Worst Performing ETFs Of The Year

December 26, 2017

Last week we highlighted the top-performing ETFs of 2017. With nearly 90% of all U.S.-listed ETFs on track to end the year with gains, it wasn’t hard to find worthy candidates for that story.

In this article, we’ll take a look at the other side of the ledger—the ETFs that performed the worst. Once again, we made two lists, one that excludes leveraged and inverse products, and one them includes them.

VIX ETFs Devastated

Both lists are topped by volatility ETFs, as record lows in the Cboe Volatility Index weighed on these products. The VIX briefly hit 8.56 in November, the lowest reading ever for the index, and has hovered below 10 consistently throughout the year. When all is said and done, 2017 will turn out to be one of the worst years ever for betting on rising volatility.

In fact, seven of the 20 worst-performing nonleveraged/noninverse ETFs were VIX products, with declines of 48% or more during the year-to-date period through Dec. 20. The REX VolMAXX Long VIX Weekly Futures Strategy ETF (VMAX) was the worst of the bunch, with an 82.2% loss in the period. 

 

Worst Performing ETFs Of 2017 (excluding leveraged/inverse)

Ticker Fund YTD Return (%)
VMAX  REX VolMAXX Long VIX Weekly Futures Strategy ETF -82.19
VIXY ProShares VIX Short-Term Futures ETF -72.87
VIIX  VelocityShares Daily Long VIX Short-Term ETN -72.78
VXX  iPath S&P 500 VIX Short-Term Futures ETN -72.76
GAZ  iPath Bloomberg Natural Gas Subindex Total Return ETN -65.3
VIXM  ProShares VIX Mid-Term Futures ETF -48.84
VIIZ  VelocityShares VIX Medium Term ETN -48.74
VXZ  iPath S&P 500 VIX Mid-Term Futures ETN -48.61
UNG  United States Natural Gas Fund LP -44
SGG  iPath Bloomberg Sugar Subindex Total Return ETN -31.94
SGAR  iPath Pure Beta Sugar ETN -30.26
PSCE  PowerShares S&P SmallCap Energy Portfolio -30.08
PAK Global X MSCI Pakistan ETF -28.57
CANE  Teucrium Sugar Fund -27.49
PXJ  PowerShares Dynamic Oil & Gas Services Portfolio -26.03
UNL  United States 12 Month Natural Gas Fund LP  -25.83
XES  SPDR S&P Oil & Gas Equipment & Services ETF -25.4
OIH  VanEck Vectors Oil Services ETF -22.95
JO  iPath Bloomberg Coffee Subindex Total Return ETN -21.63
JJS  iPath Bloomberg Softs Subindex Total Return ETN -21.47

Note: Data measures the total return for the year-to-date period through Dec. 20.

 

NatGas Leads Energy Losses

Outside of the decimation in VIX ETFs, commodity-related ETFs were the worst hit. That includes the iPath Bloomberg Natural Gas Subindex Total Return ETN (GAZ) and the United States Natural Gas Fund LP (UNG), which sagged 65.3% and 44%, respectively, this year.

Natural gas prices themselves dropped almost 30% in 2017 due to rising production and tepid demand as the all-important North American winter kicks into gear. Roll costs from contango further compounded the troubles for natural gas futures-tracking products

UNG and GAZ weren’t the only energy products to be hit this year. Energy equity ETFs also fared poorly. The PowerShares S&P SmallCap Energy Portfolio (PSCE) fell by 30.1%, while the VanEck Vectors Oil Services ETF (OIH) shed 22.9%.

In addition to the woes affecting natural gas, energy equities have had to contend with disappointing oil prices. Even though crude oil rose by about 8% in 2017 to last trade at $58, many investors had expected a stronger recovery in prices from last year’s rock-bottom levels.

Small-caps and services companies, which are more leveraged to energy prices, felt the disappointment most deeply.

 

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