Outside of calling currency swings, investors can also focus on the UK’s array of multinationals to play currency shifts.
The weak pound has lifted income-focused stocks significantly in the past year, with several of the UK’s income stalwarts – including the likes of BP and Shell – reporting their earnings in dollars and thus benefiting from the pound’s near year-long decline.
So should investors still tilt to UK income giants and their international earnings?
The question now is whether a bout of strength for the pound will turn this story around and see the dividend payers come under pressure.
That appears unlikely given the muted recovery against the levels sterling was trading at prior to the Brexit vote.
Barring a dramatic recovery for the UK economy and a sharp strengthening of the pound, there is no reason to turn away from the UK dividend trade.
Nizam Hamid is an ETF strategist at WisdomTree in Europe
