Government debt markets have been around since the city-state of Venice issued its first bonds in 1171, but public debt only became tradable in the English-speaking world six centuries later.

Contemporaries held conflicting views about the development. Several leading members of the Scottish Enlightenment were downbeat. As government debt across the developed world escalates, their concerns are proving timely.

In his book, A Fabulous Debt: The Epic Story of How Bonds Built the Modern World, Financial Times journalist Robin ‌Wigglesworth explains how Britain's geopolitical ascendancy was inexorably linked to its public finances, and in particular its ability to issue vast quantities of low-cost debt.

Thomas Mortimer, an 18th-century financial writer, described the nation's bond market as “the standing miracle in policies, which at once astonishes and overawes the state of Europe”.

Not everyone was sanguine. In his 1752 essay Of Public Credit, the Scottish philosopher David Hume fretted about Britain's newfound tendency to “mortgage the public revenues, and to trust that posterity will pay off the incumbrances contracted by our ancestors”.

Access to the bond market, said Hume, allowed politicians to behave extravagantly without having immediately to raise taxes. “The practice, therefore, of contracting debt will almost infallibly be abused, in every government.”

Adam Smith, the economist who wrote The Wealth of Nations, claimed the issuance of long-dated public debt “has gradually enfeebled every state that has adopted it… When national debts have once accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid.”

Another Scottish contemporary, Adam Ferguson, opined that a permanent and unproductive national debt was “to be reckoned among the causes of national ruin”. In the decades after these warnings were issued, Britain's national debt kept expanding. No crisis appeared, however, and the country's prosperity grew apace.

Looking on the bright side

In his History of England (1848), Thomas Babington Macaulay mocked the debt doomsayers. He hailed Britain's “fabulous debt” as “the greatest prodigy that ever perplexed… statesmen and philosophers.

At every stage in the growth of that debt, it was seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing; and still bankruptcy and ruin were as remote as ever.”

The error of the pessimists, said Macaulay, lay in their comparing national debt to that of an individual borrower. Since most of Britain's public debt was held by its countrymen, the nation was in effect borrowing from itself.

They also ignored that economic growth rendered the debt sustainable: “They greatly overrated the pressure of the burden; they greatly underrated the strength by which the burden was to be borne.”

The conditions that created a stable bond market in Macaulay's day have vanished, ‌however. Economic growth across much of the developed world has faltered. Excessive borrowing and spending by governments is partly responsible.

Bloated government spending is to blame for the collapse in productivity growth, according to Swedish economists Andreas Bergh and Magnus Henrekson. Hume expected that excessive debt would lead to debilitating taxes.

Government debt levels have risen inexorably since the financial crisis. Worldwide public debt has reached 94% of GDP, according to the International Monetary Fund. US federal debt is around 114% of GDP, reckons Fitch Ratings.

Economists Carmen Reinhart and Kenneth Rogoff concluded that when government debt breaches the 90% threshold, economic growth falters.

Hume would have agreed: “We have always found,” he wrote, “where a government has mortgaged all its revenues, that it necessarily sinks into a state of languor, inactivity and impotence.”

He cautioned that overseas investors owning big portions of a country's debt “render the public, in a manner, tributary to them”.

A large share of the national debt issued by the US, Britain and France is held abroad. For instance, a third of Washington's $40 trillion in borrowing comes from beyond its shores.

Whereas Britain in the 19th century was the world's top creditor, the US today is the world's largest debtor.

The Bank for International Settlements notes that rising geopolitical tensions could disrupt capital flows, threatening nations with large current account deficits.

After interest rates shot up four years ago, government borrowing costs soared. This wasn't a problem in Macaulay's Britain, where public debt was mostly financed with fixed-interest perpetual bonds.

By contrast, US public debt has a relatively short maturity profile, rendering it more sensitive to changes in short-term interest rates. Rising interest costs on a large stockpile of debt strain government finances.

The historian Niall Ferguson says the decline of a political superpower becomes evident when it spends more on servicing debt than on defence. The US breached this threshold two years ago.

Hume envisaged a day when an overburdened government would stop paying interest on its debt.

Since governments nowadays print the money in which their debt is denominated, an option not available in 18th-century Britain, formal default is unnecessary.

Instead, bondholders can be short-changed through inflation, financial repression and the management of long-term interest rates.

“The natural death of public credit,” said Hume, is inevitable when “overbalanced by a great debt”. The Scottish philosopher's timing was disastrous, but his principles remain sound.

A longer version of this article was first published on Reuters Breakingviews.

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.

Law Debenture (LSE:LWDB) is a unique investment trust. It is part equity income portfolio and part professional services company, all in one high-performing £1.7 billion wrapper.

It has been a stalwart of the MoneyWeek Investment Trust portfolio since September 2015, with the second-best performance of all the trusts selected. Over the past ten years the shares have produced a total return of 263%, versus 130% for the FTSE All-Share index. It has also outperformed its benchmark by a wide margin over one, three and five years.

This performance is by far and away the best of any trust in the UK equity income sector. The secret of its success is down to the independent professional services (IPS) business.

The success of Law Debenture’s IPS

The IPS business provides a selection of relatively mundane, but essential services focused around three groups: pension services, which provides pension trust services across the UK; corporate trust, a provider of trust and escrow services for transactions such as bonds and mergers and acquisitions (M&A); and corporate services, which provides company secretarial and entity management services.

Inflation-linked organic growth has been complemented by acquisitions – most recently the purchase of company secretarial unit Konexo in 2024 – have all helped IPS grow both top and bottom lines.

These businesses grew net revenue by 6% in the first half of 2026 – the ninth consecutive year of mid-to high-single-digit growth.

These businesses are relatively specialist, so they are difficult for customers to do in-house. They are also low-margin and only profitable at scale, giving incumbent providers a significant edge.

There are only a handful of peers: the four public comparables include London-listed JTC, which is in the process of going private.

Dividend support

IPS accounts for only 15% of Law Debenture's net asset value (NAV), but over the years, its profits have helped support around a third of the trust's dividend distributions to investors.

That gives James Henderson and Laura Foll, the managers of its equity portfolio, a huge advantage for their strategy.

While other UK equity income trusts need to prioritise owning dividend-paying shares to support their distributions, they can take a more flexible approach.

For example, in February 2020, Law Debenture built a position in Rolls-Royce, which then had to suspend its dividend during the pandemic. Other income trusts might have been forced to sell, but Henderson and Foll held on. The position has since generated a return of more than 1,100%.

Other examples include Marks & Spencer and Babcock. Both of these have been held for capital gains, despite their poor dividend credentials.

A strong first half

The portfolio – which accounts for 85% of NAV – is built around growth, income and value. There is also a higher percentage of smaller and medium-sized companies than you might usually find in a UK equity income trust, which reflects the solid foundation provided by IPS.

For example, in the first half, positive contributors in the investment portfolio included companies viewed as beneficiaries of AI, such as Ceres Power and Infineon Technologies. Henderson and Foll also added positions in LSEG and Relx, two previous winners that had sold off due to concerns about the threat of AI.

Strong performers during the period included Beazley, Senior, International Personal Finance, Schroders and Tate & Lyle – all of which received takeover offers, which is “further evidence of the valuation opportunity available in UK equities”, say the managers.

The trust's own shares have also been trading well. For the six months to the end of June, they produced a total return of 16.2%, as they moved from a 2.5% discount to a 1.7% premium on top of the underlying NAV return.

The quarterly dividend was increased by 6% to 8.875p. Based on the company's current target for the year, the shares currently yield around 2.9%.

Henderson is set to retire in June next year, with Foll taking over the portfolio as lead manager. Given her ten years' experience at Law Debenture – as well as 12 on the Global Equity Income team at Janus Henderson – it should be business as usual when she assumes sole command.

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

The squabbling heirs running Delfin, one of Italy's biggest companies, have “trumped” the television series Succession, says The Times, proving that “truth can be stranger than fiction”.

The hit TV drama featured four siblings vying for control of their family empire. At Delfin – the €55 billion holding company behind Ray-Ban's owner EssilorLuxottica – there are eight heirs battling it out. And there's more at stake than fancy eyewear.

Delfin is a big financial power player and has substantial holdings in a slew of Italian banks and other financial institutions – including UniCredit, Mediobanca, Banca Monte dei Paschi di Siena and the insurer Generali – as well as de facto control of the international property group Covivio.

It is thus “one of corporate Italy's top power brokers”, says the Financial Times, and this paralysing family feud has sent ripples across the country's financial sector at a pivotal moment. Italian banks are currently waging an internecine chess game of consolidation. The outcome at Delfin could swing the balance.

Delfin founder’s best laid plans…

It wasn't supposed to end like this, says the Luxembourg Times. The family patriarch, Leonardo Del Vecchio – who built the largest eyewear company in the world from a small optical workshop in the Dolomite foothills – “spent years designing a governance structure” to protect his legacy before his death in 2022.

He hoped to head off disputes by dividing the family holding company equally between eight heirs: his six children by three different wives, his widow and her son Rocco Basilico.

Yet from the outset, there were squabbles over everything from dividends to the future of the group's portfolio.

Matters came to a head this year, when Del Vecchio's fourth child – 31-year-old Leonardo Maria – a “keen DJ… avid Ferrari collector” and “mainstay in gossip magazines” – started flexing his muscles, says The Times.

He proposed cementing his control over the group by buying out two of his siblings.

For a time it looked as though “Leonardino” might get his way, says The Observer. But he hadn't bargained on opposition from key members of the EssilorLuxottica board – notably chairman and CEO Francesco Milleri – and his LA-based stepbrother Rocco, who is “credited” with arranging “Ray-Ban's controversial smart-glasses partnership with Meta”.

Their critique, says the FT, was that the younger Leonardo was “not his father” and they warned against concentrating too much power in his hands.

The dispute rapidly reached courtrooms in Italy and Luxembourg.

While Rocco Basilico and another half-sibling challenged the proposed sale of Luca and Paola Del Vecchio's stakes, Leonardo Maria “contested Basilico's entitlement to his 12.5% holding”.

Beating a retreat

After a punishing stand-off, it looks as though Leonardo Maria has conceded defeat, says Il Sore 24 Ore.

This week, he quit as chairman of Ray-Ban and chief strategy officer of EssilorLuxottica – claiming he intended to devote himself to new entrepreneurial projects. His parting shot, says Euronews, is that the company his father founded has “lost its soul”.

“I keep talking to people in the company. I did it when I was a store manager and I have never stopped doing it,” wrote the founder's son. But today, “the enthusiasm is not what it was. The sense of belonging is not what it was. The distance can be felt. And people sense it before the markets. Always.”

The departure of LMDV, as he is known in the company, from his executive roles may or may not end “the infighting at Delfin”, says The Times. But it is “a warning to Italy's legions of family firms facing generational change”.

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.

Does a fresh lick of paint in the kitchen increase the value of the house? Or a heated towel rail in the bathroom? Or an attractive water feature at the back of the garden?

We learned this week that the government is planning to appoint teams of inspectors to visit people's homes, and decide whether the owner has to pay the new “mansion tax”.

An extra levy will be imposed on homes worth more than £2 million, on a sliding scale going up to beyond £5 million.

It is meant to come into force in April 2028, but it is already proving a lot trickier than ministers seem to have realised.

Earlier this year, HMRC said it was hiring hundreds of inspectors to help with the valuation of everyone's home.

They will all have powers to enter a property to assess what it might be worth.

We can see what the authorities are getting at. If you simply rely on previous sale prices, it takes no account of how a house might have been improved, and lots of homes may well slip through the net.

There is a catch, however. It illustrates that while a mansion tax might appeal to the class warriors on the Labour backbenches, it is going to be very difficult to implement in practice.

There are three big problems. Firstly, going through a large house and trying to figure out how much each “improvement” or “feature” has added to its value is a huge task, and one that will take several years, at a minimum, of training before the “value police” are ready to start work.

It is a huge undertaking, from a state machine that can't build a new railway, or reservoir, or any extra houses. It is hard to believe it is all actually going to happen, and even if it does there will be years of delays as there is with every other government project.

A mansion tax could create a legal quagmire

Next, many of the valuations, quite rightly, will be taken to court.

The Office for Budget Responsibility (OBR) gave us a glimpse into the legal train wreck heading towards us earlier this year with a forecast that 20% of valuations would be challenged in court and that 40% of the legal cases would be successful.

The courts are going to be clogged up for years deciding how much individual homes are worth, creating huge backlogs and crowding out time that should be spent on far more serious issues.

Even worse, the top end of the British housing market is now in freefall, in part because of the looming mansion tax.

In Westminster, prices are down by 25%; in Kensington and Chelsea, 15%. Those falls are starting to ripple out into other boroughs and into the leafy commuter suburbs as well.

With those kinds of price declines, homes are going to drop below the £2 million threshold in huge numbers. The inspectors will have to change valuations constantly, and some owners are going to be heading back to court every year to try and get the tax removed.

Finally, the tax will only raise tiny sums anyway. The OBR has already downgraded its forecasts for the amount of revenue it will raise from £400 million in its first year, rising to £435 million by 2030-2031.

But it also warned that revenue would fall by £370 million before April 2028 because of reduced stamp duty, capital gains tax and inheritance tax receipts as households sold or downsized.

In other words, once all the costs are taken into account, the mansion tax may not end up raising any money at all.

All those expensive inspectors, with generous holiday allowances and gold-plated public-sector pensions that will stay on the government's books forever, will have been employed for absolutely nothing.

Those are just the practical details. The government still needs to deal with the moral issues.

What will it do about elderly homeowners, for example, who might not be able to sell a big house, but also can't afford to pay the extra tax on it?

Will it be able to face down the inevitable political backlash?

And given that the top 10% of earners already pay 60% of all the income tax collected in Britain, how can it justify yet more taxes on people who are already paying for most of what the state does?

And if the tax does cost more to implement than it raises in revenues, as it almost certainly will, how can it justify the drain on public finances at a time when the deficit is already soaring out of control?

The tax has not come into force yet. But it is already turning into a disaster.

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.

Targa Resources owns and operates natural gas pipelines, gas plants, liquefied petroleum gas (LPG) export facilities and crude oil terminals across the US. In mid-August, its shares rose 10% after it announced a 20-year midstream deal with ExxonMobil to build and operate a portfolio of energy infrastructure assets for the oil and gas giant.

Targa's deal is the latest in a series of multibillion-dollar projects recently commissioned by oil giants and governments to help move oil and gas around the world.

Targa Resources (NYSE:TRGP) is a midstream energy group, playing a vital role in the energy sector. These businesses link upstream companies, which drill and extract the raw product, and downstream businesses, which refine and sell it to consumers.

Most oil and gas majors manage this part of the process themselves, but in markets such as the US, where thousands of smaller producers in oil fields need to connect to major refining and storage hubs, midstream firms are a vital part of the chain.

Growth in the pipeline market

The $65 billion Targa is just one such company in the industry. The firm was founded in 2003 and has grown steadily through organic growth and acquisitions. In 2004, it purchased midstream natural-gas operations from oil major ConocoPhillips and in 2005, it acquired an asset from energy supply business Dynegy. In 2007, the company listed as Targa Resources Partners LP, using the money from the initial public offering (IPO) to seal more deals.

Over the following two decades, Targa secured 20 further agreements, encompassing joint ventures, partnerships, asset sales and stake sales in key infrastructure assets.

Today, the group owns and operates assets across New Mexico, Oklahoma, Texas and Louisiana. It is active in the key oil-production regions of the Permian, the Bakken Three Forks Shale, Eagle Ford Shale and Fort Worth Basin.

The Permian has become one of the most important oil-producing regions in ExxonMobil's portfolio. When the group sealed the $60 billion deal to buy Pioneer Natural Resources in May 2024, it doubled its footprint in the region and laid out plans to drive production to two million oil-equivalent barrels per day (boepd) by 2030, up from the 612,000 barrels Exxon produced from the region in 2023.

Production hit a record boepd in the second quarter and is now close to 1.8 million as the group continues to grow at a breathtaking pace.

Exxon's total Permian production consists of between 70% and 75% liquid hydrocarbons (crude oil and natural gas liquids) and 25%-30% natural gas. This needs somewhere to go, and that's where the deal with Targa comes into play.

Exxon has agreed to so-called natural gas liquids (NGL) dedications with Targa, whereby it is legally committed to using the company's midstream assets for transport, processing, or fractionation (a physical and chemical separation process) of NGL production from its key fields in the Permian region.

Following these commitments, Targa has announced three new natural-gas processing plants in the Permian Delaware: Wrangler, Ranger, and Ranger II, with a combined capacity of approximately 825 million cubic feet per day.

The plants are expected to be operational in the first half of 2028, with scope for up to five additional processing plants. It also announced plans to build a new, approximately 70-mile, natural-gas pipeline called Bull Run II, supported by take-or-pay commitments (whereby producers buy a fixed amount of capacity and pay whether they use it or not).

To meet these commitments, Targa has upgraded its expected capital spending for the year from $4.5 billion to $5 billion. The business spent $2.1 billion on growth and maintenance capital in the first half of 2026, up 23% from the same period in 2025.

A new gold rush

Despite substantial efforts by policymakers over the past two decades to wean the world off its addiction to hydrocarbons, there has been no let-up in the relentless march of the oil and gas industry.

Pipelines and midstream assets are an often overlooked part of this market, but the conflict in the Middle East has highlighted their importance to the global economy.

With the Strait of Hormuz closed to shipping, pipelines across the Middle East have become critically important for the region's oil and gas producers.

In the past two months, the United Arab Emirates has announced plans to open a new pipeline alongside its existing Habshan-Fujairah pipeline, doubling its capacity.

Meanwhile, America, Iraq and Qatar have also announced plans to upgrade a pipeline from Iraq to Syria, and Chevron is in talks to build a series of them from Iraq to Syria and Turkey.

According to The Economist, citing information from Global Energy Monitor, an oil data and research firm, 12,300 kilometres of pipelines are currently under construction worldwide, with an additional 20,100 kilometres proposed.

Taken together, these additions represent nearly a 10% increase over the 350,000 kilometres of pipelines currently in operation worldwide.

The most cost-effective way to get oil and gas from production fields (usually located inland or in deep water) to refineries and key export markets is by tanker.

Transporting each barrel of oil on the world's largest seagoing tankers can cost as little as a few dollars a barrel. But when it is impossible to use tankers to transport them, producers have no choice but to turn to other methods such as rail, road or pipelines.

A large-diameter pipeline that can carry around one millions barrels of oil per day costs, on average, about $5 million per kilometre, or $5 billion for a 1,000 kilometre pipeline.

That's assuming the pipeline is laid over relatively flat terrain. If mountains, rivers and lakes get in the way, costs can rise significantly.

The significant upfront capital cost is why midstream companies and pipeline owners turn to take-or-pay agreements.

Under these agreements, customers purchase a minimum amount of transport capacity on the pipeline and pay a fee for this capacity, often indexed to the price of oil over an extended period (frequently a decade or more).

The company has to pay to use this capacity whether or not it has oil to transport. This dramatically reduces the risk inherent in the project for the pipeline-operating company and its lenders.

Pipelines require a lot of capital to start, but the long-term economics are hard to argue with.

Data compiled by The Economist shows that the cost of transporting oil via a pipeline is, on average, around $5 per barrel. The cost rises to $18 per barrel when oil is transported via road or rail.

At the height of the US-Iran conflict earlier this year, some reports emerged of companies in central Africa paying as much as $200 a barrel, with $50 of that covering transport costs alone.

No wonder, then, that there is heavy investment in expanding pipeline networks to cut costs and improve reliability. In East Africa, for example, a 1,500 kilometre pipeline is under construction to transport oil from Uganda to the Tanzanian coast.

Argentina is building a 440 kilometre pipeline to connect its key oil fields in the centre of the country to the Atlantic.

There is a growing opportunity for investors. Because returns from pipelines are relatively stable and predictable, thanks to pre-agreed take-or-pay contracts, private infrastructure funds have flooded into the market.

According to McKenzie, a consultancy, assets under management across private infrastructure funds have rocketed to $1.6 trillion in recent years.

This year, global investment group KKR finished raising money for its largest-ever infrastructure fund with a total value of $19 billion. It's almost certain a large chunk of this will go to pipeline projects. Blackstone and Brookfield are also getting in on the action. KKR, Blackstone and Brookfield have signed a $16 billion deal with Kuwait's oil company for a stake in the country's pipeline network.

Don't be tempted by partnerships

The midstream sector is particularly strong in the United States thanks to a quirk of US tax law.

Midstream firms can be structured as master limited partnerships (MLPs), which are pass-through entities much like real-estate investment trusts (REITs).

MLPs pay no taxes, so they can distribute much more of their cash flow to investors. Investors then pay tax on these distributions. Over the past decade, many former MLPs have transitioned to C-corporations (a standard limited company) following a change introduced by the 2017 Tax Cuts and Jobs Act.

The changes have opened these companies to a wider range of investors, but yields have fallen because dividends are now paid out after corporate tax; in the partnership model the tax liability falls on the investor.

As a rough guide, the Alerian MLP ETF currently yields 7.4% on a trailing 12-month basis, while the Alerian Midstream Energy Dividend UCITS ETF, which has strict limits on MLP exposure, yields just 3.6%.

The Alerian Midstream Energy Dividend UCITS ETF has enforced limits on exposure to MLPs owing to K-1 tax constraints – the reason why these MLPs are unsuitable for all but the most sophisticated investors. A Schedule K-1 Federal Tax Form is issued by US partnerships to report a partner's share of its income, losses, capital gains and dividends.

In short, they are a nightmare for non-US investors. Even smaller domestic US investors generally avoid partnerships to avoid the added administration these tax requirements create. Very sophisticated investors who want exposure to these businesses may use total return swaps or other synthetic instruments instead, rather than becoming entangled in the web of compliance. Don't be tempted by a high yield on a US midstream MLP.

Fortunately, plenty of other options exist for investors to play this theme. Kinder Morgan (NYSE: KMI), the largest natural gas-pipeline operator in the United States (and a former division of Enron) consolidated its various MLPs into a single traditional C-corporation in 2014 in order to lower its cost of capital and appeal to a broader range of local and international investors. Many of the company's peers have since followed suit.

A tailwind from AI

Kinder Morgan reported record net income of $867 million in the second quarter, up 21% from the same period last year.

Around $660 million of new projects coming on stream helped boost the company's top and bottom lines, including Tennessee Gas Pipeline's (TGP) Cumberland Project, designed to serve a new gas-fired power plant in Tennessee.

The company said it had a construction backlog of $9.7 billion at the end of the quarter, with an additional $400 million of projects not included in the official backlog, but sanctioned to proceed.

Natural-gas projects made up 92% of the backlog, and 60% of those projects are designed to support local power generation and distribution. The company believes it will outperform expectations by 5% for the year, with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $9 billion and a 12% rise in adjusted earnings per share.

Kinder Morgan, like other US midstream companies, is benefiting from increasing demand for power across the US driven by the AI boom. According to Goldman Sachs Research, domestic power demand from data centres is projected to more than double from 31 gigawatts (GW) to 66 GW by 2027, consuming over 8.5% of total US peak summer electricity.

To keep up, companies are commissioning new natural-gas power plants, which can be brought online in a few years and located next to data centres; pipelines are needed to connect these facilities to production zones.

Kinder Morgan may be the largest natural-gas pipeline operator in the sector, but peer Enbridge (Toronto: ENB) is worth nearly twice as much.

It plans to spend between C$10 billion (£5.3 billion) and C$11 billion this year, with half of that already spent in the first six months. It is constructing the $4 billion Sunrise expansion of its British Columbia pipeline (adding 140 kilometres of new pipeline in addition to upgrading the capacity of the existing pipeline) and spending $1 billion relocating a pipeline in Wisconsin.

