<p>News that America’s Department of Justice and Federal Trade Commission will conduct wide-ranging probes into the market power of several tech giants sent their share prices tumbling. Investors fear growth-busting breakups. Telltale warning signs have been floating around for a year, yet they deepened in May and June. These companies have come a long way from the garages and dorm rooms where they were founded. Fresh-faced innovation has given way to mistrusted maturity. The FANGs are just too big and too powerful to be left alone.</p>

<p>Over the past decade, appetite for sustainable investment has increased across the global asset management industry and in the US, sustainably managed assets now represent 26% of the total. Commitment to the Stewardship Code has also shot up as and more managers have become involved in proxy voting and other forms of engagement with underlying companies. We’ve been doing this for a while – this year marks a decade since Rathbones signed the UN-backed Principles for Responsible Investment (PRI).</p>

<p>The UK economy is small, which may sound a little strange if you know that we have the world’s fifth-largest economy by gross domestic product. But we only contributed about 2% to global economic output last year – not enough to influence global asset prices, interest rates or the pace of global growth in any meaningful way. So the good news is that Brexit is not a globally systemic event, like the financial crisis of 2007-08 or the European debt crisis of 2011-12.</p>

<p>Kicking the Brexit can all the way to Halloween has done nothing but prolong the uncertainty that’s shrouded us for so long. The ‘good news’ is that we think sterling now looks so undervalued that, no matter what happens with Brexit, it should appreciate over the long term. So, those willing to hold on for a rough ride just may find themselves reaping the rewards when the Brexit puzzle is finally solved.</p>

<p>As society struggled to get back on its feet in the wake of the 2008 global financial crisis, one thing was clear: society needs the investment industry to be active and responsible. For many, this meant thinking about signing the Stewardship Code, and upping their game on proxy voting and engagement with underlying companies. For us, this created further incentive to refine our existing approach. Since then, responsible investing has become mainstream and over 2,000 asset managers around the world are now signatories to the UN-backed Principles for Responsible Investing (PRI).</p>

<p>Quality hasn’t just deteriorated in the sterling-denominated corporate bond market, but the lowest-rated BBB segment has also grown substantially as a proportion of the euro and US dollar investment-grade markets, which are both far bigger. If the rate of downgrades in the next recession is similar to the rate in the previous one, the next rung down in the bond markets – high yield debt markets – could get swamped.</p>