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Telegraph
29-03-2025
- Business
- Telegraph
‘I knew nothing when I started investing 40 years ago. Now my Isa is worth £1.7m'
Sign up to the weekly Investor Newsletter for exclusive analysis and content. View the best savings rates on the market right now. In her 30s, Jane Perry took a leap of faith and poured her money into shares, despite knowing 'nothing' about investing. Now at the age of 76, she has reached the status of Isa millionaire, with a portfolio worth £1.7m. She urges everyone, in particular women, to invest, to make their hard-earned money go further. In 1984, Perry was working at a market research bureau 'because that was the only company that didn't seem to discriminate against an unqualified woman arts graduate'. She closely followed the privatisations of the 1980s, as state-owned businesses such as BT and British Gas were floated on the stock market and millions of ordinary people became investors for the first time. 'I came from a family that had absolutely no experience of the stock market at all and I was very dubious about it,' she explains. But she asked a colleague who was 'older, richer and wiser' to explain how it worked. 'I took a deep breath, drained my cash savings account and put in an order for an awful lot of BT shares,' says the mother of two. In the 1980s personal equity plans were introduced to encourage savers to invest in British firms. A Pep allowed you to invest in shares or investment trusts and receive income and capital gains tax-free. They were replaced with Isas in 1999. Perry opened her Pep with NatWest in 1987, putting in £2,400, and made her first investment in consumer goods giant Unilever, which today owns iconic brands such as Marmite, Persil, Dove and Colman's mustard. But later that year Black Monday struck and the stock market crashed. She was so unimpressed with NatWest's handling of the crisis that she moved her Pep to Alliance Trust Savings (now part of stockbroker Interactive Investor) after using the trade press and national newspapers to research the best options. 'They offered to manage a Pep for you for free as long as you bought at least one Alliance Trust share, and if they were running it for free I could afford to buy a few shares,' she says, 'Even if Alliance Trust (now renamed Alliance Witan) was completely disastrous, I was avoiding the high costs of NatWest.' Perry, who lives in London with one of her sons, put half her original sum into Unilever shares, and the other half into communications company WPP. The next monthly standing order that she opted for was a regular investment into Foreign & Colonial, Britain's oldest investment company. Perry discovered which investment trusts were doing well and how to invest her money through the Association of Investment Companies, the trade body for the sector, which printed monthly newsletters and hosted events. She appreciated their 'unbiased' nature: 'You were never quite sure if someone else was recommending something because they had an interest in it.' Despite having been a complete novice, Perry says she quickly became sure of herself. As she grew in confidence, she started attending the AGMs of the firms she invested in: 'They invited you for a chat and a glass of wine and they were very pleasant events.' Perry didn't come from a large amount of family money, and was 'always slightly averse to spending it unnecessarily'. 'We were not very rich when I was a child and I never wanted to be poor,' she says, explaining her motivation for investing so there was 'no danger of running out of money in the future'. She didn't choose a cash savings account because she didn't anticipate ever having to withdraw her money in an emergency. She had a steady job and was confident in her investments. My biggest mistake In her 40-plus years of experience, only one investment trust investment turned out badly, she says: the Woodford Patient Capital trust. Launched by former star fund manager Neil Woodford, who suffered a spectacular fall from grace, it is now known as The Schroders Capital Global Innovation Trust. The fund has lost 90pc of its value since it launched, with losses mounting after Mr Woodford's investment empire collapsed in 2019. Perry has invested the maximum allowed each year and has only ever made one withdrawal – £150,000 a few years ago for a family emergency. Her returns 'fluctuated' but she always reinvested dividends and 'the magic of compounding ensured that the total value went up relentlessly'. Looking forward, Perry is thinking about how she can leave her wealth to her sons in the most tax-efficient way possible. She has already signed her home away to them but her Isa holds an even more special place in her heart. 'I have an emotional attachment to my Isa. I've had it for a very long time, it's done me very well. I don't want to break it up and give it away so I think that'll be the last thing to go.' She retired in 2003 and now spends a day a week volunteering at the Victoria and Albert Museum, cataloguing jewellery collections. She has also written a book for the museum, Traditional Jewellery in Nineteenth-Century Europe and given numerous talks on what has become her specialist subject. Perry has thrived in the still male-dominated world of investing and wants to encourage women to break free from cash Isas, which are incredibly popular but do not have the same potential to generate life-changing returns. The so-called gender Isa gap stands at £6.6bn, according to HMRC. This gap is most pronounced among 30- to 39-year-olds, when women have 46pc less money invested than men. 'There are very few women that I meet on the investment trust AGM circuit. You see the same faces and meet the same people and they're almost all men,' says Perry. Perry believes that women sometimes lack the confidence to start investing, and too often think that it's better suited to men. 'I would absolutely encourage women to invest. You don't have to know anything about it. 'Invest small sums regularly and pick a large global investment trust, they're easy enough to find, they've been around for years – centuries in some cases – their dividend is as secure as almost anything can be,' she advises. Perry's advice: confidence is key. 'I've been through Black Monday, the dot-com crisis of 2000 and the banking crisis of 2008. Each time everybody says 'this time is different,' but it never is.
