The top 10 most-purchased ETFs in October 2022
1st November 2022 14:35
by Sam Benstead from interactive investor
Investors retreated from UK shares last month as the US market rebounded faster.
In October, ETFs tracking the FTSE 100 and FTSE 250 both fell in the top 10 rankings, which measure the number of “buys” among customers of interactive investor. The iShares Core FTSE 100 Ucits ETF dropped from first to second place, while the Vanguard FTSE 100 Ucits ETF fell from third to fifth, and the Vanguard FTSE 250 Ucits ETF fell from fourth to sixth.
Meanwhile, the WisdomTree FTSE 100 3x Daily Short ETF rose five places to third. This ETF uses derivatives and leverage to bet that the UK market will fall, rewarding investors if it does but punishing them heavily if it does not.
In October, the FTSE 100 rose 4% and the FTSE 250 rose around 4%. The market was boosted by the appointment of Rishi Sunak as prime minister and Jeremy Hunt as chancellor, as well as strong results from oil companies.
The duo are deemed by markets to be more prudent financially than Liz Truss and Kwasi Kwarteng because they will attempt to control inflation and spending rather than pursue short-term economic growth. Falling bond yields, due to greater confidence in the government, also boosted the stock market.
US shares performed even better in October, with the S&P 500 rising 5%. ETF investors reacted by pushing Vanguard S&P 500 Ucits ETF (distributing) to the top of the rankings, from second place in September.
- Boost for income seekers as weak pound benefits FTSE 100 dividend
- Is the UK still the top dog for income investors?
- Benstead on Bonds: historic gilt collapse is a classic ‘blood on the streets’ moment
The accumulation version of this ETF stayed in ninth place, while the Vanguard FTSE All World Ucits ETF, which has 63% invested in North America, fell three places to eighth place.
Despite disappointing earnings results from technology shares, the market as a whole rose due to increased optimism that the economy was growing healthily (GDP growth was 2.6% in the third quarter in the US), and that inflation had turned a corner, which may cause the US central bank to raise interest rates less aggressively.
New entries on the most-bought ETFs list for October included the WisdomTree Nasdaq 100 3x Daily Short in fourth place and the WisdomTree FTSE 100 3x Daily Long in 10th place. Other leveraged ETFs featuring were the WisdomTree Nasdaq 100 3x Daily Long up three places to seventh and the WisdomTree FTSE 100 3x Daily Short in third place.
- What an inflation shock really looks like
- Ask ii: can I get a yield of 4% or more from bonds like I can from equities?
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.
Just missing out on the top 10 list was the iShares Index Linked Gilt Ucits ETF. Rising bond yields mean that investors can now get positive inflation-adjusted returns from index-linked bonds, which has boosted demand for ETFs that track this part of the bond market.
Top 10 most-popular ETFs in October 2022
| Position | ETF | Change on last month | 1-year return (%) | 3-year return (%) |
|---|---|---|---|---|
| 1 | Vanguard S&P 500 Ucits ETF (distributing) | Up one | 1.4 | 49.3 |
| 2 | iShares Core FTSE 100 Ucits ETF | Down one | 1 | 7.9 |
| 3 | WisdomTree FTSE 100 3x Daily Short | Up five | -16 | -62.9 |
| 4 | WisdomTree Nasdaq 100 3x Daily Short | New entry | 74.2 | -92.1 |
| 5 | Vanguard FTSE 100 Ucits ETF | Down two | 0.9 | 7.8 |
| 6 | Vanguard FTSE 250 Ucits ETF | Down two | -20.4 | -4.7 |
| 7 | Wisdom Tree Nasdaq 100 3x Daily Long | Up three | -66.5 | 42.1 |
| 8 | Vanguard FTSE All World Ucits ETF | Down three | -4.9 | 28.8 |
| 9 | Vanguard S&P 500 Ucits ETF (accumulating) | No change | 1.4 | 42.6 |
| 10 | WisdomTree FTSE 100 3x Daily Long | New entry | -9 | -23.8 |
Source: Fe FundInfo/interactive investor, 1 November 2022. 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.