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 .
Devaluation isn’t the end of the world – McLean
We need only look to the past to discover that there are worse things that can happen to the economy than a devaluation, said Colin McLean, managing director at SVM Asset Management.
“Certainly, some international investors could find the UK less attractive but history shows us others are positively attracted to economies that get a devaluation boost,” said McLean. “There may even be more takeover activity from overseas firms looking for bargains on the London stock market.”
Furthermore, McLean asserted that a weaker pound may be beneficial in the short-term for the economy and certain kinds of shares.
“In the aftermath of the banking crisis, the pound fell 30% against the US dollar just in six months. Yet, it marked the beginning of the economic recovery and strong performance by shares. Amidst the despair of international investors, it proved to be a good time to buy UK shares.”
Besides, the UK’s significant overseas earnings and certain global companies listed in London (like the kind selling commodities for dollar prices) will hardly be impacted by the instability of the pound, said McLean.
“No matter the outcome, having a long-term vision is key. Over time, the global economy grows and many shares benefit. Investors must ignore the political noise and use the past to gain perspective,” he stated.
Tags: Axa | Brexit | Hargreaves Lansdown | Lipper | Neil Woodford
