Best Performing ETFs Can Bite You

September 19, 2018

I admit it: I wish I’d bought the Direxion Daily Gold Miners Index Bear 3x Shares (DUST), which is up 72.63% so far this year. The fund is the top-performing ETF year-to-date as of Sept. 17 in the top 100 performing ETFs [see below].

DUST seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index. In a horrible year for precious metals and mining funds, borrowing heavily to bet against precious metals and mining stocks won big.

Had I invested $100,000in the beginning of the year, I’d have made more than $72,000. The Monday-morning quarterback voice in my head is saying “buy” but I know it’s the emotional part of my brain speaking. It’s coming from the same place that tells me gold is dead, as bitcoin is the new gold. I could probably even convince myself I was being rational.

Analyzing The Top 100

In looking at this “top performing” list, I see many things in common. First, the ETFs take on a ton of risk. Rather than investing in broad holdings such as a total stock index fund, they’re all quite narrow. Many magnify the risk by borrowing to buy more and going short against the market. This isn’t investing, it’s merely speculation.

Next, the fund families with the most listings tend to be small, gathering very little in the way of investor assets. ProShares had the most funds in the top 100, at 17, with Direxion in second place, with 12.

ProShares has about $30 billion in assets, while Direxion had about $12.5 billion. Combined, they make up about 1% of the total fund assets at Vanguard (mutual funds and ETFs combined).

The reason they represent such a small percentage is because the strategy of maximizing risk doesn’t work. If you look at the 100 worst-performing ETFs [see below], both fund families score even “better” on this list, with ProShares at 23 and Direxion at 25.

In fact, the Direxion Daily Gold Miners Index Bull 3x Shares (NUGT) is No. 3, losing 60.23%. This means you’d need a 151% return just to break even. These fund families tend to be small because people are generally pretty wise.

Finally, funds on the list tend to be very expensive. DUST, for example, has a 1.08% annual expense ratio, and that doesn’t include the cost of leverage. That’s dozens of times more expensive than broader ETFs that don’t follow these gambling strategies.

Math Here Not Your Friend

Between the extreme volatility and the fees, the math is heavily against you. Consider that if you lose 90% of your money (as the REX VolMAXX Short VIX Futures Strategy ETF (VMIN) has so far this year), you need a 1,000% return to get back to even.

A much better approach than picking from a top-performing fund list is to select a broad, ultra-low-cost ETF such as the Vanguard Total Stock Market ETF (VTI) that will never make a top-performing ETF list in any given year. That’s because they don’t take uncompensated risk.

But a funny thing happens over many years; they rise to the top. According to Morningstar, VTI has bested 90% of ETFs over the past 15 years. And that top-decile performance would be even better if the hundreds of ETFs that went defunct were included in the comparison. I think it’s safe to say those funds that closed weren’t the best performers.

My advice is to separate gambling and investing. In the long run, choosing an investment based on past performance is bad, but choosing based on top performance is even worse. You’d probably have better odds in Las Vegas and have more fun. These funds don't even give you comp drinks or show tickets.

Allan Roth is the founder of Wealth Logic LLC, an hourly based financial planning firm. He is required by law to note that his columns are not meant as specific investment advice. Roth also writes for the Wall Street Journal, AARP and Financial Planning magazine. You can reach him at [email protected] or follow him on Twitter at Allan Roth (@Dull_Investing) · Twitter.

 

