avoiding tough obstacles is the pathfinder. Enter pharmaceuticals giant Pfizer (NYSE: PFE). The stock is cheap, having lacked growth since the company’s Covid vaccine was launched in 2021. At just 14 times earnings and a 7% dividend yield, investors have a margin of safety built in while we find out if Pfizer’s purchase of Metsera and its obesity drug pays off in the long term.

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This year’s best-performing emerging market (EM) shouldn’t really be classified as an emerging market at all. South Korea’s high-tech industrial base is a match for any of the world’s leading developed economies. Yet restrictive trading rules on the local bourse see it consigned to the same global investing basket as Egypt and Peru.

Nonetheless, the local Kospi index has rocketed 66% this year. That reflects two massive tailwinds: AI, and a closing Korea discount. For the first theme, memory-chip champions Samsung and SK Hynix are cashing in on Big Tech’s splurge on semiconductors. For the second, Seoul has begun to implement pro-shareholder reforms, a copy of similar changes in Japan that unleashed a multi-year stockmarket rally.

Emerging market winners

Korea’s gains have helped push the MSCI EM benchmark to a 26% gain for the year to date. After years of lagging the developed-markets index, that rise comfortably outstrips the 18% gain for MSCI’s equivalent index for developed markets.

Those gains partly reflect more benign financial conditions for the developing world. US interest-rate cuts and a weaker dollar tend to push capital out of Wall Street and into more exotic locales. Yet the upswing has not been universal. This year’s big winners have tended to offer exposure to one of 2025’s two winning trends – AI-focused tech and the global metals rally. Like Korea, Taiwan’s Taiex (+20.5%) is rallying on soaring demand for AI equipment, largely driven by the enormous success of local chipmaker TSMC.

The mainland Chinese CSI 300 is up a healthy 17.5%; Hong Kong’s tech-biased Hang Seng has done even better, with a 28.5% gain. The east Asian economies now jointly account for 60% of the MSCI EM index, making the index a more concentrated bet than many EM investors would ideally like.

India, the index’s third-largest component, provides some diversification. The country’s thrilling growth story resembles that of China in the early 2000s. Yet share prices have become stretched, and the BSE Sensex’s 8% gain for the year is lacklustre. While India is a global leader in IT outsourcing, local markets offer little exposure to AI.

Southeast Asia is a mixed bag. Vietnam’s VN index has rocketed a third in the same year that it won an upgrade to emerging-market status by index provider FTSE Russell. Indonesia’ IDX Composite has gained 21%.

Malaysia’s KLCI is flat, while the Philippines’ PSEi index has slipped 7% amid signs of a domestic slowdown. Thailand’s SET index has retreated 10% as investors flee political turmoil and signs of a decline in the country’s crucial tourism sector.

Metals rally helps emerging markets shine

Gold’s 60% rally this year has helped South Africa to shine. The JSE Top40 index has had a banner year, with local miners and an improved political outlook propelling it to a 40% gain. Copper champion Chile has done even better, with the IPSA index enjoying a massive 50% rally.

But not all commodities are created equal. The oil-heavy Saudi Tadawul all-share is off 13% amid weak energy prices. The US has picked fights with both the Mexican and Brazilian governments this year, but you couldn’t tell by looking at their stock exchanges, up 28% and 32% respectively.

The White House’s 50% tariffs on Brazilian imports have “backfired”, because “Brazil exports more than twice as much to China as to the US”, says Craig Mellow in Barron’s. Brazil’s strength in agriculture makes it a highly complementary trading partner. Investors also hope that next year’s presidential election could bring a pro-market candidate to power, echoing Javier Milei’s success in Argentina.

It has been another good year for emerging Europe. Poland, the region’s biggest market, is catching up fast with western Europe. A boom in defence spending has helped push the WIG20 to a 39% gain. Finally, difficult post-crisis reforms continue to pay dividends in Athens. The ASE index has rallied 41% this year and 119% over the past three years. The protracted Greek tragedy is finally over.

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The story of commodities in 2025 was “energy down, metals up hard”, says Ole Hansen of Saxo Bank. Silver and copper are continuing their record-breaking rallies, but the world’s oil men are feeling gloomy. Brent crude is down by a fifth since 1 January. The main European natural-gas benchmark is off 45% this year, to the relief of households. Overall, the Bloomberg Commodity Energy subindex has dropped 10% this year, even as the All Metals index has soared 43%.

Energy markets are dogged by talk of massive excess supply as Opec producers lift output caps, and new players such as Guyana enter the market. Meanwhile, China’s appetite for fuel is softening as its transition to greener supplies continues.

The International Energy Agency forecasts a near-four-million barrels a day surplus next year, equivalent to about 4% of global supply. Commodities firm Trafigura recently warned of a coming “super glut” as big new oil projects that were planned when prices were high enter production just as prices drop.

Why copper is the new oil

Aluminium has rallied 13% this year, with zinc up 8%. But it is copper, with its 33% gain, that has been the real star. Prices on the London Metals Exchange (LME) have topped $11,700/tonne this month. “Much as oil dictated the geopolitics of the last century, access to copper is becoming an economic imperative in this one,” says James Attwood on Bloomberg.

Just three countries (Chile, the Democratic Republic of the Congo and Peru) account for almost half of all copper mining. More than 40% of copper processing takes place in China, much to the alarm of Western politicians. And it takes an average of 15 years to turn a new copper find into a productive mine, and big new discoveries have slowed to a trickle over the past decade.

Meanwhile, on the demand side, copper sits at the heart of mega-trends from the building of AI data centres to electric vehicles (which require three times as much wiring as those with internal-combustion engines).

But not everyone is feeling bullish. Global manufacturing is in the doldrums, with US factory activity falling for nine months in a row, says Andy Home on Reuters. This year’s supply crunch doesn’t represent strong demand so much as a market “fracture” caused by fears that 2026 will bring new US tariffs on refined copper. Anxious dealers have been shipping copper to the US en masse in anticipation of new import charges, clearing out Chinese and European warehouses in the process.

Copper prices may be poised to “decline somewhat” next year as they pull back from recent record highs, says Goldman Sachs Research. Demand for Chinese refined copper appears to have fallen 8% year-on-year in the fourth quarter. For all the talk of shortages, the metal is actually in surplus globally this year and should be next year, too.

That said, the longer-term outlook is bullish as “rising structural demand from power infrastructure” runs into limited new mined supply, with the market expected to enter a deficit in 2029. Analysts forecast an LME price in 2035 of $15,000 per tonne.

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We aim to build resilient UK equity portfolios that offer both sustainable income and attractive total returns. Our team employs a disciplined, bottom-up approach to stock selection. We focus exclusively on high-quality, well-capitalised UK-listed companies, favouring those with robust balance sheets, strong cash generation and a proven record of reliable dividend payments. Our process is underpinned by considerations including macroeconomic trends.

We construct diversified portfolios of 40 to 60 holdings, aiming for low volatility through an emphasis on large-cap, quality businesses. By maintaining a repeatable, valuation-driven discipline, we strive to avoid value traps and ensure our investors benefit from both sustainable income and capital growth potential. The three stocks below illustrate our commitment to investing in firms that combine financial strength, strategic focus and appealing returns for shareholders.

Three UK blue chips stocks to consider

One of our key holdings is National Grid (LSE: NG), a critical infrastructure provider central to Britain’s energy transition. The company is embarking on a substantial investment programme, with plans to spend £60 billion over the next five years. This capital deployment is aimed at scaling up capacity to meet growing demand for electricity driven by the electrification of transport, heating and industry.

National Grid’s investments also underpin the UK’s shift towards renewable energy, reinforcing its pivotal role in a low-carbon future. With a regulated asset base, long-term earnings visibility and inflation-linked revenues, National Grid offers resilient financial returns and defensive characteristics, making it a core holding for income-focused investors.

Another core position is Unilever (LSE: ULVR), a global leader in the consumer-staples sector. Unilever’s portfolio includes many of the world’s most trusted household brands, ensuring steady demand even in challenging economic environments. The firm’s commitment to innovation and premiumisation has helped it sustain pricing power and foster loyalty from consumers.

Unilever continues to deliver consistent sales growth and improving margins while rewarding shareholders through progressive dividends. In times of market uncertainty, we find Unilever’s defensive qualities and cash generation particularly appealing.

A third significant holding is British American Tobacco (LSE: BATS). Our overweight position in the tobacco sector benefits from high dividend yields; however, our investment thesis for BATS is based on more than just its high yield. The company is actively repositioning itself for the future, investing in next-generation products such as vapour and oral nicotine, which are gaining traction with consumers worldwide.

At current levels, BATS trades at an attractive valuation relative to its earnings and cash-flow potential. In our view, this combination of capital growth prospects, income generation, and strategic repositioning makes BATS a compelling opportunity. While tobacco remains a controversial sector, we believe that the risk/reward profile for BATS is particularly favourable given its financial strength and ongoing transformation.

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The UK renewable energy sector cannot catch a break. At the end of October, the government launched a consultation on changing the Renewables Obligation Certificate (ROC) scheme that subsidises some renewable-energy production. At present, the subsidies are linked to inflation using the retail price index (RPI) measure, but they may now be switched to the consumer price index (CPI). RPI usually rises faster than CPI (the gap varies, but one percentage point is a rough rule of thumb), and so this would mean that subsidies rise more slowly in future.

The government has proposed two options for this. One is to switch to CPI in 2026. The other is backdate the change to 2002 (when ROCs were introduced) by freezing the current price until a new “shadow price” linked to CPI since 2002 catches up with today’s RPI-linked price, and thereafter increase with CPI. Neither are good, but the latter option is clearly worse. Hence shares in listed renewable energy investment funds (REIFs) slumped further, having already been battered by a series of setbacks and problems in recent years.

The changes would have no direct impact on new investments – the ROC schemes closed to most new applications in 2017. However, existing wind and solar farms have been promised subsidy payments until 2037 in some cases, so the changes will affect their earnings. More broadly, making retrospective changes undermines the assumptions on which existing investments have been made. That will erode investors’ confidence in committing future capital.

While the subsidies are ultimately paid by users as part of their energy bill, the change from indexing on RPI to using CPI is likely to mean a minimal reduction in the average household bill. At the same time, it will probably raise the cost of capital for future projects, making it ultimately self-defeating, argue infrastructure funds. Certainly, one has to feel that the government’s Clean Power 2030 (CP30) plan – which assumes £40 billion of private investment a year in green energy between now and 2030 – now seems wildly optimistic.

Losing patience with renewable energy funds

The direct impact of the change on listed REIFs will depend on which option is chosen (and on how much ROCs contribute to their income – typically 40%-50%). For many investors, this may feel like the final straw – yet more evidence that the sector is both unlucky and dysfunctional. While the government is clearly to blame for this particular shock, the way that the REIF sector has developed in recent years hasn’t encouraged investors to give it the benefit of the doubt. One can’t treat all REIFs as exactly the same and I’m going to focus largely on the solar funds here, but many of the problems apply more widely.

Bluefield Solar Income Fund (LSE: BSIF), Foresight Solar Fund (LSE: FSFL) and NextEnergy Solar Fund (LSE: NESF) put out statements saying that the impact on net asset value (NAV) would be around 2%, 1.6% and 2% respectively under option one and 10%, 10.2% and 9% under option two. This sounds manageable. However, we immediately get onto the question of how much investors trust these reported NAVs, which are based on fair value accounting and “mark to model” assumptions. The fact that most REIFs trade on 30%-40% discounts to NAV implies some scepticism about these valuations, while the fact that dividend yields are in the 10%-15% range suggests some concerns about their sustainability.

The original sin in the REIF model is that it was built around being able consistently to issue shares at premiums to NAV to fund new projects. REIFs were marketed as a growing income story in a low-yield world, with the added bonus of a green angle during the economic, social and governance (ESG) boom. Yet they were always paying out cash with one hand while taking it in with the other (hence NESF’s shares outstanding have doubled from 278 million 10 years ago to 555 million currently). This model only worked when the shares traded at a premium to NAV – now that they don’t, the REIFs no longer have access to cheap equity. Debt is no longer cheap either. It might make sense to cut dividends and reinvest the cash, but that would alienate investors who bought for income.

While this explains their growth problem, the opaqueness of returns explains why many investors are wary of them even as a limited-life income asset. In theory, the NAV represents the current value of future expected cash flows. The focus on this – and on paying steady dividends – makes it look as if REIFs have very simple, predictable economics. Reality is more complicated. Projected revenues depend on power price forecasts that come from third-party forecasters. When these change, so do NAVs. Meanwhile, actual performance has plenty of real-world complications.

For solar, there’s the amount of sun that falls on the panels. There’s whether it all gets used or whether grid outages means some gets wasted (FSFL had UK production 8.9% above budget in the first half, but would have been 13% higher without outages). On sunny summer days, there will be points when a surplus of solar power floods the system and sets the marginal price (at extremes the unsubsidised price can even go negative). Hence the “capture price” that solar farms get can sometimes be less the base load price (the price for steady, always-on power) – this summer, capture rates have frequently dropped to 80%. And if the grid physically can’t cope with the power being supplied, producers may be curtailed (turned off) by the system operator, meaning lost revenue.

Since the REIFs’ lenders and shareholders prioritise stability, the managers fix prices for much of their output in advance with power purchase agreements (PPAs). However, this means that they don’t capture much upside from spikes in spot prices (driven by higher gas prices, which set the marginal UK power price most of the time). All these factors come together in a bewildering series of assumptions. To take just one example, NESF’s short-term power price assumptions have fallen 56% from £139 per megawatt hour (MWh) in September 2022 to £61/MWh in September 2025. Longer-term power price assumption has risen 22% over the same three-year period. Yet its 20-year average price forecast has halved since it floated in 2014, pointing to long-term downward pressure.

Can renewable energy funds win back nervous investors?

What is the result of trying to distil such complexity into a single NAV that constantly changes? It is doubt about whether management are trying to mask poor economics with financial engineering, unconsolidated statements, fair value accounting and unverified assumptions. The accounting might technically be correct, but it is opaque and hard to compare between funds. Each time forecasts prove too optimistic and NAVs get downgraded, scepticism grows. This is why the REIFs now trade at huge discounts to NAV. (Policy risk – as demonstrated by the government’s proposed ROC change – may be another factor.)

Most of the REIFs seem to have little idea of how to get investors to trust them. They have tried to address the discount to NAV with share buyback programmes, but these have been too insignificant to counter the wave of selling. What’s more, buybacks often increase leverage: in May this year, NESF had to pause its buyback as leverage would have increased beyond its 50% debt-to-gross asset value policy limit. Rising debt is exactly what nervous investors don’t want to see.

