Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Northern Trust clients "segregate" UK from European exposure

ForexJul 25, 2017 08:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Northern Trust clients "segregate" UK from European exposure

LONDON, July 25 (Reuters) - Around a third of Northern Trust's institutional clients have asked it to ringfence British exposure from their broader European portfolios to protect them from Brexit-related risks.

Wayne Bowers, Northern Trust (NASDAQ:NTRS) Asset Management's EMEA and Asia-Pacific chief investment officer who helps manage around $1 trillion in assets, said these clients did not necessarily want to sell British stocks and bonds, but to prepare portfolios.

Reuters reported earlier this year that investors are avoiding lumping British stocks, which have been an intrinsic part of the European investment process for decades while Britain has been an EU member and London a key financial centre, into Europe-bound investments follows uncertainty for the world's fifth-biggest economy triggered by the country's mid-2016 vote to exit the European Union which has hit both growth and the pound.

"Instead of having their European equity and fixed income exposure to include the UK, they are saying can you please ringfence UK exposure," Bowers told reporters on Tuesday.

Such ringfencing of assets is not unprecedented, it was in demand during the 2008-9 global financial crisis when clients asked asset managers to segregate financial industry shares out of broader equity portfolios, Bowers said, estimating that 30 to 40 percent of Northern Trust clients were asking for this.

"They want it segregated, recognising they may want to take an extra asset allocation position - either increase or decrease - but they want to be able to do that without impacting their broader European exposure," Bowers said.

Requests to separate UK portfolios are usually from non-European clients, including U.S. based and sovereign wealth investors, he said, adding that it had minimal costs.

Bowers expects the UK economy and sterling to stay under pressure in the next couple of years due to the "opportunity cost" of Brexit, although UK stocks tend to benefit from currency weakness. The FTSE's UK equity index rose 15 percent in 2016 and is up 4 percent so far this year .FTSE .

"The domiciliation of corporate activity in UK will continue, it will be clouded by the 'press pause' approach by some global multinationals...but we don't think it's a stop, we think it's a modest pause," Bowers said.

"We can't extrapolate that their next move will be out of the UK."

Northern Trust clients "segregate" UK from European exposure

Related Articles

The GBPUSD Rebounds Following Rishi Sunak Budget Speech
The GBPUSD Rebounds Following Rishi Sunak Budget Speech By - Oct 27, 2021

By Sam Boughedda — The GBP/USD saw a bounce earlier today following U.K. Chancellor Rishi Sunak's budget speech. In the upbeat speech, Sunak said the U.K. economy had...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email