2020 was wide of surprises for investors, and many of them were unpleasant. From the coronavirus bear market to a massive drop in oil amounts, 2020 offered lots of ways to lose money. Given this situation, it’s unsurprising that many change traded funds (ETFs) also failed to perform well.
Key Takeaways
- From the coronavirus bear market to a colossal drop in oil prices, 2020 offered lots of ways to lose money.
- Leveraged ETFs were responsible for numerous of the largest losses among ETFs in 2020, highlighting their risk.
- Leveraged bulls in oil and gas and leveraged bears in gold mining suffered some of the unruliest losses.
Below, we’ll take a look at those ETFs that were among the worst performers in 2020. Noted the concentration of losses in the energy industry, it made sense to look at some of the other ways to lose money choose than just the largest losses in absolute terms. However, leveraged ETFs linked to natural gas, crude oil, and other labours that were hit hard performed the worst. Other poor performers included inverse ETFs that terse 2020’s biggest winners while also using substantial leverage. It is often said that you can’t lose the aggregate investing in ETFs, but some of these funds came awfully close.
1. Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Interests (GUSH)
Performance in 2020 (as of Nov. 30): -97.74%
The Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares ETF (GUSH) fell by over 97% during the initial 11 months of 2020. This terrible performance can be traced to a collapse in oil prices caused by a supply glut due to a reward war between Saudi Arabia and Russia and a dramatic drop in demand driven by the coronavirus. That pretty much killed when requested for new oil and gas exploration. Unfortunately for GUSH investors, this fund offers 2x leveraged daily exposure to the S&P Oil & Gas Exploration & Production Single out Industry Index. GUSH weighs its index equally to avoid concentration in a small number of significantly-sized companies, but that did not aide much in 2020.
GUSH launched in May 2015 and carried a gross expense ratio of 1.05% as of November 2020.
Leveraged ETFs from time to time take tremendous losses, but they can also make spectacular gains. Since buying and holding may cause such on the loose losses in a single year, most investors only use them for short-term trades.
Leveraged ETFs from time to time take tremendous losses, but they can also make spectacular gains. Since buying and holding may cause such on the loose losses in a single year, most investors only use them for short-term trades.
2. Direxion Daily Junior Gold Miners Directory Bear 2X Shares (JDST)
Performance in 2020 (as of Nov. 30): -94.86%
Gold and oil prices often move together, but that was not exact in 2020, unfortunately for investors in the Direxion Daily Junior Gold Miners Index Bear 2X Shares (JDST). Gold reached new highs as oversights took extraordinary measures to stimulate the economy in response to the coronavirus crisis. When gold does well, lesser gold miners typically do even better. However, JDST uses 2x leverage in the bear direction, which tried catastrophic in 2020.
JDST started out in October 2013 and had a gross expense ratio of 1.10% as of November 2020.
3. Direxion Daily S&P Biotech Display 3X Shares (LABD)
Performance in 2020 (as of Nov. 30): -87.30%
Unsurprisingly, shorting biotechnology stocks in the middle of a pandemic proved to be a unlucky strategy, and the Direxion Daily S&P Biotech Bear 3X Shares (
4. ProShares Short VIX Short-Term Futures ETF (SVXY)
Performance in 2020 (as of Nov. 30): -36.61%
The ProShares Straitened VIX Short-Term Futures ETF (SVXY) allows investors to bet that stock market volatility will go down, so it was a poor actress among ETFs in 2020. This fund offers inverse exposure to an index of VIX future positions, but 2020 saw a big inflate in volatility. The weighted average maturity of the futures is one month. SVXY reaches this goal by providing daily -0.5x direction to the S&P 500 VIX Short-Term Futures Index as a substitute for tracking the VIX index itself, which is not possible.
SVXY launched in October 2011 and transported an expense ratio of 0.95% as of November 2020.