RISKS AF­FECT­ING BOND PROX­IES

Shares - - EDUCATION -

Fi­delity in­vest­ment di­rec­tor Matthew Jen­nings says util­i­ties are out of favour as the UK govern­ment is en­cour­ag­ing peo­ple to switch sup­pli­ers and en­forc­ing price caps, while in­vestors worry that the Labour Party could come into power.

De­spite this, there are in­ter­est­ing op­por­tu­ni­ties with Jen­nings flag­ging

Na­tional Grid (NG.) thanks to its good div­i­dend yield and fun­da­men­tals.

An­other sec­tor out of vogue is the to­bacco in­dus­try, af­fect­ing Bri­tish Amer­i­can To­bacco and Im­pe­rial Brands.

In­vestors have turned against the sec­tor as ri­vals have stolen mar­ket share amid reg­u­la­tory pres­sures, lower cig­a­rette sales and the in­creased pop­u­lar­ity of va­p­ing.

Even con­sumer colos­sus Unilever could be in for a tough time as con­cerns over val­u­a­tion and fu­ture growth could weigh on per­for­mance ac­cord­ing to Jen­nings.

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