Having secured the Conservative party’s best general election result in three decades and seen off the threat from remain-backing parties, prime minister Boris Johnson will have now be able to pass his Brexit withdrawal agreement and seek a trade deal with the EU.
Nonetheless, there are a number of implications of the unexpected scale of the result. Below, several fund managers give their views on what the result means and what investors need to be aware of.
Richard Buxton (pictured), head of UK equities at Merian Global Investors, said from an investor’s perspective the Conservative party landslide victory was a “welcome result”. 
“As an investor in a sector that has endured many consecutive months of net outflows, today’s result feels like a distinctly positive development,” said the fund manager. “What has become clear is that the size of the anticipated Tory majority means that Johnson will no longer be beholden to the more extreme eurosceptic elements in his party.”
In addition, the increased majority has meant that the risk of a ‘cliff edge’ departure from the EU in a year’s time has receded.
“This, in its own right, is a significant development, given a widespread acceptance among informed commentators that the likelihood of settling trade negotiations in a period of less than a year is extremely small,” Buxton explained.
“I expect to see business confidence respond positively to this new set of political realities, which in turn should be genuinely positive for the UK economy.
“I expect consumer confidence – remarkably resilient in recent years notwithstanding all the uncertainty – to strengthen significantly.”
The scale of the win is likely to have broader implications for British politics, said Buxton, who highlighted the Conservative party’s manifesto commitment to increase public spending.
In addition, while some senior Labour politicians may argue that the result is not a rejection of its leader Jeremy Corbyn’s politics and more representative of Brexit fatigue, Buxton said the party could become more centrist.
Liontrust Asset Management’s James Dowey (pictured) said the result was “the best outcome for the market” although it would be no “silver bullet” for the Brexit process.
However, Dowey said that the bounceback for UK assets is likely to be limited in size and short lived because it is likely to incur “significant long-term economic costs”. 
“There are two main reasons for this,” he explained. “First, the UK will now enter negotiations with the EU on the permanent trading relationship. Second, the biggest headwind of all for UK assets remains not Brexit, per se, but the productivity slowdown.”
A trade deal may be just as challenging to negotiate as the withdrawal bill, according to the Liontrust Global Equity manager, which took three-and-a-half years to agree.
“Never before in history have two countries or political units embarked on trade negotiations with the aim of raising the costs of trade,” said Dowey.
“That said, the sheer size of the prime minister’s newly forged majority may give him enough clout within his government to keep the UK a bit closer to the EU than currently envisioned if he chooses to do so.”
Productivity may be more difficult to resolve, he said, with the UK having seen a 90 per cent decline over the past decade compared with the four preceding decades.
“Reduced foreign market access and competition – basic long-term aspects of Brexit – are likely to keep UK productivity growth fairly low, necessitating a continued focus on the financial soundness of UK companies for investors,” he added.
John Stopford, portfolio manager of the Investec Diversified Income fund, said the scale of the win had provided some near-term economic clarity and that public sector net investment could increase to historically high levels.
“We believe markets will begin to anticipate a Boris ‘boom-let’,” the veteran fund manager explained. “This would tend to support higher gilt yields and a stronger pound.
“However, we feel the rally will be limited, due to the potential for a swift post-Brexit transition to further uncertainty about the UK’s future trading relationship with the EU.”
Colleague Alastair Mundy (pictured) – manager of the Investec UK Special Situations fund and Temple Bar Investment Trust – said the result should favour domestic earners over companies with significant international revenues, which have performed poorly since the EU referendum.
“This disappointing share price performance has, to a great extent, been justified by equally disappointing operational results, a consequence of a soggy UK economic backdrop, industry disruption, ongoing regulatory events and perhaps excess capacity in a number of industries,” he explained.
Domestic earners, he said, are likely to benefit from a stronger sterling, a potential loosening of the government purse strings, improving consumer and business sentiment, and increased interest from overseas investors.
“UK valuations are at 30-year lows compared with international equities as a whole, touching lows last seen in the early-1990s recession when judged by a range of measures,” added Richard Colwell, head of UK equities at Columbia Threadneedle Investments.
“So the greater clarity we now have over Brexit and UK politics should not only spur an immediate stock market rally, but also encourage a longer-lasting reappraisal of UK-listed companies.”
However, it’s not just “landlocked UK domestic companies” that have been affected by negative sentiment towards the UK, said Colwell.
“We think there are opportunities across the UK market, in domestically and internationally focused companies. All will benefit from a reappraisal of the UK market when that occurs,” he said.
Nevertheless, Karen Ward – chief market strategist for Europe, Middle East & Africa at JP Morgan Asset Management – said there were five things that investors need to keep at the front of their mind in the wake of the unexpected result.
Firstly, the removal of ‘Corbyn risk’ should lead to a UK asset re-rating and that, while the Brexit process still has its challenges, appetite should improve in the coming days and weeks.
Secondly, investors should be under no illusions about how ‘Herculean’ a task negotiating a free trade agreement inside 11 months will be. “Each good and sector will be negotiated line-by-line,” she said. “This is a time-consuming process.”
The strategist said talk of a hard Brexit could also continue throughout 2020 as “deadlines and cliff edges continue to generate excitement”.
Fourthly, lingering uncertainty could weigh on corporate investment although investors shouldn’t underestimate “how fiscal tides have changed”, according to Ward (pictured).
“Consumers, willing to run down their savings, have been the primary support to growth,” she said. “The main boost to growth next year will come from the almighty fiscal stimulus. Fiscal policy has been an enormous headwind for almost 10 years. It is about to become a major tailwind.”
Finally, Ward said investors should keep an eye on the Bank of England for any shift from its recently adopted dovish stance to a more neutral approach to policy and the upwards impact it could have on sterling.