What now?

Susannah Streeter: Hello and welcome to the Switch Your Money On podcast from Hargreaves Lansdown - I’m Susannah Streeter - I’m the senior investment and markets analyst here at Hargreaves Lansdown. And, as usual, I’m here with Sarah Coles, our senior personal finance analyst. And, Sarah, it is of course that time of year when you are probably sick of the sight of turkey but still managing to find room for the remaining Celebrations in the tin. We’ve got to get over the hurdle of the New Year celebrations of course – against my better judgement I agreed to a party after badgering from my teenagers.

Sarah Coles: You are brave – I’m planning a much much more low key event this year – I don’t need any more teenagers in my house. But I’ll keep my fingers crossed that nobody mentions your bash on social media – or you might be over-run.

Susannah Streeter: Yeah and my height hardly makes me much of intimidating bouncer – but perhaps I can scare off any unwanted guests by reciting my predictions for 2023 – and talking very loudly about central bank policies – growth and inflation.

Sarah Coles: You know how to make a party go really slowly. You know, that might work – that might get rid of all the teenagers. And you’ll be well versed given that’s what we’ve been analysing day in and day out – and yes in this podcast we’re going to be peering into our crystal balls and we’ll give you the lowdown on what to watch in 2023 in an episode we’re calling ‘What Now?’

Susannah Streeter: Yes, we’ll be looking at where we think inflation interest rates and energy prices could be heading – and look at some of the risks on the horizon.

Sarah Coles: And we’ll ask what the future holds for our retirements – with our Senior Pensions Analyst Helen Morrissey – hi Helen – you’ll be giving us a glimpse about what’s in store.

Helen Morrissey: Yeah, very much looking forward to it. We’re going to be talking all things state pension.

Susannah Streeter: So, so much to talk about there, Helen. And, course, we’ll be joined as usual by Sophie Lund Yates – our lead equity analyst who will be looking at the shares to keep an eye on for 2023 – Sophie what’s on your watchlist?

Sophie Lund-Yates: Hi, Susannah. Yes, I’ll be taking a deeper look at three of our five shares to watch for next year. Which includes a tobacco major, Volvo – which might not be the company you’re thinking of, and Bunzl - for those of you who don’t know, is pretty much in the business of everything. So, really looking forward to getting stuck into that a little bit later.

Sarah Coles: And plenty to get our teeth into. And Emma Wall – HL’s Head of Investment Analysis and Research will give us her fund lowdown – Emma what types of funds have caught your eye?

Emma Wall: A variety of options to add diversification to investors’ portfolios in the coming year. Hopefully, to help us weather some of the economic storm that looks like it’s coming down the line.

Susannah Streeter: Certainly does. Emma, thank you very much. So, let’s start where inflation is headed, part of that storm – rampant prices have caused so many problems in 2022 – so where are they headed next? Well inflation may have reached the peak, but there is still the potential for plenty of pain ahead as stubbornly high prices cause whiplash for economies. Once elastic supply chains have become more constrained and energy costs are set to stay persistently elevated, particularly if a long winter snap materialises and if China relaxes its zero-Covid policy further and demand swings back up. The UK is already thought to be in recession and that will depress demand but a tight labour market is also set to stay an acute inflationary pressure.

Sarah Coles: Yes, and those on lower incomes who spend a bigger proportion of their budgets on essentials will still bear the brunt of higher prices. Nonetheless, inflation is set to fall rapidly from the middle of next year, as the recession takes hold and the contraction is felt more widely through the economy. Demand could fall even further if rather than spending available pounds, households batten down the hatches and save more to boost their resilience.

Susannah Streeter: Yes and as far as interest rates are concerned - well there has been a big sigh of relief that interest rates in the UK are not expected to go as high as was predicted after the disastrous mini-budget. During the market mayhem unleashed after Liz Truss and Kwasi Kwarteng took a gamble on sparking a sugar rush of growth through unfunded tax cuts, the expectation was that rates may have to rise to 6% to bring inflation under control and stabilise the economy.

Sarah Coles: Although more hikes are on the way, it’s expected that they will be less steep, and rates will ultimately go up to around 4.75% by the middle of next year. This is why more of the super-high mortgage rates on the market have been coming down, even as the bank has increased rates and more hikes are expected in the months to come. However, this isn’t expected to be enough to save the property market from falling in 2023. The Office for Budget Responsibility expects house prices to drop 9% between the end of 2022 and the autumn of 2024, while Zoopla predicts a fall of 5% in 2023 alone. These are less striking than some earlier predictions, which reflects the easing of mortgage rates.

Susannah Streeter: With a long recession looming, and unemployment already rising to 3.6%, deflationary pressures could be set to emerge. Lower grain prices on international exchanges should also feed through as long as the Russia situation does not deteriorate. The risk is that if the Bank squeezes monetary policy too tight, the recession could be deeper. And in the US too – hopes that the hiking cycle would soon be at an end have dissipated – we’re not talking sports and fitness here – but even so central bankers might still be working up a sweat about some of the latest jobs numbers in the US. It’s that time when good news is taken by some to mean bad news.

Sarah Coles: Yes, that topsy turvy trend is alive and well. The latest data from the US signals that the labour market is healthy, and tight. But the numbers are a double-edged sword – on one hand a healthy economy and more confident consumers helps quash concerns about spending in the economy and means consumers are more likely to stay on top of debt repayments and borrowing. At the same time, a tight labour market feeds into inflationary worries.

Susannah Streeter: Reality is dawning that further rate rises are likely well into 2023 although super-size rate hikes should now be in the rear-view mirror. That’s partly because of lower energy bills – although energy prices have been hugely painful this year – we have had some relief with the drop in oil and gas prices over the Autumn and into the winter, they are still elevated compared to 2021 – but uncertainty is coming in waves in energy markets as the choppy tides of supply and demand push up the oil price but keep a lid on big gains.

Sarah Coles: Yes, there are expectations that there will be less crude available to buy given the $60 cap on Russia oil which means it can’t be shipped using EU or G7 tankers, insurance or credit lines, unless it’s below that price limit. However, Russia has vowed to circumvent that by leasing tankers elsewhere, and it seems likely that significant flows will be re-routed to friendlier countries.

Susannah Streeter: And more broadly, worries about demand being hit by the global downturn are holding crude prices back from more significant gains. OPEC+ representing oil producing nations has adopted a wait and see policy, before introducing any further change to its already lower production targets. This reticence isn’t surprising given it’s unclear how the Covid situation in China will play out. There is an uneven easing of restrictions across the vast country, causing some confusion with onerous rules and requirements being lifted in some areas and some provinces, but tests remaining in place for some workplaces. The effect on the economy of the zero-Covid rules has been underlined by CAIXIN PMI data for November and that showed activity in the Services sector shrunk to six-month lows.

Sarah Coles: Investors have been clinging onto hopes that there will be a further softening of strict pandemic policies. But a rapid turnaround for the Chinese economy is unlikely. The expected surge in infections will be another huge challenge to navigate and structural problems are still weighing heavily on the economy - not least a property house of cards which has still not been fully stabilised.

Susannah Streeter: It’s that time of the year as well isn’t it when we reassess investments and look at giving them a bit of a spring clean and there is always the urge to cut your losses – it’s a tricky time when there has been so much volatility.

Sarah Coles: Yes, investors have been on a rollercoaster ride this year and although it’s tempting to try to second guess market movements they should really hold their nerve and look beyond short-term events and focus on their long-term goals.

Susannah Streeter: Rather than switching and ditching stocks, riding out the storm is almost always a better strategy when things start to get rocky. However, a periodic review of a portfolio is no bad thing – as it may be a company’s story has changed and it may no longer fit with your investment goals. This is the time when the priority should be ensuring investors have a diversified portfolio with a wide range of holdings across different sectors and geographies. To try and smooth out volatile effects of market movements, consider drip feeding your portfolio, or setting up a direct debit to automate the decision.

Sarah Coles: And, of course, the importance of making the most of tax wrappers like ISAs and LISAs can’t be overestimated, especially with announcements of cuts in capital gains and dividend allowances in the Autumn Statement.

Susannah Streeter: So, all in all, 2023 is going to be a challenging year, but that doesn’t mean that every company will struggle, and Sophie Lund Yates, our Lead Equity Analyst has been looking at a few that may bring some positive change in the coming year. So, Sophie, you and the team have been putting together your “five shares to watch” for 2023 – how are these shaping up?

Sophie Lund-Yates: Hi Susannah, we certainly have. Every year we put together a list of 5 shares that we think could be worth attention over the next year. In the interests of time I’m not going to be able to chat through all five but have selected at random three to talk about – please keep in mind, as ever, none of the following is a recommendation to buy sell or hold any investment. For a look at the whole list, you can find it on the HL website.

Susannah Streeter: First up, British American Tobacco. What can you tell us about this company?

Sophie Lund-Yates: So, British American Tobacco is one of the world’s big tobacco producers. There are benefits that come from selling an addictive product, the main ones are recurring revenues and the ability to increase prices. The latter is crucial because tobacco volumes have been in decline for a while so higher prices are needed to offset that. The loyal, or as we call it, sticky, nature of the customer base and low costs underpins the group’s dividend paying ability – BATS – which is what we call British American Tobacco, slightly shorter, has a prospective yield of 7.3% which is well covered by free cash flow. The reason we were keen to look at a strong dividend payer for next year is because dividends make up a crucial element of total returns during market downturns. Please remember that no dividend is ever guaranteed. Now, in high inflationary environments it’s worth looking at goods and services people are unlikely to cut back on, other areas of the economy are likely to see people kind of pull back spending. BATS falls into the first category which we think is attractive. It would be wrong not to mention that we know tobacco stocks aren’t for everyone. Closely linked to this is that there are social risks associated with investing in tobacco, not least that the sector is excluded from some institutional investment products. The risk of regulators cracking down on new products – that’s things like heated tobacco and vaping - is also worth being aware of. These new products are pegged as an important area of growth over the long-term, but their success partly rests on that regulatory backdrop.

Susannah Streeter: Okay, Sophie. Thank you for that. So, from BATs to Bunzl, tell us more about Bunzl. It has diversification in its veins, in a way, doesn’t it.

Sophie Lund-Yates: Yes, so Bunzl essentially does all sorts. Think food packaging, cleaning products and safety equipment, but it’s fair to say this is just scratching the surface. Bunzl has its fingers in all sorts of pies. It’s best to think of the group as a large cluster of distribution businesses. This feeds into the idea that in uncertain environments, we think looking at companies that offer an indispensable service is a good idea. By that token, what I’m really saying is that boring can be best. We also like that Bunzl has a diverse revenue stream. All I mean from that is its profit comes from many different regions all across the world. Rather than investing heavily in internal growth, Bunzl is a merger and acquisitions (M&A) machine. Most of the revenue growth over the last 10 years has been a result of acquisitions, with the group spending an average of £317m a year over that time. M&A led strategies have their drawbacks. If the pool of target companies dries up or a business needs to raise external cash to fund acquisitions, then it’s not usually sustainable. Bunzl seems to have that covered. Acquisitions have been backed up by a strong operating cash flow and the balance sheet is in a strong position too. So, really there’s a lot to admire about Bunzl in my opinion but keep in mind there’s still wider uncertainty circling in the economy and a worse than expected economic contraction could dent performance.

Susannah Streeter: So, that’s Bunzl. Now, onto Volvo. But, this might not be the car manufacturer you’re looking for.

Sophie Lund-Yates: Precisely. So, the Volvo we’re talking about is now a truck and industrial equipment giant. Last year there were around 2.8m Volvo trucks, buses and machines rumbling around. Really, we admire the group’s high barriers to entry - Volvo’s manufacturing and supply chains are enormous, expensive and complex, helping to protect market share. Volvo has enviable visibility over demand. The order intake for trucks was around 258,000 last year as customers replaced old trucks and expanded their fleets. Demand visibility is really important in uncertain times. A bit like I was saying with Bunzl, lots of areas of the economy are going to be seeing pull-backs in spending, but something like Volvo offers a highly specialised and essential global service, meaning things should keep ticking over, all else being equal. Volvo not only produces vehicles, but services them. A 24/7 global servicing support network is a serious asset. If your truckful of goods is stuck somewhere, you need to have faith it can get moving ASAP. Services currently make up just over a fifth of overall revenues, and that’s expected to increase to over 50% by 2030. The part I find really interesting is that Volvo is also a leader in the electrification of heavy-duty vehicles. Volvo wants over 35% of its vehicle sales to be electric by 2030. We view being a front-runner of sustainable haulage a real plus point. In the medium term, cost inflation and wider supply chain issues are problematic. Not a complete derailment of the investment case, but something that could cause some bumps in the road. Essentially, we view Volvo as a steady Eddie, which is nice to have in today’s climate. There are long-term growth opportunities too - but as always with investing, nothing is guaranteed.

Susannah Streeter: Ok, thank you very much Sophie, it’ll be interesting to see what happens with these companies in the years to come. Will these Eddies continue to be as steady? Please remember investing in individual shares isn’t right for everyone. That's because it's higher risk, your investment depends on the fate of that company. If that company fails, you risk losing your whole investment. If you cannot afford to lose your investment, investing in shares might not be right for you. You should make sure you understand the companies you're investing in and their specific risks. Any investment should be as part of a diversified portfolio – more on that later. Yields are variable and not a reliable indicator of future income.

