Investors should consider ‘Brexit-proofing’ their portfolios, affirms the chief executive of one of the world’s largest independent financial advisory organisations.
Nigel Green, CEO and founder of deVere Group, is speaking out as it is reported that British banks and the Bank of England are busy preparing contingency plans in the event of Britain leaving the EU following the referendum on 23 June.
He comments: “The historic vote in June is currently looking incredibly close. As such, investors should now be considering how they can Brexit-proof their portfolio to mitigate the effects of a fall in the value of UK assets should the Leave campaign triumph on June 23.
“We have seen that the referendum and the consequent campaigning has already created considerable uncertainty, with many companies in the private sector shelving or postponing investment due to the forthcoming vote. This uncertainty and volatility can be expected to intensify if Britain decides to leaves the EU.
“Almost certainly Sterling, UK equities and government bonds will come under further pressure.”
Mr Green goes on to say: “Investors can take precautions against the potentially significant adverse effects of Brexit on UK assets by increasing their exposure to overseas investments.
“It could be a timely decision to rebalance portfolios in favour of international stocks, bonds and perhaps property.
“Indeed, many investors should be considering a rebalance anyway, regardless of Brexit. Investing across geographical regions is one of the fundamentals of a well-diversified portfolio – and those with a well-diversified portfolio are best-placed to mitigate risk in times of market turbulence and best-placed to take advantage of the opportunities.”
In a recent statement to the press, the deVere CEO was quoted as saying: “It is a myth that investing internationally is riskier. Indeed, the greater diversification that is secured by going global, the greater the reduction of overall portfolio risk.
“It is also a misconception that international investment options are exclusively the domain of sophisticated investors. This is not true. There are many well-managed retail funds that offer global stock market exposure, using a wide variety of approaches.”