Five funds to buy if there is a ‘no deal’ Brexit

Linda J. Dodson

Retreat to bonds

Richard Carter, of wealth manager Quilter Cheviot said the biggest impact on British companies would be the effect a no-deal Brexit would have on the value of the pound, which would weaken.

For investors, this would raise the share prices of overseas companies, while cheapening the British stock market to overseas investors. This makes a global stock market fund a must for any investor.

Outside of global stocks, he said that index-linked gilts should also do quite well in a no-deal scenario. The Bank of England would likely be forced to print more money (quantitative easing) – a policy designed to stimulate growth in an economy – while a weaker pound would increase short-term inflation as the cost of overseas goods would rise.

His preferred fund would be the Allianz Index-Linked Gilt fund, run by Mike Riddell. Although only two years old, Mr Riddell has invested in bonds for 15 years and has a wealth of experience, consistently beating his peers over his career.

Gold is glistening

Another way to mitigate the risk of a no-deal Brexit is gold. Rob Morgan of Charles Stanley Direct, a fund shop, said although the precious metal has had a very strong 2020, up 24pc this year so far, British investors could still find solace in the metal.

Gold is priced in dollars, so a weaker pound would make the price of gold rise in relative terms.

BlackRock Gold & General would be my fund pick,” he said. The fund, managed by Evy Hambro, buys shares in mining stocks. At the moment, the portfolio is more than 90pc invested in gold producers, with the remainder in miners of silver and platinum.

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