Chancellor Philip Hammond’s commitment to funding various schemes covering infrastructure, disruptive technology, science; innovation and R&D could prove beneficial to UK investors, managing director of Chelsea Financial Services Darius McDermott says, including the Woodford Equity Income and Woodford Patient Capital mandates.
“Neil Woodford has a well publicised liking for science research and development and has been a long-term supporter of our universities and fledgling companies,” McDermott says. “The tail of his open-ended fund and his investment trust may well benefit from the increased support and funding for this area of the UK economy.”
Other funds set to benefit include: Man GLG Undervalued Assets; VT Infrastructure Income and Wood Street Microcap.
Man GLG Undervalued Assets has house builders Bovis and Bellway in its top 10 holdings.
“With more money set aside for affordable housing and supporting local infrastructure, house builders should again get a boost,” McDermott says. “Managers Henry Dixon and Jack Barrat have a value style of investing and can have significant weightings in small and medium sized UK companies.”
VT Infrastructure Income is one of several infrastructure funds launched this year. McDermott says its target yield of 5 per cent will appeal to higher-risk investors “looking for more than the 2.2 per cent gross interest promised via the new NS&I product next year, and willing to take on more risk to achieve those potentially better returns”.
Rounding out McDermott’s recommendations is Wood Street Microcap, a highly concentrated, high conviction UK micro-cap fund with a substantial allocation to software and digital businesses.
“The boost (via tax breaks) to smaller companies across the UK will be welcomed after the worries of the Brexit vote,” McDermott says.