Having plummeted below 5800 at the start of the day on Friday after the refeendum outcome was revealed, the FTSE 100 had breached 6200 by mid-afternoon, suggesting it was among the global indices least affected by Brexit.
That’s not great consolation for those with diversified exposure to global equities, but to put it in to context the domestic market was trading much lower for longer during February’s turmoil.
The reaction from wealth managers today has been mixed, some buying back in to risk assets and others, well, doing very little.
Alan Higgins, chief investment officer at Coutts is one of those who prefers to wait it out: “Our inclination if declines are sharp enough is to be buyers on weakness, but as it stands today with the FTSE 100 just down 4-5%, we are not moving yet.
“Probably the biggest market impact has been Japan, partly reflecting the yen, which has overreacted the most, while Europe as a high beta market has also suffered.”
"The FTSE was trading much lower for longer during February’s turmoil"
Don't sell indisciminately
James Calder, research director at City Asset Management, takes a similar stance, stressing the worst mistake would be to start selling out of funds on an indiscriminate basis.
He explains: “We are still comfortable with our asset allocation. It is interesting to know that some of the defensive assets that we like – such as listed infrastructure vehicles – pretty much have held up well. Sterling aside, I think the market has taken this quite well. The drop in the FTSE is a lot less than some of the more bearish predictions.”
Other wealth managers were happy to engage with markets this morning. Having raised high levels of cash prior to the vote up to 24% in his Total Return portfolio, David Coombs, head of multi-asset investments at Rathbones, confirmed he would be selectively adding to risk today.
“Most likely this will be through adding to UK overseas earners, as well as selective US names that have been sold off,” he said.
UK overseas earners and selective US names that have sold off were on the shopping list of Richard Stammers, investment strategist at European Wealth.
He added: “Equally we will be looking for any interesting opportunities this may throw up, such as dollar-denominated UK bonds, which are likely to be sold indiscriminately by foreign investors.
“We will however retain some cash given the likelihood that volatility is likely to continue in the short term, and there will be future opportunities that we will hope to take advantage of.”