Just as there are some niches of financial markets where asset prices soared over the past three months, there are other pockets where prices dropped dramatically.
The worst performing ETFs of the last three months come mainly from three categories: volatility, gold and oil, and their fates are inextricably linked to global economic dynamics. The falling price of oil, the relative decline in volatility in recent months, increasing interest rates and a brief relief rally that may have hampered demand for gold all took tolls on most of the ETFs listed here.
Curiously, though, the two worst performing ETFs during the three months ending Sept. 16 had nothing to do with volatility, oil or gold.
10. iPath B S&P 500 VIX S/T Futs ETN VXX -22.01%
VXX, which tracks an index of S&P500 VIX futures—instruments that reflect the volatility of the S&P 500 index—was a poor performer as volatility experienced a pronounced decline from highs in June. As interest-rate policy continues to spur some equity market volatility, the fortunes of volatility exchange-traded notes may reverse.
9. VanEck Vectors Gold Miners GDX -22.09%
Gold miners did poorly despite gold’s reputation as an inflation hedge. GDX is the first gold miner’s ETF on our list, and it lost 21.1% over a one-year period ending on Sept. 16. To some extent, gold’s strong performance over the first few months of the year has made its decline since mid-spring even more pronounced.
8.Sprott Gold Miners ETF SGDM -22.09%
The second gold miner ETF on the list, Sprott’s SGDM returned 19.9% over a one-year period but dropped over 35% over the six months ending on Sept. 16. Though some of gold’s decline over the past three months represented a return to its levels at the beginning of the year, our research sampled a period where the precious metal hit a new 52-week low, placing additional pressure on miners.
7. iShares MSCI Global Gold Miners Fund ETF RING -23.31%
The third gold miners ETF in a row, iShares’ SING dropped 26.6% over a one-year period and neaerly 38% over the six months ending Sept. 16. Many analysts expect a rebound in gold values over the remainder of 2022 in response to continued interest rate increases.
6. ProShares K-1 Free Crude Oil Strategy ETF OILK -24.80%
OILK investors found themselves caught up in a period of crude price declines over the last three months and an ETF that was slow to adjust due to its use of three crude oil futures contracts as a stand-in for spot oil prices. As a result, during much of the three-month period researched by Financial Advisor, OILK traded at valuations that were higher than the oil futures price curve. If one zoomed out to look at OILK on a one-year basis, the ETF returned 18.7% in the period ending on Sept. 16.
5. Sprott Junior Gold Miners ETF SGDJ -25.63%
Smaller gold miners fared even worse than their larger peers, with Sprotts SGDJ falling 25.6% over three months and a whopping 43.3% over the six months ending on Sept. 16. The discrepancy can be partially explained by the higher volatility of companies with smaller market capitalizations.
4. ProShares VIX Short-Term Futures ETF VIXY -27.09%
Picking up with the folly of short-term volatility investing in 2022, even as volatility started to increase again in September ProShares VIXY was a big loser, shedding 27% of its value over the three month period we studied.
3. United States Gasoline UGA -27.30%
Falling gasoline prices are good news for most Americans, but distinctly bad news for gasoline futures investors. The UGA ETF lost 27.3% over our three-month study period, despite returning 41.9% during the one-year period ending Sept. 16.
2. Global X/InterBolsa FTSE Colombia 20 ETF GXG -28.28%
Amid continued inflation, dropping prices in some commodities and a relatively stronger dollar, many emerging market asset values are beginning to sink, and nowhere does the pain seem to be more acute than in Columbian markets, which caused the GXG to lose 23.5% in the one-year period ending Sept. 16. Not only has Columbia's central bank policy been among the world's most hawkish, but GXG is also unfortunately heavily weighted with oil stocks.
1. Breakwave Dry Bulk Shipping ETF BDRY -54.19%
The worst performing ETF over the three months ending Sept. 16 was BDRY, which invests in dry-bulk freight futures. Not only is the ETF now experiencing pressures from global economic issues like inflation and slowing economies, but it also has been rocked by supply chain breakdowns and the lasting effects of zero-Covid policies in China, contributing to a –70.6% one-year performance.
