I wrote here a few weeks ago that the FTSE 100 is a pretty no-growth place to invest.You might be getting good dividends from many of its heavyweight sectors, but ten years from now you might see those dividends as little more than the slow return of your own capital.
I mentioned at the time that various sectors from banks to utilities were likely to see any future growth severely inhibited by changes in regulation.
I am not the only one who is nervous about this kind of thing. James Clunie, the manager of Jupiter's Absolute Return Fund is "very scared". He tells the FT today that "on a scale of one to ten I am an eight or nine". All because of Ed Miliband.
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Over the last year, Miliband has outlined a variety of proposals to have a go at what he calls "predatory capitalism".
There is to be a freeze on energy prices; a break-up of the banks; a clampdown on payday lenders and betting shops; and a plan to seize undeveloped land being held in housebuilders' land banks. Clunie also thinks that we should consider the possibility that a Miliband government might even nationalise the energy industry. "It is not a zero possibility."
Look at this as one list and you can see the problem: it is market-moving stuff the kind of thing that "leads to fear and requires discounting". Should you worry? Probably.
Only this morning, shares in Centrica fell nearly 3% after the current energy secretary wrote to the regulators suggesting they have a good look at the profits of the big six energy companies, and even suggested that the firm might need to be split up.
All good reason, perhaps, to start to think about how much exposure to have to sectors at risk from state interference via UK income funds or FTSE 100 trackers.
PS Another article in today's FT extends the argument against investing in banks. According to PwC, the huge amount of capital available to asset management firms globally is likely to see them pushing into the shadow banking sector at the expense of real banks. The latter will end up becoming "more like utilities". There isn't much growth in that.
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