Looming Brexit vote fails to inspire defensive posture

Added 28th April 2016

Cash and absolute return funds remain the defensive assets of choice ahead of the Brexit vote, a survey revealed.

Looming Brexit vote fails to inspire defensive posture

Polled in London at a Portfolio Adviser Europe Event, a group of 22 high-profile wealth managers were asked a series of questions relating to asset allocation in light of the impending Brexit Referendum. 

When asked which defensive assets they would raise their exposure to before the Referendum, 17% of wealth managers favoured cash, 22% said they were looking into absolute return funds and 6% selected gold.

However, 39% of respondents reported said they had not plans to raise their allocation to defensive assets ahead of the referendum.

None of the individuals surveyed viewed government bonds or property as attractive assets to invest in prior to the Brexit vote.

The final question respondents were asked was: “How are you likely to vote on June 23rd?” 72% said they planned to vote for Britain to remain in the EU and 28% were in favour of Brexit. 

Taking this into account, the results from the other questions about asset allocation are quite telling. While some individuals plan to increase cash weightings or absolute return assets to hedge their bets against a Brexit outcome, the vast majority don’t intend to change their investment strategy ahead of time.

At a broader level, 78% of the surveyed wealth managers said they would keep their allocation to Europe constant within the next 12 months.  

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