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United Kingdom ETF and the Olympics

tlydon@globaltrend.com (Tom Lydon)

The United Kingdom exchange traded fund  iShares MSCI United Kingdom Fund (EWU)  is positioned to get a boost from hosting the Olympics.

“I am confident that we can derive over 13bn pound benefit to the UK economy over the next four years as a result of hosting the games. I am certain that when you add in the benefits from construction the total gain will be even greater,”  David Cameron,Prime Minister of the U.K. said, regarding the economic impact of the Olympics.

The ETF focuses about 17% of assets to consumer staples, and another 6% to consumer discretionary. Energy and financials make up the other top holdings. EWU has been able to gain about 4.5% over the first half of 2012. [5 Global ETFs to Watch]

UK Trade and Investment calculated the figure based on the impact of prior games with similar business plans, like the Sydney 2000 games, reports Helene Mulholland for The Guardian. The total is considering the 9 billion pound investment that it would cost to stage the games.[ETF Spotlight: United Kingdom]

Another aspect that will be tackled by Cameron is the effort to make sure the benefits would be lasting, from sports participation, to business and volunteering.

Other considerations have to be made, such as the strain that the crowds may have on the public transport system.

Overall, a study from Oxford economics sites that the impact from the Olympics on GDP will be derived from the period in the run up to and including the Games, with the five-year legacy period generating up 5 billion euros. [UK ETF Shakes Off Recession Fears]

A run-up in tourism should also be expected when the games begin, with the spotlight on London over the coming weeks adding promotional value to the Games, for both inward investment and exports.

iShares MSCI United Kingdom Fund

Tisha Guerrero contributed to this article.