The Investing Show: Saving for retirement; and Multi-Asset diversification – the new buzz word

In today’s investing show, we discuss the key oil and banking stocks in the UK, and why multi-asset funds are the new theme for retirement money.

Joining today’s show are Simon Lambert, Editor at This is Money, Richard Hunter, Head of Equities for Hargreaves Lansdown, Nick Batsford, CEO at Tip TV, and Adam Ryan, Manager at BlackRock Income Strategies Trust.

Oil majors: Investors paid to wait

Hunter comments on the major oil companies, noting that they are continuing to remain their refining margins. Adding to this, he highlights how BP and Shell remain cash generative despite a neutral market consensus.

With inflation expected to get easier as time goes, and oil companies taking a fairly conservative outlook on oil prices, there is more opportunity to generate cash, says Hunter.

Keeping investing in mind, maintaining dividend is key for BP and Shell.

With fall in oil prices being the major reason behind the negative sentiment on oil stocks, Batsford highlights a technical analyst’s view that oil prices might be going in a bullish formation.

UK Banks: Barclays and HSBC remain the top favourite

Jumping to the UK banking sector, Hunter mentions that UK banks have had a good run, when compared to the US counterparts, who faced some disappointment in the investment banking industry.

Sharing insights on HSBC, Hunter notes that the profits were up, but revenues weren’t up strongly. Having floated a turnaround plan in June, HSBC is looking at some progress. The bank had real exposure to Asian markets and hence have been under pressure, but its balance sheet remains robust, adds Hunter.

On Lloyds, Hunter says that the bank is not too far away from throwing off the Government shackles, and this should go well for dividend positions.

He adds that UK banks are seeing a big reduction in impairments.

On the favourite banking stocks, Hunter outlines Barclays and HSBC as serving some opportunity to investors.

Investing in retirement the ‘multi-asset’ way

Continuing with the show, Ryan outlines the strategy of BlackRock Income Strategies fund, having re-branded from the previous ‘British Assets’, and also revamped their strategy – shifting from equities to multi-asset, and from a UK-centric bias to a global one.

Ryan notes that they are trying to target a level of income which is CPI +4% return over the next 3-5 years.

Ryan comment on the their multi-asset strategy, noting that putting money in equities has a risk element, and they are trying to diversify this risk, but looking at opportunities in different sectors, and geography. He highlights how they adopt a strategic view to the world – example: India as a key beneficiary to lower oil price, and investing in companies which would remain stable if oil price stays at the current levels.

Ryan says that there is a need to consider diversification, and people are slowly catching on the buzz.

For further insights - Watch the video interview