3 UK shares to buy yielding up to 17%
3 UK shares top stocks to buy now, according to Alex Harvey of Momentum Global Investment Management.
If you’re looking for UK shares to buy today, then Alex Harvey of Momentum Global Investment Management has a couple of ideas.
Indeed, the fund manager believes that the UK market offers some fantastic opportunities today, as many stocks trade at a deep discount to international peers following the country’s recent economic and political troubles.
Here are three UK shares to buy today according to Harvey’s analysis.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
UK shares to buy now
A cheap turnaround play: Jupiter Fund Management
The fund manager’s first pick is Jupiter Fund Management (LSE: JUP).
This company is a fund management business “catering to a loyal base of retail investors.” It is also making inroads into the institutional market.
Following the acquisition of Merian Global Investors in 2020, assets under management swelled to more than £65bn. However, in recent years the firm has “found itself caught in the middle between the mega-managers and the boutiques,” and assets have dwindled.
Harvey believes the new CEO Matthew Beesley will help push the business to change. He has been reviewing the fund range and looking to cut costs in an attempt to stabilise client outflows and increase profit margins.
Jupiter looks cheap, and this is its most attractive quality. “Even a halving of the well-maintained dividend (a conservative scenario) would imply a yield of nearly 10%” Harvey notes.
What’s more, when markets do “pick up” today’s price/earnings (p/e) ratio “will look cheap.”
One of the best UK shares to buy for income: TwentyFour Income Fund
The next pick is TwentyFour Income Fund (LSE: TFIF).
This closed-ended investment company owns a portfolio of European asset-backed securities (ABS).
These securities typically pay a “floating rate” coupon, which means the rate of interest fluctuates with the base rate. As such, unlike other debt securities with fixed yields, the payouts on these ABS instruments have been rising this year.
This should “help protect capital values compared with more rate-sensitive fixed-coupon bonds,” the fund manager explains.
TwentyFour has a team of experienced analysts who know what they’re looking for when it comes to debt, so the company seems well prepared to deal with an adverse economic climate.
After recent declines the fund is now trading with a forward dividend yield of 17%. “The fund offers equity-like returns with underlying asset security,” Harvey summarizes.
Bonds are becoming increasingly attractive
Finally, Harvey recommends the exchange-traded fund (ETF) iShares £ Corporate Bond 0-5yr UCITS ETF (LSE: IS15).
This fund owns sterling-denominated investment-grade corporate bonds with a maturity of less than five years.
Only around 40% of underlying exposure is to UK-listed companies, so this is a fund with global exposure.
However, following the recent UK gilt market turmoil, the yield on this investment-grade fund topped 7%.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Rupert is the former deputy digital editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing. His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.
Rupert has written for many UK and international publications including the Motley Fool, Gurufocus and ValueWalk, aimed at a range of readers; from the first timers to experienced high-net-worth individuals. Rupert has also founded and managed several businesses, including the New York-based hedge fund newsletter, Hidden Value Stocks. He has written over 20 ebooks and appeared as an expert commentator on the BBC World Service.
-
8 of the best properties for sale with indoor swimming pools
The best properties for sale with indoor swimming pools – from an award-winning contemporary house in East Sussex, to a converted barn in Hampshire
By Natasha Langan Published
-
Chinese stocks slump on first trading day of 2025
Chinese stocks suffered in the new year from their worst first day of trading since 2016, despite a state stimulus package
By Alex Rankine Published
-
Why Wise could be worth a lot more than its share price implies
Foreign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
By Jamie Ward Published
-
Can The Gym Group pump up your portfolio?
Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
By Rupert Hargreaves Published
-
MoneyWeek's five predictions for investors in 2025
MoneyWeek's City columnist gazes into his crystal ball and sees five unexpected events in store for investors in 2025
By Matthew Lynn Published
-
How buy-and-build stocks deliver strong returns
Bunzl, DCC and Diploma became successful through buy-and-build – rolling up dozens of unglamorous businesses. How does it work and what makes it successful?
By Jamie Ward Published
-
Singapore Technologies Engineering shows strong growth
Singapore Technologies Engineering offers diversification, improving profitability and income
By Dr Mike Tubbs Published
-
South Korean won hits 15-year low – what it means for 'Korea discount'
After Yoon Suk Yeol's failure to declare martial law, South Korean markets are reeling, with the weakest won since 2009. Will this worsen the Korea discount?
By Alex Rankine Published
-
Why undersea cables are under threat – and how to protect them
Undersea cables power the internet and are vital to modern economies. They are now vulnerable
By Simon Wilson Published
-
India's stock market drops - why it's thrown investors into frenzy
Nifty 50, India's stock market index, has dropped 8% from a September record amid concerns of an economic slowdown and foreign investors pulling out
By Alex Rankine Published