Top 10 most-purchased ETFs in January 2022

ETF investors have been moving to take advantage of the good start to the year for the UK market.

3rd February 2022 12:01

ETF investors have been moving to take advantage of the good start to the year for the UK market.

Following the turbulent start to markets in 2022, there’s a new entry and some positional changes to our top 10 table of the most-purchased exchange-traded funds (ETFs).

On the whole, investors have opted to ‘keep calm and carry on’, with the top three ETFs unchanged, namely the Vanguard S&P 500 ETF (LSE:VUSD), i Shares Core FTSE 100 ETF (LSE:ISF) and the Vanguard FTSE All-World ETF (LSE:VWRD). The trio have low charges, of 0.07%, 0.07% and 0.22%. However, they are not the cheapest overall among their peers. Our recently updated guide (below) highlights the cheapest ways to track global markets.

Outside the top three, two UK funds have moved up the table. The Vanguard FTSE 100 ETF (LSE:VUKE) has risen two places to fourth place, while the Vanguard FTSE 250 ETF (LSE:VMID) is a new entry at eight.

The UK has had a less torrid time than international counterparts since the start of 2022. This is mainly down to the market’s bias towards cyclical businesses, including financials, energy and materials. Such companies have been in demand of late, while tech shares have fallen out of favour. This is in response to the prospect of higher interest rates, which typically negatively impact growth shares more than others.

The entry of the Vanguard FTSE 250 UCITS ETF pushes the number of UK ETFs in the top 10 up to four. The other UK ETF in our table – the WisdomTree FTSE 100 3x Daily Lvrgd ETP (LSE:3UKL) – fell by six places to 10th. This fund provides triple the daily return of the FTSE 100. Investors should be careful here though, 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.

Of the remaining four ETFs in the top table, three moved up the table. The outlier is the iShares Core MSCI World ETF (LSE:SWDA), which slipped four places to ninth.

The iShares Global Clean Energy ETF (LSE:INRG) rose to fifth, having been eighth in December. As its one-year performance figure shows, it has been a painful short-term period, with the ETF down 39%. On a brighter note, its three-year return is 87.4%. The popularity of this ETF led to a number of changes being made last year to the methodology of the index it tracks, the S&P Global Clean Energy Index. Most notably, the number of holdings has increased, as previously the index contained 30 companies. The move was designed to reduce constituent concentration, address liquidity risk, and improve index replication.

The Invesco EQQQ NASDAQ-100 ETF (LSE:EQQQ) moved up one place to sixth, with investors not put off by the tech sell-off in January. Its three-year return is the highest of the top 10 most-bought ETFs, up 108%. The ETF fell by just over 9% in January. Its top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN), which account for more than a quarter of the ETF’s assets.

The other climber was the iShares Physical Gold ETC (LSE:SGLN), which rose one place to seventh. Gold is considered one of the few ways to protect against high levels of inflation. However, on a global scale more than $9 billion (7.5 billion) was withdrawn from gold ETFs in 2021, despite inflation soaring.

The ETF that exited the top 10 was the iShares Core S&P 500 ETF (LSE:IDUS).

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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