One of interactive investor’s Super 60 passive picks has entered the top 10 table for May.
Investor interest in gold picked up in May, with the iShares Physical Gold ETC (LSE:SGLN) and the WisdomTree Physical Gold ETF (LSE:PHGP) entering the top 10 table of most-purchased exchange-traded funds (ETFs) among interactive investor customers.
Increased appetite for the precious metal came on the back of the gold price climbing to a four-month high of just below $1,900 in late May. Gold has been on an upward trajectory since the start of April. Then, the gold price stood at $1,730, resulting in a gain of just under 10% over the past two months. Three positive drivers for the yellow metal have been the weakening US dollar, a decline in bond yields and increasing concerns over higher inflation.
The iShares Physical Gold ETC, which is a member of interactive investor’s Super 60 list, aims to track the daily spot price of gold and physically invests in the metal in the same proportion as the value of the ETC. As well as being a defensive option for investors, the ETC is a likely beneficiary if inflation takes hold.
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Eight of the top 10 from April retain their places, albeit with some positional changes. The one exception is the iShares Core FTSE 100 ETF (LSE:ISF), which retained its place in pole position. It has now been in the top spot for two months, with further demand for UK-focused ETFs evident in the top 10, with the Vanguard FTSE 100 ETF (LSE:VUKE) in fourth place and the Vanguard FTSE 250 ETF (LSE:VMID) in fifth place.
In eighth place is another UK ETF - the WisdomTree FTSE 100 3X Daily Leveraged ETP (LSE:3UKL). This ETF allows investors to gain triple the return (or losses) of the FTSE 100. This is a high-risk strategy and should not be held for periods longer than one day.
As pointed out last month, demand for UK ETFs is down to increasingly optimistic expectations for the UK economy. First, the risk of a no-deal Brexit has now been off the table for four months.
Most importantly, however, is the success of the UK’s vaccine roll-out. With the UK leading in vaccinations, the UK economy is expected to see strong growth in 2021. Earlier this week, the Organisation for Economic Cooperation and Development (OECD) upgraded its view for UK growth. It has forecast that UK GDP will rise by 7.2% in 2021, the fastest growth since 1941, after a 9.8% contraction in 2020.
Active strategies have also seen a pick-up in demand for UK funds and investment trusts. In May, the MI Chelverton UK Equity Growth entered our top 10 most-popular funds' league table. It joined Marlborough Nano Cap Growth, which was already in the top 10, and was the fifth most-bought fund during the month, climbing three places in the rankings compared to April.
In regards to investment trusts, there is just one UK representative, City of London (CTY). The trust, which has raised its dividend for 54 consecutive years, re-entered the top 10 in March after departing last November.
Overall, investor sentiment remains bullish towards the global economy. The latest monthly Bank of America survey of 216 panellists, with $625 billion (£440 billion) of assets under management, found that 69% of professional investors expect both above-trend growth and inflation. In our top 10 ETF table, optimism about the global economy is reflected in the popularity of both the iShares Core MSCI World ETF (LSE:SWDA) and the Vanguard FTSE All-World UCITS ETF (LSE:VWRL).
Top 10 most-popular ETFs in May
|ETF||Change from April||One-year performance to 1 June (%)||Three-year performance to 1 June (%)|
|1||iShares Core FTSE 100 ETF (LSE:ISF)||Unchanged||17.6||2.1|
|2||Vanguard S&P 500 ETF (LSE:VUAG)||Up one||22.4||50.2|
|3||Shares Global Clean Energy ETF (LSE:INRG)||Up one||67.4||130.8|
|4||Vanguard FTSE 100 ETF (LSE:VUKE)||Up one||17.6||2|
|5||Vanguard FTSE 250 ETF (LSE:VMID)||Down three||33.8||15.7|
|6||iShares Physical Gold ETC (LSE:SGLN)||New entry||-3.5||37.1|
|7||Vanguard FTSE All-World UCITS ETF (LSE:VWRL)||Down one||23.4||37|
|8||WisdomTree FTSE 100 3X Daily Leveraged ETP (LSE:3UKL)||Up one||47.9||-32.1|
|9||iShares Core MSCI World ETF (LSE:SWDA)||Down two||23.3||40.3|
|10||WisdomTree Physical Gold ETF (LSE:PHGP)||New entry||-3.7||36.4|
Source for performance figures FE Analytics. Note: the top 10 is based on the number of “buys” during the month of May.
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