5 Most Popular ETFs

LOW COST FUNDS: Which exchange traded funds have Morningstar.co.uk readers been researching the most? We reveal the top five most viewed ETFs on the website

Emma Wall 27 March, 2014 | 12:49AM
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With just one week to go before the end of the tax year, investors are swotting up on their asset homework; looking for potential holdings for their ISA portfolio.

Fans of passive investment are focusing on the UK stock market, clearly confident in the outlook for domestic companies. Also featuring in the top five most viewed ETFs were two S&P 500 ETFs, showing that despite the rally in recent years the US stock market remains attractive to passive investors.

Here is the full list of the top five most viewed ETFs on Morningstar.co.uk. Morningstar ETF research is given where available; otherwise the ETF’s investment objective is explained. UK investors should bear in mind that investing in ETFs domiciled in the US is not tax efficient.

Vanguard FTSE 100 ETF (VUKE)

This fund seeks to track the performance of the FTSE 100 Index, a widely recognised UK benchmark of the UK market’s most highly capitalised blue chip companies. The fund employs a “passive management” – or indexing – investment approach, through physical acquisition of securities, designed to track the performance of the Index, a free float adjusted market capitalisation weighted index.

iShares UK Dividend (IUKD)

The fund, which offers exposure to the 50 highest yielding UK stocks, is a suitable tool to implement different strategies, says Morningstar analyst Hortense Bioy.

This broadly diversified, large and mid cap-focused fund – which has a value tilt – could easily serve as an alternative core UK equity holding for investors seeking a regular income stream.

Vanguard FTSE All-World ETF (VWRD)

This fund seeks to provide long-term growth of capital by tracking the performance of the FTSE All-World Index, a market-capitalisation weighted index of common stocks of large and mid cap companies in developed and emerging countries. The fund will invest in a portfolio of equity securities that so far as possible and practicable consists of a representative sample of the component securities of the Index.

SPDR S&P 500 (SPY)

SPDR S&P 500 (SPY) is a solid core equity holding as it is broadly diversified across sectors and individual stocks and it has an extremely low expense ratio, said analyst Michael Rawson.

The index has a slight quality tilt because of its conservative eligibility requirements pertaining to unprofitable companies and recent IPOs. However, that does not mean that the index will have superior performance or that unprofitable companies will be removed from the index on a timely basis.

Vanguard S&P 500 (VOO)

The fund employs an indexing investment approach designed to track the performance of the Standard & Poor's 500 Index.  It attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

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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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
iShares UK Dividend ETF GBP Dist749.90 GBX-0.08Rating
Vanguard FTSE 100 UCITS ETF35.85 GBP0.41Rating
Vanguard FTSE All-World UCITS ETF135.94 USD0.86Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar

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