Investors show caution toward UK assets

Appetite for UK assets in recent weeks was more muted than in the “record” third quarter of the year, according to a Brexit monitor.

Investors intending to increase their holdings to UK assets fell to 15% from 21%, State Street found. The proportion of investors looking to decrease their holdings of UK assets remained unchanged at 20%.

“This quarter’s Brexometer was conducted in the first week of November, a period when, in theory, hopes of a deal were on the rise,” said Michael Metcalfe, head of global macro strategy at State Street Global Markets.

In that context, he said, it was telling that there was little shift in investor attitudes towards their UK asset holdings and the caution was vindicated as November progressed.

In addition, despite a more optimistic outlook for the medium-term global economy in the third quarter when investor sentiment had risen to 43%, the number of those holding a negative outlook had doubled, from 15% to 30%. This was the highest negative reading since the study began.

Another finding was that more than a third (38%) of institutional investors believed their company would use more cross-border fund locations, with Ireland (45%), Luxembourg (38%) and Germany (24%) listed as the most attractive for managers.

©2018 funds europe

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