Bringing you live news and features since 2006 

Michael Metcalfe, State Street

State Street Quarterly Brexometer Index reveals latest investor sentiment towards Brexit


After a slightly more muted response from investors in Q4 2018, investor appetite for holdings of UK assets has polarised during Q1 2019, with an increase in both the number of those looking to increase and decrease their exposure.

That’s according to the findings of the latest State Street Brexometer Index which finds that investors planning to increase their exposure in the next six months increased to 19 per cent – the second highest figure since Q3 2018 at 21 per cent. The proportion of investors looking to decrease their holdings of UK assets meanwhile, rose for the third consecutive quarter to 22 per cent – also the second highest recording since Brexometer began, after a high of 24 per cent in Q1 2018.
“Brexometer shows that investors are increasingly divided,” says Michael Metcalfe (pictured), head of Global Macro Strategy at State Street Global Markets. “This would seem to mirror current market conditions, which have lurched from optimism around a deal or delay, to the pessimism surrounding the ability to get a deal done. Reflecting this reality, this quarter shows the proportion of investors expecting to significantly decrease their holdings of UK assets has jumped to a two-year high of 12 per cent.”
With the absence of clarity around Brexit, the number of investors holding a neutral medium-term outlook for global economic growth has increased during Q1, from 28 per cent to 37 per cent. Conversely, positive sentiment fell to 32 per cent, representing the lowest reading since Brexometer begun.
The survey also found that while four out of five (80 per cent) investors anticipate Brexit having an impact on their operating model, the proportion of those expecting it to have a significant impact increased from 19 per cent in Q4 to 22 per cent.
“Sterling remains undervalued while uncertainties regarding Brexit and wider political risk remain,” says Bill Street, head of Investments for EMEA at State Street Global Advisors. “Exchange rate movements have been subdued, rallying when a deal appears more likely and falling when uncertainties persist. Market movements in sterling indicate that investors agree that the tail risk of no-deal is low. However, views on the medium-term outcome of the Brexit process are mixed. This presents a market opportunity for those who are confident of the political endgame.”

Latest News

There were two companies launching this week, each reflecting key and recurring themes in ETF strategies. ..
A quiet week for launches in the US...
RBC Global Asset Management (GAM) was the only firm to launch new ETF offerings in March 2023. The firm launched..
Solactive writes that with current developments and economic trends, such as the COVID-19 pandemic, increasing inflation rates, and energy prices,..

Related Articles

March 2021 saw USD1.2 trillion Northern Trust Asset Management launch its ETF arm, FlexShares in Europe, with two climate focused...
Marie Coady, PwC
PwC’s new research amongst global ETF managers, sponsors and service providers reveals a sector with upbeat growth projections. Despite the...
Vishal Kapoor, Bandhan Mutual Fund
ETF Express reported on a couple of ETF launches in India over the last couple of weeks, including the new...
ETF Awards
We are very pleased to bring you the winners in the 13th outing of the ETF Express European ETF Awards,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by