Indholdsfortegnelse for Issue 1278 i MoneyWeek

A few years ago we kept hearing that the average human attention span had dwindled from around 12 seconds to eight, less than the average goldfish’s nine. The statistic rang true to me, given our endless scrolling through short videos on our phones and apparent inability to read an email to completion, but it turned out to be based on shaky data. Still, whether one can pinpoint attention spans or not, behavioural economists have often pointed out that people can only process a certain amount of information at a time, particularly in a world of endless data delivered through smartphones. The impulse to filter out noise explains why people are far more likely to buy something for $2.99 than $3.00, says The Economist, but they do not distinguish between goods…

Grain prices are close to five-year lows, says The Economist. Wheat, maize and soybeans surged in 2022 when Russia invaded Ukraine, the fifth-largest global wheat exporter. Prices roughly doubled compared with their levels at the start of the decade. Ukrainian production remains under pressure, yet grains have given back all their post-war gains. Benign weather has led to two “whopping” harvests in a row in Australia. And America is due to produce record volumes of maize this season. But the reprieve may not last. The world is consuming 28% more maize and 38% more soybeans than it did a decade ago. Wheat stocks among big exporters are near their lowest levels since 2007-2008. “One bad drought could be enough for prices to shoot up.” From Russia to the US and…

“Remove your US-tinted glasses,” advises Duncan Lamont of Schroders. Over the past decade, investors have grown convinced that growth stocks, especially large American technology firms, are the only reliable source of equity returns. Value investing – the practice of buying companies that appear cheaper than their intrinsic value on metrics such as price-to-earnings ratios – has fallen out of fashion. Yet beneath the radar, the style has been outperforming again, with UK and European value stocks delivering a higher total return than the main US index over the past one, three and five years in dollar terms (see chart). The bell signalling the return of value investing has started to ring.…

German orthopaedic and prosthetic-device maker Ottobock is preparing for an initial public offering (IPO) in Frankfurt this year after cancelling a previous attempt in 2022, when financial markets tumbled, says Bloomberg. The firm’s listing could help boost Europe’s flailing IPO market. Ottobock’s flotation will comprise existing shares from the billionaire Näder family, its sole shareholder, and around €100m in new stock. The Näders bought back a 20% stake from Swedish private-equity firm EQT last March, which valued Ottobock at €5.5bn. The firm’s first-half core revenue rose to €760m from €666m the previous year, while underlying core Ebitda grew to €175m from €132m.…

London A bitter pill: “The government’s plan for the life-science sector, a key pillar of the economy, has been thrown into disarray,” says Julia Kollewe in The Guardian. First came US giant Merck’s “shock announcement” last week that it was scrapping its £1bn London research centre. Two days later, AstraZeneca said it wouldn’t go ahead with a planned £200m expansion in Cambridge. Four big pharma projects worth nearly £2bn have now been “pulled or paused this year”, part of a trend that has intensified since 2022. Big Pharma accuses the government of not investing enough in the sector, saying there is little incentive for them to develop drugs and test them here. Merck’s decision could prompt other big firms to follow suit, even though the fundamentals that attracted Big Pharma…

● Three profit warnings from housebuilder Vistry last year left boss Greg Fitzgerald “facing plenty of remedial work to restore investors’ confidence”, says Ben Martin in The Times. The reaction to its first-half results show “he still has much rebuilding to do”. Yes, the decline in adjusted pre-tax profits – to £80.6m from £120.7m last year – was in line with the guidance, while the drop in net debt to £293.1m from £322m was “marginally better” than forecast. Vistry maintained guidance for higher full-year profits. Yet the shares closed down almost 6%. The snag is that the firm has a “mountain to climb” if it is to meet its full-year forecast. Fitzgerald is “very confident”, but investors may be cautious after Vistry underestimated costs at one division by £165m last…

“Investors today take for granted that the S&P 500 is an inherently superior group of stocks to those outside of the US,” says Ben Inker of value-focused US investment manager GMO. They have been impressed by the index’s better returns over the past 15 years and “superior fundamental growth” from mega-cap tech stocks. However, “the rest of the S&P 500 has not shown particularly impressive fundamental performance, but is still accorded a premium multiple”, say Inker and his colleague John Pease in GMO’s latest letter to investors. Gross profit growth has been low, with a median annualised growth of just 4% over five years – the weakest five-year record since the 1980s. The impressive gains from the “Magnificent Six” (“Tesla doesn’t make the cut on Magnificence”) have skewed perceptions. Now…

thecritic.co.uk The crisis at Britain’s Office for National Statistics (ONS) is a bellwether for the state of the country more generally, says Tom Jones. The Royal Economic Society has warned that ONS data is so bad that economists cannot properly analyse the economy and policymakers are flying blind. Gaps, delays, revisions and errors in core datasets have raised questions about the credibility of the UK’s statistics. A review last year concluded that the problems were a consequence of the ONS’s own performance and that “interest in the new” and in politically correct but stupid decisions was detracting from core competencies. It moved its HQ from London to Newport, which predictably led to the loss of skilled individuals. This is indicative of a broader trend, where “changing political mores have established…

● Hargreaves Lansdown has become the first major retail platform to offer long-term asset funds (LTAFs), with the addition of two LTAFs from Schroders that invest in private equity and renewable-energy infrastructure. Withdrawals from these “semi-liquid” funds will need 90 days’ notice and will be capped at 5% of the portfolio’s quarterly net asset value (NAV). It remains unclear if there will be much appetite for LTAFs. Critics such as the Association of Investment Companies argue that “tried and tested” investment trusts already offer a suitable structure for holding private-market assets, and have the benefit of being traded freely on the stock exchange. ● In residential real estate news, Grainger, Britain’s largest listed residential landlord, has converted to a real estate investment trust (Reit) as it completes its transformation into…

Manulife CQS New City High Yield Fund (LSE: NCYF) aims to provide investors with a high gross dividend yield (currently 8.8%) and the potential for capital growth by investing mainly in undervalued, high-yielding fixed-interest securities. Around 87% of the portfolio is in fixed-interest securities, with 13% in equities (there is a 20% limit on equity exposure). With respect to currencies, 69% of the portfolio is in sterling, 18% in US dollars and 13% in euros. As one of the smaller fixed-income funds, NCYF can participate in highly attractive small corporate-bond issues, which are often inaccessible to larger funds owing to their minimum-size requirements. The manager’s prudent risk-management focus has resulted in only three defaults since the fund’s inception in 2007 and enabled NCYF to increase the dividend every year for…

Is gold the trade of the decade? The yellow metal has soared 40% this year in US dollar terms, making more than 30 successive record highs along the way. It has gained 135% since January 2020, outstripping even the S&P 500’s tech-powered boom. Over the same period it has surged 122% in sterling terms. While the gold rally has been wild, until recently there remained one major milestone left to conquer: the all-time inflation-adjusted high. In 1980 the world economy was coming off twin oil shocks, says Bloomberg. The dollar had slumped, the long-term consequence of US president Richard Nixon pressuring the Federal Reserve to keep interest rates low during the prior decade. When the Tehran hostage crisis prompted President Jimmy Carter to freeze Iranian assets, the yellow metal went…

Five to buy Alfa Financial Investors’ Chronicle Asset-finance software company Alfa Financial’s half-year operating profit increased 33% to £21.6m thanks to a growing pipeline of work. Alfa generates revenue through recurring contracts for implementing and updating clients’ software. Alfa has maintained its full-year earnings guidance, which Investec’s analysts believe may be conservative. The market has yet to appreciate Alfa’s success, and with a 4% free cash-flow yield, it “looks good value” for a fast-growing company. 243p Gear4Music Shares Gear4music has upgraded forecasts for fiscal 2026 twice in just three months. The online musical-instrument and equipment retailer now expects to beat estimates for sales of £155.8m, adjusted earnings of £11.3m and taxable profits of £3m. First-quarter revenues rose 27%,the best growth rate since lockdown triggered a boom in spending on hobbies.…