Many have tried to sell assets, which would raise cash to pay down debt and fund buybacks while also validating NAV through real-world selling prices. This process has been slow, suggesting it may be hard to achieve prices respectably close to NAV. For example, in April 2023 NESF said it would sell 246MW of UK subsidy-free solar capacity across five separate projects. At present, there are still two project with 100MW yet to be sold. Last year, FSFL said it would sell its Australian portfolio (170MW across four sites), but the process has now been paused. A small number of bids for the portfolio were received, but none were deemed deliverable. In March this year, it earmarked a further 75MW for sale, with no results so far.

More recently, Bluefield proposed merging with its manager to focus on developing a 1.4GW pipeline of projects. However, that model implied a cut to the dividend and was quickly rejected by shareholders (if they were sceptical about the potential returns on capital, it is not surprising given the sector’s record). The fund was forced to ditch this and put itself up for sale. This has not steadied the decline in the share price, which has fallen to new lows below 70p, with a yield of 13% and a discount to NAV of 39%.

Until now, REIFs that have faced continuation votes have largely won them despite these woes – probably because investors are sceptical that they can sell their assets, pay back the debt and achieve a decent return for shareholders. This detente may be changing as investors get more anxious. The chairs of NESF, FSFL and BSIF have all stepped down in the past year and new brooms may be minded to sweep clean.

We could be reaching the point of maximum pessimism, as seems to have happened with battery funds. I have a position in NESF, bought on the basis that the dividend could well be cut, but that much of the bad news was already in the price with a yield in the mid-teens. Still, if the REIFs’ accounts clearly told us how much cash is being generated per pound invested per MW and whether it is declining, it would be much easier for investors to decide whether they still want to back these “sustainable” investments.

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What happened at COP30?

Last month’s climate jamboree in Brazil, COP30, was a damp squib – and not just due to the torrential rain that poured through the venue’s leaking ceilings. The UN’s 30th Conference of the Parties had been touted as the moment when there would be a move from pledges to implementation. But action was little in evidence.

For the first time, the US boycotted the conference. China was there, but studiously avoided stepping into the leadership vacuum. The summit ended with a watered-down resolution that made no direct mention of fossil fuels, the main driver of global warming. And at a summit held in the Amazon rainforest city of Belém, delegates failed to agree the hoped-for road map to a global deforestation accord.

Did COP30 achieve anything?

The summit adopted a set of 59 global indicators to track progress toward the Global Goal on Adaptation (GGA) and agreed on the next round of National Adaptation Plans, bureaucratic scorecards that represent an important and growing recognition that adaptation and mitigation – not just emissions cuts – must be part of global climate action. These were backed up by national commitments to triple adaptation finance by 2035 to roughly $120 billion a year.

But the defining feature of COP30 was the failure to even mention fossil fuels in the final resolution, even while explicitly acknowledging – for the first time – that the world is now likely to “overshoot” the 1.5˚C warming target in the 2015 Paris Agreement.

Is it time to scrap the COPs?

Many think so. The COPs have long been attacked as talking shops that spew a lot of hot air about hot air – issuing countless warnings about the cost of inaction but rarely managing to agree solid proposals for how the world should halt dangerous rising temperatures. In the 30 years since the first congress in Berlin, greenhouse gas emissions have risen by 34%. That’s slower than the 64% increase over the three previous decades, but not nearly enough to stop temperatures breaching the thresholds that scientists say will cause irreversible damage to the planet.

Looked at another way, though, without the Kyoto (1997) and Paris (2015) COPs, the situation would be far worse. Simon Stiell, head of the UN’s Climate Framework, calculates that, without the COP process, world temperatures would now be heading for a truly catastrophic 5˚C of heating, instead of the 2.5˚C increase – merely disastrous – that is now projected.

What’s happening to temperatures?

They are going up. This COP had an inauspicious run-up, in that early last month the UN’s Emissions Gap report confirmed what had long been known: that the steady increase in carbon emissions since Paris means global temperatures will rise beyond 1.5°C above pre-industrial levels. Global temperatures have surged past that mark in some recent years, with 2023 and 2024 ranking among the hottest on record. The 30-year rolling average – the benchmark used by the Paris deal – is still just below that level, at about 1.37˚C.

To keep even a 50% chance of limiting warming to 1.5°C, the world must cut emissions roughly 55% by 2035, compared with 2019 levels. But the national plans submitted within the COP process offer a fraction of that, putting the world on track for roughly 2.5°C of warming.

Are emissions now falling?

No. Global fossil-fuel emissions hit record highs in 2025, with the world emitting roughly 39.1 billion tons of planet-warming carbon dioxide, according to the Global Carbon Project. That’s 1.1% more than in 2024. A relatively small number of big countries account for most of the world’s emissions, with China responsible for 32%, the US 13%, India 8% and EU nations 6%.

Though emissions are still rising in the US, one promising sign is that they are now flatlining in China, after years of surging. Even so, the International Energy Agency projects that demand for coal, for example, will remain at around record highs until 2027. Demand is still rising in China, India and other developing countries, offsetting falls elsewhere.

So climate diplomacy has failed?

It may be becoming less important. It’s a “COP cliché to say the pavilions where countries host talks on green projects, technologies and trends are more interesting than the formal negotiations”, says Pilita Clark in the Financial Times. What became clear in Belém is that things are changing in the real world regardless of what gets agreed at COPs. In developing countries, from Ethiopia to Nepal, sales of electric cars are surging exponentially. Renewable energy is booming everywhere from Ukraine to Pakistan.

The economics of energy continue to shift decisively in favour of decarbonisation, agrees Paul Polman, the former CEO of Unilever, in Time. Meanwhile, the “centre of gravity is shifting” at COPs – with much of the most important progress happening “around the formal process and despite its limitations”.

What's changing?

In Belém, for example, the Action Agenda – a non-negotiated process – saw businesses, investors and city authorities set out investment plans totalling $1 trillion for clean energy and grid expansion by 2030. And the Netherlands and Colombia jointly announced a non-COP international conference in 2026 to develop an equitable, science-based road map for phasing out fossil fuels.

The institutions of multilateralism still matter greatly, but “may no longer be the primary engine of climate progress”. Businesses – organisations that plan far beyond political cycles – will increasingly be at the forefront, while the COP process must evolve to become simpler and implementation-oriented, or risk losing all credibility.

Indeed, last month’s jamboree may be “remembered less for what it resolved and more for what it exposed: that ambition is outpacing architecture, and that the world is ready to move faster than the institutions designed to guide it”.

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Europe presents a mixed backdrop, with varied political priorities and differing fiscal positions across major economies. Yet many European companies are global leaders in their fields and continue to grow despite muted domestic GDP and new US tariffs. These firms often generate earnings well beyond Europe’s borders, operate in niche markets where expertise matters and provide essential products and services that remain in demand regardless of short-term uncertainty.

The European Opportunities Trust (EOT) invests in a focused number of “special” European businesses that the manager believes have limited downside and can grow consistently over many years. The trust looks for companies with strong competitive positions, global reach and business models that remain relevant through economic cycles, resulting in a portfolio that differs significantly from the index, the MSCI Europe. The following examples illustrate some of the qualities that EOT looks for in its investments.

Three European companies to consider

Gaztransport et Technigaz (Paris: GTT) designs specialist containment systems used in the transport and storage of liquefied natural gas (LNG). GTT’s technology is used in most of the world’s largest LNG carriers, reflecting decades of engineering expertise and strict safety certification standards that competitors have found hard to replicate. Global demand for LNG is expected to continue rising in the years to come.

Following the lifting of the US moratorium on new LNG developments, 10 major liquefaction projects have now been approved worldwide, six of which are in the US. This should translate into a surge in demand for new LNG carriers fitted with GTT technology. We view this long wave of investment in LNG projects as a structural tailwind rather than a short-lived cycle.

Ryanair (Dublin: RYA), Europe’s leading low-cost airline, continues to deliver impressive growth. The company maintains the lowest cost base of any major airline and has widened its lead over rivals. The company has a strong balance sheet, allowing it to own rather than lease its aircraft, and to standardise its fleet and optimise maintenance practices, all of which contribute to keeping a lid on costs.

This creates a virtuous circle, whereby Ryanair can make bulk orders of next generation aircraft, which carry more passengers with better fuel efficiency. This cost advantage enables Ryanair to offer lower fares, attract more passengers and fill planes consistently, even when consumers’ budgets are tight. We see Ryanair as a structural winner in European aviation. The business continues to gain market share and remains resilient despite higher interest rates, elevated operating costs and fluctuating economic conditions.

Genus (LSE: GNS) is a global leader in animal genetics, helping farmers improve herds’ health and productivity through advanced breeding programmes. One of the most important long-term developments for the company is the US regulatory approval of its PRRS-resistant pig. PRRS, or porcine reproductive and respiratory syndrome, is a costly viral disease that weakens young pigs and disrupts breeding herds, leading to substantial losses across the industry.

A resistant herd can materially improve survival rates, yields and overall efficiency, offering producers clear economic value. Further regulatory approvals in the coming years are expected to be followed by commercial adoption. The scale of the US market and the global prevalence of PRRS provide a strong foundation for durable growth.

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“The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns.” – Benjamin Graham

Dividend income has always been one of the key contributors to equity-market returns, especially in periods of volatility or bear markets. In the 1970s and 2000s, both periods of significant market volatility for the S&P 500, virtually all of the index’s returns came from income, according to data compiled by Bloomberg and Guinness Global Investors. In the 1970s, the index recorded growth of 76.9%, with 17.2 points coming from price appreciation and 59.7 from dividend income. In the 2000s, the index fell by 24.1%, but dividends added 15 points for a total return of -9.1%.

The longer one stays invested, the more critical dividends become. Guinness Global’s data, going back to 1940, reveal that, over rolling one-year periods, the total contribution from dividend income to total return was just 27%, but that number grew to 57% over a rolling 20-year period. They also reveal that $100 invested at the end of 1940, with dividends reinvested, would have been worth approximately $525,000 at the end of 2019, versus $30,000 with dividends paid out. In this period, dividends and dividend reinvestments accounted for 94% of the index’s total return.

The same trend has been observed in the UK. Between 1 January 2000 and 31 December 2019, the FTSE 100 delivered an average annual return of just 0.4%. However, if you include dividends, the index has actually returned 122% over the same period (or 4% a year), according to Schroders’ calculations.

Headwinds for dividend stocks during the pandemic

Still, there’s a reason the figures presented only go up until 2019. Since the pandemic, this relationship has broken down. The latest data from S&P Global show that, since 1926, dividends have contributed about 31% of the total return for the S&P 500, while capital appreciation has contributed 69%. That’s mostly down to the performance of the past five years.

Since the end of 2021, dividend stocks, as defined by the S&P 500 Dividend Aristocrats index – S&P 500 constituents that have followed a policy of increasing dividends every year for at least 25 consecutive years – have produced a total return of just 9% a year compared with 15.6% for the broader S&P 500 index. This decade, dividends have added just 12% to the S&P 500’s total return, the lowest contribution on record, says Hartford Funds.

As Ian Lance, co-manager at the Redwheel and Temple Bar Investment Trust, notes, equity returns have been “driven by a positive re-rating of equities, particularly in the US and particularly in technology stocks”. Dividend stocks were also hit disproportionately hard in the pandemic years. During 2020, $220 billion of dividends were either cut or paused, according to Janus Henderson.

Research by Goldman Sachs found that more than 80% of US dividend exchange-traded funds (ETFs) underperformed the S&P 500 during the 2020 equity drawdown period, and half of them did not bounce back as strongly as the index in the subsequent recovery.

Dividend stocks also “tend not to perform well when interest rates rise”, as Alan Ray, investment trust research analyst at Kepler Partners, notes. “Investors drawn to conservatively managed dividend-paying companies when interest rates were close to zero now find they can buy ‘risk-free’ UK gilts with yields of 4% or 5%, or even just keep cash in a savings account,” says Ray.

When to trust the dividend yield

Despite the headwinds for dividend stocks over the past five years, history shows they can be a safe haven in periods of volatility and uncertainty. What’s more, many income stocks are now trading at relatively undemanding valuations compared with their growth peers, suggesting there’s a bigger margin of safety with these equities in the event of a market downturn.

There’s no official definition of what makes a good income stock, but there’s one thing most of the research on the topic agrees on, and that’s a correlation between yield and quality, or rather the lack of it. While a dividend stock with a high yield might seem attractive as an income play, more often than not the yield is a reflection of traders’ doubt about the sustainability of the payout.

As Martin Connaghan, co-manager of Murray International Trust, notes, “there is no point in being drawn in by a high dividend yield… because that yield is most likely unsustainable and hence false. Stocks that have, on the face of it, very high yields can be vicious value traps if dividends are subsequently cut.”

In fact, research shows that, rather than chasing high yields, investors should instead look to companies offering yields around the 2% to 4% mark. Yield itself should not be used as a gauge of quality. The best way of evaluating the sustainability and quality of a dividend payout is to analyse the quality of cash flows. In business, cash is king. Cash flow gives a good indication of management’s approach to capital allocation.

As Imran Sattar, portfolio manager of the Edinburgh Investment Trust, notes, “For stocks with higher yields it is important to understand the sustainability of that dividend, how much the dividend is covered by earnings and free cash flow, or ongoing capital generation in the case of a bank… and also to think about whether there is anything on the horizon that could change the cash-flow dynamics such as an increased need for investment.”

This view is echoed by Connaghan, who says, “The ability to sustain and grow dividends is essential. Companies with a high cash-conversion ratio, dividend cover and free cash-flow yield should be in a much stronger position to do this.”

Free cash flow is generally defined as the cash flow generated by operations, excluding the costs of running the business and capital expenditures. In a traditional capital allocation framework, if a firm has free cash to spend, it should first reinvest it back into its operations if it can achieve an attractive and sustainable return on investment. If this opportunity is not available, the company should use the money to reduce debt, and if it has no debt, return the money to investors.

Cash flow figures give us a real, unabridged version of what management is doing with a company’s funds. Investors often turn to earnings before interest, tax, depreciation and amortisation (Ebitda) as a proxy for cash flow, as that’s the metric companies usually like to present. However, this ignores essential business costs, such as the replacement of capital equipment, interest on debt and taxes.

Similarly, a simple dividend cover calculation, which generally takes earnings per share divided by the dividend per share, also provides a misleading picture. Earnings per share do not account for all capital expenditure, particularly on long-term assets, which can be extremely costly for capital-intensive companies. When a company pays a dividend, the money leaves the business. That means the capital must be truly surplus to requirements to prevent problems emerging at a later date.

