Sommaire pour Issue 1305 de MoneyWeek

“Water, water, everywhere, nor any drop to drink.” The trouble with having access to unprecedented quantities of information on a world wide web whose quality is rapidly dwindling is that most of it is useless – especially when both sides in a war are spinning a story on social media; armchair generals who once read a Frederick Forsyth novel are suddenly self-proclaimed experts in military and intelligence tactics; and you are trying to filter out half-witted financial influencers with the formula for endless riches (why are you still here, then?) on X. Not for the first time, we are glad to have the perspective of a weekly cycle to give us a chance to establish what is truly important. The key problem is that the impact of the oil squeeze…

Did markets anticipate something like the Iran war? The Stoxx Europe Total Market Aerospace & Defence index (which includes major UK arms makers) has doubled since 2024 as rising geopolitical tensions push governments into higher defence spending. A major war in the Middle East had thus already been priced in. BAE Systems’s shares have flatlined since fighting began, while Rolls-Royce and Babcock have fallen. A similar pattern can be seen for continental defence giants, including Germany’s Rheinmetall and France’s Safran. The Select Stoxx Europe Aerospace & Defense ETF (exchange-traded fund) trades on 27 times projected earnings, compared with 15 times for the wider Stoxx Europe 600 index, says Carol Ryan in The Wall Street Journal. That leaves the sector with a high bar to clear before it makes further gains.…

Investors looking to gold for relief from the energy shock have been left disappointed. The yellow metal has fallen 16% in dollar terms (and 15% in sterling) since hostilities began on 28 February. You would expect gold to do well at a time of war and inflationary pressure. So why the pullback? Firstly, gold had already been on a record-breaking rally that saw it reach an all-time high in late January. Having rocketed 174% over the previous two years, the yellow metal entered the conflict looking overextended. Secondly, gold is strongly influenced by real interest rates (interest rates adjusted for inflation). While inflation looks poised to rise, so are interest rates, reducing gold’s appeal relative to competitors such as government bonds (see page 4).…

Chinese e-commerce firm Alibaba has announced ambitious targets to reach $100bn in AI and cloud-computing sales from external customers in five years, says Robyn Mak on Breakingviews. The group’s stock nonetheless slipped 7% on the news, as it also revealed a “dismal” 67% year-on-year plunge in quarterly profits. This is partly due to “a consumer-spending slowdown and subsidy war” denting Alibaba’s core Chinese e-commerce business. But Alibaba is also starting to “spend more to build out its AI capabilities… and win customers”. Alibaba isn’t alone in feeling the brunt of investors’ worries about AI, say Bloomberg’s Jeanny Yu and Edwin Chan. Rival technology firm Tencent also recently experienced the “worst drubbing in almost a year”. Both companies are being “punished” for “failing to lay out clear visions for how to…

Chancellor Rachel Reeves has said that she will only help those who most need it should energy prices spiral, but even targeted support is unaffordable, says Jeremy Warner in The Telegraph. A glance at the bond markets shows that we cannot indulge in this kind of “largesse”. The yield on ten-year-gilts “surged through the 5% barrier on Monday” – higher than during Liz Truss’s “mini-Budget fiasco” of 2022. The markets are “punishing” the UK more than others, possibly because inflation is looking “stickier” than in much of the rest of Europe. They are pricing in three interest-rate rises by the end of 2026, which would “virtually destroy” Reeves’s fiscal headroom by increasing debt-servicing costs, raising the possibility of more tax rises or spending cuts as the economy contracts. Repeated bailouts…

It has been hard to escape the influence of money from the United Arab Emirates, Saudi Arabia and Bahrain over the past few years. It was everywhere. Saudi Arabia was a huge investor in sport and gaming as well as in infrastructure. Qatar was one of the key backers of Anthropic, the company behind Claude AI, the key rival to ChatGPT, as well as backing data centres. The takeover of Warner Brothers by Paramount was financed, in a large measure, by money from Saudi Arabia, Qatar and Abu Dhabi. The list goes on. Whenever there was a big deal, a takeover, a venture-capital round or a new listing, Gulf money was central to it. That was just what was reported. Through investment in private equity, hedge funds and property, there…

