With Britain’s election coming to a close on Thursday, investors may wish to evaluate where the country’s economy is currently positioned. While the U.K.’s economy has struggled to perform, some recent numbers have indicated potential momentum. The Office for National Statistics recently noted that the U.K. economy grew by 0.7% between January and March, outperforming analyst expectations.
That’s not all the good news for the country, either. Recently, Nationwide Building Society found that housing prices in the U.K. increased by 0.2%, following a 0.4% gain in May. Crucially, economists had previously expected no change for the housing market.
Even with these growth signals, the U.K. will still likely face a long road to recovery. However, Thursday’s election could signal some new momentum and fiscal policy for the country. A recent note from Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, noted that the U.K. market only lifted slightly as it opened on Friday.
“With political turmoil in France now taking centre stage, the UK looks finally set to enter into a period of financial stability. This has the potential to spark renewed investor interest in the UK,” Streeter added.
Established Options
There are plenty of ETFs that can provide interested investors with access to equities within the United Kingdom. One such fund is the iShares MSCI United Kingdom ETF (EWU ).
EWU provides investors with exposure to mid- and large-cap U.K. equities, with a net expense ratio of 0.50%. While the fund invests in U.K. companies, some of the fund’s largest holdings, such as AstraZeneca, Shell, and Unilever, have strong, established global exposure. This portfolio helps EWU lock in potential returns outside of the performance of the greater U.K. economy, though the fund certainly stands to benefit from the country’s growth.
Fund flows for EWU highlight the growing investor interest in both the fund and the U.K.’s economy as a whole. As of July 4th, 2024, the fund had seen nearly $100 million in net flows over the last month.
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