But, while there is no doubt that the result will mean significant movement on financial markets whatever the outcome, for those who claim to be long term investors should it really matter?
This was the thread that came out of a panel discussion at Portfolio Adviser’s Summer Congress 2016 last week.
Asked his view on the economic implications of the vote one way or the other, Kevin Gardiner, global investment strategist at Rothschild said in his view the referendum was not a game changer for the UK economy, nor had it changed the way in which the firm was building portfolios.
“We still favour stocks relative to bonds, we have some protection in portfolios, but we’re not thinking of turning things completely upside down,” he said.
And, while he added that he can imagine a scenario in which sentiment is pretty grim and people talk about a retreat to global protectionism, where they worry about losing the pool of liquidity that the single-currency represents, he said his central guess is: “It is something that would hit business, it will reduce the UK’s trend rate of growth, but it’s not the case that we can’t live with it. We can tolerate it.”
Gary Potter, co-head of F&C’s multi-manager team went a step further, saying that the whole thing is somewhat overhyped.
Acknowledging that there are pros and cons to both outcomes as well as opportunities and threats presented by the fact there is not a clear-cut better solution either way, he said it is important to keep a sense of perspective.
“History shows us time and time again not to react to situations in portfolio terms based on short-term whims and fancies,” he said, adding, “I totally support that in the short term, there are going to be some winners and there are going to be some losers, but I’m reminded that since 1996, the MSCI Index is up 250% on a total return basis. If you’ve been in conventional bonds, you’ve made 150%, despite a fifteen-year bull market for bonds. Emerging market debt is up 600%. Smaller companies are up 540%, the UK All-Share is up 250%.”
And it is here he said, that the Brexit debate becomes important, when it comes to client perceptions.
