I’m always looking for new UK shares to buy for my portfolio. Right now, I’m focusing my research efforts on a couple of sectors, which I believe will experience the most growth as we advance. The first sector is technology.
Tech sector investments
A couple of blue-chip stocks stand out to me as attractive investments in this sector. My first choice is Experian.
Specialising in credit ratings and financial information, this company has a vast database, which is virtually irreplaceable. I think this gives the firm a solid competitive advantage and should underpin its growth for years to come.
That’s why I’d buy this FTSE 100 tech champion for my portfolio of UK shares. The one key challenge Experian faces is keeping cyber attacks at bay. A significant attack, or loss of information, could damage its reputation and hold back growth.
The other technology stock I’d buy is the Scottish Mortgage Investment Trust. This trust owns a global basket of tech stocks. So rather than trying to pick my own investments, by adding this trust to my portfolio, I’ll acquire a tech portfolio at the click of a button.
Of course, with this approach, there’s always going to be a risk the trust’s managers will pick the wrong investments.
Renewable energy
As well as technology, I would also buy UK shares with exposure to renewable energy. The standout example here is SSE.
This utility provider has outlined plans to spend billions of pounds over the next few years increasing renewable energy generation. It’s already one of the largest wind farm and renewable energy asset owners in the country.
And as well as its growth potential, the stock also offers a dividend yield of 5.3%.
Another income and renewable energy champion is Greencoat Wind. This enterprise also owns a portfolio of wind farms around the UK. It’s been increasing the size of its portfolio recently to capitalise on the rising demand for renewable energy. At the time of writing, the stock supports a dividend yield of 5.4%.
The one critical risk hanging over both of these organisations is overspending in the rush to develop renewable energy assets. If they over reach, they may struggle to achieve a solid return on investment. If returns fall, dividends may also come under pressure. That’s something I’ll be keeping an eye on.
UK shares to buy for growth
The final sector I want to own is resources. There are two reasons. Rising prices are spurring fears of inflation, and commodity prices are generally good hedges against inflation. At the same time, demand for critical resources such as iron ore is growing around the world. This demand is pushing prices higher.
These tailwinds may translate into fat profits for Rio Tinto, one of the world’s largest iron ore miners. While there’s no guarantee commodity prices will rise and remain elevated, I’d like to own this stock in my portfolio of UK shares for the reasons outlined.
