Where experts will invest their money in 2022
While it’s not quite the New Years, our financial thoughts will soon be heading towards 2022. There will be self-assessment tax returns to fill out and tax bills to pay.
Many readers will also take the opportunity to review their investments – for example, those held in an Isa or a tax-advantaged pension – to see if they stay on track.
With that in mind, The Mail on Sunday asked a mix of investment experts – as well as an avid reader and you really – where they would invest any available money in the coming months as the end. the fiscal year is looming and the Isa allowances and pension contribution limits must be used or lost.
“India did well, the United States is expensive… so I’m sticking to my own ground”
Jason Hollands, Tilney Investment Management
My rule is not to hold more than 20 funds in my investment portfolio. If I am considering adding a new fund, it forces me to review my existing holdings and decide if any of them need to be replaced in favor of the new idea.
Otherwise, my approach is to supplement existing holdings to keep my asset allocation – the split across different markets – in line with what I think it should be over the long term. The composition of my investment portfolio changes naturally over time, because not all stock markets move in parallel.
With my pension fund against the lifetime allowance limit, my investment is now focused on my Isa. I am willing to take a lot of risk because my investment horizon is long term, so my portfolio is strongly focused on equity-based investment funds.
My holdings in India have performed incredibly well this year and have become a bigger part of my overall portfolio. Next year, I will therefore focus on sourcing my funds in developed markets.
US equity valuations are too expensive. Indeed, I believe that the exposure of the US market to technology companies, which have generated excellent returns on investment in recent years, may now be under pressure from rising inflation and rising corporate rates. ‘interest.
So I will be supplementing my holdings of UK stocks as the UK stock market remains undervalued relative to other developed markets.
It is heavily exposed to financials and commodities, sectors that generally benefit from rising rates and higher inflation. I also believe that the frenzy of overseas buying bids that we have seen this year for UK companies will continue, which will create investment opportunities.
I therefore intend to complement my existing stake in Fidelity Special Situations investment fund and add to a more recently established position in Artemis UK Select.
Both focus on companies that managers deem undervalued. It’s a style of investing that spent a few years in the wild, but has started to perform well again in the last year or so.
Tripartite: Europe, Asia and renewable energies
Ben Yearsley, Shore Financial Planning
Unusually for me, I did not invest any new money in my Isa this tax year. But I bought and sold stocks on my account, taking advantage of price volatility in some of the holdings.
At 45, I’m still a long-term equity investor – and three investment themes invite me to invest; Europe, Asia and renewable energies. Europe has long been unloved as an investment area. Still, corporate profits are on the rise, although Omicron may put a wrench in the jobs.
Three funds that I particularly like are the European Opportunities investment trust (led by star manager Alexander Darwall at Devon Equity Management); Martin Currie European Unconstrained and Listed Montanaro European Smaller Companies.
I am always positive about Asia as an investment opportunity and I love the Matthews Asia Innovative Growth fund. The fund invests in businesses benefiting the region’s emerging middle classes with money to spend.
Asia’s consumer market is expected to grow larger than those of the United States and Europe combined by 2030.
That’s a statistic, which is why funds like Matthews Asia Innovative Growth are expected to thrive. Although many renewable assets seem expensive, I have been happy to be an investor for ten years. This investment story is not going away anytime soon and I will be exposed to it through Schroder Global Energy Transition.
Finally, I will not be investing all of my Isa money at once, but I will be paying my money by the end of the tax year on April 5th.
Trust Nick Train and the good old British pub
Edward Browne, retired Manchester reader
I will continue to invest in the Finsbury Growth & Income investment trust, led by longtime manager Nick Train. The £ 2 billion trust has quality holdings – like beverage companies Diageo and Remy Cointreau, high-end fashion firm Burberry and UK consumer goods giant Unilever.
Hopefully, when the global economy sheds the coronavirus straitjacket, these consumer-focused businesses will thrive. Train is an outstanding manager and you benefit from its expertise through the trust at a windfall of 0.6% per annum.
I will also continue to increase my stake in advertising operator Marston’s.
