the times | Saturday January 1 2022 59
Money
certain sectors offer inflation-linked
returns. Consumer staples firms such
as Unilever, which owns brands such as
Hellmann’s and Dove, can hold out in
high inflation.
“Companies pass on price rises
directly to consumers knowing that
big-brand household essentials will be
bought regardless of the economic
backdrop. Looking outside of equities, if
higher inflation knocks growth off
course, classic safe havens such as gilts
or gold can do well.”
The UK market
Jason Hollands, the managing
director of Bestinvest, says:
Interest rate 0.75 per cent
Inflation 3.5 per cent
“Investors need to be much more risk-
aware than they’ve needed to be over
the past couple of years given rising
borrowing costs, especially as valua-
tions in parts of the market are
stretched.
“Growth sectors such as tech, which
has been the stand-out winner of the
past decade, typically struggle in such
an environment, whereas the attrac-
tions of companies churning out solid
profits today — and reliable dividends
— become more apparent. Examples
include RELX, GlaxoSmithKline, Sage,
Reckitt Benckiser, Imperial Brands,
Diageo and Aviva.
“The UK market continues to trade
at a significant discount to global equi-
ties overall — an opportunity not lost
on international private equity firms,
which have been very active bidders
this year. I expect to see this continue in- While the UK market’s very low
response to short-term uncertainty is
often to switch focus on the long term,
and we believe there are opportunities
out there.
“There are some great niche phar-
maceutical and biotechnology busi-
nesses in the UK, such as Abcam,
Genus and Dechra, whose long-term
growth is unaffected by Covid.
“Even in hospitality there will be win-
ning businesses that have the financial
firepower to prosper through whatever
the world throws at them. The world
will keep turning and great businesses
will find a way to succeed.”Value
Paul O’Connor from the asset
manager Janus Henderson says:
Interest rate 1 per cent
Inflation 3 per cent
“The recent escalation of concerns
about the Omicron variant has created
some buyable opportunities in UK
reopening plays, such as banks and
leisure stocks. While 2021 ended as it
began, with pandemic concerns domi-
nating market psychology, the UK
could emerge from the Omicron epi-
sode with one of the most highly
vaccinated populations in the world
and the greatest potential for a post-
Omicron economic rebound.”Volatility
Nick Wood, the head of fund
research at the investment
manager Quilter Cheviot, says:
Interest rate 0.75 per cent
Inflation 4 per cent
“The past 12 months helped to show
how fragile markets can be for inves-
tors. While share prices continue to
rise, we have begun to witness more
market rotations and volatility creep-
ing in. Volatility also creates opportuni-
ties, however, so investors will want a
fund that can take advantage of these
swings in asset prices while also
protecting capital and being able to
produce an absolute return despite the
market conditions.
“The Pimco Dynamic Multi-Asset
fund is structured to take advantage of
choppy markets as well as long-term
structural trends. It is exposed to
themes such as digitisation and the
transition to green economies, and as
such should be in a position to prosper
over the long term.
“The fund has good exposure to
equities so will take advantage of any
further rally in share prices, while also
being able to withstand any significant
fall in stock markets and seek out other
opportunities in different markets.”China opportunities
Richard Whitehall, the head
of portfolio management at the
wealth manager Aegon, says:
Interest rate 0.75-1 per cent
Inflation 3 per cent“Next year China could be the land of
opportunity. The country has had a
challenging year, with a crackdown on
companies in the information techno-
logy sector and issues with debt in the
property sector.
“That said, we are looking at whether
there is opportunity caused by equity
prices reacting too strongly to some of
the economic and policy difficulties
that China has experienced over the
past year. The Chinese government
may look to stabilise the economy and
counteract any growth pressure.
“The current fall in valuations may
well present opportunities over the
next 12 months.”US giants
William Davies from the
investment manager
Columbia Threadneedle says:
Interest rate 0.75 per cent
Inflation 3.5 per cent
“We look for multiple sources of com-
petitive advantage in a business. They
include strong brand, low-cost produc-
tion, efficient scale (meaning only a few
large players can operate) and switch-
ing costs that make changing a service
or product expensive.
“We don’t do stock tips, but what I
can share is two examples of individual
stocks held in the Threadneedle Global
Focus fund, one of our global equities
flagship funds.
“Amazon and Alphabet (the owner of
Google) are among the top holdings.