100 Top-Performing ETFs

Ticker Fund Issuer AUM ($M) YTD TRR
DUST Direxion Daily Gold Miners Bear 3x Shares Direxion 115.24 72.63
DSLV VelocityShares 3x Inverse Silver ETN Credit Suisse 15.45 59.36
JDST Direxion Daily Junior Gold Miners Index Bear 3X Shares Direxion 52.41 53.71
USOU United States 3x Oil Fund US Commodity Funds 9.89 53.31
UWT VelocityShares 3x Long Crude Oil ETN CitiGroup 180.04 47.65
GDXS ProShares UltraShort Gold Miners ProShares 3.44 46.46
WTIU UBS ETRACS - ProShares Daily 3x Long Crude ETN UBS 13.59 44.90
OILU ProShares UltraPro 3x Crude Oil ETF ProShares 34.62 43.65
TQQQ ProShares UltraPro QQQ ProShares 4,156.81 42.95
XWEB SPDR S&P Internet ETF State Street Global Advisors 59.61 42.43
PSCH Invesco S&P SmallCap Health Care ETF Invesco  1,358.43 42.42
ZSL ProShares UltraShort Silver ProShares 22.76 41.17
TECL Direxion Daily Technology Bull 3x Shares Direxion 779.98 40.83
DFEN Direxion Daily Aerospace & Defense Bull 3X Shares Direxion 69.86 36.75
PSJ Invesco Dynamic Software ETF Invesco  291.62 35.76
ARKG ARK Genomic Revolution Multi-Sector ETF ARK 315.92 35.36
RETL Direxion Daily Retail Bull 3x Shares Direxion 41.85 33.85
UCO ProShares Ultra Bloomberg Crude Oil ProShares 386.00 33.75
CURE Direxion Daily Healthcare Bull 3x Shares Direxion 171.22 33.70
XHE SPDR S&P Health Care Equipment ETF State Street Global Advisors 780.80 33.52
XITK SPDR FactSet Innovative Technology ETF State Street Global Advisors 73.49 32.17
PTH Invesco DWA Healthcare Momentum ETF Invesco  335.67 31.55
ROM ProShares Ultra Technology ProShares 439.93 31.54
UCC ProShares Ultra Consumer Services ProShares 32.57 30.58
XSW SPDR S&P Software & Services ETF State Street Global Advisors 138.16 30.58
QLD ProShares Ultra QQQ ProShares 2,124.19 30.51
DGLD VelocityShares 3x Inverse Gold ETN Credit Suisse 19.94 30.03
IGV iShares North American Tech-Software ETF BlackRock 2,136.84 30.03
FINX Global X FinTech ETF Mirae Asset Global Investments 401.46 29.79
URTY ProShares UltraPro Russell2000 ProShares 168.49 29.38
TNA Direxion Daily Small Cap Bull 3x Shares Direxion 739.25 28.87
DTYS iPath US Treasury 10-Year Bear ETN Barclays Bank PLC 67.66 28.74
IBUY Amplify Online Retail ETF Amplify 561.96 28.56
PXMG Invesco Russell MidCap Pure Growth ETF Invesco  313.11 28.05
TAPR Barclays Inverse US Treasury Composite ETN Barclays Bank PLC 17.54 27.88
DLBS iPath US Treasury Long Bond Bear ETN Barclays Bank PLC 18.95 27.72
SAA ProShares Ultra SmallCap600 ProShares 35.64 27.71
ARKK ARK Innovation ETF ARK 1,390.13 27.51
FDN First Trust Dow Jones Internet Index Fund First Trust 9,691.53 27.23
PILL Direxion Daily Pharmaceutical & Medical Bull 3X Shares Direxion 5.32 26.82
OLO DB Crude Oil Long Exchange Traded Notes Deutsche Bank 7.25 26.69
FBGX UBS AG FI Enhanced Large Cap Growth ETN UBS 1,759.62 26.63
BZQ ProShares UltraShort MSCI Brazil Capped ProShares 32.41 26.59
FLGE Credit Suisse FI Large Cap Growth Enhanced ETN Credit Suisse 2,409.80 26.57
IHI iShares U.S. Medical Devices ETF BlackRock 3,008.66 26.54
RXL ProShares Ultra Health Care ProShares 160.30 25.68
IHF iShares U.S. Healthcare Providers ETF BlackRock 936.03 25.43
HACK ETFMG Prime Cyber Security ETF ETF Managers Group 1,830.07 25.28
PXQ Invesco Dynamic Networking ETF Invesco  79.31 25.07
PTF Invesco DWA Technology Momentum ETF Invesco  162.18 24.79
