'Brexit fog to clear': Fund managers increase exposure to 'hammered' UK financials sector

Optimism ahead of 29 March exit date

Tom Eckett
clock • 5 min read

UK fund managers are positioning their portfolios for a rally in financials later this year amid predictions a Brexit deal will finally be agreed between the UK and the European Union, paving the way for higher interest rates.

Although it was expected the Bank of England (BoE) would follow the Federal Reserve's path in hiking rates this year, growing concerns around the Brexit negotiations prompted analysts to rein in rate rise expectations causing a "knock-out" blow to the UK financial services sector in 2018. Last year, the FTSE All-Share Financial index plummeted 13.6%, underperforming both the FTSE All-Share and MSCI World, which lost 9.5% and 3% respectively. Higher interest rates, an environment typically supportive of banks, have been put on hold by the BoE, having only been raised twice since the cu...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on UK

Square Mile's David Holder: Why now might be the time to invest in UK equities
UK

Square Mile's David Holder: Why now might be the time to invest in UK equities

'A re-rating could be on the cards'

David Holder
clock 11 July 2024 • 3 min read
BoE chief economist Huw Pill dents hopes for a rate cut due to 'persistent' inflation
UK

BoE chief economist Huw Pill dents hopes for a rate cut due to 'persistent' inflation

A case of 'when rather than if'

clock 11 July 2024 • 2 min read
UK economy beats expectation as it grows by 0.4% in May
UK

UK economy beats expectation as it grows by 0.4% in May

Boost for new Labour government

clock 11 July 2024 • 2 min read
Trustpilot