Investing after Brexit: Managing risk through diversification
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For UK investors, Brexit marked more than just a political and economic shift — it fundamentally changed how investment portfolios interact with the global economy. Since the UK officially left the EU in 2020, the UK investment landscape has been fraught with trade frictions, currency volatility and fragmented regulations. This has had a lasting impact on how UK investors build their portfolios, especially where global diversification is concerned. This article will explore the impact of Brexit on UK portfolios, and how investors can adapt their strategy — and their portfolio tracking — to thrive in a post-Brexit world.
Why global diversification is more important than ever
For the vast majority of investors, diversification is a key goal, with the understanding that holding assets across different sectors, geographies and currencies can help reduce risk and smooth returns. But for UK investors, Brexit has completely changed the dynamics of investing in the home market.
Prior to Brexit, UK investors with exposure to European equities could take advantage of relatively frictionless cross-border flows, shared regulations and strong currency alignment. Now that the UK is no longer part of the EU single market, many of those benefits have been eroded. For example:
- Regulatory divergence means that some UK-based funds no longer have passporting rights across Europe
- Trade tensions and tariffs have created supply chain uncertainties, particularly in manufacturing and consumer goods
- Currency volatility (especially fluctuations in the pound) has become a risk when investing abroad or even in UK companies with global exposure.
As a result, UK investors need to be more intentional than ever when building globally diversified portfolios.
What to watch: Sectors and regions post-Brexit
Some sectors of the UK economy have fared better than others post-Brexit. Financial services, for example, have seen a portion of business shift to continental Europe, while sectors like energy, mining, and healthcare have shown more resilience.
UK investors should now carefully consider:
- Which geographies offer growth: Emerging markets, North America, and Asia-Pacific continue to offer exposure to high-growth sectors
- Which sectors are Brexit-insulated: Tech, healthcare, and ESG-focused funds may provide lower correlation to Brexit-related domestic risks
- How currency movements affect returns: Holding assets in USD, EUR or AUD may introduce both opportunity and risk, depending on FX trends.
The value of automated tracking and reporting
Managing a diversified portfolio across borders is more complex than ever. With exposure to multiple markets and currencies, it’s easy for investors to lose track of how their assets are performing, what their true returns are once currency fluctuations and fees are taken into account, and how to calculate taxable income across different tax jurisdictions.
This is where Sharesight comes in. Our portfolio tracking platform is built with global investors in mind — especially those balancing domestic and international holdings. With Sharesight, UK investors can:
- Track performance in GBP while holding assets in multiple currencies
- Measure true returns, including capital gains, FX impact and dividends
- Calculate taxable income for local and overseas investments
- Generate reports for accountants and financial advisers with ease
- Assess portfolio asset allocation, diversification, and rebalancing requirements
- Identify overexposure to sectors or regions at a glance.
Many investors aren’t aware how heavily they may be weighted toward UK assets, or that their overseas holdings might be underperforming once FX is accounted for. With Sharesight, this becomes instantly visible.
Understand your global exposure and currency impact
One of the more complex challenges for UK investors in the post-Brexit era is managing currency risk. With a weakening or volatile pound, investors exposed to USD, EUR or other currencies may see their investment returns significantly impacted by foreign exchange movements — for better or worse. That’s why having the ability to track portfolio performance in multiple currencies is essential.
Sharesight’s multi-currency valuation report allows investors to see the value of each investment in both its original currency and GBP, using end-of-day FX rates. Whether you're holding US tech stocks, European ETFs or global funds, this report helps you understand your true performance.
In tandem, Sharesight’s exposure report offers a clear view of how your portfolio is distributed across sectors, asset types, and geographies — even drilling down into the underlying holdings within ETFs. This makes it easier to spot overlaps, concentration risks or unintentional gaps in your diversification strategy.
The takeaway
The post-Brexit investing environment is still evolving. While some changes have been sudden, others will unfold gradually — from financial services regulation to cross-border tax treaties. The one constant is uncertainty, which makes diversification, transparency and responsiveness more important than ever.
If you're managing your own portfolio, make sure you have the right tools to:
- Understand what you hold and why
- Identify concentration risks and diversification gaps
- Accurately track your performance
- Adjust as the global investment landscape evolves.
Brexit didn’t put an end to global diversification, but it has made it more complicated. For UK investors facing new challenges in global investing, Sharesight gives you the full picture of your portfolio, plus the insights you need to make smarter, more informed decisions.
Track your global investments with Sharesight
If you’re not already using Sharesight, sign up for a free account to track all your UK and global investments in one place, and gain access to powerful reporting tools that will give you the insights you need to make smart investment decisions.
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