Brexit: Three funds that could see you through the volatility
As investors are preparing themselves for a roller coaster few months ahead, with billions being wiped off the stock market within hours of the EU referendum vote, Chelsea Financial Services’ managing director Darius McDermott, suggests three funds that could offer some shelter.
Premier Defensive Growth
This is an absolute return fund that seeks to deliver positive returns in all market conditions. The fund is unlikely to shoot the lights but has consistently delivered a good return in a wide variety of market conditions. It could be a good option for an uncertain world where cash interest rates are close to zero. The fund has an excellent record of protecting investors in falling markets.
One for those who want to be a little bit more contrarian. This is a core UK income fund that has relatively little domestic UK exposure. The fund invests in very high quality defensive companies. Top holdings include Unilever, Diageo, Sage, GlaxoSmithKline and AstraZeneca. These stocks might get caught up in an initial sell off but they could actually benefit from a weaker pound. These are large global companies which derive a significant part of their sales outside the UK. If sterling remains low for some time, this could actually lead to their earnings going up.
BlackRock Gold & General
Gold is a hedge against uncertainty and there is likely to be a lot of uncertainty in the coming months. Other EU countries may demand their own referendums. Volatility is likely to increase. On top of this, the global economy is fragile. Some exposure to a gold equity fund should help hedge against these risks. The BlackRock Gold & General fund has a very long track record and is managed by mining specialist, Evy Hambro.
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