National Savings & Investments (NS&I) has mostly avoided controversy during its 162-year history.

But the Treasury-sponsored institution has shamed the banks – and made private investors consider their options – with the launch this month of its Guaranteed Growth Bonds and Guaranteed Income Bonds.

Both pay a fixed rate of 6.2 per cent – better than anything available from the High Street banking names. Also a 100 per cent guarantee covers every penny entrusted to NS&I. You can shield a chunk of your cash in this safety-first option which gives you scope to explore more adventurous long-term income opportunities.

Some of these lie in the investment trust sector which also has its beginnings in the Victorian era of thrift.

At present, some income trusts offer dividend yields of 4 per cent-plus. Partly as a result of higher interest rates, their share prices are at a deep discount to the value of their net assets, making them an attractive growth prospect.

If a trust is at a 10 per cent discount, you are getting £1 worth of shares for 90p. This could turn out to be a bargain, if you are ready for a gamble.

Nick Wood, head of fund research at wealth managers Quilter Cheviot, highlights Murray Income Trust, which is currently trading at a discount of 9.04 per cent, with a 4.6 per cent yield.

He says: ‘The trust, which has just celebrated its 50th successive year of dividend increases, invests in higher-quality UK companies. Performance has been slightly weaker in the past three years, but we have conviction in its manager Charles Luke to perform well going forwards, as our home market looks relatively cheap.’

Diverse Income represents another bet on UK market revival. The trust, which yields 5 per cent and is at an 8.11 per cent discount, holds a mix of businesses, including the £18.75billion supermarket giant Tesco and the £166million travel operator Hostelworld.

Its managers, Gervais Williams and Martin Turner, believe the prospects for the trust’s strategy are the greatest they have been for 30 years.

‘Alternative’ income trusts that invest in areas such as ‘big box’ logistics, infrastructure projects, pop music rights and renewable energies have been particularly hard hit by interest rate rises. 

As a result, some stand at discounts of 30 per cent or more. Wood cites as one example the International Public Partnerships Trust which invests in high-quality infrastructure projects in the UK, the US, Australia and Europe, earning inflation-linked revenues from some.

He says: ‘This trust – which is at a 17 per cent discount – is among our highest convictions. The yield is a little over 6 per cent.’

The depth of the discounts has sparked talk of trust mergers which could narrow the discounts.

There is also bid speculation. The £460million Round Hill Music Royalty trust, which holds rights to the hits of Alice Cooper, Bruno Mars, Louis Armstrong and others, is be acquired by Alchemy, a US company.

The deal sparked a 61 per cent rise in Round Hill Music’s price. Some observers claim that the next target could be the £1.2billion Hipgnosis trust – its artists include Blondie, Stormzy and Ed Sheeran –although the brokers Jefferies contends that its size is an obstacle. This week Hipgnosis said it would sell some catalogues, but this statement further increased the discount to 41.8 per cent.

Ben Yearsley, of Shore Financial Planning, says concerns over valuations have widened the discounts on renewable energy trusts, overshadowing their inflation-proofed revenues.

Yearsley says: ‘Take for example, Downing Renewables & Infrastructure, which yields 5.88 per cent and is on a 25 per cent discount. It invests in hydro and solar and has this year acquired a grid network in Sweden.

‘Harmony Energy Income Trust, which focuses on battery storage projects, like the Bumpers Solar Farm in Buckinghamshire, last week sold one of its holdings at above asset value which ought to allay some fears about valuations. It stands at a 24 per cent discount and yields 9 per cent.’ 

GCP Infrastructure has an even wider discount of 34.8 per cent – and yields 9.8 per cent. This will raise eyebrows, but Matthew Read, at the analytics group QuotedData, points to the trust’s inflation-proofed revenues from its portfolio of UK infrastructure debt.

Read says that the Abrdn European Logistics Income trust is at 30.8 per cent discount despite strong demand for its ‘big box’ logistics and ‘last mile’ urban warehouses.

This trust is my alternative income pick. I believe the market’s perception of its prospects is overly pessimistic. I would be happy to have money in these assets, even if they were not discounted.

