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How to Invest During Brexit? Look Outside the U.K., Fund Managers Say

ETFs that track markets abroad are seen as providing the best protection against the fallout from Britain’s break up with the European Union.

U.K. government bonds have underperformed on fears that Brexit will push inflation higher.

U.K. government bonds have underperformed on fears that Brexit will push inflation higher.

Photographer: Simon Dawson/Bloomberg

British investors are weeks away from a potentially devastating shock. They may have little to do with fisheries or food standards, but the market they trade from could face headwinds if the U.K. fails to secure a trade deal with the European Union.

The pound could plummet. The country’s recession — its worst in over a century — could deepen. Even if Britain and the EU strike an agreement, asset managers say economic conditions in the U.K. could still worsen and uncertainty is unlikely to vanish overnight as the specifics of the pact are thrashed out.