Michelle Pearce, CIO and co-founder at UK headquartered roboadvisor, Wealthify, tells PBI that Brexit has resulted in largely positive performance across its 5 investment plans.
The automated advisory service, which is predominately targeted at retail investors, was founded in 2014 and launched in April 2016. Brexit presented the first real test for the company.
Pearce says that Wealthify had opted for a cautious strategy in the lead up to the UK referendum, with a large amount of cash allocation across all its risk profiles – with as much as 40% on its more conservative plans. Pearce says:
"We were positioned cautiously in the lead up to the referendum. We moved heavily away from Sterling and had a lot of exposure to the Dollar and Yen through various international equities as well as commodity trackers."
"Brexit was good for us on June 24, we posted positive performance across all 5 of our investment plans.
"A lot of our customers are first time investors, they’ve never done this before and the last thing we want to do is scare them off. So with that in mind, we probably were a little more cautious than most people coming up to it."
Pearce tells PBI that Wealthify has moved out of UK property allocations:
"On June 24 we eliminated all exposure to the UK property market. Although our investing technique is predominately passive investment, in the property space we use active property funds – because we like the fact that it holds real physical properties which are uncorrelated with the stock market.
"We sold out of our property fund because we believe there’s going to be a lot of negative sentiment around where property is going in the medium term. With Cameron stepping down and there being so much uncertainty in the marketplace as well, we don’t know what foreign buyers are going to do."
Pearce adds that Wealthify will be looking for buying opportunities in the coming weeks:
"On June 24 we were selling, not buying just yet. We sold out of some cash equivalents as we’d had quite a high cash weighting going into Brexit, as much as 40% in our lower risk plans. On June 24 we sold those cash equivalents and moved it into liquid cash. The rational for that is we expect in the coming weeks there will be a lot of brilliant opportunities, bargain priced equities. We’re predominately interested in looking at the UK and European space as they’ve been hammered so far. But we’re not buyers just yet, we’re just waiting and looking and seeing what’s going on."