Yellen’s prepared remarks were largely in line with expectations, especially given the backdrop of a pending so-called Brexit vote, and the equities held up in late Tuesday trading.
Meanwhile, the equities market has exhibited high correlation to sentiment over the U.K.’s June 23 referendum, falling and rising on survey polls ahead of the vote. For instance, over the past week, stocks plunged when polls revealed more Britons were leaning toward an exit vote and the recent rebound came off recent polls showing a “remain” majority.
While economists expect the short-term impact of a “Brexit” to be negative for U.K. growth, investors’ focus on the referendum “shows the fragility of global markets and the general low appetite for risk, with so many question marks out there in the global economy,” Carl Hammer, chief currency strategist at SEB, told the WSJ.
Related: Safe-Haven ETFs for a Rocky Summer
With lingering concerns over the global economic outlook, investors may look to ETF strategies to diminish the risks when investing internationally. For example, the Deutsche X-trackers FTSE Developed ex US Comprehensive Factor ETF (NYSEArca: DEEF) tracks an enhanced beta FTSE Russell indices that target quality, momentum, value, size and volatility – five key factors many financial institutions have looked at to help gain an edge over traditional beta indexing methodologies.
Financial advisors who are interested in learning more about market headwinds and opportunities ahead can register for the Wednesday, June 22 webcast here.