{"id":16074,"date":"2023-12-03T18:22:56","date_gmt":"2023-12-03T18:22:56","guid":{"rendered":"https:\/\/www.brewin.co.uk\/group\/?post_type=rbcwm_news&p=16074"},"modified":"2024-03-27T14:46:48","modified_gmt":"2024-03-27T14:46:48","slug":"four-investment-trends-for-2024-and-how-to-play-them","status":"publish","type":"rbcwm_news","link":"https:\/\/www.brewin.co.uk\/group\/media\/news-and-comments\/2023-12\/four-investment-trends-for-2024-and-how-to-play-them","title":{"rendered":"Four investment trends for 2024 \u2013 and how to play them"},"content":{"rendered":"\n

Rob Burgeman, senior investment manager at RBC Brewin Dolphin<\/em><\/h2>\n\n\n\n

It has been another unpredictable and challenging 12 months for investors \u2013 but so has every year since the outbreak of the Covid-19 pandemic. As the old clich\u00e9 goes, if there is one thing that is constant, it is change, and that is only going to be the case as we continue moving forward.<\/p>\n\n\n\n

The central prognosis for 2024 from the majority of economists is that inflation will continue to ease and interest rates will start to fall \u2013 we don\u2019t know when and by how much, but there is largely consensus on those two points. If you accept that as the starting point for next year, then there are a few trends that seem likely to follow.<\/p>\n\n\n\n

As in any year, there will be unexpected and unforeseeable developments. Taking professional financial advice will help you be as prepared as possible for these types of eventualities, with a well-balanced portfolio of risk-adjusted assets.<\/p>\n\n\n\n

A green rebound<\/strong><\/p>\n\n\n\n

One of the big trends of the Covid-19 pandemic was the growing popularity of investments with strong sustainability credentials. In its aftermath, however, many of those funds fell out of favour and the gains they made between 2020 and 2022 unwound last year.<\/p>\n\n\n\n

Could next year be better for that area? Probably, yes. The drivers behind these investments are still there. While there was a wave of investment going into a range of different technologies, not all of them will work out, some were overly reliant on subsidies, valuations became unrealistic, and there was inevitably going to be some sort of correction. But, a lot of that has been flushed out and this segment of the market will be stronger for it.<\/p>\n\n\n\n

The Schroder Global Energy Transition Fund<\/strong> could be one way of playing this theme next year. It invests in a variety of companies related to the energy transition, ranging from renewable technology to electric vehicles and chemicals. It has a good geographical spread and, although is down for the year, has been more resilient than the wider sector.<\/p>\n\n\n\n

Another option is JLEN Environmental Assets Group<\/strong>, which is a FTSE 250-listed investment trust focussed on environmental infrastructure. Its portfolio includes a range of assets you\u2019d typically expect, such as wind and solar electricity generation infrastructure, but it also includes waste and wastewater processing, anaerobic digestion, and battery storage facilities. The shares have suffered over the last 12 months, but its portfolio is still robust and well diversified, with strong results out recently and a commitment to capital growth and increasing its dividend.<\/p>\n\n\n\n

A broader tech recovery<\/strong><\/p>\n\n\n\n

2022 was for tech what this year has been for what many consider sustainability plays. But the likes of Meta and Amazon have seen their share prices rally significantly in the last 12 months, as sentiment changed towards the sector.<\/p>\n\n\n\n

However, that rally has not been very broad. The so-called Magnificent Seven \u2013 Alphabet, Amazon, Apple, Microsoft, Nvidia, Meta, and Tesla \u2013 have dominated S&P 500 returns, while others in tech have continued to struggle in the face of higher interest rates. That could be about to change next year as interest rates go into reverse and some of the longer-term tech plays come back into fashion.<\/p>\n\n\n\n

Polar Capital Technology Trust <\/strong>is one way of getting exposure to the sector on a global scale. The trust includes the big US players among its holdings \u2013 including Apple, Microsoft, and Meta \u2013 but also offers exposure to smaller tech and companies from other parts of the world, such as Taiwan Semiconductor Manufacturing Company. However, it is worth bearing in mind that the trust comes with performance-related fees, which can make it an expensive choice.<\/p>\n\n\n\n

Alternatives could be the likes of Allianz Technology Trust<\/strong> and Blackrock\u2019s Next Generation Technology Fund<\/strong>. The former includes many of the same names as the Polar Capital trust, while the latter has Nvidia and Tesla among its top holdings alongside a number of less familiar names such as Lattice Semiconductor.<\/p>\n\n\n\n

