Indholdsfortegnelse for Issue 1272 i MoneyWeek

A stronger pound contributed to a 1.4% year-on-year fall in UK dividends during the second quarter. Share-transfer company Computershare’s latest Dividend Monitor shows that listed UK firms paid out £35.1bn in dividends in the three months to 30 June. Oneoff special dividends almost halved to £2bn as mining payouts dropped “sharply”. The second half of the year won’t bring relief, with headline dividends forecast to come in at £88.3bn for the year as a whole, a 1.4% annual decline. Still, stripping out currency effects and special dividends, regular payouts rose 6.8% in the second quarter on a year before. “Booming defence procurement” is raising payouts at defence and aerospace firms, with Rolls-Royce paying “its first dividend since the pandemic”. Financial firms are also performing well. Overall the UK market is…

The UK housing market is growing again. Building society Nationwide reports that prices rose 0.6% in July and 2.4% on a year before. That marks a recovery from a price fall in June, when activity was subdued in the shadow of an April cliff-edge in stamp duty that had caused many buyers to bring forward transactions to beat the tax rise. “Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well,” says Nationwide’s Robert Gardner. In good news for buyers, housing is the most affordable it has been for over a decade, with the average home valued at 5.75 times income, compared with a peak of 6.9 in 2022. The affordability ratio remains above the long-term average of 4.6.…

Poor second-quarter results for Amazon’s cloud-computing business have triggered a sharp drop in the group’s stock, says Robert Miller in The Times. Even though overall revenue in the third quarter is expected to eclipse analysts’ forecasts, investors instead focused on narrowing margins at the Amazon Web Services (AWS) business, which have now fallen to 32.9%, their lowest level since late 2023. What’s more, the 17.5% annual increase in AWS’ revenue is less than the 32% and 39% for Google Cloud and Microsoft’s Azure respectively. While AWS represents only a “small part of Amazon’s total revenue, it is a key driver of profits... accounting for about 60% of Amazon’s overall operating income”. The irony is that the relative weakness in Amazon’s cloud business comes as the company’s retail side is “humming”,…

Drilling and oil-field services firm Action Energy is planning an initial public offering (IPO) in Kuwait this year, which would be the first listing in the energy sector in the Gulf state in 17 years, says Bloomberg. Kuwait has seen few IPOs compared with Saudi Arabia and the United Arab Emirates in the past four years. Kuwait’s benchmark index has been one of the region’s top performers this year, thanks in part to the country’s ruler, Sheikh Mishaal Al-Ahmed Al-Sabah, suspending parliament last year to end political gridlock and pave the way for economic and fiscal reforms (which have yet to materialise). Kuwait has also approved a new debt law to access international bond markets.…

There are two obvious points to make about emerging markets at a time like this. One is that the idea of emerging markets as a single type of investment feels nonsensical and has done for a long time. The emerging-market universe covers a huge range of economies that have far less in common than the developed-market universe, which is already diverse enough. The other is that – regardless of the above argument – one rule still holds: when the US dollar goes down, emerging markets are much more likely to go up. We have seen the same pattern playing out again this year. The MSCI USA is up by about 7% since the beginning of January, while the MSCI Emerging Markets is up by almost 16% in US dollar terms.…

Troubled Britain is not broken Janan Ganesh Financial Times Immigration is high. Growth isn’t. Benefits are out of control. We need quicker GP appointments and to tackle petty crime. All this is true, says Janan Ganesh, but the problems are leading some right-wing commentators to “hyperventilate” and claim that Britain is a fundamentally broken society. The talk is of “total social breakdown” and “extreme measures” to reverse it. But if Britain is broken, we have to ask, “compared to what”? Compared to other countries? Which country of similar size and complexity is, then, in much better shape? France is even more indebted and harder to reform. Germany has been in recession for a couple of years. There’s a case to be made for Australia, but right-wingers are reluctant…

branko2f7.substack.com The “classical capitalism” of the 19th century was composed of two classes: those who owed capital, and those who did not and hence sold their labour to those who did, says Branko Milanovic. In the 20th century, many expected a “managerial revolution” – the rise of a new class composed of those who neither owned capital nor were simple labourers, but managed the means of production on behalf of capitalists. This revolution “never really happened”. What we have seen instead is the rise of a “homoploutic elite” composed of people who are simultaneously among the richest capitalists and the best-paid workers – financial-sector CEOs, engineers, doctors or software developers with high salaries who also own wealth sufficient to generate large capital incomes. In the more developed countries, this class…

