The Sunday Times - UK (2021-12-19)

16 The Sunday Times December 19, 2021

MONEY

CREDIT CARDS INTRODUCTORY RATES Provider Card type Introductory purchase APR^1 Reward Contact Tesco Bank Clubcard Purchases MC 0% for 23 months 20.9% Yes 0345 300 4278 Sainsbury’s BankDual Offer MC 0% for 22 months 20.9% Yes 0808 540 5060 M&S Bank Shopping plus offer MC 0% for 22 months 21.9% Yes 0808 997 996 BALANCE TRANSFERS Provider Card type Introductory purchaseTransfer fee^2 APR^1 Contact Virgin Money Balance Transfer MC 0% for 35 months 2.94% 21.9% 0800 389 2875 M&S Bank Transfer Plus Offer MC 0% for 31 months 1.99% (min £5) 21.9% 0800 997 996 Santander Everyday Long-term MC 0% for 31 months 2.75% (min £5) 20.9% 0800 912 3123 CASHBACK CARDS Provider Card type APR^1 Cashback Contact American ExpressPlatinum Cashback 29.8% 0.75%-1.25%. Intro 5% for 3 months 0800 917 8047 American ExpressPlatinum Cashback Everyday24.5% 0.5%-1%. Intro 5% for 3 months 0800 917 8047 Santander All in One Mastercard 23.7% 0.5% 0800 912 3123 1 APR = annual percentage rate, dependent on credit rating.^2 Fee charged on the amount of each balance transfer during the introductory period. Source: moneyfacts.co.uk

way to follow the index is the Vanguard S&P 500 ETF, which costs 0.07 per cent. Key growth drivers for Asian markets include Taiwan Semiconductors, Sam- sung Electronics and MediaTek. Again, a less risky approach than buying the individual shares would be the iShares Asia 50 ETF. This is relatively expensive for a tracker, at 0.5 per cent a year. The dominance of technology shares in the US and Asia means investors have the added risk of being too concentrated in a single sector. In Germany the growth comes from a wider range of sectors. Top contributors to its market include the software company SAP, the chemicals firm Linde, the engineering company Siemens and Daimler, the car company. The Lyxor Dax ETF allows you to track the performance of the top 42 Ger- man companies for 0.15 per cent a year.

Look to the future Ryan Hughes from the investment company AJ Bell points out the obvious dan- gers of investing only in firms that have already achieved good returns. He said: “The stock market has a strong propen- sity to rotate and change, and therefore making the assumption that next year’s winners will be the same as last year’s winners is a dangerous one. If we think back a year, just before the vaccine announcement, you couldn’t find any- one that wanted oil and mining stocks, yet they went on to have a storming year.” It may be worth considering companies that have not performed as well. You benefit from buying when they are relatively cheap. Hunter at Interactive Investor high- lighted the potential for bounceback in the hospitality and tourism sectors, as well as banks.

74. 8 % rise in Glencore shares in a year

T

he drinks company Diageo has boosted the FTSE 100 more than any other company this year. The company, which owns brands such as Smirnoff, Baileys and Guin- ness, has returned about 35 per cent over a year, according to the data analyst Morningstar. That is less than others, but its market size, at £91.2 billion, means it is one of the key drivers for investor returns in the leading index of UK shares. The mining company Glen- core rose 74.8 per cent in the same period but is smaller at £48.2 billion. Morningstar analysed all companies in the FTSE 100 index over one, three and five years. In all those periods Diageo was in the top three contributors to growth and was top over one year. The data shows that a handful of giant companies are the key drivers of growth for the UK stock market. They include the miners Rio Tinto, BHP and Anglo Ameri- can, drug companies such as Astra- Zeneca and GlaxoSmithKline, the energy stocks Royal Dutch Shell and BP, and the equipment rental firm Ashtead. If you think companies that have done well in the past will do well again in the future, you could buy individual shares, but this is risky because you will be

FIVE THINGS YOU NEED TO KNOW ABOUT... SECURE CUSTOMER AUTHENTICATION

THE

FIVER

5

1

It has become almost impossible to buy anything online without having to approve the purchase with your bank by entering a code sent to your phone, using a bank app or card reader.

