Interactive Investor

The top 10 most-purchased ETFs in January 2023

1st February 2023 12:01

Sam Benstead from interactive investor

interactive investor customers bought gold, US, global and UK shares last month.

Financial markets started the year strongly, with stock and bond markets posting much-needed gains following a tough 2022.

Figures from FE Analytics, a data provider, show that the MSCI World, S&P 500 and FTSE 100 indices rose about 4% over the month, and global bonds added about 1%.

Interactive investor customers responded by adding money to exchange-traded funds (ETFs) tracking these “core” markets.

However, BlackRock’s physical gold ETF was the standout new entry among the 10 most-bought ETFs.

The iShares Physical Gold ETC, which has gained 16% over the past 12 months and 28.8% over the past three years, was the seventh most-bought ETF.

Gold has recovered its sparkle, rising 17% since November to $1,926 (£1,563) an ounce, as expectations for a plateau in interest rates became the consensus among investors.

Gold competes with bonds as a safe-haven investment, but because it pays no income, periods of rising interest rates and rising bond yields are generally bad for the precious metal.

The other new entry, in eighth place, was the Vanguard FTSE All-World High Dividend Ucits ETF. A member of interactive investor’s Super 60 list of investment ideas, it owns companies globally that have higher-than-average dividend yields. It currently contains more than 1,800 stocks and yields 3.8%.

Returns from high dividend payers have beaten the market-cap weighted index on global shares recently. The Vanguard FTSE All-World High Dividend Ucits ETF has returned 6.7% over the past 12 months compared with a 0.8% decline for the Vanguard FTSE All-World Ucits ETF, which was the third most-popular ETF in January.

Top of the list, with no change from December 2022, was the Vanguard S&P 500 Ucits ETF (distributing), followed by the iShares Core FTSE 100 Ucits ETF. Other “core” trackers making the list were the Vanguard S&P 500 Ucits ETF (accumulation) in ninth place and Super 60 member iShares Core MSCI World Ucits ETF in fifth place.

Three leveraged ETFs made the list: WisdomTree FTSE 100 3x Daily Leveraged Short (fourth); WisdomTree Nasdaq 100 3x Daily Leveraged Long (sixth); and WisdomTree Nasdaq 100 3x Daily Leveraged Short (10th).

These ETFs use financial contracts to amplify the gains – and losses – of a stock market. They are therefore much riskier than normal ETFs, and investors should do their homework before buying one of them.

The promotional literature of many leveraged products specifies that they should not be held for more than one day, and our article explains why in more detail.

Dropping off the most-bought ETF list in January were the Vanguard FTSE 100 Ucits ETF (distributing) and WisdomTree FTSE 100 3x Daily Leveraged Long.

Top 10 most-popular ETFs in January 2023

PositionETFChange from JanuaryOne-year performance to 1 February 2023 (%)Three-year performance to 1 February 2023 (%)
1Vanguard S&P 500 Ucits ETF (distributing)No change-2.338
2iShares Core FTSE 100 Ucits ETFNo change8.218.5
3Vanguard FTSE All-World Ucits ETFUp one-0.828.8
4WisdomTree FTSE 100 3x Daily Leveraged ShortUp one-28.48-71.1
5iShares Core MSCI World Ucits ETFUp two-0.531.7
6WisdomTree Nasdaq 100 3x Daily Leveraged LongUp three-61.21.4
7iShares Physical Gold ETCNew entry1628.8
8Vanguard FTSE All World High Dividend Yield Ucits ETFNew entry6.728.1
9Vanguard S&P 500 Ucits ETF (accumulation)Down three-2.338
10WisdomTree Nasdaq 100 3x Daily Leveraged ShortDown two5.7-92

Source: Fe FundInfo/interactive investor, 1 February 2023. Note: the top 10 is based on the number of “buys” during the month of January.

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.