European investors wait for Brexit-storm to calm down

Added 27th June 2016

European investors are sitting on large cash piles, and are waiting for volatility to ease a bit before hunting for opportunities.

European investors wait for Brexit-storm to calm down

As Expert Investor noted last week, many European wealth managers were keeping a relatively large share of their portfolios in cash ahead of the Brexit referendum, although most of them hadn’t expected the British people to actually vote to leave the EU.

Jaap Bouma (pictured right), senior portfolio manager at Optimix, a Dutch wealth manager, was one of those investors who had relied on the bookmakers’ odds. So he was caught by surprise on Friday morning. But thanks to his large exposure of 20% to US Treasuries, which actually turned out to be a better Brexit hedge than cash, Optimix’s neutral portfolio was down only 0.8% on Friday.

“The large gains in US Treasuries prompted us to sell 50% of our position late on Friday,” Bouma told Expert Investor.

While the vote to Brexit came as a surprise to most fund buyers, the way in which asset classes responded didn’t. UK and European equities fell sharply, while prices of government bonds, and to a lesser extent investment-grade corporate bonds, rose.

The sharp fall in equities potentially opens up some opportunities though. “There could be some opportunities for contrarian buying in equities, like in February,” says Claes Roepstorff, head of balanced portfolios at Nordea AM in Copenhagen. “We haven’t immediately made changes to our portfolios though, as volatility is still way too high.”

“Investors shouldn’t think they can sit out the volatility and wait until there is absolute clarity before coming back in” - Dan Kemp

Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Lazard Emerging Markets
Lazard Emerging Markets

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Tjibbe Hoekstra

Senior Reporter

Tjibbe joined Expert Investor as a senior reporter in March 2014. Before moving to London he worked as a financial news reporter for various news outlets in Amsterdam, including Reuters and ANP, the main news agency in the Netherlands. He also worked for Fondsnieuws, a website and magazine for finance professionals in the Netherlands. Tjibbe holds a MSc in Public Administration and a post-graduate diploma in Journalism.



Investment Strategy




PA Channel Island 2016
PA Channel Island 2016

8th November 2016
The Royal Yacht, Jersey


17th November 2016
The Andaz

PA Emerging Markets 2016
PA Emerging Markets 2016

1st December 2016
The Mayfair, London

Sponsored Content

Investment Strategy