With analysts assured that we’ll (lastly) get the primary of a number of rates of interest cuts this summer season, I don’t suppose it’s any coincidence that the FTSE 100 lately set a brand new all-time excessive.

I additionally reckon it might be simply the beginning as buyers develop into more and more prepared to again previously-shunned progress shares.

Able to fly

One instance of a top-tier member which may soar if/when curiosity cuts are introduced is Scottish Mortgage Funding Belief (LSE: SMT).

Regardless of rising 30% within the final 12 months (little doubt helped by having an excellent dollop of its belongings invested in Nvidia), the Baillie Gifford-run fund continues to be roughly 40% under the all-time excessive hit again in November 2021. I consider it can ultimately get well this floor after which some.

One purpose for that is that the fund is closely centered on proudly owning the form of shares that would ship explosive returns in time.

That final bit is vital. Of their adolescence, progress corporations normally require money — within the type of debt — and many it. As a rule of thumb, debt is anathema to buyers in a excessive rate of interest atmosphere. However this burden turns into simpler to service as charges fall, therefore why I’m so bullish.

Nonetheless nice worth

It’s not fairly a slam dunk although. An ongoing concern I’ve is that Scottish Mortgage is overly-invested in personal corporations. These are more durable to worth within the standard sense. So, there’s an opportunity that the belief has overpaid to get publicity.

On a extra optimistic observe, getting in early might show to be a masterstroke if (and that’s a whopping ‘if’) a few of these corporations had been to go public as financial forecasts enhance.

In the meantime, the belief trades at an 8% low cost to its internet asset worth. That’s not as excessive because it as soon as was. Nevertheless, I nonetheless contemplate it to be an amazing price for what is perhaps a stonking return down the road.

Already the second-largest holding in my Shares and Shares ISA, I intend to proceed including to my place.

Contrarian inventory

Luxurious style agency Burberry (LSE: BRBY) might additionally ship stellar returns for affected person contrarians like me.

That may look like an outlandish declare as issues stand. Numerous poorly-received buying and selling updates — led to by the cost-of-living disaster — have induced the corporate’s worth to greater than halve in simply 12 months. Yikes!

Issues would possibly get even worse. Again in Could, the corporate introduced that pre-tax revenue for the 12 months to 30 March had tumbled 40% to £383m. I doubt enterprise has miraculously bounced again since, particularly in key markets akin to China.

Takeover goal

So, is Burberry doomed? I doubt it. This can be a firm that’s been round since 1856. You don’t get to stay round for that lengthy with out encountering the odd wobble in shopper sentiment.

No, the query I’m asking is how a lot unhealthy information is now priced in. With the shares sitting at a 12-year low, I’d say quite a bit. The truth is, I feel there’s a transparent and current hazard that Burberry might be acquired by a deep-pocketed suitor if CEO Jonathan Akeroyd can’t regular the ship.

I’m going to reassess the corporate after July’s (in all probability woeful) buying and selling replace. However I do suppose the danger/reward trade-off is more and more compelling.