Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

SEPTEMBER felt a bit like a month of reckoning after a positive six months for world stock markets. Shares and bonds both slipped back, as investors digested an outlook of “higher for longer” interest rates. Statements from central banks towards the end of the month made it clear that policymakers want to stamp out inflation once and for all this cycle. Rising oil prices added to market worries. 

The effects of this arguably manifested in the arrival of the iShares Physical Gold ETC among the top five best-selling exchange traded funds (ETFs) on the Fidelity Personal Investing platform in September. Investors have long turned to gold in times of market stress, geopolitical risks and policies leading to paper currency devaluations.   

This fund – which features on Fidelity’s Select 50 list of favourite funds – has a closer association with the gold price than funds investing in gold mining shares and is backed by a physical gold entitlement. As such, it may not be the best fund to own when gold prices are rising very strongly, but it may prove more defensive during periods when gold is out of the spotlight.  

Gold’s defensive qualities are underwritten by severely limited supply. Latest estimates suggest that all of the gold ever mined would still fit into a 22 metre cube1.  

Elsewhere, the indications were of investors still undeterred by worsening market conditions. Funds tracking “risk-on” indices with either all or a high proportion of their assets in the US continued to dominate.    

In top spot was a persistent favourite – the Vanguard S&P 500 UCITS ETF. This fund tracks the world’s largest market for an ongoing annual charge of just 0.07%. It also features on Fidelity’s Select 50 list.  

The Invesco EQQQ Nasdaq-100 UCITS ETF remained a popular choice as well, following a special rebalancing of the market-cap weighted Nasdaq 100 Index on 24 July. The rebalance helped to alleviate an increasing concentration of risk among a clutch of individual stocks. 

This was successful to the extent that only Apple now exceeds 10% of the Index (by 1.1%). Microsoft, close behind with a weighting of 9.7%, is followed by Amazon in third place with 5.2% of the Index2.  

Owing to the strong outperformance of the US stock market over recent times, the Vanguard FTSE All-World UCITS ETF is also largely exposed to America. At the end of September, the US accounted for 64% of the portfolio3.  

That’s despite the fund’s broad remit, which even encompasses positions in emerging markets alongside developed countries. It’s the third Select 50 fund to feature on this list.  

Completing the top five in September was the iShares Core FTSE 100 UCITS ETF. This remains an efficient and popular way of tracking the UK’s most well-known index for an ongoing annual charge of just 0.07%. The fund fully replicates its target index, that is to say, it holds all of the FTSE 100’s stocks in the same weights as the index.

The FTSE 100’s heavy exposure to energy, banks, pharmaceuticals and other defensively positioned businesses contrasts sharply with the aforementioned US stock indices. It’s worth noting that the index has got off to a bright start in October, largely down to oil and gas prices rebounding from their late-September slump. 

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

  1. Vanguard S&P 500 UCITS ETF 
  2. iShares Core FTSE 100 UCITS ETF 
  3. Invesco EQQQ Nasdaq 100 UCITS ETF 
  4. Vanguard FTSE All-World UCITS ETF 
  5. iShares Physical Gold ETC 

Source: Fidelity Brokerage, 1-30 September 2023 

Source: 

1 World Gold Council, 08.02.23 

2 Invesco, 09.10.23 

3 Vanguard, 30.09.23

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. 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. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. 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.

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Nick Sudbury

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Ed Monk

Ed Monk

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Ed Monk

Ed Monk

Fidelity International