Although his recent results have been disappointing – annual losses of £ 170million for the year to October – and he has decided not to pay a dividend for the second year in a row, I consider him a stock of economic recovery. You also can’t rule out a foreign bidder, given the interest shown earlier this year by US private equity firm Platinum.
Investing in the UK, Japan and the environment
Juliet Schooling Last, Chelsea Financial Services
Juliette Schooling Last
Most of my spare money this year was spent on a new kitchen, so I don’t have much left to invest. But what I have is that I will be investing every month – mainly because things are so opaque right now.
We have a new variant of the coronavirus, Omicron, which is causing trouble and destabilizing the stock market. This is after the market ignored the interest rate hike ten days ago. As a result, it’s really hard to see how things are going to play out over the next few months.
My pension contributions are invested in the Liontrust UK Smaller Companies and Marlborough UK Micro Cap Growth funds.
The UK stock market is cheap – which means investors are undervaluing it – and in the long run I think both of these funds will do well. I have also invested a large portion of my pension in India, a market that has performed very well this year.
I’m not yet ready to take a profit – I invested in the country about ten years ago and I’m going to leave things alone for now.
To my Isa the Japanese market looks relatively cheap and it has had a bad year. Baillie Gifford Japanese is the fund I have in mind. I also like ASI Global Smaller Companies.
I recently invested in Ninety One Global Environment because I really like the long term investment trend of decarbonization.
As you can see, I invest for the long term and take a lot of risks. But I tend to stick with funds rather than stocks as they are more my area of expertise. I bought shares of Sainsbury’s and Tesco during the pandemic because I thought they would win, but sold them to help pay for my cooking.
We are the hotspot of the world …
Brian Dennehy, FundExpert
The UK remains the world’s valuable hotspot. Global investors rich in cash will continue to bid for cheap UK companies next year.
In this environment, I am happy to buy the JOHCM UK Equity Income investment fund. It has generated a 21% return over the past year and is full of high value stocks, like Aviva, Barclays, Legal & General and Tesco. The increase in dividends is expected to allow the fund to generate approximately five percent income for investors next year.
Brian Dennehy, FundExpert, with his canine Cassie
… but my smart dog sniffs around Japan
Cassie, Dennehy’s canine canid
My dog Cassie is an unusually intelligent companion, so every year I like to choose a fund inspired by her. Part border collie, part boxer, most of the time she aspires to roam the hills of Cumbria. But for a bit of fun, I hire his brain Collie for a bit of a shepherd of actions.
Japan might please, I thought, if I probed her with a call “Japan” and a dog whistle. Their small businesses are cheap, and the Japanese love dogs.
Good choice, judging by his tail wagging happily.
Japanese small businesses are undervalued and neglected. Normally, the shares of these companies enjoy a 25 percent discount to their larger listed counterparts, but that discount is now 45 percent, the largest in more than 20 years. No one is paying attention to this opportunity (other than Cassie).
Three-quarters of Japanese small businesses are only covered by an analyst. In contrast, in the United States, 73% of small businesses are covered by three or more analysts.
I smell an opportunity. Buy Small Businesses from M&G Japan.
Go global … and spread the risk
I am a strong believer in the allocation of investment risks and investment opportunities. Such a strategy may not generate exceptional returns on your investment, but it does ensure that you get a little more comfortable sleep at night.
Global investment trusts are my investment cup of tea, especially when accompanied by a promise to do their best to generate growing income through thick and thin. The bankers, led by Alex Crooke at Janus Henderson, are as solid a trust as it gets. It has a market value of £ 1.5bn, is invested worldwide, has low annual charges of 0.5% and is on track to deliver its 56th year of dividend increases.
Its performance won’t necessarily blow you away – past and three-year returns of 13 and 64% respectively – but I will take those numbers back to 2022 and through to the end of 2024. The portfolio has a bit of everything – tech stocks like Microsoft, cosmetics company Estee Lauder, and escalator maker Otis Worldwide. But it’s as diverse as the big portfolios come – with some 168 holdings.
Ring? Yes. Boring? Yes. But as strong as an investment trust can be. My cup of investment tea.
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