Sarah Coles: Another area with plenty of change on the cards is state pensions, so let’s bring Helen Morrissey back. Helen, what do you think 2022 will be remembered for in the world of pensions?

Helen Morrissey: Thanks Sarah - that’s a really good question cause a lot has happened. 2022 will be known as the year that people heard about liability driven investments as well as the ongoing saga of whether the triple lock was staying or going.

Sarah Coles: Ah yes, liability driven investments - we heard about that a lot back in September/October time and it all seemed to get a bit scary. Can you explain a bit about what happened?

Helen Morrissey: Sure. Liability driven investments are a strategy used by many final salary schemes to make sure their investments rise and fall in line with, what they call, their liabilities. Now, these liabilities are the retirement incomes they pay out to people. Now, these schemes can be paying these incomes for decades and need to make sure there are enough assets to enable them to do this. Two major factors managers need to consider are movements in inflation and interest rates over time and they will effectively buy a kind of insurance - known as hedges – to help them manage these movements. Interest rates have been on the rise throughout the year and the cost of these hedges have also risen and the pension fund needs to find the money to pay these increased costs. However, in the aftermath of the mini-Budget the bond markets went absolutely haywire pushing up these costs rapidly and pension schemes were being asked to plug these gaps at very very short notice. If they didn’t have the cash available, then they had to sell assets - most notably gilts which pushed up interest rates even more creating a real downward spiral.

Sarah Coles: It looks like it could have veered out of control, but the Bank of England stepped in to steady things, didn’t it?

Helen Morrissey: Yes, the situation did escalate very quickly prompting the Bank of England to launch an asset purchase scheme whereby it pledged to buy gilts. It helped steady the market and it gave pension schemes time to get their strategies back in order again.

Sarah Coles: What do you think the impact of that has been?

Helen Morrissey: Well, it has certainly unnerved people and more are asking whether their pension is safe or not. To be clear this issue affected final salary schemes so if you are in a defined contribution scheme this didn’t affect you. It’s also worth saying that not all final salary schemes were affected badly. Many navigated the situation fine, and some actually emerged from it in a better position than when it began.

Sarah Coles: That’s good to know. You also mentioned the triple lock – that’s been a really big issue hasn’t it?

Helen Morrissey: Yes, it really has. In November we finally got confirmation that the triple lock would be returning next year with pensioners getting a 10.1% increase in their state pension. As the cost of living continues to bite this will have been welcomed by pensioners concerned the triple lock might be suspended for another year. So, just as a reminder, the triple lock is the formula used to uprate state pension every year. It rises with whichever is highest of average wages, inflation or 2.5%.

Sarah Coles: There does seem to have been an awful lot of back and forth on this hasn’t there.

Helen Morrissey: Absolutely. Earlier in the year then-Chancellor Rishi Sunak said it would be returning and this was reiterated by Liz Truss when she became Prime Minister. However, a series of ministers then refused to confirm whether the government was going to bring it back leading to concerns that it was just too expensive. It was finally confirmed in the Autumn statement which will be a relief to those who have been struggling with the rising cost of living this year.

Sarah Coles: That must have been a really stressful wait for final confirmation. So, looking ahead do you think these issues are going to continue to loom large?

Helen Morrissey: Absolutely, the status of the triple lock certainly will as the uncertainty surrounding it has prompted speculation that its days may be numbered. There’s a lot of discussion around how fair it is to effectively guarantee pensioners increases of at least 2.5% per year on their state pension when younger generations are seeing their wages fall in real terms. We are also expecting a report to be issued on state pension age early in the new year. As it currently stands state pension age is due to rise to age 68 by 2044 but this report looks at whether this should be brought forward. It’s believed the government wants to bring this shift forward to 2039. However, rumours are starting to swirl that this could now happen even earlier. The concern is that many people are simply unable to work until age 68 and this could cause them severe financial hardship. People need certainty in terms of how much they’re going to receive in state pension and when they will receive it and if the cost of maintaining the triple lock causes such uncertainty, then we need a review to highlight the best way forward.

Sarah Coles: Well, thanks for going through all that Helen, it’s going to be another interesting year for pensions by the sounds of things.

Helen Morrissey: Absolutely, always a busy year for pensions.

