Hargreaves Lansdown Multi-Manager fund manager Lee Gardhouse explains his approach to investing in the run up to the vote: “‘From here on in the volume dial on the referendum vote is likely to be cranked up even further, though in our view investors are best off not getting caught up in the excitement when it comes to making decisions on their portfolio.
“We think it’s impossible to know the long term economic implications of a British exit from the European Union. While an out vote would most likely lead to a market fall, we cannot just assume this will be bad for the long term prospects of the stock market.
“Taking a market view on big economic events will add value if you can consistently get it right, but making such calls is notoriously difficult. It could be that you predict the change correctly, yet find the market reacts in a way you would not have expected.
“Within our HL Multi-Manager funds, we won’t be partaking in any knee-jerk reactions, either before or after the referendum. Instead we will continue to focus on areas where we believe our research will generate the best returns for investors, predominantly on identifying and backing great managers.
“We only take a strong view on market direction when our analysis shows extreme valuations have been reached. At present we consider UK and European markets to be reasonable value versus their history, but not a bargain. We do however believe that equities remain appealing on a relative basis, when compared to bonds and cash. We see equities as offering an attractive starting yield, with the prospects of capital and dividend growth over the long term, while government bonds are now presenting a pretty high level of risk for a measly level of return.”
CIO Gardhouse is responsible for over £6 billion of assets invested in Hargreaves Lansdown’s Multi-Manager funds, including the £2.7 billion HL Multi-Manager Income & Growth fund.
“IFA Magazine’s Brexit coverage series is supported by Old Mutual Global Investors. Watch out for their special report on the impact of the Brexit result on UK equities, available on the 28th of June.”