In April, Buxton declared Brexit was “simply not going to happen”, with co-manager Ed Meier declaring that the £2.2bn ($3.3bn, €2.9bn) Old Mutual UK Alpha fund was not positioned to outperform should Britain leave the EU.
Today, the managers were not commenting on the portfolio, instead Buxton conceded “there is no merit in pretending that for investors and companies this is not, by some margin, the worst of two possible outcomes of the referendum.”
He added: “We had expected the result of the vote to be close, but our conviction was nevertheless that the status quo would prevail.
“The biggest sadness of today is that it is reasonable to assume that the UK will quickly enter a period of economic recession, the key reason why we believed the outcome would be different from what has materialised today.
“It is, in effect, likely to be the first ever ‘DIY recession’, as chancellor George Osborne prophetically called it.”
On UK equities, he said: “We believe that the prospects for domestically focused UK businesses are clearly the bleakest of all.
“FTSE multinationals will, on a relative basis, almost certainly perform better than their domestically oriented peers as the weaker pound will support overseas earnings when translated back into sterling.
“Nevertheless, investors should now brace themselves for an unpleasant period of relatively indiscriminate selling as funds aim to meet redemptions in conditions where liquidity may be more limited than usual.”
Old Mutual UK Alpha Fund – top 10 stocks, as at 31 May
| GlaxoSmithKline | 4.7% |
| Aviva | 4.5% |
| Sage Group | 4.4% |
| Lloyds | 4.3% |
| Vodafone | 4.3% |
| Royal Dutch Shell | 4.2% |
| Barclays | 3.7% |
| BP | 3.7% |
| AstraZeneca | 3.6% |
| HSBC | 3.5% |
