Deciding how and where to invest your money is never an easy task, but when you are in the middle of a global pandemic it is even more difficult.
We asked a series of financial experts to suggest which countries, sectors, funds and companies might be worth considering in 2022.
Simon Gergel, director of The Merchants Trust, believes the UK stock market is one of the cheapest in the world and remains highly polarized.
Despite the ongoing Covid-19 variants, the risks of continued supply chain disruption and mounting inflationary pressures, he expects the economy to grow at a decent pace in 2022.
âThis provides excellent opportunities for stock pickers to identify strong companies, trading at attractive valuations, which can generate high income and good long-term total return,â he said.
Adrian Lowcock, investment advisor and independent commentator, suggests that US small and mid-cap stocks could do well over the coming year.
âThe industry has seen strong earnings growth, but not the stock price performance relative to large US growth companies,â he said. “They look more attractive on a valuation basis and should also benefit from a focus on domestic growth, as global supply chains are under pressure.”
Alex Wright, portfolio manager of Â£ 3bn from Fidelity Special Situations and Â£ 935m from Fidelity Special Values ââPLC, believes there are many interesting sectors focused on the UK.
âWe believe Inchcape and Halfords are well positioned to take advantage of supply constraints in cars and bikes due to their superior supply chains,â he said. âWe are also exposed to rare building materials, such as the Brickability brick distributor. “
Alternative energy and real estate investment firms (REITS) are expected to be the top performing sectors in 2022, according to a survey of investment firm managers.
The Association of Investment Companies (AIC) study also found that it found software and IT services to offer the most compelling opportunities over a five-year view.
Andy Merricks, co-manager of 8AM Focused Fund, agreed that the technology will continue to flourish, with cybersecurity being a particularly attractive area.
âWhatever happens in the world, the need for better cybersecurity does not go away,â he said. âYou can gain exposure to the cybersecurity industry through exchange traded funds. “
Ben Yearsley, chief investment officer at Shore Financial Planning, pointed to the Matthews China Smaller Companies fund as a potential candidate.
âIt is well positioned to capture the rich and growing middle classes in China,â he said. âHealth and technology are two of the most important sectoral weights. “
He also cited the Fidelity Asia Pacific Opportunities fund run by Anthony Srom, who he says enjoys buying ideas before they are noticed by others.
âI’m a big fan of Asia as a long-term investment theme and that should be due to a better rebound in the Covid recovery next year,â he added.
Dzmitry Lipski, Head of Fund Research at Interactive Investor, suggests BMO Sustainable Universal MAP Cautious, Balanced and Growth funds.
âThe three BMO funds stood out from the competition because of their sustainable investing philosophy, the way the funds invest and manage risk, and BMO’s emphasis on low costs,â he said. -he declares.
âThe BMO team has a history of long-term success in producing strong risk-adjusted returns by executing multi-asset ESG products.
Darius McDermott, Managing Director of FundCalibre, suggests that the Artemis Positive Future Fund, which seeks companies that create transformational change, is worth considering.
âIt’s a global growth fund with sustainability considerations and a focus on mid caps,â he said. “It’s pretty focused and differentiated, so we like it for those reasons.”
According to Danni Hewson, financial analyst at AJ Bell, retailer Pets at Home should be taken into account – especially given the number of people who have bought pets since the first lockdown.
âWe were already a nation of animal lovers, but Covid has doubled and Pets at Home has been a grateful recipient of our addictions,â she said.
Hewson pointed out that animal lovers take a âno-costâ approach to their animals.
“While many of us will feel the strain on our finances, things will have to get worse before we revert to pet care, so expect further growth for this smart outfit in 2022,” he said. she adds.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says rising interest rates could be good news for Lloyds Bank, which is focused on traditional lending.
âThe group also has one of the largest branch banking networks in the UK, which represents an opportunity to save money if it decides to close other branches,â she said. âIt also has an incredibly low cost / income ratio, which makes it more resilient in tough times. “
Streeter also highlighted how cost savings have been achieved through the increase in digital services, which is an area of ââfuture growth as more people turn to online banking.
“Excess capital, possible interest rate hikes and growth opportunities are a tempting mix,” she said. “If interest rates do not rise in the expected path, Lloyds could struggle to improve profitability.”