This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sympathy for the U.K. Stock Benchmark

Stocks in this article: HBC BCS RBS RTP BBL AAUK

EWU has a 23% weighting in financial stocks, down from 29% a year ago. HSBC (HBC) is the largest financial in the fund and has held up relatively well, dropping 30% this year. In addition to HBC, the fund is heavy in Barclays (BCS) and Royal Bank of Scotland (RBS), down 70% and 87%, respectively.

EWU has a large exposure to mining, with Rio Tinto (RTP), BHP Billiton (BBL) and Anglo American (AAUK), down 55%, 44% and 60%, respectively. The three materials stocks peaked in May.

One aspect of a bounce is that the declines were so fast, a corrective bounce (or maybe the real thing) should be coming and may have already started. Last week, as the S&P 500 snapped back 11%, EWU came back 20%. The three mining stocks mentioned above rallied more than 30%, and RBS and HBC were up 17%. (BCS was the laggard, dropping 10% on news of a controversial capital-raising from Qatar and Abu Dhabi.)

The moves in those stocks last week are big when viewed from the bottom but not from the top. BBL is still 60% from its peak. The idea here is that if a bounce continues or happens at some point in the near future (one of the two seems reasonable), industries such as mining and financials have a chance for exaggerated moves up just as the declines down may have been exaggerated.

One other short-term kicker could be EWU's dividend. The ex-date is Dec. 23, but the amount of the dividend has not been announced. The trailing yield is 7.1%, and it is unlikely to be as much as that after this next dividend. Part of the U.K. bailout plan is that banks may not be able to pay dividends on common shares until they have bought back the preferred shares being issued to the government. The details are still being sorted out, but the dividend about to be paid has accrued from dividends collected by the fund previously. AAUK client and personal holding

At the time of publication, Nusbaum was long AAUK, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,582.21 +225.34 1.30%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs