Hype around artificial intelligence increased demand for a Nasdaq tracker fund, writes Sam Benstead
A strong rebound for technology stocks in May, fuelled by excitement about artificial intelligence, led to a new entry on the most bought exchange-traded fund (ETF) list: the Invesco EQQQ Nasdaq 100 Uctis ETF.
Tracking the 100 largest companies on the Nasdaq index, including tech giants Amazon, Nvidia and Apple, this ETF rose nearly 10% for the month, well ahead of the 5% drop for the FTSE 100, 1.8% gain for the S&P 500 and 0.4% gain for the MSCI World index.
Despite poor performance for the UK’s largest shares, the iShares Core FTSE 100 Ucits ETF rose four places to be the second most bought ETF, behind only the Vanguard S&P 500 Ucits ETF (distributing), which held onto the top place.
Other popular UK and US trackers included Vanguard S&P 500 Ucits ETF (accumulating), in seventh place, and Vanguard FTSE 100 Ucits ETF (distributing), in eighth place. These funds were in sixth and tenth place in April.
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Up one place to third was the iShares Core MSCI World Ucits ETF, a member of interactive investor’s Super 60 list of recommended funds. This ETF owns 1,511 stocks from across the developed world for a fee of just 0.2%. It has risen around 5% in value this year.
Another popular global tracker is Vanguard FTSE All World Uctis ETF. In fifth place for May, it owns more shares, at 3,688, than the BlackRock rival. It is also slightly more expensive, at 0.22% in fees, but includes emerging market shares as well, such as Chinese stocks.
Vanguard FTSE All World High Dividend Yield ETF was in tenth place, down four places on last month. By owning around 1,800 global companies with higher than average dividend yields, it gives investors cheap access to income-producing stocks from around the world.
Dropping down the list was the iShares Physical Gold ETC. The second most-bought ETF in April, it fell to fourth, as the gold price dropped about 4% in dollar terms during May.
WisdomTree FTSE 100 3x Daily Leveraged Ucits ETF was in sixth place as another new entry. This ETF use financial contracts to amplify the gains – and losses – of the FTSE 100 index. It is therefore much riskier than a normal ETF, 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.
|Position||ETF||Change from April||One-year performance to 1 June 2023 (%)||Three-year performance to 1 June 2023 (%)|
|1||Vanugard S&P 500 Ucits ETF (distributing)||No change||4.7||43.1|
|2||iShares Core FTSE 100 Ucits ETF||Up four||2.7||37.6|
|3||iShares Core MSCI World Ucits ETF||Up one||4.6||37.7|
|4||iShares Physical Gold ETC||Down two||7.7||12.1|
|5||Vanguard FTSE All World Uctis ETF||Down two||3.4||34|
|6||WisdomTree FTSE 100 3x Daily Leveraged||New entry||-5.3||84|
|7||Vanguard S&P 500 Ucits ETF (accumulating)||Down one||4.8||43.1|
|8||Vanguard FTSE 100 Ucits ETF (distributing)||Up two||2.6||37.5|
|9||Invesco EQQQ Nasdaq 100 Uctis ETF||New entry||15.9||51.4|
|10||Vanguard FTSE All World High Dividend Yield ETF||Down four||-1.9||36.4|
Source: FE FundInfo/interactive investor, 1 June. Note: the top 10 is based on the number of “buys” during the month of May.
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