Author: Jim Woods
The United Kingdom’s (U.K.) “Brexit” vote to leave the European Union last year failed to weaken the region’s economy as many had predicted.
Those wishing to play the surprising strength in the United Kingdom may be interested in the iShares MSCI United Kingdom ETF (EWU), a fund focused exclusively on U.K.-based companies. With $ 2.67 billion in total assets, EWU covers 85% of the top British companies by market capitalization.
The fund is biased towards large caps and features some big names such as Royal Dutch Shell, HSBC Bank and BP. As a result, EWU has highly liquid holdings and experiences high trading volume. On average, EWU trades $ 60.63 million daily.
From the chart below, you can see that the fund’s price has been on a zigzag upwards since late 2016. The fund’s one-year return is 6.92%, and it is up 4.92% year to date, compared to a year-to-date 5.29% return for the S&P 500. EWU has a relatively high expense ratio of 0.48% and a nice distribution yield of 2.54%.