Proactive Investors - Chancellor Jeremy Hunt is believed to outline plans to help boost small and mid-cap company growth in next week’s Budget presenting an opening for investors.
In 2022 almost all the FTSE 100 constituents, apart from the 20 biggest stocks, suffered falls in price said Joseph Hill from Hargreaves Lansdown (LON:HRGV).
“This has led to attractive opportunities to pick up excellent businesses trading at valuations well below their historic averages and relative to international peers,” Hill added.
Hill predicts that the Budget next week will bring forth pro-growth policies like:
- Incentivising retirees back into work
- Creating investment zones with 0% corporation tax
- Extending the tax-relieving ‘super deduction’ scheme which rewards company investment
Should these predictions be correct, many UK-based companies could grow significantly switching investor focus away from giants like Shell (LON:RDSa), BP (LON:BP), and AstraZeneca (NASDAQ:AZN) -the Hargreaves Lansdown senior analyst stated.
Based on this, Hill believes investing in a fund tracking the FTSE All-Share like the ‘Legal & General UK Index’ could be a decent way to benefit from UK market growth.
The FTF Martin Currie Mid Cap fund could also do well as it looks to invest in companies that can generate capital gains over the long term.
“This involves considering both the economic outlook and the merits of individual businesses when choosing where to invest,” Hargreaves Lansdown said.
Another fund that could benefit from Budget changes is the Liontrust UK growth fund, which focuses less on discounted valuation and more on long-term growth.
“Liontrust thinks the secret is to invest in the few companies with a sustainable edge over the competition that will allow them to earn above-average profits over the long term,” added the Bristol-based wealth platform.