The US, UK and global markets continue to prove popular for those looking for low-cost ways to invest.
Exchange-traded funds (ETFs) following the fortunes of developed markets continue to be in high demand among investors. Of the 10 most-popular ETFs in December, three invest in US shares, three focus on the UK and two adopt a global approach.
Retaining the top spot in December was the Vanguard S&P 500 ETF (LSE:VUSD). It has a low-cost charge of 0.07%, but it is not the cheapest way to gain exposure to the S&P 500, as the Invesco S&P 500 ETF (LSE:SPXP) costs only 0.05%. Our recently updated guide (below) highlights the cheapest ways to track global markets.
- What are the cheapest ETFs to track global markets at the end of 2021?
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In November, the Invesco EQQQ NASDAQ-100 ETF regained a place in the top 10. The ETF tracks the 100 largest companies listed on the Nasdaq. This index is tech-heavy and often taken as a proxy for the performance of US tech in general. The iShares Core S&P 500 ETF, meanwhile, entered the top 10 in October. It is almost identical to the Vanguard S&P 500 ETF, tracking the same index and having the same ongoing charge fee of 0.07%.
The second most-popular ETF was the Shares Core FTSE 100 ETF (LSE:ISF), a position retained since the previous month. Its rival, the Vanguard FTSE 100 ETF (LSE:VUKE), also featured in the top 10, but slipped two places to sixth.
The other UK ETF in the top 10, the WisdomTree FTSE 100 3x Daily Lvrgd ETP (LSE:3UKL), climbed three places to fourth. This fund provides triple the daily return of the FTSE 100. Investors should be careful here, as although there are potential gains to be made, they could experience huge losses too. The promotional literature of many leveraged products specifies that they should not be held for more than one day due to this. Leveraged ETFs are not suitable as long-term investments, and our article below explains why in more detail.
- The risks of holding leveraged ETFs for more than a day
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Climbing up the rankings to third and fifth place respectively, was the Vanguard FTSE All-World ETF (LSE:VWRD) and the iShares Core MSCI World ETF (LSE:SWDA) The Vanguard ETF has some exposure to emerging markets, while the iShares ETF sticks solely to companies listed in developed markets.
The remaining two ETFs in the top 10 invest in a specialist manner. First, in eighth place, having slipped five places, is the iShares Global Clean Energy ETF (LSE:INRG). The popularity of this ETF led last year to a number of changes being made to the methodology of the index it tracks – the S&P Global Clean Energy Index. Most notably, the number of holdings have been increased, as previously the index contained 30 companies. The move was designed to reduce constituent concentration, address liquidity risk, and improve index replication. The ETF was a very strong performer in 2020, but in 2021 it struggled. Over one year, it is down 24.9%. However, those who invested three years ago will have no complaints, with a gain of 141.2%.
In ninth place, the iShares Physical Gold ETC (LSE:SGLN) is the other specialist in the table. The ETC, which stands for exchange-traded commodity, aims to track the daily spot price of gold and physically invests in the metal. Gold is widely viewed as a safe-haven investment that performs well when markets fall heavily.
Top 10 most-popular ETFs: December 2021
|Position||ETF||Change from November||One-year performance (%) to 4 January 2022||Three-year performance (%) to 4 January 2022|
|1||Vanguard S&P 500 ETF||No change||30.6||84.5|
|2||iShares Core FTSE 100 ETF||No change||16.3||20.7|
|3||Vanguard FTSE All-World UCITS ETF||Up two||19.2||61.6|
|4||WisdomTree FTSE 100 3x Leveraged||Up three||46.7||11.1|
|5||iShares Core MSCI World ETF||Up one||23.1||67.8|
|6||Vanguard FTSE 100 UCITS ETF||Down two||16.3||20.6|
|7||Invesco EQQQ NASDAQ-100 ETF||Up two||31.6||146.3|
|8||iShares Global Clean Energy||Down five||-24.9||141.2|
|9||iShares Physical Gold ETC||Down one||-6.2||32.8|
|10||iShares Core S&P 500 ETF||No change||32.7||88.4|
Source: interactive investor. Performance figures sourced from FE Analytics. Note: the top 10 is based on the number of “buys” during the month of December 2021.
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.