History is littered with companies that have paid out too much during the good times and have struggled with weak balance sheets and a lack of shareholder support in the bad.

The best dividend stocks

The best dividend stocks are those in companies that strike a balance between operational costs, including capital expenditures, and prudent balance-sheet management, along with sensible dividend policies. And they avoid the damaging concept of a “progressive dividend policy”. Progressive policies envisage the dividend rising steadily year after year. They are designed to provide security for investors. In fact, they do the opposite.

Companies always have and always will go through cycles, and making a commitment to increase a dividend year after year, no matter what, forces management into wrong decisions. It’s difficult to cut a dividend when such a policy is in place, which often puts firms in difficult positions, having to pay out more than they can afford.

Some of the most sensible dividend policies are based on small regular payouts, with annual special dividends based on profit throughout the year. This gives more flexibility, allowing management to announce additional distributions as needed without putting undue stress on the balance sheet. Managers can also choose to alternate between dividends and share buybacks, the latter being easier to turn on and off depending on the business environment.

FTSE 100 insurance giant Admiral is an excellent example. Car insurance can be a volatile and unpredictable business. It moves between a hard market when insurance prices are rising and profits are plentiful and a soft market where competition intensifies, prices fall and insurers have to stomach big losses. Managing a business through this cycle requires financial flexibility and a strong balance sheet, so Admiral cannot afford to commit itself to an unsustainable dividend policy. Instead, it commits to distribute 65% of its post-tax profits annually as a regular dividend, supplementing these distributions with special payouts.

For example, for the first half of the year, Admiral declared a regular dividend of 85.9p per share and a special dividend of 29.1p per share, for a total distribution of 115p, or 88% of post-tax profit. This was a pretty hefty interim distribution for the group. In 2021, a bumper year following the pandemic, which forced a change in driving habits and a substantial reduction in accidents, the company’s annual dividend payout reached just under 280p per share. However, in the following years, as drivers returned to the road and started crashing into each other, the company reduced its distribution in line with falling profits. For the 2023 financial year, it paid out just 103p across both its interim and final dividends.

Another example is CME Group. It pays a regular quarterly dividend, equivalent to a yield of about 2% per year. It supplements this with a special distribution at the end of the year based on annual trading performance. Last year, for example, the company paid out four regular dividends of $1.15 per share and one final special dividend for the year of $5.25.

The perils of a regular dividend policy became all too clear in the mining sector back in 2016. That year, commodity prices slumped as China’s previously meteoric growth started to splutter to a halt, leaving mining giants such as BHP, Rio Tinto, Glencore and Anglo American in a difficult position. Not only had these companies made a commitment to hefty, regular, progressive dividends based on past profitability, they had also spent and borrowed heavily to fund growth.

As commodity prices and revenue plunged, something had to give. BHP cut its interim dividend by 75%, the first cut since 1988, and abandoned its progressive dividend policy. Rio also slashed its dividend in half and Glencore was forced into a messy restructuring involving a $2.5 billion cash call, as well as a dividend cut.

In another example, BT had to cut its dividend in 2020 when management realised the company needed to spend more on its fibre build-out to keep up with the competition. This was a big blow for income investors as prior to the cut BT was often touted as one of the UK market’s top income plays.

Where to hunt for dividend income

Sensible capital allocation is a good indicator of dividend quality, as is the overall quality of the business. Quality can be defined in many different ways. Warren Buffett summed it up quite well in his letter to shareholders of Berkshire Hathaway in 1996: “Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, 10 and 20 years from now.”

To put it another way, a quality company is one that has a strong competitive advantage and a long runway for growth. A strong competitive advantage also typically translates into higher-than-average profit margins, providing the company with ample cash to invest in marketing, growth and debt repayment, and to return funds to shareholders.

James Harries, co-manager at STS Global Income & Growth Trust, says the best income stocks are “predictable, resilient, high-quality businesses” you can “say something sensible about on a five-,seven- and 10-year view”. That often means sticking with the companies that he describes as “steady as she goes” – they often “grow slower, but [grow] more persistently”.

A great example of the strategy, and a recent addition to the portfolio, is Nike. “It’s the highest quality global sports brand,” notes Harries, and though the company is going through some turbulence, “I’m pretty confident that we’re buying a really high-quality asset at a very attractive valuation”. Nike is one of the best-known and valuable consumer brands in the world, boasts a gross profit margin of more than 40%, and has billions of dollars in net cash on the balance sheet. It’s also rewarding shareholders, with $591 million in dividends in the first half of 2026 and $18 billion returned via share buybacks since June 2022.

The utilities sector can also be a good place to hunt for income. “Often a utility company operates in a regulated sector that is supported by a long-term concession contract, which will stipulate the return that can be generated over the life of the concession,” notes Jacqueline Broers, co-portfolio manager at Utilico Emerging Markets. As a result, cash flows can be more “resilient” and “predictable” than those of other sectors. “All of which translates into a more sustainable long-term dividend payout.”

Broers highlights the example of IndiGrid Infrastructure Trust, which owns 41 power projects comprising 17 operational transmission projects, three greenfield transmission projects, 19 solar generation projects, and battery energy storage (BESS) projects located across 20 states and two union territories in India. The average remaining contract life on the company’s transmission assets is just under 26 years, with contracted revenues underpinning the company’s dividend yield of about 10%.

The other advantage utilities tend to have is the prohibitive replacement cost of their assets. Take UK-based National Grid, which owns the majority of the UK’s high-voltage transmission network, comprising thousands of miles of cables and transmission stations. Building these assets from the ground up would be virtually impossible today, not to mention the vast cost. That gives the company a robust competitive advantage.

Utilities aren’t the only companies that can have such an edge. Connaghan points to the likes of Grupo ASUR, a Mexican-listed airport operator with 16 assets across Central and Latin America. “Its key asset is Cancun airport and the company has seen its passenger numbers increase by a compound annual growth rate of 6% over the last 35 years,” he says. “Such was the financial strength of this business in the earlier part of this year that in April, they announced two 15-peso special dividends in addition to a regular dividend of 50 pesos. This put the stock on a 14% dividend yield.”

The fund manager also highlights the likes of Enbridge, a Canadian pipeline business which transports and stores natural gas and oil through its network, which spans North America. The company has grown its dividend for 30 years in a row. “This type of business is far less exposed to the underlying shifts in the commodity prices themselves, as 98% of its Ebitda comes from assets backed by either regulated returns or take or pay agreements,” he notes.

Investment trusts for dividend income

The structure of an investment trust lends itself to income investing. Not only do they give investors access to a well-diversified portfolio of income stocks, but they can also pay dividends out of both capital and income, unlike ETFs and other open-ended investments. That means trusts are more likely to be able to sustain their dividends in periods of market volatility. Trusts with a global mandate also have far more flexibility in where they can invest so they can pick the best income, quality and growth plays in the world.

JP Morgan Global Growth and Income (LSE: JGGI), Murray International (LSE: MYI), Scottish American (LSE: SAIN) and STS Global Income & Growth (LSE: STS) all have a global mandate. Ecofin Global Utilities and Infrastructure (LSE: EGL) has a global mandate within its utility sector. Others, such as Law Debenture (LSE: LWDB) and Temple Bar (LSE: TMPL), have a UK focus, but with some international holdings.

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You can’t blame BHP for having another crack at buying Anglo American, but its decision to walk away again so quickly raises big questions. It is widely acknowledged that there is a looming supply shortfall for copper, the metal at the heart both of a putative BHP-Anglo deal and of the much better Anglo-Teck Resources merger that investors prefer. Yet BHP and its peers remain reluctant to put up serious money to solve that.

The copper bull case is simple. The world is using more electricity: it is replacing fossil fuels (eg, electric cars), it is meeting new demand (eg, emerging markets) and – at the margin – it is critical to new technologies (eg, data centres are a small but fast-growing share of consumption).

In total, electricity will grow from 21% of final energy demand now to more than 50% by 2050 in some scenarios, reckons the International Energy Agency. This implies a lot of copper for wires and other components – generators, transmission cables, vehicles, appliances, in buildings, in networks and so on.

Can copper supply keep up with rising demand?

Copper supply is not on track to keep up with this. Total demand will grow by roughly 24% to almost 43 million tonnes per annum (mtpa) by 2035, reckon analysts at Wood Mackenzie. Meeting it will require eight mtpa of new mined supply and 3.5 mtpa of additional scrap supply. There is no shortage of copper reserves around the world to mine, although ore grades have been dropping over the long term (this means more rock must be mined to produce the same amount of metal, pushing up costs). However, there has been a lack of investment in major new mines. Meeting demand will now take over $210 billion in investment, says Wood Mackenzie. This is a huge increase from the $76 billion invested in the past six years, and about half of that came from Chinese miners, which adds a further wrinkle. Securing copper supplies may become a geopolitical imperative.

There may already be hints of tightness in the market, with prices reaching record highs. Steady demand growth has combined with supply disruptions at mines in Chile, the Democratic Republic of Congo and Indonesia to create a probable mined supply deficit by next year. However, there are other factors at play as well. The threat of tariffs on refined copper imports pushed US prices to a premium, causing metal to be stockpiled there and shrinking stocks elsewhere in the world. If demand forecasts are correct, the fundamental crunch is yet to come.

Some substitution is possible. Aluminium has lower conductivity and is less durable, but works well for some power applications. Fibre-optic cable has replaced copper for data transmission. More speculatively, carbon nanotubes may eventually offer another alternative. Still, for the most part, copper will be crucial for the foreseeable future. A basket of some of the most pure-play copper miners – eg, Anglo-Teck, Freeport McMoRan, First Quantum Minerals, Antofagasta, Southern Cooper – is one of the most compelling ideas in natural resources.

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Canada’s stocks have enjoyed a revival this year. The S&P/TSX Composite index has gained 25%, eclipsing America’s S&P 500, up just 16%. Canada has been one of 2025’s best-performing developed markets, an early sign that the post-globalisation era will reward a very different set of winners.

With economies reshoring and supply chains shortening, the natural lottery of geography and geology has never mattered more. Few nations have hit the jackpot quite like Canada, which ranks among the world’s top-five energy producers and sits atop $1.7 trillion of natural-resource wealth from oil, gas and uranium to potash, gold and timber.

Crucially, Canada pairs this abundance with political stability and alignment with the West, which is a rare combination in a world of rising authoritarianism. As Washington turns inward, Canada’s calmer politics, under the steady hand of prime minister Mark Carney, could become a safe haven for investors seeking exposure to the decade’s defining themes without populist noise.

Canadian stocks for your portfolio

Canada’s most strategic energy resource may be uranium. As the world’s second-largest producer, it stands to gain as nuclear power returns to the global electricity mix. Governments are extending reactors’ lifespans, new builds are back on the agenda, and even the Magnificent Seven are investing in nuclear projects to power AI data centres’ colossal energy needs – demand that could require 50 new reactors by 2030.

After years of supply cuts following the disaster at Fukushima and the West’s retreat from dependence on Russian energy, markets are turning to reliable producers such as Canada. At the heart of this revival sits Cameco (Toronto: CCO), one of the world’s largest and most cost-efficient uranium miners. In partnership with Brookfield and Westinghouse Electric, it plays a central role in supplying Western markets. The shares look promising as miners scramble to restore supply after a decade-long glut. The infrastructure sector has benefited from nearshoring, electrification and decarbonisation. The $1.2 trillion US Bipartisan Infrastructure Investment and Jobs Act alone is funding more than 66,000 projects, while Carney’s industrial strategy aims to channel billions into Canadian clean energy, advanced manufacturing and critical minerals.

Stantec (Toronto: STN), a global leader in sustainable design and engineering, is a clear beneficiary. Its diversified footprint across energy, water and transport positions it perfectly for North America’s rebuilding cycle. A focus on efficiency has delivered industry-leading profit margins, while exposure to US and Canadian infrastructure spending bodes well for growth.

Canada’s answer to Nvidia

Technology is a further major driver of the portfolio. We first bought Nvidia in 2016 at an average price of around $1.35 and have benefited from its meteoric rise ever since. But we have found the next wave of opportunities closer to home.

Celestica makes high-speed components to expand global data centres. With Nvidia, OpenAI and Oracle investing hundreds of billions of pounds in new AI computing power, Celestica sits in the middle of the supply chain. With Celestica’s sales from AI-related hardware surging 80% last quarter, we can access all the disruption of Silicon Valley at a Canadian discount to heady US tech valuations.

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Technological improvements have unrecognisably changed much of the global economy in the last 30 years. But one area that remained steadfastly stuck in the past is one of the most fundamental parts of any economy – money. In recent years, however, a financial revolution began. Cryptocurrencies have been with us now for 16 years, but they bring with them a whole host of complexities that only the faithful are willing to overlook. In most cryptocurrencies acolytes lies the spirit of the rebel – somebody who wishes to sit outside the system with their wealth independent of oversight and away from traditional assets. Inevitably, this has roused suspicion that the main benefit of cryptocurrencies is as a cover for nefarious activities.

A different type of cryptocurrency has recently come to light – stablecoins. Where Bitcoin and similar digital currencies aim at tearing down the financial order, stablecoins’ purpose is to improve it. These digital assets, backed by real-world currency, are beginning to act as an important bridge between the traditional financial system and the burgeoning world of decentralised finance. At the forefront of this movement is Circle (NYSE: CRCL), a US-listed financial technology (fintech) business that is positioning itself to be a central player in this new global landscape.

What are cryptocurrencies?

Cryptocurrencies are essentially strings of data that represent value. The key characteristic is that they are fungible, meaning that any one unit is interchangeable with any other, just as a pound coin is equal in value and function to any other pound coin. The magic that makes these digital assets secure lies in the blockchain, a development that became possible with the internet.

A blockchain is a decentralised digital ledger, a record of all transactions, that is maintained across a vast network of computers rather than being held by a single central authority, such as a bank. To understand its power, consider the traditional system of double-entry book-keeping. When you send money to someone, both you and the recipient keep a record of the transaction. A bank acts as a trusted, private third party to ensure that both records match.

The blockchain introduces a different third party outside of the private banking system. The radical idea was that the confirming party in transactions was to be a public record, open to be seen and verified by anyone. Every transaction is recorded in a “block” of data and, once that block is verified by the network, it is added to a permanent, immutable chain of previous blocks – thus creating a blockchain. This open, unchangeable record is what makes the assets on a blockchain truly unique and resistant to fraud, as it removes the need for a single, central authority. Imagine a contract between two parties. Then imagine that this contract only becomes valid once the whole world can see it and it thus only becomes legal if everyone agrees. That is the essence of the blockchain.

The difference is that a contract is a unique, non-fungible asset. Because cryptocurrencies are fungible, they can be used to facilitate secure, peer-to-peer transactions without a middleman such as a bank. That is the fundamental idea behind the original cryptocurrencies such as Bitcoin.

