What does Brexit mean?

The country has voted and we are to leave the EU. The likely effect is to see an initial drop in most asset classes. The pound has dropped overnight and may keep doing so in the immediate term.

This vote, and David Cameron’s impending resignation means that we are entering a period of significant political and economic uncertainty. This is likely to create additional volatility in markets generally, particularly in the short term.

During 2015, for our Portfolio Management Service clients, we recommended some changes in the face of market uncertainly and potential increased volatility. This was geared towards protecting positions compared to holding the higher volumes of equities prevalent in our standard portfolios. In our most recent proposed portfolio fund changes we have maintained relatively high cash positions and held more property funds but additionally have moved significant holdings from UK to overseas. We have also held general global cautious managed funds to enable managers of those funds to deliver some flexibility and diversification away from UK equities, whilst retaining the capability of beating cash returns. We anticipate these most recent fund changes will protect your positions relative to the general bog standard UK managed and equity funds.

Many of our clients continue to hold some degree of equity investments – deliberately so, but in a much reduced format than the standard allocations. We believe they will be impacted less than the general equity markets.

For clients who do not participate in our Portfolio Management Service, we expect their particular providers fund managers to have been monitoring and adapting their holdings relative to their particular funds aims and objectives.

On Wednesday I will be meeting with our in house market analyst to review the impact of the referendum on our portfolios, discuss expert opinions, and assess opportunities and threats for our clients. If appropriate I will communicate again thereafter.

If you would like to talk about your investments or pension funds and how we can help you improve your position and long term prospects, please contact dianne@reevesifa.com who will schedule a telephone discussion with myself or one of our team.

 

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