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 .
No Knee-jerk reactions – Gardhouse
In a recent note, Lee Gardhouse, chief investment officer at Hargreaves Lansdown cautioned investors not to get caught up in the excitement when it comes to making decisions on big macro events.
“We think it’s impossible to know the long term economic implications of a British exit from the European Union. While an out vote would most likely lead to a market fall, we cannot just assume this will be bad for the long term prospects of the stock market,” he said.
As a result, Gardhouse said the firm is not planning to partake in any knee-jerk reactions either before or after the referendum.
“Instead we will continue to focus on areas where we believe our research will generate the best returns for investors, predominantly on identifying and backing great managers.
“We only take a strong view on market direction when our analysis shows extreme valuations have been reached. At present we consider UK and European markets to be reasonable value versus their history, but not a bargain. We do however believe that equities remain appealing on a relative basis, when compared to bonds and cash. We see equities as offering an attractive starting yield, with the prospects of capital and dividend growth over the long term, while government bonds are now presenting a pretty high level of risk for a measly level of return,” he added.
Tags: Axa | Brexit | Hargreaves Lansdown | Lipper | Neil Woodford
