Three of the five largest private equity funds are in Asia
Three of the five largest private equity funds are...
Theresa May’s call for a snap general election caught even UK political hawks off-guard. May announced she will ask Parliament to hold a snap general election on June 8, despite repeatedly previously stating that she was against the idea of a vote before 2020.
With a twenty-point lead over the opposition labour party, May is looking to secure a stronger mandate in Parliament to push on with Brexit negotiations while the opposition is weak. Industry experts share their advice for investors following May’s announcement.
“UK politics remains a ready source of uncertainty for investors already trying to digest a full menu of political risk this year, ranging from this week’s French elections to fears of potential military action in North Korea,” says M&G Investments’ multi-asset portfolio manager Steven Andrew.
“The announcement […] is an interesting reminder of the fact that nothing in politics should be taken for granted. To the extent that this leads to volatility in financial markets, it is important that investors are alive to the potential opportunities that such price behaviour may present.”
According to Nigel Green, founder and CEO of deVere Group, investors should diversify their investment portfolio, and seek profitable opportunities in the coming volatility.
“Investors should be doing two key things to protect and build their portfolios,” says Green. “First, now is the time to ensure your investment portfolio is properly diversified. Having a well-diversified portfolio across asset classes, sectors and regions means you are best-placed to mitigate risks, especially in times of increased volatility.”
“Second, keep an open-mind and seek out the opportunities. Although May's announcement, and other geopolitical events, are alarming markets, investors shouldn’t be put off or avoid investing. Typically, profitable opportunities become available during periods of fluctuation, to enable investors to enhance wealth portfolios by picking up high quality equities at more attractive prices.”
Andrew also agrees on taking advantage of UK equities, “Appraising the UK investment landscape in this context suggests to us that equity assets remain attractively priced – especially in the context of a robust UK and strengthening global economy. With that in mind, we would look to add to our UK equity positions should political-inspired volatility offer material discounts from here.”
Experts already disagree on the outcome of the election. Andrew believes “confident predictions of the outcome of June’s vote should be avoided. The path between here and June 8 is unlikely to be a smooth one”. Conversely Green expects “Theresa May to be re-elected with a larger majority and bigger mandate to take on the EU in Brexit negotiations.”
19 Apr 2017