The rise of stablecoins

The older digital currencies grabbed headlines due to their volatile price swings and the vast wealth they created for the mavericks who saw the potential early. Stablecoins may prove a more practical innovation. As the name suggests, they are digital assets specifically designed to maintain a stable value, and their value is typically pegged to a fiat currency such as the US dollar or the euro. There are different types of stablecoins, each with a different mechanism for maintaining their peg.

The most common and trusted type is the fiat-backed stablecoin, such as Circle’s USDC. The mechanism is simple: for every digital token created, an equivalent amount of a real-world asset is held in a reserve account. This backing provides trust and stability, ensuring the stablecoin can always be redeemed for its real-world dollar equivalent. Crypto-collateralised stablecoins, such as MakerDAO’s DAI, are backed by volatile cryptocurrencies and use extra collateral to manage risk. Algorithmic stablecoins, such as the failed TerraUSD, rely on complex programs to maintain their value, but can collapse. The recent public failures of algorithmic coins have highlighted the importance of transparent, asset-backed models such as Circle’s.

Circle, formerly Circle Internet Financial, is a prominent US-listed fintech business that has made this model its core mission. Its flagship product is the USD Coin (USDC), but it has since expanded to include the EUR Coin (EURC). The company was founded in 2013 and initially focused on Bitcoin payments before making a strategic pivot to stablecoins. Circle’s history is defined by its commitment to working within the existing financial and regulatory system. From its early days, it actively pursued regulatory approval around the world. It secured key licences in New York, the UK and Singapore.

This dedication to compliance has set it apart. By actively seeking regulatory clarity from the outset, Circle has positioned itself as a trusted partner for financial institutions and businesses. Unlike many of its competitors, rather than trying to replace the financial world order, it is trying to fix it. This is in stark contrast to its main rival, Tether and its USDT coin. Historically, Tether has operated with less transparency and a more decentralised approach, often drawing intense regulatory scrutiny. Tether remains the larger stablecoin by value of currency in circulation, but Circle’s strong focus on trust and following the rules has helped it grow quickly. Because of this, many large investors and businesses see it as a safe and reliable way to enter the world of digital assets.

Circle's new financial infrastructure

Beyond simply providing a digital dollar or euro, Circle is building a new financial infrastructure. This is where the concepts of the off- and on-ramp become critical. The on-ramp is the process of converting traditional currency into a digital one, such as moving dollars from your bank account to a crypto exchange to buy USDC. The off-ramp is the reverse. Currently, these two steps can be a barrier, often involving fees and delays. But the true power of a stablecoin system could lie in a frictionless future where on-ramping and off-ramping are less frequent. Once an individual or business holds their currency in a stablecoin such as USDC, they can transfer it to anyone else in the system instantly, at nearly no cost, and at any time of day. This “always-on” payment rail will bypass the traditional banking system and its associated fees.

This is already happening – in international remittances, for example, where a USDC transfer can take seconds and cost fractions of a penny. This stands in contrast to the traditional system, which can cost upwards of £20 and take several days. In a world of mass adoption, one could even receive a salary in stablecoins, then use them to pay for groceries or bills, all within the same digital system, unlocking a cheap, frictionless, financial life. Circle has actively pursued partnerships with major financial players such as Visa and Fiserv to turn this vision into a reality. These collaborations will allow traditional finance firms to integrate Circle’s technology, helping to bridge the gap and accelerate the adoption of USDC.

Most of Circle’s income comes from the interest it earns on the money that backs its stablecoins. Each USDC and EURC is supported by cash and short-term government bonds, which together provide a steady source of earnings. How much Circle makes depends mainly on two things: current interest rates and how many of its stablecoins are in use. It’s an attractive model, but not without its risks. In a high-interest-rate environment, the firm’s profitability soars. In a rate-cutting world, however, Circle’s revenue from this source would be directly affected.

Acknowledging this dependency, Circle is diversifying its income by offering a suite of software services and customisable interfaces that help businesses integrate stablecoins into their own operations. This includes its Circle Payments Network (CPN), which provides a transaction-based revenue stream that is less sensitive to interest-rate fluctuations. At present, these are small parts of Circle’s business, but they have the potential to become more important as the firm grows.

What the future holds with Circle

Circle’s strategy of working with regulators positions it to be centrally important to an emerging global financial framework. This is no longer a theoretical possibility, especially given the recent passage of the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS, Act. This new US law is the first to set clear national rules for stablecoins. It says that only approved companies can issue them and that they must follow strict rules to protect users and remain transparent. Every stablecoin must be backed one-for-one with safe assets such as cash or short-term US government bonds. Circle has followed this approach from the start and proves it through public reports. The GENIUS Act is a big deal for a company like Circle. Many other stablecoin makers will find it hard to follow these strict new rules, but Circle’s business model was already set up to meet them. This new law provides the clear rules that banks, tech companies and large businesses need. They can now use stablecoins with confidence because the law removes the legal doubts that stopped widespread use before. Additionally, the Act bans stablecoins that don’t follow the rules and sets clear guidelines for foreign companies. This will probably make Circle’s USDC even stronger as a trusted, regulated choice in the market. It punishes companies that don’t meet this new “gold standard”.

By building a trusted, compliant infrastructure, Circle is not simply creating a new cryptocurrency. It is also helping to lay the groundwork for a stablecoin-powered financial system that could one day become the backbone of global commerce. In the process, it has the potential to make the company enormously profitable. The traditional banking world is on notice: the future of finance is here, and it is built on a foundation of stable, digital money.

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Renewable energy trusts were already struggling before the government decided to kneecap them at the end of October. In a major shock, it has launched a consultation on changing the inflation linkage on the subsidies they receive from the retail price index (RPI) to the consumer price index (CPI) in April 2026, three years sooner than expected.

Even worse, the government has floated a second, complex option that would backdate the switch to 2002. This may have been thrown in mainly to make a April 2026 change sound like a concession, but if actually implemented could reduce the income received by generators by billions of pounds over the coming years. The market reacted accordingly and the sector as a whole lost about 5% of its market value on the day.

Why is the renewable energy trusts industry struggling?

The proposals have created yet another cloud of uncertainty over a sector that was already unloved by investors. The industry has been caught in a “perfect storm” and is ill-equipped to deal with its current challenges, says Pietro Nicholls of RM Funds, an activist that has been battling battery-storage fund Gore Street Energy Storage Fund (LSE: GSF). Many of the trusts’ boards lack the experience required to address these problems, he argues. So instead, they’ve turned to easy ideas such as share buybacks.

Part of the problem is uncertainty over reported net asset values (NAVs). “An infrastructure or renewable investment trust NAV calculation is generally based on a number of different asset-specific (eg, output, power prices or project cash flows) and macro (eg, inflation or foreign exchange rate) assumptions, with individual trusts using different inputs to calculate the NAV value,” says Ashley Thomas of broker Winterflood. For example, if Greencoat UK Wind (LSE: UKW) were to use the same power price assumptions as Renewables Infrastructure Group (LSE: TRIG), its NAV would be lower than currently reported, estimates Winterflood. Since these are just assumptions, it is hard to say which numbers are more appropriate, but with so many variables, NAVs are undoubtedly highly subjective and volatile. Across the sector over the past 18 months, NAV changes have ranged from +8% to -7%, says Winterflood.

Feuding with renewable energy trust managers

It is regrettable that many managers were paid fees based on a percentage of NAV rather than performance. This became increasingly controversial once shares traded far below NAV. In the past year, many trusts have belatedly shifted to levying fees on a 50/50 mix of NAV and market value (or in UKW’s case, entirely on market value). Dealings with managers are becoming a common point of contention. Take Aquila European Renewables (LSE: AERI), which has agreed to sell assets to another fund advised by Aquila at a large discount to the current NAV, says Nicholls. How can the same manager assign two different values to the same assets? Or take a plan by Bluefield Solar Income Fund (LSE: BSIF) to merge with its manager, saying this would make to easier to invest in new projects. The trust has instead put itself up for sale after a backlash. Or just this week, TRIG has said it will merge with HICL Infrastructure (LSE: HICL), run by the same manager.

These developments show a lack of concern for investors, says Nicholls, which is clouding the real value of the assets. “If boards were more respectful of shareholders, the share prices would be a lot higher.”

It isn’t clear what it will take to shift sentiment towards the sector. The government’s consultation certainly won’t help. Still, there needs to be a substantial change in the way these trusts are run, with a primary focus on the interests of shareholders. Only then can investors begin to trust NAVs are what managers say they are.

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The Scottish government has announced plans to sell up to £1.5 billion of its own debt over the next five years, the first time the country has issued its own bonds in more than three centuries. The “kilts”, as they will inevitably be known in a play on the British “gilts”, will help finance the devolved administration. The plans took a step forward last week when two of the major agencies, Moody’s and S&P, gave the planned issue an investment-grade rating. The Scottish National Party plans to press ahead, in part to give it more money to play with, but also, perhaps more importantly, to demonstrate that Scotland can flourish on its own and have credibility in the markets.

The trouble is, it is not likely to work out that way. The ratings agencies were quite clear that they were grading Scotland on the basis that it was still part of the United Kingdom, and the debt backed by the Bank of England and the Treasury in London. If Scotland were an independent country it would surely be a very different story.

To start with, Scotland runs a huge budget deficit. For 2024-2025 it rose from £21 billion to £26 billion. That is 11% of GDP, compared with 5.1% for the UK as a whole. If you took out oil, which might not all go to Scotland in a separation agreement with the rest of the UK, it would rise to a terrifying 14%. The rise was largely on account of lower revenues from North Sea oil and gas, but the SNP is fiercely opposed to the oil industry, and wants to close it down as quickly as possible, so the deficit would be a lot worse if the country became independent. Its deficit would rank as one of the highest in the developed world. It is behind Timor-Leste, at 48% of GDP, and Ukraine at 18%, if above Egypt and Zimbabwe. It is hard to believe that borrowing on that scale would be sustainable for very long.

Next, Scotland has a political class that is addicted to spending. Ever since the devolved government was created at the start of the century the one thing it has proved very good at is giving away free stuff. Higher education does not have to be paid for, and neither do prescriptions, or bus travel if you are under 22 or over 60. It makes politicians sound generous. Some of that is paid for with higher income-tax rates in Scotland than in the rest of the country, but most of it comes from subsidies from London. Public spending is already more than £2,000 per person higher in Scotland than in the rest of the UK, but the budget deficit is still huge. It is hard to see any government in Edinburgh changing that.

It's hard to think of anything worse than Scotland's proposed 'kilts'

Finally, Scotland may break away from the UK at some stage, and, if it does so, it may have to issue its own currency. The SNP has always maintained that it can carry on using the pound after independence, if it ever happens, and the Bank of England will remain the ultimate guarantor of its debts. But the government in Westminster has never agreed to it and neither has the Bank. It is hard to see why they ever would. Anyone holding a “kilt” has to reckon with the possibility that Scotland may have to issue its own currency at some stage and that it will sharply devalue against the pound. Measured in sterling, or indeed dollars or euros, they will face huge losses on their holdings.

In reality, it is hard to think of a worse investment. A market in “kilts” will make that painfully clear almost as soon as it is launched. It might start out trading at the same price as UK-issued gilts, but it will very quickly start to deviate from that. If a second referendum on independence is mooted, prices will plunge if there are polls showing a “yes” vote, which paradoxically, will make that outcome far less likely.

If there is a prospect of a vote being held, prices will start to sink as investors weigh the possibility that it might be a Treasury in Edinburgh rather than London that has to pay them back. Scottish politicians pushing for “kilts” might imagine it will strengthen the case for independence and bolster their financial credibility. More likely is that it will backfire spectacularly, making it clear that an independent Scotland would struggle to pay its bills.

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Our annual conference, which this year coincided with the magazine’s 25th birthday, was a roaring success. For those who weren’t there, here is an overview of what you missed. Andrew opened proceedings by noting that the magazine’s quarter-century was bookended by two huge technology booms, while the years in between had seen extraordinary events ranging from a financial crisis to a pandemic.

The only thing it hadn’t seen was a normal business cycle, thanks to constant interference in economic cycles and economies by central banks. Calderwood Capital’s Dylan Grice underlined how state meddling was a recurrent theme – well-intentioned efforts to regulate the market only deepened the crises leading to the American and French revolutions. Throw in today’s geopolitical, technological and financial uncertainty, and extreme caution is called for.

Diversify as follows, he says: construct an equally weighted portfolio comprising equities, commodities, precious metals, real bonds, nominal bonds and securities offering exposure to insurance and reinsurance, such as CAT bonds.

The panel following Dylan’s speech, hosted by MoneyWeek’s columnist Rupert Hargreaves of City A.M. and consisting of Jasmine Yeo of Ruffer, Troy Asset Management’s Charlotte Yonge, RIT Capital Partners’ Frank Ducomble and Charlie Morris of ByteTree, highlighted the scope for gold, bitcoin and index-linked bonds to shield investors’ holdings. Charlie said he was convinced that AI is a massive bubble that peaked in late October.

MoneyWeek Wealth Summit highlights

The emphasis then switched to long-term growth opportunities. Enter Vietnam, which has been one of our favourite stock markets since 2005. Dominic Scriven of Dragon Capital says the economy is growing at 7%-8% a year. Exports have moved up the value chain from raw materials to electronics, and consumption is rising. The pro-business Communist government is sacking one million civil servants to make the public sector more efficient.

Japan, meanwhile, is making its private sector more efficient. Nicola Takada Wood of AVI reviewed the progress of the campaign to shake up corporate governance and unlock value. AVI has been a key activist investor in the under-researched small-cap segment of the market. There is still room for improvement – a large majority of the firms trading below book value in the market are small caps.

Ben James of Baillie Gifford focused on AI. It is the latest technological revolution in a series that began with the industrial revolution, the last one being information technology. We are in the early phase of the machine era, and a key theme will be robotics, with robots doing manual tasks everywhere. In this context, Aurora, an unmanned truck group, and Tesla’s robots have caught Baillie Gifford’s eye.

Next we heard from India Capital Growth Fund’s Gaurav Narain. India continues to exhibit robust growth of about 6% a year, powered by a young population’s household spending – the median age is 28. The stock market remains buoyant, too, accounting for a third of flotations worldwide.

A lunchtime discussion about gold was led by Cris Heaton, who quizzed James Proudlock of OptionsDesk and Erik Norland of CME Group. A snap poll of the audience afterwards was bullish.

After lunch, our founding editor, Merryn Somerset Webb, now at Bloomberg, reviewed the lessons of MoneyWeek’s 25 years. Two of them were that diversification and mean reversion always matter. And hold gold.

