Exchange-traded funds, or ETFs, are often low-cost instruments for investors to track popular indexes or leverage experienced manager choices in an attempt to beat the market. The best ones serve as building blocks for a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.
In the second quarter of 2024, the worst performers included VanEck Rare Earth and Strategic Metals (REMX) and Xtrackers MSCI EM Latin America ESG Swap (XMLA). Data in this article is sourced from Morningstar Direct.
To read about the best-performing ETFs, check out our other story.
Screening for the Worst-Performing ETFs
To find the quarter's worst-performing ETFs, we screened those in Morningstar's Equity, Allocation, or Fixed-Income categories that are available in the UK. We excluded exchange-traded notes, known as ETNs, and ETFs with less than $25 million (£19.7 million) in total assets. We also excluded funds that fall into Morningstar's "trading" categories, as these funds are designed for active traders and are not suitable for long-term investors. All returns are quoted in GBP.
Among the worst-performing ETFs, two were from the Latin America equity category, where funds fell 13.60% in the second quarter.
The 10 Worst-Performing ETFs for Q2 2024
1. VanEck Rare Earth and Strategic Metals UCITS ETF (REMX)
2. Xtrackers MSCI EM Latin America ESG Swap UCITS ETF (XMLA)
3. Global X Lithium & Battery Tech UCITS ETF (LITU)
4. iShares MSCI EM Latin America UCITS ETF (DLTM)
5. iShares MSCI Brazil UCITS ETF USD (Dist) (IBZL)
6. Amundi MSCI Indonesia UCITS ETF (INDO)
7. HSBC MSCI Indonesia UCITS ETF (HIDD)
8. Xtrackers MSCI Indonesia Swap UCITS ETF (XMIN)
9. iShares MSCI Brazil UCITS ETF (DE) (4BRZ)
10. Amundi MSCI Brazil UCITS ETF (RIO)
Metrics for the Worst-Performing ETFs
VanEck Rare Earth and Strategic Metals UCITS ETF
• Morningstar Rating: N/A
• Expense Ratio: 0.59%
• Morningstar Category: Equity Precious Metals
The worst-performing ETF in the second quarter was the £62 million VanEck Rare Earth and Strategic Metals, which lost 16.88%. The passively managed VanEck ETF underperformed the average 7.49% gain on funds in the equity precious metals category in the second quarter. Over the past 12 months, VanEck Rare Earth and Strategic Metals fell 48.61%, placing it in the 100th percentile within its category and underperforming the 14.46% return on the average fund.
VanEck Rare Earth and Strategic Metals, launched in September 2021, has a Morningstar Medalist Rating of Neutral.
Xtrackers MSCI EM Latin America ESG Swap UCITS ETF
• Morningstar Rating: 2 stars
• Expense Ratio: 0.57%
• Morningstar Category: Latin America Equity
With a 15.50% loss, the £80 million Xtrackers MSCI EM Latin America ESG Swap was the second-worst performing ETF on our list for the second quarter. The passively managed Xtrackers ETF fell further than the average 13.60% loss on funds in the Latin America equity category. Over the past 12 months, Xtrackers MSCI EM Latin America ESG Swap lost 11.50%, placing it in the 90th percentile within its category and falling further than the 7.62% loss on the average fund.
Xtrackers MSCI EM Latin America ESG Swap takes environmental, social, and governance criteria into consideration. This fund has a Morningstar Medalist Rating of Neutral.
Global X Lithium & Battery Tech UCITS ETF
• Morningstar Rating: N/A
• Expense Ratio: 0.60%
• Morningstar Category: Equity Natural Resources
The third-worst performing ETF in the second quarter was the £25 million Global X Lithium & Battery Tech, which fell 13.70%. The Global X ETF, which is passively managed, underperformed the average 0.73% gain on funds in the equity natural resources category. Over the past 12 months, the ETF fell 38.62% to place in the 99th percentile within its category, underperforming the category's average 1-year return of 6.47%.
Global X Lithium & Battery Tech has a Morningstar Medalist Rating of Bronze. It was launched in December 2021.
iShares MSCI EM Latin America UCITS ETF
• Morningstar Rating: 4 stars
• Expense Ratio: 0.21%
• Morningstar Category: Latin America Equity
The £243 million iShares MSCI EM Latin America was the fourth-worst performing ETF in the second quarter, with a loss of 12.89%. The passively managed iShares ETF performed roughly in line with the average 13.60% loss on funds in the Latin America equity category. Over the past year, the ETF dropped 5.63% to land in the 27th percentile within its category, dropping less than the category's average one-year loss of 7.62%.
The Gold-rated iShares MSCI EM Latin America was launched in October 2007.
iShares MSCI Brazil UCITS ETF USD (Dist)
• Morningstar Rating: 3 stars
• Expense Ratio: 0.74%
• Morningstar Category: Brazil Equity
Fifth-worst was the £183 million iShares MSCI Brazil, which lost 12.63% in the second quarter. The passively managed iShares ETF performed roughly in line with the average 13.09% decline on funds in the Brazil equity category. Over the past year, iShares MSCI Brazil fell 8.44%, finishing in the 47th percentile within its category. It edged out the category's average one-year loss of 10.58%.
iShares MSCI Brazil has a Morningstar Medalist Rating of Bronze. It was launched in November 2005.
Amundi MSCI Indonesia UCITS ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.45%
• Morningstar Category: Indonesia Equity
The sixth-worst performing ETF in the second quarter was the £43 million Amundi MSCI Indonesia, which lost 12.58%. The passively managed Amundi ETF performed roughly in line with the average 11.78% loss on funds in the Indonesia equity category. Over the past 12 months, Amundi MSCI Indonesia fell 11.51%, placing it in the 49th percentile within its category and declining less than the 14.15% loss on the average fund.
Amundi MSCI Indonesia has a Morningstar Medalist Rating of Gold. It was launched in March 2019.
HSBC MSCI Indonesia UCITS ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.50%
• Morningstar Category: Indonesia Equity
With a 12.58% loss, the £80 million HSBC MSCI Indonesia was the seventh-worst performing ETF on our list for the second quarter. The passively managed HSBC ETF performed roughly in line with the average 11.78% loss on funds in the Indonesia equity category. Over the past 12 months, HSBC MSCI Indonesia lost 11.87%, placing it in the 54th percentile within its category and putting it down less than the 14.15% loss on the average fund.
HSBC MSCI Indonesia, launched in March 2011, has a Morningstar Medalist Rating of Silver.
Xtrackers MSCI Indonesia Swap UCITS ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.65%
• Morningstar Category: Indonesia Equity
The eighth-worst performing ETF in the second quarter was the £35 million Xtrackers MSCI Indonesia Swap, which fell 12.57%. The Xtrackers ETF, which is passively managed, performed roughly in line with the average 11.78% loss on funds in the Indonesia equity category. Over the past 12 months, the ETF fell 11.96% to place in the 56th percentile within its category, declining less than the average one-year loss of 14.15%.
Xtrackers MSCI Indonesia Swap, launched in March 2010, has a Morningstar Medalist Rating of Silver.
iShares MSCI Brazil UCITS ETF (DE)
• Morningstar Rating: 4 stars
• Expense Ratio: 0.27%
• Morningstar Category: Brazil Equity
The £2.1 billion iShares MSCI Brazil was the ninth-worst performing ETF in the second quarter, with a decline of 12.48%. The passively managed iShares ETF performed roughly in line with the average 13.09% loss on funds in the Brazil equity category. Over the past year, the ETF dropped 7.66% to land in the 24th percentile, falling less than the category's average one-year loss of 10.58%.
iShares MSCI Brazil has a Morningstar Medalist Rating of Gold. It was launched in October 2018.
Amundi MSCI Brazil UCITS ETF
• Morningstar Rating: 4 stars
• Expense Ratio: 0.65%
• Morningstar Category: Brazil Equity
Tenth-worst was the £126 million Amundi MSCI Brazil, which lost 12.42% in the second quarter. The passively managed Amundi ETF performed roughly in line with the average 13.09% loss on funds in the Brazil equity category for the quarter. Over the past year, Amundi MSCI Brazil fell 7.70%, finishing the 12-month period in the 18th percentile within the Brazil equity category. It edged out the category's average one-year loss of 10.58%.
The Bronze-rated Amundi MSCI Brazil was launched in March 2019.
What Are ETFs?
Exchange-traded funds are investments that trade throughout the day on stock exchanges, much like individual stocks. They differ from traditional mutual funds – known as open-end funds – which can only be bought or sold at a single price each day. Historically, ETFs have tracked indexes, but in recent years, more ETFs have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.
The Best ETFs: More Ideas to Consider
Investors who would like to find more of the top-performing or cheapest ETFs can do the following:
• Read the latest articles on ETFs.
• Use the ETF screener to find the best ETFs according to your specific criteria. You can search for funds based on their fees, Morningstar Medalist Ratings, manager tenures, and more.
• Compare funds and ETFs side by side and easily follow their valuations, ratings, and fees.
This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Sunniva Kolostyak.
This article was generated with the help of automation and reviewed by Morningstar editors.
