Holly's Blog: 5 reasons to say YAY

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It’s been a good news week in a number of camps. This week has smiled on:

  1. Ted Hastings who [spoiler warning for Line of Duty viewers] finally nailed the great criminal mastermind that was Ian Buckells. (IAN BLOODY BUCKELLS! For non-LOD fans this was like unveiling Bungle from Rainbow as the brains behind the Great Train Robbery.)
  2. The UK economy. After the most horrendous 2020, the growth forecast for 2021 is over 7% - the fastest growth rate since the Second World War. 😊

    I observe two things. First the UK and in particular smaller UK companies are feeling the love. UK funds were the fourth largest sector bought by retail investors in March and are starting to return to favour.

    I have been topping up the amount I have in UK ‘small caps’ over the last few months. The Marlborough UK Micro Cap Growth fund Is perennially popular. The TB Amati UK Smaller Companies fund appears on several platform buy lists. As does the Liontrust UK Smaller Companies.

    Have a look at Trustnet for details of these funds and others if you’re doing your research and interested in some UK options.  

    Second – what do the Bank Of England’s rumblings suggest for interest rates? For anyone mulling over mortgages, I think it’s extremely unlikely that we’ll see any meaningful increase until the end of next year, despite the rosier short-term outlook. So we have some breathing space.

  3. It’s also been another cracking week for commodities. Things from the earth used to make stuff, which have no branding and so are interchangeable. In other words, one bushel of wheat is the same as the next bushel of wheat.  Grain, gold, natural gas and oil are examples.

    Commodities are alternative investments to companies and bonds (loans or IOUs to governments or companies) – they tend to behave differently and so can be a good way to diversify. They had been doing really badly since 2008 but are now having a moment in the sun and have risen 35% over the last year. 🌞

    Some people are talking about a ‘supercycle’ - a long-running shift (think over decades) in base prices which rise above trend. I’m not sure if it’s super or not but prices have certainly rallied. This week platform Interactive Investor added the WisdomTree Enhanced Commodity ETF to its preferred fund list. It’s a low-cost way to access 22 commodities across four underlying themes that include industrial metals, precious metals, energy and agriculture. (For disclosure, I have this ETF in my portfolio. So far so good.)

    ETFs – or Exchange Traded Funds - are a low-cost and simple way to access a collection of things like commodities, or themes such as clean energy. Check out our ETF pages for a bit more detail.

  4. The green money revolution rallies on. So-called ESG funds (environmental, social and governance factors) are roaring ahead and took MORE money in Europe in the first three months of the year than traditional funds. If you’re interested, I recently interviewed Keith Bulmer from BMO who looks after their Sustainable ‘multi-asset’ range. What makes the grade and what doesn't?  (Clue: fossil fuels and Tesla).

    For anyone a tad sceptical, Merryn Somerset-Webb (aka “she-of-large-brain”) has written a good piece on this in today’s FT. She essentially articulates what I think – that most ESG funds are just quality growth funds with a slight bias to tech -  in a more erudite manner than I would, and certainly makes no mention of point 5 below.

  5. Vive La Willy-Waglification! At a time when we are told that the world has irrevocably changed, I find small seeds of comfort that the English and the French are squabbling over who has the largest poisson. It somehow roots me in history and makes me feel that maybe, just maybe, we are returning to normal. Plus ca change, plus c’est la même chose.

 

Over and out for this week. The good news euphoria was mildly disturbed this morning when I received a mail from an online recruiter. “Congratulations! You look like a good fit for the job at Her Majesty’s Prison and Probation Service”. What the hell has been going into that algorithm?!? Yikes.

 

Holly

 

P.S. As more readers write to us, sharing experiences of dealing with financial firms, or looking for solutions, we plan to publish more reader content moving forward. If you’ve looked for a good adviser, or moved platform, or investigated the best place for a drawdown pension, would you write an article for our site? As much as we do our research, we can’t replicate your experiences and I know they would be super helpful to many who have similar questions. Please contact Caoilainn if you’d be willing to contribute a piece for us? 

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