I have also put savings into NS&I’s new bonds which require you to lock your cash away for a year. There is no certainty that income trusts’ share prices will rebound by next autumn, but therein lies the excitement of investing.

Every child could get £1,000 pot to invest in plan to revive ‘stagnant’ economy

By Daily Mail City & Finance Reporter

Updated: 18:37 EDT, 6 September 2023

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The Government must be prepared to ramp-up investment in Britain if the private sector is to back the country and the economy is to thrive, the chief executive of Aviva Investors has told This is Money in an exclusive interview.

Mark Versey, who has led the insurer’s £223billion asset management unit since 2021, also highlighted the importance of rebuilding market confidence in certainty of UK policy after a volatile few years, particularly if the country is to successfully transition to net zero by 2050.

Britain has long been regarded as a laggard in terms of investment but this trend has worsened in recent years, with the country ranking the lowest among G7 peers and as one of the worst performers in the OECD group of 37 developed economies.

The UK has the 23rd worst levels of public investment at 3.1 per cent of gross domestic product and ranks 27th in terms of private investment, which is at 10 per cent of GDP, according to recent analysis by the Institute for Public Policy Research.

The worst private investment growth among the G7 since 2016 and a record as historically the absolute worst in overall investment as a percentage of GDP has been cited by the IMF as cause of Britain’s poor productivity.

As a result, the country ranks 35th in terms of overall investment at 17.3 per cent of GDP. Top performers, South Korea, Estonia and Turkey, enjoy investment levels of 31.6, 28.9 and 29.1 per cent of GDP, respectively.

Speaking to This is Money, Versey said: ‘That’s going to have to change if we want to power up the economy.

‘Private investment, which we represent a big chunk of, is waiting for the Government. 

‘We need to know what long-term government policy is, we need to know where government is going to invest, where it’s going to give subsidies, where it’s going to encourage growth, and where it’s going to limit growth.’

IPPR analysis of OECD data found that the UK has not been above the G7 median level of investment as a proportion of GDP since 1990, while it has not met the median average for private sector spending since 2005.

Had the UK remained in that median position, businesses would have invested an additional £354.3billion between 2006 and 2021 in real terms.

Had public sector investment met the G7 average over the same period, the government would have invested an additional £208.4billion in real terms, marking a private and public sector total of an additional £562.7billion of investment.

However, while the UK is below average in terms of public investment, austerity policies imposed on Spain and Italy have made them even worse. Germany, which currently faces recession, is also historically a low spender.  

One area where the Government has been vocal on its willingness to spend has been billions of pounds worth of policy and funding commitments to achieve the country’s net zero ambitions.

But Versey, who has intensified Aviva Investors sustainability push since being made chief exectuive, said ministers must be more transparent and detailed on net zero spending and policy plans if the private sector is to help achieve these goals.

He said: ‘If the UK wants to reach net zero, it needs to have a transition plan for each sector – it’s not just renewable energy, it’s actually the demand side of energy too.

‘Aviation, for example – is the Government going to subsidise sustainable aviation fuel? Is it going to invest in creation of sustainable aviation fuel? Is it going to use policy to force airlines to have to use different fuel?

‘We need to know what it’s going to do – but that’s one sector and then the same thing applies for every other sector of the economy.

‘If you have that plan of how each sector will get to net zero over the next 20 years with government policy backing it, that’s when the private sector will say ‘great, we’ll invest in these sectors’ and you create a spiral of investment where the government is working with industry and finance.

‘That’s what the country needs.’

Pensions should back private assets for returns  

The Government earlier this month revealed a series of reforms intended to help breathe life into the British economy, which some City forecasters say is doomed to face recession early next year.

The Mansion House Compact has seen Aviva and eight other major defined contribution pension providers agree to allocating at least 5 per cent of their default funds to unlisted companies by 2030, potentially unlocking another £50billion of investment.

Versey said that while the initiative aims to help drive the success of growth companies, an area of the market the UK struggles with, pensioners should welcome the changes for more selfish reasons.

He said: ‘The reason pension funds should invest in private markets is for returns.

‘[Approximately] half of companies globally are privately held. So if pension schemes are only invested in listed stocks they are missing half of the available investments.

‘Today only 0.5 per cent of pension assets Aviva manages – and it’s similar across the sector – are invested in anything private.

‘That includes real estate, infrastructure, forestry, private equity and venture capital – Just half a percent.

‘Contrast that to most global institutional investors. which would have around 20 per cent of assets invested.

‘There is a real rationale to improve returns for pensioners, but at the same time the private capital investment [in the economy] would be created. But in order to invest in the UK you’ve got to have government policy.’

Sir Rocco Forte: I would rather invest overseas – UK’s policies ‘restricting enterprise’, says hotelier

• Sir Rocco revealed that he had ripped up plans to open series of boutique hotels
• He said the Government was ‘moving very, very slowly’ to slash red tape
• Deregulation that would have helped to move the economy hasn’t happened

By Emily Hawkins For The Daily Mail

Updated: 18:18 EDT, 25 June 2023

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MIDAS SHARE TIPS: Round Hill is a Nashville-based, London-listed song royalties firm that’s blowing the music industry’s trumpet

By Joanne Hart, Financial Mail on Sunday

Published: 17:01 EDT, 10 June 2023 | Updated: 15:46 EDT, 11 June 2023

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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On the basis that you should invest in what you know, I have lately been watching other people shop for furniture and furnishings. This is not snooping, but a way to gauge consumer sentiment ahead of a portfolio makeover.

The fortunes of homeware retailers rely on people feeling relatively confident about their circumstances and the outlook for the property market.

Which is why this weekend you will find me monitoring activity in one or more of the sector’s UK-listed players such as B&Q (part of the Kingfisher empire), B&M, Dunelm, Marks & Spencer, Next and Sainsbury’s, owner of Argos and Habitat.

These companies are operating in what Dunelm chief Nick Wilkinson has called ‘a new, complex and rapidly evolving economic reality’. They have to deliver great design, service and value in stores and online, to appeal to households with squeezed budgets.

This endeavour could falter if interest rates continue to rise and inflation lingers even longer than expected. But this year I am taking bets on the UK market, which many consider undervalued.

Also, demand for furniture, lighting and the rest is proving stronger than feared. For the moment, house prices have not fallen as sharply as forecast, and the pandemic appears to have fostered an even closer attachment to the home and its refurbishment.

The travails of John Lewis also provide an opportunity for its rivals, although they must also strive not to cede more ground to Amazon. In the first quarter, the US giant seized an 8.82 per cent share of the online homeware market, ahead of Argos with 8.67 per cent. Dunelm was third, with 4.42 per cent.

First-quarter sales at Dunelm rose 6.1 per cent and its enthusiasts believe it can continue to deliver because it provides contemporary and traditional styles for every pocket. Guy Anderson, manager of the Mercantile investment trust, which has a stake in the company, says: ‘Consumer weakness could make life more challenging for many retailers.

‘But we’re optimistic about Dunelm’s growth ‘runway’, which is driven by an improving omni-channel proposition.’

Richard Hunter of the Interactive Investor platform observes that Dunelm has been the subject of vague bid speculation – one reason why the shares are up 16pc this year. Eleonora Dani of Shore Capital rates them a ‘hold’ since they trade at 16 times earnings, which is at the top end of the retail sector and means that I will be waiting for some weakness before I buy.

Next, trading at 13 times earnings, is on my list of stocks to consider if the price slips a bit. Its collection is attractive and affordable, and a formidable website features a host of third-party brands such as The White Company.

Meanwhile, Kingfisher, whose divisions include B&Q, Screwfix and the French chain Castorama, said this week that it had been hit by poor weather, but that ‘sales in core and big-ticket categories were showing continued resilience’.

However, Hunter says shares are a ‘sell’ in the opinion of a consensus of analysts, which may reflect an assessment that, while the desire to refurbish remains keen, the pandemic DIY craze is over.

Sainsbury’s shares – up 26 per cent this year – trade at 14 times earnings, partly spurred by improvements in profitability at Argos.

The potential of this combination is one of the reasons why analysts argue that it is worth continuing to hold Sainsbury’s shares.

I will be hanging on to my stake in Marks & Spencer following this week’s news of an 11.2 per cent jump in clothing and home sales. This formerly woebegone operation is ‘fast becoming the poster child for the new-look M&S,’ says Hunter.