Telegraph
29-03-2025
- Business
- Telegraph
Buy junk bonds, lean hogs or soybeans
Sign up to the weekly Investor Newsletter for exclusive analysis and content. Do you actually know anything about whisky? Sure, you might know Laphroaig is that peaty one, whether or not to include an 'e' and what the barrel economy is. Maybe you've heard of the angels' share and know why you can't find a 39pc whisky. You might know why Macallan 1926 is an important bottle or how to pronounce 'quaich'. But are you aware of what the reform of WOWGR means for you? Can you explain the difference between OLA and RLA and whether AYS would affect that? Or know how many times VAT is due from the time you purchase a cask to it landing in your glass? However tempting that advert on Facebook offering returns of 18pc a year and a chart showing that whisky outperforms gold and every stock market, let this be your pause for thought. The chances that you are in any position to invest in whisky are, for all intents and purposes, zero. Disregarding the potential for it to be outright fraud, even the most scrupulous and legitimate proposal should be ringing very loud alarm bells for an investor. For a start, the whisky cask investment world is entirely unregulated. There are no protections offered by the Financial Conduct Authority, and you have no recourse with either the Financial Ombudsman Service or the Financial Services Compensation Scheme. Even the advertising of these schemes is so misleading that the Advertising Standards Authority issued a widespread enforcement notice against the concept of it. The City of London Police was compelled to press release a warning – not for the potential fraud, but simply the deceptive marketing. Nobody seems to have paid much attention to this though, with whisky cask websites still strewn with promises that your cask will increase in value and assertions they outperform markets. There are cherry-picked charts showing the performance of a backdated whisky 'index' to seemingly random points in time, a move that would get a regulated fund manager in real trouble. But let's say you've done all of your research, found one of the genuine brokers offering legitimate and transparent investment in whisky casks, of which there are a few, and are keen to plough your cash into casks. Have you actually considered the investment proposition at hand? This could not be a less diversified investment. Even buying a single stock or one particular gilt is a better spread of risk thousands of times over. Hell, a share in a tiny whisky producer is significantly more diversified. That one share represents a slice of every single cask they own, all of the distribution networks they have established, the legacy and power of that producer's name, bottling, labelling and manufacturing costs, all taxes, debts and earnings accounted for. That investment represents thousands of whisky casks, so when a few of them inevitably succumb to rotting or tasting foul or not meeting the legal definition of whisky, your eggs aren't all in that singular cask. Let's say by some miraculous coincidence you do manage to pick a particular cask that winds up worth 10,000pc more than you paid for it. How long do you think you have to wait for that ship to come in? Most of the websites suggest that a cask should be considered an investment of at least 10 years. But you know in your heart you wouldn't be impressed if somebody gave you a 10-year-old whisky for your retirement gift, would you? We're talking decades to have your money locked up in a dream that could become a nightmare at a moment's notice. Fine, you've done your research, considered the proposition in full and you're comfortable with staking your capital for decades at the risk of losing it all. Before you commit, here's a potted selection of every other investment you should consider before venturing into the deep space of this most distant of satellite holdings. Global index funds, US index funds, UK index funds, European index funds, emerging market index funds, actively managed funds of each of the above, actively managed funds targeting financial sectors, tech sectors, consumer sectors, individual stocks, bonds, gilts, Treasuries, junk bonds. Buy a house, buy a second house, buy a holiday let. Have you maxed out your Isa? Have you maxed out your premium bonds? Buy some VCTs, some EIS, some SEIS. Invest in Aim stocks, and buy some private equity. Do you own gold? Silver? Uranium, copper, platinum? Do you have a position in lean hogs, soybeans and wheat? Carbon credits, oil, gas, wind farms, solar farms, regular farms. Have you considered wine? If the answer to any of the above is no, then, like me, scam or not, you shouldn't be investing in whisky.