Duration is a measure of risk that is typically applied to bonds. It describes how sensitive a given bond is to movements in interest rates. Think of the relationship between bond prices and interest rates as being like a see-saw: when one side goes up, the other goes down. Modified duration (which can be found in the fact sheet of most bond funds) tells you the likely percentage change in a bond’s price in response to a one percentage point (100 basis points) change in interest rates. The higher the duration, the higher the “interest-rate risk” of the bond – that is, the larger the change in price for any given change in interest rates. So if a bond has a duration of ten, it indicates that a single percentage…

“My parents didn’t need me to be famous to survive or to be stable. What happens to a lot of these [celebrity] kids is their parents want [fame] more than they do, or the kids become responsible for the entire income of the family. That was never my job. Every penny I ever made went into my bank account because my parents were good.” US singer and actress Miley Cyrus (pictured) on being a child star, quoted in Variety “The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” Author and former options trader Nassim Nicholas Taleb, quoted in India’s Economic Times “I have got a very normal life. My husband and I have had to work our arses off… I look at other kids who have got…

theconversation.com It’s often said that you need to “network” to get ahead in your career, says Maura McAdam. That would seem to put introverts, who find such things draining, at a disadvantage. But that is not necessarily so. Introverts must simply learn to network in smarter ways. Firstly, understand your strengths. You do not need to “work the room” at social events. Instead, focus on one or two deeper conversations. Networking is really all about connection and an opportunity to learn from others, rather than impress them. So approach it with curiosity rather than with the expectation that you must adopt a persona and perform. Where introverts get a real chance to shine is in the follow-up: the “quiet, reflective stage of relationship building”. Sending a personalised note to those…

● CQS Natural Resources Growth & Income, Golden Prospect Precious Metals and Geiger Counter have all issued protective notice to their management company CQS following the unexpected resignation of managers Keith Watson and Robert Crayfourd (ie, they have started the notice period to terminate their contracts, while keeping the option to rescind it). All three funds said that they are considering their options for future management arrangements without providing any further details; one possibility – based on past events at other trusts – is that they will consider following Watson and Crayfourd to a new firm. The duo will serve a three-month notice period at CQS, with Diana Racanelli and Craig Bethune appointed by CQS’s parent Manulife to work with them during the handover. ● Gore Street Energy Storage (GSF)…

The most direct way to play the robotics revolution is through an exchange-traded fund (ETF), such as the WisdomTree Physical AI, Humanoids and Drones Ucits ETF (LSE: PAIG). This tracks WisdomTree’s own proprietary index, which covers what it considers to be the leading companies in four areas: humanoids; drones and autonomous mobility; next-generation factories and logistics; and emerging applications (such as healthcare). The fund is exposed to all parts of the supply chain, from the firms that build the robots, to those that supply key components. The two largest holdings are Ubtech Robotics and Rainbow Robotics, and the ETF has a total expense ratio of 0.45%. Another option is the iShares Automation & Robotics Ucits ETF (LSE: RBOT), which tracks companies that make robots, alongside software companies and semiconductor firms.…

Has the House of Lords killed off government plans to force pension schemes to invest a chunk of their assets in areas deemed important to the nation? The Pension Schemes Bill going through parliament gives ministers the right to mandate schemes to invest a minimum proportion of their assets in schemes such as infrastructure projects or business start-ups. But last week, peers voted to remove these “mandation” powers from the bill. This follows a bitter row with large asset managers. Last year, they signed up to a voluntary agreement to invest up to 10% of pension-fund assets into private-market holdings such as infrastructure and early-stage venture capital. But they argue ministers should not have legal powers to force them to invest in potentially risky assets, pointing out that disappointing returns…

2025 Domaine des Oullières, Harmonie Rosé, Coteaux d’Aix-En-Provence, France £15.25, yapp.co.uk We are all familiar with the big names in the Provence rosé constellation, and now that this year marks the 20th anniversary of the first release of the game-changer Whispering Angel, it is time to acknowledge those rare wineries that have kept their standards as sky-high as the eponymous wines from Château d’Esclans. If you would like to delve into boutique, hand-crafted, utterly delicious wines at highly competitive prices, look no further than Yapp. My headliner is an ethereal stunner with gentle pomegranate and raspberry leaf notes over a stunningly silky palate. It is leagues finer than the etiolated dross that populates the shelves and it is guaranteed to cast a spell on your senses. By contrast, those of…

