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Pidcock: It’d be insane not to vote for Brexit

30 April 2016

The manager of the Jupiter Asian Income fund says the Remain campaign is based on fear, driven by people who have little understanding of economics.

By Anthony Luzio,

Editor, Trustnet Magazine

The UK should vote to leave the “European Soviet Union” in the June referendum, says Jason Pidcock, manager of the Jupiter Asian Income fund, who adds it would be “insane” not to take the chance to rid ourselves of an unnecessary layer of government.

The Remain camp has made enormous progress in the past few weeks, gathering the support of major global players such as US president Barack Obama.

However, the BBC recently reported that a group of influential economists have thrown their support behind the Leave campaign, claiming the UK economy would be much better off outside the EU.

And Pidcock, former manager of Newton Asian Income, said the UK would be better off if it left the EU – although he admitted it is more likely to vote to remain.

“I’d love us to leave the European Soviet Union," he said. "I think if you can remove an unnecessary layer of government, you should absolutely do it, but I think as a country, we are going to bottle it.”

“People talk about fear of the unknown – I can’t believe that should be a problem for a country like this."

"Could you imagine Scott of the Antarctic fearing the unknown? We should embrace the unknown. Of course, it’s not really the unknown – there was a time before the European Soviet Union when things were fine.”

Pidcock says he is annoyed by the Remain campaign's scaremongering, especially as much of this stems from their own ignorance.

“I think the fear campaign is nuts,” he added. “Most politicians don’t have a good understanding of economics and I think they have latched on to something and the clichés are coming out.”

“I’m hoping that Boris [Johnson, mayor of London] will step up his game, because time is running out. I’m hoping he’ll be able to convince more people.”

Data from FE Analytics shows Jason Pidcock has made 103.23 per cent over the past 10 years compared with 81.38 per cent from his peer group composite.

Performance of manager vs peers over 10yrs

 

Source: FE Analytics

James Clunie, manager of the Jupiter Absolute Return fund, would also prefer it if the UK left the EU, although his reasons are different from Pidcock's.

“I am concerned by some European institutions, particularly the accounts, as we can’t actually get the sums to add up – money went missing somewhere," he explained. "In the short-term, that is certainly a red flag.”

“So I have some concerns about the institutions of Europe and that’s my main concern. I’ve been toying with the pluses and minuses for months now and I’m veering slightly to the Vote Leave camp, but I’m willing to be persuaded otherwise.”

However, Pidcock and Clunie are in something of a minority when it comes to their view on the UK’s membership of the EU.

Respondents to the Jupiter Wealth Manager Index (JWMI) survey, which tracks wealth manager sentiment, called the EU referendum the most prominent risk factor to the UK’s growth outlook in 2016, with more than 70 per cent citing it as a major worry.

There are strong concerns among wealth managers that a vote to break away from the EU would result in foreign investors questioning their exposure to the UK economy and UK assets; this in turn could lead to an increase in bank funding costs, which could be passed to UK consumers through tightening credit conditions.

Ben Whitmore, manager of the Jupiter UK Special Situations fund, falls into this camp.

“I think the issue around leaving is actually a bit of a paper tiger,” he said.

“We’re allowed to get all the benefits, we have access to the free trade area, and yet we don’t have to play by any of the rules – we’ve got control of our currency.”

“I think in reality the interference from Europe is a lot less than people make out. We get most of the benefits, yet we’re given so many opt-outs, so in fact I think it would be daft to leave.”

Cedric de Fonclare, manager of the Jupiter European Special Situations fund, also takes this view. He says that not only would voting to leave the EU lead to short term uncertainty, but would mean giving up advantages that would only become apparent once it was too late.

“I think it would be a big mistake,” he said. “I think there is some short term uncertainty that weighs on business confidence and I don’t think this is going to go away very quickly.”

“If you think about large corporates, Japanese companies decided to locate in the UK because of things like the flexibility of its workforce – the likes of Toyota came here because they could export their cars to the rest of Europe."

"If you asked them again where they would put their plants, they might not say the UK.”

“I think there are potential long term gains to staying in the UK that you can’t quantify and I think there would be some short-term shocks that are already visible.”

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