Telegraph
22-03-2025
- Business
- Telegraph
Are you a risk-taker? Take our test and see your investment options
When it comes to investing, knowing your risk appetite is more than just a consideration – it's the foundation of a sound financial strategy. Every investment carries a level of uncertainty, and your ability to navigate any fluctuations in the market will depend on how well you understand what's called your 'personal risk appetite'. Put simply, it's how comfortable you are with your investments potentially losing a lot of their value during turbulent times, and whether a high level of discomfort is going to lead you to make hasty decisions that could be bad for your money. Your risk appetite might be influenced by your age and financial circumstances. A younger person in a comfortable financial position may be far more laid back about market volatility than a pensioner who has earmarked the money to be used in retirement. By assessing your risk profile, you can build an investment portfolio that balances growth opportunities with the ups and downs that you're willing and able to stomach. This short quiz features some of the questions you should be asking yourself before you start investing to identify your risk appetite, and the actions you should take once you know what kind of investor you are. For daily stockpicking advice, read The Telegraph's Questor column, which offers insights on where to invest and how to decode the markets. Whatever your result, be sure to sign up to the weekly Investor Newsletter for exclusive analysis and content. Other considerations Your risk appetite may be more nuanced than the definitions outlined in your results. For example, you might consider yourself a 'high risk' investor, but would prefer to take a more cautious approach with some of your portfolio – this could be the case if you have financial goals with shorter timeframes. While gilts and bonds don't usually rival the stock market when it comes to outsized returns, they are a good option to consider when diversifying your investment portfolio, as they offer a more reliable and steadier source of income to counterbalance more adventurous investments. Another thing to factor in – and something that runs adjacent to risk appetite – is your capacity to bear investment losses. What this means is that, while you might be happy with the possibility of losing lots of money, you must be able to afford to.
Telegraph
28-02-2025
- Business
- Telegraph
‘I don't care if you love or hate Elon Musk – he's the entrepreneur of our generation'
Fund Of The Week quizzes fund managers about how they're investing your money. If you'd like to suggest which funds you want to hear about and pitch your questions to the managers, sign up to the Investor Newsletter here for more details. Britain's sleepy and discounted investment trust industry received an unwelcome wake-up call in December when Saba Capital Management, the American hedge fund, forced general meetings at seven investment trusts after building significant stakes. Their intention was to take over the trusts after ousting the boards and managers. Edinburgh Worldwide, which invests in public and private growth companies, featured among Saba's initial seven targets. On Valentine's Day, close to 64pc of votes cast by its shareholders rejected Saba's proposals, an outcome that marked the hedge fund's seventh straight defeat. Douglas Brodie, Edinburgh Worldwide's manager describes these votes as a 'test of shareholder democracy'. Nevertheless, he acknowledges the challenges associated with having a large shareholder who is actively disengaged with the investment strategy and not aligned with other shareholders. Mr Brodie, a backer of SpaceX, also tells Telegraph Money why Elon Musk's new role in the administration of Donald Trump, the American president, is not a source of concern. Shares in Edinburgh Worldwide are up by 22pc over the past 12 months, which compares to the average 11pc gain achieved by rival global smaller companies trusts. However, over five years, the trust's share price has fallen 12pc, while its competitors have risen by 25pc. Edinburgh Worldwide, which is also managed by Svetlana Viteva and Luke Ward, trades at a 5pc discount to its assets. How do you invest? We have long been intrigued by the role of technology and the scientific drivers of change. With this in mind, we seek to find entrepreneurial, innovative companies when they are young, investing when they are below the radar of mainstream global investors. We try to identify these special businesses and hold them as they grow and thrive. How are you feeling after the recent shareholder vote to fend off Saba? I think the whole process for us and the other trusts was a real test of shareholder democracy. It was pleasing to see the results and engagement among the shareholder base. We thought it was a hugely important topic for shareholders to engage with because the proposition that Saba put before them was a radical change in the investment proposition that came with a lot of conflicts and challenges, and a clear change of remit. At Edinburgh Worldwide, we try to find the most interesting, relevant, long-term businesses that are trying to drive change and innovate. By comparison, the tentative narrative Saba put out was about building a strategy around arbitrage by trading investment trust discounts. It is the classic contradiction of long-term investment versus trading. Ordinarily, those worlds