A FINAL WORD

ISA portfolios should not just include plenty of income stocks – they should also be diverse, with companies drawn from a range of sectors. In that regard, firms such as defence giant BAE Systems and drinks group Diageo could prove appealing.

Sadly, countries will still need arms and security equipment for the foreseeable future, arguably more so now than in many decades.

BAE is one of the best in its industry – the company has a strong order book and a dividend yield of more than 4.6 per cent. Diageo is very different, with a stable of brands, including Smirnoff, Johnnie Walker, Captain Morgan, Baileys and Guinness. The company has not been immune to the impact of Coronavirus but its presence in 180 countries provides some protection and any adverse effects are likely to be temporary.

The UK is not a huge contributor to Diageo’s bottom line but the group is still likely to benefit from Chancellor Rishi Sunak’s bold decision on alcohol duty last week. And that move highlights a deeper truth – in troubled times, consumers like a drink. At £24.42, the shares should deliver over the long term.