001 INVESTING INSIGHTS FOR 2025

Alexandra Buchan Heelas is a Portfolio Manager and Director at Waverton Investment Management. In this show, Alexandra gives us her analysis and thoughts for investing in the year ahead.
https://www.waverton.co.uk/about/meet-the-team/alexandra-buchan-heelas/

Lisa Conway-Hughes is a Chartered Financial Adviser, a Fellow of the Personal Finance Society and founder of LCH/WEALTH. Lisa also regularly posts financial information, education and updates on her hugely popular Instagram account:
https://www.instagram.com/misslollymoney/

Book a one to one Financial Diagnosis with LCH/WEALTH here:
https://lchwealth.co.uk/lch_wealth_services/one-to-one-financial-diagnosis/

This content is to be used for information and educational purposes only and nothing contained in it is or is intended to be construed as individual financial advice. Financial advice must only be given on an individual basis. If you require legal advice, financial advice or any other expert assistance, you should seek the services of a competent and qualified professional.

Show Transcript

Podcast Transcript: Money Lessons with Lisa Conway-Hughes & Alexandra Buchan Heelas

Introduction

Lisa Conway-Hughes:
15.6 million UK adults are now investing. Stock pickers continue to see opportunity, but what are the predictions for 2025?

We’ve got Donald Trump policies making waves on his way to the White House, and as always, we’re heavily impacted by the US economy.

Today, I’ve invited Alexandra Buchan Heelas from Waverton to talk about what she learned from last year, what she’s watching for in 2025, and what she expects from her portfolios.

Welcome Alexandra, and thanks for joining us.

Alexandra Buchan Heelas:
Pleasure to be here.

Lisa Conway-Hughes:
You’re a portfolio manager at Waverton, shortlisted three times for PAM’s 40 under 40, and currently managing around half a billion in client assets. Not too shabby.

Recap on 2024

Lisa Conway-Hughes:
Tell us about last year. Was it a rocky one, or could you relax?

Alexandra Buchan Heelas:
Definitely not relaxing. There was a real dichotomy between the doom-and-gloom headlines—wars in Ukraine and the Middle East, political upheaval—and the performance of equity markets, which actually delivered two consecutive years of 20%+ growth, a first since 1998.

While everything screamed “risk off,” our stock pickers saw opportunities and wanted to stay invested.

Client Sentiment in 2024

Lisa Conway-Hughes:
Were clients nervous?

Alexandra Buchan Heelas:
Yes, understandably so. It felt odd to be overweight equities when the news was so grim. But those investments paid off, delivering strong returns—especially driven by the “Magnificent Seven.”

The Magnificent Seven

Lisa Conway-Hughes:
Remind us who they are?

Alexandra Buchan Heelas:
Microsoft, Amazon, Alphabet (Google), Apple, Nvidia, Meta (Facebook, Instagram), and Tesla. They’ve dominated the US market for years and heavily influence overall performance. We hold Microsoft, Amazon and Alphabet—based on their cash flow sustainability, management, and valuations.

We’ve avoided Nvidia, which has boomed on the back of AI. We think it’s overpriced with unsustainable profit margins and expect a new competitor to challenge them soon.

AI, GPUs & Sustainability

Alexandra Buchan Heelas:
Nvidia dominates GPU production, but newer chips are being developed to be more energy-efficient. Right now, AI tools like ChatGPT use significantly more power than traditional search engines. The environmental cost is real—cooling the systems requires a lot of water and energy.

Investors often forget that while tech is seen as innovative, it can be at odds with ESG principles due to its energy use.

Predictions for 2025

Lisa Conway-Hughes:
Let’s talk 2025. What’s on your radar?

Alexandra Buchan Heelas:
Key concern: inflation. Post-Covid and war-fuelled spikes didn’t come down as expected. That’s kept interest rates higher than anticipated. Mortgage rates are climbing again as two-year swaps shoot up.

In the US, Trump’s potential policies—tariffs on Chinese goods, reduced labour supply—are all inflationary. And as always, what happens in the US tends to impact us here in the UK.

We also import most of our energy, so we’re exposed to price volatility. Some domestic policies like National Insurance changes may also spark wage inflation.

So yes, I’d expect a rockier year.

Opportunities from Trump’s Presidency?

Lisa Conway-Hughes:
Any upside if Trump gets back in?

Alexandra Buchan Heelas:
Absolutely. Policies like onshoring factories and chip production could benefit infrastructure and industrial companies. Deregulation can boost sectors like finance. In fact, markets performed well under his last term, and he’s very focused on using the stock market as a performance indicator.

Spotlight on Japan

Lisa Conway-Hughes:
Any overlooked markets?

Alexandra Buchan Heelas:
We’re very interested in Japan. Despite a history of lacklustre performance, structural reforms and governance changes make it attractive. There’s strong exposure to automation, energy transition and long-term growth themes. Companies are starting to think more like Western shareholders, which is encouraging.

Cash vs Investing

Lisa Conway-Hughes:
The FCA says 15.6 million UK adults invest, but many, especially women, hoard cash. Why do you think that is?

Alexandra Buchan Heelas:
Lack of confidence and not knowing where to start are big reasons. That’s where advisers like you come in. It helps to keep three to six months of cash for peace of mind, but beyond that, investing makes sense.

Start small, use global equity trackers, and build up gradually. The real risk isn’t volatility—it’s inflation eroding your capital.

For example, £1,000 invested with a 7% return doubles in 10 years. In cash, at 3% inflation, it drops to around £750. That’s a huge difference.

Top Tips for Nervous Investors

Don’t accumulate excess cash—invest what you typically save each month.
Don’t invest money you’ll need in the next 3 to 5 years.
Use pensions and Junior ISAs for long-term growth. You can’t touch them, so let them grow.

Lisa Conway-Hughes:
What about people heavily invested in the S&P 500?

Alexandra Buchan Heelas:
It’s risky to be overexposed to US tech. In 2022, they dropped significantly. Diversification helps—adding gold, alternative assets, or exposure to other markets can protect you.

Right now, US tech stocks dominate market weightings. Index trackers amplify this because they have to buy more as those stocks rise. But it works both ways—on the way down, they also have to sell more.

Active vs Passive Investing

Lisa Conway-Hughes:
Do you personally use trackers?

Alexandra Buchan Heelas:
No, I invest 100% actively. We aim to identify the “oak trees”—resilient, market-leading companies that survive storms and come out stronger. These are the quality businesses we focus on.

Yes, active management has higher fees, but the protection it offers in downturns can justify the cost. We avoid overpriced or poorly managed stocks, which trackers can’t.

Final Thoughts for 2025

Alexandra Buchan Heelas:
I don’t think we’ll see the same level of equity performance in 2025. I hope to see less market concentration, which would spread risk and create a healthier investing environment. But there will still be fantastic stock opportunities globally.

Lisa Conway-Hughes:
Thank you so much, Alexandra.

Podcast: Money Lessons with Lisa Conway-Hughes
Guest: Alexandra Buchan Heelas, Portfolio Manager at Waverton