EWU has a trailing 12-month yield of 2.40%, according to iShares data. Investors looking to gain exposure to U.K. dividends while hedging against GBP/USD fluctuations can consider currency hedged funds such as the db X-Trackers MSCI United Kingdom Hedged Equity Fund (NYSEArca: DBUK) and the WisdomTree United Kingdom Hedged Equity Fund (NasdaqGS: DXPS). Both funds debuted in the latter half of 2013.
The aforementioned stocks combine for 12.2% of DBUK’s weight while AstraZeneca, BP and BHP Billiton represent a combined 14.1% of the portfolio in DXPS. DXPS has a robust distribution yield of 7.66%, according to WisdomTree data.
Importantly, all three ETFs have noticeable allocations to the financial services sector, which is expected to be fertile ground for U.K. dividend growth this year. The average weight to that sector among the three ETFs highlighted here is over 20%, led by a 22.3% weight in DBUK.
db X-Trackers MSCI United Kingdom Hedged Equity Fund Sector Weights
Data Courtesy: Deutsche Bank