Susannah Streeter: And I’m sure you will keep us updated. Thank you very much, Helen. If you’re enjoying this podcast please do let us know what you think, and do subscribe wherever you get your podcasts so you get a fresh new episode in your inbox as soon as it’s ready. Well, let’s bring in Emma Wall now – our head of investment analysis and research here at HL, who has been looking at some funds to watch in 2023. We’ve got a very uncertain outlook ahead, haven’t we Emma?

Emma Wall: Yeah, we have Susannah. As our listeners have already been hearing, the economic outlook for 2023 is far from positive – recession is looming and stock market volatility is highly likely. And because of that, we’re feeling cautious about the coming year and our five funds to watch reflect this, with a greater number of multi-asset and fixed income funds than we have selected in previous years. It is important to note that any investment should be made with an outlook of at least five years, and before you invest you should consider whether a fund’s objectives are aligned with your own financial goals, and that you understand the risks. You can find out more about these five funds, including their charges, risks and key investor information, on our website. And remember, any investment should be as part of a well-diversified portfolio. This isn’t personal advice, and if you’re unsure about any of these investments, do seek professional advice. So, first up is Pyrford Global Total Return. This fund invests in a mix of stocks, bonds, commodities and currencies and has three aims: not to lose money over a 12-month period, deliver an inflation-beating return over the long term, and to do this with low volatility. This focus on capital preservation is a conservative stance that we really like in the current market environment, although of course there are no guarantees.

Susannah Streeter: So, next up is the Schroders Managed Balanced fund. What’s caught your eye here?

Emma Wall: So, this is similarly a multi-asset fund. So, invests in a mix of stocks and bonds. But here, the managers primarily invest in funds run by other talented Schroders fund managers, although they can invest outside of the Schroders range where necessary. Collectively those managers invest in hundreds of different companies and bonds. The managers also invest in alternative areas of the market and thematic funds. The alternatives part of the fund includes commodities, including energy and gold, as well as themes such as food and water and digital infrastructure. This means the portfolio offers plenty of diversification – always a key attribute of a good portfolio, but particularly important in times of market stress – which we are expecting for 2023.

Susannah Streeter: And I suppose, you know, fund managers at this time really have to keep such a close eye on the global macro-economic outlook.

Emma Wall: Absolutely, which leads us to the third pick which is M&G Global Macro Bond. Jim Leaviss, this fund’s manager, starts with his 'bigger picture' macroeconomic outlook, forming a view on economic growth, interest rates and inflation globally – topics which are, of course, dominating the headlines at the moment. Leaviss then has the freedom to invest in different types of bonds, issued in different currencies, to generate a combination of income and growth over the long term. The fund invests across global government bonds, investment grade corporate bonds, and higher-risk high yield and emerging market bonds. He can also use derivatives to enhance returns, but this is a higher-risk approach if used. Investing in different bonds issued overseas also adds currency risk.

Susannah Streeter: In terms of dividend income as well, what funds have you been watching?

Emma Wall: Absolutely, so we’ve heard Sophie speak earlier about the importance of dividends when you’re going into a volatile market. And our fourth fund is Jupiter Income. The UK has faced further headwinds in 2022, not least rising inflation and ongoing political upheaval. That said, the UK large company index, which features the biggest dividend payers in the UK market, has held up better than most global markets, partly helped by stronger returns from sectors including oil & gas and healthcare. Jupiter Income invests in UK companies that the managers believe are undervalued by the wider market. This focus on out-of-favour companies is called value investing. This style has struggled in recent years and means the fund can fall out of favour through certain periods of the market cycle. The value investment style has the potential to do better when interest rates and inflation are rising - things that we’re expecting for 2023 - and the style therefore came back into favour in 2022. Past performance obviously isn’t a guide to the future though. The manager invests in a fairly small number of companies, so each investment can influence performance for good or bad which increases risks. Investors should be aware that the fund’s charges are taken from capital, which could help boost the income but reduce some of the potential for growth.

Susannah Streeter: Okay, so finally, your last fund to watch, and a bit of a no-frills approach.

Emma Wall: Absolutely, we recognise that with so much uncertainty currently in markets, a tracker fund with a no frills approach could be a reasonable long-term option, and could form a good core building block of most portfolios. So, we’ve gone for a globally diversified fund of companies which we think could be a good choice for long-term growth potential – and in this area we like Legal & General International Index. While the fund diversifies across global markets, it’s heavily weighted in US companies which make up around two thirds of the fund. This is determined by the underlying index the fund is tracking. Other countries and regions represented in the fund include Japan, Canada, Europe, Australia, and Taiwan. The fund also has some exposure to emerging markets which adds diversification but also increases risk. The fund doesn’t invest in the UK though, so it could be useful for exposure to global markets without the UK. Other funds focused on the UK could be held alongside this one in order to gain exposure to our home market and have that total global diversification within your portfolio.

