Energy exchange-traded funds were the big risers as conflict escalated in Eastern Europe.
The race to secure energy independence amid rising geopolitical tension drove demand for both renewable and traditional energy exchange-traded funds (ETFs) in March.
The iShares Global Clean Energy UCITS ETF, which owns 76 stocks involved in clean energy, from hydrogen power to wind turbines, reappeared in the most-bought list at sixth place after dropping off it in February.
The iShares Oil & Gas Exploration & Production UCITS ETF, which owns 63 smaller oil and gas companies, entered the list in 10th place.
Investors are betting that governments will place greater emphasis on finding new fuels and building renewable energy capacity to reduce the impact of sanctions on Russian fossil fuels, following its invasion of Ukraine at the end of February. Both ETFs performed well in March, rising around 9%.
Energy ETFs also benefit from a growing consensus that globalisation is coming under threat. Investment giant BlackRock’s CEO Larry Fink wrote to investors last week arguing that companies and governments will be looking at their dependencies on other nations and will begin to bring manufacturing and energy production onshore.
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Gold tends to perform well when investors are afraid because of its long history as a store of value. It is also considered a hedge against high inflation because the supply of gold is relatively fixed, so its price should rise as more money flows around the economy.
However, over the month its price rose only 1.5%. An ounce currently costs $1,935.
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Investors continued to buy UK stocks in March. The most popular ETF was the iShares Core FTSE 100 UCITS ETF and Vanguard’s ETF tracking the FTSE 100 was in fifth place, the same as in February. The Vanguard FTSE 250 ETF remained in ninth place, while WisdomTree’s FTSE 100 3x Daily Leveraged fell from fourth to eighth.
Top 10 most-popular ETFs March 2022
|Position||ETF||Change from February||One-year performance to 31 March 2022 (%)||Three-year performance to 31 March 2022 (%)|
|1||iShares Core FTSE 100 UCITS ETF||No change||16.9||16.2|
|2||iShares Physical Gold ETC||Up one||19.6||46.9|
|3||Vanguard S&P 500 UCITS ETF||Down one||22.7||67.5|
|4||WisdomTree Physical Gold||Up six||19.9||46.6|
|5||Vanguard FTSE 100 UCITS ETF||No change||16.9||16.1|
|6||iShares Global Clean Energy UCITS ETF||New entry||-6||122.4|
|7||Vanguard FTSE All-World UCITS ETF||Up one||13.6||47.2|
|8||WisdomTree FTSE 100 3x Daily Leveraged||Down four||46.4||-2.6|
|9||Vanguard FTSE 250 UCITS ETF||No change||0.8||18.6|
|10||iShares Oil and Gas Exploration and Production UCITS ETF||New entry||79||44.2|
Source: FE fundinfo. Note: the top 10 is based on the number of “buys” during the month of March.
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