The initial reaction to the UK's vote to exit the European Union (EU) has been surprise, markets sharply risk off, the Prime Minister has decided to stand down, the head of the British opposition Labour Party is being challenged, and there has been an avalanche of comments as to why the vote is bad.
This paper focuses on how our portfolios are positioned as we enter what is expected to be a volatile period. The challenges ahead for the UK are not necessarily the same as those faced by UK companies, as they have the ability to shift production overseas if needed to overcome future barriers. We feel our portfolios are well placed to weather the uncertain period ahead. Our focus on long term investments into stable and predictable growth companies has kept the earnings underlying our Global, International and European equity portfolios well diversified, relatively well insulated from cyclical swings, low direct exposure to the demand from any single EU market, and a high weighting to Consumer Staples companies.