BREXIT and defensive portfolio measures

fcandmp

Just wondering what if any measures folks might be taking to position for a potential “no deal” scenario, particularly in context of U.K. portfolio holdings and sterling currency exposure. Is anyone reducing their UK exposure and if so how much action are they taking

Many thanks

atush

Any potential actions should have taken place earlier, a bit late now.

LHW99

Nothing, except adding some more to holdings if prices look OK.
Considering increasing UK allocation, but not made a decision yet.

dunstonh

Just wondering what if any measures folks might be taking to position for a potential “no deal” scenario, particularly in context of U.K. portfolio holdings and sterling currency exposure. Is anyone reducing their UK exposure and if so how much action are they taking

none whatsoever. The UK equity allocation of our portfolios is lower than the global equity content. So, nicely hedged for all scenarios.

Is anyone reducing their UK exposure and if so how much action are they taking

Not now. Indeed, it isnt going to be long before we may consider increasing UK allocations. UK equity is cheap and has had recent falls (especially in mid cap) and once the uncertainty is gone, it could well be ripe for recovery. Reducing UK allocations now is reacting after the event. That isnt to say there may not be more volatility in UK equity to come in the short term but you are really quite a long way past the point to start reducing allocations.

DairyQueen

I am increasing my UK exposure. Home bias is something I try to resist but, as dunstan mentioned, UK stocks are currently looking good value courtesy of Brexit uncertainty.

Brexit is just a small blip on the horizon of a decades-long, investment strategy. What happens in the US has far more impact on global markets, and a well-diversified portfolio will have more (much more) ex-UK exposure than UK.

Audaxer

dunstonh wrote: »

Not now. Indeed, it isnt going to be long before we may consider increasing UK allocations.

I am thinking of investing more in UK equity now before the prices go up again so as I don't miss the low prices. Interesting to note that you are waiting a bit longer before you consider increasing UK allocations. Are you thinking they are going to fall a bit further?

dunstonh

Audaxer wrote: »

I am thinking of investing more in UK equity now before the prices go up again so as I don't miss the low prices. Interesting to note that you are waiting a bit longer before you consider increasing UK allocations. Are you thinking they are going to fall a bit further?

Lots of strings pulling at the weighting chart. US equity has fallen a lot as well. Emerging Markets is probably entering its final phase of the cycle this year too. We cut UK property holdings right back.

We should never try to predict the unpredictable and never assume you can time the market. Short term issues come and go and long term valuations are more important in the long run. On that basis, UK mid cap does look good value and once the Brexit issues are resolved, you could see some bounce there. However, whether its now, next week or next month or even next year, I wouldn't want to say.

BLB53

I am not too concerned about Brexit but I am starting to think more about the potential disruption from climate change and whether I should be re-thinking my current portfolio. Early days but certainly the predictions of the climate scientists seem to be reflected in the changing weather this past year or so.

cfw1994

BLB53 wrote: »

I am not too concerned about Brexit but I am starting to think more about the potential disruption from climate change and whether I should be re-thinking my current portfolio. Early days but certainly the predictions of the climate scientists seem to be reflected in the changing weather this past year or so.

I’m curious: in what way would you re-think?
Do you mean to increase investments in “green” or “ethical” funds?
Just not clear how you are making the link between climate scientists and investment plans!

I’m more concerned we are perhaps heading for a deeper downturn on a more global scale.
Not entirely certain what I would do now though: I did shift 20% of my main pension funds to bonds and gilts last August, & frankly wish I’d done a whole lot more than 20%: those bits have done okay since (flat to rising :beer:), the rest decidedly less so :eek:

20:20 hindsight is a marvellous thing

Albermarle

On that basis, UK mid cap does look good value and once the Brexit issues are resolved, you could see some bounce there.

On the other hand if there is some resolution to the Brexit dilemma , or if it does not happen at all , then the Pound will improve a lot. In this case most of the FTSE 100 companies will lose out n profits and probably the FTSE 100 will drop. |In theory anyway .

Alexland

As a global investor I am not that concerned about 'no deal' as the pound will go further down and my investments would grow nicely even if they have less spending power overseas.

My biggest concern is the risk (however unlikely it currently seems) the pound recovers from a deal or no-brexit decision.

Alex