British investors bullish on Brexit portfolios as they cast net wider for returns

 
Jasper Jolly
Riders raise their arms as they travel t
British investors think they can ride out the ups and downs of Brexit negotiations (Source: Getty)

British individual investors are bullish on the prospects for their portfolios over the next two years as the UK picks its way through the process of leaving the EU.

Only nine per cent of Brits with more than £10,000 in liquid investable assets thought Brexit would negatively impact their investment plans over the next two years, according to a survey of more than 1,000 investors by Market Financial Solutions (MFS).

Some 39 per cent of respondents see the next two years (the period of trade negotiations with the EU under the terms of Article 50) as an opportunity to focus on a short-term investment strategy, with a third saying they took a shorter-term approach to their investments because of political events.

Read more: UK investors are at their most confident since the Brexit vote

Meanwhile the low yields on interest-rate sensitive assets has prompted 45 per cent to seek exposure to other, less orthodox asset classes.

The Bank of England’s accommodative monetary policy is aimed at making borrowing less difficult in order to stimulate the UK economy. However, it also has the side effect of lowering yields (and raising prices, which move inversely) on government bonds, forcing investors to look elsewhere for higher returns.

However, low interest rates are also thought by many to have contributed to rising house prices, with no sign of interest waning in investing in property.

Read more: UK investor faith in equities grows as 10 months of outflows to an end

With rental price rises expected to easily outstrip inflation more than a third of respondents view buy-to-let investment in property as an attractive investment choice, the survey found.

Paresh Raja, MFS chief executive, said: “UK investors have spoken loud and clear, signalling their intent to continuing pursuing investment opportunities during the two-year Brexit negotiations that are now underway.

“However, this research reveals that they are doing so with a more short-term and open-minded mentality, as investors seek different investment types to secure returns before the true effects of Brexit set in.”

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