Advisors Beware: These 5 ETFs Are in the Zero Return Club

These large funds have been volatile, but ultimately gone nowhere.

TwitterTwitterTwitter
RobIsbitts310x310
|
Reviewed by: etf.com Staff
,
Edited by: James Rubin

When we return from a long vacation, we’re probably happy to be back home. I’d imagine even frequent travelers often feel this way. Those “round trips” can take a lot out of you, especially when multiple modes of travel and adventure activities add up to a lot of energy expended.  

But at least when we do a round trip like that, we accomplish something. Unfortunately for an alarming number of ETFs, including some very large and prominent ones, their round trip accomplished nothing for their shareholders. I’m talking about ETFs that, including any dividend payments (so “total return”), are trading right about where they were–not yesterday, or a year ago, but for a very long time.  

In researching this article, I had to force myself to focus on a limited number of members of what I call the “zero return club.” So perhaps there is more to this story as it develops.  

And by no means am I suggesting that these are “bad” ETFs. Frankly, I’m more of a contrarian myself. For some investors, considering a list of ETFs that have close to zero total return over several years might be akin to those iconic value investors saying that they look for ideas by scanning the 52-week lows list, not the 52-week highs. 

5 Equity ETFs That Have Gone Everywhere, and Nowhere 

I excluded fixed income ETFs here, as just experienced the worst macro landscape for bonds since the 1970s. And with the Fed aiming to start cutting rates, likely next month, the bond ETF scene might be changing. 

So, here are five ETFs that represent a much larger group of near-zero performers. Collectively they paint a picture of a stock market that is far less successful than the mega caps, and particularly the Magnificent Seven. But when we pan back and look at the broader market, we find a lot of zeroes on the scoreboard. So here are seven ETFs that, despite having some strong runs along the way, have been anything but magnificent.  

They are also not tiny, obscure ETFs. I note their assets under management alongside their “zero return since” date. 

The ARKK Innovation ETF (ARKK) is trading about where it did on June 20, 2018. It still has more than $5.8 billion in assets. 

Those round-trip air fares have fared better than the $982 million US Global Jets ETF (JETS). Frankly, this fund has more resembled the NFL’s New York Jets in recent years. It has been flat since June 12 of 2020, and still well off its 2015 debut price.  

This Dividend ETF Giveth, and Taketh Away 

Some ETFs that scout very high-yielding stocks have delivered the income but given it back in return–consider the $793 million Global X Super Dividend ETF (SDIV), Aug. 31 of 2011. That is not a misprint! It is about to “celebrate” its thirteenth anniversary of delivering a dividend yield that has consistently been in the 7%-10% range or higher (10.7% currently) but given all of it back in price declines. 

Finally, a pair of prominent ETFs round out this edition of the zero-return club. The iShares Russell 2000 ETF (IWM) has been flat since March 16, 2021, nearly three-and-a-half years ago. But at $70 billion, there are still plenty of investors voting to stick it out. 

And, if it seems like we’ve been waiting a long time for gold stocks to rally hard, it is because we have. The $14.7 billion Van Eck Gold Miners ETF (GDX) has traded in a total return price range of around $15 to $70 since Sept. 20, 2007, nearly 17 years ago.  

Every advisor and investor must determine for themselves what the significance of these long return droughts are to them–opportunity, reason to avoid, intriguing trading vehicles, or something else. The zero-return club reminds us that beneath the headlines and the hype, the market is made of many segments. And ETFs help us identify them. 

Rob Isbitts' Wall Street career spans 5 decades and multiple roles, all dedicated to providing clarity to investors by busting classic myths and providing uncommon perspective. He did so as a fiduciary investment advisor, Chief Investment Officer and fund manager for 27 years before selling his practice in 2020. His efforts now focus exclusively on investment research, education and multimedia. He started ETFYourself and SungardenInvestment to provide straightforward commentary and access to his investment intellectual property for portfolio construction, stocks and ETFs. Originally from New Jersey, Rob and his wife Dana have 3 adult children and have lived in Weston, Florida for more than 25 years.