Based on my love of M&S fashion and furniture, I invested last November at 120p. The shares now stand at 179.5p. A few investors may dream of a return to 743p, its peak of May 2007.

But higher energy costs are just one obstacle to such a revival.

The return of shoppers to high streets and malls is boosting M&S. Another beneficiary is B&M, the discounter which supplies decor trends for less.

Such is the pull of this latter-day variety store that Simon Skinner at Orbis Investment, one of the largest shareholders, says: ‘I defy anyone to leave a B&M without buying something for their home.

‘It provides very compelling products at very compelling price points, thanks to its efficiency.

‘It makes the very best use of its store estate and sources its stock directly from Asia, rather than through middlemen.’

He considers the shares, which have risen by 13 per cent since January and trade at 11 times earnings, to be a good, long-term gamble.

The discount supermarkets Aldi and Lidl have gained acceptance among an affluent middle-class clientele. As a middle-class person, I am taking a bet on B&M doing the same.

NFL hero JJ Watt and his wife, former United States international Kealia, have invested in English football team Burnley as they bid to usher in a new era of success at the club.

Burnley, coached by Manchester City legend Vincent Kompany, have already secured promotion to the English Premier League and the power couple will be attending the team’s game on Wednesday night against Cardiff. They previously attended Burnley’s 3-0 home victory against Wigan on March 11 at Turf Moor. 

An amusing video of the two announcing the investment was also shared on social media – where Watt jokes he is not trying to copy Ryan Reynolds and his investment in Wrexham. 

In a joint statement, the couple said: ‘When you invest in a club that’s been around since 1882, you must have great respect for its history and tradition. 

‘We understand that not only are we investing in the squad and manager, we’re investing in the town and its people. We take that responsibility very seriously and intend to work hard in earning their trust and support.

‘We have such great respect for what has been built here by Alan (Pace, Burnley chairman), Vincent and the entire organization and are looking forward to working with them. 

‘We believe that Burnley is a special club with incredible supporters and we want to help continue to elevate its global profile on its return to the Premier League.’

In the video footage, Watt jokes: ‘I’ve only been retired four months now and I really need something to do. I just love football – not that kind. In these isles (pointing at a map of Britain), they play football with their feet.

‘We are going to invest in European football. We don’t have ‘buy an entire European football club’ kind of money, we are more along the lines of minority investment but massive emotional investment.

‘So America, allow us to introduce you to Burnley. Welcome to the Premier League.’

Hollywood A-Lister Reynolds invested in minor Welsh team Wrexham alongside fellow actor Rob McElhenney. Wrexham recently won promotion to the fourth tier of English soccer.

Watt retired from the NFL last year after 12 seasons. He is a three-time defensive player of the year and widely tipped as a future hall-of-famer. In 2021, Forbes ranked his estimated wealth at $34.5m (27million pounds).

His wife Kealia played three times for the United States women’s team and has underlined her desire to elevate the growth of the women’s team at Burnley.

‘In the US, I’ve seen the NWSL grow into something really incredible, and we’d love to be a part of growing the women’s team here and be a part of their journey,’ she said.

Burnley chairman Alan Pace added: ‘We’re absolutely delighted to welcome JJ and Kealia into the Clarets family. 

‘This is a conversation that has been happening for some time and over the course of this season we’ve been hugely impressed by their passion and interest in both the club and the Burnley community. I am very much looking forward to working with them.

‘Both JJ and Kealia bring with them an incredible amount of top-level sporting pedigree and success, as well as ideas and connections that will be invaluable in helping us to continue telling the Clarets story to an international audience.’

Watt announced in January that we was going to retire from the NFL at the end of the season with the Arziona Cardinals. 

‘It just feels like a good time,’ the 34-year-old said. ‘I want to leave while I’m playing good football, while I’m proud of the film I’m putting out. I want people to remember me for playing good ball, not for getting knocked on my ass.’

There are, however, concerns that Burnley’s impressive coach Kompany could leave the team at the end of the season.

He has been linked with the Tottenham job after an impressive first season at Watt’s new team. 

As a player, Kompany won four Premier League titles and two FA Cups with Manchester City.