The clock on the Brexit transition period is not so much ticking as violently tolling. If a solution isn’t found to break the current impasse by 31 December, the UK will likely be forced to operate under World Trade Organisation rules. Rather than run for the hills, however, I’d snap up top FTSE 100 shares that are unlikely to be affected all that much.
FTSE 100 global play
If I’m going to avoid the nastiness of a no-deal exit, it makes sense to buy shares in global players. Top-tier drinks behemoth Diageo (LSE: DGE) is surely a great example. It sells its premium spirits in 180 countries around the world.
This geographical diversity is important since a disorderly Brexit could see the value of sterling fall once again, helping exporters. Indeed, it’s one of the reasons why the FTSE 100 index has done so well recently.
But Diageo has other attractions. In my book, it’s also one of the best ways to play the bounce in equities once the coronavirus storm has passed.
Like many stocks, Diageo has enjoyed a nice recovery over the last few weeks following news of several vaccines proving effective in fighting the coronavirus. Since the beginning of November, shares are up 17%. This suggests investors are confident that bars, restaurants and sporting venues will be able to completely open their doors at some point in 2021, thus helping revenue and profits to recover. As such, the £68bn cap is still a buy, in my opinion.
Back in fashion
Despite the uncertainty surrounding Brexit, I’ve been slowly accumulating a position in luxury brand Burberry (LSE: BRBY) throughout 2020. Like Diageo, the FTSE 100 stock sticks out as a great buy given that a huge proportion of its earnings come from Asia and its increasingly affluent middle class.
Burberry is, of course, a highly desirable brand. As I see it, the demand for luxury goods will continue to grow regardless of the outcome of the current negotiations. Those who can afford to buy Burberry’s products will do so. Never underestimate our desire to stand out from the crowd!
Burberry’s shares are up 16% in the last month. Even so, I still believe the company is undervalued, at least relative to other global luxury brands. Further gains could be on the cards when it next reports to investors in January.
Copper load of this
A final FTSE 100 stock I’d consider as a way of navigating a no-deal scenario would be miner Antofagasta (LSE: ANTO). Having extracted copper from its operations in Chile, the company then sends it to buyers around the world. Importantly, Anto generates 100% of revenues from outside the UK. In fact, most of its copper goes to Asia.
Naturally, any investment in a company exposed to commodity prices — something it has no control over — involves risk. Even so, I think the outlook for companies like Antofagasta is very encouraging.
Thanks to the excitement surrounding the EV revolution and clean energy in general, the copper price has been in fine form recently. Accordingly, Anto’s share price has also soared 24% in just one month!
Sure, there will be lots of ups and downs ahead. Nevertheless, I believe the miner could be another way of reducing Brexit-related portfolio exposure. Deal or no deal, Antofagasta could prove a cunning buy in years to come.
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Paul Summers owns shares of Burberry. The Motley Fool UK has recommended Burberry and Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.