Going… A rare complete set of all seven Harry Potter novels were heading for auction with Bonhams in London this week. Each had also been signed by the author, J.K. Rowling. The most prized was a first-run copy of Harry Potter and the Philosopher’s Stone – the first book that introduced readers to the boy wizard, Hermione Granger and Ron Weasley at the Hogwarts School of Witchcraft and Wizardry. It is one of just 500 that were printed by Bloomsbury in 1997. Harry Potter and the Chamber of Secrets was published the following year, with the final instalment, Harry Potter and the Deathly Hallows, selling 11 million copies in its first 24 hours in 2007. The complete set was expected to sell for between £100,000 and £150,000. Gone… Jack Kerouac’s…

“Fake news is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped,” says Mohammad Bagher Ghalibaf, the speaker of Iran’s parliament. Officials in Tehran have vehemently denied claims that peace talks are under way with Washington, even as US media reports that contacts have been established via Pakistan. Last Saturday, Donald Trump menaced Iran with the destruction of its energy infrastructure unless it reopened the Strait of Hormuz. Tehran responded by making it known that such an escalation would see it set fire to oil and gas wells across the Middle East, a cataclysmic scenario for global energy markets. Come Monday, Trump had U-turned, touting “very good and productive talks”, even as an Iranian military spokesman claimed that the…

●“It’s unusual to take a pop at your own regulator”, but Jonathan Simpson-Dent, chair of Edinburgh Worldwide Investment Trust (EWI), may feel he has “little to lose”, says Ben Martin in The Times. US activist hedge fund Saba Capital, which owns 30% of EWI, has been “besieging” the trust for more than a year with repeated attempts to oust the board. The investment trust sector wants the Financial Conduct Authority (FCA) to introduce rules to protect trusts from aggressive shareholders, but Simon Walls, the FCA’s director of markets, has dismissed these calls as “self-interested” and “short-sighted”. Yet Walls has missed the point, argues Simpson-Dent; low voting turnouts make it possible for an investor with a large minority stake to try to seize control and change the strategy and manager (including…

Sebastian Lyon, chief investment officer, Troy Asset Management “I’m not predicting a [global] recession, but there is far more of a risk of recession than markets are discounting after two-and-a-half weeks of [the Middle East crisis],” says Sebastian Lyon, chief investment officer at Troy Asset Management. “If this carries on and the Gulf of Hormuz stays shut for a prolonged period of time – call it three to six months, rather than three to six weeks – then you could have real issues.” The situation is very different to what prevailed when Russia invaded Ukraine in 2022 and energy prices soared, he tells Bloomberg. “There were huge pent-up savings from consumers… They could withstand the high prices to some extent.” Today, we are in a “K-shaped recovery” with the economy…

capx.co Iran’s missile strike on the Ras Laffan refinery in Qatar matters, not just for Qatar, but for the world, says Ed Conway. The “sprawling jungle of pipework in the desert” cleans and processes natural gas, and is “one of the most important energy hubs” in the world. The rise in the use of natural gas is sometimes described as marking the “fourth energy transition” and today’s gas turbines are the “very best energy convertors in existence”, making the gas the most efficient and least polluting of fossil fuels. Ras Laffan sits next to the” single biggest and most important energy source on the planet” – an underground reservoir of gas covering 3,750 square miles, some of which stretches into Iranian territory. It provides around 4% of global energy –…

Two managers at GAM are urging Liontrust to launch a strategic review with a view to selling itself, two-and-a-half years after a deal for Liontrust to buy the Swiss asset manager collapsed in acrimony. Liontrust is “no longer in a position to act as a serious consolidator”, claim Albert Saporta (the current GAM CEO and vocal opponent of the failed bid) and Randel Freeman, who hold 3.6% of the British firm: assets under management have halved since 2021 and the shares have fallen 85% over the same period. The £280m spent on acquisitions in the past 15 years is almost twice Liontrust’s market value, and while last week’s £10m deal to buy River Global is attractive, it is “too little too late”.…

