In this week’s MoneyWeek magazine: what the upheaval in Saudi Arabia means for oil and for investors; a fund that’s returned 12% a year for 127 years; and a one-stop shop for global small-cap stocks.
Plus, why you should think twice before buying a new-build house on a private estate; why you should beware of overconfident fund managers, and why annuity-buyers should hold on for better rates.
All that, and our usual collection of news, views and comment from politics, economics and the markets; a roundup of the best share tips from the rest of the financial press, plus a few of our own; personal finance, small business and six pages of how to spend it once you’ve made it. Sign up to MoneyWeek magazine now and you’ll get the magazine delivered to your door, along with full access to the MoneyWeek website and the iphone and smartphone app.
What’s going on in Saudi Arabia and what does it all mean?
Saudi Arabia is going through a radical upheaval. Crown Prince Mohammed bin Salman (MBS) has arrested dozens of high-profile rivals, including the country’s richest man, and is consolidating his grip on power via an “anti-corruption” purge. The country has been almost entirely dependent on income from oil for a long time now, but MBS wants to change that. He unveiled his “Vision 2030” at the start of this year, citing Dubai as an example to follow, with the intention of weaning the country off oil and massively diversifying the economy.
It’s a bold call, and there’s a very long way to go. And a lot could go wrong. Very wrong. But, says, John Stepek in this week’s cover story, “there’s no doubt about it, a more open Saudi Arabia could be a very interesting investment proposition”. Find out exactly what John thinks and how to play it here.
An eclectic and attractive global investment trust
The British Empire Trust may sound a bit old fashioned. But then, to be fair, it was launched back in in 1889, at a time when “the idea of empire didn’t have quite as many detractors – just a sense of global reach and riches”, says Merryn Somerset Webb. It has indeed delivered riches. In its 127 years of existence, it’s returned an average of 12% a year by focusing on buying companies whose share price is trading below the value of their assets. And, while it hasn’t done quite as well as some other one-stop global equity trusts, there’s still plenty about it that’s attractive. Merryn talks to the fund’s manager, Joe Bauernfreund, whose firm has run it for the last 30 years, to find out the secret of its success. Read the interview here.
A one-stop shop for global small caps
Continuing this issue’s rather global theme is fund expert Max King. this week, he’s looking at how to invest in the world’s small-cap companies. “Smaller companies persistently outperform larger companies, not just in the UK, but around the world,” says Max. Unfortunately, however, “global small-cap funds are thin on the ground”. That’s not surprising. With around 30,000 smaller companies around the world identifying the good ones and conducting detailed research is “a huge task”. But it’s not impossible. Max picks two funds that consistently deliver – find out what they are here.
Elsewhere, Cris Heaton sounds a warning on overconfident fund managers – while investors do need a high degree of conviction, he says, “sometimes too much conviction can go badly wrong”. In this week’s Personal View feature, professional investor Rachel Winter picks three top ethical stocks. And David Prosser looks at annuity rates – they’re already on the way up.
Ruth Jackson explains why now’s the time to fix your mortgage, Matthew Lynn looks at the brouhaha surrounding the so-called “Paradise Papers”, and Chris Carter dives into the world of collecting tribal art.
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