The companies are the biggest cloud
providers in the world. For Amazon in
particular, but also for Alphabet, rent-
ing out storage capacity on the internet
makes up a large part of profits — and
the demand for storage space continues
to grow.”Low costs
Peter Westaway, the economist
for Europe at the US investment
manager Vanguard, says:
Interest rate: 0.5 per cent
Inflation: 2.5 per cent
“With price pressures building and to
head off a larger and more persistent
inflation shock, we expect — Omicron
allowing — the Bank of England to
undertake a second hike in the rate to
0.5 per cent, probably at its next
monetary policy committee meeting
on February 2.
“Where interest rates head from
there will depend on the economic
data, the strength of the ongoing recov-
ery and whether inflationary pressures
prove as transient as expected. Amid
this, investors should concentrate on
the factors they can control.
“That means being thoughtful and
realistic about investment goals,
keeping investment costs low, building
broadly diversified portfolios, tuning
out the noise and staying focused on
their long-term aspirations.”exposure to tech companies has been
its Achilles’ heel in recent years, what it
does have in abundance is exposure to
financials, industrials and commodities
— sectors that prove resilient in an
inflationary environment and as inter-
est rates rise. Investors who have
ignored the UK might want to take
another look at the opportunities on
their doorstep.”Niche pharmaceuticals
Andrew Millington, the head
of UK Equities at the wealth
manager abrdn, says:
Interest rate 0.75 per cent
Inflation 2.9 per cent
“Our economists still expect above-
trend growth for the next couple of
years, albeit not as strong as expecta-
tions were three months ago. The bestPut your
faith in big
brandsBuy into
China’s
recoveryRide a
boom for
UK banksSeek out
nichepharma
save money by switching, but also be
able to get faster internet or better cus-
tomer service.
First check your contract: if you still
have some time to run you would have
to pay a termination fee, negating any
savings you might make elsewhere. If itShortcuts to help you cut back those soaring household bills
W
ith the cost of living soaring,
it’s even more important to
cut costs where you can. Here
are some key areas to consider.
0 Council tax bands
Some councils will increase council tax
by as much as 6 per cent this year after
Rishi Sunak allowed them to charge
more to pay for essential services.
As many as 400,000 homes in
England and Scotland could be in the
wrong council tax band, according to
MoneySavingExpert, so you could be
due a refund. Council tax is based on
your property’s value in 1991 if you live
in England or Scotland or in 2003 if you
live in Wales.
To find out if you are in the wrong
band ask your neighbours in similar
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Registry website to get an idea of what
your home or one like it sold for in 1991
makes sense to start the process, com-
parison websites such as GoCompare
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Once you’ve found a deal, your new
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gle with your existing company and get
a cheaper deal out of it.
Shell Energy offers line rental and
broadband with unlimited downloads
for £15.99 a month and gives £40 credit
when you sign up, according to Money-
SavingExpert. Plusnet’s equivalent
tariff is £18.99 and includes a £75 pre-
paid Mastercard.0 Investment fees
High fees can eat up a significant part of
the returns you make from investment.
The obvious place to start is with theplatform you are using. Vanguard char-
ges a fee of 0.15 per cent per year,
capped at £375 for accounts worth over
£250,000. Be aware that you can only
invest in Vanguard funds here, though.
For those that like to dabble in share
investing, including investment trusts
and exchange traded funds, Freetrade
charges zero commission on buying
and selling them and no account fees.
If you are keen to get other members
of your family investing, Interactive
Investor’s Friends and Family tariff
allows an account holder to pay £5 extra
per month to give up to five people a
free subscription to the platform. This
saves them £9.99 per month, which is
what the firm’s core Investor plan costs.
For a Junior Isa, look to Fidelity,
which does not charge an account fee
for the service: all you will need to pay
is £1.50 to buy a fund if you set up a regu-
lar savings plan.
David Brenchleyor 2003. If you think you should be in a
lower band, you can ask the Valuation
Office Agency, or Scottish Assessors
Association, for a review and explain
why you think you’re in the wrong one.
You may need to provide evidence of
other houses like yours that are in lower
bands. If your challenge is accepted,
you should be refunded for what you
have overpaid, backdated to when you
first started paying council tax for that
property. Repayments can be backdat-
ed as far as 1993.
Bear in mind the risk that if you ask
for a recalculation, you could end up
with a higher bill.0 Broadband
The launch of Ofcom’s One Touch
Switch process in September means it
has never been easier to change your
broadband provider. You need only
contact your new supplier and it will do
the rest. You may not only be able toYou could get a better broadband deal