Williams Companies (NYSE: WMB), the second-largest pipeline group after Enbridge in market value, has raised its spending guidance for the acquisition of Momentum Midstream. It is now projecting spending between $7.3 billion and $7.9 billion in 2026.

Enterprise Product Partners is spending around half as much, with capital spending earmarked at between $2.9 billion and $3.4 billion, net of asset sale proceeds.

Key projects include two new gas-processing plants in the Permian Basin, illustrating the growing importance of natural-gas processing and transportation.

Enterprise Product Partners is the fastest-growing of the large midstream companies, but it is also still structured as a partnership. It reported a 19% increase in adjusted cash flow from operations in the first half to $2.5 billion, as well as a 28% increase in net income, thanks primarily international demand for US natural-gas liquids and crude oil.

Energy Transfer also set several all-time record volumes, notably in natural-gas liquids transportation volumes, which increased 13%, and exports, which increased 25%. Distributable cash flow rose 32% to $2.6 billion. Enbridge, Williams and Kingdom Morgan are all trading at roughly the same valuation, with a price/ earnings ratio (p/e) in the low 20s and a yield between 3% and 5.5%.

The Alerian Midstream Energy Dividend UCITS ETF (LSE: MMLP) offers exposure to all three companies, plus 16 others, with Kinder Morgan, Williams, Enbridge and Targa comprising around 40% of the fund. Investors also get synthetic exposure to the Alerian MLP index.

The picks-and-shovels plays

Infrastructure provides a steady, predictable return. But if you want something offering a bit more excitement, consider the companies providing the picks and shovels to help build future pipelines. Companies worthy of research include Caterpillar (NYSE: CAT), Tenaris (NYSE: TS), MasTec (NYSE: MTZ) and Primoris Services Corporation (NYSE: PRIM). Caterpillar is a broad-based play on the health of the US economy. The company reported record revenue of $20.5 billion in the second quarter, up 24% year on year – the first time Caterpillar has reported more than $20 billion of revenue in a single quarter.

Meanwhile, the company's order backlog hit a record of $72.1 billion, that's not just related to its diggers. While Caterpillar is widely associated with earth-moving and construction equipment, it also operates the SPM oil and gas brand and manufactures equipment for gas power plants. This energy and transportation division increased sales by 17% year on year. While the stock has dipped recently, it is still trading at 25 times projected 2027 earnings.

Tenaris is one of the more interesting companies in the area. It supplies tubular steel used to make pipelines worldwide. Sales fell 4% in the second quarter, mainly because shipments to customers in the Middle East were postponed owing to the conflict.

Lower deliveries to Kuwait and Iraq were, however, offset by higher sales to Venezuela and Argentina, along with the start of delivery of offshore line pipes to the Sakarya Black Sea development in Europe.

The company reported a $3.6 billion net cash position at the end of June, compared with a $19bn market capitalisation. The stock is on a forward p/e of 13.9.

MasTec and Primoris are two of the largest engineering construction contractors in North America. The latter is more focused on utilities, while the former has a big pipeline and energy business. Still, both recently reported record second-quarter sales and record order backlogs.

MasTec reported a record 18-month backlog of $21.4 billion; of this total, $1.8 billion was allocated to its pipeline segment, while Primoris achieved a record total backlog of $13.9 billion (comprising $7.7 billion in the utilities segment and $6.2 billion in energy).

MasTec recently acquired The Superior Group to expand its services into datacentre infrastructure and trades at the higher valuation of the two (21 times 2027 earnings versus 14 for Primoris). That's because Primoris reported a loss for the second quarter, despite record sales. The losses stemmed from cost overruns on six renewable-energy projects. All of these will be complete by the end of the year, which should draw a line under the situation.

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

The Old Mill, Linztford, Rowlands Gill, County Durham

A Grade II-listed former paper mill on the banks of the River Derwent. It has exposed stonework, wood floors, a wood-burning stove and a large kitchen with an Aga. 3 bedrooms, 2 bathrooms, reception, double garage, studio, riverside terrace, gardens, 0.34 acre.

Price: £700,000 Finest Properties 0330-111 2266

The Stack, Trelyon, Truro, Cornwall

A five-storey, Grade II-listed former engine house dating from the 1800s overlooking a valley. It has granite walls with arched doorways and a wood-burning stove. 3 bedrooms, 2 bathrooms, dining kitchen, reception, terrace, workshop, studio, gardens, 0.6 acres.

Price: £895,000 Rohrs & Rowe 01872-306360

Lakeland Cottage, Spark Bridge, The Lake District

This converted 1850s bobbin mill was originally one of the oldest continuously operating industrial sites in the country. The gardens include a pond and a bridge over the river that leads to a pavilion. 4 bedrooms, 3 bathrooms, 3 receptions, study, orangery, dining kitchen, balconies, garages, gym, greenhouse, outbuildings, workshop, private riverside jetty, grounds.

Price: £1.995 million Fine & Country 01539-733500

Rhydlewis, Llandysul, Ceredigion

A mid 17th-century mill in west Wales that was rebuilt in 1811. The former mill has solid stone walls and a full-height living area with a vaulted ceiling with exposed wooden rafters, timber panelling, a Danish wood-burning stove and large glass doors that open onto a substantial balcony that overlooks the garden. 2 bedrooms, bathroom, open-plan kitchen/living area, mezzanine, parking, gardens, grounds.

Price: £350,000 Savills 0292036-8915

The Old Foundry, Panxworth, Norfolk

A former iron foundry and smithy dating from 1869 on the edge of a village. It has double-height ceilings with a mezzanine, exposed beams and a large fitted kitchen. 4 bedrooms, 3 bathrooms, reception, study, office, roof terrace, gardens.

Price: £550,000 Sowerbys 01603-761441

Royal Mint Street, London E1

A penthouse apartment in a converted Victorian factory originally constructed in 1890 for the tobacco manufacturers Thomas Bear & Sons. It has a dual-aspect kitchen and reception with double-height vaulted ceilings, exposed brickwork, the original cast-iron columns, timber floors and Crittal windows. 3 bedrooms, 2 bathrooms, office/bedroom 4, open-plan kitchen/dining room, share of freehold.

Price: £2.25 million Knight Frank 0203-597 7687

The Old Fire Station, Worcester

A top-floor apartment in the award-winning Old Fire Station development in the centre of Worcester. The flat has an open-plan interior with wood floors and modern fittings. It comes with its own private balcony that commands views over Worcester Cathedral and also has access to a communal roof garden. 2 bedrooms, bathroom, open-plan kitchen/ living area, parking.

Price: £260,000 Allan Morris 01905-612266

The Wheelhouse, Canterbury, Kent

A Grade II-listed former industrial building dating from the 18th century just outside the city walls in the Nunnery Fields conservation area. It has a 32ft vaulted drawing room with a log-burning stove and a 36ft sitting room with a vaulted ceiling, exposed timber beams and a Juliet balcony. 6 bedrooms, 3 bathrooms, 4 receptions, study, conservatory, breakfast kitchen, greenhouse, garage, courtyard garden.

Price: £900,000 Strutt & Parker 01227-473700

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.

CVS Group (LSE:CVSG) is an example of how temporary uncertainty can create attractive investment opportunities.

For the past three years, the UK's largest listed veterinary services group has traded under the shadow of the Competition and Markets Authority's (CMA) investigation into the sector.

Investors feared the regulator would impose remedies severe enough to undermine the industry's profitability, pushing the shares down to 13 times earnings – a ten-year low.

Yet during that period, the business continued to compound earnings at an attractive rate. Revenue and profits kept growing, the firm expanded internationally and management kept investing in the business.

With the CMA's process now largely complete, investors have a chance to judge CVS Group on its operating performance rather than regulatory uncertainty.

Since listing in 2007, CVS Group has delivered uninterrupted revenue and Ebitda growth, a record few UK-listed companies can match, and one that helps explain why the shares historically commanded a premium valuation.

Few industries offer the resilience of veterinary care. People may postpone replacing a car or renovating the kitchen when finances come under pressure, but pet owners are unlikely to delay treatment for a sick pet. Demand therefore tends to remain resilient through economic downturns.

The industry's long-term outlook also remains favourable. Advances in veterinary medicine mean treatments once confined to specialist centres – including MRI scans, orthopaedic surgery and oncology – are becoming increasingly commonplace.

Add the millions of puppies and kittens acquired during Covid now reaching the age where healthcare spending accelerates, average spending per pet looks set to continue rising.

CVS Group has spent more than two decades building a business designed to benefit from those trends.

What started as a consolidator of independent veterinary practices has evolved into an integrated healthcare network spanning 500 sites, including general veterinary practices, specialist referral hospitals, diagnostic laboratories and an online pharmacy.

That integrated model creates meaningful competitive advantages. A routine consultation can lead to specialist diagnostics, orthopaedic surgery or oncology treatment without the patient leaving the CVS Group network.

Rather than referring work elsewhere, the company retains a greater share of each pet's lifetime healthcare spending while improving utilisation of its specialist facilities. It also makes the network more attractive to both clients and clinicians, reinforcing the advantages that scale already provides.

How CVS Group is cementing loyalty

Roughly 500,000 owners pay monthly subscriptions via The Healthy Pet Club, covering vaccinations, parasite treatments and routine health checks.

The subscriptions provide recurring revenue, and encourage owners to visit their vet more regularly – increasing customer loyalty while creating opportunities for higher-value diagnostics and treatment.

CVS Group has also invested heavily in recruitment, training and retaining veterinary professionals.

While labour shortages affect much of the sector, the firm's scale enables it to offer clearer career progression and more opportunities for clinical specialisation than independent practices can provide.

That should help support future growth and reinforce its competitive position.

The story does not end in the UK. Australia today resembles the UK veterinary market of 15 years ago – fragmented, independently owned and offering considerable scope for consolidation.

In three years, CVS Group has acquired 57 practices generating £80 million of annual sales, with the same disciplined acquisition strategy that proved successful in the UK.

Since the CMA announced its investigation, the company's valuation has steadily fallen even as the underlying business has continued to grow.

Australia has emerged as a meaningful contributor to earnings, the group has strengthened its market position and sales have continued to rise.

Management used the period to strengthen the business and diversify future sources of growth. CVS appears stronger today than when the regulatory review began, yet the share price continues to reflect much of the uncertainty.

That valuation gap is difficult to justify. Businesses capable of generating resilient cash flows, delivering consistent double-digit earnings growth and reinvesting capital over long periods rarely trade on just 13 times earnings. For much of the past decade, investors were prepared to value CVS Group at more than 20 times.

That premium was not simply a reflection of optimism. CVS Group combined resilient end-market demand with dependable double-digit growth, strong cash generation and repeated opportunities to reinvest capital at attractive returns.

Those characteristics remain largely intact today. If anything, the Australian expansion has broadened the opportunity to deploy capital at attractive returns.

Wage inflation remains a challenge across the veterinary profession and continued investment in clinicians may weigh on margins in the near term. Australia must still demonstrate that it can replicate the success of the UK business over a longer period. A rerating may therefore take time.

However, those risks appear broadly reflected in the current valuation. The CMA investigation depressed CVS's valuation for much of the past three years. It did not stop the business from growing.

If the market begins to focus on the latter rather than the former, today's valuation may prove an attractive entry point.

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

What's the current situation with adult social care?

A few years ago a parliamentary committee memorably summed up the adult social care system in England as “unfair, confusing, demeaning and frightening” – and that remains a good summary.

A central problem is the “care lottery” involved in a complicated patchwork of funding rules, means-testing, local-authority decisions and private providers – with families taking up the slack.

Whereas a patient with cancer receives free state-funded treatment on the NHS, someone with dementia must fund long-term care costs themselves if they have assets worth more than £23,250 – so even modestly wealthy individuals can be forced to sell their homes to fund residential-care costs, which can easily top £100,000, or indeed multiples of that for the most unfortunate.

Addressing that unfairness in a way that's acceptable to taxpayers, those requiring care and those eager to protect hard-gained assets is a problem that has so far proved unsolvable.

What about quality of adult social care?

The squeeze on funding for local authorities, which provide social care, has led to a “fragile and fragmented market of providers”, says the Financial Times– leading to even lower pay levels, problems in recruiting and retaining staff and huge variations in quality.

As the population ages, demand is growing – at present only 42% of requests for help can be met. But it's not just about age: half of council care budgets go toward care for working-age adults, whose care needs can last much longer.

Overall, two million people have unmet care needs because they can't afford help, while more than 30,000 died last year while waiting for a social-care package, such as residential care, to be provided.

Under this badly functioning system, unpaid family carers absorb enormous personal costs, while delayed discharges owing to gaps in social care account for almost one in ten hospital beds, adding costs and stress onto the NHS.

What has Andy Burnham announced?

Andy Burnham has reconfirmed Labour's pledge to reform and rebuild adult social care in England via the creation of a National Care Service.

So far, though, that is very much an aspiration, with no fixed plan on how to achieve it – nor a clear picture of what that service will look like.

Burnham has also begun cross-party talks, and last month launched a “big conversation” with the public to get buy-in for whatever funding model is ultimately proposed.

And he has asked Louise Casey, a cross-bench peer, to bring forward delivery of her Independent Commission, begun under Starmer, to the summer of 2027.

Haven't we been here before?

Many times. Ominously, even Andy Burnham himself has been here before. As health secretary in 2009, Burnham floated a national-care scheme to revitalise and fund social care in England.

The Conservatives promptly branded the funding model – a levy on estates – a “death tax”, a label that stuck. But even so, Labour went into the 2010 election with a very familiar sounding policy – the creation of a National Care Service implemented in phased stages.

Under the Conservatives, a series of white papers were promised, but successive PMs failed to take action, with Theresa May's attempt at the 2017 election backfiring spectacularly with voters.

Labour accused her of planning a “dementia tax”; in fact she'd proposed a rather promising state-sponsored equity-release scheme that protected assets up to £100,000.

What are the funding options?

The phrase “National Care Service” suggests a universal NHS-style service free at the point of use and paid for out of general taxation. But the Health Foundation estimates the costs at £18.5 billion a year – and the UK's delicate fiscal position, demographics and low-growth economy make such a scenario highly unlikely.

More money will be needed, either via some form of hypothecated tax, or some form of compulsory social insurance that caps liabilities and pools risks – a model that works well in Germany and Japan. Here, civil servants have produced a model where workers over 34 pay an extra 1.8% income tax (above a £6,240) threshold to fund a national Later Life Care Fund.

Separately, Burnham has mooted scrapping inheritance tax and introducing a 10% levy on all estates, not just the largest 5% or so. Such a system would be simple and potentially raise large sums, but it's a tough sell politically and open to the “death tax” accusation.

So what's the solution?

Britain can't afford a “blank cheque” National Care Service that pours resources into a “taxpayer money hole”, says Eamonn Butler on CapX. But it urgently needs a “targeted safety net against genuine catastrophe”.

The first stage of any resolution will surely draw on the 2011 Dilnot report, says the FT: impose a lifetime cap on individuals' contribution to care costs and raise the assets threshold for making them pay. Such a cap would remove the threat of crushing expense that would overwhelm all but the very wealthy. And it would “create an insurable risk against which consumers could take out private insurance, avoiding having to sell their homes in their lifetime”.

The second plank, says Bloomberg, should be to “make more private provision workable”, for example by more stringent regulation that facilitates transparency and comparability, and by ensuring no one is penalised insuring themselves. “New financial instruments – from auto-enrolment pensions with a social-care component to annuities attached to home equity – could play a role if carefully regulated.”

In terms of funding, there “will be fights over thresholds, taxes and who gets what. So be it. The option Burnham can't afford is the one governments have been choosing for decades: pretending the bill disappears if nobody opens it.”

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.

Average asking prices for homes in Glasgow and Manchester’s commuter hubs have soared in the past year, new research shows.

Property portal Rightmove analysed asking price growth in commuter towns linked to six of Britain's largest cities: London, Manchester, Birmingham, Bristol, Glasgow and Cardiff.

Of the cities analysed, the strongest asking price growth is concentrated in commuter locations by Glasgow and Manchester, with 10 of the top 15 fastest-growing hotspots located here.

Asking prices are rising fastest in more affordable commuter areas, Rightmove said, but falling in some higher-priced locations.

Colleen Babcock, property expert at Rightmove said the research shows two very different stories playing out in the UK’s commuter markets.

“In the more affordable locations around Glasgow and Manchester, asking prices are rising strongly as buyers look for value within reach of major cities,” she said.

“Meanwhile, some of the more expensive commuter hotspots are seeing prices ease, which could create opportunities for buyers who may previously have been priced out.

“For anyone considering a move, it's a reminder that looking a little further beyond the main city locations can often open up more options and better value for money."

Glasgow and the North dominate list of commuter hotspots with the fastest rising asking prices

Asking prices for homes in Falkirk, a commuter town of Glasgow, had the highest annual change among the cities listed, with growth of 13.5%.

The average asking price for home in the town is now £183,596, just lower than the average asking price in Scotland of £199,888, according to Rightmove in August.

Clark Gillespie, director at Forth and Clyde Property, an estate agent in Falkirk, said the city is “an attractive choice for buyers because it offers a combination of affordability, strong transport links and excellent family amenities”.

The town has good transport connections to nearby hubs like Edinburgh and Stirling too, meaning “it's a practical option for commuters who want to stay connected to major cities while getting more for their money”.

Beyond Falkirk, towns near Glasgow dominate the list of commuter hotspots with the fastest-growing asking prices, with six locations earning a place in the top 15.

Several of Manchester’s commuter towns have also seen strong asking prices growth, with four ranking in the top 15.

Asking prices for homes in Rochdale have grown by 8.7% in the past year, the second-fastest of those analysed, bringing the average to £238,115. The suburb has asking prices lower than the average for the North West, which stood at £273,421 according to Rightmove in August.

Other notable Manchester commuter towns with fast-growing asking prices are St Helens (7.8%), Wigan (6.2%), and Stalybridge (5.6%).

Source: Rightmove, 24 August

London’s commuter hubs dominate list of asking price falls

Average asking prices in many towns serving London have fallen, representing 11 of the bottom 15 commuter towns.

Haywards Heath in West Sussex, a commuter town for the capital, has seen the biggest price fall of 4.8% since last year, Rightmove’s analysis found. Here, the average asking price is now £461,066, just below the average of £469,604 in the South East of England.

Meanwhile, asking prices in Maidenhead, Berkshire have fallen by 3.9% in the past year, bringing them to £571,686.

London does have one commuter town that bucks this trend. Broxbourne in Hertfordshire had the third-strongest asking price growth at 8.1%.

Some of Bristol’s commuter hubs have also seen asking prices fall. Asking prices for homes in Bath fell by 3.8% in the past year, while those in Yate, a suburb of the city, fell by 2.3%.

Source: Rightmove, 24 August

During Covid, Halfords (LSE:HFD), briefly benefited from the expectation that everyone would become a cyclist. Many people were making changes to their lives, such as adopting a pet, buying an exercise machine, or taking up a new hobby.

Shares in the firms that served these sectors surged, but once the lockdowns ended, many of these interests dwindled, causing the shares to fall back.

Even today, Halfords’ share price is still down 50% from its record peak in May 2021. But recently it has started to take off again and this time the increase could prove sustainable.

Halfords makes its money from selling accessories and providing repair services for bicycles and cars; it accounts for about half of all bicycles sold in the UK. It operates 370 stores, 496 garages, 21 mobile hubs and 92 commercial depots in the UK and Ireland.

Although overall sales have grown at a solid rate, increasing by around 40% since 2021, this conceals the fact that profitability has been far less consistent, due to higher costs and the overstocking of bicycles.

Normalised earnings per share are now less than half the level reached in 2021.

Halfords brings in a new broom

The good news is that Halfords' problems led to the appointment of new CEO Henry Birch last year. Birch has come up with a turnaround strategy based on three ideas.

In the short term, Halfords has worked hard to boost margins by keeping costs under control. It has also taken steps to improve its digital platform, making it easier for its customers to book services and sign up for regular plans.

However, the most interesting part of the new strategy is that Birch has been trying to shift Halfords' business more towards cars, which now comprise around 80% of sales.

He wants Halfords to focus on car repair and maintenance. One reason for this is that this part of the company has more growth potential than the stores owing to the greater opportunities for upselling (offering customers more and pricier products and services).

Another big advantage is that it is much harder for drivers to delay essential repairs than the purchase of accessories, making the division more resilient to the economic cycle.

Already this strategy seems to be paying off, with last year's pre-tax loss becoming a comfortable profit in the year to April 2026. Like-for-like sales (those from existing business units) are also growing at a healthy rate, while gross margins have improved too; Halfords recently upgraded its profit guidance for the next year.

Despite all this, the stock's valuation remains cheap at 12 times 2028 earnings and barely the value of the company's net assets.

The shares also offer a very solid dividend yield of 4.4%. Furthermore, they have soared 75% since 1 May, and they trade above both their 50-day and 200-day moving averages.

Go long at the current price of 232p at £15 per 1p. Put the stop-loss at 167p, which gives you a stop loss of £975.

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.

Skiing made easy

Wellness, luxury and indulgence come together at Hotel Nesslerhof. This five-star Austrian retreat is ideally located for hiking year-round. But its location within the Alpine valley of Großarl also makes it particularly well-situated for skiing.

Guests can pre-order their ski equipment online before they arrive and find it waiting for them in their personal locker after check-in. They can then cross the road to the Kieserlbahn cable car that will take them up to the Grossarltal-Dorfgastein ski area – part of the vast Ski amadé network (Europe’s largest), with 70km of immaculate slopes and 18 modern lifts. The ski area, where snow is guaranteed from December to April, is suitable for skiers of all levels.

Afterwards, guests should head to restaurant Sky Lounge Wolke 7 for panoramic views at the top of the Kieserlbahn or unwind at the Nesslerhof’s 1,800-square-metre wellness area and spa.

From £428 a night, including breakfast, visit nesslerhof.at/en.

Autumn food festival

The Culinary autumn food festival is returning to Schlosshotel Fiss, high in the Tyrolean Alps, from 5-25 September. Guests can take part in wine tastings and cooking workshops, as well as outdoor activities such as food-themed hikes through the mountains and events at the local distillery.

While the festival is bound to be indulgent, Schlosshotel Fiss has tied it in with its wellness programme so that guests can, for instance, go on guided walks through the hotel’s herb garden to learn about the Alpine plants that go into seasonal dishes.

There will also be yoga sessions beside Lake Wolfsee and sauna sessions in the evenings, accompanied by singing bowls.

Schlosshotel Fiss is situated in the sunny little village of Fiss, at an altitude of 1,438m. In the warmer months, it is ideally located for hiking and mountain biking, and in the winter guests are able to go skiing and snowboarding.

From €746 A night in winter, full board, schlosshotel-fiss.com/en.

Family fun on the slopes

Specialist ski operator Powder Byrne has been organising high-end holidays for families for 40 years. A range of ski programmes is available for children of all ages and abilities and, new for this year, Powder Byrne is introducing a ski clinic for adults to master their form.

The highlights this winter in Austria and Switzerland include Christmas in Arosa. Guests will be able to enjoy reliable early-season snow at Hotel Valsana – a refined hideaway in the Swiss Alps with a focus on staying healthy.

From £19,146 for a family of four for seven nights, with first-class train transfers.

And you can spend Easter at Hotel Maiensee in the Austrian Arlberg at an altitude of 1,800m, which has access to the Arlberg ski area. The pretty little resort of St Christoph is part of the bigger and better-known St Anton ski circuit.

From £19,256 for a family of four for seven nights, visit powderbyrne.com.

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

“What should I do if there's a AI crash?” a friend asked me recently. It is a very sensible question – we don't know there will be an AI crash, but having a clear plan to follow when you start to worry is better than waiting and panicking.

However, it's also a very difficult question, because the AI theme is such a huge part of the market: tech is over 35% of the MSCI World index (once you allow for firms such as Amazon and Alphabet assigned to non-tech sectors), while the trillions of AI capital expenditure is also buoying other sectors.

My first suggestion is to look at what wealth preservation trusts such as Capital Gearing (LSE: CGT), Personal Assets Trusts (LSE:PNL)and Ruffer Investment Company (LSE: RICA) hold.

These have diversified portfolios intended to cushion a market downturn, while still achieving growth. You could put some of your portfolio directly into these trusts, or you could look at how they allocate to cash, bonds, gold and other assets such as infrastructure as a template.

Even if you are a growth investor who is comfortable with high volatility to earn higher long-term returns, portfolios like these give you ideas for temporarily reducing risk that may be better than holding cash.

If you prefer open-ended funds, Orbis Global Balanced stands out for an active approach with more of a bottom-up value philosophy than most multi-asset funds.

Hedge against an AI crash with value stocks

If you want to stay entirely in stocks yet still dial down risk, you need to consider what kind of stocks are not caught up in the AI boom and may sell off less or rebound more quickly.

Think about this top down – by region (eg, UK and Europe) or sector (eg, pharmaceuticals and financials). Or you could look for value-focused stockpickers who favour other sectors.

That said, keep in mind that a European industrial that makes power equipment held in a value portfolio may still be a play on data-centre construction.

So it is difficult to anticipate how widely any pain from an AI crash may spread.

The most value-focused global trust is AVI Global (LSE:AGT), while most UK trusts have a value bias.

Among open-ended funds, Ranmore Global Equity has consistent returns from a portfolio that is very different to a typical global fund.

Some niche funds to consider

A third option is to look at very niche strategies whose medium-term returns should hopefully be unrelated to the AI-heavy global index.

Majedie Investments (LSE:MAJE) is now centred around such investments. It's an interesting holding in its own right, while looking at its strategy may help shape your own.

There are many specialist investment trusts and funds such as BH Macro (LSE:BHMG), BioPharma Credit (LSE:BPCR), BlackRock Frontiers (LSE:BRFI), Nippon Active Value Fund (LSE:NAVF) and Rockwood Strategic (LSE:RKW) or Polar Capital Global Insurance.

However, picking such funds is an approach for experienced investors who clearly understand what they are buying.

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.

Putting money in the S&P 500 is popular among those who want to start investing as well as experienced investors.

The S&P 500 is an index that tracks the performance of 500 of the largest companies in the United States, and is therefore one of the most effective proxies for the US stock market.

If you put your money in the index, you are effectively backing large US companies to continue to perform and grow in the future. Historically, this has brought about large returns.

Between 1 January 2000 and 1 January 2026, the S&P 500 increased by around 386%, and in the year to 17 August 2026 alone, the index rose by around 20%.

Given the index’s historically strong performance, it’s a popular one for people to track – often using an exchange-traded fund (ETF).

ETFs are one of the “the simplest ways to start investing,” says Kate Marshall, investment analyst at Hargreaves Lansdown.

“They can offer a great entry point into investing because they provide exposure to a diversified mix of investments, such as shares or bonds, rather than relying on the fortunes of a single company or asset. This helps to spread risk and can smooth some of the ups and downs that come with investing.”

But with so many options, how do you choose the one that’s right for you?

What are the most popular ETFs that track the S&P 500?

The most popular S&P 500 ETF is the Vanguard S&P 500 UCITS ETF USD ACC (GBP), according to Hargreaves Lansdown.

That title has several components, each of which says something about the ETF:

• Vanguard is the name of the company that issues the ETF and S&P 500 refers to the index the ETF tracks.
• UCITS stands for “Undertakings for Collective Investment in Transferable Securities”, a regulatory framework that governs how ETFs in the UK and European Union operate. It effectively means the fund can be sold to UK and European investors.
• USD refers to the base currency of the ETF – in this case US dollars. Some ETFs hedge against the possible impact of currency fluctuations between their holdings’ domestic currencies and another currency.
• ACC means the fund accumulates and reinvests dividends.
• (GBP) at the end refers to the trading currency of the fund. As this particular ETF is listed on the London Stock Exchange (LSE), you can buy and sell it in British pounds, meaning you do not need to manually convert currency.

This particular fund is listed on the London Stock Exchange (LSE) with the ticker “VUAG”.

The second-most popular ETF on Hargreaves Lansdown’s list is also from Vanguard – it is nearly identical to the one detailed above, but the only difference is that this one distributes your dividends. It trades on the LSE with the ticker “VUSA”.

A list of the top ten most popular S&P 500 ETFs among Hargreaves Lansdown’s investors can be found below.

^{Source: Hargreaves Lansdown, 31 July}

How much does an S&P 500 ETF cost?

When comparing S&P 500 ETFs, one of your biggest considerations should be the fund’s fees as they can eat into your returns.

The main one is the expense ratio, an annual fee charged by the fund provider for managing the fund. These are typically levied as a percentage of your holding in the fund.

For example, VUAG has an expense ratio of 0.07% which is relatively low. In contrast, HSBC's S&P 500 ETF has slightly higher fees of 0.09%.

That means that while both ETFs track the performance of the same basket of companies, you will pay higher fees with HSBC.

You should also look out for other types of general fees involved with investing, like platform fees. These are also usually levied as a percentage by the platform you use to make your investments.

Should I pick an accumulating or distributing ETF?

ETFs often have two variants: accumulating (ACC) or distributing (Dist).

The two labels refer to dividends – payments some companies make to investors – and what happens to them when they are paid out.

An accumulating ETF will automatically reinvest dividends back into the fund. This has the benefit of adding more money directly into your investments, meaning your position may grow faster.

Meanwhile, a distributing ETF will pay dividends into a bank account of your choice to do whatever you want with.

Which ETF to pick will depend on your priorities. Afolabi Thomas, equity specialist, Vanguard said: "Investors focused on long-term growth may prefer accumulation shares, while those looking for an income stream may prefer distribution shares."

One rule of thumb is the further you are away from retirement, the more likely an accumulation fund is right for you, as they allow your investments to grow faster.

“A distribution fund might suit someone who wants their investments to provide a regular income, which could become more relevant as they approach or enter retirement”, Lynn Hutchinson, head of ETF and Index Solutions at wealth manager Raymond James added.

“Though it doesn’t have to be a case of accumulation for younger investors and income for retirees. It really comes down to what you want the income to do. Someone in retirement could quite happily continue using accumulation funds and sell some of their investment when they need cash. Likewise, an investor who is still building their portfolio might prefer to receive the income”.

Why does performance differ between ETFs if they all track the S&P 500?

The performance of S&P 500 ETFs can vary slightly from one another.

This is known as tracking difference. Marshall explains: “Tracking difference shows how much an ETF has outperformed or underperformed its benchmark over a given period and is often the more important measure for investors, as it reflects the return they have actually received.”

There are many reasons an ETF may lag its benchmark, like fees, tax rates or securities lending (where the ETF issuer lends holdings out in exchange for a fee).

“Tracking difference gives you a broader view of what actually happened to the ETF's return once the various costs - and potential benefits - of running the ETF came into play,” said Hutchinson.

“That doesn't mean fees aren't important, they are. But when comparing two ETFs tracking the same index, looking at the OCF alone only tells part of the story. Looking at cost alongside historical tracking difference can give a much better idea of how efficiently an ETF has actually done its job: tracking the index.”

The number of individuals liable for dividend tax is estimated to have reached 3.2 million in 2025/26, up from 3.14 million in 2024/25, according to new Freedom of Information (FOI) figures.

The number of people having to pay dividend tax has almost doubled in the six years since 2020, when 1.81 million were liable to pay it.

The spike comes after successive cuts to the dividend tax allowance. The allowance was lowered from £2,000 to £1,000 in April 2023, then halved again to £500 in April 2024.

Around 630,000 individuals were brought into paying dividend tax when the allowance was cut from £2,000 to £1,000, according to the FOI figures obtained from HMRC by wealth management firm Quilter shared exclusively with MoneyWeek.

A further 480,000 were dragged into paying dividend tax when the allowance was cut from £1,000 to £500.

Rachael Griffin, tax and financial planning expert at Quilter, said: “These figures show how dramatically the dividend tax net has expanded in a relatively short period.

“While much attention is given to frozen income tax thresholds, the sharp reduction in the dividend allowance has quietly pulled hundreds of thousands of people into paying tax on investment income for the first time.

"The government has repeatedly said it wants to encourage greater participation in investing, but reducing the tax-free allowance has moved in the opposite direction by increasing both the tax burden and administrative complexity faced by ordinary investors,” Griffin added.

Source: Quilter

How does dividend tax work?

Dividends are paid to you if you own shares in a company. You don’t pay income tax on any dividends if your income is less than the £12,570 personal allowance.

You also receive a dividend allowance which means if you do pay income tax you can earn up to a certain amount before owing income tax on dividends. For the 2026/27 year, the dividend allowance is £500.

The tax rate you pay depends on your income tax band:

• Basic rate - 10.75%
• Higher rate - 35.75%
• Additional rate - 39.35%

As an example, if you received £3,000 in dividends and earned £29,570 in wages in the 2026/27 year, your total income would be £32,570.

Taking your personal allowance of £12,570 off this figure would leave you with a taxable income of £20,000.

As you are in the basic rate income tax band, you would pay 20% tax on £17,000 of wages, no tax on £500 of dividends because of the dividend allowance and 10.75% tax on £2,500 of dividends.

How to protect your dividends from the taxman

You can’t do much about falling dividend tax allowances, but there are ways to lower your dividend tax bill with HMRC.

Use a stocks and shares ISA

Dividends paid on investments held in stocks and shares ISAs are free from tax and don’t take up any of your £500 dividend allowance.

You can put up to £20,000 into a stocks and shares ISA each tax year.

Griffin, from Quilter, said: “Making full use of ISAs remains one of the most valuable planning opportunities available, particularly as the dividend allowance is now just £500.”

Do a ‘Bed and ISA’

If you have investments held outside a tax-wrapper, for example in a General Investment Account (GIA), you could consider transferring them across to an ISA.

The process is known as ‘Bed and ISA’, and involves selling investments in a taxable investment account and immediately buying them back inside a tax-wrapped account.

Investments transferred into an ISA will benefit from tax-free growth.

Transferring assets between spouses

You can transfer shares to a spouse or civil partner who either pays income tax at a lower rate or hasn’t utilised some or any of their dividend allowance.

By doing this, you’re effectively making the most of two sets of allowances.

Ade Babatunde, senior financial planning director at wealth manager Rathbones, said: “Sharing ownership of company shares between spouses or civil partners can allow both parties to utilise their allowances and lower-rate tax bands before higher dividend tax rates begin to apply.”

Consider alternative investments

If you’ve got the risk appetite, you could invest your money in a Venture Capital Trust (VCT).

VCTs are set up to fund younger businesses with high growth potential, and dividends and capital gains on ordinary shares aren’t taxed.

You also receive 20% income tax relief on up to £200,000 held in shares in a VCT, so long as those shares are held for at least five years.

One major drawback to VCTs is that because they invest in early-stage companies, there is a greater risk they could fail and your investments drop in value. For that reason, they can be a good option if you have maxed out your ISA and pension allowances for the financial year.

Small cap stocks are often overlooked but, for that reason, they can reward patient investors over the long term.

“Small caps offer a rare combination of attractive valuations, growth, and diversification,” said Abby Glennie, co-manager, Aberdeen UK Smaller Companies Growth Trust. “We’ve also gone through market periods globally where the dominant tech themes have driven handfuls of mega caps to lead markets, but perhaps now is the time for market strength to broaden out. Or at least for investor allocations to broaden out from mega caps for risk diversification, as they become increasingly nervous on the artificial intelligence (AI) trade.”

Glennie highlighted that small cap stocks have held up surprisingly well this year in the face of the conflict in the Middle East – which, on paper, could have looked like a major headwind for smaller businesses.

The MSCI World Small Cap Index returned 13.8% in 2026 through to 31 July, outperforming the core MSCI World Index which gained 10.3% in the same period.

“We aren’t seeing risk-off market performance in the way many would expect,” said Glennie. “Part of this driver is that smaller companies are trading at significant discounts to their historical valuation levels.”

What are small cap stocks?

Investment bank Saxo Group defines a small cap stock as one with a market capitalisation (market cap) ranging between $250 million and $2 billion.

Not everyone categorises small caps in this way. The major index provider, MSCI, groups stocks into size categories according to the percentage of the investable market they cover in each individual country, rather than using an absolute figure as a threshold.

“When constructing the MSCI World Small Cap Index, MSCI looks separately at each developed market, such as the US, Japan, UK and Australia,” said Lynn Hutchinson, head of ETF and index solutions at Raymond James. “The large and mid-cap companies might make up around the first 85% of each country's investable stock market.” Small caps then become the rest, and MSCI then combines the small cap stocks from each country into a single, market cap-weighted index.

Generally, though, the $250 million to $2 billion range is a good rule of thumb for thinking about small caps.

With exceptions, their smaller size means small caps are less globalised than larger stocks – they may, for example, be more tapped-in to the domestic economy of their home country than larger cap stocks.

Why invest in small caps?

Small caps can offer diversification, especially in the current environment where momentum investing has concentrated lots of portfolios into the world’s largest stocks.

“Small caps provide exposure to a much broader range of businesses, sectors, and growth drivers,” said Glennie. “Small cap benchmarks and portfolios tend to be very diverse in that way, not dominated by handfuls of stocks or one overarching theme.”

They also offer the potential for higher returns, though this comes with the caveat that you might need to be prepared to ride out periods of volatility.

“In my view, small caps shouldn’t be treated with fear but with healthy curiosity,” said Angeline Ong, senior investment analyst at trading platform IG.

Small caps also offer good value to investors at the moment. The MSCI World Small Cap Index has an average trailing price/earnings (P/E) ratio of 18.4, as of July 2026 – compared to 23.1 for the MSCI World Index, according to data from investment research firm Morningstar.

Are UK small caps good value?

The UK’s small cap sector in particular offers good value. It trades even lower – at just 15.6 times trailing earnings, according to Morningstar.

“We see opportunities across global small caps, but the UK remains especially compelling on valuations,” said Glennie. “UK smaller companies have experienced a prolonged period of investor neglect, and the asset class has been unloved.

“This has left valuations substantially below both their own history and many international peers,” Glennie continued. “At the same time, many UK listed small caps generate revenues overseas, giving investors access to international growth opportunities but at a discounted price awarded for its headline UK listing tag.”

UK stocks are widely undervalued, across the market cap spectrum. But its small caps are weathering the economic storms that 2026 has thrown. The FTSE 250 index (which is made up of mid-cap stocks) gained 10.6% in 2026 through to 25 August, while the FTSE AIM All Share Index (comprising the country’s smallest stocks) gained 6.4%.

“While macroeconomic uncertainty remains, this isn’t holding back the asset class in the way many market participants might fear,” said Glennie. “Many high quality UK small caps continue to deliver strong earnings growth, maintain strong balance sheets, and generate strong cashflows, as well as support shares through ongoing share buybacks.”

The risks of investing in small caps

MSCI highlights the fact that small caps can be more volatile than larger stocks. Additionally, they might be less liquid, which can make trading them more costly.

“If you’ve not done your homework, your due diligence… you could be caught offside and end up nursing quite large losses,” said Ong.

The lack of liquidity, Ong said, could mean you can’t sell a position you want to exit quickly enough just because there aren’t enough buyers on the other side.

“The risk with small caps is you might not have the flexibility if you want to get in and out quickly,” she said.

How to invest in small caps

It’s tempting to try to pick the small cap stocks you want to invest in, particularly as many of these might be businesses you’re familiar with yourself.

But this approach can exacerbate the risks of small cap investing. “We’d suggest [small cap investing] is best approached through a portfolio holding, rather than direct individual equities,” said Glennie. “This is because of the benefit of risk adjusted returns that you get through a managed portfolio, whereas at individual stock levels the risk level is much higher- so that strategy is perhaps only suitable for a certain type of investor.”

Tracker funds replicating some of the major small cap indices include the iShares MSCI World Small Cap UCITS ETF (LON:WLDS) or the Vanguard FTSE Global Small-Cap UCITS ETF (LON:VSML).

Active funds tracking global small caps include the Janus Henderson Horizon Global Smaller Companies Fund or the Invesco Global Smaller Companies Fund.

Investment trusts that focus on small caps include The Global Smaller Companies Trust (LON:GSCT) and Edinburgh Worldwide (LON:EWI).

For a focus on UK smaller companies, you could select Aberdeen UK Smaller Companies Growth (LON:AUSC). Top holdings as of 31 July include investment platform AJ Bell (LON:AJB) and construction firms Morgan Sindall (LON:MGNS) and Galliford Try (LON:GFRD).

If you do want to pick your own small cap stocks, Ong stresses the importance of sticking to companies, or at least sectors, that you understand very well.

“It’s not like buying Microsoft,” she said. “You really need to know what you’re buying.”

When you’re planning your retirement, one of the key decisions you’ll need to make is what your residential status will be: especially, will you live in your own home throughout your golden years, or spend your retirement renting?

The latter is not a cheap option. Renting in retirement will now cost an average of £419,000 as rents are expected to more than double in the next 20 years, according to new research from retirement specialist Standard Life.

While data from the Office for National Statistics (ONS) shows rents are an average of £1,160 today, this could climb to £2,350 by 2046 if they continue to grow by an average of 3.8% a year, the research shows.

The high cost means those who plan to rent into their retirement will need to ensure their pension pots support that choice.

But ONS data shows the average pension wealth for someone aged 65 to 74 was just £145,900 in 2022 – much less than the rental costs over a 20 year retirement.

It means pensioners are at risk of not having enough to pay for their housing costs if they do not own a house and plan to rent when they retire.

Pete Cowell, head of annuities at Standard Life said: “For a growing number of people, housing costs could be the single biggest expense they face in later life, adding many thousands of pounds a year to the income needed to maintain a minimum standard of living.

“While support is available for those on the lowest incomes, many retirees will still need to plan for how ongoing housing costs will be met over the long term.”

Although it is expensive, more people are now renting in retirement. Data from the government’s Pensions Commission shows the proportion of households renting privately in retirement has more than doubled in the last 20 years.

Cowell added: “As renting in later life becomes more common, planning how those costs will be met is likely to become one of the most important financial decisions people make.

“Whether through savings, guaranteed retirement income products or a combination of both, having a clear plan for meeting those costs can make a significant difference to long-term financial security.”

The true cost of renting in retirement where you are

If you are planning to rent during your retirement, you will need to take a careful look at your pension pot and work out if you can afford to do so where you are as prices vary wildly across the UK.

The most expensive place to rent as a pensioner is London, where the average price of a year’s rent is £28,520.

That works out to £859,000 when over the course of a standard 20-year retirement, factoring in rental price growth.

The region with the second-highest expected renting cost is the South East, where the average for a year is £17,610 or £531,000 over 20 years – much lower than the price in the capital, but still far more than in cheaper regions of the UK.

As with house prices, there is a large North-South divide in rental costs as the North of England and the devolved nations are much cheaper than the South of England.

The cheapest region to rent in retirement is the North East of England, where a year’s rent costs an average of £9,670. This amounts to £291,000 over 20 years.

Meanwhile, the second-cheapest region is Yorkshire and the Humber, where the average rent for a year is £10,650 – or £321,000 over a 20 year retirement.

The interactive map below shows the projected cost of renting during a 20-year retirement.

Should you rent in retirement?

While renting in retirement is expensive, there are also some positive sides to renting rather than owning your own home.

“If you decide to rent, then you have the flexibility to move around without the burden of having to sell a home,” said Helen Morrissey, head of retirement analysis at wealth manager Hargreaves Lansdown.

This may mean you can be closer to your loved ones, or you may choose to move to a cheaper part of the country or one that fits your lifestyle better.

Certain maintenance problems with the home you rent will also be the responsibility of the landlord, meaning you will not need to fork to fix a leaky roof, for example.

Additionally, if you do not expect to pay off your mortgage before the end of your retirement, renting can be a more flexible solution and potentially a cheaper option depending on where you live.

There are of course drawbacks, the main one being that the home you rent is owned by your landlord, so you do not have the final say on what happens to the property.

In the worst-case scenario, you may be evicted from your home, though the new Renters’ Rights Act means this is much more difficult for landlords.

If you own your home instead, you will not need to worry about being evicted or getting approval to make changes to your property. Once you have paid off your mortgage, you will have far lower monthly costs too, meaning you will have more money in your pocket each month.

“Going into retirement owning your own home means your day-to-day expenses will likely be lower,” said Morrissey. “You can also use your home to release money either through equity release, or downsizing, should you need it.”

Ultimately, whether you should rent in retirement is dependent on your lifestyle, whether you already own a house, and whether you can afford it with your pension.

Around a million workers are being urged to look out for letters landing on their doorstep in the next few weeks telling them they’re entitled to money from the government.

HMRC is kickstarting a campaign this month to offer top-ups to people who didn’t receive pension tax relief because of the way their workplace pension scheme was administered.

Workers whose occupational pension schemes issue tax relief through a net pay arrangement (NPA) could be entitled to the top-up.

A NPA is when pension contributions are taken out of your monthly pay before tax is calculated. It means you receive tax relief there and then.

Typically, people earning £10,000 or more a year are automatically enrolled into workplace pension schemes, but under an NPA method, those earning between this amount and £12,570, and therefore not paying income tax, aren’t eligible for pension tax relief.

If these same people were in a workplace pension scheme using the relief at source (RAF) method, the employer automatically would claim tax relief from the government to add to their pension and they would benefit from pension tax relief.

Employees have no choice in whether they are signed up to a workplace scheme that uses the NPA or RAF method.

The government is seeking to compensate these lower earners who have been in NPA occupational schemes from 2024/25 onwards and estimates that around one million people are affected, of which 75% are women who may have earned less due to working part time or taking a career break.

The top-ups are worth £70 on average and will be paid by bank transfer.

When will I receive the top-up?

From this month, HMRC will start contacting the one million eligible people via letters in the post or through their personal tax account.

HMRC said these letters or notes on personal tax accounts will explain what people need to do to accept payments, which are expected to start being claimed over the "coming months”.

The letters will be rolled out gradually and into early 2027, HMRC said.

“Real risk” low earners won’t claim free money

Steve Webb, former pensions minister and now partner at pension consultants LCP, warned that people unexpectedly receiving these letters offering them money may think they're a scam and not claim what they’re entitled to.

Webb said: “The process of getting these payments to the right people is going to be incredibly painful and there is a real risk of huge non take-up.

“Most people will not have a clue about this issue and may be suspicious of a letter out of the blue from HMRC offering them free money.”

Webb is urging people to check their post in the coming weeks to make sure they do not miss out.

An HMRC spokesperson said: "We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine.

“Customers can check a letter is genuine on gov.uk and should only respond via official HMRC channels. We’ll never ask for passwords, PINs or money to be transferred to claim a payment.”

Will I be entitled to a top-up in future years?

The process set up by HMRC is offering top-ups to people who may have missed out on pension tax relief in 2024/25.

Once registered, these low earners are expected to receive the top-ups through a more automated system for future years, if they’re still eligible, Webb said.

HMRC will assess eligibility each tax year and so you may qualify for a payment this year but not future payments.

Nationwide has boosted rates on some of its savings accounts, offering customers an interest rate of up to 4.55% on their cash.

The building society’s one and two-year fixed rate cash ISAs are now paying respective rates of 4.5% and 4.55% AER, up from 4.4% and 4.5% earlier this month.

Its one and two-year taxable fixed rate bonds now have interest rates of 4.5% and 4.55%, respectively, a rise from 4.25% and 4.3%.