Legal & General Group (LSE: LGEN) is one of the oldest companies in the UK. It’s also one of the few remaining that formed part of the FTSE 100 at the time of its inception. The group is known among investors as a slow-and-steady beast that pays a consistent, relatively high dividend yield, but hardly does anything to get the pulse racing. That is starting to change as Legal & General transitions towards an asset-light, higher-margin, faster-growth business. Legal & General’s longevity is down to its business model: life insurance and long-term savings. It is one of the largest retirement, life-insurance, and annuity providers in the country, operating under strict rules to ensure management runs the business prudently with a long-term mindset. This means the business is relatively boring compared…

• More than half of members of Generation X – those born between 1965 and 1980 – are heading for a pensions shock, according to the Social Market Foundation. Analysis from the think tank suggests that 54% of savers from Generation X – that’s 7.5 million people in Britain – are on track for a retirement income below what is needed to maintain their current standard of living or to meet basic living costs. Generation X savers are particularly vulnerable since they are less likely than older savers to have access to guaranteed final-salary pension benefits and won’t benefit for so long as younger savers from the compulsory pension provision introduced in 2012. • Does your employer offer “bonus sacrifice”, enabling you to take some or all of your bonus…

Action cinema in the 1980s was a forum where Arnold Schwarzenegger and Sylvester Stallone fought it out for the gold and silver medals, says The Guardian. “Bronze belonged indisputably to Chuck Norris,” (pictured) who has died, aged 86. A six-time world karate champion who retired undefeated to run his own chain of martial-arts schools, Norris was encouraged by one of his student, Steve McQueen, to pursue a screen career, and he rose to fame fighting Bruce Lee in Way of the Dragon (1972). He went on to develop a sizeable following with a “string of gung-ho hits” in the Eighties, including Lone Wolf McQuade, Missing in Action and Invasion USA. In later years, he enjoyed one of his biggest successes in the TV action series Walker, Texas Ranger, which ran…

“Nobody can know for sure how the war with Iran will affect investments. But... I know how it will affect investors. You will be blitzed with... messages from the financial industry. You’re going to be urged to keep your money safe... with these funds, this asset, that industry, these AI-driven recommendations, this secret set of trading signals... All for a small fee, of course... Sudden moves based on anybody’s geopolitical forecasts are a bad idea... You should think about overhauling your portfolio the way people should decide about adding tattoos [–] if you get... a little tattoo on your ankle, you aren’t likely to look back later and kick yourself. If, however, you get... ‘Lisa and Me 4Eva’ inked across your entire chest or back, you might end up wondering…

Last week shares in reviews-website Trustpilot surged as the British midcap posted profit that far eclipsed forecasts, says Simon Hunt in City AM. Pre-tax profits almost tripled to £14.1m in 2025. It ascribed the jump to “a dramatic rise in the visibility of Trustpilot in AI models”. It expects revenue growth “in the high teens” this year, while it has also unveiled a “bumper” £22.5m share-buyback programme. On Tuesday, however, the stock fell sharply when private-equity backer Advent Global offloaded its 5.6% stake in the company, a move that followed Trustpilot’s statement that it is to appeal a €4m fine by Italy’s competition regulator. Trustpilot is no stranger to controversy, says Ben Martin. Late last year US short-seller Grizzly Research alleged that Trustpilot ran “mafia-style extortion campaigns” and sought to…

The EU and Australia have signed a trade deal after eight years of talks, says Lana Lam on the BBC. The deal, designed to cope with pressure from China and the US, was described as a “win-win” by Australian prime minister Anthony Albanese and European Commission president Ursula van der Leyen, who added that it focused on “collective resilience” in a “deeply changing” world. The two sides also agreed to increase cooperation on defence and critical minerals. Both the EU and Australia have been hit by US tariffs and fear the US can no longer be relied on militarily, say Andy Bounds and Nic Fildes in the Financial Times. Albanese said the trade and security deals could provide an annual $A10bn (£5.2bn) boost to the Australian economy, while EU exports…

One of the many unusual things about the Middle East crisis is that many markets still seem reluctant to treat it as a crisis. Take stocks. Yes, markets have fallen since 28 February, but still by far less than you’d expect given the scale of the conflict, the disruption to global energy supplies and the complete uncertainty about how long this may go on. At the time of writing on Wednesday, the MSCI World index of developed markets is down by about 5.5% in sterling terms. The MSCI Emerging Markets is worse, down about 10%. This is not nothing, but it is considerably less than most investors would have expected in response to Iran closing the Strait of Hormuz. Still, there is obviously some variation within this. The US continues…

