Stockmarkets hate uncertainty, so with less than a month to go until the British public have their say on whether to remain in or leave the European Union (EU), investors will be keeping a close eye on the opinion polls.
The consensus view among fund managers and investment commentators is that the short-term impact of a Brexit vote will be negative for various asset classes.
The longer-term impact, however, is anyone's guess, as it is impossible to predict whether in a couple of years' time the economy will be better or worse off.
Below we consider how shares, bonds and sterling could be impacted in the short term in the event of a Brexit.
The theory is that a Brexit vote will harm the smaller and medium-sized companies that tend to be more domestically focused. These business are naturally more geared towards the fortunes of Britain's economy.
The big blue-chips in the FTSE 100 are expected to fare better, as most firms in the index generate the vast majority of their revenues overseas.
Laura Foll, deputy fund manager of, one of our sister magazine Money Observer's Rated Funds, says that smaller and medium-sized companies make up approximately two-thirds of the trust's holdings. But she is not repositioning it ahead of the EU referendum.
Foll says: "What gives us some comfort ahead of the vote is that the trust has a diversified list of holdings, approximately 120 in total, some of which should be more insulated in the event of a 'leave' vote."
"We are not, however, naïve to the fact that, were there to be a 'leave' vote, it would have a very real effect on some of the businesses that we own in terms of where manufacturing is located, and an immediate impact on the UK economy."
John Bilton, head of global multi asset strategy at JPMorgan Asset Management, is concerned there will a sharp sell-off.
"Regardless of one's personal view on the referendum, no one can dispute that stockmarkets dislike uncertainty.
"Thus in the immediate aftermath of the vote, we see UK equities rallying on a remain vote and sinking on an exit vote. But in the longer run the situation becomes more complicated," says Bilton.
The impact on fixed income markets is trickier to call. David Page, senior economist at Axa Investment Managers, says the impact on bonds should be "more neutral" than for other asset classes.
But he notes that gilt holders may become more nervous, due to the fact they are sensitive to the health of the economy.
Overseas owners, who currently own 35% of the gilt market, could lose their nerve and rush to the exits, which would cause prices to fall and yields to rise.
However, the long-term impact will be negligible, Page adds. "We contend that demand for sovereign, domestic-currency issue bonds of one of the world's oldest international borrowers is likely to remain firm, and in a world of low interest rates, relatively small yield increases should attract relatively large inflows.
"Moreover, gilts should benefit from the expected easing in monetary policy - particularly additional quantitative easing - that we envisage if the UK were to leave the EU," says Page.
The outlook for sterling is easier to predict - it will almost certainly fall in the event of a Brexit.
Since last November, sterling has depreciated nearly 10% against the US dollar, and the upcoming referendum has been the main factor behind the fall. Currency markets hate uncertainty, so tend to fall ahead of a potentially negative event.
Bilton predicts the pound will fall 10 to 15%. "On the other hand, a vote to remain could spark a sterling rally," he adds.
Simon Evan-Cook, senior investment manager at Premier Asset Management, says sterling has been under the cosh since just before the hype over the Scottish referendum ramped up in summer 2014.
He adds: "The pound is now significantly weaker against the dollar, to the point of looking cheap, while the prospect of a few referendum- and election-free years could bring it some relief - even if the result is 'out'."
This article was originally published by our sister magazine Money Observer here.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser