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Anthony Cross: Plotting a path through Brexit uncertainty

We adhere to an investment process – the Economic Advantage – which does not involve the prediction of macroeconomic or political outcomes. We believe it is better to concentrate on the selection of companies capable of outperforming over the cycle.

 

In the run up to the EU Referendum we therefore made no significant changes to our portfolios, nor have we done so since the Leave vote was announced.

UK votes for Brexit: what this means for markets and investors

Stephen Bailey, fund manager, Macro-Thematic team: We have considerable US dollar exposure in our portfolios and while this is not a Brexit-driven position, we believe it should provide protection in the event of a drop in sterling. We believe the vote to leave could cause Cable (the sterling/US dollar exchange rate) to correct by around 10% and would act to hedge our position if we see a 1.30-1.35 level. In terms of equity markets, we believe the UK could come off by around 5% but stress that we see any market and currency implications of Brexit as short term and do not expect any long-term damage. London remains the most important financial centre in Europe and its size and skilled labour pool, together with English being the global business language, should ensure it stays in this position. That said, given the damage to the Conservative party in recent weeks, we believe a leadership challenge and perhaps a General Election are possible, which will bring a fresh bout of uncertainty. Patrick Cadell, fu ...

Disclaimer

Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

Liontrust, its partners and/or employees may have had, have or will have positions in the securities (or related financial instruments) which are those referred to, or those underlying the content discussed in this blog.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a regulated investment advisor or licensed stock broker before investing.

Shares in companies referred to may be relatively illiquid and hard to trade, therefore riskier than other investments and there could be a large bid/offer spread, so if you need to sell soon after you’ve bought, you might get less back than you paid. This can make them riskier than other investments.