Cool Heads Ep 1: Anne Richards on Brexit

Cool Heads Ep 1: Anne Richards on Brexit

Welcome to the first episode of Cool Heads, a new video series where we cut through political noise and focus on what matters to investors.

Watch Anne Richards, CEO of Fidelity International, explain the investment implications of Brexit and political risk around the world, while Dan Hedley, Director of Public Policy, provides an update on the latest Brexit scenarios.

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Brexit is not just a British problem

Brexit is not just a British problem. Of course, it has dominated UK politics for the last three years - and may do so for years to come, even if a departure from the EU is sealed with a deal this week. But the political uncertainty it has spawned is mirrored in many markets across the world. In this episode of Cool Heads, we hear how market fragmentation is on the increase.

Market fragmentation
Public demands for politicians to curb the growth of globalisation have led to protectionist measures such as tariffs and capital controls. Indeed, trade conflicts have escalated between the US and China, the US and Canada, Mexico and Europe, and Japan and Korea. And there have been new political spats over where companies are listed. These tensions reflect weakening political support not only for a global trading system, but also for a global financial system in which capital flows almost seamlessly around the world.

As globalisation slows - and perhaps even reverses - a multi-polar world is emerging. The big powers are seeking to dominate their own regions and unravel their interdependent economic relationships. Many countries are taking a more nationalistic view of the world, making bilateral, as opposed to global, arrangements. As part of this process, further barriers to global trade may be erected, which will increase the cost of capital. This could have a knock-on impact on companies around the world and create liquidity strains as capital becomes trapped - a fragmentation of markets.

Position for range of outcomes
Specifically in relation to Brexit, another shock to the pound like the one that followed the 2016 referendum is unlikely. But sterling volatility is expected to increase as we approach the 31st October deadline, even if a deal looks more likely. Investors can manage this type of risk by having a diversified portfolio that is able to withstand a range of scenarios, rather than trying to pivot towards a particular outcome.

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In the next episode of Cool Heads, Alex Wright and Natalie Briggs compare Brexit fallout for UK and European stocks, so do join us then

This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”).  Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.

Retail investors should not rely on any information in this document without first seeking advice from their financial adviser. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information.  You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009.

© 2019 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.

 

 

This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”).  Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.

This document is intended for use by advisers and wholesale investors. Retail investors should not rely on any information in this document without first seeking advice from their financial adviser. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information.  You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise.

© 2019 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.

 

This video is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.

Prior to making an investment decision, retail investors should seek advice from their financial adviser. This video is intended as general information only.

Please remember past performance is not a reliable indicator of future performance. This video has been prepared without taking into account your objectives, financial situation or needs. You should consider such matters before acting on the information contained in this video. Investors should also obtain and consider the Product Disclosure Statements ("PDS") for any Australia Fidelity products before making any decision about whether to acquire the products. The PDS is available on www.fidelity.com.au or can be obtained by contacting Fidelity Australia on 1800 119 270. The relevant Target Market Determination (TMD) is available via www.fidelity.com.au. This video may include general commentary on market activity, industry or sector trends or other broad-based economic or political conditions which should not be construed as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be construed as a recommendation to buy, sell or hold these securities. While the information contained in this video has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. Investments in overseas markets can be affected by currency exchange and this may affect the value of your investment. Investments in small and emerging markets can be more volatile than investments in developed markets. This video may contain statements that are "forward-looking statements", which are based on certain assumptions of future events. Actual events may differ from those assumed. There can be no assurance that forward-looking statements, including any projected returns, will materialise or that actual market conditions and/or performance results will not be materially different or worse than those presented. This video may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity's funds is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Details of Fidelity Australia’s provision of financial services to retail clients are set out in our Financial Services Guide, a copy of which can be downloaded from our website.

© 2021 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.

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