While the US dollar was continually getting stronger and sterling was continually getting weaker, British investors rarely need to worry too much about currency movements. If you held an international fund that was benchmarked to the MSCI World or a similar index, your currency exposure was around 60%-70% to the US dollar and the trend worked in your favour. If the era of the strong dollar is over – and the Trump administration’s policies imply that it probably is – that will no longer work in our favour. Even if the US stockmarket keeps going up – which is quite possible if the US Federal Reserve cuts rates aggressively – a weaker dollar would mean much lower gains for foreign investors. One obvious conclusion is that investors will give much…

Adapt to an emptier planet Editorial The Economist Many countries are starting to worry not about overpopulation, but the opposite, says The Economist. Two-thirds of people now live in countries where the fertility rate is below the replacement rate of 2.1. The UN estimates that the global population will peak at 10.3 billion in 2084, but its assumptions – an abrupt reversal of fertility rates in low-fertility countries and a slowing rate of decline in high-fertility countries – are “questionable”. Based on current trends continuing for ten years, “peak human”, of 9.6 billion, will occur in 2065. Regardless of timing, sub-replacement fertility rates imply that the population will shrink slowly, then fast. That could be “hugely disruptive”. Heavy public debts fall on fewer ageing people; towns hollow out; innovation slows.…

project-syndicate.org Nearly six months after US president Donald Trump announced his “ultra-high reciprocal tariffs”, in defiance of World Trade Organisation rules, the global trading system is “holding up well”, says Daniel Gros. No other major economy has followed Trump’s example and world trade increased by about $300bn in the first half of 2025. US imports in the first half of 2025 actually exceeded their level in 2024 and America’s monthly merchandise trade deficit stood at almost exactly the same level in July as a year earlier. The cumulative US trade deficit widened in the first half of the year, the opposite of the intended effect. US demand for imports has withstood Trump’s tariffs because the US economy continues to perform strongly and because tariffs rates have, on average, remained well…

Thirty-eight years after banker Walter Salomon died, his son William has at last finished untangling his inheritance. Initially, many assumed that the complex web of corporate cross-holdings between various investment trusts and trading companies held a hidden pot of value. But it soon became apparent that the only value was what could be created from the parts. The thorniest problem was a business operating tug boats in Brazilian ports. This was turned into a port services and logistics group and floated on the São Paulo market as Wilson Sons, in 2007, with UK-listed Ocean Wilsons (LSE: OCN) retaining a majority holding. Ocean Wilsons is in turn controlled by Hansa Investment Company (LSE: HAN) and private trusts associated with the Salomon family. Hansa is itself controlled by the same family trusts…

On 8 October, UK retail investors will once again be able to invest in bitcoin exchange-traded notes (ETNs), which will be listed on the London Stock Exchange. The UK financial regulator, the Financial Conduct Authority, banned them in 2020, saying that crypto assets cannot be reliably valued by retail consumers because “these assets have no reliable basis for valuation”. It was also concerned about “the prevalence of financial crime, extreme volatility, inadequate understanding by retail consumers, and the lack of legitimate investment need. These features mean retail consumers might suffer harm from sudden and unexpected losses if they invest in these products”. This accurately described many crypto assets at the time, but I believe it was heavy-handed to include bitcoin, along with the other major projects such as Ethereum. Other…

High-net-worth families are increasingly giving their money away to charity in a bid to cement a lasting legacy and avoid higher rates of inheritance tax (IHT), writes Laura Miller. Changes to IHT rules – particularly the freezing of the nil-rate band and the inclusion of unused pensions as part of the taxable estate from April 2027 – “are prompting more people to consider charitable legacies as part of their estate planning”, says James Graham, wealth planner at financial advice group Succession Wealth. A Rathbones’s survey of high-net-worth families with average wealth exceeding £3m found that 53% have increased charitable donations in the past two years, with two-thirds (66%) expecting to give more in the next two years. Almost two-thirds (62%) have included a charitable gift in their will – averaging…

