Brexit negotiations in the late winter and early spring led to a spike in investor anxiety. A no-deal Brexit would have huge consequences for the European and global economy, but so far that catastrophic outcome has been avoided.
Negotiators from the United Kingdom and the European Union have agreed on a delay stretching to the end of October.
The iShares MSCI United Kingdom ETF (NYSE:EWU) seeks exposure to large and mid-sized companies in the United Kingdom. Shares of the ETF have climbed 15% in 2019 as of early afternoon trading on April 16. However, the ETF is still down 6.5% from the prior year.
Some of its top holdings include the financial giant HSBC, energy giants like Royal Dutch Shell, and consumer staples like British American Tobacco.
The smart money is betting against a no-deal Brexit, which negotiators are doing everything to avoid. There is the potential for a British election over the next year with Prime Minister Theresa May hinting that she will step down if MPs agree to a proposed deal.
Broader economic headwinds are a constant concern, even as global markets have started hot in 2019. Rumours are circulating that the United States will take aim at the EU once it settles trade accounts with China. This has the potential to lead to more turbulence. For the time being, this ETF is a pricey pick in a hot market.
