Where to put your money as the investible universe shrinks

If you had £1,000 to invest right now for a ten-year period, where would you invest it? That's not a simple question to answer any more, says Merryn Somerset Webb.

Some exciting news to distract you from epidemiologist Neil Ferguson’s love life this week. This is issue 998 of MoneyWeek. In two weeks (assuming 2020 has already done its worst and we are still here) we will publish issue 1,000. In some senses this feels right. MoneyWeek launched into a crisis of sorts (the dotcom crash) and rather came into its own during another (the GFC). So it should be no great surprise that we are marking our relative longevity in the middle of another. Our core purpose has always been to help you invest. Our plan is to make issue 1,000 one of our best investing issues ever. So, here’s my anniversary ask to you: if you had £1,000 to invest right now for a ten-year period, where would you invest it?

This is not easy to answer. Listen to our latest podcast with Andrew Milligan (until this week, chief investment strategist at Aberdeen Standard Investments), and you will begin to see the problems. We have some idea of when economies will unfreeze – much of the EU is unlocking; US case growth is slowing; and in the UK we have been told that lockdown will ease from next week. But we have no idea how much of it will melt away completely as they do. How will consumer behaviour change (“not much” is my slightly contrarian view)? How will corporate behaviour change? How might government force that change? Are markets, currently operating in the dark as they are, massively overvalued? Or is it just that the investible universe has shrunk: perhaps travel, hospitality and commercial property are too risky compared to technology and healthcare? And what of oil – is it lower for longer or is the best cure for low prices really low prices?

As ever, tough question or not, MoneyWeek writers have plenty of ideas. This week, James McKeigue makes the case for Latin America. And David Stevenson looks at his favourite income funds. Dominic Frisby (and this will not surprise you) is more certain than ever that gold is the answer. He isn’t alone – John has put much of his faith in his portfolio of gold miners.

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I am also acting true to form here. I’m trusting to our core portfolio of investment trusts but also looking around for more niche ones on decent discounts. Nick Greenwood of Premier Miton has a few ideas. He likes Henderson Opportunities on a 24% discount to net asset value. It has long had a bias towards small firms, but the last few years have been tough and “the shares are now friendless.” However the team behind it (James Henderson and Laura Foll) are too good to think it will never perform again (note too that more small firms than you may think will survive). Artemis Alpha is another friendless fund (it was small-cap only, now it’s revamped as multi-cap). It’s on a discount too. Finally, possibly of interest is German residential property fund specialist Phoenix Spree: it is on a discount of 34% but as 97% of its tenants are still paying their rent that seems a bit much.

There are, then, no shortage of ideas (though I accept not all of them will turn out to be good ones). Please send us yours to editor@moneyweek.com. I think that even in these tough times we will be able to dig up a prize of some sort for the best ones.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.