The First Trust United Kingdom AlphaDEX Fund (NYSEArca: FKU) provides a smart-beta play on U.K. stocks. Components are selected on growth factors including 3-, 6- and 12- month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets. FKU is up 16.5% year-to-date.
“Money markets are now pricing a more than 75 percent chance of a rate increase in November, with a 25-basis-point rise fully priced for February and a second one by December 2018. Some currency analysts said two hikes might be a step too far given the uncertainty over Brexit and the economic outlook,” according to Bloomberg.
If investors are worried about foreign exchange risks, the currency hedged iShares Currency Hedged MSCI United Kingdom ETF (NYSEArca: HEWU), WisdomTree United Kingdom Hedged Equity Fund (NasdaqGM: DXPS) and Deutsche X-Trackers MSCI United Kingdom Hedged Equity ETF (NYSEArca: DBUK) outperform non-hedged U.K. exposure during periods of sterling weakness.
For more news and strategy on currency-hedged ETFs, visit our Currency-Hedged category.