Brexit

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Pryor Portfolio Management run a range of risk rated actively managed investment funds. We have successfully steered our funds during the recent wave of volatility so we thought it may be prudent to give our strategic opinion of the next few months leading to the vote on the 23rd June.

Brexit

The UK EU referendum is bound to split opinion throughout the populace however, much like UK Income manager Neil Woodford, we believe that it is hard to see any credible evidence to support either staying or leaving. Because of this there are only a few things we can be relatively sure of;

Pre Referendum

There will be an increase in volatility leading up to the 23rd June. This is not just UK Market volatility, but Currency fluctuations and wider EU market volatility as the effects of a possible Brexit are considered. These periods of overreaction and volatility offer up good investment opportunities and a weak sentiment does not necessarily mean fundamentals have changed.

There will be winners and losers. A weaker currency may be seen as negative to domestic importers but from an economic perspective a weakening currency makes our exports more competitive and therefore would be a positive for the UK Economy.

There is as much to fear right now from the Brexit talks bringing down the Euro at the same time as Sterling; its cable and the Euro/Dollar that are arguably a better gauge of any potential fallout.

Post Referendum

No matter the result, the effects on the underlying companies and therefore, investments generally, are likely to be muted. After all, the status of the UK’s EU position does not affect that many companies directly, and a good company does not become a bad company over night. It is also important to point out that the UK market is particularly international in nature.

A point worth making is that the referendum should probably not be seen as a simple win-lose barometer for either camp. An establishment-backed status quo campaign probably needs to win by a sizeable margin to declare victory and to consider the Brexit debate settled once and for all (well a few years anyway).

In summary, our stance is to continue to aim for outperformance on a relative basis and remain invested, trusting to our selection of managers to navigate what could be a troubling but not apocalyptic UK investment environment

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

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