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The FTSE 100 has been all around the store these days. Like each different market, it’s taken a hit from Donald Trump’s commerce tariffs.
Though perhaps it’s not wobbled fairly as a lot as folks 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 robust, however not catastrophic. Over the previous 12 months, the FTSE 100 has edged up 5%, with whole returns pushing nearer to 9% once dividends are included.
One motive it’s held up is that the index wasn’t overpriced to start with. The FTSE 100 is filled with prime dividend-paying shares, the sort that bought left behind in the course of the US tech frenzy.
UK shares look good worth to me
With central banks more likely to minimize rates of interest to melt the affect of tariffs, UK earnings shares may change into much more engaging.
FTSE 100 shares have a tendency to supply greater 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 comply with. However there’s no quick motive for dividends to drop. That would push extra traders again in 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 Trend. And earlier than that, I picked up extra shares in life insurer Phoenix Group Holdings.
All seemed first rate worth to me amid the present turbulence. I’m now absolutely 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 anticipate to be rewarded when right this moment’s uncertainty clears.
I’m backing my Taylor Wimpey shares
One inventory I feel may rebound properly is housebuilder Taylor Wimpey (LSE: TW). Just some months in the past, its shares have 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 new houses.
Issues haven’t panned out that means. The Financial institution of England has delivered only one minimize to this point. Home value progress has slowed, with costs flat in February, in keeping with the newest HM Land Registry knowledge. Affordability stays a serious hurdle, and with the short-term stamp responsibility break having ended on 31 March, consumers now face greater prices too.
The Taylor Wimpey share value has slumped nearly 33% within the final six months, and almost 14% over the 12 months.
It appears affordable worth at 13.7 instances earnings, however the true attraction 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 cost hits my account on 9 Could. I can’t wait.
In fact, right this moment’s issues may drag on, for months, perhaps even years. Taylor Wimpey’s shares may not bounce again shortly. However for now, the dividend appears 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 could lead on the cost. No ensures although.
