Interactive Investor

Top 10 most popular ETFs: August 2020

2nd September 2020 13:50

Tom Bailey from interactive investor

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We examine the most popular ETFs among interactive investor customers. 

The most popular ETF among interactive investor customers  in August was once again the iShares Core FTSE 100 ETF (LSE:ISF). For a fee of just 0.07%, the ETF tracks the FTSE 100.

Despite the ETF’s popularity, the FTSE 100 index provided relatively weak performance over the course of August. While the US market continued to storm ahead in August, the FTSE was mostly flat on the month. The Vanguard FTSE 100 ETF was also included in the top 10, albeit one place below where it was in August. The ETF has a charge of 0.07%.

The index has struggled since the onset of the Covid-19 crisis owing to a combination of poor UK economic performance and the composition of the index. As previously noted, the index is heavily weighted to financials and energy companies, whose share prices have been hit hard in 2020. On top of that, the index has hardly any tech, a sector that has been the star performer of 2020 so far.

Nevertheless, the index still proved popular among ii investors, perhaps trying to pick up stocks on the cheap.

ETFs tracking the price of precious metals continued to prove popular in August, with iShares’ gold and silver ETFs keeping their places near the top of the table. WisdomTree’s gold and silver ETFs also remained in the rankings.

Gold has proven popular in recent months due to a variety of factors. This includes the lower yields seen on bonds increasing its attractiveness, as well as broader fears among some investors of a coming bout of inflation. While gold has come off its recent all-time high records, its price remains historically high.

A closer look at the table, however, suggests, that silver is perhaps starting to become the more popular precious metal play. The iShares Physical Silver ETC (LSE:SSLN) rose one place to third in August. Meanwhile, WisdomTree Physical Silver (LSE:PHSP) gained one place at the expense of the WisdomTree Physical Gold (LSE:PHGP).

In terms of leveraged ETFs, investors appear to have retreated slightly since July. In July, one of the most popular ETFs was the WisdomTree FTSE100 3x Daily (LSE:3UKL), a triple leveraged ETF. That has since fallen out of the rankings, replaced by new entrant L&G FTSE 100 2x Leveraged Daily (LSE:LUK2), an ETF which is “only” double leveraged.

Through striking deals with other parties such as banks, it aims to provide the return of the index it tracks by a certain multiplication. In this case, it intends to provide three times the FTSE 100’s daily movement, as the name suggests. This means that if the FTSE 100 goes up by 1% on a day, the ETF will provide a return of 3%. However, it also works the other way, making these products very risky. Leveraged ETFs are not considered suitable to be held for more than one day, as previously explained.

Some investors, it appears, were still keen on shorting the FTSE 100, with the L&G FTSE 100 Super Short Strategy Daily 2x (LSE:SUK2)keeping a place in the rankings, albeit two places below where it was in July.

The Vanguard S&P 500 ETF (LSE:VUSA) kept a place in the rankings. As noted above, the US had a good August. Specifically, the broad S&P 500 index closed up 7% on the month — its best August since 1986. On September 1, it hit a new all-time high of 3,526.65. That was largely led by tech companies, meaning the Nasdaq index also had a solid month and reached a new all-time high at the start of September. Despite this, however, Invesco EQQQ NASDAQ-100 UCITS ETF (LSE:EQQQ) fell out of the rankings in July.

Another new entrant to the index was iShares Global Clean Energy ETF (LSE:INRG). This ETF tracks the S&P Global Clean Energy Index for a fee of 0.65%. The ETF is part of interactive investor’s ACE 30 fund list.

Rank ETF Change since July 1-year performance (1 September) 3-year performance  (1 September)
1 iShares Core FTSE 100 ETF no change -14.3 -9.6
2 iShares Phys Gold ETC no change 16.7 43.2
3 iShares Physical Silver ETC 1 35.4 50.6
4 Vanguard FTSE 100 ETF  -1 -14.4 -9.8
5 WisdomTree Physical Silver 1 35.2 50.2
6 WisdomTree Physical Gold -1 16.5 42.6
7 iShares Global Clean Energy ETF new entry 45.2 91.9
8 Vanguard S&P 500 ETF 1 11.3 43.2
9 L&G FTSE 100 2x Leveraged Daily new entry -34.1 -32.4
10 L&G FTSE 100 Super Short Strategy (Daily 2x) -2 8.2 -10

Source: FE Analytics. Note: The top 10 is based on the number of  “buys” during the month of August.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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