This week in MoneyWeek: how to reduce your inheritance-tax bill, the best mining stock to buy now, and why the best thing to do about Brexit is to just ignore it.
On top of that, we look at the exodus from UK real estate funds, ask which stock index is the best gauge of Britain’s economic health, and explain the mechanics of leaving the EU.
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Five small-caps to safeguard your inheritance
In this week’s cover story, we’re talking about death. One way or another, it will come to us all. And for some of us, it could prove very expensive – inheritance tax is charged at 40% of your estate above £325,000 (£650,000 for a couple).
But “the good news”, says John Stepek, is that “there are several ways to protect your assets”.
“One of the less well-known options”, he says, is to “invest in assets that qualify for business property relief.” To qualify, a business cannot be listed on a “recognised stock exchange”, and its main business “cannot be investing in other businesses or property”, which excludes investment trusts, for example. But it does include businesses listed on London’s Alternative Investment Market (AIM).
The trouble with small-cap stocks is that they’re notoriously risky. And “there’s no point in careful IHT planning if you only save on tax because you’ve lost all your money”, says John.
That’s where analyst and private investor Richard Beddard comes in. He’s picked five stocks that are worth buying regardless of their status with regards to business property relief. Find out what they are by sign up for MoneyWeek magazine.
Brexit? Forget about it
This week our editor in chief, Merryn Somerset Webb, interviews fund managers Nick Train and Michael Lindsell. They buy “quality, cash-generative businesses that they view as undervalued by the market” and hold them for the long term.
The key phrase there is “long term”. The EU referendum has generated an awful lot of column inches and cause and whole lot of chest beating. But, say Lindsell and Train, the short-term market reaction is “irrelevant” – 3% here or there isn’t unusual. In fact, the fall in the pound is good for people who own overseas stocks. And “in the very long term”, says Lindsell, “it is not significant for the companies we own”.
Find out how they’re calmly investing while all around are losing their heads with sign up for MoneyWeek magazine.
The world’s strongest miner
Mining stocks have been out of favour for a while, as commodity prices have slumped in tandem with China’s slowdown. But in this week’s share pages, Alex Williams looks at one big miner that’s emerging from the downturn as the strongest player in the field. Even at the bottom of the market, it was profitable, and with a new CEO on board, it could prove a handsome investment.
Alex also brings you his usual roundup of the best share tips from the rest of the UK press.
How to gauge the health of UK plc
The FTSE 100 is the most widely-quoted of Britain’s stock indexes. But it’s made up of an awful lot of multinational businesses, or UK-based businesses that make their money abroad. For that reason, it’s not necessarily the best barometer of Britain’s economic health, says Matthew Partridge. HSBC, for instance, accounts for 5% of the index, but “the UK accounts for less than a quarter of its assets and revenues”.
The FTSE 250, however, “is much more focused on the domestic economy”. On top of that, you have the FTSE 350 and FTSE All-Share. Which one should you follow if you want to keep tabs on companies that rely on the domestic economy? Matthew explains it all.
The beginning of the end for UK commercial property?
At the time the magazine went to print, three major UK real-estate funds had suspended trading in their shares as investors withdrew their money in the wake of the EU referendum result. By the time I was writing this, that number had grown to six. Who knows how many will have suspended trading by now?
Sarah Moore looks at the implications for investors, and explains why in times like these, investment trusts are a much better alternative to open-ended funds.
Natalie Stanton asks “How safe is your SIPP?”, we explore the rising rate of defaults in P2P finance, and examine what effect leaving the EU could have on our finance industry. Plus, Matthew Lynn asks if the experts got it wrong on Brexit, and Simon Wilson explains the procedures for pulling out of the EU once article 50 has been invoked.
All that, plus much, much, more – including all our regular features. Why not sign up for MoneyWeek magazine?