The Merry-Go-Round and Top-Performing Investments

It’s been a sad week for England football fans and for investors in semiconductor stocks, which have had their worst week since last year’s ‘Liberation Day’ rout. A sad week and a great year seems to sum it all up –  Samsung Electronics and SK Hynix, which make the chips used by Nvidia, are up over 200% and 500% respectively, in the last year.

Back in Blighty, and the political merry-go-round continues as Burnham prepares to take the reins and the rumour mill is naming Shabana Mahmood as our next Chancellor.

Shabana Mahmood gets a 7 from Craig

Any incoming Chancellor has a very honest assessment of their anticipated performance by the bond markets. These act like a financial Craig Revel Horwood on the money dancefloor. Mahmood got a row of credible 7s out of 10, as sterling rose to a one-year high against the euro on the rumours. What does this mean? What are Wide Boy traders thinking? “Phew. I mean it’s still Labour but it’s not some loony spendy leftie and she’ll probably not bang on about windfarms nor do anything too nuts so we can still have some money in sterling and we don’t need to dump our Government bonds and exit the UK sharpish.” 

Her public record seems to suggest she would focus on control and discipline. Keep a firm eye on the purse. She’s unlikely to be a big tax and spend Chancellor. And, for our readers, there isn’t much I can find to suggest she will adopt any radical stance on reform to savings, ISAs or pensions.

Her new boss, Andy Burnham, has previously said that he would keep the state pension triple lock. (A promise that the state pension rises each year by the highest of earnings growth, inflation or 2.5%.) But this political hot potato is an increasingly expensive promise to keep, and many of his advisers will advocate for change. Burnham does sound more willing than Rachel Reeves to defend the promise of the state pension and so I don’t think we’ll see any immediate change here.

Those unsure can check your current State Pension age. Cracking fun. I always mentally assume mine is decades away, so reminding myself of this date is as aging as admitting you know who shot JR or most of the lyrics to Wham! songs.

(Side note: if you don’t know who Wham! are, a) rejoice in your youth, and b) make sure you open a Lifetime ISA with just £1, so you reserve the right to save into these with the accompanying Government top-up ‘till you’re 50. Just a quid can open you one up but do read the Ts and Cs.)

Top performing easy-peasy investment collections

Every 3 months, we track the best performing ready-made portfolios out there. Easy collections of investments curated for us, a bit like a Spotify playlist. The best performer went up by a whopping 27% in the last 12 months – this was AJ Bell’s Adventurous portfolio. Not bad! And Aviva, Vanguard, JP Morgan Personal Investing and Quilter Invest are all up there at 26% too. After fees.

It’s been an astonishing year in markets, which (buyer beware) I don’t think will be repeated soon. These growth levels are not sustainable. However, it reminds us of why we invest. £10,000 in the average high risk portfolios we track would have turned into £12,500 over the last 12 months. Compared to cash – if I assume a basic Bank of England rate – this would have been more like £10,375.

Even low-risk portfolios have done well with average annual growth of nearly 9%.

Ideally, we should ideally look at performance on a 5-year basis. Even my daft cockerpoo could have a good few months. Vanguard top the charts for high-risk over a 5-year period, Quilter and AJ Bell tie for top medium-risk performance, and Hargreaves Lansdown win the gong for the best low-risk performance. You can see full details here.

Have a brilliant weekend, everyone. I’ve been zooming around the Solent in my new-ish boat. I was bobbing around at The Needles, off the Isle of Wight coast last night, accompanied by some seagulls and the odd jellyfish, and the world looked momentarily very peaceful. Although I was probably over a Russian submarine…

Holly