With the UK’s future lying somewhere between “a hard Brexit, a soft Brexit, a Goldilocks Brexit, and a no Brexit at all”, he believes it is “virtually impossible” to invest in the UK with any confidence.
The head of investments said: “Since 23 June last year, sterling is down 14.5% against the G10 currencies while the FTSE 100 is up 15% over the same period. Coincidence? Not at all.
“So, to make any calls on the UK market (in particular the overseas earnings dominated large-cap index) you have to have a clear conviction on what type of Brexit outcome we’ll see.
“Sterling could regain all that it’s lost, or it could tumble again, depending upon the eventual path.”
While encouraging investors not to put new money to work in the domestic market, Skerritts is following a strategy to invest carefully in the more domestically focused smaller companies sector, while “leaving the large-cap sector to others”.
While keeping a close eye on sterling, Merricks believes the dollar should maintain its “best of breed” status among major currencies.
He asserted that a strong dollar and growing international trade tensions could affect those US mega-cap multi-nationals that earn more from overseas than at home.
