Investors prefer the UK’s largest companies post-Brexit

Following the Brexit vote, what kind of UK equities are you more likely to buy?¹

Following the referendum’s Brexit outcome, we put the UK stock market in the spotlight in our July poll and asked FundCalibre visitors what kind of UK equity they were more likely to buy.

After an initial slump across the market, large-cap stocks (meaning the UK’s largest listed companies) recovered quickly and in fact finished the week after Brexit 5% above where they were on the day of the vote*. Our poll participants clearly took note, as 37%** said they were more likely to invest in large companies.

Small and medium-sized companies unfortunately fared worse, with Brexit forecast to reduce Britain’s economic growth. Many of the UK’s smaller companies are far more reliant on the domestic economy and people worry that these companies may now struggle to generate returns. On the other hand, some investors saw buying opportunities where prices had fallen. Our poll participants reflected these mixed views, with 27%** saying they would buy small-to-medium sized companies.

Just 21%** of participants said they would buy UK equity income stocks, although this could be due to falling dividends within the UK as much as Brexit results. And finally, 15%** of participants opted to steer clear altogether in the short-term, saying they wouldn’t buy any UK equities for now.

*Google Finance, FTSE 100, 23/06/2016–01/07/2016

**Results based on feedback from 79 FundCalibre visitors from 01/07/16 – 29/07/16

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.