10 Most Popular ETFs in Q2

Investors' growing interest in the developed markets' equity rally was evident in the second quarter of 2013, while gold also remained alluring

Jose Garcia Zarate 22 July, 2013 | 2:08PM
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Investors' growing interest in the developed markets equity rally was evident in the second quarter of 2013, with the SPDR S&P 500 (SPY) again topping the list of most searched ETFs on Morningstar.co.uk.  In fact, the only new addition to the top-10 list, the SPDR S&P US Dividend Aristocrats ETF (UDVD), reveals that within the developed equity world, UK investors are particularly interested in profiting from the good performance of the US market. With an economy growing at a more accelerated pace than those of its European counterparts, the US equity market reveals itself as a very attractive investment proposition for UK investors, with total market returns boosted by favourable foreign exchange as the US dollar strengthens against a monetary policy-driven weakening sterling.

Meanwhile, with regards to emerging market equities, the fall of the Vanguard FTSE Emerging Markets ETF (GBP) (VFEM) from sixth to ninth reflects investors' general concerns about the downgrading of growth prospects for these economies, and particular concerns about political instability in countries like Turkey and Brazil. In a way, these events have come as a useful reminder that for all the past successes, investing in emerging markets ultimately remains subject to a number of additional risks vs. developed markets that investors should take into consideration. 

Once again we see a plethora of gold exchange-traded commodities making it into the "most searched" list. Precious metals have seen a steady decline in prices so far in 2013, and this has led to significant outflows from commodity ETCs (mainly gold products) in Europe. Against this general backdrop, we have to wonder whether investors searching for gold ETCs on Morningstar.co.uk are doing so in order to the unwind (i.e. sell) long-held positions in their portfolios; extend those positions at cheaper prices on the belief that the price of gold would bounce back; or whether we have a totally new breed of investor interested in profiting from the fall in gold prices by setting short positions in these ETCs.  In either case, it seems that the allure of the gold metal remains as strong as ever. 

10 Most Searched for ETFs in Q2

SPDR S&P 500 ETF (USD) (SPY)
4 Stars
Not covered by Morningstar analysts

SPDR Gold Shares Trust (USD) (GLD)
No quantitative rating
Morningstar analyst report

ETFS Gold Bullion Securities ETC (USD) (GBS)
No quantitative rating
Morningstar analyst report

Vanguard FTSE 100 ETF (GBP) (VUKE)
No quantitative rating
Not covered by Morningstar analysts

SPDR S&P US Dividend Aristocrats ETF (USD) (UDVD)
No quantitative rating
Morningstar analyst report

Source Physical Gold P-ETC (USD) (SGLD)
No quantitative rating
Morningstar research report

ETFS Physical Gold ETC (GBP) (PHGP)
No quantitative rating
Morningstar research report

iShares FTSE UK Dividend Plus Inc (IE) (GBP) (IUKD)
2 Stars
Morningstar research report

Vanguard FTSE Emerging Markets ETF (GBP) (VFEM)
No quantitative rating
Not covered by Morningstar analysts

iShares Corporate Bond UCITS ETF (GBP) (SLXX)
2 Stars
Morningstar research report

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Jose Garcia Zarate

Jose Garcia Zarate  is Associate Director of Passive Strategies Research for Morningstar Europe