While much has been said by the fund management industry about the UK’s plan for Brexit, a survey has found that institutional investors do not appear to be offloading UK assets.
Despite the majority of institutional investors (80%) in a State Street survey expecting Brexit to have an impact on their operating models, 63% of respondents said they would maintain their holdings in UK assets (equities, bonds and alternatives) over the next six months.
Michael Metcalfe, head of global macro strategy at State Street Global Markets, said that six months since the referendum result, markets seemed to have “mostly moved on”.
“The extremely gloomy pre-Brexit predictions for the UK economy and asset markets look well off the mark,” said Metcalfe.
However, almost half predicted the level of investment into the UK economy to fall during the next quarter.
While just under a third (31%) believe asset owners will decrease levels of investment risk over the next three to five years, 26% believe they will increase levels of risk in the same time period.
State Street’s “Brexometer Index” survey, which is now to be carried out quarterly, polled 111 institutional investors during December 2016 and January 2017 about their attitudes to the UK’s EU departure.
Jeff Conway, regional chief executive officer for the firm, said that many appear well prepared for Brexit and are proactively putting strategies in place to mitigate impact.
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