However, if the UK continues to delay the triggering of Article 50, which Forsythe sees as a distinct possibility, he believes the market may be able to reap the benefits of a weaker pound.
“At present, one does wonder whether there is a chance Article 50 won’t actually be triggered,” Forsythe mused.
“You’re handing all the negotiation cards to the opposition if you just press the button and go. I suspect as it gets closer to the March deadline, there will be more and more noise about delays. A delay sounds ineffective, but I think it is in Britain’s best interest. We have had the benefit of a devaluation which Prime Minister Shinzo Abe would love to have had. In a low growth environment, everyone wants to competitively devalue. Tourists are flooding into the UK. We are starting to see the benefits at the moment so I cannot see why we should push too hard for the implementation of Brexit.”
Forsythe is also a big proponent of Gravitas Capital Partners infrastructure and student accommodation funds and closed-ended property funds, like REIT, Tritax Big Box, that have infrastructure leanings.
“The closed-end funds have come through Brexit relatively unscathed and have even offered extra value. When all the open-ended funds were closing, there was a sympathetic drop that gave us some very attractive 7% yields to invest in,” he said. “These funds haven’t fully recovered, but they are still offering good returns.”
A surprise sector, which Forsythe likes but is not fully committed to yet, is the banking sector. “The banking sector might start to improve a little because it likes higher interest rates. Lloyds showed an increase in regulatory capital in their latest results, which gives them a few more options in the dividend arena.”
