Staggered

Theresa May has had almost as rough a week as our multi-asset funds assistant manager Will McIntosh-Whyte. Recuperating from a stag party, he wishes Brexit was as simple as his friend’s send-off to married life. 

Stag dear

Going on a stag (or hen) is a highly political event.

There are lots of different factions within the group: old school friends, Johnny-come-lately university mates, even a few work colleagues and, of course, the future father-in-law who no-one realised was even coming. Each clique has its own idea of what a stag do should be about. Some want the stag to get as drunk as possible or make him wear a mankini. Some want a more controversial trip – perhaps a visit to a ‘cabaret-style’ venue for example – and not necessarily for the stag’s benefit.

While it’s something of a tradition to stitch up the stag, ultimately it is the stag’s do. You want them coming away from their last night of freedom intact - not leaving in an ambulance. The friends make compromises and keep unhelpful personal opinions to themselves. The old school crowd living in the Home Counties may think the stag do hardly looks like a stag party at all. The liberal-minded uni crowd and work friends from the City might think the marriage is a bad idea. And more than one or two may have kids at home and worry about spiralling costs. But all of them should remember that being the best man is no easy job, and undermining him every step of the way doesn’t help the stag. Sometimes you just have to fall into line for the greater good.

Having finally fully recovered from a stag do on the weekend (not mine), I reflected on what a remarkably unified experience it had been despite these differences. A visit to a microbrewery on the first night ensured that at the very least we achieved a booze-up in a brewery. Back in the real world, even this moderate achievement would appear to be beyond the planning skills of our current Parliament. Like an under-pressure best man, Theresa May is undermined by virtually everyone at every turn. By the remainers who don’t agree with the marriage, by the ERG who want to go all out no matter the consequences, and the DUP father-in-law who’s nervous the whole thing will get out of hand.

We always thought Brexit would go right to the wire (and potentially beyond), with brinkmanship necessary for anything material to be agreed. We believed that sense would ultimately prevail, that compromises would be made and deals struck. Yet the level of emotion involved and with factions on both sides jostling for the top job, reason has been in short supply. That means we are days away from the deadline with every option – and none – still on the table.

While a so-called hard Brexit would likely be bad for sterling and the UK economy (certainly in the short term), our multi-asset fund portfolios invest globally. At the moment, most of the stocks we hold are overseas. In the UK, our companies predominantly receive their earnings from abroad, so our portfolios should hold up relatively well. However, we have increased the hedges on our overseas assets (euro, dollar and Australian dollar) for fear that, rather counterintuitively, the greater risk to our portfolios is actually a ‘positive’ Brexit that sends sterling shooting higher. In that situation, foreign assets would be worth less in pounds, weighting on the returns of our portfolios.

We don’t pretend to predict the future, nor are we willing to bet everything on black. This Brexit mess has so many twists and turns, that this blog will likely be out of date by the time it’s published. But, because we have kept some exposure to the dollar, the Swiss franc and Asian currencies (including the defensive yen), our portfolio positioning shouldn’t be out of date, regardless of the final result. We have set up our portfolios to attempt to mitigate capital losses in the event of any scenario. Cowardly, boring or sensible – whatever you want to call it – we are not in a casino on night two of a stag do.

For those of you into niche ’90s cinema, you may remember the Martin Clunes film Staggered. The groom wakes up alone and naked on a remote Scottish Island three days before his wedding; we can only hope the UK doesn’t have that same feeling come 29 March.  

Photo by Diana Parkhouse on Unsplash.

 

Important legal information

This area of the site is for professional advisers

Please read this page before proceeding, it explains certain legal and regulatory restrictions applicable to the distribution of this information. It is your responsibility to inform yourselves of and to observe all applicable laws and regulations of the relevant jurisdiction.

This section of the website is directed only at investment advisers and other financial intermediaries who are authorised and regulated by the Financial Conduct Authority (FCA).

The information provided in this site is directed at UK investment advisers only and must not be circulated to private clients or to the general public. It does not constitute an offer to sell, or solicit an offer to purchase any investments by anyone in any jurisdiction in which such offer or solicitation is not authorised or in which a member of the Rathbone Group is not authorised to do so.

I confirm that I am an investment intermediary authorised and regulated by the Financial Conduct Authority. I have read and understood the legal information and risk warnings below:

Important Information (Terms and Conditions)

The information contained on this site is believed to be accurate at the date of publication but no warranty of accuracy is given and the information is subject to change without notice. Any opinions or estimates included herein constitute a judgement as of the date of publication and are subject to change without notice. Furthermore, no responsibility is accepted for the accuracy of any information contained within sites provided by third parties that may have links to or from our pages.

Rathbone Investment Management Limited ("RIM") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered Office: Port of Liverpool Building, Pier Head, Liverpool L3 1NW. Registered in England No 01448919.

In accordance with regulations, all electronic communications and telephone calls between Rathbones and its clients are recorded and stored for a minimum period of six months.

The information provided in this site is directed at UK investors only. It does not constitute an offer to sell, or solicit an offer to purchase any investments by anyone in any jurisdiction in which such offer or solicitation is not authorised or in which a member of the Rathbone Group is not authorised to do so.

In particular, the information herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in France and the United States of America to or for the benefit of United States persons (being resident in the United States of America or partnerships or corporations organised under the laws of the United States of America or any state, territory or possession thereof).

In order to comply with money laundering and other regulations, additional documentation for identification purposes may be required.

Rathbones shall have no liability for any data transmission errors such as data loss, damage or alteration of any kind including, but not limited to, any direct, indirect or consequential damage arising out of the use of services provided or referred to in this website.

Past performance should not be seen as an indication of future performance.

The value of investments and the income from them can fall as well as rise and you may not get back the amount originally invested, particularly if your client does not continue with the investment over the longer term.

Changes in the rate of exchange between currencies may cause the value of an investment to go up or down.

Interest rate fluctuations are likely to affect the capital value of investments within bond funds. When long term interest rates rise the capital value of units is likely to fall and vice versa. The effect will be more apparent on funds that invest significantly in long dated securities. The value of capital and income will fluctuate as interest rates and credit ratings of the issuing companies change.

Tax levels and reliefs are those currently applicable and may change and the value of any tax advantage will depend on individual circumstances.

Investing in emerging markets or small companies may be potentially volatile, as these investments are high risk.

The design, text and images are owned, except as expressly stated by members of the Rathbone Group. They may not be copied, transmitted, displayed, performed, distributed, licensed, altered, framed, stored or otherwise used in whole or in part or in any manner without the written consent of Rathbones except to the extent permitted and under the procedures specified in the copyright Designs and Patents Act 1988, as amended and then only with notices of Rathbones' rights.

Rate this page:
Average: 5 (5 votes)

Subscribe to the In the KNOW blog email

Archive