UK funds feel the Brexit effect, but FX remains best barometer
By International Adviser, 16 Jun 16
With Brexit now less than two weeks away, the volume of commentary finding its way into our sister publication Portfolio Adviser’s inbox is growing rapidly. For your convenience they have placed all the most interesting investment ideas into one place .
EU negotiations and sterling volatility biggest obstacles post-Brexit– Silk
While a Brexit outcome would permit Britain the freedom to broker its own trade agreements with the rest of the world, it would also inevitably result in challenging renegotiations with the EU, said Elliot Silk, head of employee benefits at Sanlam UK.
And Brexit would not only muddy the waters for the future of British trade with EU member states, Silk said, it would also have negative consequences for the EU.
“Britain has a world-class financial centre that no other major European city is likely to match in the short-term, is a major contributor to the EU budget (10% of the total in 2015) and is a leading voice for free markets.”
Because of this, Silk thinks it “unlikely that the EU will ‘play ball’ during negotiations over new trade agreements with the UK in an attempt to discourage other separatist calls that are likely to arise, particularly from the troubled peripheral countries.”
However, Silk speculated the biggest impact of a vote to leave will be the pressure placed upon the value of sterling. As a consequence, it will be even more essential to have a diversified portfolio, both in terms of sectors within the UK and regions globally, he asserted.
“Although client portfolios do have exposure to UK equities this is balanced against a range of overseas equity funds and other asset classes such as fixed income. Exposure to overseas equities is going to be vital in navigating the coming months; the focus of investment portfolios being balanced with exposure in regions outside of the UK will help to limit the impact of any volatility seen in the UK markets.”
Tags: Axa | Brexit | Hargreaves Lansdown | Lipper | Neil Woodford
