The Brexit event is undoubtedly a significant event for the UK and investment markets. Despite the initial falls in the FTSE100 it has recovered and markets generally are calm at present.
Save & Invest’s investment principle is to diversify and whilst some individual funds have fallen overall we see that portfolios in general are fairly static or even slightly up.
The fall in the pound has meant that the diversified international funds we use have benefited when they are revalued into sterling and it appears that sterling will be significantly weaker than recent years for some time.
That said we are clearly in uncertain times and we do expect periods of volatility and market nervousness as we await the new path the country will take. Of most immediate concern is a slowing economy and the Bank of England has indicated it will take measures, including cutting interest rates to support or stimulate it.
Before and after the Referendum we have been speaking to managers about how their funds would respond to the outcome and we currently believe no major changes need to be made to clients’ portfolios, since the multi asset funds are already responding the changing conditions.
The recent news on Standard Life, Henderson and M&G property funds being suspended is not of concern to Save & Invest clients as we anticipated potential problems with the Commercial Property Sector earlier this year and most clients took our advice to encash their holding in March this year.
In short, we expect volatility for an extended period and so the most important tactic is to review your strategy for coping with volatility