It’s the second time this month Nationwide has bumped up rates on its fixed rate bonds and ISAs.

How do the savings accounts work?

Fixed rate cash ISAs

You can open one of the ISAs if you’re 18 or over, a UK resident and you haven’t maxed out your £20,000 annual ISA allowance this tax year.

People under 65 face a £12,000 per year limit on cash ISA contributions from April 2027. The overall £20,000 annual ISA allowance will remain.

If you are a new Nationwide customer, you have to apply for the ISA in a Nationwide branch. You can find your nearest branch using the building society’s search tool.

You have to fund the ISA during the application and can’t open it then top it up later. You can fund one of the accounts through an ISA transfer or via another Nationwide account.

You can withdraw money from one of the fixed-rate ISAs before the end of the term, but would have to pay an early access charge.

At the end of the term, the money from the account is moved to an instant access cash ISA with a lower interest rate.

Fixed rate bonds

Nationwide’s fixed rate bonds can be opened in branch or online if you’re 16 or over and a UK resident with an email address.

Once the fixed rate accounts are open, you can’t access your money until the end of the term. You can save up to £5 million in the accounts – although the Financial Services Compensation Scheme (FSCS) only protects up to £120,000 per person, per banking licence.

Money must be paid into the bond within 14 days of opening it. At the end of the term, your savings are moved to an instant access savings account paying a lower interest rate.

Are the boosted savings accounts worth it?

The headline interest rates on both the one and two-year fixed-rate cash ISAs can be beaten by other savings accounts on the market, based on the latest data from Moneyfactscompare as of 27 August.

AlRayan Bank’s one-year fixed-rate cash ISA pays 4.72% while Vida Savings has a two-year fixed-rate cash ISA paying 4.77%.

You’ll also find better headline rates on one and two-year fixed-rate bonds – AlRayan Bank’s one-year fixed-term bond is paying 4.87% interest while Investec Save’s two-year fixed-rate saver is paying 4.95%.

However, if you want to bank with an established name, Nationwide’s bumper rates on its one and two-year fixed-rate ISAs could be a good choice.

The two cash ISAs are paying higher rates for these types of accounts than the ‘Big Four’ banks – NatWest, Barclays, Lloyds and HSBC.

Nationwide’s one-year fixed-rate bond is much less competitive compared to other options on the market, but still offers the best rate out of the Big Four.

The two-year fixed-rate bond is also not as competitive and you can get a better rate with NatWest which is offering a two-year fixed term savings account paying 4.75%.

Rachel Springall, finance expert at Moneyfactscompare, said Nationwide customers can get in-person support at branches too, something a lot of digital banks don’t provide.

“Customers who find digital banking difficult, such as for accessibility reasons, will need to look beyond top rates to find a brand that can cater to their personal needs,” Springall said.

She added: “The fixed-rate cash ISAs from Nationwide are accessible for savers with either small or larger pots, with its minimum investment limit set at just £1, plus transfers in from both cash and stocks and shares ISAs are [currently] accepted. Those who do find they need their money sooner can even access the ISA funds early, subject to a set penalty.”

For all their talk of investing for the long run, active fund managers like to trade.

Take Terry Smith for example, whose flagship Fundsmith Equity fund reported portfolio turnover of 51.8% in the first half of 2026. In his mid-year letter to shareholders, Smith said the fund had started building positions in 12 companies while exiting, or starting to exit, 13 others. For a fund whose investment mantra ends with "do nothing", that's a lot of activity.

For investors in active funds, keeping tabs on what they own can be a challenge.

The latest Fundsmith Equity factsheet (31 July) lists only its top 10 holdings. It also says that, while a position is being built, the company name may be withheld until the intended weighting has been accumulated. That's a reasonable trading precaution, but another reason why monthly factsheets can be far from comprehensive.

A top 10 list is useful, but it's more like the signature dishes on a restaurant menu than an inventory of the kitchen. A fund can change materially beyond those 10 names, especially if several smaller positions are being added or sold.

While many funds only highlight their top 10, because in most cases these are the largest holdings, should investors be given more information to understand the risks and strengths in their portfolio?

Fund holdings: What the rules require

There's no law spelling out exactly what investment funds must disclose about their holdings. But the Financial Conduct Authority (FCA) requires funds to follow the Investment Association's Statement of Recommended Practice. These demand a full portfolio statement, listing every investment asset and liability, in the annual and half-yearly long reports behind the headline factsheet.

Some asset types have separate presentation rules, but the principle is the same.

The catch is timing. Annual reports can be published up to four months after year-end and half-yearly reports up to two months after the half-year. Because the snapshots are six months apart, the latest complete picture can be nearly 10 months out of date by the time the annual report deadline arrives.

But for investors, knowing more can avoid over-concentration and better understand their market exposure. But are they always useful?

The top 10 is a convention, not a rule

If you want to see a fund's 10 largest holdings, the latest factsheet is generally easy to find. But if you want more than the top 10, then that may not be so easy to find.

Publishing just the top 10 is not because of the regulator. The FCA doesn't require a monthly factsheet at all, let alone prescribe the top 10 format funds use when they publish one. Publishing the top 10 is an industry convention, not a regulatory judgement about how much investors need to see.

Anything beyond those 10 holdings sits in the fund's long report, which must list every investment asset and liability. It takes more digging to find than a factsheet, but that's where the full picture sits.

That full list can reveal changes the top 10 misses. It can show whether the manager's stated process is still visible in the portfolio, whether concentration has shifted and whether several funds you own increasingly hold the same companies. Smaller positions can also expose sector, country or company-type bets that the headline names miss.

Having the ability to see the full portfolio doesn't mean every new holding deserves an inquest. Active managers are paid to make decisions, and investors who second-guess every trade can create problems of their own.

But while questioning every individual trade is one thing, checking whether the fund still resembles the one you chose is another.

Funds transparency

Greater transparency is usually seen as a good thing. But it has its downsides. If, for instance, a manager reveals an unfinished trade too quickly, other investors can trade ahead of it, copy the idea or push the price against the fund.

The academic evidence points to a trade-off, not a simple case for more disclosure. Parida and Teo (2018) studied US mutual funds that moved from semi-annual to quarterly disclosure after the 2004 SEC rule. Funds that had performed well under the old regime subsequently lost about 22.5 basis points, or 0.225 percentage points, a month. The effect was particularly pronounced among funds holding illiquid portfolios.

Other research identifies further drawbacks. Agarwal et al. (2015) found that mandatory portfolio disclosure could improve stock liquidity, but at a performance cost for some funds. Xin, Yeung and Zhang (2024) linked more frequent reporting to window dressing: reshuffling a portfolio just before it is due to be seen. These are both US studies, and neither directly shows what monthly disclosure of near-current holdings would do to UK funds.

Full transparency can give investors a false sense of security. Woodford Investment Management published the full portfolio of the Woodford Equity Income Fund from its launch in 2014 and was widely praised for doing so. But after prolonged disastrous performance, the fund was suspended in 2019 and closed soon after.

Full holdings are still useful as they can show unusual or unquoted positions and prompt harder questions than a headline list ever could.

What they can't tell investors is how easily assets could be sold into redemptions, how uncertain valuations were or whether governance would hold up under pressure. Transparency can sharpen due diligence, but it cannot replace it.

How to check fund holdings

To see what’s in your fund, you may have to do the homework yourself. Begin on the manager's website. If there's no spreadsheet or report, find the latest annual or half-yearly report and search for "portfolio statement".

If it's hard to find, don't read too much into that. Treat it as an information disadvantage, not evidence of bad management or an automatic sell signal.

Once you have the full portfolio, check both the holdings date and the publication date. They can be months apart.

Then compare the latest complete portfolio with the previous one. Look for new and exited positions, changes in concentration, shifts in sector or geographic exposure and growing overlap across funds. You are looking for material change, not trying to reverse-engineer every trade.

Investors need enough visibility to spot material change; managers need enough delay to finish trading without being front-run. Making a recent, complete portfolio easy to find is a reasonable place to start.

Families could be stung with a triple tax blow from next year when inheritance tax changes come into effect – but there are ways to lessen the hit.

Most unspent pensions will become subject to inheritance tax (IHT) in April 2027, which could leave some families facing IHT, an income tax bill and the loss of the residence nil-rate band allowance.

How families could be hit

Everyone has an allowance known as the nil-rate band which means estates worth less than £325,000 are not subject to IHT.

You can also benefit from a further £175,000 allowance known as the residence nil-rate band if you are passing your home to a direct descendant such as a child or grandchild.

Any unused amounts from these two allowances can be passed onto a spouse or civil partner, meaning some estates worth up to £1 million have no IHT liability.

However, the residence nil-rate band is cut by £1 for every £2 an estate is worth over £2 million.

If you are single, you lose your entire residence nil-rate band once your estate is worth £2.35 million or more and if you are in a couple you lose it all if the estate is worth £2.7 million or more.

The inclusion of most unused pensions within estates for IHT purposes from April 2027 could see more people losing their residence nil-rate bands.

Beneficiaries also have to pay income tax on any unused pension funds if the deceased was 75 or older when they died.

This means, from April 2027, some estates are facing a triple tax hit, when combining IHT and income tax on pensions, plus the loss of the residence nil-rate band.

According to calculations by insurance firm NFU Mutual, some estates may have an effective 91% tax charge on inherited unused pensions.

Adam Cole, retirement specialist at wealth management firm Quilter, said: “The prospect of some families facing an effective tax rate of over 90% on inherited pension wealth highlights just how significant the inheritance tax changes coming in from April 2027 will be.

“While these are quite extreme scenarios, many more families will find pensions that were previously outside the inheritance tax net are now contributing to much larger tax bills.”

Source: NFU Mutual

How to lower the impact from a potential triple tax blow

Gifting

Making gifts throughout your lifetime is one of the simplest ways you can lower the value of your estate, and a potential IHT bill.

There are various gifting allowances. For example, you can give away up to £3,000 tax-free each financial year to one or more people. This is known as the annual exemption.

You can also make regular gifts to people, as long as they’re made out of income and not capital and they don���t affect your standard of living.

This is known as ‘expenditure out of income’ and can include regularly paying rent for a child or adding money into an under 18’s savings account.

There are other inheritance tax allowances, plus if you give a gift at least seven years before your death, it won’t be subject to inheritance tax – unless the gift is part of a trust.

Sean McCann, chartered financial planner at NFU Mutual, said: “Making gifts during your lifetime is one of the most effective ways of reducing inheritance tax.

“While some gifts are immediately exempt, including gifts up to £3,000 each tax year and regular gifts from income that don’t compromise your normal standard of living, most others require you to survive seven years.

“In many circumstances it will be possible to take out a life insurance in trust to meet any potential inheritance tax liability on the gift.”

Take your 25% tax-free lump sum earlier

You can withdraw as much as 25% from your pension pots as a lump sum, up to a maximum of £268,275, from age 55 currently and from 57 from April 2028.

The advantage of doing this earlier is that it reduces your capital and the size of your estate.

However, there are drawbacks to taking the lump sum early, namely that the size of your pot will become smaller and there is less in there to continue growing.

Consider an annuity

Buying an annuity could be another option to lower the value of your estate.

An annuity is an insurance product which offers you a regular payment for a specific period of time in exchange for a lump sum of cash.

By buying one, you’re taking capital out of your estate and potentially lowering an eventual IHT bill for your loved ones.

Annuity rates have increased in recent years, making them a more attractive proposition. Sales of annuities have increased by 7.8% from 82,061 in 2023/24 to 88,430 in 2024/25, according to the Financial Conduct Authority.

Ed Wood, financial planning director at wealth manager Rathbones, said: “We would not advocate annuity purchases simply to avoid future inheritance tax, but the relative merits of annuity vs drawdown have slightly changed. For anyone who had previously ruled this out, it may be worth a second look.”

Having sufficient savings is an important step towards financial independence.

To ensure your nest egg is working hard for you, it’s a good idea to understand tax-free allowances, how inflation affects your finances, and the rules around how different savings accounts operate.

Can you get full marks in our savings quiz? Test yourself below.

How did you do in our savings quiz? Share your results on social media.

For all the latest news and analysis, subscribe to MoneyWeek’s newsletters.

• Best easy-access savings accounts
• How much should I have in emergency savings?
• What is an ISA? How they work and what you need to know

Many workers are snubbing pay rises amid fears of higher taxes, research suggests.

While most people would welcome higher wages, one in six (16%) have hesitated over or refused a pay rise, bonus or promotion because they were concerned they could lose out financially, according to research by Standard Life. This includes 5% who have turned an opportunity down altogether.

This is due to frozen income tax thresholds, which last increased in England, Wales and Northern Ireland five years ago and aren't set to rise until at least April 2031. The freeze is pushing people into higher tax brackets at a faster rate than if the thresholds had kept pace with inflation, which is known as fiscal drag.

The tax-free personal allowance would be £16,072 in 2026/27 had it kept pace with inflation – £3,502 higher than its current £12,570 level, Standard Life said.

The higher-rate threshold would be £64,274, rather than £50,270.

Based on this, the frozen personal allowance adds £700.36 to the annual income tax bill of a basic rate taxpayer who uses the allowance in full, Standard Life said.

It is not just higher taxes that are worrying people – they may also lose valuable tax allowances as their pay rises.

The analysis found that a fifth say paying a higher rate of income tax could make them consider turning down a pay rise, while 7% cite the risk of losing other financial support or allowances and 5% point to losing childcare support.

Neil Jones, tax and estate planning specialist at Standard Life , said: “A pay rise, promotion or bonus should be something to celebrate, so it’s concerning that some people are thinking twice because they’re worried they could end up worse off.

"It’s understandable that people want to protect valuable allowances and manage how much tax they pay, but turning down additional income without fully understanding your options could mean missing out unnecessarily.”

The risks of a pay rise

A pay rise is a good sign that your career is progressing but as you earn more, you could end up having to give up valuable tax benefits.

For example, parents could be taxed on Child Benefit payments or lose them altogether once one person in the household earns more than £60,000 under the High Income Child Benefit Charge. Under this tax, HMRC takes 1% of the total Child Benefit received for every £200 of income between £60,000 and £80,000. The money is fully clawed back at £80,000.

Basic rate taxpayers get a £1,000 per year personal savings allowance but this is reduced to £500 per year for higher earners. Additional rate taxpayers don't get a personal savings allowance.

There are more allowances lost once you earn above £100,000.

For instance, you lose eligibility for tax-free childcare once you earn above £100,000.

Plus, for every £2 you earn over £100,000, you lose £1 of your standard £12,570 personal allowance, dropping to zero once your income reaches £125,140.

This creates an effective 60% tax rate on taxable income between £100,000 and £125,140.

How to cut your income tax bill

There are several tax-saving strategies to consider before rejecting a pay rise.

The first recommendation is to increase pension contributions.

If your employer offers salary sacrifice, increasing pension contributions can reduce your taxable income while putting more into your pension.

Jones said: "This can be particularly useful if a pay rise takes you into a higher tax band or across another important income threshold. You may also pay less National Insurance (NI) than if you took the additional salary as cash."

The rules around pension salary sacrifice are due to change from April 2029 with a £2,000 cap being introduced on NI relief.

Pension contributions also benefit from tax relief. Basic rate taxpayers effectively receive 20% tax relief, while higher and additional rate taxpayers can qualify for relief at 40% and 45%. Depending on how contributions are made, the additional relief may need to be claimed from HMRC, so it’s worth checking you’re receiving what you’re entitled to.

Beyond pensions, you could also reduce your taxable income by making use of company benefits such as gym membership or a car scheme that may be available to fund through salary sacrifice.

Charitable donations can also reduce your taxable income and it may be worth changing the timing of how or when you receive a bonus.

Eamonn Prendergast, chartered financial adviser at Palantir Financial Planning, said: “The answer is planning, not earning less.

“When workers genuinely consider refusing career progression because of tax, policymakers should be asking whether the tax system itself has become part of the problem.”

Nvidia reported record adjusted quarterly earnings per share (EPS) of $2.22 for the second quarter (Q2) of its 2027 financial year following market close on 26 August – 5.7% above analysts forecasts of $2.1, and 120% higher compared to the same period last year.

Quarterly revenue was $96.2 billion, 4.4% above the $92.2 billion analysts polled by London Stock Exchange Group (LSEG) had forecast and representing a 106% year-on-year increase.

“Nvidia’s (NASDAQ:NVDA) results show that the artificial intelligence (AI) boom is not running out of demand,” said Lale Akoner, global market strategist at investment platform eToro. “The constraint is increasingly the industry’s ability to supply and finance the infrastructure required.”

The results sent Nvidia’s share price surging in after-hours trading. As of 9.45am BST on 27 August the shares had risen around 7.5% from the previous day’s close.

“AI has reached its inflection point,” said Jensen Huang, founder and CEO of Nvidia. “It’s doing useful work. Its tokens are productive and profitable.”

Nvidia’s results in detail

There were more positives for investors throughout Nvidia’s results.

Revenue for the Data Center division – the largest and most closely-watched of Nvidia’s business arms as it contains all of the AI hardware elements – beat expectations at $89 billion, up 117% year-on-year.

Nvidia’s gross margin increased from 72.5% a year ago to 75.0% in the latest quarter.

“Nvidia remains the main toll collector on big tech’s enormous AI budgets, capturing a large share of each new round of infrastructure spending,” said eToro’s Akoner.

Nvidia also issued Q3 revenue guidance of $108 billion (plus or minus 2%) – higher than the $105.1 billion that LSEG’s poll had projected.

“Blackwell Ultra drove the quarter, while Vera Rubin is already entering production,” said Akoner. “This smooth handover suggests the AI hardware upgrade cycle is accelerating without the pause some investors feared.”

How did other stocks respond to Nvidia’s results?

While growing demand for Nvidia’s products is a positive for the AI boom in general, it could be seen as a headwind for the companies that are reliant on buying them.

Alphabet fell 0.4% overnight, while Meta Platforms and Amazon both fell around 0.2%.

These are not large shifts, and could be due to other factors besides Nvidia’s results. But many are starting to question whether the so-called hyperscalers will ever recoup the hundreds of billions of dollars they are pouring into AI infrastructure.

“Once the initial excitement settles, questions are likely to resurface about the durability of this boom in revenues,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club. “It’s becoming less about whether Nvidia can keep climbing the AI mountain, and more about how long it can sustain this extraordinary pace of ascent and whether the vast sums being poured into AI infrastructure will ultimately deliver the returns needed to justify the colossal investment.’’

Higher costs for memory chips could also become a headwind for Nvidia in due course, according to Akoner.

“Rising memory costs are expected to push gross margins down from 75% to 71%-72%,” she said. “Nvidia’s ability to raise prices should help margins recover, showing considerable pricing power, but it cannot escape supply pressures entirely.”

Almost one in 10 people in the UK own cryptoassets, but HMRC suspects tens of thousands are failing to pay tax on them properly.

According to the Financial Conduct Authority (FCA), 8% of UK adults held cryptoassets in 2025, up from 4% in 2021.

However, there’s concern some crypto investors don’t understand the tax implications of receiving, holding and selling these assets.

HMRC sent out 81,000 warning letters to crypto investors it suspected of underpaying tax in 2025/26, according to a Freedom of Information (FOI) request by accountancy firm UHY Hacker Young, up from 65,000 in 2024/25 and 27,700 in 2023/24.

Neela Chauhan, a partner at the firm, said: “A lot of the traders are young, have had little previous exposure to HMRC and often work under the assumption that HMRC has limited visibility over their activities.”

Recent FCA research found UK-based crypto investors tend to be younger, with 15% of 18 to 34-year-olds owning cryptoassets versus 9% of 35 to 54-year-olds.

Chauhan added: “The tax treatment of cryptocurrency in the UK is complex, and many individuals do not fully understand their reporting obligations or recognise when transactions give rise to taxable income or gains that must be disclosed to HMRC.

“Crypto investors often forget that you may still have made a taxable gain even when you are swapping one cryptocurrency for another and might not be aware that the income you can earn by lending cryptocurrencies is taxable.”

When you might owe capital gains tax cryptoassets

You may be taxed when you dispose of cryptoassets for gain or profit, as is the case with other assets like stocks or shares.

Disposing of a cryptoasset involves selling it, exchanging it for another type of cryptoasset, using it to pay for goods or services or giving it to another person, unless that person is a spouse, civil partner or you are giving it to charity.

Different types of cryptoasset, such as Bitcoin and Dogecoin, are typically treated as separate assets and gains need to be calculated on each type individually.

Everyone receives a capital gains tax (CGT) allowance of £3,000 each financial year. This means you can make up to £3,000 in capital gains without owing any CGT.

If you make more than this allowance in gains when disposing of assets, including cryptoassets, you will likely owe CGT.

Typically, the gain made is calculated by working out the difference between what you paid for the asset and what it sold for.

However, sometimes you have to use the market value to work out a gain, for example if you have cryptoassets that have been transferred between ‘connected persons’ – such as a spouse or civil partner.

How to report and pay cryptoasset capital gains

You can report gains on cryptoassets by either completing a self-assessment tax return at the end of the tax year or by using the CGT ‘real time’ service.

If you’re reporting your gain on a self-assessment return, you should complete it in pound sterling within the cryptoasset section.

You can use the real time CGT service to report assets sold in the current or previous tax year.

When working out your gain you can deduct certain allowable costs. This includes transaction fees (exchange or trading fees) and costs incurred for advertising a cryptoasset for sale.

You can also offset capital gains made from cryptoassets with capital losses, but you must report these losses to HMRC.

Meanwhile, if you’ve paid income tax on a cryptoasset, you won’t pay CGT on that amount. You may have to pay CGT when you come to dispose of that asset though.

Once you’ve reported any gains, HMRC will send you a letter or email with a payment reference number starting with ‘X’.

You use this reference when paying the tax, either through the online tax payment service or through online banking or cheque.

You have to report any gains by 31 December in the tax year after you made them, and pay by 31 January.

For example, if you made a gain in the 2025/26 tax year, you would need to report it by 31 December 2026 and pay the gain by 31 January 2027.

When you might owe income tax on a cryptoasset

You may also owe income tax on cryptoassets if you received them in a specific way.

Mining

‘Mining’ involves helping to solve difficult mathematical problems and maintaining a cryptoasset network, for which you can earn rewards.

HMRC generally treats income made from mining as trading or miscellaneous income which means it’s subject to income tax.

Staking

‘Staking’ is when you temporarily lock up your cryptoassets to keep a blockchain network running. In return, you can earn extra cryptoassets as a reward.

Like mining, you have to pay income tax on these earned cryptoassets.

Airdrops

A cryptocurrency airdrop is when someone is given free tokens, sometimes as part of a market or advertising strategy to raise awareness of a new digital currency.

You may also receive airdrops for answering a survey or helping promote a digital currency through social media.

Typically, if you received airdropped cryptoassets in return for a service, you will owe income tax.

Employment income

If you receive cryptoassets as income from an employer, they count as ‘money’s worth’ and the value of the asset will be subject to income tax.

Allowance for money earned through trading income and miscellaneous income

You receive a £1,000 allowance per year for trading income or miscellaneous income.

This can apply to income earned through mining, staking and airdropping, so income tax would only apply on income above this threshold.

It’s a difficult time for value investors.

The theory goes that value stocks – those trading at a lower price relative to their fundamentals than others – ought to outperform the rest of the market over the long term.

That’s not how it’s playing out. In the 10 years to 31 July 2026, the MSCI World Value Index generated an annualised return of 11.0%, compared to 13.3% for the MSCI World Index. The former index is based on the latter, with a tilt towards value stocks.

Momentum has been a more dominant investing factor during that time. The MSCI World Momentum Index has outperformed the main index over the last 10 years, with an annualised return of 15.2% during that time.

