Exchange-traded funds (ETFs) tracking US shares claimed first and second place in the most-bought ETFs list last month, even as the S&P 500 index fell in September.
In first place, unchanged from August, was the Vanguard S&P 500 Ucits ETF (distributing). Second, up four place was its sister fund, Vanguard S&P 500 Ucits ETF (accumulating). The difference between the two ETFs is that the former pays out dividends (the yield on the index is currently 1.27%) and the later reinvests them. They both cost 0.07% and track the largest 500 companies in America.
New entries were BlackRock’s S&P 500 tracker, iShares Core S&P 500 Ucits ETF, which came in in ninth place, and Invesco EQQQ NASDAQ-100 ETF, which tracks the largest 100 companies on the Nasdaq exchange, and entered the list in eighth place.
September was a tricky month for US and tech shares, with the Nasdaq 100 dropping 1.2% and the S&P 500 dropping 1.56%, including dividends. Global shares, which are also dominated by US shares, dropped 0.92%.
The iShares global tracker owns 1,518 stocks from across the developed world for a fee of just 0.2%. The Vanguard alternative 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.
The Lyxor Smart Overnight Return Ucits ETF rose three places to seventh in September. This is an actively managed ETF that invests in a diversified portfolio of financial instruments and repurchase agreements in order to deliver a cash-like return. Cash-equivalent investments have risen in value over the past two years due to higher interest rates.
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UK shares lost their appeal last month, despite the FTSE 100 returning 2% over the month. The iShares Core FTSE 100 Ucits ETF fell from second to fourth place on the most-bought ETF list and the Vanguard FTSE 100 UCITS ETF dropped one place to 10th.
Rounding off the list was WisdomTree Nasdaq 100 3x Daily Short. This is a “leveraged” ETF, meaning it uses derivatives to give investors a bumper return if the Nasdaq 100 drops in value. It is therefore 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 September 2023
|Position||ETF||Change on last month||One-year return (%)||Three-year return (%)|
|1||Vanguard S&P 500 UCITS ETF GBP (LSE:VUSA)||No change||8.3||41|
|2||Vanguard S&P 500 ETF USD Acc GBP (LSE:VUAG)||Up four||8.3||41|
|3||iShares Core MSCI World ETF USD Acc GBP (LSE:SWDA)||No change||9.3||33.6|
|4||iShares Core FTSE 100 ETF GBP Dist (LSE:ISF)||Down two||14.7||43.8|
|5||Vanguard FTSE All-World UCITS ETF GBP (LSE:VWRL)||Down one||8.5||29.2|
|6||WisdomTree NASDAQ 100 3x Dl Short ETP GBP (LSE:LQQS)||No change||-66.8||-81.6|
|7||Lyxor Smart Overnight Return ETF C GBP (LSE:CSH2)||Up three||-5.2||12.7|
|8||Invesco EQQQ NASDAQ-100 ETF GBP (LSE:EQQQ)||New entry||19.7||38.3|
|9||iShares Core S&P 500 ETF USD Acc GBP (LSE:CSP1)||New entry||8||40.6|
|10||Vanguard FTSE 100 UCITS ETF (LSE:VUKE)||Down one||14.6||43.7|
Source: FE FundInfo/interactive investor, 2 October. Note: the top 10 is based on the number of “buys” during the month of September.
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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.