JSML Janus Henderson Small Cap Growth Alpha ETF Janus Henderson 44.03 24.46
DBO Invesco DB Oil Fund Invesco  375.33 24.43
EDZ Direxion Daily MSCI Emerging Markets Bear 3X Shares Direxion 84.38 24.32
CHAD Direxion Daily CSI 300 China A Share Bear 1X Shares Direxion 124.32 24.32
PXSG Invesco Russell 2000 Pure Growth ETF Invesco  106.95 23.84
ARKW ARK Web x.0 ETF ARK 683.26 23.51
FXL First Trust Technology AlphaDEX Fund First Trust 2,337.86 22.99
SLIM Obesity ETF Janus Henderson 11.64 22.94
FYC First Trust Small Cap Growth AlphaDEX Fund First Trust 476.84 22.70
XHS SPDR S&P Health Care Services ETF State Street Global Advisors 98.31 22.40
CIBR First Trust NASDAQ Cybersecurity ETF First Trust 827.94 22.15
OLEM iPath Pure Beta Crude Oil ETN Barclays Bank PLC 2.83 21.80
SKYY First Trust Cloud Computing ETF First Trust 2,038.28 21.71
IGM iShares North American Tech ETF BlackRock 1,686.59 21.70
DZZ DB Gold Double Short Exchange Traded Notes Deutsche Bank 26.08 21.64
USL United States 12 Month Oil Fund LP US Commodity Funds 78.77 21.56
VGT Vanguard Information Technology ETF Vanguard 22,527.40 21.56
MILN Global X Millennials Thematic ETF Mirae Asset Global Investments 31.99 21.39
IPAY ETFMG Prime Mobile Payments ETF ETF Managers Group 495.71 21.35
SMLL Direxion Daily Small Cap Bull 2X Shares ETF Direxion 4.13 21.26
SLYG SPDR S&P 600 Small Cap Growth ETF State Street Global Advisors 2,469.73 21.05
IJT iShares S&P Small-Cap 600 Growth ETF BlackRock 7,306.73 20.97
PBE Invesco Dynamic Biotechnology & Genome ETF Invesco  282.50 20.96
VIOG Vanguard S&P Small-Cap 600 Growth ETF Vanguard 551.97 20.84
UWM ProShares Ultra Russell2000 ProShares 259.05 20.64
USO United States Oil Fund LP US Commodity Funds 1,631.57 20.48
BNO United States Brent Oil Fund LP US Commodity Funds 98.34 20.44
XKFS SPDR Kensho Future Security ETF State Street Global Advisors 9.01 20.40
JSMD Janus Henderson Small/Mid Cap Growth Alpha ETF Janus Henderson 54.18 20.29
OILB iPath Series B S&P GSCI Crude Oil ETN Barclays Bank PLC 102.50 19.99
PPSC PortfolioPlus S&P Small Cap ETF Direxion 8.55 19.96
UPRO ProShares UltraPro S&P500 ProShares 1,577.03 19.96
FBT First Trust NYSE Arca Biotechnology Index Fund First Trust 2,245.32 19.83
SPXL Direxion Daily S&P 500 Bull 3x Shares Direxion 947.27 19.80
RTH VanEck Vectors Retail ETF VanEck 119.00 19.79
CLIX ProShares Long Online/Short Stores ETF ProShares 64.99 19.64
XAR SPDR S&P Aerospace & Defense ETF State Street Global Advisors 1,552.27 19.60
ENTR ERShares Entrepreneur 30 ETF EntrepreneurShares, LLC 82.69 19.42
OILK ProShares K-1 Free Crude Oil Strategy ETF ProShares 9.01 19.35
GLL ProShares UltraShort Gold ProShares 28.17 19.30
BUZ Buzz US Sentiment Leaders ETF ALPS 11.48 19.23
BEMO Aptus Behavioral Momentum ETF Aptus Capital Advisors 84.09 18.95
BOSS Global X Founder-Run Companies ETF Mirae Asset Global Investments 4.15 18.88
FTEC Fidelity MSCI Information Technology Index ETF Fidelity 2,337.96 18.80
ALFA AlphaClone Alternative Alpha ETF Exchange Traded Concepts 25.52 18.47
JKK iShares Morningstar Small-Cap Growth ETF BlackRock 215.02 18.39
PXLG Invesco Russell Top 200 Pure Growth ETF Invesco  256.77 18.37
RZG Invesco S&P Smallcap 600 Pure Growth ETF Invesco  374.46 18.23
DWAS Invesco DWA SmallCap Momentum ETF Invesco  456.81 18.02
FXH First Trust Health Care AlphaDEX Fund First Trust 1,247.98 17.97