“Investing and gambling are not the same. Investors have access to relevant information, such as a company’s competitive advantages, cash flow and leadership. Ironically, though, this difference may make people feel more confident in betting on the markets. After all, if I can make informed decisions about the market, then my gamble on it becomes more akin to investing, right? Not quite. Though we can make informed investing decisions, the truth is that we have cognitive biases. We place too much weight on events that easily come to mind, information that confirms our preexisting beliefs, and what others are doing. When it comes to investing, we have things like portfolio diversification and a long time horizon that can help mitigate the effects of our mistakes, but with a ‘yes-no’ gamble…

Gea has just gained promotion to the DAX index, Germany’s blue-chip index, says WirtschaftsWoche. The company, which has around 250 subsidiaries, supplies processing systems, machinery and components for sectors ranging from food and drink to chemicals. Every second litre of beer in the world is brewed in GEA’s machines. Gea has scant competition; only Sweden’s Alfa Laval can match its sheer range. That helps explain why Gea has been able to pass on tariffs to its customers in the US. Its lucrative service business, meanwhile, comprising repair and maintenance for its machines, now makes up 40% of sales. The stock offers a free cash-flow yield of more than 4%. “Cheers.”…

US tech giants have pledged more than £31bn in UK investment as part of a landmark “Tech Prosperity Deal” signed during Donald Trump’s second state visit to Britain. It relates to artificial intelligence, quantum computing and nuclear power, and promises tens of thousands of new jobs as well as regional renewal. The main announcement was Microsoft’s £22bn investment, which will see the UK’s largest ever supercomputer built in Essex. An OpenAI and Nvidia partnership, StargateUK, will see the creation of a new AI Growth Zone in the northeast. If AI does “supercharge growth”, gains will not be evenly shared, says Fraser Nelson in The Times. America comes first; China, next; then, Britain. “We’re the only other democracy with a trillion-dollar tech sector and a university base to rival America’s.”…

There were plenty of good reasons why Angela Rayner had to resign as deputy prime minister earlier this month, but the most important was not her missteps over tax, but her record as housing secretary – she presided over a collapse in house building that is rapidly turning into a national emergency. When she wasn’t expanding her own property empire, Rayner was meant to be driving a huge increase in new housing starts. When it came into office, Labour committed to building 1.5 million new homes over the parliament. Without having to worry as much about backbenchers in leafy suburbs, it could overrule all the local objections to new development and get to work. That was badly needed. For over a decade, the UK has not built anything like enough…

There are many concepts in investing that sound far more complicated than they are. Pound-cost averaging – also known as drip feeding – is no exception. It simply means investing a sum of money into the market at regular intervals rather than in one go. So if you have £1,200 to invest this year, you might invest £100 per month. If you have £12,000, you invest £1,000 per month. The advantage of investing this way is that it may reduce the risk (and pain) of buying just before the market drops. If you put all your money in UK shares this month and the FTSE 100 drops steadily over the next year to end up down 30%, your portfolio is also down 30%. If you invest equal amounts monthly, you…

“It’s the best thing, to be cut from a film. You still get paid and no one can say you were sh*t.” Olivia Colman (pictured),quoted in The Mail on Sunday “When a man tells you he got rich through hard work, ask him: whose?” American humorist and journalist Don Marquis, quoted in Forbes “I have a tremendous amount of respect for AOC [US Congresswoman Alexandria Ocasio-Cortez]. I buy her T-shirts for $39.95, ‘Tax the Rich’… She has an 82% margin on that, proving that inside of every socialist is a capitalist trying to get out.”Canadian businessman Kevin O’Leary, quoted on social-media platform X “I want children to know money isn’t a dry subject. It’s liquid and interesting.”TV presenter Ross Kemp on wanting compulsory lessons on money instated in schools, in…

conservativehome.com The left has for too long claimed a monopoly over environmental concerns, says Maurice Cousins. But conservatism is a “philosophy of inheritance, prudence and restraint” and is “naturally environmentalist”. It’s time to reclaim the green mantle. Properly understood, environmentalism is about stewardship, conserving landscapes, protecting wildlife, honouring inheritance and “maintaining the bonds between past, present and future”. Climate activism, by contrast, is anti-capitalist posturing in a green wrapper. Conservatives must resist this and be realists. A modern industrial economy cannot run on weather-dependent energy. Neither can it compete globally if its energy prices are high. Climate policy should not be insulated from democratic scrutiny; nor should it be used as a justification for creeping authoritarianism. As the Covid experience showed, freedoms, once surrendered, are “slow to return”. Finally, Britain…

