Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

With the Pound Cratering, Here’s How to Play UK Investments

Sunday, October 16, 2016 5:17
% of readers think this story is Fact. Add your two cents.

British poundFrom Zacks Research: The British pound is now the worst performing major currency in the world, thanks to growing Brexit concerns. The currency has continued to slide since the Brexit vote on June 23, while recently the fall accelerated after the British PM Theresa May said that she plans to pursue a “hard Brexit”.

It is now down almost 20% against the dollar since the vote.

The decline in currency has greatly benefited UK stocks with the FTSE 100 rallying to near all-time high levels. Another reason for the rally in stocks is that Brexit did not trigger any systemic event.

While the decline in the currency makes British exports more competitive, it also increases the possibility of inflation since imports become more expensive. Higher inflation could prevent the Bank of England from easing further to support the economy.

While it is difficult to predict how Brexit is going to play out in the longer-term, it appears that the currency will remain under pressure at least in the near-term, more so with the rising probability of a rate hike in the US.

As far as UK stocks are concerned, they look somewhat expensive now.

Biggest Winners: Currency Hedged UK ETFs

ETF Ticker Expense Ratio AUM YTD Return
iShares Currency Hedged UK ETF (HEWUFree Report) 0.45% $116.97 mil 13.80%
WisdomTree UK Hedged ETF (DXPSFree Report) 0.48% $28.22 mil 17.26%
Deutsche X-trackers UK Hedged Equity ETF (DBUKFree Report) 0.45% $6.22 mil 12.83%

Biggest Losers: British Pound ETFs

ETF Ticker Expense Ratio AUM YTD Return
CurrencyShares British Pound ETF (FXBFree Report) 0.40% $256.78 mil -17.91%
iPath GBP/USD Exchange Rate ETN GBB 0.40% $3.83 mil -17.84%

This article is brought to you courtesy of Zacks Research.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global

Top Alternative




Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.