HNW investors to lessen UK exposure following Brexit
A global survey undertaken by deVere in July reveals 69 per cent of HNW individuals are looking to ‘rebalance and diversify’ their investment portfolios to reduce their exposure to UK-based assets following the Brexit decision.
We asked 770 of our clients from countries including the UK, the U.S., Australia, the United Arab Emirates, Qatar, Hong Kong, South Africa and Switzerland, with investable assets of £1m or more (or equivalent): “Do you intend to decrease your investment exposure to the UK during the remainder of 2016 following Britain’s decision to leave the EU?”
69 per cent of clients responded with ‘Yes’; 18 per cent responded ‘No’ and 13 per cent did not yet know.
As we can see, this survey reveals that high new worth investors are strongly considering rebalancing and diversifying their investment portfolios since the Leave victory was announced.
These investors are seeking to lessen their exposure to assets based in the UK due to the prospect of complicated negotiations which could give a hard knock to the UK economy. In turn, other countries could see higher growth levels during this time, and, as such, produce higher returns.
Indeed, this poll shows that these HNW investors are focusing on a Brexit-fuelled diversification within their portfolios, which is something we wholeheartedly advocate.
That said, regardless of Brexit, it is always a good idea for investors to maintain a well-diversified, globally-minded portfolio.
Three essential aspects to this are to invest across asset classes, industrial sectors and geographical regions.
It is absolutely untrue that international investing is riskier. On the contrary, the more diverse the portfolio, the greater the reduction of risk.
In addition, investors should also ‘think global’ in regard to other geopolitical risks, such as the U.S. election; China’s economic growth; and the concern over a possible Brexit domino-effect, as other member countries look for an EU exit.
Therefore, with Brexit now a clear catalyst for investors in making sure their portfolios are sufficiently diversified, this places them in a peak position to take advantage of available opportunities and mitigate risk.
Whilst the trend is clear for people to consider a shift away from UK-based assets, UK property appears to remain immune from this, with deVere Mortgages reporting a surge in enquiries since Brexit.