How the Brexit vote is scaring investors away from traditional asset classes

William Turvill
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The UK voted for Brexit in June
ThinCats said investors are turning their attention to gold and peer-to-peer (Source: Getty)

The UK’s Brexit vote is putting investors off traditional asset classes, new research suggests.

Some 13 per cent of active investors said they have steered clear of currency markets since the EU referendum, while 10 per cent have pulled away from government bonds and nine per cent have been discouraged from investing in equities.

Read more: This is the make or break moment for P2P lending

Peer-to-peer (P2P) lender ThinCats said that 30 per cent of investors – from a survey of 2,000, including 500 defined as active investors – have been put off traditional asset classes.

In contrast, the research found that assets such as gold has become more attractive, with 14 per cent of investors saying they have turned to the commodity to shore up security. Seven per cent, meanwhile, said they view P2P as more attractive after the vote. The figure for P2P is 16 per cent among 18 to 34-year-olds.

“An unprecedented period of low interest rates combined with recent market volatility, heightened by the decision to leave the EU, has left many savers and investors scratching their heads about how best to use their cash,” said ThinCats founder and chairman Kevin Caley.

Read more: Fund Brexodus slows in July after "quite extraordinary" June outflows

Alternative finance has come a long way in helping to plug this gap, offering some reprieve for investors, many of whom believed they’d be seeing a rate rise by 2017. In the last two months alone, our research tells us that many thousands of investors have started looking at peer-to-peer lending as a way of earning meaningful returns while avoiding the rollercoaster ride of volatile markets.