SIMON BROWN: I’m chatting with Hywel George, director of investments at Old Mutual Investment Group. Hywel, I appreciate the time today. Let’s first kick off with 2022 which, in many ways [as you said] in a note you put out recently, is really mirroring the 1970s. We’ve got high oil [prices], we’ve got inflation. We’ve had initially loose monetary policy, which of course then ends up in rising rates.
SIMON BROWN: It has the hallmarks of it. And that then raises the next question: one of the other hallmarks is sort of places to invest in the seventies. Gold was the obvious one. [US President Richard] Nixon had just come off the gold standard, so there were some slightly different nuances there. Some Reits, and everyone’s currently liking inflation-linked bonds.
And then real assets these days are important. So anything like infrastructure or renewables tends to be index-linked. If we can get a way to get retail investors as well as large institutions into those assets by, let’s say, tokenising them using blockchain, I think that could be a really interesting asset class for people to invest in, in an era of higher inflation.
The Chinese put a landing craft on the dark side of the moon four years ago. We didn’t even know what was on the dark side of the moon because you never see it, and the Chinese managed to land on it. They’re doing that because they want to mine for minerals to build space stations in space. They’ve said going to build the first space hotel in space in 2025.
HYWEL GEORGE: It’s not. The way to do it, the way we see it, is to invest in those companies which are based outside of China but can benefit from that Chinese growth and dominance because, once you invest in China, you’re investing in a communist state, which is what it is, and in governance standards which you can’t lay a great store by. So invest in companies which benefit from Chinese growth but aren’t based there.