In the main, investors stuck with big-name index-tracking ETFs.
Exchange-traded fund (ETF) investors in October continued to pile money into funds tracking broad and well-known indices, such as the S&P 500 and FTSE 100, according to the latest data from interactive investor.
The most-purchased ETF in October was the Vanguard S&P 500 UCITS ETF (LSE:VUSD). This ETF has long dominated our most-bought ETF rankings. Over the past year, it has returned 35%, and 66.2% over three years.
Another US passive play entered the rankings, the iShares Core S&P 500 ETF USD Dist (LSE:IDUS).
Both ETFs are almost identical, tracking the same index with the same ultra-cheap ongoing charge fee of 0.07%.
However, while investors were favouring ETFs tracking the S&P 500 index, the Invesco EQQQ NASDAQ-100 ETF GBP (LSE:EQQQ) fell out of the rankings, having previously been the ninth-most purchased. The ETF tracks the 100 largest companies on the tech-heavy Nasdaq stock exchange.
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Another ETF to fall out of the rankings was the WisdomTree Carbon ETC GBP (LSE:CARP). This fund shot into the rankings in the previous month, following its recent re-launch.
As mentioned, ETF investors continued to favour the big headline indices. The second most-bought ETF was the iShares Core FTSE 100 ETF GBP Dist (LSE:ISF). The Vanguard FTSE 100 UCITS ETF (LSE:VUKE) was also in the rankings, climbing by one place on the previous month. Buying one of these ETFs would have returned investors around 35% over the past year. On a three-year basis, performance has been more disappointing.
Investors also continued to favour the iShares Global Clean Energy ETF USD Dist GBP (LSE:INRG), which climbed three spaces to the third most-bought spot. It is by far the most popular ‘thematic’ ETF, having seen a surge of inflows in recent years. Performance has also been strong, with one-year returns sitting at 22.4%, and three-year returns at 194.7%.
The iShares Physical Gold ETC (LSE:IGLN) fell by two places, although it still came in at a respectable fifth place in the rankings. Gold has moved in and out of favour over the past few months. However, measured on a one-year basis the precious metal has performed poorly, losing investors 11.5%.
Global passive strategies remained popular, with the Vanguard FTSE All-World UCITS ETF (LSE:VWRD) and the iShares Core MSCI World ETF GBP H Dist (LSE:IWDG) both in the top 10. The Vanguard fund was in fourth place, up one spot on the month prior, while the iShares fund was in the sixth spot, down by two positions compared to last month. Both ETFs have provided a return of around 30% over the past year.
Another new entrant to the rankings was the WisdomTree FTSE 100 3x Daily Lvrgd ETP (LSE:3UKL). This fund re-entered the rankings, having fallen out in September. The WisdomTree FTSE 100 3x Daily Leveraged allows investors to gain triple the return (or losses) of the FTSE 100. Leveraged funds are highly risky.
On a one-year basis, the fund has gained 124%, more than the usual FTSE 100 ETFs mentioned above. However, on a three-year basis, it has provided a return of -7.3%, despite normal FTSE tracking ETFs returning around 14% over the period. This underlines that leveraged products are not suitable as long-term holdings, as previously explained.
Top 10 most-popular ETFs: October 2021
|Position||ETF||Change from September||1-year performance (%) to 1 November||3-year performance (%) to 1 November|
|1||Vanguard S&P 500 ETF||No change||35||66.2|
|2||iShares Core FTSE 100 ETF||No change||34.3||13.9|
|3||iShares Global Clean Energy||Up 3||22.4||194.7|
|4||Vanguard FTSE All-World UCITS ETF||Up 1||30.2||52.3|
|5||iShares Physical Gold ETC||Down 2||-11.5||35.2|
|6||iShares Core MSCI World ETF||Down 2||32.6||55.1|
|7||Vanguard FTSE 100 UCITS ETF||Up 1||35.3||14.5|
|8||Vanguard FTSE 250 UCITS ETF||Down 2||37.3||29.1|
|9||WisdomTree FTSE 100 3x Daily Leveraged||New entry||124||-7.3|
|10||iShares Core S&P 500 ETF||New entry||34.4||66.4|
Note: the top 10 is based on the number of “buys” during the month of October.
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.