The outbreak of conflict in the Middle East triggered a rebound in the gold price, from around $1,800 an ounce to $2,000 during October, which boosted demand for iShares Physical Gold ETC.
This exchange-traded fund (ETF) was a new entry in last month’s most-bought ETF list. Investors tend to turn to gold as a safe-haven asset when they are worried, particularly during times of war and high inflation. However, gold is not without risk – it pays no income, and therefore its price has been under pressure during the ongoing period of rising interest rates, as investors can find a good income, as well as a safe-haven asset, from government bonds.
UK shares proved popular in October, with the iShares Core FTSE 100 Ucits ETF rising three places to second, knocking Vanguard’s S&P 500 Ucits ETF (acc) down to fifth place. The Vanguard FTSE 100 Ucits ETF held on to 10th place.
However, Vanguard S&P 500 Ucits ETF (inc) maintained the top spot for another month, and the iShares Core MSCI World Ucits ETF and Vanguard FTSE All-World Ucits ETF, which both have around two-thirds invested in America, were in third and fourth place respectively.
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- The shares Nick Train says are undervalued compared to rivals
Over the month, UK, US and global shares all fell. The FTSE 100 was the worst performer of the three, down 3.7%, while US shares (as measured by the S&P 500 index) dropped 1.56% and global shares (MSCI World) fell 2.33%, according to data from FE Analytics.
The Lyxor Smart Overnight Return ETF fell two places to ninth place. This is an actively managed ETF that invests in a diversified portfolio of financial instruments and repurchase agreements to deliver a cash-like return. Cash-equivalent investments have risen in value over the past two years due to higher interest rates.
They use derivatives to give investors a bumper return if the index rises or falls in value, therefore making them much riskier than a normal ETF.
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.
Top 10 most-popular ETFs in October 2023
|Rank||ETF name||Change on last month||One-year return (%)||Three-year return (%)|
|1||Vanguard S&P 500 UCITS ETF GBP (LSE:VUSA)||No change||3.3||40.8|
|2||iShares Core FTSE 100 ETF GBP Dist (LSE:ISF)||Up three||7.1||46.3|
|3||iShares Core MSCI World ETF USD Acc GBP (LSE:SWDA)||No change||4.3||34.4|
|4||Vanguard FTSE All-World UCITS ETF GBP (LSE:VWRL)||Up one||4.6||29|
|5||Vanguard S&P 500 ETF USD Acc GBP (LSE:VUAG)||Down three||3.3||40.8|
|6||WisdomTree FTSE 100 3x Daily Lvrgd ETP (LSE:3UKL)||New entry||6.4||121.2|
|7||WisdomTree NASDAQ 100 3x Dl Short ETP GBP (LSE:LQQS)||Down one||58||80.6|
|8||iShares Physical Gold ETC GBP (LSE:SGLN)||New entry||15.3||12.5|
|9||Lyxor Smart Overnight Return ETF C GBP (LSE:CSH2)||Down two||-0.4||14.7|
|10||Vanguard FTSE 100 UCITS ETF (LSE:VUKE)||No change||7.2||46.3|
Source: FE FundInfo/interactive investor, 1 November 2023. Note: the top 10 is based on the number of “buys” during the month of October.
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