View from the Floor: June 2016

June 2016

Euan Munro on Brexit

Following the UK’s historic vote to leave the European Union, Euan Munro, Chief Executive Officer of Aviva Investors, discusses the implications for the financial markets and investment in the latest View from the Floor podcast.

During the podcast, Euan considers the economic impact on the UK and the likely monetary and fiscal policy response; contagion risk; and what a Brexit means for long-term investment and the asset management industry. 

Highlights from the podcast

On the markets calling the vote wrong

“One of the things I’ve said consistently is that no-one has a crystal ball. We need to build portfolios that are robust to many different eventualities because these things can be so unpredictable.”

On the long-term impact to the UK

“It’s not difficult to make a call about the likely consequences over the next two years. There will be delays to investment projects and consumers will be more cautious. The long-term consequences are really a function of the trade agreement they come up with. It’s hard to know at this stage what that will be.”

On value

“Good value has been hard to define for some time. Investors will have to think very hard about where to find value.”

On the policy response

“I don’t think QE is necessarily the answer. The solution will rely on some kind of fiscal response. It’s time to pull out some of those weapons.”  

“The interest rate response and fiscal response that’s triggered by this type of crisis will always benefit someone. Our job as asset managers is to work out who is in the best position to benefit from whatever twists and turns the global economy takes.”

On the potential impact for the asset management industry

“I would expect this to lead to further consolidation in the asset management industry.” 

Important Information

For professional investors only. Not to be distributed to, or relied on by retail investors.

Opinions expressed are those of Aviva Investors Global Services Limited (Aviva Investors) as at 28 June 2016. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. Past performance is not a guide to future returns. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.

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