Response to the Brexit vote

Friday, 24 June 2016

5:00pm 

Britain has voted to leave the European Union in an historic referendum causing volatility in global financial markets and the British pound to fall to its lowest level since 1985.

When the UK market opens again in several hours’ time, we’ll get a clearer indication of where things lie. In the meantime, we’ve been able to evaluate how the markets’ response to the vote has impacted QSuper’s investments to this point.

Portfolio performance

Currently, the QSuper member investment options are broadly performing as we would expect in such an environment. We made a strategic decision some time ago to focus on long-term returns while providing a less volatile experience for our members. This was designed to provide stability and meet our members’ objectives via a diversified portfolio with less equity exposure.

Currency effects

There’s a lot of talk about the currency fluctuations occurring as a result of this leave vote. These currencies are traded on a 24-hour basis globally, and our principle of hedging foreign exchange, or currency, exposure means that moves in exchange rates have very little effect on the returns of our portfolios – a particularly good thing when currencies are looking a little uncertain.

These currency moves are well within our stress test limits and our liquidity policy is responding exactly as it should. 

So for now, it’s a matter of seeing what unfolds in both the UK market and markets across the world. But we’re very pleased with how our investments have been performing in the face of such volatility.

We will provide more updates as they come to hand.



Disclaimer:

We’ve put this information together as general information only and you should get professional advice before relying on this information.

Past performance is not a reliable indicator of future performance. Each of our investment options has a different objective, risk profile, and asset allocation.