View more on these topics

The investment sectors to watch ahead of the election

The expectation of a stronger pound is set to bring investor focus back towards sectors such as general and food retailers as well real estate as the election nears.

Prime Minister Theresa May announced a snap election last month, to be held on 8 June.

After a sharp sell-off ahead of May’s announcement, the pound surged to a five-month high of $1.2729 against the dollar from a low of $1.2513.

This is the opposite to what investors saw after the referendum last June where overseas firms became more attractive than domestic companies, given a significant drop in the pound.

AJ Bell investment director Russ Mould says key names in the general and food retail sectors such as Next, Dunelm and Mothercare could get a boost to their share prices if sterling remains at current levels or appreciates.

The real estate investment trusts and real estate investment services sectors could also benefit from a stronger currency, in addition to falling bond yields and cheaper valuations.

Mould says: “There is a risk that a sudden jump in sterling dampens overseas interest in British assets, but the UK still offers a rule of law and an independent central bank while a strong – or at least more stable – currency could reaffirm the long-term appeal of UK commercial property to potential buyers.”

Progeny Asset Management investment manager David Battersby argues the election will not change the fundamentals and stocks will remain cheap.

He says: “We do not recommend reducing exposure to the UK stockmarket. Some market analysts forecast the FTSE to break 7,800 and there are attractive opportunities in high-yield stocks with sustainable dividends.

“Sectors such as telecoms, oil, support services and pharmaceuticals all offer useful yields looking further ahead.”

But The Share Centre chief executive Richard Stone warns of “sharp and sudden” moves in opinion polls over the next six weeks and says investors should stay alert.

He says: “If investors can ride through the short-term volatility, and assuming opinion polls are right, then a stronger Government with the ability to play a longer negotiating game on Brexit without having to have an eye on an election in 2020 should be a positive outcome for the economy and for markets.”



Fears grow over advisers’ investment due diligence

Concerns are being raised advisers are not carrying out robust due diligence when it comes to fund selection, with insufficient attention paid to asset management charges. Research by Money Marketing suggests many advisers carry out their investment due diligence themselves, but the findings also point to an over-reliance on rating agencies and marketing material from […]

‘No turning back’: What the Article 50 trigger means for investors

The UK has formally started the negotiation process for its exit from the European Union after 44 years as a member. Today, Prime Minister Theresa May has triggered the Article 50 of the Lisbon Treaty which will start a two-year negotiation process for the divorce of Britain from the EU. Earlier today, Britain’s ambassador to […]

Natixis video: Making smarter use of asset classes

Content supplied by Natixis Global Asset Management This video from Natixis Global Asset Management focuses on Active Share. One strategy for the smarter use of equity investments is ensuring you get what you pay for. According to the company, looking at Active Share can give you a better perspective on where performance comes from. Active […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm