Investors continued to buy into UK-focused ETFs.
Interest in UK-focused exchanged-traded funds (ETFs) remained strong in April, according to the latest most-bought ETF data from interactive investor. In April, the iShares Core FTSE 100 ETF (LSE: ISF) proved the most popular rising one place to be the most-purchased ETF. Closely behind was the Vanguard FTSE 250 UCITS ETF, in second place, rising by four places compared to the prior month.
Meanwhile, the Vanguard FTSE 100 ETF (LSE: VUKE) kept a spot in the table, albeit two places below where it had been the month before. Also popular was the WisdomTree FTSE 100 3x Daily Leveraged ETF (LSE: 3UKL). This ETF allows investors to gain triple the return (or losses) of the FTSE 100.
Demand for UK-focused ETFs was likely driven by increasingly optimistic expectations for the UK economy. First, the risk of a no-deal Brexit has now been off the table for four months. Most importantly, however, has been the success of the UK’s vaccine roll-out. With the UK leading in vaccinations, the UK economy is expected to see strong growth in 2021. Indeed, some are forecasting that the UK economy will grow at its fastest rate on record. Notably, the EY Item Club upgraded its 2021 growth forecast from 5% to 6.8%.
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Driving investors to UK stocks is also perhaps the nature of the UK index. The FTSE 100 has a lot of exposure to value and cyclical stocks in the form of energy, mining and banks. With the global economy expected to pick up this year, the FTSE 100 looks well placed to perform well.
Indeed, optimism about the global economy also likely influenced the popularity of both the iShares Core MSCI World ETF (LSE: IWDA) and the Vanguard FTSE All-World ETF (LSE: VWRL), both of which climbed up the table in April.
However, investors were still interested in US stocks, with the Vanguard S&P 500 ETF (LSE: VUSD) edging into third place. The iShares Core S&P 500 ETF also re-entered the rankings. However, while US-focused ETF demand remained strong, it is notable that US tech appears out of focus, with ETFs such as the Invesco EQQQ NASDAQ-100 ETF still not finding a place back in the rankings.
The iShares Global Clean Energy ETF (LSE: INRG) was knocked out of its previous first-place position, falling to the fourth most-bought ETF. It had enjoyed a long run of being the platform’s most-purchased ETF. However, in recent weeks there have been concerns about the liquidity of the ETF due to the nature of the index it follows. Interactive investor has put the ETF under formal review.
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The Invesco Elwood Global Blockchain ETF (LSE: BCHN) regained some ground, rising to be the eighth most-popular ETF on the list. The ETF invests in companies with exposure to both blockchain and bitcoin. It has managed to return investors almost 150% over the past year.
Top 10 most-purchased ETFs in April 2021
|ETF||Change from March||One-year performance to 4 May (%)||Three-year performance to 4 May (%)|
|1||iShares Core FTSE 100 ETF||1||25||4.3|
|2||Vanguard FTSE 250 UCITS ETF||4||41.8||18.2|
|3||Vanguard S&P 500 ETF||1||29.1||61.1|
|4||iShares Global Clean Energy ETF||-3||100.8||140.9|
|5||Vanguard FTSE 100 ETF||-2||25||4.1|
|6||Vanguard FTSE All-World UCITS ETF||2||34.9||43.1|
|7||iShares Core MSCI World ETF||2||34.9||46.6|
|8||Invesco Elwood Global Blockchain ETF||2||148.1||-|
|9||WisdomTree FTSE 100 3x Daily||-4||71.3||-29.5|
|10||iShares Core S&P 500 ETF||new entry||35.6||62.9|
Source: interactive investor. Note: the top 10 is based on the number of “buys” during the month of April.
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.