Outcome of the EU Referendum
The UK’s decision to leave the European Union has been widely reflected in financial markets. While markets have been volatile, there has been some evidence of a ‘flight to safety’, with most equity markets falling in the immediate aftermath of the result, while the government bonds of the largest developed nations, including the UK, have risen. The pound has fallen significantly against other major currencies.
For customers who invest in our multi-asset portfolios, we aim to reduce the impact of market volatility by spreading investments across a range of different asset classes and regions. This approach to investing was beneficial over the period immediately following the referendum result. While our UK equity investments generally fell, the value of many overseas equity investments actually rose in sterling terms, primarily as a result of the weakening of the pound.
The response of financial markets to the referendum result continues to develop and in the short term we may see further volatility. We will of course continue to monitor the situation closely in order to identify any emerging issues that may be relevant to our customers and our funds. However, it very much remains business as usual and we continue to invest for the long term, with the best interests of our customers in mind.
Should I make any changes to my investments?
Everyone’s circumstances are different and we aren’t able to give you advice on what is appropriate for you. As always, if you are considering your own position, you should remember why you invested in the first place and consider the lifespan of your investments. Most importantly, you should seek financial advice before making any changes to your investments.
As explained above, one way in which you can help reduce the impact of any potential market volatility is to spread your investments across different asset classes and regions. For more information about investing across different asset classes, take a look at our An introduction to diversification in multi-asset funds guide.
Remember that before making any changes to your investments, you should seek financial advice. If you don’t have a financial adviser, you can find one local to you by visiting find a financial adviser, which is responsible for promoting financial advice in the UK.
The information contained in this article has been derived from sources which we consider to be reasonable and appropriate. It may also include our views and expectations, which cannot be taken as fact.
Investment markets and conditions can change rapidly and, as such, the views expressed in this update should not be taken as statements of fact nor be relied on when making investment decisions. Forecasts are opinions only, cannot be guaranteed and should not be relied on when making investment decisions.