An activist investor is calling for US satellite communications firm Viasat – which bought Britain’s Immarsat in 2021 – to spin off its defence unit, which provides encrypted systems for the military. Carronade Capital Management argues the latter has growing value as global defence budgets rise, but is overshadowed by Viasat’s satellite broadband business – in-flight WiFi for airlines and internet for residential customers – which accounts for roughly 75% of revenues. Rising competition from Elon Musk’s Starlink and Amazon’s Kuiper has seen Viasat’s shares dropping 60% over the past five years, but a successful spin-off could boost its total value by about $11bn (against a current market capitalisation of $2.9bn), claims Carronade.…

Interactive Investor’s Alex Watts picks out two active ETFs potentially of interest to investors in the current market conditions: one more benchmark-aligned fund and one conventionally active fund. “JPM UK Equity Core ETF (LSE: JUKE) is diversified across around 150 holdings and aims to outperform the FTSE All-Share index, but with small overweight holdings in the highest-conviction securities based on JPMorgan’s bottom-up analysis. The ETF has modestly, but consistently outperformed its benchmark after fees over most time periods, doing so with a similar sector and stylistic exposure to the benchmark and an ongoing charges figure (OCF) of just 0.25%. “At the more conventionally active end of the spectrum are those ETFs making meaningful divergence from benchmark indices and with perhaps more concentrated portfolios. An interesting example given its traction in…

Plans to raise the age at which people become eligible to claim the state pension may be brought forward following a new government inquiry into the pensions system. Ministers have announced the launch of a Pensions Commission to investigate changes that could be made to improve the UK’s pension system and to encourage people to save more for retirement. Reducing the cost of state-pension provision will be one priority – and while ministers say a review of the triple-lock guarantee is not in the scope of the inquiry, eligibility criteria will be one area of focus. The age at which state pensions become payable is currently due to rise from 66 to 67 in 2028 and then to 68 by 2046. However, that latter date could now be brought forward…

Most important US elections tend to take place in an even year. However, there are several small elections due this November. One of these is the contest for the next governor of Virginia. One of the quirks of Virginian politics is that the state governor is limited to a single four-year term, which means that every election is ‘open’: the current governor Glenn Youngkin is barred from running for re-election. In theory, the fact that no candidate has the advantage of incumbency should make the outcome more uncertain. However, this time the bookies think the outcome is effectively a foregone conclusion, and that Abigail Spanberger, the Democratic candidate, will almost certainly beat Republican Winsome Earle-Sears. Ladbrokes has the Democrats at the extremely short odds of 1/10 (90.9%) to triumph, while…

“I keep reading that Donald Trump is an economic genius,” says Matthew Hennessey in The Wall Street Journal. The story goes that the “punishing recession prophesied by the priests of the economic religion” has not come to pass, despite the US president’s decision to tariff the world’s biggest economy to the hilt. One is reminded of the old joke about the optimist falling from a skyscraper, who enthusiastically comments “so far, so good” as he plummets past each floor. We might not be able directly to measure the investments not made and the employees not hired because of uncertainty about trade, but serious damage is in the pipeline. So far US investors disagree, says Martin Baccardax in Barron’s. While Trump has swung the tariff hammer at Switzerland, Brazil and India…

Five to buy Burberry The Telegraph Burberry’s first-quarter comparable-store sales fell 1%, nonetheless eclipsing expectations. The fashion brand is turning itself around, helped by the fact that “quiet luxury” (understated elegance) is out and “bold luxury” is in. The stock has surged 85% in a year, and analysts predict a 12% operating margin by March 2028. A return to 16% could lead to a valuation of 17 times earnings, while 20% implies a “tempting” 13 times. We’re a “long way from that, but the worst may be behind Burberry, and patience could yet get a reward.” 1,265p Oracle The Times A recent dip in the share price may be a “buying opportunity.” The US AI and cloud-computing company has signed a deal with OpenAI set to generate $30bn a year…

Shares in Close Brothers were up by 20% on Monday. Lloyds was up by almost 8%. The rest of the banking sector was rising, too, as shareholders celebrated the decision by the Supreme Court that some of the wilder claims over mis-selling of motor finance should be thrown out. It was a rare example of common sense from a body that, in its short life, has rarely shown any inclination to take the side of business. After the market closed last Friday, it rejected the bulk of the claims that millions of car-finance packages had been mis-sold because commissions paid to dealers and other middlemen had not been properly disclosed. The judges decided, quite sensibly, that the motor trade has, to put it mildly, always been known for sharp practice,…

Stockmarket returns are often quoted on the basis of price return – the gain or loss in the price of the shares that make up the index. However, investors will also receive dividends from many companies and over the long term this can amount to a much larger element of returns than the capital gains. The total return from an investment takes into account income received from dividends or interest from bonds or other sources. Total returns are usually calculated on the assumption that any income received is invested back into the market. Over a short time frame, the difference between total return and price return will usually be small, unless you are looking at investments with a relatively high yield, such as high-yield bonds. But over several years, the…

“I probably spend about £150 a week on wine, easily. The place where I like to go has put a large glass up to £21… ridiculous.” Carol Decker (pictured), lead singer of 1980s pop band T’Pau, quoted in The Sunday Times “The big money is not in the buying or the selling, but in the waiting.” Investment legend Charlie Munger, quoted on social-media platform X “The word pension is taboo in the music business. The last thing a young musician wants to think about is retiring and nobody tells you when you are that age that you need to start saving for your later years.” Liz Mitchell, one of the original singers of the 1970s disco and reggae band Boney M, quoted in The Mail on Sunday “A government big…

theconversation.com The UK government’s new ten-year plan to transform the NHS includes a focus on preventing ill health rather than treating sickness, says Renaud Foucart. Some think of moves in that direction as symptomatic of a “nanny state”. But if Britons want to retain tax-payer funded and universal healthcare, options are limited. Obesity, for example, is estimated to cost the NHS around £12.6bn a year – more than 5% of its total budget. Policies relying on individual action and personal responsibility have failed to bring the numbers down. So nanny is stepping in – the government is working with food retailers and manufacturers to encourage people to make healthier choices. Products will contain less sugar and fat. Data that supermarkets own about your shopping habits through loyalty cards will be…

The most straightforward way to invest in the UK market is through an index fund, such as the SPDR FTSE UK All-Share UCITS ETF Acc (LSE: FTAL) or the SPDR FTSE UK All-Share UCITS ETF Dist (LSE: FTAD). As the names suggest, these aim to track the FTSE All-Share index and their five largest holdings are drug company AstraZeneca, bank HSBC, energy company Shell, consumer-products firm Unilever and the information and analytics company Relx. Both funds have a total expense ratio of 0.2%. The only difference between them is that the accumulation (Acc) fund reinvests the dividends, while the distribution (Dist) one pays them out. At the moment the index has a yield of 3.5%. A more active alternative is the City of London Investment Trust (LSE: CTY). This fund,…

● Hydrogen Capital Growth – the struggling specialist in hydrogen investments – has sacked its managers and engaged Redwheel to oversee a managed wind-down. The trust will now appoint a valuation agent to update its NAV: it trades at a 71% discount to last reported NAV, but analysts say the case of Digital 9 Infrastructure – which switched managers and went into wind-down in December – shows investors should be prepared for write-downs. A slow market for renewables may also make it harder to sell assets in development. Aquila European Renewables, which is already in wind-down, has paused the sale of part of its portfolio after the preferred buyer cut both the price and the number of assets it would buy. ● Gresham House Energy Storage signed a ten-year floor-pricing…

Camellia (Aim: CAM) is an unusual business, often flying under the radar as a throwback to a bygone age. This British holding company, incorporated in 1889, once boasted a sprawling empire. Now, it’s streamlining into a focused agricultural player with a clear strategy, substantial cash reserves, and still trading below its book value. For investors willing to embrace its quirks, Camellia offers a rare opportunity: a modernising business with a robust balance sheet, actively working to close the gap between its market price and intrinsic worth. A storied past Camellia has a history that stretches back to the Victorian era and the British Empire. But much of its greatest expansion occurred between the 1960s and 1980s when it grew into the world’s largest private producer of teas. Today, it employs…

● HM Revenue & Customs issued £49m of tax refunds to pension savers in the three months to June. The refunds relate to a glitch resulting in HMRC overtaxing people when they make their first withdrawal from a pension fund; such withdrawals tend to be large, but the tax authority’s systems assume every subsequent withdrawal will be for the same amount, leading to excessive tax charges. HMRC has repeatedly promised to fix the glitch, but in the meantime, savers can avoid the trap by making sure their first pension withdrawal is for a token sum only. ● Are you a member of Nest, the pension provider that administers the workplace pension schemes of thousands of employers? If so, you are likely to be paying higher fees than many other savers.…

