The Worst-Performing ETFs of the Year
Applying the abilities of the etf.com Pulse Tool, we are highlighting the worst-performing ETFs in seven broad categories. The list of losers illustrates how some strategies are just out of favor while others are still gaining net flows as popular trading vehicles.
Currency ETFs
The Invesco CurrencyShares Japanese Yen Trust (FXY) is essentially a portfolio of Japanese Yen, and the performance of the ETF is dependent on the fluctuating relationship between the value of the Yen relative to the U.S. Dollar.
While FXY’s performance this year is not horrible compared to the rest of the ETFs on this list, it has suffered due to a slightly stronger Dollar.
YTD return through Nov. 20: -9.4%
Net flows: $148M
AUM: $423M
Expense ratio: 0.4%
Asset Allocation ETFs
The Cambria Tail Risk ETF (TAIL) is an actively managed strategy that is essentially betting against the performance of the S&P 500 Index, which has been a bad bet this year because the S&P tracking ETF the SPDR S&P 500 ETF (SPY) is up more than 25%.
The TAIL portfolio is made up of mostly cash and Treasury bonds and employs a strategy of buying put options on the S&P 500 Index, which has virtually no upside potential when the underlying index is rising.
YTD return through Nov. 20: -9.5%
Net flows: -$19.6M
AUM: $67.5M
Expense ratio: 0.59%
Fixed Income ETFs
The iShares 25+ Year Treasury STRIPS Bond ETF (GOVZ) is an index-based strategy that focuses on the long end of the yield curve tracks a market-value weighted index of non-coupon paying Treasury bonds with maturities of at least 25 years.
The strategy has been hit hard by the reality of the longest inverted yield curve in U.S. history, which makes long-term bonds less attractive to most investors.
YTD return through Nov. 20: -12.1
Net flows: $150.7M
AUM: $313M
Expense ratio: 0.10%
Alternatives ETFs
The ProShares VIX Short Term Futures ETF (VIXY) is a passive fund that tracks futures contracts on the CBOE Volatility Index. The strategy performs best when equity markets experience steep declines or face heightened risk events, but that hasn't been the case in 2024.
The asset flows tell much of the story behind this somewhat sophisticated strategy. The fact that the inflows this year are more than double the total assets is because VIXY is a trading vehicle and like most strategies that reset exposure daily, it is not a buy-and-hold investment.
YTD return through Nov. 20: -28.5%
Net flows: $403M
AUM: $167M
Expense ratio: 0.85%
Commodities ETFs
As a commodities strategy, the United States Natural Gas Fund LP (UNG) invests in front month natural gas futures contracts, which is highly sensitive to the price of the underlying commodity.
With the price of natural gas climbing this year, UNG has suffered from being forced to buy forward futures contracts at continuously higher prices, a concept known as contango.
YTD return through Nov. 20: -32.3%
Net flows: $63.3M
AUM: $896M
Expense ratio: 1.06%
Equity ETFs
Launched in October 2023, the YieldMax MRNA Option Income Strategy ETF (MRNY) is an actively managed fund that uses a covered call strategy to provide income while tracking the price performance of the pharmaceutical company, Moderna Inc.
Moderna’s stock price is down this year in line with MRNY. The ETF has suffered along with the pharmaceutical maker, which has fallen from grace since gaining notoriety as one of the makers of the Covid vaccines.
YTD return through Nov. 20: -63.3%
Net flows: $63.3M
AUM: $30.5M
Expense ratio: 0.99%
Leveraged & Inverse ETFs
The Direxion Daily FTSE China Bear 3X Shares ETF (YANG) is another perfect example of an ETF designed for trading. This extremely aggressive ETF multiplies by three a bet against the 50 largest public companies traded in Hong Kong.
While the Hang Seng Index, which is made up of 82 companies, is not an exact comparison to the companies tracked by YANG, the Hang Seng is up nearly 17% this year, which should explain the poor performance of YANG.
YTD return through Nov. 20: -65%
Net flows: $136M
AUM: $146M
Expense ratio: 1.09%
