Diversifying For Brexit – FactSet

Diversifying For Brexit by Alyx Flournoy, FactSet

After months of build-up, the UK’s referendum on its EU membership will take place tomorrow. As a result, fears of trade slowdowns with continental Europe, a weakening GBP, and stress on UK businesses have many investors looking for ways to diversify their investments. In our recent In Search of the Brexit Hedge, we saw how UK revenue exposure affects the UK equity markets and potential hedge opportunities within the space, but there may be other options for playing it safe as the vote approaches.

Traditional finance tells us that an easy form of diversification for equity exposure exists in the fixed income market. With this in mind, we’ll use a simplistic analysis by...