The rise of momentum investing was acknowledged in July 2026 by veteran value investor Terry Smith, CEO and chief investment officer of investment management company Fundsmith, when he told Fundsmith Equity Fund shareholders he would start paying more attention to the momentum factor when selecting investments.

“Periods of market exuberance can be particularly testing for valuation-driven investors,” said Cedric Jacque, investment manager at wealth manager Lloyd Capital. “Today, the combination of the artificial intelligence (AI) investment boom, strong momentum and elevated valuations has clear echoes of previous late-cycle markets.”

Why is value investing struggling?

There are two main reasons why value investing has trailed the returns of alternative strategies in recent years, though the two are interrelated.

The first is the rise of passive investing. According to data from investment research company Morningstar, passive funds’ share of the total investment fund market has risen from 12.4% in January 2008 to 46.4% in July 2026.

Most passive funds are market-cap weighted, meaning that the largest companies form the largest part of the fund. When investors buy index funds, they are therefore putting most of their investment into the largest companies in the index. In other words, the more popular passive investing becomes, the more money pours into the world’s biggest companies, pushing their share prices higher regardless of any change in their fundamentals. Indeed, many of their buyers are likely not looking at their fundamentals, but simply buying an index fund.

The rise of passive funds has coincided with an era during which technology stocks have ballooned in value. Developments like cloud computing, the proliferation of smartphones and, more recently, the AI boom have concentrated much of the market’s growth into tech stocks.

Tech is a tricky sector for value investors, because it tends to look far more at the future than the past or present. As of 21 August, software company Palantir Technologies traded at over 150 times its trailing earnings and 112 times its forecast earnings; the equivalent figures for Tesla are around 336 and 185 respectively. Tech investors price in expectations of rapid future growth that make the sector effectively off-limits for value-focused investors.

Terry Smith highlighted the convergence between these two phenomena in his shareholder letter, ascribing much of his fund’s underperformance to “a market which is dominated by so-called passive or index funds… and the boom surrounding AI which have combined to produce a market dominated by momentum rather than any fundamental factors like profitability, returns on capital and growth”.

Does value investing still work?

Smith hasn’t abandoned value investing outright, but he identified a need to “take more account of momentum… in our investment decisions”.

That shift has drawn criticism, though, with some arguing the current environment is precisely where it is most important to adhere to value investing’s principles.

“We agree with [Smith] that a market driven by passive flows and momentum can become increasingly distorted, that momentum sits at levels last seen in 1999, and that this will end badly,” said Lloyd Capital’s Jacque. “Where we part ways is on the remedy.

“We believe that becoming more of a crowd follower, and setting aside time-tested investment principles, is not a solution we can get behind,” Jacque continued. “We continue to believe that disciplined, bottom-up value investing, with a focus on earning power, is the right way to compound capital over the long term.”

Jacque argued that the passive investment boom isn’t a threat to patient value-driven investors, but rather creates an opportunity.

“Passive investing and index flows should increasingly expand the pool and the magnitude of the mispricing and therefore lead investment opportunities for the patient long-term shareholders,” he said. “We are thrilled about that.”

UK fintech PensionBee (LSE: PBEE) has carved out a successful niche for itself, to become the UK's most recognised pension consolidator with the UK pensions sector undergoing a major transformation over the last ten years.

Following the introduction of the Auto Enrolment scheme in 2012, assets in defined-contribution (DC) schemes have exploded, and the pensions industry has rapidly had to adapt to this new norm. The DC pension market has two main segments: workplace schemes and personal or individual wrappers. The latter is dominated by the self-invested personal pension (SIPP) market and the consolidation of legacy workplace schemes. This market is worth around £600 billion and is growing.

The larger workplace-scheme segment is far bigger and more complex. The government is pushing through regulations to consolidate this market, with a goal of consolidating pots into £25 billion-plus mega funds. Although the market has consolidated significantly over the past ten years, hundreds of schemes remain, some with as few as 100 members, which can add cost and complexity.

Where PensionBee comes into the picture

Auto-enrolment is widely recognised as one of the most successful pension reforms worldwide. Under the current rules, an employer must enrol an employee in a pension scheme if they are a UK resident, work in the UK, are aged over 22 and earn more than £10,000. The minimum contribution is 8% of salary, 5% from employees and 3% from the employer.

Employers can pick one of two approaches: either a contract-based approach, or a trust-based scheme. Under a contract-based scheme, individual contracts are agreed between the scheme member (the company) and the pension provider, usually an insurance company or investment platform. With a trust scheme, the company agrees a relationship with a large pension master trust, such as Nest or the People's Pension.

Auto-enrolment has greatly reduced the burden on employers of setting up pensions for employees. It also helps employees save for the future, as they are, as the name suggests, auto-enrolled in the scheme and contributions scale up with wage growth. But people do switch jobs regularly throughout their career and due to the fragmented nature of the industry, there's no guarantee your next employer will be able to offer access to the same scheme as you had previously.

How PensionBee consolidates retirement pots

PensionBee markets itself primarily as a pension-consolidation platform, but it also provides private-pension schemes, such as those for the self-employed. It does not manage the underlying investments itself, but takes a platform fee and partners with institutional giants such as BlackRock, State Street and HSBC to provide a range of low-cost funds.

PensionBee's real edge is its technology platform. Pension transfers and consolidation can be costly and time-consuming. PensionBee aims to complete electronic transfers within two weeks, although more complex transactions can take longer. The company's focus on technology, marketing and simplicity has really resonated with consumers. It estimates it generates around £100 of net asset inflows for every £1 it spends on marketing. It has a 57% brand-awareness score among consumers, one of the highest among pension brands, and customer retention of 95%.

The last time I covered the company in early 2022, it had just reported £5.8 billion in assets under management. According to its latest half-year results, that figure has grown to £8.6 billion of assets under administration across 327,000 invested customers.

With exposure in both the UK and US, the firm operates across markets representing more than $30 trillion in retirement assets. Currently, the US market is still tiny, with less than $5 million of assets under management. However, the company is in talks with more than 100 intermediaries and has an estimated $1 billion in potential recurring annual inflows over the medium term from this business line. This growth should be relatively inexpensive as it has already spent heavily on the technology it needs. As a result, most of its day-to-day spending is now on marketing, plus select technological improvements. PensionBee should be able to scale quickly and efficiently.

Profitability is in sight for PensionBee

In the first half of its 2026 financial year, the firm reported group adjusted Ebitda of -£1.1 million. The UK market alone generated adjusted Ebitda at £1.5m million in the first half or £7.5 million over the last 12 months.

According to estimates compiled by analysts at Peel Hunt, the company is expected to report adjusted Ebitda of £0.5 million for the full year across all markets. Analysts believe PensionBee will achieve sustainable profitability from 2027 onwards and reach management's 20% adjusted Ebitda margin by 2029.

PensionBee is still a small-scale business in a large market with much bigger and deeper-pocketed competitors. However, the opportunity should not be understated. Peel Hunt believes the firm will report £1.5 million of adjusted Ebitda by 2027 and then £8.08 million by 2028, as the group finally reaches an inflexion point in its growth. Sales are expected to rise from £43 million for 2025 to £83 million by 2028, according to Berenberg, as assets under management rise to near £13 billion. Canaccord Genuity has similar figures.

If the company hits these targets, it could achieve a return on invested capital of 34.5% by 2028. If there's one number that illustrates just how profitable PensionBee could be at scale, it's this. The next few years could transform its fortunes.

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.

Fidelity China Special Situations is an actively managed investment vehicle providing broad access to China's growth opportunities – from established technology leaders to entrepreneurial businesses that have yet to float on the stock market. In the year to date, Chinese and Hong Kong stocks have experienced greater volatility as geopolitical tensions, higher energy prices and concern over inflation weighed on sentiment, although China's diversified economy provides some resilience against these external headwinds.

It's not all about AI either. Semiconductor, power equipment and other AI infrastructure-related companies have seen stronger earnings momentum, while internet platforms have been market laggards. Domestically, consumers' confidence remains subdued amid ongoing property-market weakness. But there are signs that the economy is stabilising, supported by state policy that remains supportive, but targeted. Against this backdrop, many companies are trading at significant discounts to their global peers and there are attractive opportunities across a range of sectors spanning advanced manufacturing, property and domestic consumption, where strong long-term fundamentals are not reflected in valuations.

Three Hong Kong stocks for your portfolio

Contemporary Amperex Technology (Hong Kong: 3750) is the world's largest battery manufacturer and a global leader in the electrification value chain, supported by its leadership, manufacturing scale and continued investment in innovation.

Batteries for electric vehicles remain an important growth driver, but the firm is becoming increasingly diversified. Energy storage systems (ESS) are emerging as another major source of growth, supported by rising generation of renewable energy, electricity security needs and rapidly expanding demand for power from AI data centres. Commercial vehicles and accelerating EV penetration outside China provide further opportunities, with electrification in many markets still at an early stage. With its scale and technology leadership, this firm is well positioned to capture these multiple sources of long-term demand across transport and power systems.

Anta Sports (Hong Kong: 2020) is one of China's leading sportswear groups, with a multi-brand portfolio spanning mass-market sportswear, premium sports fashion and specialist outdoor categories. Its strong brand management, disciplined execution and proven direct-to-consumer model have supported consistent market-share gains in China's growing sportswear market. Importantly, Anta has demonstrated a strong record of acquiring, repositioning and scaling brands, providing additional avenues for growth beyond its core franchise. Newer additions, such as Jack Wolfskin and Puma, further broaden the portfolio. Anta is well positioned to continue gaining market share across China's evolving sportswear industry.

China Resources Land (Hong Kong: 1109) is one of China's leading property companies, with a high-quality investment portfolio, including shopping centres alongside its residential business. Despite the prolonged downturn in the market, the company has continued to gain market share as weaker developers have exited the industry, while its investment properties have delivered steady growth and resilient recurring income. The market is not fully appreciating the quality and value of its investment-property portfolio.

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

It took both Andy Burnham and Friedrich Merz three attempts to win the leadership of their parties and ultimately reach the top job. Neither was their party's natural favourite, but time, doggedness and perhaps the exhaustion of the alternatives eventually delivered the prize they had long coveted. Burnham should hope that is where the similarities end.

Fifteen months after becoming chancellor, Friedrich Merz is in trouble. His approval rating has collapsed, his coalition is fractious and his centre-right CDU/CSU is trailing the populist-right Alternative für Deutschland (AfD) by seven percentage points in the polls. Friedrich Merz has recorded the lowest approval rating for a chancellor since records began. CDU politicians recently told Politico of internal discussions about a Kanzlertausch, or “chancellor swap”. This is an extraordinary prospect in a traditionally stable political system.

The immediate danger comes in east Germany. The AfD is polling above 40% in Saxony-Anhalt, which votes on 6 September, putting it within reach of taking control of a German state for the first time. Two weeks later, Mecklenburg-Vorpommern votes, with the AfD ahead on 36%. An AfD breakthrough into government would be a political earthquake and heap further pressure on Friedrich Merz. Yet his problems contain a broader lesson for Britain's new prime minister.

Friedrich Merz stretched the mandate

Friedrich Merz fought the 2025 federal election promising fiscal conservatism. Within days of becoming chancellor, he performed an extraordinary U-turn. Working with the outgoing parliament, he pushed through constitutional changes exempting much defence spending from Germany's debt brake and created a €500 billion infrastructure fund. Germany needed to rearm, its crumbling infrastructure required investment and its restrictive fiscal rules had become an impediment. It was realpolitik in response to a global order reshaped by Donald Trump's return to the White House. But it was also a betrayal of the proposition Merz had put to voters. Political mandates are not infinitely elastic. Voters may accept that circumstances change, but repudiating a central election commitment risks losing the trust required to make subsequent difficult decisions. Merz has discovered that borrowing more money does not magically resolve the political constraints on governing.

Burnham starts with an even bigger problem: he has no personal electoral mandate at all. In 2024 the electorate voted for Keir Starmer, Rachel Reeves and their programme while Burnham was not even an MP. That programme promised “change”, but combined higher spending ambitions with a pledge not to raise the three big taxes on working people. Burnham is now trapped. He wants to spend more, his party has demonstrated that it will not readily let him spend less, and Labour's tax pledges have closed off the most straightforward way of raising the money.

The problems facing Burnham

The result is a government searching for increasingly inventive ways to square the circle before the Budget on 28 October. The danger is that Burnham follows Friedrich Merz in concluding that the only escape is to reinterpret the mandate he inherited – except Britain has far less room for manoeuvre. Germany entered its fiscal expansion with government debt of just 63.5% of GDP in 2025, rising to 68%. Britain's public-sector net debt is already 94% and the Office for Budget Responsibility expects it to peak above 96%.

The financing requirements make the contrast starker. Germany's abandonment of its cherished debt brake has been described as a historic fiscal splurge, yet it plans to issue roughly €335 billion of longer-term federal securities this year, against £252 billion of gilts from Britain – almost as much in the same currency despite the German economy being around 50% larger. Britain is already running the sort of debt programme that Germany regards as extraordinary. That leaves Britain far more dependent on keeping bond investors onside. Germany is borrowing from a much stronger starting position and directing much of the money towards infrastructure and defence. Burnham would be asking investors to tolerate yet more borrowing from a country already carrying a much heavier debt burden.

For investors, Britain's weaker fiscal starting point leaves gilts vulnerable to a greater risk premium than Bunds, particularly if Burnham tests the bond market's tolerance. The outlook is brighter for defence equities. Rheinmetall's order book has swollen to around €80 billion, while BAE Systems boasts an £84 billion backlog and its shares have performed well this year.

Britain has advantages elsewhere. Its deeper venture-capital markets and more flexible economy give it a better chance of producing European winners from AI and other emerging technologies. It also has a shock absorber unavailable to Germany: its currency. Sterling can fall when the economy needs to adjust, whereas Germany is locked into the euro. But depreciation is no free lunch: it raises import costs, risks higher inflation and can become a verdict on investors' confidence.

For Burnham, Friedrich Merz is therefore both a warning and a useful comparison. Merz responded to changing circumstances by abandoning one of his clearest election promises and has paid a heavy political price. Burnham has inherited promises that leave him wanting to spend more and constrained in raising taxes. Borrowing offers an apparent escape, as it did for Merz. But with our debt burden already far higher, the bond market may prove far less forgiving than the electorate.

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.

When INPP – International Public Partnerships (LSE: INPP) – invested in the Thames Tideway Tunnel project in 2015, many investors thought its directors and managers were mad. Weren't infrastructure projects in the UK always delivered late and massively over budget? The project was a carve-out from the financially stretched Thames Water and would surely be dragged down by it.

Instead, the 16-mile super-sewer under the River Thames from Acton to Beckton was completed as planned in March 2024. In the year to 31 March, it “diverted over 20 million tonnes of sewage and drain overflow that would otherwise have polluted the River Thames and prevented over 1,000 spills”. This represents a 95% reduction in the volume of untreated waste water entering the river.

Win-win investing from INPP

Infrastructure investment is often denigrated as being expensive off-balance-sheet financing of projects the public sector should do itself. However, the success of Tideway shows why bringing in the private sector can help construct and manage infrastructure projects at a reasonable cost to the taxpayer, as well as offering good returns for investors.

INPP's stake in Tideway is one of its largest, representing 15.6% of its £2.9 billion of net assets. The investment in gas distributor Cadent is of a similar size, while a stake in 11 offshore transmission owners (OFTOs) is over 20%. The latter does the boring but essential job of connecting offshore wind farms to the onshore grid.

Lower down the list is the 4.2% invested in BeNEX. The British political class may have become disillusioned with the separation of Britain's railway system into network infrastructure, rolling stock and operating franchises, but Germany has copied the model. BeNEX has concession agreements with 14 of Germany's 16 federal states and owns more than 130 trains.

Last year, the trust won a deal to contribute £254 million to the construction of Sizewell C nuclear power station in return for a 3% stake, of which £35 million has been invested so far. The investment is “expected to generate an annual cash yield of 6% through construction and early operations, with a significant step-up in yield once fully operational”.

Meanwhile, it is trimming mature investments, selling part of its stake in Angel Trains, which owns over one-third of the UK's passenger rolling stock, for £3millionmn. It has also reduced its exposure to public-private partnerships (PPPs) through asset sales – this week, it sold stakes in 15 London schools for £58 million – and handing back concessions as they expire.

INPP’s shift to higher returns

This is part of a broader trend. Over the years, International Public Partnerships and its peers have moved away from the lower-risk PPP projects into ones that are riskier, but offer higher returns, such as Tideway and Sizewell. 3i Infrastructure (LSE: 3IN) was the first to do so, and International Public Partnerships and Pantheon Infrastructure (LSE: PINT) followed. More recently, HICL Infrastructure (LSE: HICL) has announced a further shift away from the PPP “yielders” in the portfolio (currently 53%) into “growers” (currently 47%) and “enhancers”, such as data centres and leisure facilities. This is expected to increase its annualised total return to 10%, from 8.5% historically.

The infrastructure funds have been held back in recent years by rising gilt yields, but discounts have fallen in the last year and operational performance has been good. Discounts to net asset value (NAV) range from 5% (3iIN) to 15% (HICL). Yields are between 3.5% (3iIN) and 6.1% (HICL), with dividends likely to rise with inflation.

International Public Partnerships is on a discount of 7%, yielding 6% and has 72% of its assets in the UK. A writedown of its £24 million investment in a UK broadband firm this week is not material (0.9% of NAV) and guidance is unchanged. Despite a 24% return over one year, it continues to look attractive.

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.

US Treasury secretary Scott Bessent has found himself caught in a standoff with currency traders more than a fortnight after the US and Japan jointly intervened to buy yen for the first time since 1998.

The move strengthened the yen at the start of August, but it has since given back roughly half of its post-intervention gain. Currency analysts warn the fundamental drivers of a weak yen, especially a yield gap between Japan (where rates are 1%) and the US (where rates are over 3.5%), have not gone away.

Scott Bessent knows a thing or two about currency trading, says The Guardian. He was part of the George Soros team in 1992 that made a billion dollars by forcing the pound off the European Exchange-Rate Mechanism. His intervention to stabilise the yen wasn't an act of charity. Japan is a “cash spigot”, with the cheap yen funding a global “carry trade” that helps prop up US technology shares.

If the yen's slide continues, then Japan might be forced to respond with “aggressive” interest-rate rises. That could quickly unwind the carry trade and trigger a Wall Street rout, as happened two years ago when a surprise Japanese rate rise sent global markets tumbling.

Don't worry, the risk of a “disorderly” unwind “seems low”, Masayuki Nakajima of Mizuho Bank tells Katie Martin in the Financial Times. The danger of higher Japanese rates is now “extremely well understood” by traders, who have made appropriate preparations. Rather than a snap yen rally, “all the ingredients are in place” for the carry trade to continue and yen selling pressure to persist. “It is increasingly clear that the market is in the mood for a fight” with the US Treasury.

What does Scott Bessent’s intervention mean for the global economy?

The “US currency intervention was not only ineffective, but counterproductive”, says George Saravelos of Deutsche Bank. Washington has been encouraging Tokyo to tap an emergency Federal Reserve dollar facility, inadvertently sending a signal that “it is not comfortable” with the “direct US Treasury sales” that Tokyo usually uses to prop up the yen.

If Scott Bessent's yen “ruse” was designed to keep US borrowing costs under control, then it has failed, agrees Simon Nixon on Substack. Washington's use of “unorthodox” tools, including selling euros rather than dollars to fund the yen intervention, has only “deepened the anxiety it was meant to soothe”. Bond traders sniff out hesitation like sharks detect blood in the water.

The spike in government debt isn't only affecting America. Japan's own ten-year yield hit a 30-year high on Monday, while France's has topped 4% for the first time since 2008, potentially pushing the country closer to the brink of a “debt crisis”.

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.

Tina Fordham is the former chief global political analyst at Citigroup and founder of Fordham Global Foresight. Tina has spent more than 25 years advising senior business, government and military leaders on navigating political and geopolitical risk; she has served as a senior adviser to the UK prime minister and advised military leaders. She also sits on advisory boards at Columbia University and the University of Cambridge. Her forthcoming book, Mad World: A Geostrategy Survival Guide for Leaders, is published by Whitefox in September 2026.

Matthew Partridge: Your new book, Mad World: A Geostrategy Survival Guide for Leaders, argues that in the current geopolitical climate, companies no longer have the luxury of ignoring politics?

Tina Fordham: Yes, ignoring geopolitics was something you could only afford to do in the era of globalisation, which happens to be the time that most of today's executives, myself included, grew up in.

Matthew Partridge: You've talked about the emergence of a new geopolitical supercycle.

Tina Fordham: The data for that study examines the period between 2010 and 2025. So even before Donald Trump's second term, we detected a tripling of events posing geopolitical risk. People hope things will get better after Trump leaves office in January 2029, but the evidence suggests that the drivers of geopolitical risks are multiplying and have been for a long time. Moreover, the guardrails that temper the risks are either eroding or being actively dismantled. So the idea that we only have to survive another year and a half before things return to normal is misplaced.

Matthew Partridge: Which guardrails in particular are being eroded?

Tina Fordham: There's a diagram in the book of the supercycle framework, where we talk about some of the long-term drivers, like declining trust, climate change and income inequality. However, when there are risky events or shocks, good government, liquidity from central banks, institutions or even social cohesion can help you mitigate these problems. But when these guardrails are damaged, even relatively small risks can become quite disruptive. This is difficult for most executives to get their heads around, but it's how we try to apply a systematic conceptual framework to thinking about geopolitical risk.

Matthew Partridge: Your book is primarily aimed at business leaders and executives, but would it also apply to ordinary investors deciding how to structure their portfolios and which assets to choose?

Tina Fordham: There are certainly implications for everyday people who are having to think about how to manage their own lives, their families and their careers in a time of unprecedented global change.

Most people have yet to recognise that we are in a new age. They assume we are still in the period most of us became used to: one of continuously improving living standards. In fact, the period between the fall of the Berlin Wall [1989] and the collapse of Lehman Brothers [2008] was actually the most peaceful and prosperous period in all of human history – not the baseline for the future. You can mess it up.

Matthew Partridge: Turning to specific issues, I've noticed that in your recent talks you've been a lot more pessimistic about the prospects for a lasting resolution to the situation in the Strait of Hormuz. Why is that?

Tina Fordham: We were among the few to come out strongly and say that the conflict between Iran, Israel and the US would not be a short war, which was counter to the consensus at the time that it would all be over very quickly. Our reasoning was based on how Iran has always negotiated. It was never going to be enough simply to order them to meet the White House's maximalist demands.

I also felt that there is vanishingly little evidence in history of aerial bombardment causing regime change, one of the original aims of the conflict. Every US president since Jimmy Carter in the 1970s has wargamed and studied possible options for dislodging this regime and concluded that it was too hard to do without massive loss of life and huge disruption, so president Trump wasn't going to change that.

So now, we've got the situation where the US has seemingly depleted its stock of long-range munitions, while Iran can regenerate its drones faster than the US can replenish its stocks. While the markets have been reacting to the good news – in the short term – that there may be a resumption of oil supplies to the Strait of Hormuz, the actual long-term effect of this war has been to give Iran a source of leverage that it didn't have before, a power it is not going to relinquish. Meanwhile, Trump seems to have got bored with this conflict, except he's realised he can't just walk away.

Matthew Partridge: What is the most likely outcome?

Tina Fordham: Most market participants have assumed that America doesn't want to have high petrol prices before an election. However, while this might have applied over the last 25 years, I think this time we're going to end up in a situation that is between war and peace, where Trump will keep threatening because that's the only tool he has.

