It has now been a week since the UK voted to leave the European Union and what a week it has been. With so many scare stories coming from the media, many investors would expect to have seen significant drops in markets, but actually the opposite was the case.
Why is this happening?
It is important to remember that the European Union Referendum vote was not an unexpected event and has been known about for many months. Investors, Governments and fund managers all knew that the vote was happening and that the UK could end up leaving the European Union. This meant that they could and they have all planned ahead to deal with how we navigate through this event.
For Governments and more importantly Central Banks (such as Bank of England), this means they have been planning on how to stimulate the economy for many months now. The Bank of England has put aside £250bn and are now considering cutting the UK Base Rate should they need to shore up markets and UK growth, but this hasn’t been necessary so far. It is not just the UK though, throughout the World Central Banks are looking at what they can do to positively affect global growth.
What has happened with our Portfolios?
Our own Managed Portfolio Series, which is controlled in-house by our experienced Investment Management Team, uses multi-asset diversification to spread your investment across a range of management styles, asset classes and geographic regions.
By doing this, we spread investment risk and during the events of this week, because of this diversification, our clients invested in one of our ten Manged Portfolios will have received solid positive returns from their investments.
What will happen moving forward?
Markets this week have brushed aside media and politically induced worries and are concentrating on solid investment-led fundamentals.
From speaking to the global fund managers we partner with, the key theme is that they see global positive growth moving forward. Volatile markets, although uncomfortable for investors, offer up opportunities for fund managers to buy assets at favourable prices.
Within the UK, the next step is a plan to be formulated as to how we move forward and we will continue to keep you informed on these events.
Your capital is at risk. Investments can fluctuate in value and you may not get back the amount you invest. Past performance is not a guide to future performance. Tax rules can change at any time.