Relatively buoyant stockmarkets on both sides of the Atlantic have ensured that it has been a broadly positive fortnight for my seven long tips, with four appreciating and three falling. Telecoms firm Airtel Africa surged from 185p to 208p and Dunelm Group increased from 1,194p to 1,215p. Videogame company Electronic Arts also rose, from $152 to $159, while food-distribution outfit SysCo climbed from $78.41 to $79.52. However, drinks company AG Barr, the maker of Irn Bru, declined from 704p to 695p, payments firm Corpay went down from $335 to $324 and vending machine firm ME Group decreased from 217p to 216p. Nevertheless, the overall gains outweighed the losses, with my long tips going from from £226 in the red to £303 in the black. The recent closure of my positions…

The reason the young will never be able to afford a house, we are told, is that they spend too much on avocado toast and cappuccinos. “This is entirely incorrect,” says Joseph Bullmore for The Gentleman’s Journal. “The cash has actually gone on lobster toast and affogatos. Or whitebait ceviche and pét nat.” At some point in the last decade, says Bullmore, food “stopped being something we ate and started to become something we were” – in other words, eating out is now a cultural phenomenon more important than the pub. That created demand for curators. Enter the “boys of TopJaw”, Will Warr (left in the picture) and Jesse Burgess. That two-man social-media sensation is “the most powerful force in food right now”, says Polly Vernon in The Times. The…

“The downside of living longer is that even a… small increase in… inflation can put a massive dent in our pension pots when it’s compounded over many years… I’m old enough to remember the 1970s, which… look like an increasingly useful template for investors. Now, as then, I expect the following to be sensible building blocks for an inflation-ready portfolio. First, unless inflation really spirals out of control, I would expect the equity market to continue to provide the core of my investments. At very high levels of inflation, the stockmarket’s valuation can be pummelled, but at more moderate levels it is the place to be… Other investments that performed relatively well in the… 1970s were real assets such as property, commodities… and neutral reserve assets such as gold. The…

The AI “land grab” is hotting up, says Lex in the Financial Times. Cybersecurity firm Palo Alto Networks is to buy rival CyberArk for $25bn. The move is the latest in more than a dozen deals that Palo Alto has made since 2019, and comes as security software has become “the hottest niche in enterprise software”. Developments in AI have increased both the amount of data stored and the scope for “more sophisticated AI-powered threats”. By buying CyberArk, Paolo Alto Networks is making a bet that identity management (making sure that people who log in to systems are who they say they are) will become an “important niche to fill” as AI agents increasingly “start attempting to access systems”. Expanding into identity security just as AI presents new threats holds…

Germany’s multinational software group SAP is on a roll, says WirtschaftsWoche. The group, which specialises in business software (ranging from supply-chain and expenses management to human-resource and customer-relationship applications) grew sales by 10% to €18bn in the first half of 2025. SAP’s cloud business is the key driver of overall growth; revenue is expanding at 20%, and there is no indication that the momentum is set to slow. The order book is full and margins are stable. Net income for the full year is likely to reach more than €7bn, eclipsing 2021’s record figure of €5.3bn. With a market value of €308bn, SAP is worth as much as US giants Oracle and Salesforce. Buy on dips.…

● “Anglo American is caught between a rock and a hard place,” says Karen Kwok on Breakingviews. The miner is looking to sell De Beers, its diamond business, as it refocuses on high-demand metals such as copper. But “getting the sale through will require accepting a super-low price” since “buyers have good reason to haggle”. Anglo has written down the value of De Beers twice in two years, and it could now be worth just $2bn, even though it is “sitting on $2bn of diamond inventory”. Demand for natural diamonds is falling due to competition from lab-grown stones, while fewer people are marrying in China and the US. Potential buyers may also have to spend $10bn covering operating losses, boosting marketing and maintaining a key mine. To make matters worse,…