Susannah Streeter: Great, thank you so much Emma. Really interesting insight into the funds there to watch in 2023. You’re listening to Switch Your Money On from Hargreaves Lansdown

Sarah Coles: And now it’s time for the quiz! And for this one, we’re looking back at 2022, and some of the more unusual investment stories of the year.

Susannah Streeter: So, let’s start with the man who created plenty of them, Elon Musk. He swept into Twitter and made some sweeping changes, including sacking 80% of the staff, but when he did so, Sarah, what was he carrying? A giant broom, a kitchen sink, or a scythe.

Sarah Coles: It would have been great to see him try to get that scythe past security, but I know this one, it was a sink.

Susannah Streeter: Yes, he did. He tweeted a video of himself, with the words 'let that sink in'.

Sarah Coles: That’s quite a poor pun, really, isn’t it?

Susannah Streeter: Okay, right, so this year has been a fairly torrid one for crypto, especially for FTX, which saw a run on the exchange. But one of the things crypto has always been good at is coming up with weird names for the coins, so which of these are real, and which have I made up. So, is there such a thing as the useless etherium token, putincoin or unobtanium.

Sarah Coles: This sounds like one of your trick questions, so they’re either all made up, or they’re all real. So, I’m going to go for all real.

Susannah Streeter: You’re right, although I’m not sure I’d touch any of them with a bargepole. OK, so now onto more alternative investments but this time something more familiar – comics. So, in September this year, the comic which introduced the world to superman was sold for a whopping $3.4 million. Its official name was Action Comics No.1. But what was it known as through the deal process? Was it The Super Copy, The Krypton Copy, Or the Rocket Copy?

Sarah Coles: I’ve no idea, I’m tempted to say Krypton, but comic book fans are sticklers for accuracy and Kryptonite isn’t a good thing for Superman, so I’ll go for The Super Copy.

Susannah Streeter: it’s not a bad guess, but it’s wrong. It was actually The Rocket Copy – named after the rocket stamp that the original owner used to mark the cover when he was just 13, way back in 1938. That is a long time to keep a copy of a comic, isn’t it. The sale comes just months after the same comic sold for a record $3.2 million at Dallas’s Heritage Auctions to a buyer who clearly wasted no time re-selling the comic. I think my husband is hoping that one day all those Rolling Stones magazines in the loft might be worth something – I just think its wishful thinking.

Sarah Coles: Yes, I think he should probably just put them all in the bin.

Susannah Streeter: Yes, I’ve got to persuade him. OK, lets stick with collectibles – this time something slightly harder to store in the loft – tractors. A blue 40-year-old so called snort nose Ford tractor sold at auction in the UK in the Spring. It was bought for £20,000 back in 1982. So, how much did it sell for? Just how popular do you think tractors are? Was it £75,000, was it £125,000 or was it £215,000?

Sarah Coles: I can’t believe an old tractor could be worth a fortune, but you never know what people are going to choose to collect, so I’ll go down the middle with £125,000.

Susannah Streeter: No, it was more expensive - £215,000 – and purchased by Tom O’Connor a businessman who owns a utility business near Manchester. He grew up on a farm and turned into a collector – with 12 tractors now in his shed. Apparently, according to the auctioneers, the tractor market is alive and well and collectors are becoming younger – and demand is focused on tractors and machinery from the 70s, 80s and 90s – because they want to buy up a slice of nostalgia.

Sarah Coles: I’m not sure I’d have a lot of patience if someone in my house started collecting massive tractors – I think I’d actually rather my teenagers stuck with collecting dirty crockery under their beds.

Susannah Streeter: Imagine all the tractors lined up on a cul-de-sac near you. Let’s hope it’s not a trend for 2023. So, that’s all from us this time, but before we go, we need to remind you that this was recorded on 12 December 2022, and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Investments rise and fall in value, so you could get back less than you invest. Past performance isn’t a guide to the future.

Susannah Streeter: This is not advice for a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment and investors should form their own view on any proposed investment.

Sarah Coles: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however, HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So, all that’s left is for me to thank our guests Helen, Sophie, Emma, and our producer Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. Goodbye.