“If sterling were to weaken this would cause the opposite, with the need to focus away from domestically driven companies, while focusing on UK-listed multinational firms – in other words, favouring FTSE 100 companies with a material portion of the revenues generated abroad.”
This poses the question of whether investors should reposition themselves in equities before the referendum. Adrian Lowcock, head of investing at Axa Wealth, advises against allocating to one result ahead of another “as that could damage portfolio values quickly”.
He says: “The key is to have some capital protection in place in the event of a sell-off over the summer, and have cash ready to allocate to those sectors and companies that offer attractive value.”
But many are preparing for a volatile summer as managers and investors shift their portfolios on the outcome of the vote, or put to work cash they have been sitting on in the months leading up to the referendum.
Ellie Duncan is deputy features editor at Investment Adviser