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Top UK ETFs for Q4 2022

by SuperiorInvest

As one of largest economy in the worldThe United Kingdom has long been a major focus of interest for American investors. The country’s economy declined sharply in 2020 due to the disruption caused by the COVID-19 pandemic. However, the UK economy is starting to recover as the introduction of the vaccine reaches more citizens.

Investors looking to profit from the growth of the UK economy could consider the UK exchange traded fund (ETF) which provides diversified exposure to a basket of UK equities.

Key things

  • The UK stock market has slightly underperformed the broad US market over the past year.
  • The three UK exchange traded funds (ETFs) ranked by annual return total return are EWU, FLGB and FKU.
  • Investing in a UK ETF provides exposure to diversified shares domiciled in the country.

There are three UK ETFs that trade in the US, with an exception inverse and leverage effect ETFs as well as funds with less than $50 million assets under management (AUM).

The UK stock market, as measured by the MSCI United Kingdom Index, has slightly underperformed the broader US stock market. The index has provided a total return of -2.7% over the last 12 months, which is just below the S&P 500’s total return of -2.6% as of August 12, 2022. The best performing UK ETF for Q4 2022, based on past year performance, is the iShares MSCI United Kingdom ETF (EWU).

We examine three UK ETFs below. All numbers are as of August 12, 2022.

  • One year performance: -2.52%
  • Cost ratio: 0.51%
  • Annual Dividend yield: 2.68%
  • Three-month average per day Volume: 3,780,106
  • Assets under management: $3.6 billion
  • Start Date: March 12, 1996
  • Issuer: BlackRock Financial Management

EWU tracks the MSCI United Kingdom Index, which measures the performance of the wider UK stock market. The weighted by market capitalization The ETF provides exposure to mid- and large-cap UK companies. It is pure game on the British economy. The fund’s largest sector allocations are in consumer goodsfinance and healthcare, which make up roughly half of the fund’s assets.

The fund follows a mixed strategy, investment in the mix grow and value supplies. EWU’s three largest holdings are Shell PLC (SHEL: LON), energy and petrochemical company; AstraZeneca PLC (AZN: LON), a pharmaceutical and biotechnology company; and HSBC Holdings PLC (HSBA: LON), provider of banking and financial services.

  • One year performance: -5.13%
  • Expense ratio: 0.09%
  • Annual dividend yield: 2.76%
  • Three-month average daily volume: 303,455
  • Assets under management: $535.9 million
  • Start date: November 2, 2017
  • Issuer: Franklin Templeton

FLGB aims to provide investment results that closely match, net of fees and expenses, the performance of the FTSE UK Capped Index. The ETF provides targeted exposure to mid and large UK companies The fund’s largest sector allocations are in consumer goodsfinance and healthcare, which make up almost half of the fund’s assets. Like EWU, FLGB’s main holdings are Shell, AstraZeneca and HSBC.

  • Performance in one year: -22.10%
  • Expense ratio: 0.80%
  • Annual dividend yield: 2.39%
  • Three-month average daily volume: 9,553
  • Assets under management: $70.7 million
  • Start date: February 14, 2012
  • Issuer: First Trust

FKU tracks the NASDAQ AlphaDEX United Kingdom Index, which uses the AlphaDEX stock selection methodology to select the top 75 stocks from the NASDAQ United Kingdom Index that meet a set of growth and value criteria. The ETF provides exposure to UK shares of various types market capitalization. The sectors with the greatest exposure in the fund are financials, Consumer sectorand materials, which make up roughly half of the fund’s assets.

FKU’s top three holdings are Beazley PLC (WITHOUT: LON), insurance and security company; 3i Group PLC (III: LON), a private capital firm; and SEGRO PLC (SGRO:LON), industrial real estate investment trust (REIT).

The comments, opinions and analysis expressed herein are for informational purposes only and should not be construed as individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information contained herein to be reliable, we do not guarantee its accuracy or completeness. The opinions and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analysis contained in our content are provided as of the date of publication and are subject to change without notice. The material is not intended to be a complete analysis of all material facts relating to any country, region, market, industry, investment or strategy.

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