Then Laura Foll of Janus Henderson explored the perennial problem of the British stockmarket withering away, with former MoneyWeek editor John Stepek, also now at Bloomberg. The market’s overall valuation is in line with its long-term average, while small and mid caps still look cheap. Foll highlighted commercial property as an area unlikely to become obsolete as technological advances gather pace.

Diana Choyleva of Enodo Economics has become more positive on China in the past few years. There is scope for a bull market now that the government is trying to encourage people to hold stocks rather than property. Pantheon International’s Charlotte Morris reminded the audience that privately held companies outnumber listed companies threefold, so it is important to have exposure to private equity. The same goes for healthcare, according to James Douglas of Polar Capital. The pace of innovation remains impressive and demand robust – concern over the Trump administration’s capricious health policies has eased and valuations are appealing.

The afternoon panel, focusing on diversifying beyond the US and its AI-driven tech stocks, along with the relative merits of small and large caps, was hosted by MoneyWeek’s columnist David C. Stevenson. David was joined by Martin Connaghan of the Murray International Trust, Simon Barnard of the Smithson Investment Trust and Swathi Seshadri of MCP Emerging Markets. Value lies beyond the US, while Simon Barnard noted that the AI boom may be like the railroad one – more useful to future users than the original investors.

Following Dr Pippa Malmgren’s riveting explanation of how stablecoins could remodel the global financial order, MoneyWeek’s funds columnist, Max King, finished the conference by reminding readers to stay optimistic and recall that sometimes value stocks were cheap for a reason. The FTSE 100 should soon reach 10,000, he said. This week, it is tantalisingly close.

Thank you to our headline partner Aberdeen, event partners India Capital Growth Fund, OptionsDesk, Polar Capital, QuotedData, RIT Capital Partners, Smithson Investment Trust and Vietnam Enterprise Investments; and association partner The Association of Investment Companies for their support.

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Isaac Newton, who must be one of the cleverest individuals ever to have lived, made groundbreaking contributions to physics, mathematics, mechanics, philosophy and astronomy. The laws of motion, the theory of gravitation and the reflecting telescope were among his many contributions. He was also a brilliant alchemist, obsessed with theology and biblical prophecy. As if that isn’t enough, he is credited with the design of the gold standard, the primary monetary system of the world for over two hundred years.

Counterfeit coins

In 1695, counterfeit coins accounted for more than a tenth of all English money in circulation. The English used the counterfeit coins in particular to pay their taxes. The Exchequer that year reported no more than ten good shillings for every hundred pounds of revenue. Coin clipping was also a major problem, especially of old coins, and silver coins were disappearing from circulation altogether.

Silver was worth more on the continent as bullion than it was in the UK as tender, so arbitrageurs shipped coins abroad, melted them down, and sold them for gold. Everyone from the Jews to the French was blamed, but by 1695, it was almost impossible to find legal silver in circulation. It had all been melted down and sold.

This all led to a shortage of currency, which inhibited trade. King William III begged the House of Commons to respond to the crisis and, seeking help, secretary of the Treasury William Lowndes wrote letters to England’s wisest men, asking their advice. Among them were philosopher John Locke, banker Josiah Child, and scientist Isaac Newton.

Newton was in his mid-40s and probably not far off the peak of his powers. He had published his most famous work, the Philosophiæ Naturalis Principia Mathematica, just eight years earlier in 1687, and it had established him as the cleverest man in the country. He would now apply his great mind to money.

With the formation of the Bank of England in 1694, Newton had become aware of the possibilities of paper money. “If interest be not yet low enough for the advantage of trade and the design of setting the poor on trade,” he wrote, “the only proper way to lower it is more paper credit till by trading and business we can get more money”.

He could see that token value and intrinsic value were not necessarily one and the same. It was also obvious to Newton that the currency criminals were rational actors. They would continue to clip, counterfeit and sell abroad while there was profit in it. Bullion smuggling carried the death sentence, yet still it went on. Coercion alone would not be enough to stop it from happening. The market itself needed to be changed.

Newton came up with two measures. Firstly, to deal with the clipping, all coins minted prior to 1662 should be called in, melted down, and, using machines, re-made into coins that had a single consistent edge. With no more hand-hammered coins in circulation, clipping coins would become that much more difficult. Re-minting the entire country’s coin, however, at a time of such primitive machinery, was no small undertaking. Secondly, to deal with the silver issue, the amount of silver in coins should be lowered so that the silver content and the face value of the coin were the same. The thought of such a devaluation went against the psyche. The idea that token value and intrinsic value might be different was alien and Newton’s second proposal was not widely welcomed. There were 20 shillings to a pound, so a shilling should contain a concomitant amount of silver.

Newton may have thought that the token was more important than the silver content, but landowners and the government, which was largely made up of them, would lose 20% of their wealth by Newton’s proposal. In 1696 Parliament approved the recoinage, but stipulated the new coins maintain the old weights. Newton warned that the silver outflow would continue.

Isaac Newton's new career

The following year, nudged by John Locke, Charles Montagu, the chancellor of the Exchequer, sent Newton a letter notifying him that the King intended to make him warden of the Mint. So began his new career. Perhaps the role was only intended as a sinecure, but Newton took it very seriously.

Putting his chemical and mathematical knowledge to good use, Newton got the Mint’s machines working and the coins minted at a speed that defied the predictions of even the boldest optimist. Newton would also have to learn the skills of a policeman – both investigator and interrogator – and he proved masterful. This ruthless enforcer of the law oversaw numerous investigations, exposing frauds and then prosecuting perpetrators. Poor counterfeiters had no idea what they were up against, and many were sent to the gallows for their crimes.

So good at the job of warden was Newton that, in 1699, he was promoted and made master of the Royal Mint. After the political union between England and Scotland in 1707, Newton directed a Scottish recoinage that would lead to a new currency for the new Kingdom of Great Britain. He had solved the clipping problem, the counterfeiting issue was vastly improved, but silver was still making its way across the Channel, just as Newton had said it would. As long as the silver content exceeded the face value of the coins, the trade would continue. By 1715, almost all of the coins that Newton had struck between 1696 and 1699 had left the country.

Newton’s studies had moved on from tides, planetary motions and pendulums to the gold markets. He drew up an extensive table of assays of foreign coins and in doing so realised that gold was cheaper in the new markets opening up in Asia than in Europe, and thus that silver was not just being sucked out of England, but out of Europe itself to India and China where it was traded for gold.

The 18th-century gold rush

Portuguese deserters had found alluvial gold two hundred miles inland from Rio de Janeiro in Minas Gerais in Brazil. Soon everyone was flocking there. By 1724, within just three decades of the discovery, world output had doubled. By 1750, 65% of global production was emanating from Brazil. The gold made its way to Lisbon, along with sugar, tobacco and other Brazilian products, and with it the Portuguese minted their moidores coins. The Portuguese used their gold to buy English cereal crops, beef and fish, woollen goods, manufactured articles, and luxuries. Portugal imported five times as much from England as it exported to it, and it used its gold to settle the difference.

The moidores, which weighed slightly more than an English guinea, worth 28 shillings, actually became currency. In London, the Bank of England began buying vast amounts of gold “to be coined as it comes in” and the Mint began minting guineas from the moidores. By 1715, the Bank had 800 kilogrammes, or 25,700 troy ounces (t.oz), a nascent central bank reserve, and this figure would rise to 15.5 tonnes, 500,000 t.oz, by 1730. So much gold coin had never been minted before, and London soon overtook Amsterdam as the foremost precious-metals market. Gold was coming and staying. Silver was leaving for Asia. In 1717, Newton was called on to investigate.

He came up with a new system in 1717. Less than three months later there was a Royal proclamation that forbade the exchange of gold guineas for more than 21 silver shillings – even if they were clipped or underweight. Thus was a guinea just over a pound, which was 20 shillings, or 113 grains of gold. The ratio of gold to silver was effectively set at roughly 1:15.5.

But silver-coin clipping continued, and full-weight silver coins continued to be exported to the continent, where 21 shillings of silver could still get you more than a guinea’s worth of gold (just over 7.6 grams/1/4 t.oz). Exports also headed to Asia, especially India and China, often via the East India Company, where silver was even more valuable. The result was that silver was used for imports, and thus left the country, while exports were traded for gold, which thus came into the country. All in all, some two-thirds of that Brazilian gold is thought to have ended up in England.

Britain had always been on a silver standard. A pound was a pound of sterling silver. Although the Royal proclamation suggested a bimetallic standard, in practice, with so much silver going abroad, it moved Britain from silver to its first gold standard.

Gold was more dependable than clipped silver. The future would look back on Newton as the father of the gold standard. His system proved the bedrock of Britain’s domestic and international trade throughout the 18th century, helping it to become such a formidable commercial power. But it was an accidental gold standard. Nobody – not the institutions nor the persons involved – had had the slightest intention of creating a new monetary system based on gold. Most people wanted to sustain silver as the prime coinage of the land. Newton had tried to create a functioning bimetallic standard.

But market forces had other ideas

The second half of the 19th century proved the age of the gold rush. Aside from taxation, it is difficult to think of anything more overlooked that has had a more profound influence on the course of human history than the gold rush. Nations, indeed civilisations, have been formed on the back of them. The 24th of January 1848 stands as a watershed moment, the dawn of a new golden age.

On that day a carpenter from New Jersey by the name of James Marshall saw something shiny at the bottom of a ditch while carrying out a routine inspection of a lumber mill he was helping build on the western slopes of the Sierra Nevada in California. Within a few years, the scale of the gold business changed out of all proportion.

Until that point there had been roughly one-third of an ounce of gold for every person on the planet. Fifty years later, even with a higher population, there was two-thirds of an ounce. The gold price should surely fall with all the new supply, feared bankers and economists. “The price must fall,” said The Economist, wrong about everything even then. But the gold price did not fall. It remained constant. What everyone had failed to appreciate was that most of the gold would be used as money, and that trade, exchange and economic expansion would be the result.

Surprisingly perhaps, the biggest casualty of the gold rush was silver. Silver had been used as money for thousands of years. Not for much longer. Its price halved. In 1850, only Britain, Portugal, Brazil, and a handful of other nations were on the gold standard. Everyone else was on bimetallic standards. By the end of the century, every major nation bar China was on a gold standard, the classical gold standard Newton is credited with having designed, but which, really, was accidental.

Dominic Frisby’s latest book is The Secret History of Gold: Myth, Money, Politics & Power, published by Penguin Business and available from all good bookshops. He writes investment newsletter The Flying Frisby.

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Questions about AI’s stock market dominance are being asked louder than ever. On 27 October, Wired published an article contending that “AI may not simply be ‘a bubble’ or even an enormous bubble. It may be the ultimate bubble.” The article included comments from Brent Goldfarb, co-author of Bubbles and Crashes: The Boom and Bust of Technological Innovation. Goldfarb said that the AI boom ticks every box he looks for in a technology-driven bubble: uncertainty over the ultimate end use, a focus on “pure play” companies, novice investor participation and a reliance on narrative.

As Edward Chancellor, financial journalist and former hedge-fund strategist, has pointed out in these pages, the AI bubble is also on shakier ground than many previous technology-driven bubbles, such as the dotcom bubble, the “Roaring Twenties” and the US railroad boom, all of which were followed by major economic depressions. It is also more speculative. Railways, cars and the internet were proven technologies in their bubble periods – the same cannot be said of self-teaching computers. The AI bubble is more “a multi-trillion-dollar experiment” to see if we can arrive at artificial general intelligence (AGI) – technology that successfully matches human levels of intelligence. If that experiment fails, we won’t have canals, railways or fibre-optic cables to show for it, but rather millions of obsolescing computer chips and dormant, debt-funded data centres.

AI as a field of research dates back at least to Alan Turing, and includes established fields such as machine learning and computer vision; generative AI is a newer subdivision that has taken shape over the last 15 years. It leapt to public attention – and brought the wider field along with it – with the launch of ChatGPT in November 2022. But it’s worth emphasising that if you are happy to buy Nvidia shares at current prices, you are effectively betting on the long-term profitability of generative (and its newer subset, “agentic”) AI, not the field as a whole. And even the bulls are nervous about the prospects for that. “AI... is driving trillions in spending over the next few years and thus will keep this tech bull market alive for at least another two years,” says Dan Ives, head of global technology research at Wedbush Securities. That is significant as Ives is one of the great tech bulls. If even he is implicitly conceding that the current bull market could end and suggesting a possible timeframe, it shows that doubt is creeping in.

The nature of the AI bubble

“This time it’s different” is regarded as one of the most dangerous phrases in investing, but it’s a refrain that AI’s proponents turn to increasingly frequently. The companies driving AI today, they say, are highly profitable, unlike the proliferation of profitless internet start-ups in the dotcom era. That holds true of Nvidia as well as the “hyperscalers” (Alphabet, Amazon and Microsoft), but none of these are profitable because of revenue generated by generative AI products. They were already highly profitable (and, for the most part, less capital-intensive) before the arrival of ChatGPT. No one denies there is money to be made selling computer chips or cloud computing. But AI is a different story.

Step back and look at generative AI firms in isolation, and the current set-up looks a lot like the dotcom bubble. Venture capital is flooding into speculative businesses that burn through cash with no credible plans to turn that into profit any time soon. James Mackintosh of The Wall Street Journal observes that the dotcom bubble kept inflating between 1995-2000 despite media references to the bubble increasing every year throughout this period. Bubbles can keep growing, even if everyone knows they’re bubbles.

A bubble usually bursts after encountering some form of pin. No one knows what that will be for AI, but a contender is an energy-driven inflation crisis. AI requires vast amounts of energy. Policymakers can make life as easy as possible for AI developers, but they can’t control energy prices. The more advanced AI models become and the more users they acquire, the more energy they are likely to consume. And there are signs that AI is already making energy more expensive for US consumers. Bank of America deposit data shows that average electricity and gas payments increased 3.6% year-on-year in the third quarter of this year. Whether or not energy-driven inflation reaches a point where it poses headaches for US politicians, it doesn’t take much imagination to see it quickly becoming a problem for AI developers themselves.

OpenAI’s CEO Sam Altman wants his firm to have 250 gigawatts (GW) of data-centre capacity by 2033. According to Bloomberg’s Liam Denning, that’s equivalent to about a third of peak demand on the US grid and more than four times all-time peak electricity demand for the state of California. Nvidia’s CEO Jensen Huang says 1GW of data-centre capacity costs $50 -billion - $60 billion to build (of which $35 billion or so goes on Nvidia’s chips), so building this could cost OpenAI north of $12 trillion. That simply it isn’t going to happen – certainly not in anything like the next eight years, at least – but the numbers show just how much energy AI’s biggest players are planning to consume.

