Brexit — opportunity in uncertainty, weak pound a help or hindrance, and it promises to be an interesting

Genuine Impact
Aug 27 · 3 min read

Here are the top 3 insights for August 27th.

Today’s Brief

  • Aberdeen Standard: Brexit — opportunity in uncertainty?
  • Fidelity: Weak pound a help or hindrance for investors?
  • Federated: It promises to be an interesting few months

Brexit — opportunity in uncertainty?

  • The UK is set to leave the EU on 31 October.
  • Under new Prime Minister Boris Johnson the prospect of a ‘no-deal’ Brexit — once viewed by many as unthinkable — is now a real possibility.
  • The questions are: what might be the fallout if the UK crashed out of the EU?
  • And what would it mean for investors?

Genuine Scores for the top 3 UK listed stocks:

  • Ferrexpo, 73
  • Etalon Group, 73
  • Liontrust Asset Management, 72

Weak pound a help or hindrance for investors?

  • Such has been the price of intensifying concerns about a no deal Brexit, a possibility Britain’s new prime minister seems to have successfully convinced markets of.
  • Boris Johnson will be hoping the EU feels the same way, as he pursues a new withdrawal deal in the autumn.
  • The signs so far are the Union will be harder to convince.
  • The vagaries of the foreign exchange markets have important consequences for investors too.
  • What a company earns from its investments overseas can be critical when the foreign exchange in its tills is converted back into sterling.

Genuine Scores for the top 3 UK focused Bond funds:

  • Allianz Index-Linked Gilts, 87
  • AI Index-Linked Gilts Over 5 Years, 87
  • AI Index Linked Gilt UK Life, 86

It promises to be an interesting few months

  • Despite opposition in Parliament, Prime Minister Boris Johnson and his Cabinet have made a no-deal Brexit appear increasingly likely, particularly if one considers it is the default option according to current legislation if no exit agreement is struck with the European Union (EU) by the Oct. 31 deadline.
  • Sterling’s recent tumble — it’s fallen nearly 8% since May and is hovering around 33-month lows — suggests a no-deal Brexit could take the pound into unchartered territory.
  • The recent relationship between changes in the British pound/U.S. dollar exchange rate and the evolution in the probability of a no-deal Brexit in betting markets indicates the currency pair rate could collapse to 1.05–1.10 in a no-deal Brexit scenario, and could even push the pound to parity with the dollar, which has never happened before.

Genuine Scores for the top 3 UK focused Equity funds:

  • FP Foresight UK Infrastructure Income, 83
  • LF Lindsell Train UK Equity, 78
  • Finsbury Growth & Income Trust, 78

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All the best,
Genuine Impact Team

p.s. all Genuine Scores are accurate as of the 23rd of August

Genuine Impact

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