By Annabel Brodie-Smith
This month, following the triggering of Article 50, we are looking at the impact of Brexit on both the UK and the EU. It will still be a while before we understand the exact implications of our decision to leave the EU, but despite any uncertainty about the future, markets are holding up.
We have asked Charles Luke, Manager of Murray Income which has an impressive 43-year record of dividend increases, for his thoughts on the impact of Brexit on the UK. Although he expects slower economic growth as inflation begins to bite on real incomes, he remains positive on prospects for his portfolio stating: “although the UK is facing significant uncertainty around the outcome of its negotiations with the EU, the outlook for many UK-listed companies with diversified international exposure is brighter.”
Sam Morse, Manager of Fidelity European Values has provided the outlook for Europe. He comes up with a number of reasons to be cheerful including the improving outlook for company earnings. However, there are reasons to be cautious including: “a busy political calendar in 2017 with French, German and, possibly, Italian elections to look forward to” and a possible knock to confidence due to Trump failing to deliver his economic plans in the US.
You may well be interested to see the collation of managers views on the triggering of Article 50 including the refreshingly honest, Harry Nimmo, Manager of Standard Life UK Smaller Companies Investment Trust who said: “Essentially I’m indifferent to the triggering of Article 50…. History has demonstrated that our kind of lower risk growth-orientated companies can generally flourish regardless of the direction of macro-economic change.”
For all those income seekers, please do take a look at the latest list of next generation investment company dividend heroes. These are the 18 companies that have increased their dividends for 10 years or more but less than 20 years.
Have a Happy Easter and let’s hope the spring weather stays!
Annabel Brodie-Smith, Communications Director, AIC