ETFs had a banner year in 2021, with the first mutual fund conversions, the first bitcoin-linked product and potentially $900 billion worth of fresh assets coming into the industry.
Despite this, $124 billion worth of assets drained from 565 ETFs over the course of the year. Here are the funds that suffered the deepest losses of assets during one of the strangest years in recent memory.
ETF.com compiled this list by comparing every ETF’s assets under management on Jan. 1, 2021 with their assets as of Dec. 20, 2021, based on Bloomberg data. Funds that launched this year are not counted.
Here are the top 10 ETFs of the year by outflow in absolute dollars:
|Ticker||Fund||YTD Net Flow ($M)||YTD Return|
|LQD||iShares iBoxx USD Investment Grade Corporate Bond ETF||-17,388.51||-1.78%|
|GLD||SPDR Gold Shares||-14,654.88||-5.32%|
|HYG||iShares iBoxx USD High Yield Corporate Bond ETF||-5,072.64||3.78%|
|SHV||iShares Short Treasury Bond ETF||-4,940.67||-0.1%|
|USMV||iShares MSCI USA Min Vol Factor ETF||-3,982.41||19.24%|
|GDX||Vaneck Gold Miners ETF||-3,685.83||-11.57%|
|IAU||iShares Gold Trust||-3,466.28||-5.18%|
|JNK||SPDR Bloomberg High Yield Bond ETF||-3,254.84||4.04%|
|EWY||iShares MSCI South Korea ETF||-2,823.78||-6.66%|
|SLV||iShares Silver Trust||-2,753.90||-13.84%|
Bonds clearly were hit hard during the year, as near-zero interest rates drove inflation-adjusted yields into negative territory, while equities reached multiple record highs. The fixed income funds above saw a combined $30.65 billion loss during the year, with the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) alone down almost $17.4 billion in assets.
Investors were also keen to reduce their exposure to precious metals, as the SPDR Gold Trust (GLD) lost approximately $14.7 billion in assets, while the iShares Gold Trust (IAU) and the iShares Silver Trust (SLV) took haircuts of $3.5 billion and approximately $2.8 billion, respectively.
Of the 10 funds that saw the greatest declines in assets, three had positive returns for the year. The iShares iBoxx USD High Yield Corporate Bond ETF (HYG) and the SPDR Bloomberg High Yield Bond ETF (JNK) had respective returns of 3.78% and 4.04%, both paltry compared with the S&P 500’s roughly 30% return as the year comes to a close.
The iShares MSCI USA Min Vol Factor ETF (USMV) was down nearly $4 billion in assets over the year despite returning nearly 20%. The extreme optimism in the beginning of the year likely gave investors confidence in higher volatility strategies.
Next, let’s look at the funds that lost the most as a percentage of their starting assets under management at the beginning of the year. To account for volatility, geared ETFs and funds with less than $500 million in assets are not counted.
|Ticker||Fund||Starting AUM ($M)||12/20/2021 AUM ($M)||Change||YTD Return|
|IBUY||Amplify Online Retail ETF||1,440.60||621.14||-56.88%||-21.66%|
|KOKU||Xtrackers MSCI Kokusai Equity ETF||843.29||387.54||-54.04%||19.41%|
|SIZE||iShares MSCI USA Size Factor ETF||1,062.07||530.97||-50.01%||23.70%|
|ILF||iShares Latin America 40 ETF||1,562.96||794.35||-49.18%||14.84%|
|PTH||Invesco DWA Healthcare Momentum ETF||708.10||393.04||-44.49%||-3.59%|
|PSJ||Invesco Dynamic Software ETF||639.35||359.19||-43.82%||-10.72%|
|IPO||Renaissance IPO ETF||737.53||426.94||-42.11%||-8.30%|
|ISCG||iShares Morningstar Small-Cap Growth ETF||698.24||423.93||-39.29%||-1.13%|
|EWY||iShares MSCI South Korea ETF||7,297.87||4,474.08||-38.69%||-6.55%|
|USO||United States Oil Fund LP||3,625.22||2,294.36||-36.71%||60.50%|
Here, the patterns become far less evident. However, there are a few explanations for why investors pulled assets from certain funds.
The Delta and Omicron variants of COVID-19 shook confidence in a return to normal travel demand, which hurt the United States Oil Fund LP (USO) and the online travel-service-heavy Amplify Online Retail ETF (IBUY).
Momentum factor ETFs also struggled, such as the Invesco DWA Healthcare Momentum ETF (PTH), as well as the Invesco Dynamic Software ETF (PSJ), which uses momentum as part of its reconstitution strategy.
Finally, ex-U.S. funds like the Xtrackers MSCI Kokusai Equity ETF (KOKU), the iShares Latin America 40 ETF (ILF) and the iShares MSCI South Korea ETF (EWY) lost between almost 40% to more than half of their 2021 starting assets.