1 March 2023
Rob Burgeman, senior investment manager at wealth RBC Brewin Dolphin
“Markets have had a reasonable start to 2023, as fears over inflation ease and interest rates look set to peak lower than anticipated. That is a marked turnaround from where we were this time last year, as the conflict in Ukraine and its knock-on effects spooked investors.
“With many personal allowances set to be cut in April and then be reduced again next year, using as much of your ISA allowance as possible will be more important for the next tax year than it has been in quite some time. Fortunately, ISAs remain unaffected and everyone can still contribute up to £20,000 for the tax year to either a cash or stocks and shares ISA, with the latter tending to outperform the former over the long-term – albeit, past performance is no guarantee of future returns.
“Our smart advice for good ISA stocks is quality companies that have a good chance of share price growth combined with providing a reasonable level of income through dividends. These should compound over the long term and grow within the tax-free ISA wrapper.
“While we would never recommend only holding five stocks, or only investing in that many during any given tax year, for 2023/24 there are five companies we would suggest considering as part of a wider, diversified portfolio:
Unilever
“Unilever operates in the world of fast-moving consumer goods (FMCG) and makes everything from Dove shampoo and deodorants to Walls ice cream. The wonderful thing with a company that owns a broad range of quality brands is that it has some element of pricing power, which enables it to pass on cost increases in higher prices to consumers – a very relevant attribute at the moment. Having recently appointed a new chief executive, Unilever is expected to continue to refine its brand portfolio, focus on growth, and reduce the discount it trades at compared to some of its peers.”
Disney
“The House of Mouse, as it is affectionately known, operates in a broad range of activities in the entertainment and media space. Alongside its eponymous film studios, the company has launched its Disney+ digital streaming service which has attracted vast numbers of subscribers. At the same time, parts of its business that suffered during Covid restrictions – namely its resorts, theme parks and cruise business – look set to rebound strongly over the next year. The return of Bob Iger as CEO is also likely to see a refocus of the business on its core values.”
Booking Holdings
“As Covid restrictions fade away, a holiday-starved population looks poised to storm resorts across the world. Enter Booking Holdings, parent company to Booking.com and Hotels.com amongst other websites. As an organisation, it is poised to disintermediate the hotel chains, offering consumers easy access to a range of hotels with easy cancellations and low costs. Add to this the opportunity to offer value-added services, like airport transfers and day trips/excursions, and the company looks well placed to benefit from these shifts.”
Barclays
“A bank may be a surprise inclusion, but interest rates at current levels create a far more conducive environment for financial institutions to make money, as the gap between what they pay on deposit and the rate at which they lend widens. Of course, with the economy slowing, there remains the danger that banks will disappear under a tidal wave of bad debts and defaults. However, while we agree that there is a slowdown, we do not think it is going to be the kind of uber-sharp contraction that we saw in 2008’s Great Financial Crash. Banks remain cheap, their balance sheets are in fine fettle, and there is the realistic prospect of decent dividends and share buy backs. As such, Barclays is our preferred stock in the sector.”
Diageo
“Some stock market stalwarts are just that for a good reason and Diageo is definitely in this category. It runs a series of premium brands, with strong pricing power and a long runway for growth in a highly fragmented global industry. Almost regardless of the economic environment, Diageo looks poised to continue to deliver decent long-term returns to shareholders.”
Rob Burgeman and his fellow investment managers at RBC Brewin Dolphin put together bespoke investment portfolios for clients based on their long-term objectives and their attitude to risk. The portfolios will have a mixture of hand-picked holdings in them including third party funds and individual stocks that are researched and recommended by RBC Brewin Dolphin’s in-house research team.
Disclaimers
The value of investments, and any income from them, can fall and you may get back less than you invested. This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Investment values may increase or decrease as a result of currency fluctuations. Information is provided only as an example and is not a recommendation to pursue a particular strategy. We or a connected person may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk. Forecasts are not a reliable indicator of future performance. . RBC Brewin Dolphin is a trading name of Brewin Dolphin Limited. Brewin Dolphin Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register reference number 124444).
-ENDS-
PRESS INFORMATION
For further information, please contact:
Peter McFarlane peter.mcfarlane@framecreates.co.uk / Tel: 07412 739 093
Richard Janes richard.janes@brewin.co.uk / Tel: +44 (0) 20 3201 3343
NOTES TO EDITORS
About RBC Brewin Dolphin
RBC Brewin Dolphin is one of the UK and Ireland’s leading wealth managers and traces its origins back to 1762. With £51.7* billion in assets under management, we offer award-winning, personalised wealth management services from bespoke, discretionary investment management to retirement planning and tax-efficient investing.
Our qualified investment managers and financial planners are based in 33 offices across the UK, Jersey and Republic of Ireland. They are committed to the most exacting standards of client service, with long-term thinking and absolute focus on our clients’ needs at the core.
As part of Royal Bank of Canada (RBC), we are now able to draw on the strength of a global financial institution to continue to improve the service we provide to our clients and drive further innovation across our business.
*as at 30th June 2022.
Disclaimers
The value of investments can fall and you may get back less than you invested. RBC Brewin Dolphin is a trading name of Brewin Dolphin Limited. Brewin Dolphin Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register reference number 124444).