Investors looking to maintain U.K. exposure without the commitment of a country-specific fund can consider any number of diversified Europe ETFs, including the Vanguard FTSE Europe ETF (NYSEArca: VGK).
VGK, the largest U.S.-listed Europe ETF by assets, is rated overweight by S&P Capital IQ. At the end of July, VGK had a 33.2% weight to the U.K. That is more than double the ETF’s next-largest country weight, 14% to France. Four FTSE 100 stocks are found among VGK’s top-10 holdings. The ETF is also one of the least expensive Europe funds with an annual expense ratio of just 0.12%. [Big Possibilities for a Big Europe ETF]
“The likelihood of an acutely confused post-referendum political environment is expected to heighten investor restiveness markedly, warranting a purposefully defensive posture to protect portfolios against potential bond, stock and currency losses. GMI recommends investors fully hedge sterling exposures and sharply reduce the composite duration of all bond holdings. On the equity front, macroeconomic fundamentals should continue to favor English over Scottish companies, but paring Britain’s overemphasis by a point may cushion the downside potential of stock holdings,” said S&P Capital IQ.
iShares MSCI United Kingdom ETF