don't meet that often, but they did in this case. It is encouraging to see shareholders who bought into our long-term investment strategy backing that strategy. Do you suspect there could be further proposals from Saba? If so, what shape could they take? I have no insight on that. However, I think it is odd that the largest shareholder in Edinburgh Worldwide is actively disengaged with the strategy. We have offered to meet Saba but they show no interest in meeting. I don't know what their strategy is – to some extent I don't think they know. I'm not being overly critical here, but they seem to be building it as they go. Given Saba has a 25pc stake in the trust, are you and the board thinking about how they will offload that? That is more of a question for the board than for me. The board is willing to return up to £130m to shareholders during the course of the year, I think it is front and centre for them. We have a shareholder who is not aligned with the strategy or the other shareholders. The vote in favour of Edinburgh Worldwide's strategy, as was the case for the other trusts, is telling in that regard. Why did Edinburgh Worldwide's performance struggle between 2021 and 2024? We have come through a difficult period for a lot of growth and smaller company investors. If you consider our particular slant on smaller company investing, where in some cases we back high-potential but unproven businesses, it has been very challenging. These are businesses that are all about the future, and all of a sudden, the stock market's lens condensed to the here and now. Market volatility was also a lot higher than we would have liked or expected. Performance clearly disappointed over that period. It gave us an opportunity to pause and think about the long-term positioning of the fund. We have a spectrum of company maturities in the portfolio – some are very early high potential businesses which have a lot to prove, some are proving themselves and delivering, while others are performing at scale and beginning to dominate their markets. We are now more conscious about the spread of companies in the portfolio. Also, we have better rules and discipline to avoid country or industry skews that may have crept in. We have been through a process of kicking the tyres and have deployed new processes. How do you view Mr Musk's role in President Trump's administration? We have invested in Elon-backed companies since 2013. I believe he is the entrepreneur of his generation. Throughout that time, he has worn multiple hats and has a phenomenal bandwidth for doing that. So the political aspect to Mr Musk's new role isn't a concern? I don't ask the management teams of the companies I invest in to fill out a political questionnaire so I can form views around their political opinions. I am backing them to build businesses. Elon has a track record that is second to none of doing that. What is your typical success rate picking stocks? If you look at our long-term returns, about 20pc of our names deliver the bulk. Typically, you also have a pool of companies that wash their face and do okay and a pool of companies that underperform relative to your hypothesis. Some of the successful companies can become quite big in the context of the fund, so it is a strategy that benefits from 'investment asymmetry'. We get into these businesses on the ground floor, when they have huge runways for growth, but they then have to execute their plans well. Axon Enterprises, which makes taser devices and body-worn cameras, is a good example. It has been a phenomenal investment for us. The management team has executed brilliantly and it continues to redefine its end-markets. What has been your best investment? SpaceX is up in the order of more than 600pc over the past five years. It is rare you come across a company that has redefined what is possible in its industry – the opportunities are exploding in front of them. If you think about how the world has evolved over the last few years, people put extra importance on geopolitical tension points. You probably have to view SpaceX and Starlink (SpaceX's satellite network and telecommunications business) as the most geopolitically important assets out there if they have the advantage we think they do, versus others for getting objects into orbit and controlling low earth orbit geostationary satellites. When do you think SpaceX will go public? Elon and SpaceX have said Starlink is cashflow positive. Most companies list when they need access to capital, but it isn't obvious that SpaceX needs capital. Elon and the board will list the business when they believe it is a natural point to do that. What has been your worst investment? Online supermarket, Ocado, is down roughly 70pc over five years. If you go back to the start of that five-year period, the industry was beginning to properly embrace e-commerce and scalable ways of doing that. Ocado did very well in that initial period and was a Covid beneficiary, signing multiple partnership deals around the world. Demand is still very much there at the consumer level, but from Ocado's perspective, it is about tailoring their offering for individual partners whose starting points and requirements are different. The lesson we learned is that Ocado isn't a 'plug and play' solution for everyone. The UK is a very interesting test case because we think the returns are there, but you have to build to fit the opportunity. And the opportunity is different in every territory you go to.
