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The FTSE 100 has been everywhere in the store currently. Like each different market, it’s taken successful from Donald Trump’s commerce tariffs.
Though possibly it’s not wobbled fairly as a lot as individuals assume. I simply checked how the UK’s blue-chip index carried out final week and surprisingly, it climbed 4.6%, clawing again most of its latest losses.
Issues are powerful, however not catastrophic. Over the previous 12 months, the FTSE 100 has edged up 5%, with complete returns pushing nearer to 9% as soon as dividends are included.
One motive it’s held up is that the index wasn’t overpriced to start with. The FTSE 100 is full of prime dividend-paying shares, the type that acquired left behind in the course of the US tech frenzy.
UK shares look good worth to me
With central banks prone to lower rates of interest to melt the affect of tariffs, UK earnings shares might develop into much more enticing.
FTSE 100 shares have a tendency to supply increased yields than their US counterparts. Proper now, the common sits at 3.65%, versus simply 1.4% on the S&P 500.
If rates of interest fall, money and bond yields will observe. However there’s no rapid motive for dividends to drop. That would push extra traders again in the direction of shares.
Ten days in the past, I added British Airways-owner Worldwide Consolidated Airways Group to my SIPP. Earlier than that, I topped up on coach and athleisure agency JD Sports activities Style. And earlier than that, I picked up extra shares in life insurer Phoenix Group Holdings.
All seemed respectable worth to me amid the present turbulence. I’m now totally invested. I don’t have a penny of my SIPP in money.
Annoyingly, meaning I can’t snap up extra shares whereas they’re low-cost. However I nonetheless count on to be rewarded when immediately’s uncertainty clears.
I’m backing my Taylor Wimpey shares
One inventory I believe might rebound properly is housebuilder Taylor Wimpey (LSE: TW). Just some months in the past, its shares had been flying as markets priced in a number of rate of interest cuts for 2025, that will slash mortgage charges and revive demand for brand spanking new properties.
Issues haven’t panned out that approach. The Financial institution of England has delivered only one lower to date. Home value progress has slowed, with costs flat in February, in response to the most recent HM Land Registry knowledge. Affordability stays a serious hurdle, and with the momentary stamp obligation break having ended on 31 March, consumers now face increased prices too.
The Taylor Wimpey share value has slumped virtually 33% within the final six months, and practically 14% over the 12 months.
It seems cheap worth at 13.7 instances earnings, however the actual enchantment is the dividend. The trailing yield now sits at a whopping 8.4%, one of many highest on the FTSE. I maintain the inventory, and the subsequent fee hits my account on 9 Could. I can’t wait.
In fact, immediately’s issues might drag on, for months, possibly even years. Taylor Wimpey’s shares may not bounce again rapidly. However for now, the dividend seems protected sufficient, and I’ll be reinvesting each penny to construct my stake, prepared for the restoration. When it does, I reckon my Taylor Wimpey shares may lead the cost. No ensures although.
