Why Brexit Had Richard Bernstein Advisors Unfazed
Brexit has been in the limelight
The Brexit vote was a major event that will be talked about for years, if not decades. In fact, it was the result of the vote that made Brexit assume paramount importance. Had the result been in favor of Britain’s staying in the European Union, it would not have made as many headlines, or made headlines for as long as the “leave” vote did.
The vote did have political implications, as David Cameron resigned and Theresa May took over the reigns as the prime minister of the United Kingdom.
Though there’s a lot of negativity surrounding the impact of the “leave” vote, surprisingly, monetary policymakers and market participants don’t necessarily know what to make of it. In response to the vote on June 23, 2016, financial markets in Europe tanked.
The iShares MSCI United Kingdom ETF (EWU) and the Vanguard FTSE Europe ETF (VGK), among a host of other Europe-focused ETFs, fell sharply for two successive days. The iShares MSCI Europe Financials ETF (EUFN) was also sharply impacted, with UK banks and financial institutions such as HSBC Holdings (HSBC), Lloyds Banking Group (LYG), and Prudential (PUK) bleeding over the two days.
But they started recovering, and though they haven’t yet achieved the levels seen on June 23, they’re still much better off than they were on June 24 and 27.
All people want to talk about
While expressing his views on Europe on a market review call arranged by Eaton Vance Investment Managers, Richard Bernstein said that all people want to talk about in regards to Europe is Brexit. However, his company was able to ride the storm without much trouble by just doing nothing about the event. He said that “By luck or by skill,” his company made it through the volatility created by Brexit.
Apart from this, he also talked about Brexit’s being viewed only negatively. Let’s look at that in the next article.