Sterling bets too risky, some UK stocks appeal - UK's biggest asset manager

Chief Investment Officer Sonja Laud, who oversees more than 1 trillion pounds ($1.3 trillion) at Britain’s biggest asset management company, Legal & General Investment Management, warned over Sterling’s next move, in the face of looming Brexit uncertainty.

Key Quotes (courtesy Reuters):

“I wouldn’t take a position on sterling at this point.” 

“Sterling is really is a binary bet and no client would want you to take a binary bet. You’d have to tell your client we know what will happen, but we don’t.”

“You have to understand what you buy into, and the currency is a bet at this point ... It’s not worth taking that risk.”

“We don’t have a deal, we just have a divorce and let’s face it, a free trade agreement is equally fraught with problems and forks in the road,” 

Equities are a better bet if Brexit happens with a deal.

“There are still a few really good (UK) companies that it might be worth hanging on to,” 

“But longer term, I wouldn’t bet on a prolonged rally .... reality might kick in when we have the first roadblock in terms of negotiations.”

“It could take as long as 3-4 years to reach a free-trade agreement with the EU.”

“The market is not factoring in that this could lead to more drastic changes, with more drastic economic policy changes.”

“We downgraded it because the S&P500 is at an all-time high, markets are betting squarely on central bank support and that inflation is not coming back and that the political backdrop will remain stable.”