U.K. ETFs Reeling From Zero Growth And Property Glut

British economic growth has come to an end after 15 years of continuous expansion, marking the end of an era and the beginning of troubles for exchange traded funds (ETFs).

With a growth figure of 0.0 is below even the modest estimate of 0.2. With a falling housing market, low consumer confidence and inflation out of control, the “R” word is looming.

Emily Flynn Vencat for Associated Press reports that the economists are calling for a recession, and data shows the British economy is doing worse now than it did during the second quarter.

The construction sector has been particularly hard-hit in the wake of Britain’s worst housing crash in 30 years.

• iShares MSCI United Kingdom (EWU), down 21% year-to-date
• NETS FTSE 100 (LDN), down 12.9% since April 10 inception

U.K. property stocks have fallen by more than half since Britain introduced real estate investment trusts (REITs) in January 2007. A glut of empty space in London could lead to a property recession, reports Peter Woodifield for Bloomberg.

Prices for offices in London have dropped 25% since last August and rents are declining for the first time in four years. Developers have been working on 160 trading floors of office space, with around 120 more due to be finished in 2010 - the worst timing possible.

• iShares S&P World ex-US Property Index Fund (WPS): down 25.5% year-to-date; 10.2% in the United Kingdom
• SPDR Dow Jones Wilshire International Real Estate (RWX): down 22.4% year-to-date; 13.4% in the United Kingdom
• iShares FTSE EPRA/NAREIT Global Real Estate ex-US Index Fund (IFGL): down 25.8% year-to-date; 11.2% in the United Kingdom
• iShares FTSE EPRA/NAREIT Europe Index Fund (IFEU): down 15.9% year-to-date; 36.6% in the United Kingdom

Posted in Categories: Contributor, Eurozone, External Research, Stocks, UK, USA.

Subscribe by RSS Subscribe by Email