Even with energy prices where they are, the economics are stretched thin for AI developers. OpenAI posted an operating loss of $7.8 billion in the first half of 2025, according to tech news site The Information. Annual recurring revenue is set to exceed $20 billion this year, but OpenAI’s own projections say it will not be cash flow positive until 2029, when it projects revenue of $125 billion. If the economics of scaling its capacity at pace ever start looking negative, then OpenAI’s semiconductor-spending binge could slow dramatically.

If you want an idea of how overblown the stock market’s reaction is to this binge, look no further than AMD (Nasdaq: AMD). On 6 October, OpenAI announced that it would buy up to 6GW of GPUs from AMD, which AMD executives estimated could net $100 billion in additional revenues once the ripple effects are factored in. Within two days of the announcement, AMD’s market capitalisation had increased by around $115 billion – more than the revenue the deal was expected to raise. That’s before getting into the fact that AMD will be paid for the GPUs not with money, but with its own stock.

Where are the benefits of AI?

Generative AI does at appear to be improving professional productivity. What data we currently have available from the US shows a trend of reasonably healthy GDP growth alongside subdued job creation, which Joseph Amato, president and chief investment officer at Neuberger, calls “an unusual combination that points to productivity doing more of the heavy lifting”. AI is expected to lift productivity in the US by 1.5% over the next ten years, and between 0.2%-1.3% across the G7. But Amato cautions that these gains are far from evenly distributed and that they pose risks of their own. “Lower-end white-collar roles – performing routine analysis or administrative tasks often filled by recent college graduates – face significant displacement risk,” he says. That has profound policy implications.

The AI revolution could eat itself. You can’t put an entire generation of the global middle class out of work without expecting substantial economic consequences; perhaps enough to negate all the potential GDP gains. There is evidence that this is already happening. Ron Hetrick, principal economist at workforce consulting firm Lightcast, observes that average real spending on retail goods compared with total employment has been stagnating ever since the housing bubble that led to the 2008 crash. Covid and the consequent stimuli disrupted this trend, but only temporarily: retail spend per employee is now falling again.

Hetrick calls AI “a jobs-destroying, money devouring technology” that threatens to accelerate this decline. As retail spending continues to fall, AI companies’ “large enterprise clients will also see their buyers stagnate”. If the world entered a recession, the core business pillars at Amazon, Google and Meta would take a major hit; advertising and e-commerce revenues are all ultimately reliant on a large crop of middle class consumers happily spending money. None of these companies has an AI division that is remotely profitable in its own right, let alone capable of supporting the wider business.

AI could deliver some genuinely world-changing social benefits, improved medical research being an obvious example. Google DeepMind’s AlphaFold is a program that can predict the structure of a protein based on the sequence of amino acids that comprise it, which has profound implications for the research of diseases and development of treatments.

But two things need to be remembered: firstly, this isn’t particularly new: DeepMind debuted AlphaFold in 2018, so its potential ought to have been priced in before ChatGPT came along. These kinds of techniques are also not generative AI – researchers at the top biotechs are not asking ChatGPT to come up with new amino acid sequences for them, because that’s not how large language models work. More pertinently for investors, it is not a given that the medical applications will be profitable.

How to hedge your bets with AI

How can investors hedge their bets given these trends? Judicious selection of energy stocks is one way to play the increasing demand for power that AI companies will drive over the coming years. But this window may already have passed: Vistra (NYSE: VST), for example, has gained 60% in the past 12 months and now trades at 22 times forward earnings – which is a reasonable price for a tech stock, but looks steep based on traditional valuations for utilities. That said, if it does turn out to be energy inflation that eventually bursts the AI bubble, then the suppliers ought to catch the tailwinds in the process. An investment trust with exposure to companies powering and building data centres, such as Pantheon Infrastructure (LSE: PINT), can offer exposure to data-centre energy suppliers.

Or you could look for undervalued AI plays. Certain semiconductor stocks, such Taiwan Semiconductor Manufacturing Company (NYSE: TSM), stand to continue benefitting from AI infrastructure spending for as long as it takes the bubble to burst, without the overblown valuations of the big US names.

Given TSMC’s effective monopoly on high-end chip manufacturing, it is well-placed to capitalise on whatever technological innovation might follow in AI’s wake if and when the bubble bursts.

Chris Beauchamp, chief market analyst at IG, suggests some traditional defensive plays in order to hedge portfolios, including gold, government bonds, defensive shares in sectors such as consumer staples and healthcare, and multi-asset funds. “Finally, with policy rates still elevated, holding cash-like assets is no longer punitive,” he says. “The key is diversification: no single hedge works in every scenario, but a combination can cushion portfolios if AI euphoria fades.”

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.

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“The lesson of history,” it is said, “is that the lessons of history are never learned.” Does the same apply to investment? Investors, amateur and professional alike, spend a huge amount of time poring over charts, historical precedents, analogies and past behaviour to find clues to the future.

Regulators warn us that past performance is not indicative of future results but, as Baroness Helena Morrissey reminds us, “we are instinctively drawn to think that the past is a model for the future”. The problem is that history never repeats itself and, even if it did, the outcome would vary as people, perhaps drawing on past precedents, react differently.

Investors are better served by remembering Mark Twain’s observation that “history doesn’t repeat itself, but it often rhymes”, and by accumulating pearls of wisdom from their own experience, as I hope I have in the last 47 years, 42 of them in investment.

Being good at sums, I started out qualifying as a chartered accountant at what is now KPMG, though I impetuously left after qualifying to spend two years in corporate advisory under Victor (aka “Lord”) Blank. Fortunately, I realised before he did that the varied skills and personal characteristics necessary in that career were conspicuously lacking in me and that I was more suited to the world of investment.

Good investment goes beyond the numbers

Still, those early years taught me priceless lessons, especially that, as any good accountant knows, the secret of good investment does not lie solely in the numbers. Many investment companies have a screening system to identify companies that combine good margins, high returns on capital, a solid balance sheet, revenue growth, cash generation and so on as part of their “process”. The problem is that these processes are all more or less the same, so the stocks identified are fully valued. The best opportunities are often in the stocks that the screens reject.

An early quote of Warren Buffett’s that I learned was that “when a management with a reputation for excellence encounters a business with a reputation for bad economics, it is the reputation of the business that survives”. It sounds great but management success is not necessarily transferable from one business to another. Simon Wolfson, CEO of Next, points out that 28 of his top 30 employees were promoted internally and have a combined 500 years of experience at Next.

“Bad economics” is not a given in any business. Companies fail because they prove incapable of adapting to change or just give up, rarely because their business has become obsolete. Woolworths continues to thrive in Australia and South Africa, where Wimpy, not McDonald’s, is the market-leading burger chain. 3i’s hugely successful European retail chain Action mimics Woolworths, as does the UK’s B&M. Tim Waterstone built up his chain of bookshops to market dominance when his competitors despaired of competing with Amazon and downloads.

Professional investors will often tell you that they never invest in a business they don’t understand. I doubt it is possible for any manager to really understand any business they invest in; an investor covering dozens or hundreds of companies cannot compete with a dedicated management team. The advantage investors have is objectivity, the ability to see the broader picture and the ability to walk away.

Investment-management companies boast of the number of analysts they employ globally, the number of company meetings they hold and the depth of their research. This often leads to overanalysis, whereby huge amounts of research improves the investor’s confidence but doesn’t result in a better decision. Many of my best investments were made almost on the spur of the moment from a single insight.

Hope is not an investment strategy

Nathan Rothschild said that the secret of his success was that “I never buy at the low and I always sell too soon”. Yet many investors try to finesse their investment decisions, holding back from an investment decision in the hope that a share price would revisit a high or low. I found it helpful to assume that any share I bought would promptly fall 10% and any I sold rise 10%. I would be pleasantly surprised if it turned out differently.

“Run your profits, cut your losses” has always been a popular dictum but is contradicted by “nobody ever went broke taking a profit”. True; they went broke selling a winner and reinvesting in a loser. It is incredibly hard to know when to sell. Most people sell too soon but selling a share in freefall is mortifying. “Up like a rocket, down like a stick,” the wags say. I sometimes top-slice holdings but am a reluctant seller. However, the market regularly reminds us that great companies and funds don’t outperform forever.

“The stock market can stay irrational for longer than you can stay solvent” is another popular favourite. Any professional investor will tell you that it can be a long, long wait before an investment comes good, so you have to be very patient.

They say this after it has come good, not after three or five years of dud performance when they are wondering if they have made a mistake. Also, remember that markets are irrational much less often than many professionals believe – investment sages are not known for their humility or lack of self-confidence.

“Cheap is not cheerful” is a strapline I picked up along the way. Investors are drawn to lowly valued shares or markets (like the UK) but they are usually cheap for a reason. Cheapness is the easiest excuse for a bad investment. That is not to belittle “value” investing but the best hunting ground for value is recovery – which is contrarian and risky – or undiscovered potential.

Go for growth

The opportunity in “growth” investment is the reluctance of investors to believe that high growth is sustainable. No analyst likes to predict sustainable growth above 15% per annum but, as the leading firms in the technology sector have shown, it does happen. Still, there are many blind alleys: companies whose technology is superseded by others, who fail to monetise the potential, whose big idea turns out to be less revolutionary than expected or just a fad.

An early lesson every investor needs to learn is that they will make mistakes and lose money. The two don’t always go together. A mistake can be profitable and a rational decision can lose money: you played the odds wrongly but got lucky, or the other way round. Learn the lessons of the mistakes and move on.

An early boss, hedge fund manager John Angelo, used to tell me, “opinions are like a**holes; everybody’s got one”. Much later, I learned that it was, broadly, an aphorism of Winston Churchill’s.

John’s point was that he was only interested in what was going to happen and what it meant for markets, not in subjective opinions. Good investors shy away from opinions on politics, economics and current affairs but listen to all the arguments, distrusting the consensus. You learn much more that way.

Bumps in the road

The greatest lesson of all is that markets go up in the long term. Time turns most bear markets and crashes, which seemed so serious at the time, into mere blips in the long upward path. Yet the narrative of the investment gurus, faithfully reported by the media, is always to talk down the outlook for markets, to warn of “bubbles” and predict disaster just around the corner.

It is a standing joke of investment professionals that headlines of “billions wiped off stockmarkets” and lurid magazine covers depicting an absence of hope are a signal to buy rather than sell. But retail investors in the UK are more easily influenced, which helps to explain why the British investment market struggles. Bad news sells and Britons are not known for their optimism.

“The more you know, the more you realise how little you know,” said Bertrand Russell, though the sentiment goes back to Aristotle and Socrates: “Wisdom is knowing how little you know.” Experience makes you come to terms with this more than it teaches you how to invest.

You will not be right all the time. Even Roger Federer won only 54% of the points he played in his tennis career and many of the points he lost were unforced errors, probably regularly repeated. As Baillie Gifford points out, a good investment can multiply your money but a bad one will only lose it once. A missed opportunity may be more painful than a loss.

One of my best investment decisions was back in 1992 when I correctly predicted Britain’s departure from the exchange rate mechanism (ERM) and, against the overwhelming consensus, the economic and market consequences of our exit. This laid the foundations of five years of great performance. All I did was recognise the close parallels with Britain’s departure from the gold standard in 1931, a lesson in economic history I had absorbed at university.

One of my worst decisions was to sell my holding in a gold mining fund two years ago, having held it for about ten years. I despaired of the failure of shares in gold miners to respond to a rising gold price and switched into an energy fund.

The fund I sold performed strongly last year and has doubled in 2025, while the energy fund has remained marooned. I daren’t switch out for fear of being whipsawed. You never learn all the lessons from experience that you should have.

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What MoneyWeek got right

The commodities supercycle (Oct 2001)

Buy gold (Sep 2002)

The US housing bubble (March 2005)

The credit crunch (July 2007)

Sell the banks (Feb 2008)

Trump, Corbyn and populism (Sep 2015)

Post-Covid inflation (May 2020)

What MoneyWeek got wrong

We are all instinctively value-orientated (it tends to beat growth in the long term), and this meant we were often too sceptical of technology stocks. We said Google was overvalued at its flotation in 2004, when the share price was $85. Now it would be $2,330 if the stock hadn’t split in 2022. Being structurally bearish in view of the endless money printing, and central-bank interference in the business cycle, sometimes meant being insufficiently cyclically bullish over the years – that liquidity has to go somewhere, after all.

Columnist Max King has been a useful bullish corrective to our scepticism over the past decade or so. He is also sceptical when he needs to be, however: he rightly urged readers to get out of Neil Woodford’s Patient Capital Trust in early 2018.

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“History is just one f**king thing after another,” declares a vulgar schoolboy in Alan Bennett’s play The History Boys. Surveying the past 25 years can feel the same way. From Iraq to the euro crisis and from Brexit to bitcoin, a great deal has happened over the quarter-century that MoneyWeek has graced newsstands. But not all news stories are created equal.

Hazarding a slightly more elegant periodisation than Bennett’s character, I would argue that the great turning point of the past quarter-century was the financial crisis that began in 2007. For the UK in particular, recent history can be neatly sliced into two periods: the years before and after the great crash.

London loses its crown

In the early 2000s, London could credibly claim to be the centre of global finance. It topped Z/Yen’s inaugural Global Financial Centres index (GFCI) in 2007.

America might be the superpower, the argument went, but London was the world’s capital. Britain’s economy was like the tennis at Wimbledon, a venue for global heavyweights to clash, helped by the English language and an excellent time zone.

The past is indeed a foreign country. Where once the “Sir Humphreys” in Whitehall talked of surpassing New York, today they tremble at unflattering comparisons to Greece. The London stock exchange fears irrelevance. Nvidia alone, valued at $5 trillion, dwarfs the combined value of all London’s blue chips. Deal volume has never regained its 2006 peak of $51 billion (it was just $248 million in the first nine months of this year).

While the technology megabucks fly on Wall Street, one of London’s most notable listings this year has been Princes Group, a purveyor of tinned tuna. It is a perfectly respectable business, but there is a certain desperation in efforts by officials to tout this solid, dull flotation as heralding some great renaissance.

Most tellingly, UK living standards have flatlined since 2007. “[Had the] pre-2007 productivity trend continued, British workers would be 16% more productive today,” says Aadya Bahl on an LSE blog. The significance of 2008 is much more evident in Britain than in America, where growth eventually recovered. The S&P 500 index of US stocks has rocketed nearly 900% since its 2009 low (compared with 153% for the FTSE 100). The UK had placed all of its chips on the wealth generated by the City.