US activist Saba Capital has built up a small stake in Life Science Reit, the struggling specialist in properties for the life-sciences sector. Saba – which has invested at least £1.3bn across 30 London-listed trusts, according to Deutsche Numis – has a position of just under 2%. Life Sciences Reit, which has been hit by lower funding for the life-science sector, launched a strategic review in March as it tries to close its 40%-plus discount to net asset value. Management recently announced a new seven-year lease on a London property at a marginally higher rent (after allowing for a rent-free period), which is “incrementally positive” and could make the asset easy to sell, says Numis, but investors are likely to be “increasingly agitated” for a “more conclusive update” to the…

Domino’s Pizza (Nasdaq: DPZ), the US arm of the global Domino’s brand, has been a fantastic investment for those shareholders who’ve stuck with the business over the past 15 years. According to figures compiled by Morningstar, the stock has generated a total return of 27.1% per annum over the past 15 years, outperforming the benchmark index, which returned just 14.4% over the same period. Domino’s business model is simple. It runs an “asset-light” franchise model supported by a vertically integrated supply chain and advanced technology. Most of its earnings come from franchise royalty fees and income generated from selling supplies via its supply-chain network. This translates into a highly cash-generative business model. Last year, Domino’s generated cash flow from operations of $625m and invested just $31m back into the business.…

● NS&I has been accused of fleecing savers with its Investment Account, which pays just 1% interest, says Eric Williams in The Telegraph. There are 1.4 million people with the postal-only account, some with savings of more than £100,000. Someone with £50,000 in the account would earn £500 in interest over a year, “yet the real-terms value of their savings would be just £48,651 if inflation remained at its current level”, Martyn James, a consumer-rights expert, told the paper. ● First-time buyers can borrow up to 98% of the price of a property from Newcastle Building Society’s new First Step mortgage. But there’s a catch. “They cannot get help with their deposit from the bank of Mum and Dad,” says Hilary Osborne in The Guardian. In 2024, more than 50%…

Emma Grede (pictured) has “quietly become one of Britain’s most successful businesswomen”, says Phoebe Luckhurst in The Times. She is “the woman the Kardashians call when they want to make even more money” – the co-founder of Skims, Kim Kardashian’s “colossus shapewear brand”, which is valued at about £3bn; the CEO of denim label Good American with Khloé Kardashian; and co-founder of cleaning-product brand Safely with Kris Jenner and clothing retailer Khy with Kylie Jenner. Last year, Forbes put her net worth at an estimated £298m – “well on her way to keeping up with the Kardashians”. “Call me Emma Greedy,” she said last year when she was a guest judge on Dragons’ Den. But that could not be a less apt nickname for the off-screen Grede, now 42, says…

£65, in bond per bottle, bbr.com Earlier in the month, elite Bordeaux négociant CVBG hosted one of the most fascinating tastings of the year. “Beyond Bordeaux” celebrates some of the non-Bordeaux wines released for sale on La Place de Bordeaux every autumn. Following this event and identical tastings in Asia, wine merchants worldwide reserve stocks, endeavouring to sell them to prized private collectors and wine-trade customers. I always cast a critical eye over this global collection of celebrated wines and from the 78 I tasted, a quarter made the grade for further commentary on matthewjukes.com. While you might expect the Europeans, or perhaps Californians, to catch my eye and hold it, it was the Aussies whose collection of 12 near-perfect wines was the standout. Jim Barry’s monumental 2022 The Armagh…