Telegraph
19-02-2025
- Business
- Telegraph
‘We made 434pc on one stock – now we're hunting for the next Ozempic'
Fund Of The Week quizzes fund managers about how they're investing your money. If you'd like to suggest which funds you want to hear about and pitch your questions to the managers, sign up to the Investor Newsletter here for more details. Healthcare investors have had a disastrous time of late. Over the past five years, the average biotech and healthcare investment trust has fallen 13pc, losing money during a period in which the FTSE 100 and S&P 500 hit record highs. However, in Polar Capital Global Healthcare trust, investors will find an extreme outlier – over the same period, the vehicle has offered a total return of 60pc. Its manager, Gareth Powell, sits down with Telegraph Money to explain what has worked for the team and why it will continue to grow. He discusses the difficulties the new American health secretary will bring for the sector, and explores why his team is looking beyond incumbents Novo Nordisk and Eli Lilly for the next generation of weight-loss drugs. Polar Capital Global Healthcare, which is co-managed by James Douglas, currently trades at a 3pc discount to its assets. How do you invest? We try to find aspects of healthcare stocks that aren't widely understood. Essentially, we look for inefficiencies in these stocks – we try to go into greater detail and we add value with financial analysis and a focus on valuation to find the best ideas. What does president Donald Trump mean for American healthcare stocks? Normally as an investor in healthcare, you are more scared about a Democrat president or big wins in Congress for Democrats because they favour greater government involvement, which means less of a free market. You would have thought we would be jumping up and down with glee about the election result. However, Mr Trump announced his nomination for health secretary as Robert F Kennedy Jr, who doesn't have any expertise in the space and has lots of conspiracy theory-driven views on healthcare. He has caused a huge degree of uncertainty for the sector. Mr Trump is very focused on the government spending less money, so we expect to see an impact on government-covered healthcare, particularly Medicaid, the health insurance exchanges and healthcare providers. There are stocks in the service sector that could potentially get hurt and stocks exposed to vaccines will also be impacted by Mr Kennedy in the role. Overall, I am optimistic on the healthcare sector, given how cheap and out of favour it is. The outcomes are never as bad as people fear at the time. How do you think the weight-loss drug craze will play out? There was initially a lot of enthusiasm. Prescription trends were very strong and the stocks moved in line with that. However, they have moderated over the last few months due to negative news flow and poor sentiment towards healthcare stocks. There is now a huge amount of negativity, so these stocks warrant a fresh look. I think what's critical in the short term is improving prescription trends – the market opportunity is still there. These drugs are very powerful, but there are lots of moving parts in the short to medium term, like 'reimbursement access' (whether the medication is covered or reimbursed by health insurers), and how long patients use these drugs while experiencing side effects. Novo Nordisk and Eli Lilly are investing heavily, trying to develop other candidates, but we are not just focused on Novo and Lilly – there are others coming. Development will focus on whether the drugs are administered orally or via injection, and whether the time between doses can be pushed out. Also, can you have different mechanisms with better side effects? Is artificial intelligence (AI) going to shake up healthcare? Investors are buying stocks like chipmaker Nvidia, which provides the hardware for AI. This is how these things start with a tech cycle. The second stage will be about making AI more user-friendly and available in different formats. I think healthcare will be a beneficiary during the third stage and will use AI to become more efficient. For example, AI could be used in image analysis. When patients go for scans, AI-driven capability can read images rather than relying on doctors. There is a real opportunity there and I think this is just the start. AI could also be used to enrol clinical trials faster by accessing patient records and quickly identifying patients over a wide geographic area. This would be a game changer. People suggest new drugs will come from AI. I think it can help the process, but what I have seen in 25 years of investing in healthcare is that big innovations for diseases come through the identification of a new target. AI is based on historical data – if you are looking for a new target, you still need to be doing the biology. What has been your best investment? Argenx, an immunology company that focuses on treatments for severe autoimmune diseases, is up 434pc over the past five years. It successfully developed a product called Vyvgart for a rare neurological condition, servicing a big unmet need. It also recently got an 'indication' (the specific use of a drug based on its demonstrated effects) for another rare condition called chronic inflammatory demyelinating polyneuropathy, filling a further unmet need. It is already a blockbuster drug, generating more than a billion dollars annually in sales, so it has got significant potential. What has been your worst investment? A blood diagnostics company called Quotient. We had a period where it was making good money and then it just sadly fell apart. It got heavily delayed by Covid, and as the company was developing new technology, there was a need for capital. There was a huge stock market bubble, followed by a collapse, then interest rates went up and so did the cost of capital. Sadly, it ended up as a very poor investment. It delisted and essentially went to zero. We got out before that, but not at a great price. The shares were down 99.9pc when we sold in December 2022.
