Britain’s voters made the historic decision to leave the EU last week, despite all indicators suggesting the vote would go the other way.
What will now follow will be a period of economic, political and constitutional uncertainty. This will surely manifest in volatile asset prices, particularly UK and European equities. The immediate policy response, and strong statement from the Bank of England Governor, has helped to calm nerves. At the time of writing, the FTSE100 has stabilised above 6,000 points, well ahead of the 12 month lows seen earlier in the year.
Despite the consensus prediction of a remain victory, we spent a lot of time over the last few months with our panel managers. We wanted to understand their positioning and also the immediate decisions they would take following either result. We were comforted with the robust contingency plans that they had in place, and also the steps they had already taken to mitigate the potential fall-out.
As an additional safeguard, our client portfolios are all well diversified, using the major asset classes and also with a wide geographical spread. This is a prudent approach for all market conditions, but particularly at times of higher market volatility.
All of our panel funds, bar two, are actively, rather than passively, managed. We find ourselves in a period where active fund management should prove particularly beneficial, as stock selection will be very important over the coming months.
In summary, our investment process puts our clients in a strong position and we feel that the best approach, for now, is to stick with the long-term investment plans already in place, and make no short-term decisions. This is a fluid situation, of course, so we will continue to monitor events very closely and we will contact you should we feel that alternative action is necessary. However if you have any concerns in the meantime, do not hesitate to contact us.