197. Why interest rates are likely to go higher in the UK

Job Curtis, manager of City of London Investment Trust, discusses the UK stock market and why it has outperformed other stock markets around the world this year. He gives his thoughts on the windfall tax for oil companies and how their presence in the North Sea will impact how much of their profits are taxed. Job also discusses inflation and interest rates – their impact on the UK economy and on companies in different sectors. He ends with details of the sectors he likes and dislikes and tips from a 30-year career running money.
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City of London Investment Trust aims to provide growth in income and capital by investing predominantly in larger UK companies with international exposure. It has increased its dividend payment every year for the past 55 years. Manager Job Curtis has run the trust for more than three decades and his thorough research process and conservative approach to stock selection have generated steady returns over a long time. The trust is also very good value: it charges 0.325% per annum of net assets under management.

What’s covered in this episode:

  • Why the UK stock market has been doing well this year
  • If the UK stock market can continue to do well
  • How much exposure the trust has to oil companies
  • If the windfall tax could have an impact on oil company dividends
  • Why the North Sea is important when it comes to this windfall tax
  • How much gearing the trust has at the moment
  • How inflation could impact UK equity investments
  • Why the manager thinks interest rates will rise further
  • How the trust has some inflation protection through its holdings
  • Which area of the UK stock market the manager likes best
  • Which area he likes least
  • What tips the manager has for investors
This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.

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