The most straightforward way to get exposure to tech may be a Nasdaq tracker, such as the iShares Nasdaq 100 ETF<\/strong>. But, be wary of its punchy concentration \u2013 the top five holdings account for around 40% of the index, which can make it volatile. That said, if a new tech giant emerges then it will also likely be listed here.<\/p>\n\n\n\n

A closing gap between large and small caps<\/strong><\/p>\n\n\n\n

While large cap companies have weathered the last couple of years relatively well, mid and small caps have generally suffered more. Again, this tends to be a function of rising interest rates, with smaller businesses more susceptible to the economic environment and the cost of debt, among other factors. In turn, it has affected active fund managers \u2013 of which there are more in the smaller cap universe \u2013 than it has passives.<\/p>\n\n\n\n

A changing interest rate environment should make things easier for the likes of Abrdn UK Smaller Companies<\/strong>. The fund has had a tough year, with a new management team taking the reins at an unfortunate time. It includes the likes of 4IMPRINT Group, Cranswick, and Hollywood Bowl among its top holdings and, all things being equal, should benefit as interest rates fall and the economic picture in the UK improves.<\/p>\n\n\n\n

For more of an international spread, an ETF such as iShares MSCI World Small Cap<\/strong> could be an option. It offers exposure to more than 3,300 different small cap companies across the world and is relatively cheap at an ongoing cost of 0.35%<\/p>\n\n\n\n

A golden lining<\/strong><\/p>\n\n\n\n

Gold has recently approached new all-time highs as the dollar has weakened. Traditionally, investors who have favoured gold \u2013 so-called \u2018gold bugs\u2019 \u2013 have been notoriously pessimistic about the world\u2019s economic fortunes. The precious metal tends to have a negative correlation with equity markets \u2013 in other words, its price typically rises when the stock market falls and vice-versa.<\/p>\n\n\n\n

If the world economy falls into disrepair, gold will ultimately have limited use. The last time I checked, you can\u2019t pay for your shopping with precious metals. But, it is a form of insurance policy and usually warrants a place in most people\u2019s portfolios.<\/p>\n\n\n\n

Some people are tempted to get exposure to gold through gold miners. However, these companies often operate in difficult parts of the world, which can incur a degree of political risk and cost. A gold spot ETF, such a WisdomTree Physical Gold<\/strong>, iShares Physical Gold<\/strong>, or Amundi Physical Gold <\/strong>should do the trick.<\/p>\n\n\n\n

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\u2019s in-house research team.<\/em><\/p>\n\n\n\n

Disclaimers<\/strong><\/p>\n\n\n\n

The value of investments can fall and you may get back less than you invested. 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<\/a>. Information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. We will only be bound by specific investment restrictions which have been requested by you and agreed by us. The criteria for a sustainable investment are still under development and can change. Please make sure you understand the objective and environmental, social and governance (\u201cESG\u201d) characteristics of the product or service you invest in. Be aware a strategy, based on securities of companies which maintain strong ESG credentials, may result in a return that compares unfavourably to similar investments without such focus.<\/p>\n\n\n\n

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) and regulated in Jersey by the Financial Services Commission. Registered Office: 12 Smithfield Street, London, EC1A 9BD. Registered in England and Wales company number: 2135876. VAT number: GB 365 3456 40.<\/p>\n\n\n\n

– ENDS –<\/strong><\/p>\n\n\n\n

PRESS INFORMATION<\/strong><\/p>\n\n\n\n

For further information, please contact:<\/p>\n\n\n\n

Richard Janes richard.janes@brewin.co.uk<\/a> \/ Tel: +44 (0) 20 3201 3343<\/p>\n\n\n\n

Si\u00e2n Robertson: Sian.Robertson@brewin.co.uk<\/a> \/ Tel: +44 (0) 20 3201 3026<\/p>\n\n\n\n

Payal Nair payal.nair@brewin.co.uk<\/a>  \/ Tel: +44 (0) 20 3201 3342<\/p>\n\n\n\n

NOTES TO EDITORS<\/strong><\/p>\n\n\n\n

About RBC Brewin Dolphin<\/strong><\/p>\n\n\n\n

RBC Brewin Dolphin<\/a> is one of the UK and Ireland\u2019s leading wealth managers and traces its origins back to 1762. With \u00a351.8* 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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

As part of Royal Bank of Canada<\/a> (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.<\/p>\n\n\n\n

*as at 31st<\/sup> October 2023.<\/p>\n\n\n\n

Disclaimers<\/p>\n\n\n\n

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).<\/p>\n\n\n\n

About RBC<\/strong><\/p>\n\n\n\n

Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 94,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada\u2019s biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com<\/a>. We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com\/community-social-impact<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

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