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Investors de-risk portfolios ahead of Brexit uncertainty

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05/04/2016
The EU referendum is still three months away but private investors are already de-risking their portfolios ahead of the historic vote.

One in four ISA investors are taking on less risk, with almost half pointing to the Brexit vote as their reason, a study by online platform The Share Centre found.

It surveyed 1,500 investors and of those seeking a safer route for their investments, 42% said the UK markets felt too volatile, while over a quarter blamed the instability around the Chinese economy.

While not slowing down on their overall investments, 58% chose to invest in ‘medium risk’ stocks for their ISA, which balance return with security.

The Share Centre recommends Fundsmith Equity, Woodford Equity Income and Old Mutual Global Equity Absolute Return as funds suitable for medium-risk investors.

Richard Stone, chief executive of The Share Centre, said: “With political uncertainty weighing down on markets, including the EU referendum, personal investors are hedging their funds towards safer options until the mist clears.

“Whether investors will eventually end up voting for an ‘in’ or ‘out’ – and our latest research actually shows 63% of personal investors would vote to leave, despite concerns over the impact of the stock market – it can be all too easy to turn away from investing altogether when headwinds seem a little strong.

“However, the ‘little and often’ approach is truly an achievable and sensible method in volatile markets, and it’s important to recognise the benefits of drip-feeding rather than investing a lump sum.”

 

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