 

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Ticker Fund Issuer AUM ($M) YTD TRR
VMIN REX VolMAXX Short VIX Futures Strategy ETF Exchange Traded Concepts 10.21 -90.22
SVXY ProShares Short VIX Short-Term Futures ETF ProShares 398.73 -88.79
NUGT Direxion Daily Gold Miners Index Bull 3x Shares Direxion 1,109.45 -60.23
BRZU Direxion Daily MSCI Brazil Bull 3X Shares Direxion 298.15 -59.53
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares Direxion 736.92 -57.32
USOD United States 3x Short Oil Fund US Commodity Funds 1.03 -54.58
DWT VelocityShares 3x Inverse Crude Oil ETN CitiGroup 176.57 -53.74
WTID UBS ETRACS - ProShares Daily 3x Inverse Crude ETN UBS 2.91 -52.97
OILD ProShares UltraPro 3x Short Crude Oil ETF ProShares 25.89 -52.94
SHNY Direxion Daily Silver Miners Index Bull 2X Shares Direxion 3.74 -49.90
TUR iShares MSCI Turkey ETF BlackRock 412.90 -49.04
USLV VelocityShares 3x Long Silver ETN Credit Suisse 284.62 -48.79
TVIX VelocityShares Daily 2x VIX Short-Term ETN Credit Suisse 478.63 -47.09
DRIP Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares Direxion 48.07 -46.07
NAIL Direxion Daily Homebuilders & Supplies Bull 3X Shares Direxion 46.77 -45.09
LABD Direxion Daily S&P Biotech Bear 3X Shares Direxion 69.47 -43.60
CHAU Direxion Daily CSI 300 China A Share Bull 2X Shares Direxion 66.80 -43.43
TECS Direxion Daily Technology Bear 3X Shares Direxion 29.12 -43.41
SQQQ ProShares UltraPro Short QQQ ProShares 566.70 -43.40
KORU Direxion MSCI Daily South Korea Bull 3X Shares Direxion 16.53 -42.61
CWEB Direxion Daily CSI China Internet Index Bull 2x Shares Direxion 59.36 -41.94
UBR ProShares Ultra MSCI Brazil Capped ProShares 6.99 -41.66
GDXX ProShares Ultra Gold Miners ProShares 7.17 -41.66
LBJ Direxion Daily Latin America Bull 3X Shares Direxion 12.08 -40.21
SOXS Direxion Daily Semiconductor Bear 3x Shares Direxion 73.99 -39.15
EDC Direxion Daily MSCI Emerging Markets Bull 3x Shares Direxion 242.23 -38.17
REMX VanEck Vectors Rare Earth/Strategic Metals ETF VanEck 128.82 -37.56
YINN Direxion Daily FTSE China Bull 3X Shares Direxion 305.62 -37.51
DTO DB Crude Oil Double Short Exchange Traded Notes Deutsche Bank 18.57 -37.40
BDD DB Base Metals Double Long Exchange Traded Notes Deutsche Bank 1.97 -36.94
SCO ProShares UltraShort Bloomberg Crude Oil ProShares 157.82 -36.56
ZBIO ProShares UltraPro Short Nasdaq Biotechnology ProShares 2.80 -34.89
AGQ ProShares Ultra Silver ProShares 181.32 -33.03
SRTY ProShares UltraPro Short Russell2000 ProShares 59.10 -32.39
TZA Direxion Daily Small Cap Bear 3x Shares Direxion 315.24 -31.77
HOML ETRACS Monthly Reset 2xLeveraged ISE Exclusively Homebuilders ETN UBS 4.11 -31.24
REW ProShares UltraShort Technology ProShares 2.50 -31.11
CNXT VanEck Vectors ChinaAMC SME-ChiNext ETF VanEck 18.25 -31.04
BRF VanEck Vectors Brazil Small-Cap ETF VanEck 68.10 -30.32
SCIF VanEck Vectors India Small-Cap Index ETF VanEck 204.29 -29.99
QID ProShares UltraShort QQQ ProShares 261.59 -29.91
RUSL Direxion Daily Russia Bull 3x Shares Direxion 181.47 -29.58
ASHS Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF Deutsche Bank 21.25 -29.54
SCC ProShares UltraShort Consumer Services ProShares 1.06 -29.48
EWZS iShares MSCI Brazil Small-Cap ETF BlackRock 45.06 -28.89
UGLD VelocityShares 3x Long Gold ETN Credit Suisse 126.61 -27.65
SCIN Columbia India Small Cap ETF Columbia 18.41 -27.57
AGT iShares MSCI Argentina & Global Exposure ETF BlackRock 21.35 -27.40
EVIX VelocityShares 1x Long VSTOXX Futures ETN UBS 3.53 -27.36
