BREXIT
The Brexit vote to leave the European Union is a clear vote against the political establishment. The UK’s withdrawal process will not be simple, uncontentious nor immediate. However, under the bloc’s governing treaty, it must be completed within two years. Meanwhile, capital markets are set for renewed and potentially brutal volatility, as traders take positions deemed most favoured by the referendum’s outcome.
Monetary and fiscal policy in the UK and EU is expected to remain highly accommodative to limit the economic fallout, with interest rates staying low or declining further.
Foord's local and international portfolios will not be immune from the near-term downside volatility, despite the emphasis on quality businesses and conservative portfolio construction. However, longer term, the Brexit vote will have very little effect on the forward earnings of the businesses in our portfolios.
Volatile markets are the ideal time to accumulate quality businesses and position portfolios for the next up-cycle. All of Foord's portfolios have relatively significant cash holdings, which may now be judiciously applied to accumulate quality businesses at lower prices, a scenario for which we have waited patiently.
Investors should take special care not to react imprudently by selling into declining markets.
Insights
10 Apr 2024
Performance Review — Light at the End of the Tunnel
The Foord International Fund is known for its resilience during market weakness. It is much more likely to lag in bull markets — and last year was no exception. In this article, Director Paul Cluer discusses why the…
08 Apr 2024
MARKETS IN A NUTSHELL — FOR MARCH 2024
World equity markets remained in go-go mode last month, with US bourses hurtling along at a giddy pace. The S&P 500 Index added another 3.1%, wrapping up the first quarter with a hefty double-digit gain and closing…