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Retail investors pile into iShares FTSE 100 ETF despite higher costs
by Robert St George on Sep 10, 2013 at 13:49
The most purchased ETF by clients of Barclays Stockbrokers in August was the £4.1 billion iShares FTSE 100, marking its 14th consecutive week at the top of the sales chart.
It has achieved this feat despite being one of the more expensive ways to gain passive exposure to the index, with a total expense ratio of 0.4%. This compares with 0.3% from the £273 million x-trackers FTSE 100 Ucits ETF or 0.1% from the £400 million Vanguard FTSE 100 ETF. The latter was the ninth best seller last month.
However, the iShares ETF has also delivered the better performance over the past year net of fees with a total return of 17.89% against 15.96% from the Vanguard product.
A surprise new entrant at number eight in the rankings was iShares MSCI Brazil, following that market’s 23% plunge in sterling terms through the past six months.
Chris Stevenson, proposition manager at Barclays Stockbrokers, attributed this to ‘growing optimism for Brazil as eyes start to turn towards its hosting of the 2014 football World Cup and 2016 Olympics games’.
The figures from Barclays Stockbrokers also suggested that retail investors are becoming less enamoured with fixed-income ETFs. The iShares GBP Corporate Bond ETF was the third most popular by total assets in August 2012, but slipped to sixth last month. It was overtaken by ETFs focused on the FTSE 250, S&P 500 and emerging-markets indices.