AI demands smarter regulation Roland Fryer The Wall Street Journal Various US states and the EU have enacted legislation governing AI, but they “can’t agree what it is” and the rules are vast and largely incoherent, says Roland Fryer. Some firms have abandoned hiring algorithms that led to more meritocratic outcomes, for example, because the legal exposure was too great (so regulation is increasing not decreasing discrimination). The basic challenge regulators face is asymmetric information. Regulators want certain behaviour, but they can’t observe the true costs or motivations of those they are trying to regulate. Demanding information doesn’t necessarily elicit honest answers. The alternative, a well-designed menu of options so firms can choose the level of regulation they want – strict scrutiny with lower risks for failure or a light…

project-syndicate.org Russia’s war on Ukraine and the uncertainty created by US foreign policy have “raised security concerns in Europe to levels unseen since the Cold War”, say Enrico Letta and Pascal Lamy. But it would be a mistake to focus on too narrow a conception of security in response. Instead, the EU should commit to completing the single market. The single market is the EU’s “strongest asset” and committing to completing it would “send a clear signal”: that the EU has “chosen unity over fragmentation and embarked on a new phase of integration”. It would also unleash the growth needed to cover rising defence spending. In a world increasingly shaped by rivalries between major continental powers, scale matters more than ever. Yet the European economy remains too fragmented, structured as…

While whole-of-life cover may be ideal for insuring against your family’s eventual inheritance tax (IHT) liability, term assurance could help you address a more immediate issue. Giving away large sums or valuable assets will reduce the value of your estate for IHT purposes – and therefore cut your family’s bill – but these potentially exempt transfers only drop out of the IHT net seven years after you make them. In which case, a term assurance policy could provide cover against you dying sooner than expected and triggering a tax liability. The idea is to take out the insurance you need only for a set period – until your gift becomes fully exempt from IHT. This will usually be much more affordable than whole-of-life cover. One nuance to consider here is…

The state pension is meant to be straightforward: if you’ve made at least 35 years of national-insurance contributions, you’ll qualify for the full amount of the benefit, currently worth £230.25 a week. However, hundreds of thousands of people are discovering that this often isn’t true – they’re in line to receive less than the full amount because of how they saved for retirement decades ago. The confusion stems from a major shake-up of the state pension that took effect in 2016. Before the changes, many people were entitled to two types of retirement benefit from the state – the basic state pension and an additional payment related to their earnings, earned through the State Earnings Related Pension Scheme (Serps) or the State Second Pension (S2P). Now, anyone reaching state pension…

The Ashoka India Equity Investment Trust follows a bottom-up approach focused on identifying quality businesses with strong returns on capital and attractive valuations. Stock selection is the key driver of performance, supported by rigorous proprietary research, disciplined valuation frameworks and screening of corporate governance The portfolio is built with long-term conviction, diversified across sectors but with a bias towards growth opportunities, particularly in small and mid-cap companies – reflecting the belief that India’s market inefficiencies create significant opportunities for boosting returns. In this context, we discuss the top three holdings in the Trust: Bharti Airtel, ICICI Bank and Bajaj Finserv. “Well run private-sector banks are gaining market share from their state-owned counterparts” Dialling up strong profits Bharti Airtel (Mumbai: BHARTIARTL), part of Bharti Enterprises, is India’s leading telecoms company, with…

Markets hate uncertainty. So now that the formerly anonymous “street artist” Banksy has been revealed by Reuters to be a 50-something man from Bristol named Robin Gunningham, there is clarity. That, art insiders speculate, will be good for the value of Banksy’s work – so the thinking goes. In reality, the “odds are, the prices of his existing work will fall”, says Allison Schrager on Bloomberg. Yes, “embracing commercialisation could create a new and more stable market for Banksy’s work”, but not without losing the mystique. Banksy’s “anonymity and covert methods” had made his “otherwise unsurprising political messages feel fresh”. His work is not “especially exceptional on its own”. Rather, it’s Banksy’s ability to “capture the political moment”, the spectacle and the hype they generate that creates value. “Timing and…