What's more, the Gulf states have prevailed upon the White House not to destroy Iran's energy infrastructure because of what that would do to the rest of the region. So, we are likely to be left in a situation where Iran is more powerful – if battered – after this war. What's more, the situation sends a message to the rest of the international community that if they don't like their present borders, or have some beef with their neighbour, the US has a much smaller capacity to stop them.

Matthew Partridge: On a more positive note, it looks as though Ukraine is fighting back against Russia and seems to be regaining some of the territory the invader stole. Will that continue?

Tina Fordham: The Ukraine conflict is being fought over feet and yards of territory. While this is a quagmire for Russia, with China prevailing on Putin not to go nuclear, neither is he going to come to the negotiating table in any meaningful way and agree to a ceasefire. Russia will not seek a deal that gets sanctions rolled back. That is simply not how Putin thinks.

Given that 40% of Russia's energy infrastructure has been destroyed, resulting in queues for petrol, Putin may want to make a grand gesture to demonstrate control. There is therefore a material risk of Russia attacking a Nato member. Most British people don't seem to have factored this risk in, even though we're being attacked by Russia all the time.

Matthew Partridge: Could Putin end up like the Serbian dictator Slobodan Miloševic – who was overthrown in 2000 – and succumb to internal dissent or a palace coup?

Tina Fordham: While there is no chance of Putin ending up in The Hague, a palace coup is more plausible than a popular revolution. But, the trouble with palace coups is you really need an alternative. And Putin has made sure that there are no plausible successors to him. So, while he and his policies are increasingly costing the Russian elites more than they're gaining, leaders like this can hang on for a long time.

Matthew Partridge: Do you think Ukraine's brave resistance and the fact it's actually been able to at least block Russia will give hope for other countries like Taiwan?

Tina Fordham: Ukraine has certainly given Beijing pause for thought. The fact that both the US and Russia have been dealt a serious blow by much weaker middle powers suggests that might doesn't necessarily win and can leave you stuck in a very awkward position for a long time.

Matthew Partridge: Trump will have to leave office in January 2029. The Republicans are now expected to lose at least one House of Congress seat in the midterms. Do you think that a bad result in the midterms will rein in Trump, or do you think that he might become even more unpredictable?

Tina Fordham: This is the question on the minds of many. The Iranian regime have said that they weren't going to negotiate any longer with the US but are going to wait until after Trump has left office.

While the US constitution means that Trump is limited to two terms, he is printing “Trump 2028” hats already. There's also the possibility that Trumpism may outlast Trump himself. In the most sinister scenario, the dubious behaviour by many in the administration means that even if they are voted out, the threat of possible investigations may complicate the usual peaceful transfer of power.

Matthew Partridge: In your book, you say that while the big losers from automation had been older, blue-collar workers, the worst affected by AI will be middle-class people in their 20s and 30s, who tend to be more politically aware. Will this fuel opposition to AI?

Tina Fordham: Absolutely. It will also increase demand for policy solutions. Covid has led to a rise in both benefits and expectations of government support. The historians who speak very grandly about previous waves of innovation and industrialisation forget that during the Industrial Revolution, working-class people didn't have the vote, which is not the case today.

In any case, revolutions are not fought by the poor, they are launched by the middle classes, and it's not only university students and recent graduates who are angry, but also those in the their 50s who are being told they need to work longer because the pension age is being delayed. All of this is going to add to pressure on governments at the same time that Europe needs to spend more on defence.

Matthew Partridge: What is the upshot of all this for investors?

Tina Fordham: We used to think about geopolitical risk in terms of what could go wrong and undermine a portfolio. But recent geopolitical developments and other themes such as AI have led to a situation of constant potential danger, as opposed to sporadic upsets. The threats won't dissipate within a year or two; this backdrop is set to last longer than a decade.

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.

There is a pervasive belief that the “Magnificent 7” tech stocks are the drivers behind the relentless rise of the US stock market. The Magnificent 7, sometimes called the Mag 7, are Nvidia, Amazon, Alphabet, Microsoft, Apple, Meta and Tesla – seven of the largest companies in the US and therefore the world.

But the Magnificent 7 no longer ride together and their performances this year are very different. The S&P 500 has returned 13.4% year to date. Amazon has returned 21%, but Tesla -25%. In between are Nvidia (19%), Apple (16%), Alphabet (12%), Microsoft (6%) and Meta (0.4%). As a result, Meta and Tesla have been pushed down the list of the world's largest companies by TSMC, Broadcom, SpaceX and Saudi Aramco, now in sixth, seventh, eighth, and ninth place, respectively.

Fifteen companies in the S&P 500 have more than doubled in value this year, led by Sandisk (+413%), Dell (+255%) and Micron (+207%). None of the Magnificent 7 come in the top 150; Tesla is near the bottom. As strategist Ed Yardeni notes, the Magnificent 7 are up just 4.8% this year against 16% for the remaining “impressive 493”. Information technology is still the S&P's second-best-performing sector (up 23.6% against +28.4% for energy), but the Magnificent 7 no longer lead it.

The Magnificent 7 have invested heavily in AI

The dull performance may be accounted for by investors' concern about the gigantic amounts of money these companies are investing in AI. This may seem like collective insanity, but these companies are led by and employ many of the smartest people in the world. How likely is it that they are wrong and the itinerant pundits, with limited knowledge and experience, are right? In any case, any fall-off in investment and thereby an increase in cash flow could lead to renewed outperformance.

Yardeni notes that the forward multiple of earnings of the S&P 500 Growth index has fallen to 20.2 against 18.3 for the Value index. In 2000, he says, Growth traded on a multiple above 40. Growth's forward earnings have been boosted by mark-to-market capital gains, so the multiple of sustainable forward earnings is higher but, he points out, “bull markets do not die of old age or of accumulated gains. They usually die when earnings roll over.”

The driving force of the bull market is then “FEMO” – fabulous earnings momentum, rather than “FOMO”, or fear of missing out, as in the late 1990s. “In the current bull market, the S&P 500 is up 117% since it began on October 2022. That ranks fifth of the eight bull markets since 1969.” Taking a longer-term perspective, the index is up 277% since 2015, but between 1985 and the millennium, it was 625%. “If the analogy continues to hold and the market keeps climbing, the interesting years are ahead rather than behind.”

How other markets are faring

Yardeni also monitors sentiment, which suggests that institutional investors are bullish (a contrary indicator), but “retail investors not so much”. Markets do not go up in a straight line, so a setback or period of sideways trading would be likely to dampen sentiment, paving the way for a further advance. The chances of a serious setback to earnings growth are small; if the Gulf war and its effect on oil prices could not achieve that, what could?

Elsewhere, the outlook is at least as good. The reliably pessimistic and risk-averse British have led to a serious undervaluation of the UK market and a takeover bonanza for private equity and overseas bidders, which shows no sign of slowing. The yen, at last, is showing signs of stabilising if not reversing its 15-year bear market. This would mean that the strong underlying performance of the Japanese market would look even better for overseas investors.

The outlook for the European economy is improving while its companies have successfully globalised. Technology companies in emerging markets are doing even better than in the US with year-to-date performance of 32%, so South Korea (+71%) and Taiwan (+62%) lead the country performance table even after the recent setbacks. Earnings growth in the MSCI All Countries World index ex US has been pedestrian in the last three years, but is about to accelerate sharply, with 34% growth expected in the next 12 months.

Further evidence of a broadening market comes from the improved performance of smaller companies, with the Russell 2000 index for the US hitting record highs and outperforming the S&P 500 over the last year. Small caps in the UK, Europe and Japan have continued to underperform, but performance has picked up and may be moving ahead.

This is not the end for the bull market

The outperformance of the Magnificent 7 in recent years looks like having been a passing phase. Its end does not signal the end of the bull market, much less an imminent collapse, but a healthy return to the traditional pattern whereby mega-caps lag a broadly advancing market.

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

The past few years have been very tough for UK housebuilders and their shareholders, says Jo Rands, a portfolio manager on the UK Equity Income, UK Managers' Focus and UK Rising Dividends strategies at ClearBridge Investment. The government has pledged to build 1.5 million homes in five years, but various headwinds, including cost increases and higher interest rates, have caused UK housebuilders' shares to plunge over the past two years. Yet with Andy Burnham entering No. 10 with talk of building more council houses, and even bringing back a form of Help to Buy, their shares have rallied recently. Will this continue?

Why are UK housebuilders struggling?

At the core of the British housing crisis is the fact that we're simply not building enough housing, either in the public or the private sphere. David Crosthwaite, chief economist of the Building Cost Information Service, notes that housebuilding peaked in 1970, with nearly 400,000 homes completed, of which just under half were council houses. Fast-forward half a century and only 200,000 homes were built last year, of which just 4,000 were council housing. Essentially, “you have a diminishing supply of housing, particularly social housing, at a time when the population is continuing to grow at a strong rate”.

Unsurprisingly, the gap between housebuilding and population increase has created a huge backlog. There are several ways of estimating this unmet demand, says Edward Clarke, an associate director at planning consultancy Lichfields UK. When you take into account what statisticians call “concealed households” – people who would like to start a household, but are currently “sofa surfing”, or living with their friends and parents – then “we really need to build two million more homes”. That might seem like a shockingly large number, but Clarke thinks it could even be an underestimate. Getting the homes-to-population ratio in line with continental Europe would require even more construction – around 2.4 million additional homes.

It isn't just young people, and those on the margins, who are suffering as a result. The shortfall in supply means that houses in the UK are less affordable, in terms of the ratio of prices to incomes, than they are in countries such as France and Germany, as Jeremy Matallah, co-founder of rent-to-own company Keyzy, notes. Just to meet the immediate needs of the market, “we should be building around 300,000 homes a year”, roughly a 50% increase from the 200,000 homes a year that we are building at the moment.

Hoarding land and restrictive planning rules

Most experts agree that the big factor behind the lack of supply is the planning system. In 2024, the Competition and Markets Authority, the competition regulator, was called in to investigate allegations that builders and developers were hoarding land excessively, says Paul Smith, managing director at The Strategic Land Group. It found that the market for land was not working properly and that the planning system was such a fundamental barrier to the delivery of new houses that it felt compelled to talk about it, even though this was outside its original remit.

The planning system acts as a block on development in two main ways, says Smiths. Firstly, there simply isn't enough land earmarked for development, with only a third of councils in England even bothering to have up-to-date local plans. Worse, the process for dealing with individual planning applications, which is supposed to act as a “safety valve” given the lack of local plans, is too subjective (and therefore unpredictable) as well as increasingly complex.

Even when decisions are made, the process is getting ever slower due to a shortage of town planners. Indeed, “applications for new homes take more than three times longer to be approved than they did a decade ago, with the median time around 349 days”, says Smith. This matters, as even putting in a planning application can be expensive for a developer, costing around £150,000-£200,000 per application, even if the application is not successful. “If the process was speeded up and the outcome was more predictable more developers would be willing to take the risk.”

The plethora of rules and regulations make the planning system dysfunctional. Section 106 agreements, for example, which oblige builders to help contribute to additional development-related infrastructure, have been around for decades, but their scope has been broadened to the extent that you now see local police forces asking developers to contribute money so they can buy more laptops, says Smith. The Future Homes Standard rules on carbon emissions also “typically add around £7,000 to £8,000 per home in extra building costs”.

The Building Safety Act, approved in 2022, which significantly increased the safety requirements for tower blocks, is particularly contentious. The intention, to avoid a repeat of the Grenfell Tower disaster, is of course understandable, but the legislation “feels like a bit of a sledgehammer to crack a nut, reducing the appetite that anybody has to actually build flats”, says Adam Murray, CEO of planning and development consultancy Urbana. Indeed, developers in Germany and the US are safely able to build high-quality tower blocks “without having to follow rules such as having to have two staircases”, says William Reeve, chief executive of property technology company Goodlord. Loosening these rules is key if we are not to end up depending solely on single-family homes.

A blizzard of other problems for UK housebuilders

Poor planning rules aren't the only constraint on housebuilding. Even when development is allowed, buying land can be difficult when a site is owned by multiple parties, says Matt Beckley, partnerships director at Keon Homes. Remediation of former industrial land to make it fit for housing can also prove expensive. The government provides some support in the form of grants, but “there needs to be a good, hard look at the amount of funding that's available and how that is financed”, says Beckley.

Housebuilders are also “contending with a notable skills shortage, which means builds are taking longer to complete and projects are stalling”, says James Anderson, a construction supply-chain expert at Catnic. The National Audit Office has estimated that as many as 755,000 workers are needed to help meet housebuilding targets, even before factoring in those leaving the sector. The industry, including Catnic, is providing training, but additional help will be required.

The demand side is a problem too, says David Smith, portfolio manager of Henderson High Income trust. Elevated mortgage rates and political uncertainty over tax issues have weighed on consumers' sentiment, leading to a “lacklustre number of transactions”. Higher inflation and borrowing costs are also having a negative impact, says Ronnie George of Volution. He believes some form of subsidies for those buying a home, along the lines of Help to Buy, could be useful.

Andy Burnham's challenge

New prime minister Andy Burnham clearly faces a significant challenge. But many are optimistic that he can really make a difference, given his record as mayor of Greater Manchester between 2017 and 2026. His achievements in that time in office were far from perfect, says Smith, and he didn't quite hit the ambitious housebuilding targets that he set himself – he ended up making some concessions to those who opposed greenbelt development. But he deserves credit for going out and creating his own plan for local development rather than just “kicking the can down the road”, as local leaders in other parts of the country did.

As mayor of Manchester, Burnham at least showed an “understanding of the problem and a willingness to try and address it”, says Matallah, who is impressed that Burnham has promised to go beyond the existing commitment to invest £39 billion over ten years in affordable housing by tackling the “structural undersupply of social housing for the past 40 years”. There are indications that Burnham may be willing to allow councils to keep more of the revenue that they make from the sale of council houses, to use public lands for development and even take on debt in order to build more houses.

Burnham's “Manchesterism" – the belief that growth can be boosted by “devolving power to give mayors and councils the power and resources to make decisions” – could work, says Terry Woodley, managing director of development finance at Shawbrook. “Of course, there needs to be some sort of national strategy put in place, with regular monitoring to make sure that the councils are using these powers to boost development,” but decentralisation, combined with Burnham's enthusiasm, represents “the best chance to boost housebuilding levels that we have seen in over a decade”.

And it's not as if Burnham is starting with a blank slate, says Clarke. Over the last two years, the Starmer government put a lot of effort into reforming the system in order to meet their targets of building 1.5 million homes in five years. This was expressed in their proposed reform of the National Planning Policy Framework (NPPF), a draft version of which was circulated last December (with further revisions in May). As well as trying to make the process more rules-based and hence predictable, the new NPPF encourages councils to free up more sites by pushing them to allow development in the “greybelt” – that is, lower-quality greenbelt sites. The NPPF has also raised overall targets for home building in various areas.

Signs of an uptick in the housebuilding sector

Already many in the sector are starting to become more upbeat about the prospects for an increase in the number of homes built. “You've always got to be optimistic in this game,” says Smith, and there are a number of “easy wins” the government can make to help remove “the grit from the system”. Smith is particularly happy that Matthew Pennycook, the minister of state for housing and planning, has been kept on and elevated to a Cabinet role.

“We have at last moved away from a situation where there wasn't a proper housing minister, and if there was, they were moved on every 12 months,” says Bleckley. It feels “like there is now a will to get more houses built than there has been for more than ten years”. This doesn't mean the government will hit its targets for housebuilding over the next five years (although Bleckley hopes he's wrong about this), but “I do think that there will definitely be an uptick”.

There are “many uncertainties”, says Clarke, but there has recently been an increase in the number of planning submissions made, which is a good leading indicator of future activity. We “should expect to see more homes being built if the market conditions allow for it”. Similarly, despite his concerns about the shortage of planners, Woodley is starting to see that “some of the developers that we work with are getting approvals” more rapidly.

The housebuilding market may be about to turn

The market may now have reached the point where it is too negative about the housebuilders, says Jack Fletcher-Price, an equity analyst for Morningstar, but things are unlikely to improve until something happens to shift investors' perceptions. If (or when) such a catalyst appears, things could change quickly. Shares in housebuilders shoot up, sometimes by as much as 5% in a day, every time there is a rumour that the government is going to bring back some kind of Help-to-Buy scheme, for example.

If there is an uptick in housebuilding, the big housebuilding firms will be best placed to profit “because they tend to have stronger balance sheets, established land banks and greater access to funding, allowing them to respond more quickly if market conditions improve”, says Guiseppe Scozzaro, a partner with chartered accountants and business advisers Goodman Jones. Any uptick would “also benefit a much broader range of firms, from planning consultants and specialist lenders, to building-materials suppliers and infrastructure providers”. We take a look at some of the most promising investment ideas below.

The most promising housebuilding investments to buy now

One of the most attractive housebuilders is Persimmon (LSE: PSN). Its relatively high exposure to the north of England, compared with London and the southeast, “was previously seen as a negative, but it is now viewed as a positive, as you're seeing much better house-price growth up there”, says Morningstar's Jack Fletcher-Price. David Smith of Henderson High Income also likes that the firm is “one of the most vertically integrated UK housebuilders, with in-house brick, tile and timber-frame manufacturing operations, helping to improve cost control, efficiency and security of supply”. Persimmon trades at 11 times 2027 earnings and on a yield of 5.8%.

If snapping up a bargain is your priority, then you might want to think about Barratt Redrow (LSE: BTRW). It is even cheaper relative to its fundamentals than Persimmon, says Fletcher-Price, although he thinks that Persimmon has the more attractive business. The stock is trading at just a touch more than half its book value (the value of its net assets). Barratt also appears cheap on other metrics, trading at 12 times 2027 earnings and offering an attractive yield of 3.97%.

If you're willing to take on a bit more risk, then Vistry (LSE: VTY) is even more of a bargain, trading at an even greater discount of more than 70% to its book value, and at only 6.4 times its 2027 earnings, following a series of scandals over understated costs, followed by poor results. The company has a unique model, says ClearBridge's Jo Rands. It partners with local authorities on projects and so “could possibly do well from a greater emphasis on affordable housing” (though Rands emphasises that she doesn’t have an overall view on the company).

As well as housebuilders, businesses exposed to drainage, piping, insulation, heating systems and other construction inputs could see stronger demand if housing output increases, says Smith. One promising play on that theme is Genuit (LSE: GEN), which provides water, climate and ventilation systems for buildings. The firm has enjoyed solid growth, with revenue climbing by a third between 2020 and 2025, and profits doubling during the same period. Despite this, the stock trades at less than ten times 2027 earnings and on a dividend yield of 4.9% Volution (LSE: FAN) also specialises in ventilation systems. It has had an even stronger record of growth than Genuit.

Aided by a series of acquisitions, the company has nearly doubled its revenues and tripled its profits over the five years to 2025. Chief executive Ronnie George thinks that greater awareness of the importance of good ventilation, especially following the Covid pandemic and several tragic cases where people have died from asthma triggered by mould, will drive further demand for its systems. The bulk of its business used to come from retrofitting old buildings, but new-builds account for around half of revenue. Volution trades at 15.8 times 2027 earnings and offers a dividend yield of 2.1%.

Another company that should do well from any uptick in UK housebuilding is Ibstock (LSE: IBST), which makes bricks and concrete for the UK construction industry. Revenue has been volatile since 2020, but the long-term trend is upwards, with both sales and profits expected to keep increasing over the next few years. Two new brick factories have been completed, which should help to keep revenue growing. Ibstock trades at 16.4 times expected 2027 earnings and offers a dividend yield of 2.8%.

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.

Over the last 12 months, developer Caswell & Dainow have seen a 50% increase in enquiries, the majority from homeowners interested in selling parts of their garden off for development.

Co-founding director Adam Dainow says: “In the cost-of-living crisis people are looking at ways they can release large sums of cash to help out."

But not everyone agrees that selling off some of your land, while appealing in the short-term, will have little or no impact on the value of your home when you come to sell up.

MoneyWeek investigates the pros and cons of selling off some of your garden.

Does your land have development value?

Your plot must be big enough for at least one property which is in keeping with the size expectations of similar neighbouring properties.

In inner city locations where space is scarce, your plot may not be expected to host a property and a garden, for example. A small terrace or balcony may be sufficient. In suburban areas, where large gardens and privacy may be expected, a desirable plot is likely to be larger.

How much money could you get from selling part of your garden?

That depends on whether you live in a higher or lower value housing market. According to Caswell & Dainow, a plot of land where a typical three- or four-bedroom house sells for £500,000 to £600,000, your land could be worth up to £100,000 before planning permission or between £150,000 to £200,000 after planning permission has been granted.

In housing markets where the same size property sells for between £750,000 to £1 million, homeowners could expect £150,000 to £175,000 for their garden pre-planning permission and from £200,000 to £275,000 post planning permission. These values rise to up to £300,000 and £400,000 pre- and post-planning respectively where nearby homes sell for up to £1.5 million.

Dainow says: “We worked with a homeowner in North London who received £150,000 for land to the rear of his property where planning was secured for a three-bedroom family home and a family in South London who received £140,000 for overgrown side land that had become a regular site for fly tipping.”

But those living in more modest neighbourhoods need not miss out.

“In areas of lower value, landowners may still net between £30,000 and £60,000 for a slice of their garden for a single home,” he says.

How does it work?

If your property has a mortgage secured on it, your lender must agree to the sale first.

The bank’s lending is based on the original value of your property, which will go down when you sell part of it – reducing the value of their security.

The lender will also be looking at the future saleability of your home, says Nicholas Mendes, mortgage technical manager at brokerage John Charcol.

“Practical details matter,” he says. “If the sale affects access, parking, drainage, services, boundaries, or rights of way, it can quickly become a problem.

“What often derails these plans is not the idea of selling land itself, but the knock-on effect.

“A lender may be nervous if the remaining property becomes less marketable, if valuable development potential is being carved away, or if the title becomes more complicated because of covenants, restrictions, or unclear boundaries.”

Your mortgage lender is likely to request a valuation at your cost before making a decision. Lenders can ask for part of the mortgage to be repaid from the sale proceeds depending on the size of your debt and value of your property after selling some of your garden.

If you have been given the go ahead, you have three routes to choose from;

• Sell your garden to a developer before getting planning permission – this is a quickest option but will net you the lowest price.
• Agree with the developer on a ‘subject to planning’ offer, whereby they agree to buy your garden at a higher price on the condition they can get planning permission – you’ll need to instruct a solicitor to draw up a contract.
• Apply for planning permission yourself. This is the costliest option but if successful, you’ll end up with the highest price for your land.

Will selling your land devalue your home?

That depends on the size of your original plot, the amount of land you are left with and the type of area you live in.

Richard Sexton, managing director of Legal & General Surveying Services, said: “In some cases, selling off some land won’t hit the value of your property, particularly where the remaining plot is still generous for the type and location of the property.

“A house with an acre of land may still feel substantial and attractive with half an acre of land, especially in rural or semi-rural settings. However, buyers will pay a premium for space, outlook and exclusivity – so removing development land can still reduce desirability even if the house remains objectively sizeable.”

Land only adds meaningful value to a home where it contributes to privacy, setting, future potential or overall enjoyment of the property. If the sale changes the character of the house or reduces separation from the neighbours there is usually a material impact on value and market appeal.

Those with a smaller plot to begin with, in a suburban location, are more at risk of damaging the value of their property.

“Carving off land can alter the balance of the property quite significantly, affecting privacy, parking, outlook and future extension potential,” adds Sexton.

“In valuation terms, buyers tend to react more negatively where the remaining plot begins to feel compromised or out of keeping with neighbouring homes.”

Brett Ray, registered valuer and founder of Survey Shack, an app-based property assessment tool, has seen the impact on saleability first hand.

“Part of the garden to a house on my street had previously been separated from the original plot,” he said.