2

This two-factor approval is known as Secure Customer Authentication, first introduced by the Financial Conduct Authority, the City regulator, two years ago. It means that you need to provide two forms of identification to protect you from fraud. It is also used when you log in to online or mobile banking. The banks use fingerprints or facial recognition; a code supplied to a mobile phone, mobile app or card reader; or a password.

3

It is designed to reduce online shopping fraud if a fraudster gets hold of your card details and make it harder for someone to break into your bank account and empty it.

4

Secure Customer Authentication has had a slow and troubled launch. It was supposed to be in place for online banking and shopping by September 2019, but questions were raised about how banks could support customers who didn’t use mobile banking or have reliable phone signals and about how ready online shops were for the technology.

5

The deadline for it to be fully introduced for online purchases was pushed back again in May; it is now March.

George Nixon

CASH ISAS INSTANT ACCESS Provider Account name Min deposit Interest Transfers in Contact Shawbrook Bank Easy Access Isa Issue 18 £1,000 0.67% Yes shawbrook.co.uk Cynergy Bank Online Isa (Issue 17) £1 0.65% Yes cynergybank.co.uk FIXED RATE Provider Account name Term Min deposit Rate Transfers inContact Shawbrook Bank Fixed Rate Cash Isa Bond Issue 531 year £1,000 0.93% Yes shawbrook.co.uk Paragon Bank Fixed Rate Cash Isa 2 years £500 1.17% Yes paragonbank.co.uk

Source: savingschampion.co.uk — 0808 178 5354

CHILDREN’S ACCOUNTS Provider Account name Account type Min deposit Interest rateContact Dudley BS Junior Easy Saver Regular Saver £10 3.5% dudleybuildingsociety.co.uk Santander^1 123 Mini Current Account Current Account £1,500 2.96% santander.co.uk HSBC^2 MySavings Easy Access £10 2.47% hsbc.co.uk

