Health care, real estate and technology stocks were mentioned as the best options.
Robert Darwin, partner at Hogan Lovells, who follows mergers and acquisitions deals, told CNBC that pharma is the place to look at. “Britain’s importance to the Life Sciences industry, and its status as a major player in global science, should mean that irrespective of Brexit, major pharmaceutical companies continue to see the UK as a key place to invest,” he said.
Morris of BNP Paribas noted that “real estate has the lowest share of international revenues as a percent of total sales, so sterling would matter less to corporate profits. Consumer Discretionary and Financials are also below average for the index.”
When it comes to technology, it is “the driving force of everyone’s life,” Collins from CCO said.
Banking stocks should also benefit from higher interest rates but life could be difficult for the financial services industry, which will relocate some operations from the U.K. to Europe, Chillingworth from Rathbones said. He added that sectors heavily dependent on U.K. consumers, such as leisure and retail, will be unlikely to escape Brexit intact.
Brexit has gotten investors split, with overseas money managers clearly moving towards European equities rather than U.K. ones. As Michael Browne, portfolio manager at Martin Currie, described, “I honestly don’t see how we can find a Brexit proof sector.”
“When you change you trading relationship and population movements with the world, it has to change everything from the cost and supply of labour, the cost of good (exchange rate) , the availability of market access (in and out), government finances (fiscal policy) or as we know very well monetary policy. You can find a stock, which for its own reasons does well or badly, within this but…,” he wondered.
“Then throw in what sort of Brexit we are going to have? Here I do not mean the hard/soft debate but whether it’s a capitalist or Socialist Brexit. A question made sharply important post the election of 8th June. And a socialist Brexit would change everything,” he added.