What ETFs did investors buy in June?

Stock markets ended the first half of the year with a flourish, as the US continued to defy expectations a recession would be here by now. Technology stocks roared once again, as developments in AI provided investors with reassurance the growth outlook may have improved.

In contrast, oil stayed in the doldrums, as markets eyed patchy growth in China and banked on Russia not complying with OPEC’s latest production quotas. Oil prices around $75 per barrel could help to bring down inflation in the second half of the year and act as a growth tailwind.

A more optimistic tone in markets was reflected in the exchange traded funds (ETFs) Fidelity personal investors bought in June. ETFs tracking indices in the US figured strongly.

The Vanguard S&P 500 UCITS ETF was in pole position. This proved a good place to be, as the US market rounded out a strong first half to the year in fine form.

While recent interest rate rises and the possibility of more to come count against shares, data released last month provided further evidence that US consumers remain largely undeterred in the face of inflation and higher borrowing costs.  

The fund’s low, 0.07% ongoing charge and Vanguard’s long and creditable experience in tracker funds are among the other attractions here. This fund also features on Fidelity’s Select 50 list of favourite funds. According to MSCI, the US now accounts for some 68% of the world’s investable stock markets¹.

If you think of the S&P 500 as a bit light on technology, the iShares S&P 500 Information Technology Sector UCITS ETF or the Invesco EQQQ Nasdaq-100 UCITS ETF might be more your thing.

The former is a carve-out of the 65 stocks of the S&P 500 classified as information technology and is run by BlackRock – another manager with a strong reputation in tracker funds.

In the case of the latter, the mega-cap companies that have recently propelled the S&P 500 higher – Apple, Microsoft, NVIDIA, Tesla for example – are here plus some other interesting large cap names such as Costco and PepsiCo. Technology stocks account for around half the portfolio.

Funds investing in the UK were absent from the list in June, despite having been in evidence over previous months. After beginning the year on the front foot, the UK stock market has faded a little of late. In particular, the FTSE 100’s heavy exposure to energy, banks and defensively positioned businesses is now in less demand than the excitement provided by big tech.

The remaining positions on this list were taken by two more Vanguard funds – the Vanguard FTSE All-World UCITS ETF and Vanguard FTSE Developed World UCITS ETF.

Both funds offer a low cost route to a broad markets exposure. The former – another Select 50 fund – includes an exposure to riskier but faster growing emerging markets in Asia, Latin America and the Middle East.

The IMF currently expects emerging markets to grow by 3.9% this year and 4.2% in 2024. That’s about three times faster than the 1.3% and 1.4% rates of growth expected in developed markets².

Top 5 best-selling exchange traded funds (ETFs) on Fidelity’s Personal Investing platform in June 2023

1. Vanguard S&P 500 UCITS ETF
2. iShares S&P 500 Information Technology Sector UCITS ETF
3. Vanguard FTSE All-World UCITS ETF
4. Invesco EQQQ Nasdaq 100 UCITS ETF
5. Vanguard FTSE Developed World UCITS ETF

Source: Fidelity Brokerage, 1-30 June 2023

Source: 

¹ MSCI, 31.05.23
² IMF, April 2023

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Before investing, please read the relevant key information document which contains important information about each investment trust. There is no guarantee that the investment objective of any Index Tracking Sub-Fund will be achieved. The performance of the sub-fund may not match the performance of the index it tracks due to factors including, but not limited to, the investment strategy used, fees and expenses and taxes.  Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Select 50 is not a personal recommendation to buy or sell a fund. Eligibility to invest in an ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.