(^1) Interest paid on balances between £1,500 and £2,000 (^2) 0.25% paid on balances above £3,000
JUNIOR ISAS
Provider Account name Min deposit Interest rate Rate Contact
Loughborough BSJunior Isa £1 2.5% Variable theloughborough.co.uk
The Family BS Cash Junior Isa £3,000 2.4% Variable familybuildingsociety.co.uk
Coventry BS Junior Cash Isa (2) £1 2.25% Variable coventrybuildingsociety.co.uk
Source: savingschampion.co.uk — 0808 178 5354
Diageo BP Royal Dutch Shell
Glencore Ashtead Group FTSE 100
150%
50
0
100
-50
Source: Morningstar Direct
2020 2021
Five soaring shares
Best Buys
FOREIGN
CURRENCY
Interbank rates at 5pm
on Friday, which show
where the market is
trading. They are not
indicative of the rate
you could get.
EURO
GBP>EUR
1.17
USA
GBP>USD
1.32
SWITZERLAND
GBP>CHF
1.22
AUSTRALIA
GBP>AUD
1.85
ENERGY DEALS
Table shows the cheapest tariff now available
from the three cheapest suppliers. Excludes
fixed tariffs of less than 12 months’ duration,
tariffs that do not have national coverage and
tariffs where payments are taken in advance
of supply
Supplier Average annual bill Rate Contact
Scottish Power £1,798 Variable 0800 027 0072
GEUK £2,215 Variable 01920 486156
OVO £2,434 Variable 0330 303 5063
Phone numbers provided will call through to theenergyshop.com switch support team. Source: theenergyshop.com — 0800 448 0205
SAVINGS ACCOUNTS
INSTANT ACCESS
Provider Account name Min deposit Interest rate Contact
Investec Online Flexi Saver £5,000 0.71% savings.investec.com
Cynergy Bank Online Easy Access Account - Issue 43 £1 0.7% cynergybank.co.uk
Shawbrook Bank Easy Access Account - Issue 28 £1,000 0.67% shawbrook.co.uk
NOTICE ACCOUNTS
Provider Account name Notice period Min deposit Interest rate Contact
Oxbury Personal 120 Day Notice Account Issue 3120 days £1,000 1.1% oxbury.com
Secure Trust Bank 120 Day Notice Account (11 Nov 2021)120 days £1,000 1.1% securetrustbank.com
Shawbrook Bank 120 Day Notice Personal Account Issue 50120 days £1,000 1.08% shawbrook.co.uk
FIXED-RATE BONDS
Provider Account name Term Min deposit Interest rate Contact
Zopa 1 Year Fixed Term Bond 1 year £1,000 1.37% zopa.com
Zopa 2 Year Fixed Term Savings 2 years £1,000 1.61% zopa.com
Raisin 3 Year Fixed Term Deposit (provided by UBL UK)3 years £1,000 1.82% raisin.co.uk
DEALS ARE LISTED ONLY IF THEY ARE COVERED BY THE UK FINANCIAL SERVICES COMPENSATION SCHEME (FSCS) OR A EUROPEAN EQUIVALENT
Source: savingschampion.co.uk — 0808 178 5354
MORTGAGES
2-YEAR FIXED RATES
Lender Rate Scheme Deposit Fee Notes Contact
Barclays 1.11% Fixed to 29.02.24 40% £999 LV 0333 202 7580
Furness BS 1.33% Fixed for 2 years 20% £999 LOV 0800 220 568
Halifax 1.64% Fixed to 02.02.24 10% £995 P 0345 850 3705
3-YEAR FIXED RATES
Nationwide 1.34% Fixed for 3 years 40% £999 RS 0800 302 010
Nationwide 1.39% Fixed for 3 years 15% £999 FPV 0800 302 010
Virgin 2.3% Fixed to 01.04.25 10% £0 MR 0345 605 0500
LONG-TERM FIXED RATES
Yorkshire BS 1.39% Fixed to 28.02.27 25% £1,495 V 0345 166 9510
Santander 1.69% Fixed to 02.03.27 20% £999 NPV 0800 068 6064
Virgin 2.3% Fixed to 01.04.27 10% £995 MR 0345 605 0500
Barclays 1.65% Fixed to 28.02.29 40% £999 LV 0333 202 7580
TRACKERS / DISCOUNTS
Barclays 1.00% Tracker + 0.75% for 2 years 40% £999 ELV 0333 202 7580
Nationwide 1.49% Tracker + 1.24% for 2 years 10% £999 EPV 0800 302 010
Newbury BS 1.69% 2.26% discount for 5 years 25% £850 LV 01633 555 5777
First Direct 2.34% Tracker+2.09% for term 25% £490 ELV 0800 482 448
FIRST-TIME BUYER / LOW DEPOSIT
Leeds BS 2.64% Fixed to 29.02.24 5% £0 PV 0345 045 4049
Yorkshire BS 2.81% Fixed to 28.02.27 5% £995 NPV 0345 166 9510
Barclays 1.41% Fixed to 28.02.27 25% £749 HPV 0333 202 7580
BUY TO LET
TSB 1.69% Tracker + 1.44% to 31.03.24 40% £995 RS 0800 056 1088
HSBC 1.69% Fixed to 30.04.24 40% £0 LV 0800 494 999
Virgin 1.82% Fixed to 01.04.27 25% £995 CR 0345 605 0500
Early repayment charge applies unless otherwise stated. Most deals track Bank of England base rate.
C = £500 cashback for purchases; E = No early repayment charge; F = £500 cashback for first-time buyers; H = Help to Buy;
L = Free legal work for remortgages; M = £300 cashback for purchases; N = £250 cash back for purchases; O = £250 cash back;
P = Purchases only; R - Free legal work and valuation for remortgages; S = Remortgage only; V = Free valuation
Source: landc.co.uk — 0800 373 300
CURRENT ACCOUNTS
CREDIT INTEREST
Provider Account name Account fee Reward Balance (for reward) Contact
Halifax Reward Current Account None £5 a month – 0345 720 3040
TSB Spend & Save None £5 a month – 0345 975 8758
Virgin Money M Plus Account None 2.02% AER Up to £1,000 0800 678 3654
OVERDRAFTS
Provider Account name Account fee Interest rate^1 0% overdraft limit Contact
Starling Bank Current Account None 15% £0 starlingbank.com
First Direct 1st Account None 39.9% £250 0345 600 2424
Virgin Money M Plus Account None 19.9% £0 0800 678 3654
(^1) Equivalent annual rate.

