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Macro Alerts

Italy votes no. How are you positioned?

05 Dec 2016

Italy has spoken and now’s a good time to shift the spotlight onto your portfolio and ask yourself: how am I positioned? In the below, we outline our thoughts on positioning your portfolio for both the short-term and the long-term using Exchange Traded Products (UCITS ETFs and Exchange Traded Notes). For more detail driving our initial investment view, read our pre-reform article, 'A vote for sustained growth or more economic risk? The stakes are high for the Italian referendum'

Figure 1: ‘No’ Reform Asset Allocation Impacts

Source: WisdomTree 

In the short term, tactical opportunities are aplenty
The message to investors is to be prepared: volatility will continue in the short term, so hedge your broad exposure in equities and think about retreating back to safe havens – like gold. We believe that a vote against Renzi’s reform would see Grillo’s Euroscepticism rising, resulting in equity markets selling off in the short term, while worsening government finances and political uncertainty should see bonds and the Euro sell off sharply.

Figure 2: Tactical allocations using our range of Boost Exchange Traded Products

Source: WisdomTree

And in the long run… “Dis-inflation” and “loosening” fiscal compact could see Italian bonds and equities recover over the long term. Investors may consider the following strategies:

Figure 3: Strategic allocations using our range of WisdomTree UCITS Exchange Traded Funds

Source: WisdomTree

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Macro Alerts, Europe / Eurozone

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This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.


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