UK funds feel the Brexit effect, but FX remains best barometer
By International Adviser, 16 Jun 16
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Diversification and longer-term outlook will keep you above the fray – Henning
The day after the EU Referendum will be business as usual for Distribution Technology (DT) after its Investment Committee revealed it would not make alterations to the Dynamic Planner asset allocation strategy.
DT’s Committee argued the purpose of its digital tool is antithetical to “short-term tactical positions in the light of a ‘flip-of-a-coin’ referendum outcome.” And because of their deliberate long-term strategic positioning, DT will refrain from making any snap judgments immediately before or after the vote.
The takeaway from the inconclusiveness of competing polls within the last week should be that diversification across a range of core asset classes and currency exposures is incredibly beneficial, the firm stated.
“Our assumptions for non-UK denominated assets are unhedged and are translated back into Sterling. This means that should Sterling weaken further, investors will benefit directly and of course the reverse would apply if it rebounds,” DT’s principal consultant, Jim Henning said.
“Whilst there is an intentional home bias applied to the majority of the Dynamic Planner allocations, remember the UK Equity Market Index assumption consists of mainly large multi-national companies who derive a significant proportion of their earnings in overseas currencies,” he added.
Tags: Axa | Brexit | Hargreaves Lansdown | Lipper | Neil Woodford