EUFL Direxion Daily MSCI European Financials Bull 2X Shares Direxion 8.64 -27.26
ARGT Global X MSCI Argentina ETF Mirae Asset Global Investments 86.40 -27.16
SGDJ Sprott Junior Gold Miners ETF ALPS 94.64 -27.08
DYY DB Commodity Double Long Exchange Traded Notes Deutsche Bank 1.54 -26.84
KGRN KraneShares MSCI China Environment Index ETF KraneShares 5.56 -26.75
SPXS Direxion Daily S&P 500 Bear 3x Shares Direxion 277.09 -26.49
SPXU ProShares UltraPro Short S&P500 ProShares 464.72 -26.48
SDD ProShares UltraShort SmallCap600 ProShares 1.97 -26.31
SIL Global X Silver Miners ETF Mirae Asset Global Investments 340.48 -26.19
INDL Direxion Daily MSCI India Bull 3X Shares Direxion 89.19 -26.04
EZA iShares MSCI South Africa ETF BlackRock 354.38 -25.76
XINA SPDR MSCI China A Shares IMI ETF State Street Global Advisors 3.61 -25.75
EET ProShares Ultra MSCI Emerging Markets ProShares 26.89 -25.31
DAG DB Agriculture Double Long ETN Deutsche Bank 5.05 -25.20
EXIV VelocityShares 1x Daily Inverse VSTOXX Futures ETN UBS 14.22 -25.10
SGDM Sprott Gold Miners ETF ALPS 130.49 -25.01
RXD ProShares UltraShort Health Care ProShares 0.80 -24.80
SLVP iShares MSCI Global Silver Miners ETF BlackRock 48.05 -24.52
RING iShares MSCI Global Gold Miners ETF BlackRock 226.28 -24.16
CQQQ Invesco China Technology ETF Invesco  379.32 -24.07
GASL Direxion Daily Natural Gas Related Bull 3x Shares Direxion 31.63 -23.91
XPP ProShares Ultra FTSE China 50 ProShares 29.61 -23.83
COPX Global X Copper Miners ETF Mirae Asset Global Investments 69.55 -23.80
ASHR Xtrackers Harvest CSI 300 China A-Shares ETF Deutsche Bank 735.94 -23.72
PEK VanEck Vectors ChinaAMC CSI 300 ETF USD VanEck 53.85 -23.68
RSXJ VanEck Vectors Russia Small-Cap ETF VanEck 38.69 -23.59
WDRW Direxion Daily Regional Banks Bear 3X Shares Direxion 2.38 -23.51
SMDD ProShares UltraPro Short MidCap400 ProShares 1.70 -23.33
MIDZ Direxion Daily Mid Cap Bear 3X Shares Direxion 3.22 -23.16
ASHX Xtrackers MSCI China A Inclusion Equity ETF Deutsche Bank 11.06 -22.97
PSAU Invesco Global Gold & Precious Metals ETF Invesco  23.07 -22.88
SDOW ProShares UltraPro Short Dow30 ProShares 191.75 -22.55
UGAZ VelocityShares 3x Long Natural Gas ETN Credit Suisse 361.08 -22.49
SILJ ETFMG Prime Junior Silver ETF ETF Managers Group 45.57 -22.47
ERY Direxion Daily Energy Bear 3X Shares Direxion 35.86 -22.29
KBA KraneShares Bosera MSCI China A Share ETF KraneShares 321.13 -22.27
FBZ First Trust Brazil AlphaDEX Fund First Trust 6.82 -21.95
CNYA iShares MSCI China A ETF BlackRock 13.66 -21.92
BIS ProShares UltraShort Nasdaq Biotechnology ProShares 29.63 -21.90
TWM ProShares UltraShort Russell2000 ProShares 95.55 -21.76
UVXY ProShares Ultra VIX Short-Term Futures ETF ProShares 564.45 -21.74
EUXL Direxion Daily EURO STOXX 50 Bull 3X Shares Direxion 3.04 -21.74
ECON Columbia Emerging Markets Consumer ETF Columbia 478.85 -21.65
CHIQ Global X China Consumer ETF Mirae Asset Global Investments 146.86 -21.59
SSG Proshares Ultrashort Semiconductors ProShares 3.42 -21.46
CPER United States Copper Index Fund US Commodity Funds 10.10 -21.27
GDX VanEck Vectors Gold Miners ETF VanEck 7,989.71 -21.17
NGE Global X MSCI Nigeria ETF Mirae Asset Global Investments 40.03 -21.10
EMCG WisdomTree Emerging Markets Consumer Growth Fund WisdomTree 34.04 -20.98
GOEX Global X Gold Explorers ETF Mirae Asset Global Investments 32.48 -20.74
EIDO iShares MSCI Indonesia ETF BlackRock 368.57 -20.67

 

100 Bottom-Performing ETFs

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