Based on overdraft of £500 for 7 days a month.
Some accounts require minimum funding/direct debits to open or receive rates shown.
Source: moneyfacts.co.uk
investing in a small pool of companies
that operate in a similar area. Dan Kemp,
the global chief investment officer of
Morningstar Investment Management,
said: “One of the greatest enemies of a
successful investment strategy is the
overconfidence of the investor. While
this can take many forms, one of the most
pernicious is the concentration of a port-
folio into a small number of holdings.
“Although such concentration can
improve returns in the event that an
investor is right in their forecast of the
future, the reverse is also true.”
So how should I invest?
Although Diageo has performed well
already, Richard Hunter from the wealth
manager Interactive Investor rates its
future prospects as encouraging. He said:
“Diageo’s access to premium products,
pricing power and currently high organic
growth rates, not least in its largest mar-
ket in North America, have propelled the
shares this year. The company remains
well favoured, and for many is a core
portfolio constituent given its growth and
its defensive properties.”
If individual shares are not your bag,
you can invest in certain sectors such as
energy through an exchange traded fund
(ETF). These are like shares but use com-
puters to track an index or a basket of
companies in a particular sector. The
Xtrackers MSCI World Energy ETF
tracks the world’s largest energy stocks
for 0.25 per cent a year. This fee comes on
top of any platform or advice charge you
pay. Top holdings include Exxon Mobil
and BP.
An option with more FTSE 100 growth
contributors is the Vanguard FTSE UK
Equity Income fund. This tracks an
index of shares that pay the highest
dividends. Top holdings include BP,
Glencore, GlaxoSmithKline, Rio Tinto
and Anglo American, all among the top
drivers for FTSE 100 returns. It costs
0.14 per cent a year.
A broader approach
A less risky approach is to invest in a
broader basket though a tracker that uses
computers to mimic an index. You can
track the performance of the FTSE 100
using the iShares Core FTSE 100 ETF at
a very competitive price of 0.07 per cent.
The downside is that you will also be
exposed to shares that have been duds in
the past. Over a year, of the 110 compa-
nies in the FTSE 100 index, 74 made a net
contribution to growth, three made no
contribution and 33 had a negative effect
on returns.
Companies that have had the biggest
negative impact on the FTSE 100 index
over one year include Unilever, which
owns brands such as Dove and Hell-
mann’s, the gambling company Flutter
Entertainment and the London
Exchange Group. They are down about
12, 27 and 19 per cent respectively over
12 months. Over five years, those that put
the biggest downward pressure on the
FTSE 100 index were HSBC, British
American Tobacco and BT Group, down
4, 4.9 and 11 per cent respectively.
Market concentration
As markets evolve and investors back
companies that have already done well,
an index can look increasingly concen-
trated in certain sectors. This is the case
for US and developed Asian markets,
where technology giants have dominated
for years.
The top contributors to growth for the
S&P 500 index of American companies
include Apple, Microsoft, Amazon and
Alphabet (the owner of Google) and the
computer graphics specialist Nvidia.
There are 693 companies on the S&P 500
but these five account for about 16 per
cent of the index by market size. A cheap
The ten stocks
powering
the FTSE 100
A drinks giant, miners
and energy companies
are driving stock market
growth, says Ali Hussain

The Sunday Times - UK (2021-12-19)

Get our desktop app

Company

Features

Documentation

Resources