Brexit impact on cash


Greg Miller, Senior Fund manager

24 June 2016

Markets are still in early stages of reaction, and it will take time for the dust to settle. Trading has been thin today and spreads noticeably wider. Low-quality banks are now paying more for overnight rates than yesterday, and higher-quality banks are paying less in the longer-term.
We have been decreasing our exposure to UK banks by switching into UK Treasuries, although pricing is competitive as demand for high-quality assets has spiked, and the difference between 3 and 6 month maturities shows the high level of uncertainty in markets at the moment. 
We have not experienced liquidity difficulties in our funds today. Our trading has been minimal. Our objective is to maintain liquidity for our clients, and if we perceive tightening in markets, we will take appropriate steps in our portfolios by switching into UK Treasuries.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.