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BREXIT Day One: Investment Update

Hello,

Given the Brexit result we wanted to share with you what has happened, and how you are positioned.



Brexit: “Your Portfolio Is Built For This”:

Brexit

The Shock of the Divorce: The markets have violently responded to the shock of the United Kingdom leaving the European Union. However, like all “divorces”, this will be a long drawn–out process and will take some time to unwind. The reaction is more based on emotion and shock.

How SAGE Portfolios are Built

US Exposure: During periods of global uncertainty, the world seeks to purchase safer investments. This flight to safety is always centred on US denominated assets (even if the US is the cause of uncertainty). You have significant US exposure and will benefit from inflows to the US.

Expected Impacts of Brexit

EU GDP Growth will contract and as a result:

  • The banking sector will struggle
  • EU Energy demand will soften
  • The FED will not raise interest rate

Your Portfolio

  • We have very little financial sector exposure and have been out of Canadian banks for some time now
  • We hold a very small, but strategic weight in energy
  • We own many interest sensitive stocks, like utilities, that will benefit from lower interest rates
  • We also hold sectors like food, staples, and healthcare, which continue to make money regardless of European uncertainty


We are confident in your portfolio holdings, and would be happy to discuss any aspect of the Brexit with you further.

Regards,
The SAGE Team

 

Brad Moore is a Portfolio Manager with Raymond James Ltd. The views of the author do not necessarily reflect those of Raymond James. This article is for information only.  Raymond James Ltd.  member of Canadian Investor Protection Fund.