“That property has now been on the market for over a year. Ray believes this shows how reducing garden size and altering the original plot can “affect future saleability”.

Since the pandemic, Ray says outside space has become much more valuable, particularly in and around large towns and cities so homeowners should weigh up the risks and benefits carefully.

What to consider before selling your land

A loss of privacy, your garden or windows being overlooked, extra traffic down your drive or side access to your property and the stigma of being the property with the smallest garden on the street are all serious considerations for sellers, says Trudy Woolfe, director of lender services at e.surv chartered surveyors.

“Many people just see the pound signs rather than thinking about the impact,” she adds. “It’s a fine balance.”

Practical complications around access rights, drainage and shared boundaries can all affect saleability and the chances of getting a mortgage if not handled properly.

If your garden has development potential, by selling off the land, you are eliminating an upside of the original property.

And, by selling it to a developer who secures planning permission and sells it on to a builder, you lose control over the design quality and materials used which could have a detrimental impact on the desirability of your home.

Dainow says a good developer will make sure any new homes built on garden land would be positioned to protect the homeowner’s privacy and property value.

But rather than take the developer’s word for it, you can get specific terms written into the contract with the developer.

For example, you could agree you don’t want to look at any windows from a particular elevation or that maintenance of any new access created is the responsibility of the new owner.

You can also include an ‘overage’ clause in your contract which stipulates that the seller gets more money if the land becomes more valuable after the sale because more homes are being built on the land than originally agreed.

Independent advice should be sought from both a solicitor and chartered surveyor with development land expertise before agreeing any terms as land values can vary considerably depending on planning prospects and local demand.

India is rapidly becoming one of the world’s economic powerhouses.

India’s economy grew by 6.5% in 2025, according to IMF data, making it the fifth-fastest growing that year. With a GDP of over $4.1 trillion it is also the sixth-largest global economy.

It overtook China as the world’s largest country by population in 2023, and its growing population – particularly its expanding middle class – underpins much of its current and expected economic growth.

“A young working-age population, urbanisation and rising incomes should continue to expand the consumer base and gradually shift spending towards financial services, healthcare and other discretionary categories,” said Chetan Sehgal, lead portfolio manager at Templeton Emerging Markets Investment Trust.

Its economy has been transformed over the last decade by reforms such as the goods and services tax (GST), a single indirect tax which simplified the pre-existing tax system in 2017, and the unified payments interface (UPI), a protocol that facilitates instant digital payments on mobile devices using a unique digital ID.

“Registered GST taxpayers have increased from around 6.7 million in 2017 to 16.5 million as of May 2026, while UPI processed more than 240 billion transactions in FY2025/26 and had more than 550 million users by June 2026,” said Sehgal. “This brings more consumers and businesses into the formal system, creates digital transaction histories and expands the addressable market for credit, insurance, payments and savings products.”

All of this amounts to a powerful shift that could create an enormous amount of value for the country’s consumers and investors.

“India today reminds us of China’s internet opportunity 20 years ago – but with artificial intelligence (AI) potentially accelerating the transformation,” said Kevin Carter, founder and chief investment officer of investment manager EMQQ Global.

What’s driving India’s stock market?

India’s stock market has come up against greater challenges this year than it has faced in recent times, particularly the consequences of the conflict in Iran.

Between the start of the year and 19 August, the MSCI India index fell 9.3%, reflecting a range of macroeconomic headwinds that mostly result from the US-Iran conflict.

“India has been impacted by volatility in crude [oil] prices as a result of ongoing wars,” said Sehgal, “as well as by cost inflation in the AI supply chain, where India is a major importer.”

Since hitting a low of 1,049.11 at the end of March, though, the index has staged something of a recovery, gaining 10.8% between the end of the month and 19 August.

“Indian stocks have stabilised after a bruising first quarter and are proving resilient to both the Iran war and the ‘AI-takes-all’ market environment,” said Peter Clark, chief executive at global wealth manager Bentley Reid.

“Though cyclical headwinds remain there are growing signs that the record foreign selling of Indian equities is over with $2 billion of net inflows being recorded in June,” Clark added.

He highlighted that the MSCI Emerging Market index is dominated by Taiwanese and Korean chipmakers. Three companies – Taiwan Semiconductor, Samsung Electronics and SK Hynix – account for more than 28% of the index as of 31 July.

“If the AI trade ever reverses, ‘AI laggard’ is a moniker the Indian market may be happy to own,” said Clark.

Which are the most appealing sectors in India’s stock market to invest in?

Though it is perceived to be light when it comes to AI, India’s stock market benefits from having several sectors where it is a major global player.

IT services

For years, IT services companies have been at the forefront of India’s economic growth. Companies like Tata Consultancy Services (MUMBAI:TCS), Infosys (MUMBAI:INFY) and Wipro (MUMBAI:WIPRO) are among the world’s largest, with combined market capitalisations of over $100 billion.

Despite fears that AI could disrupt this market, Sehgal still views it as a significant sector for the country. “India retains significant advantages from its large skilled workforce, global delivery capabilities and deep client relationships,” he said. “We believe that, as enterprises adopt AI in their workflows, there will be opportunities for such companies to develop new solutions and move further into higher-value consulting and transformation work.”

Financial services and banking

One of the most significant impacts of UPI is that it brought a population of Indian consumers that had previously been largely unbanked into the mainstream financial system – and continues to do so.

“As more households and businesses enter formal payment and tax systems, banks gain greater visibility over customers and cash flows, supporting credit underwriting and the cross-selling of savings, insurance and other financial products,” said Sehgal.

Sehgal picked out ICICI Bank (MUMBAI:ICICIBANK) as an example of the kind of bank he favours: “well-managed private-sector banks with strong deposit franchises and disciplined underwriting”.

Pharma and healthcare

“Healthcare remains a structural opportunity,” said Sehgal. “Rising incomes, greater insurance penetration and increasing expectations for quality of care should support demand across hospitals, health insurance and pharmaceuticals.”

India has also historically been a strong producer of pharmaceuticals and could benefit from further demand from the world’s largest companies.

“There’s a need from the multinational [pharmaceutical companies] to have an alternative supplier at scale,” Gabriel Sacks, manager of the Aberdeen Asia Focus fund, told the MoneyWeek Talks podcast. “When you don’t look at China, then you start to look at places like India.”

Consumer discretionary spending

India’s growing middle class and rising smartphone adoption is also creating rapid growth in consumer discretionary spending, “particularly in areas such as food delivery, convenience and other digitally enabled services” Sehgal said.

Coupled with the GST reducing tax rates on consumer goods, discretionary spending and demand for premium offerings are expected to rise.

Are Indian stocks overpriced?

There are clearly opportunities for investors here, but given its size relative to other emerging markets, India’s stocks don’t necessarily fly under the radar. The biggest challenge to would-be investors in India over recent years has been that its companies are relatively expensive.

According to the website World PE Ratio, India’s stock market has an average price/earnings (P/E) ratio of 22.4 as of 18 August. That makes it more expensive than the Dow Jones Industrial Average, which tracks 30 US large cap stocks with an average 21.5 P/E ratio.

The good news is that prices have come down this year. The MSCI India Index fell 8.9% in 2026 through to 18 August.

“Recent underperformance relative to other emerging markets has also reduced India's valuation premium to below its long-term average,” said James Thom, lead manager of Aberdeen New India Investment Trust. “The energy crisis has eased, liquidity conditions are becoming more supportive and policymakers are refocusing on the reform agenda… In our view, improving fundamentals combined with more reasonable valuations create a compelling backdrop for the market.”

How to invest in India

It can be difficult for DIY investors based overseas to access Indian stocks directly, though this may depend on your broker.

For most investors, using a fund or investment trust is likely to be the best means of gaining exposure.

Aberdeen New India Investment Trust (LON:ANII) targets “world-class, well governed companies at the heart of India’s growth”.

Banks ICICI Bank and HDFC Bank (MUMBAI:HDFCBANK), telecoms business Bharti Airtel (MUMBAI:BHARTIARTL) and automaking conglomerate Mahindra & Mahindra (MUMBAI:M&M) are the trust’s top holdings as of 31 May.

Templeton Emerging Markets Investment Trust (LON:TEM) has 8.3% of its portfolio invested in India as of 31 July. ICICI Bank is its largest Indian holding, accounting for 2.5% of the portfolio.

EMQQ Global issues the India Internet ETF (LON:INQP) which specifically targets the opportunities in India’s expanding internet economy. Top holdings as of 19 August include food delivery business Eternal (formerly Zomato), non-banking financial company Bajaj Finance and Reliance Industries, a conglomerate that includes the country’s largest telecoms operator, Reliance Jio.

The fund “focuses on the digital disruptors across fintech, e-commerce, quick commerce, online travel and consumer platforms,” said Carter. “These companies are already taking share from traditional businesses, and AI should accelerate that by lowering costs and improving monetisation.”

Fast-fashion retailer Shein is about to make its debut as a listed company. It is floating on the Hong Kong market at the end of this month, with a target valuation of between $25 billion and $30 billion. It remains to be seen whether it can get that away successfully, but it looks like a missed opportunity for the City of London.

Shein initially explored a listing in New York, and when that looked troublesome, switched its focus to the City. Over the course of 2024 and 2025, Shein was trying to get approval for its initial public offering (IPO) here. It jumped through all the hoops, but more and more questions kept being asked about whether it was suitable for the London market.

The UK Sustainable Investment and Finance Association, for example, objected that London must “uphold strong governance standards”. Liam Byrne, the then chair of the House of Commons Business and Trade Committee, wrote to the stock exchange to demand it put tests in place to “authenticate statements” by firms seeking to list, “with particular regard to their safeguards against the use of forced labour”. The questions went on and on, but the message was clear. Shein did not look like the right sort of company for the privilege of listing on a bourse as distinguished as the LSE.

Shein has legitimate questions to answer... but so what?

Seriously? Looking back, it has to be asked what the critics could possibly have been thinking. It is legitimate to ask questions about Shein's business model. When you are selling summer dresses to teenagers around the world for a fiver or less, you are probably not paying the workers in the factory a fortune. There are concerns about its supply chains, about its governance standards and its relationship with the Chinese government. It is probably not a company that many of us would want to work for, or even buy stuff from.

But so what? The harsh reality is that the London stock market is in terrible shape. More companies have left it than joined in every year since 2022. In the last 20 years, the number of companies quoted on the main market has fallen from more than 1,700 to less than 1,000. In 2024, London dropped to 20th place globally for IPOs, overtaken by Oman and Malaysia among many others. Almost every week brings news of another major company accepting a takeover from a foreign bidder – easyJet was the latest example – and each time it happens the market gets a bit smaller. On its current track, the City is trapped in a vicious cycle. The market gets smaller and smaller, global investors have less incentive to pay any attention to it, valuations remain low, and more companies decide to leave, or else never list their shares in the first place.

The London Stock Exchange is trapped in a vicious circle

A Shein IPO was a chance to break out of that. Whatever its faults, it is a huge player in the global fast-fashion industry, and has millions of loyal customers around the world and a formidable business model. It has made online retailing work in a way that few of its competitors have been able to. At a $30 billion valuation, it would have been one of the biggest IPOs in Europe this year, would have leapt straight into the top half of the FTSE 100, and would have added a major technology company to an index that is dominated by a handful of ageing banks, oil companies and pharmaceutical conglomerates.

Shein would have put the London market back on the map and stirred up some interest from global asset managers who have largely forgotten it even exists. In its wake, a lot more of the fast-growing Asian technology companies might decide that London was a pretty good place to list their shares after all, and investors buying Shein might well decide there were a few more companies on the same market that were worth adding to their portfolio too. Valuations would start to rise, the market would recover, and it would become a more attractive place for entrepreneurs to list their business. A vicious circle could have been replaced with a virtuous one. As it is, the London market must make do with ridiculous and self-important moral posturing that no one is listening to anyway.

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.

Millions of people rely on the state pension but the cost is ballooning – and it’s only set to surge further.

The full new state pension has risen in value by 55% over the last 10 years alone and is forecast to have cost the government £146 billion in 2025/26.

The Office for Budget Responsibility (OBR) projects it will cost 9% of GDP by 2075/76, up from 5% now, putting the rise down to an ageing population and the cost of the triple lock – the policy which means the state pension rises annually by the highest figure out of inflation, wages and 2.5%.

The UK’s ageing population and falling birth rate are compounding the strain on taxpayers, as pensioners will likely live for longer but there will be fewer workers to pay taxes.

There were 585,396 births in England and Wales in 2025, according to the latest available data from the Office for National Statistics (ONS), down from 594,677 in 2024 and the lowest number since 1977 (569,259).

Meanwhile, life expectancies across the UK are on the up. Over 19% of girls and 12% of boys born in 2024 can expect to live to 100, according to the ONS. By 2049, this is forecast to rise to 26% for girls and 18% for boys.

Source: ONS

These factors are forecast to push up the cost of the state pension to ever greater heights.

Heidi Karjalainen, senior research economist at the Institute for Fiscal Studies (IFS), said an ageing population will also seep into health spending, “creating greater overall pressure on public finances”.

What could the UK state pension look like in the future?

These surging costs could prompt the government into ditching the triple lock and/or raising the state pension age higher than currently planned.

The state pension age will rise to 68 by 2048, but in an April 2026 report, the IFS said there was a “good case for legislating for further increases in the state pension age beyond 68, as part of the response to rising life expectancy and the resulting public finance pressures”.

Considering the growing cost of the state pension, swathes of think tanks have called on the government to ditch the triple lock policy.

How think tanks like the Intergenerational Foundation, IFS and Tony Blair Institute for Global Change (TBI) think the rising cost of the state pension should be combatted varies, but all three agree it needs to put less pressure on the public purse.

However, for now at least, the triple lock is here to stay. Prime minister Andy Burnham has pledged to honour the Labour manifesto pledge and retain the policy.

What happens to the mechanism afterwards is less clear. But despite fears it might not be as plentiful in the future, some Brits seem undeterred.

A recent survey by investment platform Hargreaves Lansdown found that one in 10 people expect to be totally dependent on the state pension in retirement, while two thirds said they will rely on it “to some extent”.

How much do you need for a comfortable retirement?

Trade body Pensions UK’s Retirement Living Standards give an indication of how much money you need each year for a certain standard of living in retirement.

The standards are updated each year and based on someone owning their home, and after tax deductions.

To meet a ‘moderate’ standard of living, a single person household currently needs £32,700 a year. This rises to £45,400 a year for a ‘comfortable’ lifestyle.

The amount needed for a ‘minimum’ standard of living in retirement is £13,900 for a single person.

Calculations from wealth management firm Quilter estimate you would need an overall pension pot of £691,000 to match Pension UK’s comfortable standard of living. To meet the moderate level, you would need a total pot of £413,000.

Quilter’s calculations are based on someone receiving a full new state pension (£12,548 per year) and using their pot to buy an annuity paying 6.1%.

Someone who started saving into a pension at 25 would need to contribute £270 a month to reach the £691,000 figure by age 66, assuming growth of 6% and after fees.

That same person would need to contribute £162 a month to reach the £413,000 figure by age 66, assuming the same growth and after fees.

But what about if your state pension was reduced?

Assuming someone received a new state pension of £3,583 a year (based on 10 National Insurance years), the size of the pension pot needed for a comfortable standard of living rises to £838,000.

To meet the moderate level, the size of the pot needed rises to £560,000.

Someone who started saving into a pension at 25 would need to contribute £328 a month to reach the £838,000 figure by age 66, assuming growth of 6% and after fees.

For the moderate standard of living, that same person would need to contribute £219 a month to reach the £560,000 figure by age 66, assuming the same growth and after fees.

Source: Quilter, based on a single person household. The amount of income needed for couples is different.

Source: Quilter, based on a single person household. The amount of income needed for couples is different.

How to prepare for retirement without having to rely on the state pension

Increasing pension contributions

Contributing more to a workplace pension is a good place to start. The total minimum contribution for a UK workplace pension is 8%, made up of 3% from your employer and 5% from you, including some tax relief.

But you can contribute more and some employers will increase their contributions.

If you’re in your 30s, 40s and 50s, consolidating private or workplace pensions can make it easier to keep track of savings and save you money on fees. Be careful to check the features of the pension before you do this though.

Make sure you’re not consolidating one that comes with a guaranteed annuity rate, Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown said.

Guaranteed annuity rates pay out a guaranteed rate. They generally come from older plans and can pay out much more than more modern plans.

Morrissey added: “When looking to consolidate, check whether the [new] provider meets your needs – do they offer the investment choice you want, the educational resources or access to a helpdesk? These can prove extremely important.”

Consider building other investment pots

You can also add money into an ISA, alongside your pension, if you’re after more flexibility in how you can access your savings.

An approach like this can be beneficial for someone who is self-employed and may want to draw on money earlier due to a lack of work and a drop in income.

Morrissey said: “You can benefit from investment growth in a stocks and shares ISA and still access money if you need it – any income taken will also be tax-free. Using this alongside a pension means you still benefit from the tax relief of a pension with the flexibility of an ISA.”

Can you boost your savings?

Make sure you check how hard your savings are working too.

Recent research by savings app Spring revealed £227 billion was sitting in current accounts with over £10,000 in them earning no interest.

If you're starting saving, it's a good idea to put the money into a high-paying easy-access savings account and build up an emergency buffer, which you can use for unexpected expenses, such as a boiler breakdown or loss of a job.

Typically, you should have enough in this account to cover three to six months’ worth of essential outgoings such as your mortgage and bills.

Any spare money after this could be put into a savings account or you could invest it. Research has shown investing over the long-term tends to offer better returns than putting money into a savings account.

But remember, investing means the value of your money can go up or down at any time and there are risks attached. You should generally invest any money for at least five years to allow your investments time to ride out any dips in the market.

If you invest, make sure money held in a general investment account or stocks and shares ISA is actually invested, with not too much held in cash or money market funds.

Claire Trott, head of advice at wealth management firm St. James’s Place said: “Allowing it [money] just to sit in cash or cash-like funds can feel safe but they will have their buying power eroded over time by the increase in the cost of living and inflation.”

Investors were feeling deeply bearish about European stocks earlier this year, with warnings that the closure of the Strait of Hormuz would unleash the continent's second energy crisis in a decade. That danger has not passed, but markets got carried away. Unusually strong second-quarter earnings have allayed fears of stagflation. The Stoxx Europe 600, a pan-European stock index that includes UK-listed shares, is up 13% since its low in March.

German earnings on the DAX index rose 11% year on year, the best showing “in at least ten quarters”, according to Deutsche Bank analysts. The country's carmakers remain in poor health, but that was more than offset by a superb showing from industrial and chemical firms. The wider Stoxx 600 did even better, recording year-on-year earnings growth of 23%.

European stocks have turned in their “best earnings season in nearly four years”, say Sagarika Jaisinghani and Alice Atkins on Bloomberg. Miners and industrials are booming. The continent's small technology sector is outperforming the US giants, led by Dutch chip specialist ASML, whose shares have risen 57% this year. Foreign investors are piling in, with European stocks attracting the second-strongest inflows in a decade so far this year. Given the challenging backdrop, the “resilience” of the continent's corporations is deeply reassuring.

European stock markets have long been overshadowed by Wall Street and some of the racier Asian markets, says Joseph Wilkins on CNBC. Goldman Sachs analysts argue that many of the things investors think they know about Europe are “myths”. Chinese competition, for example, isn't an existential challenge, because carmakers represent just 1% of the continent's market capitalisation. “Since 2022, European banks have considerably outperformed the Magnificent Seven.” And with anxiety growing about AI exposure, the old continent offers an obvious “hedge”.

Eurosclerosis continues for European stocks

US equity valuations are “on the nuttier side of bonkers”, but that doesn't necessarily make European stocks good value, says Stuart Kirk in the Financial Times. The Euro Stoxx 50 index of eurozone blue-chips has managed a fairly boring annualised return of 11.1% over the past decade. True, ASML is a “world-class firm”, but the performance of the continent's other industrials and banks is underwhelming when compared with US peers. “Europe's 25% price/earnings discount to US shares is not deep enough.”

European growth remains sclerotic, says James Carter for National Review. The EU's GDP per capita is just half that of the US, down from 76.5% in 2008. Contrary to popular belief, Europeans work just as much as Americans; indeed, employed Europeans average longer working weeks than their US counterparts. The real issue is sluggish productivity growth.

The danger of an energy shock has not gone away either. European natural gas prices have been trading above €60/MWh, levels not seen since the tail end of the 2022-2023 energy crisis. The continent's gas storage is the lowest it has been for this time of year since at least 2009.

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 ‘factors’ refer to a number of styles or strategies that dictate how investors choose their stocks. Some of the best-known are value and growth.

Momentum investing is one of the simplest investing factors, but paradoxically one of the most difficult to successfully adopt.

In essence, it means you buy stocks, funds or other assets that are rising in price, and sell the ones that are falling.

It is an especially prevalent factor in the current market environment. As of 18 August, the MSCI World Momentum Index has returned 21% so far this year, compared to 13% for the MSCI World Index (the former index is based on the latter, but has a heavier weighting towards stocks that have positive momentum traits).

In July, the respected fund manager Terry Smith, CEO and chief investment officer of investment management company Fundsmith, wrote to investors in the Fundsmith Equity Fund explaining that he would tweak the value-driven strategy for which he is known to account for the prevalence of momentum investing.

He compared trying to buy undervalued stocks to “trying to catch the proverbial falling knife”. “All we are getting is cut fingers as their downward share price spiral is exacerbated by the index momentum enhancement effect,” he said.

Momentum investing’s current outperformance is so strong, that it is forcing seasoned investors to change their approach.

It’s particularly important to understand the concept as it’s not an easy strategy to replicate.

“It’s wonderfully simple to apply but also fraught with risks if you blindly follow what you see as a trend without understanding what you are actually buying and the risks involved,” said Rob Morgan, chief investment analyst at Charles Stanley Direct.

What is momentum investing?

Momentum investing effectively means buying stocks or other assets that are increasing in price.

“Momentum investing is simple in principle,” said Angeline Ong, senior investment analyst at IG. “Buy what's already going up or sell (short) what's already going down. It's built on the idea that any asset that has performed well over the recent past tends to keep performing well in the near term, and vice versa.”

A basic approach might be to rank stocks or funds by their returns over a given time period (three, six or 12 months) and buy whichever has generated the greatest returns.

“Some investors are probably doing it without even thinking about it, by buying a share or fund they notice is performing well,” said Charles Stanley Direct’s Morgan.

More advanced momentum investors might make use of technical analysis tools which measure patterns in how an asset is trading.

For example, the relative strength index measures the speed and change of an asset’s price and quantifies this as a number between 0 and 100; a reading of 50 or above indicates positive momentum (though a reading above 70 is usually interpreted as a sign that a stock is overbought and that its price might soon fall back), while a reading below 30 indicates it might be oversold and due a rebound.

Some also use long-term moving averages to look for signs of momentum. A stock’s 50-day moving average price rising above its 200-day moving average can be interpreted as a ‘buy’ signal; (and vice versa: if it falls below, this can signal a ‘sell’).

Ong added that momentum investing is often considered a natural opposite to value investing.

“Value investors buy cheap stocks that the market has undervalued, and wait for them to re-rate,” she said. “Momentum investors and traders buy stocks the market already likes, and ride the trend.”

What are the drawbacks of momentum investing?

For most non-professional investors, momentum investing is a challenging strategy to execute over the long term.

One obvious reason for this is that the stocks or sectors that have momentum behind them are constantly changing. A stock can go from having positive momentum to being overbought – and then, oversold – very quickly, so if you’re not spending most of your waking hours looking at live market data, you could easily miss the switch and be left out of pocket.

