Interactive Investor

The top 10 most-purchased ETFs in April 2022

5th May 2022 11:10

Sam Benstead from interactive investor

Investors turned to income stocks last month as central banks signalled higher interest rates. 

The hunt for dividends amid a rout for fast-growing technology shares was the biggest exchange-traded fund (ETF) investment theme in April.

ETFs tracking the FTSE 100 and 250 indices and returning dividend payments to investors all rose up the ranks, with the Vanguard FTSE 250 UCITS ETF moving from ninth to third place and the Vanguard FTSE 100 UCITS ETF going from fifth to fourth.

The most-bought ETF, however, was still the iShares Core FTSE 100 UCITS ETF.

A new entry on the most bought ETF list was the iShares UK Dividend ETF, which tracks British stocks that pay high dividends. The ETF’s 49 companies together yielded 5.45% over the past 12 months, driven by firms in the mining, oil and finance sectors.

The FTSE 100 yields 3.5% and the FTSE 250 pays 3.3%, based on last year’s payouts. The latter index makes up the 151st to 350th largest companies in the UK.

Investors sought the safety of income stocks as central banks voiced concern about inflation and prepared investors for higher interest rates.

In April, the FTSE 100 was flat, while the FTSE 250 fell 2%. Meanwhile, the technology-heavy S&P 500 index of large US companies fell 9%.

While higher rates are bad for technology stocks as they eat into the value of future earnings, dividend stocks tend to make a lot of money today so are not downgraded in the same way as “growth” stocks. Moreover, collecting dividend payments as the cost of living rises is another way of shoring up household finances.

Investors also turned away from gold and clean energy stocks last month, two of the most popular investments following Russia’s invasion of Ukraine.

The iShares Physical Gold ETC dropped from second to fifth place on the most-bought ETF list, while the iShares Global Clean Energy ETF (LSE:INRG) fell from sixth to ninth place.

The start of the conflict had raised the profile of clean energy as a means of reducing dependence on Russian oil and gas and highlighted gold’s strength as a safe-haven asset.

However, in April investors focused their attention on rising inflation and the reaction from central banks.

Dropping off the most-bought list were the Exploration and Production UCITS ETF, WisdomTree Physical Gold and WisdomTree FTSE 100 3x Daily Leveraged.

New entries, at sixth and 10th place were the iShares Core MSCI World UCITS ETF and Vanguard S&P 500 UCITS ETF (accumulating).

Top 10 most-popular ETFs April 2022

Position ETF Change from March One-year performance to 30 April 2022 (%) Three-year performance to 30 April 2022 (%)
1 iShares Core FTSE 100 Ucits ETF No change 12.2 14
2 Vanguard S&P 500 Ucits ETF (distributing) Up one 11.5 54.1
3 Vanguard FTSE 250 Ucits ETF (distributing) Up seven -6 11.9
4 Vanguard FTSE 100 Ucits ETF (distributing) Up one 12.3 13.9
5 iShares Physical Gold ETC Down three 19.1 55.4
6 iShares Core MSCI World Ucits ETF New entry 6.5 41
7 Vanguard FTSE All-World Ucits ETF No change 4.9 37.1
8 iShares UK Dividend Ucits ETF New entry 11.1 16.3
9 iShares Global Clean Energy Ucits ETF Down three -8.9 99
10 Vanguard S&P 500 Ucits ETF (accumulating) New entry 11.5

54.1

Source: interactive investor. Performance figures: FE fundinfo. Note: the top 10 is based on the number of “buys” during the month of April.

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