Budget 2020: Funds to play the key themes

by Dzmitry Lipski from interactive investor |

Our head of funds research picks the funds and trusts best-placed to benefit from big initiatives. 

Initial reaction from the markets has been somewhat muted however, we get some sort of bounce from the UK equity funds, particularly those investing in mid and small domestic companies should benefit from a potential pick up in sentiment on the back of promised stimulus.

Fund ideas: Man GLG UK Income, Henderson Smaller Companies (LSE:HSL) and R&M UK Recovery Fund

With a focus on tacking pollution and encouraging energy efficiency the government is to freeze the levy on electricity and raising it on gas from April 2022. In addition, the climate change agreements scheme is to be extended for a further two years to support the most energy-intensive industries to transition to net zero carbon emissions.

The Chancellor also promised to spend £500 million to support the roll-out of new rapid charging hubs for electric cars and invest £300 million in tackling nitrogen dioxide emissions in towns and cities across England.

Fund idea: VT Gravis Clean Energy Income Fund offers exposure to companies engaged in the provision, storage, supply and consumption of clean energy. (50% in UK)

The Chancellor promised to extend the Affordable Homes Programme with a new, multi-year settlement of £12 billion, describing it as the largest cash investment in affordable housing in a decade, when the Conservatives came into government. The government also to cut interest rates by 1% on lending for social housing with more than £1 billion of discounted loans available for local infrastructure and £650 million of funding to help rough sleepers into permanent accommodation. 

Fund ideas: Threadneedle UK Social Bond fund invests in bonds issued by companies, governments, voluntary organisations such as housing associations, healthcare charities and universities that engage in socially beneficial activities and development.  

HICL Infrastructure (LSE:HICL) invests in infrastructure for local communities and to support the delivery of essential services, working in partnership with the public and private sectors (75% in UK). 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article. 

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