Rathbones Investment Director Jane Sydenham says ahead of the UK general election investors should be considering their exposure to sterling.

SHOWS: LONDON, ENGLAND, UK (OCTOBER 21, 2014) (REUTERS - ACCESS ALL)

1. RATHBONES, INVESTMENT DIRECTOR, JANE SYDENHAM, SAYING:

JOURNALIST ASKING JANE SYDENHAM: 'One of your notes is about the general election next year in the UK and the question you ask is should investors worry? It's a big question.'

SYDENHAM: 'It is a big question.'

JOURNALIST: 'But it seems to me they should?'

SYDENHAM: 'I think they should be thinking about it. I mean particularly investors should be asking themselves the question do I need to have exposure to sterling. I think that is one of the most important questions. Certainly the run up to the Scottish referendum made us all realise that uncertainty as far as the outlook for the UK is concerned had an impact on currency markets actually so quite aside from all the taxation and investment issues there is just a simple currency question to start with.'

JOURNALIST: 'And I guess the key there, if you are investing in equities and companies is to go for companies with big exposure out of the UK right?'

SYDENHAM: 'I think it is. I mean roughly 70 percent of FTSE 100 earnings are outside the UK anyway so you can argue you are quite well diversified as a UK investor. But if you have a portfolio that is very small company and very domestically focused you ought to start asking yourself a question. Do those companies have a sustainable growth trajectory in their own right or are they reliant on the economic background.'

JOURNALIST: 'You know, we talk about the election, you know, I don't want to get into all the detail because we could be here for hours but let's throw the in/out referendum in Europe in there, if the Tories win, and let's throw the likely fiscal tightening in there as well, higher interest rates there and it does become very uncertain doesn't it?'

SYDENHAM: 'It does, it does, I mean the EU referendum obviously is something that the Tory backbenchers are pushing for pretty hard and UKIP success is clearly building pressure on that. Any run up to that kind of referendum I think we would see the similar kind of uncertainty that we had in the run up to the Scottish referendum. Does it actually make it more or less likely that we would vote to leave the EU? I suspect actually because of the Scottish experience we might look over the edge and say, you know maybe not. But, it doesn't mean there won't be a lot of uncertainty in the run up to it.'

JOURNALIST: 'Let's have a look at some sectors in particular. Whoever wins, whether it's a Labour coalition, whether it's the Tories, both have said they want to tackle the deficit in housing in the UK. Now that would seem to be good news for house builders. So you want to be in the house building sector?'

SYDENHAM: 'I think that is probably right. Certainly at the moment we are only building something like 145,000 houses a year, we ought to be building more like 260,000. There have been commitments from both parties to free up the planning process and to just kind of improve the flow through from the housing sector. So, yes it ought to be good. What we have got to bear in mind though is that interest rates may start to rise after or somewhere ahead or perhaps just after the election and of course that is a headwind for house builders.'