The United Kingdom’s Role in an International Portfolio

Capital Suites 14/15/16 │ Level 3

Ian Harnett
​Managing Director and Chief Investment Strategist
Absolute Strategy Research Ltd.

Neil Govier, CFA, Moderator
Director, CPD Content and Delivery APAC
CFA Institute

  • For two years, the United Kingdom has been a “bet” rather than an investment; investors now need to decide whether it is a market to “rent” as an occasional source of alpha or to “own” as a long-run recovery story.
  • The high level of policy uncertainty in the United Kingdom has biased equity valuations downward, and the equity markets are at risk from slower growth and higher inflation.
  • The domestic economic outlook remains a challenge, with twin deficits challenging bonds and the pound sterling.
  • The key problem for international investors is that the United Kingdom is becoming the “new Italy”—aging, slowing, indebted, and willing to devalue at the first sign of stress.

Topical Track: Brexit