Chelsea Financial Services has highlighted four UK equity funds which could benefit from changes announced in Wednesday's Autumn Statement, especially those related to housebuilding and infrastructure spending.
Chancellor Philip Hammond gave his first and last Autumn Statement on 23 November, after being appointed to the position in July.
His announcements included a new £23bn National Productivity Investment fund focusing on innovation and infrastructure, which will make investments over a five-year period and a £2.3bn housing infrastructure fund.
Hammond also announced additional investment in research and development (R&D), rising to an extra £2bn per year by 2020-21. This would boost technology and science firms.
Chelsea Financial Services managing director Darius McDermott (pictured) said: "While thankfully tax wrappers were left well alone this time round, in his bid to make the UK resilient enough to exit the EU, Philip Hammond did announce funding for a number of schemes that could benefit UK investments; namely in the area of disruptive technology; infrastructure – both physical and digital; science; innovation and R&D."
Here, the firm has chosen four funds which could receive a boost from today's measures:
Man GLG Undervalued Assets
"With more money set aside for affordable housing and supporting local infrastructure, housebuilders should again get a boost. This £494m fund has Bovis and Bellway amongst its top ten holdings. 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
"This is a relatively new fund, launched earlier this year. It invests in UK infrastructure projects and targets a yield of around 5%, which will appeal to investors looking for more than the 2.2% gross interest promised via the new NS&I product next year, and willing to take on more risk to achieve those potentially better returns."
Wood Street Microcap
"The boost (via tax breaks) to smaller companies across the UK will be welcomed after the worries of the Brexit vote. This a highly concentrated, high conviction UK micro-cap fund, which has been managed by Ken Wotton since its launch in 2009, with the support of the 40-strong specialist team at Livingbridge. It has a number of holdings in software and digital businesses."
Woodford Equity Income (and Woodford Patient Capital trust)
"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. The tail of his £9.3bn open-ended fund and his investment trust may well benefit from the increased support and funding for this area of the UK economy."
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