The FTSE 100 index has had a pretty solid year considering all the turmoil we’ve gone through. But as the end of the year approaches, investors are looking ahead to what 2022 might have in store.
Investing experts at IG have compiled their top picks for shares to look out for in 2022. Here’s a complete breakdown of their choices and what investors need to know about the upcoming year.
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What are the top FTSE 100 shares to look out for in 2022?
There’s no way to predict how the next year will unfold. However, we can look at past trends and the wider economic outlook to get a sense of what the future investing landscape might look like.
These are the ten FTSE 100 shares that the experts at IG believe could have a booming 2022.
1. Rolls-Royce Holdings (RR)
This is a stock that should perform well under a strong economic recovery. The Rolls-Royce share price is currently sitting around 89% below its five-year high.
So, although confidence may be shaky right now due to travel issues and supply bottlenecks, this business has a lot of space to grow under the right conditions.
2. International Consolidated Airlines Group (IAG)
Another share that’s had a tough time due to travel restrictions. But many investors are hoping it will bounce back hard as and when things return to normal.
IAG is expecting a huge loss this year, but that’s no shock. If the group can hold on and travel picks up, this FTSE 100 stock is definitely poised for a big rebound.
3. Lloyds Banking Group (LLOY)
Although the recent price performance of Lloyd’s shares hasn’t been great, the company has recently seen huge profit growth compared to last year.
If inflation continues to build and the Bank of England raises interest rates, this will be great news for the bank. As the UK’s largest mortgage lender, interest rate rises mean profits could increase further.
4. Persimmon (PSN)
This British home builder is a big dividend-paying stock that currently has a whopping dividend yield of 8.9%.
The UK housing market has been on fire since the start of the coronavirus pandemic, and small interest rate hikes are unlikely to deter buyers. So 2022 could shape up to be another promising year for the business.
5. Rightmove (RMV)
Another company tied to the housing market is Rightmove. it’s the UK’s largest online real estate portal and it’s become a household name with UK investors.
Surging interest in homes has helped the firm go from strength to strength. The company’s popularity and low operating costs could see its strong performance continue throughout 2022.
6. Compass Group (CPG)
Compass is one of the largest catering companies in the world. And although hospitality has had a rough time of late, the company’s share price has held quite strong.
After surviving such a big hit, this might be an excellent FTSE 100 share to keep an eye on if the economy gets back to normal.
7. Whitbread (WTB)
Whitbread is another hospitality business, but with a focus on hotels and restaurants. Solid returns could be back on the menu for next year.
Restrictions will have a big impact on the ability of the company to perform, but it stands to benefit from a return to business as usual.
8. Diageo (DGE)
This big alcohol brand has been beaten down by hospitality restrictions. However, a resurgence in pubs, bars, restaurants, and hotels during 2022 would be great news for this mammoth stock. I’ll raise a drink to that!
9. BP (BP)
Although not a fashionable share, BP is one of the biggest constituents of the FTSE 100. With energy being a top priority, the profits for the business are surging and show no signs of slowing as we move into the new year.
10. Royal Dutch Shell (RDSA)
Being an oil-related stock, Shell shares are not a great choice for socially responsible investors. However, our reliance on oil and gas means that until there are viable alternatives, we will rely on Shell’s services for some time yet.
What do FTSE 100 investors need to know about investing in 2022?
No one knows exactly how 2022 will pan out. If you want to invest in the biggest British businesses but don’t want to pick out individual companies, you can use a FTSE 100 fund to invest in the top hundred firms with one single investment.
Whether you pick out top shares or invest more broadly, using a brokerage account with lots of choice and low fees could serve you well in 2022. With no changes to ISA rules, it’s also worth considering something like the IG Stocks & Shares ISA to hold your investments and protect them from tax.
Remember that all investing carries risk and you may get out less than you put in. So be sure to consider any investments carefully. If you need some guidance, check out our complete guide to share dealing to brush up your skills before the new year.