The top 10 most-purchased ETFs in September 2022

Investors snap up UK shares despite political and market troubles.

Exchange-traded fund (ETF) investors increased their investments in UK shares in September, as the pound fell to a record low against the dollar and Chancellor Kwasi Kwarteng’s “mini-budget” spooked bond markets. Against this backdrop the FTSE 100 fell 3.5% and the FTSE 250 fell 7% for the month.

interactive investor customers sought to profit from the downturn by buying the iShares Core FTSE 100 Ucits ETF (up one spot to first place), Vanguard FTSE 100 Ucits ETF (a new entry) and Vanguard FTSE 250 Ucits ETF (another new entry).

These ETFs charge fees of around 0.1% to track Britain’s largest companies and are often core holdings for customers.

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WisdomTree FTSE 100 3x Daily Leveraged was in sixth place, down from fifth in August.

However, some investors also continued to bet against the UK market, with the WisdomTree FTSE 100 3x Daily Leveraged Short in eighth place, down three places on last month.

Investors should be careful with leveraged ETFs though, as although there are potential gains to be made, they could experience significant losses too. 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.

Part of the reason for the interest in UK shares last month could have been the series of fiscal measures announced to increase economic growth.

Kwarteng’s “Plan for Growth” unveiled a wide range of tax cuts, including next April scrapping the 45% “additional tax” rate on income over £150,000 and changing the basic rate from 20% to 19% on income between £12,571 and £50,270.

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He also removed VAT for tourists in the UK, cancelled the corporation tax hike, which would have seen the rate moved from 19% to 25%, and cut stamp duty. 

However, the 45p tax rate will now not be scrapped, after a U-turn from Liz Truss following backlash from the public.

The increase in interest in UK shares displaced American and global shares from the top 10 list. The ETFs to exit the top 10 were iShares Core MSCI World Ucits ETF, iShares Core S&P 500 Ucits ETF and iShares Global Clean Energy Ucits ETF.

iShares Physical Gold ETC held on to its seventh place spot and Vanguard FTSE All-World Ucits ETF rose one place, from sixth to fifth. Vanguard S&P 500 Ucits ETF (distributing) fell from first to second place in September.

Source: Fe FundInfo / interactive investor, 1 October 2022.  Note: the top 10 is based on the number of “buys” during the month of August.