What does U.K.’s Brexit mean for the markets?

The U.K. decision to make a so-called “Brexit” from the European Union, while a significant event with far-reaching political, financial and economic implications, will play out over a fairly long period. Investor concerns are understandable, but it’s important to avoid overreacting to current volatility. As we have seen over the last 140 years of managing money, major events often create temporary upheaval as sentiment does more to drive markets than a real understanding of long term outcomes. 

David Hunt
President & CEO
PGIM

Insights From Our Businesses

 

Brexit Perspectives

Our original prediction for "risk-off" sentiment in the case of a U.K. leave vote is playing out. The risk-off response to the Brexit vote is a consequence of a political event, and while this response carries negative implications for risk assets in the short term, various policy responses will follow. The policy responses will likely blunt the effect of the risk-off sentiment in the short term, and the longer-term duration of the risk-off environment will depend on the overall effectiveness of these responses.

Thoughts on Brexit

QMA

Coming into the vote we were pursuing a cautious investment strategy with neutral exposure across the major asset classes: Stocks, Bonds, Commodities, Real Estate, and Cash. The Brexit referendum results are likely to make us more defensive on the margin, but the strength of the response from policy makers will also be a critical factor in determining portfolio positioning looking forward.

European Union Referendum

With the UK voting to leave the European Union, we are in a period of uncertainty, for what might be several months, which will impact occupier and investment markets. It is challenging to understand exactly what this means for real estate markets. The sooner there is a road map for how and when the UK and the EU separate, the better.

Brexit Update

As fundamental, bottom-up investors, we examine company and industry prospects over the intermediate and long term. We have made modest modifications but no major changes to equity portfolios in the wake of the vote. As with any period of volatility, we look for potential opportunities to invest in or add to companies with attractive long-term fundamentals.

Carnage in Financial Markets as U.K. Votes FOR “Brexit”

Global financial markets were roiled by the U.K. voting FOR "Brexit" in the June 23rd referendum on U.K. membership in the European Union. Pramerica International Investments Advisers' Global Investment Outlook discusses the financial, economic and political impact and potential policy response by global central banks to contain the fall-out.