It can also lead to significant over-concentration. Momentum investing by definition targets the most popular stocks at any given time. If a majority of the world’s investors are deliberately targeting momentum stocks, the effect can become circular; investors keep putting more and more money into a given stock or sector, simply because everyone else is.

That can generate excellent returns when the stock market is gaining, but it can unravel quickly when it falls.

“If $200 billion market valuation stocks are moving 33% a day in a bull market, you can reasonably speculate about what’s going to happen if or when things reverse,” Terry Smith wrote in his July letter. “In 2007–08, the S&P fell 57% in five months. Next time round, it would not surprise me if it accomplished this in five days.”

“Popular momentum trades can also become crowded, which amplifies the snapback when they unwind,” said Ong – as happened with silver prices in early 2026.

Momentum is arguably better-suited towards shorter term approaches.

“In momentum investing's purest, fastest-moving form, which involves chasing days-to-weeks price action, it is seen as more of a trading strategy, not an investing one, and needs discipline and speed most retail investors may not have time for,” said Ong.

As well as it being a difficult strategy to consistently get right, Ong highlighted that it can lead to higher costs; momentum strategies require frequent buying and selling, which racks up trading costs and, for taxable accounts, capital gains tax.

How can you adopt a momentum investing strategy?

If you do want to try momentum investing for yourself, you have two basic options.

The first is to attempt to identify momentum stocks yourself. This will take a lot of technical analysis, and given the potential of the market to change in a flash, it will be time-consuming to ensure you’re on top of all your picks.

The simpler approach would be to buy a momentum-focused fund. This leaves the hard work of deciding what to buy and sell to the fund manager or index provider.

There are plenty of passive funds, most of which are focused on the MSCI World Momentum Index or similar indices. Some examples include the iShares Edge MSCI World Momentum Factor UCITS ETF (LON:IWFM), the Xtrackers MSCI World Momentum UCITS ETF (LON:XDEM) or the L&G Developed World Momentum Factor Index Fund.

Active funds following a momentum strategy are less common. Active fund managers, in theory, earn their living by picking out opportunities the market has overlooked, rather than simply following what everyone else is doing.

But Smith is not the only active manager to acknowledge that momentum can (and, debatably, should) play a role in their investment decisions. So momentum does factor into the strategies behind some active funds and investment trusts.

Morgan, for example, highlights Artemis US Extended Alpha Fund as an active strategy that incorporates elements of momentum investing (its stated objective is to profit from both rising and falling share prices). Notably, though, the fund describes its approach as contrarian, which is in some respects antithetical to momentum investing.

“It’s not pure quantitative momentum but represents partial exposure to the factor,” said Morgan.

Investment trusts where momentum is one of the characteristics assessed include JPMorgan European Growth & Income (LON:JEGI), which targets companies exhibiting value, quality and momentum characteristics, and Aberdeen UK Smaller Companies Growth Trust (LON:AUSC) which assesses companies based on quality, growth and momentum criteria.

Suddenly, it seems, a member of the Tata family – Noel Tata – is back in the driving seat of the gigantic “salt to software” group, which owns Jaguar Land Rover, Air India and Tata Steel, and is India's largest private-sector employer. And not everyone is happy.

Tata Group, India's largest conglomerate has been consumed by boardroom drama for months. Now, though, matters have come to a head, says The Economist. Natarajan Chandrasekaran – chair of the $280 billion group's holding company Tata Sons – has announced he will step down after his term ends next February.

“This is very much the beginning of the Noel Tata era,” one investor told the Financial Times, and it began with a rout. Shares in Tata's listed companies – including its cash-cow IT outsourcer Tata Consultancy Services – dived as investors worried about what lies ahead.

Noel Tata, a half-brother of the group's legendary leader Ratan Tata, who died in 2024, is commonly described as lacking “the stature” of his sibling. Nonetheless, on Ratan's death, he acquired a key role in the 158-year-old conglomerate's firmament when he took over as chair of Tata Trusts – a collection of charitable trusts that majority-own the holding company. That set him on a collision course with Chandrasekaran.

The main cause of the boardroom feud that came to dominate business gossip in the country was over whether to list the Tata holding company – as demanded by India's central bank, which had classified it as “one of the country's largest shadow banks” in 2022, and was pushing for greater transparency.

Noel Tata was set against the move, arguing that staying private meant more freedom to make “long-term strategic bets” and conserve the company's “founding ethos and desire to serve India”.

His critics say his real motive was “to exert more control” so he could set up the eventual succession of the rising generation of Tatas – his 33-year-old son, Neville, and daughters Leah and Maya – before he exits the stage on his 70th birthday in November.

People close to the family dispute these alleged manoeuvres. Certainly, Noel Tata hardly comes across as an aggressively Machiavellian operator, says The Indian Express. Known for “his quiet demeanour, discretion and aversion to public attention”, he has “built his reputation not through flamboyance but steady performance” – making a successful fist of building Trent, the conglomerate's retail arm, and later serving as a director at its aircon arm Voltas and the Tata Investment Corporation.

Will Noel Tata win Tata Group's succession drama?

Some Indians of a more nationalist bent are wary of Noel Tata's international credentials. Although born in Mumbai, his mother Simone Tata hailed from Switzerland and he himself holds Irish citizenship – via his marriage to Aloo Mistry, a member of another prominent Indian business dynasty whose mother, Patsy, was born in Dublin. He also spent much of his early life abroad, including in Britain and France.

Still, after decades of being overlooked for the conglomerate's top jobs, some argue Noel Tata deserves his chance to steer the tanker. He lost out in 2011 when his brother-in-law, Cyrus Mistry, was announced as Ratan Tata's successor – and then again in 2016 “when Mistry was dramatically ousted from the chairmanship” and Chandrasekaran (the first real outsider to lead the group) was installed, says The Indian Express.

But the price paid for this, says Reuters Breakingviews, is yet more turmoil in a conglomerate renowned for its “abysmal record on managing succession” – at a critical time for many of its companies.

It's up in the air whether Noel Tata's family will eventually assume control; meanwhile, the group is rudderless. But “this was a long time coming”, one Mumbai-based investor told the FT. Neville Tata has been “groomed very carefully. I don't think these guys will let go of the opportunity.”

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.

I am contemplating the Torre di Chia from the balcony of my suite at the Conrad Chia Laguna Sardinia hotel. The Spanish built the defensive round tower in the 16th century – on the far side of the lagoon from where I am standing – to ward off pirates raiding the southern coast of the Mediterranean island. Other than its half-millennium of history, there isn't very much that is remarkable about it.

What is remarkable is what it sits on – ancient Bithia. This settlement, built by the Phoenicians, had existed since at least the eighth century BC. But when the Phoenicians arrived, there were people already living in the area – a people we call the Nuragic civilisation. We don't know what they called themselves. Curiously, they haven't left us any writing – or none that we have found at any rate. So, historians have named them for the often monumental dry-stone structures that lie dotted around the interior of the island in various states of preservation. One of the most impressive Nuragic sites is at Su Nuraxi, a 90-minute drive due north from Conrad Chia Laguna.

(Sardinia is peppered with archaeological sites. Another, called Nora, is located 25 minutes from the Conrad and it is also well-worth visiting. Like Bithia, it was founded by the Phoenicians, but it is the impressive Roman ruins that you see today.)

What remains of Bithia – and there isn't very much – is to be found on the raised promontory, marked out by the Torre di Chia (one of the area's relatively more recent additions). Here, the coastline is stunning, with two golden beaches – Monte Cogoni and Dune di Campana – just off to the side. It reminds me a little of the famous Mayan ruins at Tulum, on the Caribbean coast of Mexico, and I wonder why Bithia isn't better known.

Three hotels in the Chia Laguna Nature Resort

The Conrad is one of three hotels in the Chia (pronounced “kia”) Laguna Nature Resort, along with Baia di Chia Resort Sardinia, Curio Collection by Hilton; and The Village. The first two are run by the Hilton Group, and all of the accommodations are charming.

The rooms and suites at the Baia di Chia have more of a cottage feel to them, and they either overlook the lagoon or the sea. Guests of the resort can use the large pool and restaurants here and, of the three hotels, it is closest to the beaches and cabanas. I am told this is where the Germans like to stay – and, really, who could blame them?

The Italians, arriving in family groups, apparently enjoy the relaxed fiesta atmosphere of The Village, where there is live music and entertainment in the evenings and a buffet restaurant.

As for the British, we – and our American cousins – like our luxuries and it is to the Conrad hotel that we retire. The decor is elegant and the colour scheme reflects the natural, neutral tones of the area – wicker, stone and terracotta-tiled floors. Amphorae have been arranged in the recesses of the stairs and corridors to remind you of the local ancient history.

Drink the elixir of life at the Conrad Chia Laguna

The Conrad has a terrace bar and restaurant, called Bar Bollicine and La Terrazza respectively. The restaurant serves a menu centred around local and Mediterranean dishes. I recommend the seafood fregula, which are very small balls of Sardinian pasta. You must also try the seadas, which is the local sweet speciality. It is a fried pastry containing pecorino cheese and covered in local honey. It sounds savoury, but it is really very nice. (Two courses cost €55.) And do try the wine. The local cannonau red grape is supposedly what makes Sardinia a “blue zone” – a region where the inhabitants remain sprightly well into old age and live for an especially long time. At least, that's what the locals say, anyway.

In the warmer months, Sa Mesa is another restaurant option, focused on Sardinian dishes. And not far away is the Conrad Spa in case the cannonau doesn't do the trick. The Conrad also has its own outdoor swimming pool (and pool bar) and padel courts. During the peak season, the resort has nine restaurants, eight bars and five swimming pools in total.

The triumph over mass tourism

The rooms and suites at the Conrad Chia Laguna are either garden-facing or look out onto the sea. Our “king suite” is comfortable, with a tub in the bathroom. As is often the case in the Mediterranean, the large balcony terrace is the standout feature and it's where we while away the hours. There is a small table and a couple of armchairs under cover and, forward, a pair of sun loungers. Below is the lagoon, framed by the hills and occasionally visited by pink flamingos. And beyond it, the Torre di Chia and ancient Bithia.

With the passing of centuries, the Phoenicians who founded Bithia became the Carthaginians, who were conquered by the Romans and the Romans themselves later succumbed – each wave leaving its mark on Sardinia. In the seventh century AD, Bithia was abandoned for the same reason the Nuragic peoples had moved inland and the Spanish built their tower centuries later – the persistent threat of coastal raids. It seems incongruous that such a naturally beautiful place could have ever witnessed destruction. Happily, the area has held out better against the onslaught of mass tourism and the vicinity has retained much of its wild ruggedness. And so the passage of time continues.

Chris was a guest of Conrad Chia Laguna Sardinia. From €270 a night, including breakfast. Visit hilton.com

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

Investors have been warned against putting money into mini bonds issued by unregulated companies just five years after the Financial Conduct Authority (FCA) banned promotions of the risky products.

The high-profile collapse of London Capital & Finance in 2019 – where 11,600 bondholders lost an estimated £237 million – prompted the FCA to ban the marketing of mini-bonds to retail investors in 2021.

They can now only be sold to high-net worth and sophisticated investors who can handle more risk in their investment portfolio.

But the regulator remains concerned after the July failure of Woodville Consultants, a litigation funder that raised capital from retail investors through unregulated loan notes.

The FCA is now warning consumers about the risks of investing in loan notes and mini-bonds issued by unregulated companies, after it said it continues to see people lose money in these high-risk investments.

What is a mini bond?

A mini bond usually involves lending money to a company for a set period in return for interest.

Mini bonds were popular pre-pandemic when savings and interest rates were at record lows.

The rate of return is often high - even at double digits - to tempt investors and reflect the risk. But they are not regulated so you can’t get any recourse from the Financial Services Compensation Scheme or Financial Ombudsman Service if something goes wrong.

Ultimately, if the company fails, consumers could lose every penny.

Nouran Moustafa, practice principal for Roxton Wealth, said her starting point for an ordinary retail client with mini bonds is a very simple 'no'.

She said: “The word ‘bond’ sounds reassuring, but some of these investments are anything but. You can be lending to one unregulated company, with little liquidity, limited diversification and the possibility of losing every penny if that business fails.”

Moustafa feels they could “potentially” have a place, but if so “only for a very small minority of sophisticated investors who fully understand the structure" and who aren't relying on that money for the future.

“My rule is simple: if losing 100% of that investment would materially change your life, you should not be anywhere near it," said Moustafa. “No yield is worth destroying your financial plan.”

What is the latest mini bond warning about?

Despite promotions of mini bonds to mainstream investors being banned since January 2021, the FCA said consumers may still come across adverts for loan notes and mini bonds in everyday places including social media, online adverts or websites promoting high fixed returns.

The adverts can look simple and safe but may be scams, said the FCA.

Lucy Castledine, director of consumer investments at the FCA, said: “Big, fixed returns are a warning sign, not a guarantee. Loan notes, mini-bonds and other speculative illiquid securities are high-risk investments and are not suitable for most people.

“Ordinary retail investors should only invest through regulated firms because if they invest through an unauthorised firm, they may have little or no protection if things go wrong. We are working hard to prevent harm, but consumers should still stop and check before investing.”

Anita Wright, chartered financial planner for Ribble Wealth Management said mini bonds can be seductive but investors should ask why the offer reached them.

She said: “Credit this good doesn't need retail money, banks price it for a living, and private credit funds fight over the scraps. When the capital is raised instead from savers through a commissioned introducer, every desk with a credit team has already looked and walked away.

“You are not early. You are last,” Wright said, adding that the only people who know the business they are lending to and can afford to write off the investment completely should consider buying one.

“Even then the deal is lopsided,” she continued. “If the business fails you lose like a shareholder, if it thrives you still only get your interest.”

Households will have a new energy-saving option that they can pickup in the supermarket from next week – plug-in solar panels.

The Iran conflict and cost of living crisis have pushed up energy bills in recent months with Ofgem's price cap remaining high.

Rooftop solar panels are often highlighted as one way of going green and potentially reducing your electricity bills.

But not everyone can afford the upfront cost and many don’t have the roof space or permission to install them.

There will be another option from 27 August though when government changes to energy power regulations go live and shops such as supermarkets and hardware stores including B&Q and Lidl will be allowed to sell plug-in solar panels.

These can be installed on balconies or in gardens to capture energy from the sun.

What is a plug-in solar panel?

A plug-in solar panel is a smaller and less powerful version than a rooftop one.

They are popular in Europe but couldn't be used in the UK until a change in regulations.

Rather than attaching to your roof, you can find a common sunny spot at your home such as a balcony or garden and connect it to your mains via a cable that plugs straight into a typical socket.

The idea is that people in flats or who can’t install panels on their roof such as renters or leaseholders can still try to reduce their energy bills and go solar.

Similar to a rooftop panel, electricity is generated from sunlight.

But there are differences as the plug-in panels can't store power (with the rooftop versions, you can store the power in a special home battery), meaning you need to be home to actually use it as it is being generated.

How much could you save with a plug-in solar panel?

The government estimates that the panels could save households between £70 and £110 on energy per year.

There are other costs though. You will need to purchase the kit, which is estimated to cost between £400 and £600. You will also need a professional tradesperson to install it.

It may therefore take a few years to breakeven.

The savings will ultimately depend on your own energy usage but anything plugged in will use energy from the panel first before drawing it from the National Grid and your main bill.

Is a plug-in solar panel worth it?

The cost of installing a rooftop solar panel starts from £6,000, according to the Energy Saving Trust so a plug-in panel is cheaper to start with.

But there is less capacity for energy savings.

The maximum power of the plug-in panels has been capped at 800 watts.

The website Money Saving Expert suggests that’s the equivalent of two kilowatt hours of electricity per day, while the average UK household uses 7.4kWh.

Another issue is that the panels don’t store energy, so it is best to make sure they are being used while you are at home so you can benefit from the power being generated.

Renters and leaseholders may also need to get permission to install a plug-in panel depending what their rental or leasehold agreements say.

Martyn Fowler, founder of green energy supplier Elite Renewables, said: “The value is highest when you use the electricity as it is being generated. If the system produces a unit of electricity and you consume that unit in the house, you have avoided buying one from your supplier.

“Homes with a steady daytime load will benefit most. Someone working from home is likely to use more of the generation than a property that sits empty all day.”

Orientation matters as well.

Fowler added: “A panel mounted vertically on a balcony will generate less over the year than the same panel at a good angle facing south.

“Plug-in solar is a useful entry point into solar. It will not transform your energy bill, but it can be a low-cost way to reduce grid use and start generating some of your own power.”

The Bank of England might be best known for setting interest rates and printing banknotes, but there’s much more going on at the central bank you might not be aware of.

Jack Leslie and Rupal Patel, Bank of England (BoE) economists and authors of the new book Money: The Inside Story, discussed how the central bank holds 400,000 bars of gold and ‘giant’ and ‘titan’ banknotes worth up to £100 million in its vaults.

Speaking on the MoneyWeek Talks podcast, they also explained how electronic payments in the UK, from coffees to house purchases, go through the Bank’s ‘black box’.

They recalled a “spooky” story of how a sewer worker in the 1800s accidentally discovered an old drain which led to the Bank’s gold vaults.

Plus, Leslie and Patel explained why the first colour banknotes were printed amid a German plot during World War Two to airdrop counterfeit notes over the UK and crash the economy.

The episode is also available to watch on our YouTube channel.

Bank of England facing ‘uncertain’ external environment

As well as some of the quirkier Bank of England-related facts, Leslie and Patel also addressed the biggest challenges facing the central bank – such as the rise in wholesale energy costs due to ongoing tensions in Ukraine and the Middle East.

Speaking to MoneyWeek’s digital editor-in-chief, Kalpana Fitzpatrick, Patel described increasing interest rates as a “blunt tool” to combat inflation, in that it can reduce demand, but that it is less effective at counteracting shocks on the supply side.

Patel also said interest rate decisions taken by the BoE’s Monetary Policy Committee can take “about 18 months to two years” to filter through to inflation.

She explained: “What the Bank of England is looking at is trying to think about inflation about two years ahead, and that’s quite difficult to do when the external environment is quite uncertain and you keep getting these new shocks.”

Leslie also addressed the issue of soaring government debt – recent analysis from The TaxPayers Alliance, a pressure group, estimates public sector debt has now tipped over the £3 trillion mark.

Asked whether printing more money could be the answer to pay off some of the debt, Leslie said: “When there’s more money in the system, you can actually buy fewer things because those things are more expensive.

“And so it’s really not a useful tool in helping out governments when they need more money.

“We can see the effects of that in other countries. A lot of people would’ve heard of Zimbabwe or Germany where money was printed and caused something called hyperinflation…and that’s just not useful.”

How you can get rid of old banknotes

They also explained what you can do if you come across an old banknote that’s no longer classed as legal tender.

You can exchange any Bank of England note that’s ever been issued back to 1694, for the same value modern note with the Bank of England, Leslie said.

He added: “You can physically come into the Bank of England because we have a counter for the public to exchange those notes.”

If you’ve got half or more of a note, you can exchange it for a new one.

“As long as you’ve got more than 50% [of the note], so just a fraction more than 50%, we’ll swap it for a new note,” he said.

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick, Andrew Van Sickle and Cris Sholto Heaton 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. You can also watch the episodes on our YouTube channel.

Invest smarter with Britain's best-selling financial magazine. Benefit from expert analysis on investments, stocks and shares, pension planning and more.

Take advantage of our End of Summer Sale offer and get 6 free issues, then save an extra 20% off an annual subscription - sale ends 15 September.

• Your first 6 issues free
• Continue to pay £117.99 £94 every 52 issues (that's an extra 20% off the subscription price)
• Read the digital edition early on the MoneyWeek app
• Full access to online articles, the podcast and our digital magazine archive
• Cancel or pause anytime*

Not what you're looking for?

In each issue we cover all this, and more...

_{*Your subscription is protected by our full money-back guarantee. If for any reason you're not satisfied you may cancel at any time during your subscription and receive a full refund on any unmailed issues within 30 days. Read our subscription terms and conditions here. Alternatively, you can request to pause your subscription for up to three months. An annual subscription comprises of 52 issues. MoneyWeek publishes four extended issues throughout the year, each of which counts as two issues. Offer is only available on a Digital subscription. Sale ends 15 September 2026.}

Invest smarter with Britain's best-selling financial magazine. Benefit from expert analysis on investments, stocks and shares, pension planning and more.

Take advantage of our End of Summer Sale offer and get 6 free issues, then save an extra 20% off an annual subscription - sale ends 15 September.

• Your first 6 issues free
• Continue to pay £117.99 £94 every 52 issues (that's an extra 20% off the subscription price)
• Read the digital edition early on the MoneyWeek app
• Full access to online articles, the podcast and our digital magazine archive
• Cancel or pause anytime*

Not what you're looking for?

In each issue we cover all this, and more...

_{*Your subscription is protected by our full money-back guarantee. If for any reason you're not satisfied you may cancel at any time during your subscription and receive a full refund on any unmailed issues within 30 days. Read our subscription terms and conditions here. Alternatively, you can request to pause your subscription for up to three months. An annual subscription comprises of 52 issues. MoneyWeek publishes four extended issues throughout the year, each of which counts as two issues. Offer is only available on a Digital subscription. Sale ends 15 September 2026.}

Invest smarter with Britain's best-selling financial magazine. Benefit from expert analysis on investments, stocks and shares, pension planning and more.

Take advantage of our End of Summer Sale offer and get 50% off your first quarter - sale ends 15 September.

• Your first 13 issues for just £32.99 £16.48 (that's 50% off the subscription price)
• Continue to pay £32.99 every 13 weeks
• Read the digital edition early on the MoneyWeek app
• Full access to online articles, the podcast and our digital magazine archive
• Cancel or pause anytime*

Not what you're looking for?

In each issue we cover all this, and more...

_{*Your subscription is protected by our full money-back guarantee. If for any reason you're not satisfied you may cancel at any time during your subscription and receive a full refund on any unmailed issues within 30 days. Read our subscription terms and conditions here. Alternatively, you can request to pause your subscription for up to three months. An annual subscription comprises of 52 issues. MoneyWeek publishes four extended issues throughout the year, each of which counts as two issues. Offer is only available on a Digital subscription. Sale ends 15 September 2026.}

Invest smarter with Britain's best-selling financial magazine. Benefit from expert analysis on investments, stocks and shares, pension planning and more.

Take advantage of our End of Summer Sale offer and get 50% off your first quarter - sale ends 15 September.

• Your first 13 issues for just £32.99 £16.48 (that's 50% off the subscription price)
• Continue to pay £32.99 every 13 weeks
• Read the digital edition early on the MoneyWeek app
• Full access to online articles, the podcast and our digital magazine archive
• Cancel or pause anytime*

Not what you're looking for?

In each issue we cover all this, and more...

_{*Your subscription is protected by our full money-back guarantee. If for any reason you're not satisfied you may cancel at any time during your subscription and receive a full refund on any unmailed issues within 30 days. Read our subscription terms and conditions here. Alternatively, you can request to pause your subscription for up to three months. An annual subscription comprises of 52 issues. MoneyWeek publishes four extended issues throughout the year, each of which counts as two issues. Offer is only available on a Digital subscription. Sale ends 15 September 2026.}

Invest smarter with Britain's best-selling financial magazine. Benefit from expert analysis on investments, stocks and shares, pension planning and more.

Take advantage of our End of Summer Sale offer and get 50% off your first quarter, plus get a free notebook gift - sale ends 15 September.

• Your first 13 issues for just £32.99 £16.48 (that's 50% off the subscription price)
• Continue to pay £32.99 every 13 weeks
• Free notebook gift
• Read the digital edition early on the MoneyWeek app
• Full access to online articles, the podcast and our digital magazine archive
• Cancel or pause anytime*

Not what you're looking for?

In each issue we cover all this, and more...