Top 10 most popular ETFs: July 2020

by Tom Bailey from interactive investor |

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We detail the most popular ETFs among interactive investor customers.

The most popular ETF among customers of interactive investor in July was 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 July. 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, which is heavily weighted to financials and energy companies, whose share prices have been hit hard in 2020. 

That iShares Physical Gold ETC (LSE:SGLN) has come in at second place is not surprising. The precious metal has reached several new highs in recent weeks, driven by a combination of safe-haven asset seeking investors and low bond yields. For investors trying to get a piece of the action, the iShares Physical Gold ETC is the most obvious way to get exposure. As we explored here, however, there are other, slightly more risky ways to gain exposure.

Several other precious metal ETCs have made an appearance in the top 10. Notably, WisdomTree Physical Gold (LSE:PHGP) came in as the fifth most-bought ETF. However, investors were also clearly interested in silver, with iShares Physical Silver ETC (LSE:SSLN) being the third most-bought and WisdomTree Physical Silver (LSE:PHSP) the sixth. The price of silver has somewhat traced the upward movement in gold prices.

Also on the list is the WisdomTree FTSE100 3x Daily (LSE:3UKL), a leveraged ETF. 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.  

It would be incorrect to conclude that a huge number of investors are pouring into such leveraged ETFs due to the appearance in the list of WisdomTree FTSE100 3x Daily. Compared to a normal FTSE 100 ETF, there are not that many ETFs offering leveraged FTSE 100 exposure. Countless different asset managers offer normal FTSE 100 ETFs, such as iShares, Vanguard, HSBC and Scottish Widows, among many others. Investors trying to gain normal exposure to the FTSE 100 will be dispersed across the very competitively priced ETFs offered by these companies.

Another esoteric ETF on the list is the L&G FTSE 100 Super Short Strategy Daily 2x (LSE:SUK2). This is a leveraged inverse ETF, meaning that it aims to provide twice the opposite return of the FTSE 100. This is also a highly risky ETF for investors to be playing around with. Often highly sophisticated investors will own an inverse ETF in order to provide a hedge.

As expected, an ETF tracking the S&P 500 also appeared in the top 10 in the form of the Vanguard S&P 500 ETF (LSE:VUSA). The US tech giants have been leading the US market even higher in the past few weeks. In a recent article, we explored what this shows about the positives and negatives of market-cap weighted indices.

  ETF 1-year performance (5 August) 3-year performance
1 iShares Core FTSE 100 ETF -15.3 -9.5
2 iShares Phys Gold ETC 26.1 54.7
3 Vanguard FTSE 100 ETF -15.4 -9.6
4 iShares Physical Silver ETC 38.6 43.4
5 WisdomTree Physical Gold (Gbp) 27 55.4
6 WisdomTree Physical Silver (Gbp) 38.9 43.5
7 WisdomTree FTSE100 3x Dly -54.7 -52.4
8 L&G FTSE 100 Super Short Strategy (Daily 2x) 11.2 -9.9
9 Vanguard S&P 500 ETF 6.5 39.4
10 Invesco EQQQ NASDAQ-100 UCITS ETF 40.1 91.4

Source: interactive investor. Past performance is not a guide to future performance.

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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