When that bet imploded, the country struggled to carve out a new role for itself. Ever-Tiggerish, Americans bounced back from the banking disaster, reinventing themselves as shale-oil prospectors and smooth-talking tech venture capitalists; Britain has more resembled a middle-aged man bouncing between odd jobs after an involuntary redundancy.

Far too easy money

Gordon Brown’s hubristic claim to have abolished “boom and bust” was widely panned as the Great Recession got underway. But in this, the chancellor-turned-PM was only mirroring the wider economic establishment, where the notion of a “Great Moderation” (built on the supposed inflation-fighting genius of central bankers) was all the rage.

Central banks treated us to further financial wizardry after the subprime meltdown by unleashing ultra-low interest rates and the money-printing of quantitative easing (QE). More tranches were added whenever markets started to feel queasy. By the peak in 2021, the Bank of England’s QE portfolio had swollen to £895 billion, or 40% of UK GDP. Contrary to the worst fears, inflation did not immediately rocket. What happened was more insidious.

With credit all but free, risky behaviour went unchecked for years. On Wall Street, the era of ultra-low rates led to some truly daft companies and unworkable business models. The most notorious was WeWork, a poorly run office landlord that somehow convinced venture capitalists it was a ground-breaking tech innovator. Investors threw tens of billions at the idea before it filed for bankruptcy in 2023.

The impact on governments’ behaviour was even worse. Easy money anaesthetised bond markets, removing pressure on states to get spending in order. Although not openly admitted, this was by design. The hope was that cheap borrowing costs would prompt governments to borrow and spend more, thus ending the world economy’s post-crisis slump.

Governments binge on debt

It took a pandemic for the balance of global savings and borrowing to shift decisively. Anyone wondering why interest rates and inflation have spiked so violently of late need look no further than the world’s finance ministries. With furlough schemes, governments got out the credit card, treating tens of millions of workers to a year off. Then came the energy shock after Russia’s invasion of Ukraine in 2022, combined with a pressing need to find more money for defence and an ageing population.

The result has been an explosion in public borrowing. In 2000, UK public debt stood at 37.7%. Today it is 103%, with the Office for Budget Responsibility warning that on the current trajectory it will hit 270% of GDP by 2070. It’s a similar story in most of the developed world.

The mirror image of worsening government credit has been surging gold prices. The yellow metal started the year 2000 at $289 an ounce (oz). Today it trades at $4,035/oz. That 1,294% gain arguably makes it the trade of the century so far, far outstripping the S&P 500’s 365% return over the same period. MoneyWeek is a great fan of the yellow metal, but even we must admit that at current levels, vertigo is setting in.

Bitcoin fanatics will argue that theirs is the trade of the millennium. MoneyWeek has been cautious about embracing the highly volatile cryptocurrency. Claims that bitcoin is “digital gold” are suspect. Bitcoin tends to behave more like a risky asset, rising and falling together with frothy tech stocks, than it does a hedge.

Yet our scepticism is proving hard to maintain. Since its first boom in 2017, the digital currency has gone on to return over 500%. Modish “meme” coins can do even better. Investing is about growing and preserving pre-existing wealth, rather than making a fortune from nothing. Yet pick the right meme coin and you can become wealthy overnight. Still, a lottery ticket can also do that for you.

So much for peak oil

Gordon Brown’s talk of ending boom and bust is far from the only dubious prediction over the past 25 years. During the 2000s, looming “peak oil” was a persistent worry due to the depletion of existing reserves. Credible estimates predicted that production would peak sometime around the late 2000s, before plummeting. Oil prices did in fact rocket at the end of the decade, rising from $30 a barrel in April 2004 (when MoneyWeek suggested readers buy) to more than $140 a barrel in 2008 (shortly before it told readers to sell).

Yet peak oil was not to be. All of that talk of coming shortages only prompted capitalists to go out and find more. In the 2010s, Texan cowboys flooded world markets with shale. Today, peak production is thought to be likely to occur in the early 2030s.

Peak oil was overdone, but the warning that energy was set to become more scarce has proved accurate. As cheaper production sources were exhausted, more marginal reserves such as shale require a higher price point to be economical. At $64 a barrel, Brent crude prices trade at a level regarded as cheap by current standards. But that is still much higher than its $29 a barrel of November 2000.

Emerging markets diverge

MoneyWeek was launched just as emerging markets (EMs) were gathering steam. The first decade of the 2000s was a golden era for developing economies, as China entered the World Trade Organisation, and Asia and Russia recovered from financial crises. From January 2001 to the end of 2009, EM equities gained 200%, compared with a measly 4% in developed markets. The rise of EMs has remained a vital theme, but one that proved messier than expected.

For one thing, growth has had a frustrating tendency to fail to translate into equity gains. The EM index has returned a paltry 28% since the start of 2010. Leadership of the complex has narrowed as Brazil, Russia and South Africa variously stagnated.

Yet defying repeated predictions of an imminent “China crisis”, China has kept on growing, although the recent property bust is proving the most serious test yet. Many developing economies become trapped at the “middle-income” level, defined as GDP per capita of between $1,000 and $13,800. With GDP per head of $13,300 as of last year, China finds itself on the cusp of joining the world’s high-income economies.

Since Covid, the world’s second-largest economy has emerged as a global leader in electric cars and AI. This has not made for very exciting investment returns (the CSI 300 index is still 13% off the level it reached at the height of an investing mania in 2015). But as geopolitical facts go, none is more fundamental to the future than the Middle Kingdom’s growing power.

Don’t buy at the top

Other popular narratives today may also ultimately prove wide of the mark. Tech leaders in Silicon Valley are currently warning that automation could lead to a jobless future, while simultaneously worrying that low birth rates will starve the economy of working-age people. The future, they incoherently claim, is one of both mass unemployment and a chronic labour shortage. Both problems can’t be true at once.

What about Britain? Trying to be optimistic, one might argue that pessimism has reached such an extreme level that it won’t be very hard for growth to surprise on the upside. The FTSE 100 has returned a decent 75% over the last five years.

Yet its performance this century has been dire. Up 52% since MoneyWeek launched, the blue-chip index has given investors a measly annualised return of 1.75% over 25 years (generous dividends on top do soften the pain of sluggish capital growth, though). Measure from the 2003 low, and the index has returned 165%.

No country knows more about investing misery than Japan, one of MoneyWeek’s long-standing favourites. Last year, the Nikkei index regained its 1989 peak; it took 34 gruelling years. The Topix share index has returned 275% since 2013, when Shinzo Abe launched economic reforms, but getting there has involved a long and painful wait.

The investment industry is fond of reminding us that over the long-term stocks tend to deliver an attractive rate of return. Yet that is an average. As grinding returns in the UK and Japan have shown, if you buy near the top, your portfolio’s recovery time risks being counted in decades. Those currently going all-in on the US tech frenzy have been warned.

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After World War II, America and its allies put in place a set of alliances, institutions and power structures to rebuild war-ravaged countries, create geopolitical stability and generate global economic growth. This post-war order has endured – with one important change – for much of the following eight decades.

The fall of the Berlin Wall and the dissolution of the Soviet Union seemingly marked the end of any alternative to Western capitalism and liberal democracy as the main global economic system. However, in recent years, it has become increasingly obvious that the ties holding this US-dominated system together are fraying and are likely to break.

We are heading into a new world that is likely to be more unstable. In a symbol of this change, on 5 September this year, US president Donald Trump signed an executive order renaming the Department of Defence as the Department of War. This restores the name that it carried from 1789 until 1947 and points to the rising risks of conflict in the years ahead.

So how should investors position themselves for what comes next? What areas that are currently under-represented in most portfolios should they consider for diversification and protection?

Rivalry and conflict between the US and China

The main question is how the shift from a single superpower to two contending nations – the US and China – will affect global supply, demand and the efficiencies of comparative advantage. Free trade has generated huge gains since the end of the Second World War, and even more so since the end of the Cold War. This is now clearly under threat.

With the end of the post-war order comes the new “Great Game”. This name was originally given to the struggle between Britain and Russia for influence in Central Asia (Afghanistan and Persia). This time, the strategic rivalry and political conflict is between the US and China. Paradoxically, it is America that is now pursuing a more inward-looking strategy under Trump’s Make America Great Again (MAGA) banner, while China aims to build economic and political alliances through its Belt and Road (BRI) and Global Development Initiative (GDI) projects.

While America strives to bring its manufacturing base back onshore, Europe is now having to divert budgets from social welfare to rearmament. Both are now in stiff competition with China to electrify the planet and build digital infrastructures. This will inevitably lead to global competition for resources across energy, metals and critical minerals.

This is leading the two superpowers to weaponise their core strategic advantages. For America, this is the US dollar, still the world’s global reserve currency. For China, it is a stranglehold on rare earth elements and critical minerals.

China needs an alternative to the dollar

Freezing and confiscation of assets and denial of access to global payments systems is forcing non-US aligned countries to look for an alternative store of wealth and means of exchange. Herein lies the potential significance of the Brics+, the informal name for the original group of five key emerging-market powers – Brazil, Russia, India, China, South Africa – plus other countries that have begun joining them for summits and policy coordination. Some see this group as a counterpart to the G7 group of developed economies. Initiatives by the Brics+ members so far include work on a development bank, central-bank cooperation and an international payment messaging system.

Any alternative to the dollar looks increasingly likely to be a form of tokenised, asset-backed digital currency. This explains why many central banks closely aligned with the Brics+ nations have been large buyers of gold and other precious metals.

If the creation of a new currency system seems far-fetched, it is worth a quick review of the genesis of the post-war order: the Bretton Woods Agreement of 1944. China is a great student of history, and this agreement provides an template for how new world orders are created. While World War II was still raging, more than 700 delegates from 44 countries met at Bretton Woods in New Hampshire in the US to work on a new global monetary system. The goal was to create a globally efficient foreign exchange market, prevent competitive currency devaluations and promote global economic growth.

John Maynard Keynes, one of the principal economists at the meeting, proposed creating a new international reserve currency called the “bancor” and setting up a global central bank called the “Clearing Union”. However, these proposals were eventually watered down by the US Treasury in favour of a more prominent role for the US dollar, whereby the dollar would be pegged to the price of gold, and other participating currencies would be pegged to the dollar. The agreement was fully implemented in 1958, pegging the US dollar to gold at $35 per ounce.

This system functioned until the early 1970s when it became evident that US gold reserves were not adequate to sustain the peg. This caused a run on gold, forcing first a temporary suspension of the dollar’s convertibility into gold followed by complete collapse of the agreement in 1973. US president Richard Nixon also imposed a 10% tariff on all dutiable imports to force its major trading partners to adjust their currencies upwards and trade barriers downwards. Does this sound familiar?

China has already taken the strategic initiative to convene the Brics+ group of nations. It has established the Shanghai Gold Exchange – and associated physical storage – and now holds a significant percentage of its reserves in gold. It has shown little desire to replace the dollar with its own currency – internalisation of the renminbi would erode the ability to operate capital controls – but it and its allies need an alternative to the dollar.

Given China’s embrace of technology and advanced domestic digital-currency adoption, it does not feel far-fetched to envisage it launching a Bretton Woods-style gold-backed digital currency for those unable or unwilling to access the US dollar system. Crypto tokenisation is the vehicle, not the asset.

China's control of strategic resources

China’s strongest bargaining chip lies in its control of rare-earth elements (which are used in magnets, electrification, lasers and optical devices, catalysts and emission controls and radar/guidance systems), as well as critical minerals, that have broader energy, industrial and defence applications.

China has this control because, while the West focused on the comparative advantage of outsourcing its production to countries with lowest costs, China focused on building an end-to-end supply chain comprised of exploration, mining, refining and industrial manufacturing. With its looser environmental controls, it has come to dominate the global supply of these critical minerals.

In the tit-for-tat game of tariffs and sanctions, China is able to leverage its position in the one area where the US is completely vulnerable. So just as China and its allies have no alternative but to develop a competitor to the US dollar as a store of wealth and means of exchange, the US and Europe now see they have no choice but to develop alternative sources for mining and processing capacity to break this reliance. Exacerbating the situation, America’s prioritisation of its own MAGA agenda over historical alliances has left Europe and other previously US-aligned countries to build their own rather than collective resources.

If investors believe the post-war order is irretrievably compromised, they should consider investments that give exposure to these themes. Gold and precious metals for hard assets. Tokenisation and chips to enable digitalisation. Energy and power generation, rare earth elements and critical minerals, which will be in demand as both sides try to secure supply chains. And US and European defence stocks as the West joins in the new arms race.

Investors have many ways to access these ideas, including individual stocks, thematic exchange-traded funds (ETFs) or exchange-traded commodities (ETCs) that hold physical metals. Listed commodity futures and options are also becoming increasingly accessible, as major exchanges such as the Chicago Mercantile Exchange (CME) roll out mini and even micro contracts, which are 1/10 or 1/100 of the size of standard contracts and require less up-front capital. Such instruments are only suitable for experienced investors, but they offer a way to quickly add hedges or speculative positions to a portfolio – something that will become more valuable in a fast-changing world.

James Proudlock is managing director of OptionsDesk.

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

It’s been a tough two decades for UK-listed firms. BP, Shell and HSBC have dropped out of the ranks of the world’s largest listed companies. Britain’s current largest firm, AstraZeneca, doesn’t even make the global top 40. At the same time, the reputation of British universities has gone in the opposite direction. “We now have more universities in the global top 10 than we had 20 years ago,” as Robin Bagchi, chairman of the London Technology Club, points out. UK universities “continue to punch well above their weight in terms of producing world-leading research”, which is an important economic asset, says James Witter, head of Sarasin Bread Street. More than 2,000 active start-ups have been spun out of UK universities. Little wonder that a sovereign-wealth investor has said that British academia is “our equivalent of Gulf oil”.

The cutting edge of the 'golden triangle' UK universities

Such economic excellence is built on a foundation of “incredible institutions that are focused on applying science and technology to solve fundamental problems”, says Ed Bussey, CEO of Oxford Science Enterprises. He puts Oxford University at the top of the list of such institutions, pointing to the fact that every year Oxford comes up as one of the leading research universities, with a history of more than 70 Nobel prizes in a wide range of disciplines. “When I go out to lunch, I’ll be standing in a queue and the person behind me will be a world leader in this, and then I’ll be walking back to the office and another will walk past me and they’re the Nobel winner in another area.”

Such a concentration of elite academics can help create an environment that ends up being worth more than the sum of the individual academics involved. Having a “cosmopolitan and multinational” atmosphere “attracts other great minds” – and a lot of investors willing to put money into early stage enterprises stemming from Oxford research. This in turn creates a “virtuous circle” where the quality of research attracts capital, which in turns encourages more talented academics to move to Oxford.

Andrew Williamson, managing partner of Cambridge Innovation Capital, emphasises Cambridge’s reputation and heritage as a major competitive advantage in attracting the best scientific talent. “We’ve existed for nearly 800 years, which means that we’ve been doing this for longer than almost anyone else in the entire world,” he says. It has leveraged its infrastructure and culture of “cutting-edge science” to create links between “the academic world, the start-up world and the biggest global technology companies”.

Oxford and Cambridge are not the only points of excellence in British academia. Commentators increasingly talk about the “golden triangle” of Oxford, Cambridge, and Imperial and UCL, rather than just “Oxbridge”. Indeed, as Bagchi notes, when it comes to science, technology, engineering and mathematics (STEM) subjects, “some recent rankings put Imperial College London near the very top of the global table, ahead of Oxford, Cambridge and Harvard”. University College London has also had a lot of success when it comes to creating interesting spin-outs – DeepMind is one example.

UK universities beyond the golden triangle

The golden triangle may be the most visible sign of British scientific excellence, but there is “some really great science coming out of the other UK universities” too, says Doug Quinn, partner at DSW Ventures. As Quinn’s colleague, Mira Androniciuc, notes, there are key specialised laboratories in other UK universities that outperform the general laboratories in the golden triangle institutions. “There are clearly opportunities out there.” But sadly, these are not yet producing a strong pipeline of new firms. There were around 600 early-stage investments in the golden triangle in 2024, but only 250 in other universities. The regions get around a fifth of the total investment that the golden triangle gets, says Quinn. But the gap is mainly due to inexperience and should narrow as the teams outside Oxbridge and London do more deals. Already, there have been more than 100 spin-outs from Manchester University, which now has a well-established technology transfer office.

Indeed, a “Northern arc” is starting to emerge as a serious challenge, led by the four universities of Liverpool, Leeds, Manchester and Sheffield, says Duncan Johnson, CEO of Northern Gritstone. Johnson notes that these four institutions alone employ around 16,500 researchers and have the UK’s largest research budget at around £770 million, which is bigger than those of Oxford, Cambridge and London. Northern Gritstone, which has first refusal on the commercial opportunities from research produced by the Northern arc, has been able to raise £362 million from individuals and institutions.

Henry Lane Fox, CEO of Founders Factory and chairman of the Creator Fund, singles out the University of Southampton as particularly strong when it comes to quantum and high-performance computing; the University of Glasgow as a leader in chemistry; and Edinburgh when it comes to robotics. Overall, around half of the deals that Lane Fox and his team evaluate, and around a third of those that they end up investing in, come from outside the golden triangle, "and both numbers are growing”.

Lane Fox is so enthusiastic about the quality of academic research in the UK as a whole that, in an attempt to grab the most interesting idea at an earlier stage than his competitors, his Creator Fund is now targeting doctoral students at universities across the UK. Similarly, Chris Wiles, Director of Private Equity and Venture Capital at Foresight Group, has set up a network of regional offices, including in Edinburgh, Leeds, Manchester, Cardiff and Exeter. Another source of world-leading research comes from the various research institutes that are funded by the UK government, but not affiliated with any specific university – the nuclear research facility at Culham Campus, for example, run by the UK Atomic Energy Authority (UKAEA), as well as the Harwell Science and Innovation Campus in Oxfordshire.

Rethinking commercialisation in UK universities

As well as producing some of the best research in the world, British universities are generally much better at turning their research into companies and products than they were even a few decades ago. “Every university around the world is on a journey when it comes to commercialisation,” says Williamson. Over the last 20 years, the UK government has made a particular effort to encourage universities to make commercialisation and “knowledge transfer” key to their mission. This began with universities setting up knowledge-transfer offices, principally focused on the licensing of technology. Over the past 10 to 20 years, that model has evolved and is now creating spin-out companies based on the technologies that the academics have created. Academics and students have become more entrepreneurial and “want to set up their own firms to commercialise their tech, rather than stay as academics and simply license it to third parties”.

Arnab Basu, founder and CEO of Kromek, which specialises in radiation-detection technology, agrees that things have changed for the better. When he set up Kromek two decades ago from research he pioneered at Durham University, “spin-outs were not the flavour of the day, and we had to do everything ourselves, from agreeing a licensing agreement with the university, to finding investors and then raising additional funds”. Today, the support system for entrepreneurs, in terms of both money and advice, is much more developed. Many smaller universities have also realised that forming partnerships with similar institutions is a good way to gain experience quickly.

There has been a change in attitude within academia over the past 15 years, says David Grimm, a partner at AlbionVC. Launching start-ups was previously seen as “a bit grubby and commercial”, but now founding a start-up has almost become a precondition for becoming a professor. The latest report into spin-outs, produced in conjunction with analytics firm Beauhurst, reveals that investment in UK spin-outs reached the record level of £3.35 billion in 2024. This compares with £1.16 billion in 2019, as Moray Wright of Parkwalk Advisors points out.

Lowering the “university tax”

But just because UK universities have upped their game doesn’t mean that there isn’t plenty of room for further improvement. MoneyWeek spoke to several venture capitalists, and nearly all of them pointed to universities’ desire to cling on to as much of the company spun out as possible as a big problem. It is, of course, reasonable for institutions to try to get the best return for what is, after all, their intellectual property, says James Paton-Philip, partner in the corporate team at law firm Hill Dickinson, but too often this “university tax” can make investing unattractive for investors and for those founding the company in the first place, especially given that the founders’ stake will end up being diluted further as they raise more cash.

Universities do have a tendency to be too aggressive in negotiations, agrees Grimm, and to take too long to reach an agreement, which can be a major problem in the fast-moving world of technology, where multiple firms are trying to bring similar products to market first. “I’ve known of several major cases where ideas for start-ups have failed on the launch pad because the negotiations got so involved that by the time they were settled the opportunity had passed.”

The good news is that this is becoming much less of an issue thanks to pressure from the government to reduce the share institutions demand and to standardise terms. The 2023 Independent Review of University Spin-outs has helped speed up the process, says Grimm. AlbionVC has, for example, an agreement with UCL where the university agreed to take just a flat 5% stake in any software start-up spun out of it. The first company AlbionVC spun out under the new conditions took much less time to set up. UCL isn’t the only university to do this, says Bagchi. Imperial now takes a flat 10% share from its spin-outs, and Oxford has reduced its share by more than half from 50% to 20%.

The British Microsoft is coming

The UK may be “world class at research, and very good at creating early stage companies, but there is still room for improvement when it comes to scaling up”, says Greg Smith, CEO of IP Group. Northern Gritstone’s Johnson agrees that our tech sector still “struggles” when it comes to raising large sums for expansion. From his own experience, he’s found that raising amounts in the region of £200 million is still a big ask for British tech firms, whereas those in Silicon Valley can raise such sums with a single phone call.

The lack of domestic capital willing to back tech firms means that too often UK start-ups are either forced to rely on overseas investors, or sell themselves to larger US tech companies, says Wright. He emphasises that such investment represents a vote of confidence in the capabilities of the UK research base, but such external investors and larger tech companies also “have their own agendas, which don’t necessarily align with the interests of the UK”. He points to DeepMind, the AI company spun out from UCL that was acquired by Google in 2014 for £400 million, and which “would now be worth more than £10 billion – maybe even more than £100 billion – if it had remained private”.

Google’s purchase of DeepMind may have deprived Britain of its very own OpenAI. Yet the fact that it, and others, such as OrganOx and Oxford Ionics, have fetched “significant sums” will “undoubtedly draw more interest into this area, and encourage more university researchers to launch commercial enterprises”, says Sarasin’s James Witter.

Such successes are also helping to build the necessary environment in the UK “of investors, lawyers and financial services intermediaries”. So, provided pension funds and institutions are willing to invest more, “there’s no reason” why we can’t build a British tech company on the scale of Microsoft, says Paton-Philip. Smith believes “unequivocally” that several large British tech firms will emerge within the next decade. We look at some of the most promising places to put your money below.

Spin-outs from UK universities: where to invest

Companies such as Oxford Capital, Parkwalk Advisors, Foresight Group and AlbionVC all offer investors with deep pockets access to venture-capital trusts. Those of more modest means might like to consider IP Group (LSE: IPO), a listed FTSE 250 company that has been investing in spin-outs from UK universities for the last 25 years. Over this time, it has supported around 500 companies, creating an estimated 10,000 jobs. At the moment, the group has 62 firms in its portfolio, spanning “deep technology”, life sciences and clean-energy technology (cleantech). The stock trades at only seven times estimated 2026 earnings and at a sharp discount to the book value of its assets.

One of IP Group’s most successful clean-technology investments was in fuel-cell and hydrogen-power technology company Ceres Power (LSE: CWR). Originally spun out of Imperial College London, IP Group stepped in to rescue the company after a failed trial, taking an active role in its management before eventually selling its stake for a large profit in 2020. Ceres Power is not currently making any money, but it continues to grow, with sales tripling between 2019 and 2024, and it is expected to be a big winner from the spike in demand for clean energy created by the data-centre boom.

One of Cambridge Innovation Capital’s many success stories is Bicycle Therapeutics (Nasdaq: BCYC). It was founded in 2009 by Cambridge Enterprises (Cambridge’s commercialisation body) and uses technology developed by Greg Winter, winner of the Nobel Prize for chemistry in 2018, to develop drugs that can target and treat solid tumours that cannot be reached by conventional drugs. It is not making any money yet, but has several promising drugs in development. The most advanced of these is zelenectide, which is in advanced trials as a treatment for metastatic urothelial cancer (the hope is that it will also prove effective in treating other cancers).

Autolus (Nasdaq: AUTL) was founded by Martin Pule, who leads the “CAR-T” research programme at UCL’s Cancer Institute, with the help of UCLB (UCL’s commercialisation arm). Its products modify white blood cells to help the body’s immune system fight cancer. The company is not making any money, but its therapy Aucatzyl has recently been approved for use in the UK, US and EU for treating acute lymphoblastic leukaemia, with the hope that this can pave the way for similar treatments being approved for a wider range of cancers in the near future.

As noted in the main story above, Kromek Group (Aim: KMK) was originally spun out of Durham University by Arnab Basu. The company specialises in making radiation detectors that use cadmium zinc telluride (CZT) semiconductors for use in medicine and security. The company has already secured contracts with GE, Siemens, Philips and Canon, and with the help of funding from the US and UK governments, it is developing devices to detect biological pathogens. The stock trades at 18 times expected 2026 earnings. With revenue more than doubling between 2020 and 2025, that looks like good value.

Investors with an extremely high tolerance for risk might want to consider micro-cap Quantum Base Holdings (Aim: QUBE). It was founded by Robert Young of Lancaster University and uses quantum technology to produce product codes that are virtually impossible to counterfeit. With counterfeiting being a significant problem for global brands, the commercial potential seems huge, although the company is currently losing 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.

History may merely rhyme, rather than repeat itself, but it certainly often offers a neat sense of symmetry. When this magazine launched on 4 November 2000, air was hissing loudly out of the dotcom bubble. Today, with MoneyWeek’s 25th birthday imminent, stock markets are once again indulging in a bout of exuberance, possibly irrational, over a new technology. Meanwhile, globalisation and the liberal internationalist world order are being eclipsed by mercantilism and military conflict, while growth has stagnated in much of the developed world.

This is the context in which we are holding Turmoil, tariffs and Trump 2.0, this year’s annual wealth summit on 7 November. After an introduction from MoneyWeek editor Andrew Van Sickle and summit host Dominic Frisby, keynote speaker Dylan Grice of Calderwood Capital will focus on the challenges of this “high signal” environment, before we look at how to get to grips with the risks.

First, MoneyWeek columnist Rupert Hargreaves will lead a discussion among four top multi-asset investors: Charlotte Yonge of Troy Asset Management; Charlie Morris of ByteTree; Frank Ducomble of J. Rothschild Capital Management; and Jasmine Yeo of Ruffer. They will explore the role of stocks, bonds, gold, crypto and more in protecting and growing your portfolio.

Then the agenda become more optimistic, reflecting the fact that for all the world’s intractable problems, there is always money to be made somewhere. Enter Dominic Scriven of Dragon Capital, who will make the case for Vietnam, which has been one of our favourite markets since 2005. Another of our favourites is Japan, and Nikola Takada Wood of Asset Value Investors will outline the corporate governance revolution there.

Baillie Gifford has a knack for finding outstanding growth, so who better than Ben James from the US Growth Trust to tell us how AI could reshape the world. There is also ample scope for long-term gains in India, the world’s fourth-largest economy, as Gaurav Narain of India Capital Growth Fund will explain.

MoneyWeek has liked gold since 2001 – but after the recent surge, are we near the end of the bull market? Gold experts Erik Norland of CME Group and James Proudlock of OptionsDesk will be the guests of contributing editor Cris Sholto Heaton for our lunchtime discussion. Meanwhile, some of our speakers will share their personal investing experiences with Kalpana Fitzpatrick, our digital editor, during the coffee breaks.

MoneyWeek Wealth Summit: afternoon sessions

After lunch, former editor John Stepek will discuss how to tackle the ongoing malaise in the UK stock market with Laura Foll of Janus Henderson and Law Debenture, before Charlotte Morris of Pantheon International explores opportunities in listed private equity. Gareth Powell of Polar Capital will then look at structural tailwinds for healthcare.

Our columnist David C. Stevenson will hear from Carlos von Hardenberg of MCP Emerging Markets, Martin Connaghan of Murray International Trust and Simon Barnard of Smithson Investment Trust about the global outlook. Are small caps and emerging markets set to rally after years in the shadow of US mega caps?

Many of our guests run investment trusts. These are our favourite type of fund – they tend to outperform open-ended funds and offer a better structure for holding illiquid and volatile assets. We expect volatility in the years ahead, and the ability to tolerate it will matter.

The afternoon will also see Merryn Somerset Webb, MoneyWeek’s founding editor, reflect on lessons from the past 25 years. China expert Diana Choyleva will explain how Beijing aims to reshape the world as it competes with the US. Economist, entrepreneur and award-winning author Dr Pippa Malmgren will argue that stablecoins could revolutionise the financial system in our afternoon keynote. MoneyWeek columnist Max King will wrap up with thoughts on why gloomy British investors should be more like optimistic Americans.

We hope to see you there – see moneyweekwealthsummit.co.uk for more details and to register. Thank you to our headline partner, Aberdeen; event partners India Capital Growth Fund, OptionsDesk, Polar Capital, QuotedData, RIT Capital Partners, Smithson Investment Trust and Vietnam Enterprise Investments; and association partner The Association of Investment Companies for their support.