How to BREXIT-proof my portfolio?

Voyager2002

I have just heard some analyses of the probable impact of BREXIT on various sectors of the UK economy. For each sector, the forecasts are alarming: only government bureaucracy seems likely to grow in the short term, and I cannot see a way to invest to benefit from this.

Short of off-shoreing my entire portfolio, or concentrating on the FTSE 100 who earn most of their income from abroad, are there any strategies to mitigate the likely losses and perhaps even benefit a little?

System

How much of your portfolio is invested in UK firms? You should be internationally diversified regardless of Brexit.

Voyager2002

Economic wrote: »

How much of your portfolio is invested in UK firms? You should be internationally diversified regardless of Brexit.

Yes, I am.

However, I do have significant holdings in some UK-focused investment trusts (Woodford's "Patient Capital"; Blackrock UK Small Business, as well the Finsbury Growth and Income Trust) and wonder how vulnerable these are.

IanManc

Voyager2002 wrote: »

I have just heard some analyses of the probable impact of BREXIT on various sectors of the UK economy. For each sector, the forecasts are alarming: only government bureaucracy seems likely to grow in the short term, and I cannot see a way to invest to benefit from this.

Short of off-shoreing my entire portfolio, or concentrating on the FTSE 100 who earn most of their income from abroad, are there any strategies to mitigate the likely losses and perhaps even benefit a little?

And for each sector the forecasts before the Brexit vote about what would happen after the vote if the country voted to leave have been shown to be completely wrong.

I suggest that you stop reading forecasts.

ColdIron

I suppose it depends on what you think will be the outcome in 2, 5 or 10 years because they could all be different. If you think it will be wholly bad then decrease your UK exposure. If you think it will be an unmitigated success then increase it. If like me you think it is not a binary thing and will comprise of some good stuff, some bad stuff, a lot of neutral stuff and be dominated by other global events anyway, the sensible course of action is to admit nobody knows and maintain a diversified portfolio

enthusiasticsaver

I would agree with cold iron. No one knows what the outcome will be post Brexit so we are not altering our investment strategy which is to diversify as far as possible and invest globally rather than just U.K.

Voyager2002

IanManc wrote: »

And for each sector the forecasts before the Brexit vote about what would happen after the vote if the country voted to leave have been shown to be completely wrong.

I suggest that you stop reading forecasts.

No, because BREXIT has not yet happened. All that has happened is a fall in the value of the pound and a consequent stimulus to those sectors that rely on foreign earnings.

bostonerimus

I'd do a quick geographical analysis of your portfolio. Being market cap weighted geographically is one approach. Domestic bias might mean that you want to slightly over weight UK investments, but don't go crazy. In short a diversified portfolio id your best bet for insuring against Brexit issues.

Voyager2002

ColdIron wrote: »

I suppose it depends on what you think will be the outcome in 2, 5 or 10 years because they could all be different. If you think it will be wholly bad then decrease your UK exposure. If you think it will be an unmitigated success then increase it. If like me you think it is not a binary thing and will comprise of some good stuff, some bad stuff, a lot of neutral stuff and be dominated by other global events anyway, the sensible course of action is to admit nobody knows and maintain a diversified portfolio

In fairness, nobody knows after ten years, or even five years. There seems little doubt that after two years the impact on major parts of the economy will be wholly bad.

pafpcg

Voyager2002 wrote: »

..... only government bureaucracy seems likely to grow in the short term, and I cannot see a way to invest to benefit from this.

Use a little imagination!

Invest in:
- property companies owning offices near Whitehall and Westminster (rents will rise due to increased demand).
- manufacturers of red tape and vellum for all that promised new legislation to replace the EU regulations, etc.

AnotherJoe

If your portfolio needs adjusting to take account of Brexit then it needs adjusting anyway. It’s like asking “All my investments are in Mongolian companies, how do I protect myself against a fall in the Mongolian economy”.

The answers obvious and if all your investments are in UK companies the same answer applies.

Voyager2002 wrote: »

No, because BREXIT has not yet happened. All that has happened is a fall in the value of the pound and a consequent stimulus to those sectors that rely on foreign earnings.

IanManc did say “after the vote” not “after Brexit”. If the forecasts as to what would happen after the vote were wrong why believe the ones as to what will happen after Brexit which are made by the same “experts”. That includes the BoE who dropped interest rates in a knee jerk manner when it was unnnecessary.