Nvidia's CEO Is Bullish on the U.K.: Should You be Too?

Yahoo

a day ago

Like many global markets, the UK economy had a volatile start to the year. After trending upward from early January, gaining around 7.4%, the FTSE 100 reversed course in early March, falling about 13% by early April.
However, it has since rebounded, gaining approximately 15%, highlighting renewed investor confidence and a positive shift in the UK's economic outlook. The British economy grew more than expected in first-quarter 2025, largely driven by the services sector.
Recent trade agreements with India, the United States, and the EU provide a strong tailwind for the U.K. economy, potentially supporting an upgrade to its growth outlook. With rising uncertainty over tariff policies and growing fears of an economic slowdown, investors have turned their attention away from U.S. assets, another factor driving increased attention toward alternative markets like the U.K.
On Monday, Nvidia CEO Jensen Huang expressed strong admiration for U.K.'s economy, as quoted on CNBC, remarking the economy to be in a goldilocks situation.
According to CNBC, Nvidia CEO pledged to ramp up investment in the UK economy's AI industry through his multitrillion-dollar semiconductor company. The U.K. has recently been promoting itself as a future global leader in AI, which can be highlighted by the optimistic comments of the Nvidia CEO.
Early in the year, prime minister Keir Starmer introduced an ambitious strategy to strengthen the U.K.'s AI sector, including plans to ease regulations for new data centers and to boost the nation's computing capacity twentyfold by 2030.
Huang's comments come as a major boost for the U.K., as he heaped praise on that country's thriving AI ecosystem. While speaking on a panel, as quoted on CNBC, Huang went on to say that the ability to develop AI supercomputers in the U.K. will spark greater interest from startups.
Amid global uncertainty, the British economy has demonstrated notable resilience. Further igniting investor interest is British finance minister Rachel Reeves's proposed $2.7 trillion spending plan.
Per projections by the IMF, as quoted on Reuters, U.K.'s growth is expected to slightly outpace the Eurozone. However, it will trail behind the United States and Canada. According to Allan Monks, JPMorgan's chief U.K. economist, as quoted on CNBC, a series of positive developments could help lift UK economic growth for the entire second quarter.
Investors can increase their portfolio exposure to the U.K. with pure-play ETFs, namely, iShares MSCI United Kingdom ETF EWU, Franklin FTSE United Kingdom ETF FLGB, First Trust United Kingdom AlphaDEX Fund FKU and iShares MSCI United Kingdom Small-Cap ETF EWUS.
With a one-month average trading volume of about 1.38 million shares, EWU is the most liquid option, offering investors easier entry and exit while minimizing the risk of significant price fluctuations, ideal for active trading strategies.
EWU has also gathered an asset base of $3.09 billion, the largest among the other options. Regarding annual fees, FLGB is the cheapest, charging 0.09%, which makes it more suitable for long-term investing.
Performance-wise, EWUS was better over the past month, gaining 8.55% and over the past three months, adding 14.62%.
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First Trust United Kingdom AlphaDEX ETF (FKU): ETF Research Reports
iShares MSCI United Kingdom ETF (EWU): ETF Research Reports
iShares MSCI United Kingdom Small-Cap ETF (EWUS): ETF Research Reports
Franklin FTSE United Kingdom ETF (FLGB): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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