This website uses cookies. Read more. Okay
24 Jun 2016

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

08 May 2025

MARKETS IN A NUTSHELL — FOR APRIL 2025

April began as if the markets had fallen victim to an April Fool’s joke — but investors weren't laughing. US President Trump’s much anticipated ‘Liberation Day’ tariffs took effect on 2 April, and all countries…

Read more

25 Apr 2025

Navigating Global Markets With Shariah-Compliant Equities

Shariah-compliant investing has long formed a cornerstone of Islamic finance, providing Muslim investors with opportunities to participate in global financial markets while adhering to the principles of their faith.…

Read more
newsletter subscription