Worst Performing ETFs Of The Year

October 06, 2017

Earlier this week, we posted an article on ETF.com highlighting the top-performing ETFs of the year so far. That list included inverse volatility products, tech ETFs and China funds, among others. They all handily outperformed the S&P 500's 15% year-to-date gain.

In this piece, we'll take a look at the other end of the spectrum, the worst-performing ETFs of the year. Once again, there'll be two lists; one that includes all exchange-traded funds, and one that excludes inverse and leveraged products.

There's quite a bit of overlap between the two lists.

Long VIX Products Decimated

The broader worst-performers list can be found below and is topped by the ProShares Ultra VIX Short-Term Futures ETF (UVXY) and the VelocityShares Daily 2x VIX Short-Term ETN (TVIX), both with losses of more than 88% for the year.

Just as shorting the CBOE Volatility Index (VIX) resulted in handsome gains in 2017, going long the VIX resulted in painful losses. Add leverage to the mix, and you get the eye-popping declines of UVXY and TVIX.

 

Worst-Performing ETFs Of 2017 (All Products)

Ticker Fund YTD Return
(%)
UVXY  ProShares Ultra VIX Short-Term Futures ETF -88.7
TVIX  VelocityShares Daily 2x VIX Short-Term ETN -88.6
LABD  Direxion Daily S&P Biotech Bear 3X Shares -77.0
UGAZ  VelocityShares 3X Long Natural Gas ETN -77.0
VMAX  REX VolMAXX Long VIX Weekly Futures Strategy ETF -74.8
TVIZ  VelocityShares Daily 2x VIX Medium-Term ETN -67.1
VIXY  ProShares VIX Short-Term Futures ETF -62.5
VXX  iPath S&P 500 VIX Short-Term Futures ETN -62.4
VIIX  VelocityShares Daily Long VIX Short-Term ETN -62.4
SOXS  Direxion Daily Semiconductor Bear 3x Shares -61.8

Data measures the year-to-date period through Oct. 4

 

Products that go long the VIX were decimated as the index hit record lows this year, the damage compounded by roll costs associated with a futures structure in contango. In addition to UVXY and TVIX, five other ETFs providing long-VIX exposure found themselves on the broad worst-performers list.

Betting Against Biotech Hurt

The only non-VIX ETFs on the all-products list were the Direxion Daily S&P Biotech Bear 3X Shares (LABD), the VelocityShares 3X Long Natural Gas ETN (UGAZ) and the Direxion Daily Semiconductor Bear 3x Shares (SOXS).

Biotech stocks have soared higher this year as political uncertainty surrounding the group has eased. Likewise, semiconductor stocks have climbed this year amid the broader rally in the tech sector, led by shares of Nvidia, a company that's benefited greatly from the boom in digital currency mining.

Betting against biotech or semiconductors―especially with leverage―has been an awful bet, as evidenced by the 77% loss for LABD and the 61.8% loss for SOXS.

At the same time, betting on natural gas, with leverage, was also one of the worst trades of the year, as illustrated by the 77% decline for the VelocityShares 3X Long Natural Gas ETN (UGAZ).

Natural gas prices lost 21% this year following one of the warmest winters on record, and as U.S. production spiked to a record high.

 

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