Neil Woodford, former fund manager Six years after the collapse of the Woodford Equity Income Fund, the regulator’s verdict is in. The Financial Conduct Authority has fined Neil Woodford almost £5.9m and banned him from holding senior manager roles and managing funds for retail investors. It also fined his firm Woodford Investment Management (WIM) £40m. Between July 2018 and June 2019, Woodford and his firm made “unreasonable and inappropriate” decisions that affected the liquidity of the fund, ruled the FCA. They “disproportionately” sold more liquid investments and bought less liquid ones. They “did not react appropriately” as withdrawals caused the fund’s size to shrink from £10.1bn to £3.6bn and its liquidity to worsen, which disadvantaged investors who remained in the fund. At the point when the fund was suspended after…

capx.co In the 1980s, Sweden was grappling with the consequences of an overgrown welfare state, says Ayushma Maharjan. Public spending spiralled way above the OECD average. “Economic strain” was the result, swiftly followed by a banking crisis. But Sweden responded with “remarkable resolve”. Unemployment insurance was scaled back, disability benefits tightened, pensions overhauled. Within a few years, the ship of state had been steadied. Britain is in similar position today, on “the edge of fiscal doom”, but it seems unlikely we would be able to pull off Sweden’s trick. Even in “the heat of collapse”, Sweden was able to call on institutions and political parties willing to “rise to the occasion” and work across political divides to do what was necessary. Britain is too “mired in polarisation” to do the…

Last year saw record consolidation and corporate action in the investment trust sector. If the past seven months are anything to go by, 2025 will be a year of note, as well. At the beginning of the year 20 trusts were undergoing managed wind-downs, and since January, a further six have proposed or had wind-downs approved, according to Deutsche Numis. Wind-downs usually happen because an asset class, strategy or individual trust is out of favour. At the same time, they can present a new opportunity if they offer a timetable and a catalyst for realising value from a portfolio that is persistently trading at a deep discount to net asset value (NAV). This is especially true in the alternative-asset segment of the market. That said, alternatives trusts normally own illiquid…

The clock is ticking. Having announced in last year’s Budget that private pension savings will fall within the inheritance-tax (IHT) net from April 2027 onwards, the government has just published more detail on how this will work. Ministers reckon the changes will affect around 8% of families: those where someone dies and leaves pension savings that take the value of their estate above the £325,000 threshold at which IHT becomes due. At present unused pension savings don’t normally count towards IHT. The latest proposals from the government have been amended slightly. Initially, ministers had suggested that pension schemes should be responsible for ensuring families pay the right amount of tax following a member’s death. But amid warnings this would lead to delays and bureaucracy as schemes tried to work out…

The US has been undergoing a quiet energy revolution. The amount of energy produced by solar, wind and geothermal sources has more than tripled over the last decade. Solar energy has been one of the big winners. Total installed capacity has grown eightfold, while solar power’s share of new energy capacity has expanded almost continuously from a miniscule 4% in 2010 to 66% in 2024, a figure that rises to 84% when you include storage. While Trump’s return to the White House has cast doubt on the subsector’s progress, even he may not be able to stop its rise. That is good news for firms like First Solar (Nasdaq: FSLR). For most of its history, First Solar has focused on making and installing solar panels; it is still the seventh-largest…

“Chrysalis Investments holds several of Europe’s biggest fintechs” While finding discount opportunities in the investment-trust sector has always been at the core of the Migo Opportunities Trust strategy, Migo 2.0 now overlays this with increased activism, engagement and concentration. Higher interest rates, flawed regulation surrounding cost disclosures and wealth-manager consolidation have jointly created the most fertile hunting ground in a generation. We intend to exploit this opportunity by finding the best-value opportunities in the sector and unlocking that value for shareholders. For some, activism is a dirty word. But, at its best, it is often centred on dialogue with shareholders aimed at creating a consensus. This then allows for a sharper and more coherent message to be presented to boards when engaging to create value. Most of our work happens…

2022 Blanc Fumé de Pouilly, Barre à Mine, Michel Redde, Loire, France £69, reduced to £60 in a Mix Six, majestic.co.uk One of the most memorable tastings each year is the suite of Pouilly-Fumés from the estimable Michel Redde. This small estate in the Central Loire makes the most finely tuned and enchanting sauvignons on Earth. The 2017 vintage of my featured wine gained a perfect 20/20 score – the only wine made from this grape ever to do this, and my featured 2022 is only a point off perfection, too. I have just finished tasting the 2023s, from Le Petit F (£23.95, jeroboams.co.uk), right to the top, and they are astounding. Many will blanche at a £60 price tag, but 2021 Pavillon Blanc de Château Margaux is £250! Most…