The first half of 2022 is shaping up to be the worst for U.S. stocks since 1970. The S&P 500 is currently down around 18.5% on a year-to-date basis, while the Vanguard Information Technology Index Fund ETF (VGT) has fallen by 26.7%.
In such an abysmal year for stock market returns, the threshold for making this edition of the “Worst Performing ETFs of the Year” is really high.
This time around we have two lists—one that includes inverse and leveraged exchange-traded funds, and one that doesn’t. To make the all-encompassing list, the cutoff was a loss of 64%; to make the narrower list without leveraged and inverse ETFs, the cutoff was a still-massive 50% loss.
Both lists are located at the bottom of this article.
Blockchain ETFs Dominate Worst Performers List
Taking the unfortunate title of worst-performing ETF of the year so far is the Global X Blockchain ETF (BKCH).
BKCH got hit with a double whammy—collapsing cryptocurrency prices and plunging stock markets. Its basket of blockchain-focused companies—including Coinbase, Riot Blockchain and Galaxy Digital—were absolutely demolished this year.
The ETF’s nearly 73% year-to-date decline was just ahead of competing crypto-focused ETFs, such as the VanEck Digital Transformation ETF (DAPP), the Viridi Bitcoin Miners ETF (RIGZ) and the Bitwise Crypto Industry Innovators ETF (BITQ)—all down more than 69%.
Meanwhile, the ProShares Bitcoin Strategy ETF (BITO), which holds bitcoin futures contracts, is down a little over 55%, enough to put it at No. 15 on the worst performers list.
Cannabis ETFs Plunge
Crypto ETFs are one of two big groups to dominate the worst performers list; the other is cannabis ETFs.
The Advisorshares Poseidon Dynamic Cannabis ETF (PSDN), the ETFMG US Alternative Harvest ETF (MJUS) and The Cannabis ETF (THCX) each tumbled more than 50% this year.
BTIG analyst Camilo Lyon told Bloomberg that the slump in cannabis stocks has to do with a “regulatory recession,” in which cannabis reforms across the country had progressed slower than investors had expected.
ARK ETFs Among Worst Performers
While crypto and cannabis make up the majority of the 25 worst-performing ETFs this year, a few notable funds not tied to those categories popped up on the list.
The one everyone will recognize is the ARK Innovation ETF (ARKK). Cathie Wood’s flagship fund is down 53% this year, enough to make it the 22nd-worst-performing ETF of the year.
The ARK Fintech Innovation ETF (ARKF) and the ARK Next Generation Internet ETF (ARKW) also make appearances on the list.
Finally, two of the hottest and arguably frothiest corners of the market in 2020 and 2021—SPACs and meme stocks—are also represented on the list. The De-SPAC ETF (DSPC) and the Roundhill Meme ETF (MEME) are down 63.7% and 51%, respectively.
For a full list of this year’s worst-performing ETFs, see the tables below:
Worst Performing ETFs Of The Year (ex. leveraged/inverse)
Data measures total returns for the year-to-date period through June 28, 2022.
Worst Performing ETFs Of The Year (all-compassing)
Data measures total returns for the year-to-date period through June 28, 2022.
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