New Brexit poll: what investors really fear

A flash poll by interactive investor, the UK's second largest investment platform, reveals a split in investors’ sentiment.

Last year's Conservative Party Conference was dominated by Abba's 'Dancing Queen', this year it's been about 'Money, Money, Money', with Sajid Javid's promises of multi-billion pound spending plans coupled with hints of inheritance tax cuts.

But with Johnson's Brexit offer clearly taking centre stage, how are investors feeling as we head towards 31 October deadline?

A flash poll by interactive investor, the UK's second largest investment platform, reveals a split in investors' sentiment. Investors are increasingly taking a 'keep calm and carry on' approach, saying they are sticking with their investment strategy. Interestingly, many seem less concerned about Sterling.

Some 45% of respondents polled between 24-30 September 2019 said they will not tinker with their investment strategy despite continued uncertainty over Brexit – up from 41% in August as the October 31 deadline for leaving the EU edges closer. 

In addition, fewer investors are strategically investing in companies with less exposure to the UK over fears of how Brexit will affect the value of sterling (17% versus 24% in August).

This is not to say that investors are more bullish about the UK's investment landscape. With the Brexit saga approaching crunch point, more investors have decided to put their investment decisions on hold. In September, 22% of respondents said they would not invest until a firm decision has been made on Brexit – up four percentage points from 18% in August, but lower than 25% in March and 31% in January.

There has also been a modest increase in investors deciding to filter out market ‘noise' and take a long-term view - 26% in September compared to 23% in August, but less than the sentiment in March (32%).

In all, concerns over Brexit have dipped to 34% in September from 36% in March and 37.5% in August, but remains ahead of the US-China trade war as number one investor worry (30%). 

Lee Wild, Head of Equity Strategy, interactive investor, says: "A lot has happened since our last Brexit poll. Boris Johnson has become PM, he's banished lifelong Tories from the party and temporarily prorogued Parliament, while MPs have voted against no-deal. 

Respondents to our latest poll are less worried about Brexit than they have been, focusing instead on longer-term strategies. That Britain is now far less likely to crash out of the EU without a deal is a clear boost to confidence, reflected in an increase in the value of the pound, although there will be twists and turns guaranteed,  most probably extending the uncertainty for financial markets well beyond October 31st. Circumstances are further complicated by the inevitability of a general election this side of Christmas, which explains why increasing numbers of respondents to our Brexit polls cite a Labour government as their number one concern."

Myron Jobson, Personal Finance Campaigner, interactive investor, said: "Much like the EU referendum, investors appear split over the potential impact of Brexit. On the one hand, more investors are resisting the urge to chop and change their investment strategy amid Brexit-fuelled volatility. On the other hand, a greater number of investors are holding off on making investment decisions until the Brexit picture becomes clearer. 

"No one short of a functioning crystal ball can say for sure what the outcome of the Brexit saga will be, but having a clear idea what your investment goals and time horizon are should inform you next steps. It's all too easy to say ‘keep calm and carry on' amid periods of great uncertainty - both political and economic - but it's even more difficult to heed when there is serious money on the line. While Brexit fuelled market volatility creates investment opportunities, the benefit of portfolio diversification shouldn't be forgotten. The worst thing anyone can do is panic, and nervous investors might like to consider regular investing, which can help smooth out some of the highs and lows in the price of shares."