Market Volatility Hits Options and Theme ETFs Hard
It has been a challenging year for options income strategies, with YieldMax funds dominating the worst performers list in 2024. While the broad market SPDR S&P 500 ETF Trust (SPY) gained 28% year to date, these specialized exchange-traded funds have struggled to deliver.
The 10 worst-performing non-leveraged ETFs of 2024 share common themes: options-income strategies on volatile stocks and exposure to challenged sectors like cannabis and lithium mining. Four YieldMax funds top the list, with losses exceeding 50%.
YieldMax MRNA Option Income Strategy ETF
The YieldMax MRNA Option Income Strategy ETF (MRNY) is an actively managed fund that employs a synthetic covered call strategy on Moderna Inc. stock, while using cash and U.S. Treasuries as collateral.
The fund’s decline mirrors Moderna’s challenging year, with the underlying stock falling over 60% year to date and trading between a 52-week high of $170.47 and a low of $35.80.
YTD performance thru Dec. 30: -60.3%
AUM: $57.3M
Expense ratio: 0.99%
Inception: Oct. 2023
YieldMax AI Option Income Strategy ETF
The actively managed YieldMax AI Option Income Strategy ETF (AIYY) generates monthly income through a synthetic covered call strategy on C3.ai stock, with positions collateralized by cash and U.S. Treasuries.
Despite C3.ai stock gaining 23.3% year to date and trading between a 52-week high of $45.08 and a low of $18.85, the fund’s covered call strategy has capped potential gains.
YTD performance thru Dec. 30: -55.8%
AUM: $93.8M
Expense ratio: 0.99%
Inception: Nov. 2023
YieldMax AMD Option Income Strategy ETF
The YieldMax AMD Option Income Strategy ETF (AMDY) is actively managed and uses an options-based income strategy focused on Advanced Micro Devices stock, aiming to provide income through covered calls.
The underlying AMD stock has dropped 16.3% year to date, trading between a 52-week high of $227.30 and a low of $117.91.
YTD performance thru Dec. 30: -55.4%
AUM: $167.9M
Expense ratio: 0.99%
Inception: Aug. 2023
YieldMax COIN Option Income Strategy ETF
The actively managed YieldMax COIN Option Income Strategy ETF (CONY) employs an options-based strategy centered on Coinbase Global Inc. stock to generate monthly income.
While Coinbase stock has surged $43.7% year to date, trading between a 52-week high of $349.75 and low of $114.51, the fund’s covered call strategy has limited its participation in the stock's upside.
YTD performance thru Dec. 30: -52.1%
AUM: $1.1B
Expense ratio: 1.01%
Inception: Aug. 2023
Amplify U.S. Alternative Harvest ETF
The actively managed Amplify U.S. Alternative Harvest ETF (MJUS) invests in companies involved in the U.S cannabis industry, focusing on firms that derive at least 50% of their revenue from cultivation, production, and distribution of cannabis products.
The fund's decline reflects broader challenges in the cannabis sector, including ongoing federal regulatory hurdles, market saturation and increasing competition from illecit markets.
YTD performance thru Dec. 30: -48.9%
AUM: $65.9M
Expense ratio: 0.75%
Inception: May 2021
Roundhill Cannabis ETF
The Roundhill Cannabis ETF (WEED) is an actively managed fund that provides exposure to companies operating in the legal production, growth, and distribution of cannabis and related products globally.
The fund's performance has been impacted by industry-wide challenges, including limited access to banking services and slower-than-expected progess on U.S. federal legalization efforts.
YTD performance thru Dec. 30: -48.5%
AUM: $3.2M
Expense ratio: 0%
Inception: April 2022
AdvisorShares Pure US Cannabis ETF
The actively managed AdvisorShares Pure US Cannabis ETF (MSOS) focuses exclusively on U.S.-based companies in the legal cannabis industry, including multi-state operators.
The fund's decline reflects ongoing challenges faced by U.S. operators, including high taxation, limited interstate commerce, and competition from unregulated markets.
YTD performance thru Dec. 30: -48.5%
AUM: $475.3M
Expense ratio: 0.83%
Inception: Sept. 2020
Breakwave Dry Bulk Shipping ETF
The passively managed Breakwave Dry Bulk Shipping ETF (BDRY) is the first ETP to provide exposure to the dry bulk shipping market through freight futures and contracts on dry bulk indices.
The fund's performance has been hurt by fluctuating demand for commodities, vessel oversupply issues, and geopolitical issues affecting major shipping routes, including the Panama Canal and Suez Canal.
YTD performance thru Dec. 30: -47.8%
AUM: $31.3M
Expense ratio: 3.5%
Inception: March 2018
iShares Lithium Miners & Producers ETF
The passively managed iShares Lithium Miners & Producers ETF (ILIT) provides exposure to the lithium industry, tracking an index of global companies involved in lithium mining, extraction and production.
The fund's decline reflects a challenging year for lithium prices, which have fallen due to oversupply concerns and slower-than-expected electric vehicle demand in some markets.
YTD performance thru Dec. 30: -43.9%
AUM: $4.13M
Expense ratio: 0.47%
Inception: June 2023
Sprott Lithium Miners ETF
The passively managed Sprott Lithium Miners ETF (LITP) focuses on providing exposure to global companies engaged in lithium mining and production, with a goal of supporting the worldwide clean energy transition.
The fund has been impacted by falling lithium prices, with spot prices dropping more than 22% year to date amid supply chain disruptions and inventory adjustments by battery manufacturers.
YTD performance thru Dec. 30: -42.4%
AUM: $6.4M
Expense ratio: 0.65%
Inception: Feb. 2023
