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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 July 2024, the worst performers included Middlefield Innovation Dividend ETF MINN and Guardian i3 US Quality Growth ETF Hedged GIQU. Data in this article is sourced from Morningstar Direct.
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Screening for the Worst-Performing ETFs
To find the month’s worst-performing ETFs, we screened equity, allocation, and fixed income funds that trade within Canada for those that have at least C$10 million in total assets. We narrowed the list to only ETFs with parent pillars for their Morningstar Medalist Ratings of average or above, meaning our analysts believe they’re backed by industry-standard asset management companies. We also excluded exchange traded notes, known as ETNs.
The 10 Worst-Performing ETFs for July 2024:
1. Middlefield Innovation Dividend ETF MINN
2. Guardian i3 US Quality Growth ETF Hedged GIQU
3. iShares S&P/TSX Global Base Metals Index ETF XBM
4. Invesco NASDAQ 100 Index ETF QQC.F
5. iShares NASDAQ 100 Index ETF (CAD-Hedged) XQQ
6. Dynamic Active Global Dividend ETF DXG
7. Dynamic Active US Dividend ETF DXU
8. Guardian i3 Global Quality Growth ETF Unhedged GIQG.B
9. BMO NASDAQ 100 Equity Index ETF ZNQ
10. Global X NASDAQ-100 Index Corporate Class ETF HXQ.U
Metrics for the Worst-Performing ETFs
Middlefield Innovation Dividend ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 1.42%
• Morningstar Category: Global Equity
The worst-performing ETF in July was the C$91 million Middlefield Innovation Dividend ETF, which lost 2.63%. The actively managed Middlefield ETF underperformed the average 1.59% gain on funds in the global equity category in July. Over the past 12 months, the Middlefield Innovation Dividend ETF rose 42.76%, placing it in the 1st percentile within its category and outperforming the 18.88% return on the average fund.
The Middlefield Innovation Dividend ETF, launched in March 2018, has a Morningstar Medalist Rating of Bronze.
Guardian i3 US Quality Growth ETF Hedged
• Morningstar Rating: 1 star
• Expense Ratio: 0.71%
• Morningstar Category: US Equity
With a 2.36% loss, the C$16 million Guardian i3 US Quality Growth ETF Hedged was the second-worst performing ETF on our list for July. The actively managed Guardian Capital ETF underperformed the average 3.07% gain on funds in the US equity category. Over the past 12 months, the Guardian i3 US Quality Growth ETF Hedged gained 27.56%, placing it in the 25th percentile within its category and outperforming the 24.05% return on the average fund.
The Neutral-rated Guardian i3 US Quality Growth ETF Hedged was launched in August 2020.
iShares S&P/TSX Global Base Metals Index ETF
• Morningstar Rating: 3 stars
• Expense Ratio: 0.60%
• Morningstar Category: Natural Resources Equity
The third-worst performing ETF in July was the C$254 million iShares S&P/TSX Global Base Metals Index ETF, which fell 2.23%. The iShares ETF, which is passively managed, declined less than the average 5.03% loss on funds in the natural resources equity category. Over the past 12 months, the ETF fell 0.58% to place in the 72nd percentile within its category, underperforming the category’s average 1-year return of 8.96%.
The iShares S&P/TSX Global Base Metals Index ETF has a Morningstar Medalist Rating of Gold. It was launched in April 2011.
Invesco NASDAQ 100 Index ETF
• Morningstar Rating: 4 stars
• Expense Ratio: 0.20%
• Morningstar Category: US Equity
The C$1.2 billion Invesco NASDAQ 100 Index ETF was the fourth-worst performing ETF in July, with a loss of 1.79%. The passively managed Invesco ETF performed worse than the average 3.07% gain on funds in the US equity category. Over the past year, the ETF gained 22.11% to land in the 55th percentile within its category, underperforming the category’s average one-year return of 24.05%.
The Neutral-rated Invesco NASDAQ 100 Index ETF was launched in June 2011.
iShares NASDAQ 100 Index ETF (CAD-Hedged)
• Morningstar Rating: 4 stars
• Expense Ratio: 0.39%
• Morningstar Category: US Equity
Fifth-worst was the C$2.8 billion iShares NASDAQ 100 Index ETF (CAD-Hedged), which lost 1.72% in July. The passively managed iShares ETF fell short of the average 3.07% return on funds in the US equity category. Over the past year, the iShares NASDAQ 100 Index ETF (CAD-Hedged) rose 21.97%, finishing in the 56th percentile within its category. It underperformed the category’s average one-year return of 24.05%.
The iShares NASDAQ 100 Index ETF (CAD-Hedged) has a Morningstar Medalist Rating of Silver. It was launched in May 2011.
Dynamic Active Global Dividend ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.82%
• Morningstar Category: Global Equity
The sixth-worst performing ETF in July was the C$627 million Dynamic Active Global Dividend ETF, which lost 1.72%. The actively managed Dynamic Funds ETF underperformed the average 1.59% gain on funds in the global equity category. Over the past 12 months, the Dynamic Active Global Dividend ETF rose 33.64%, placing it in the 2nd percentile within its category and outperforming the 18.88% return on the average fund.
The Dynamic Active Global Dividend ETF has a Morningstar Medalist Rating of Gold. It was launched in January 2017.
Dynamic Active US Dividend ETF
• Morningstar Rating: 3 stars
• Expense Ratio: 0.81%
• Morningstar Category: US Equity
With a 1.37% loss, the C$125 million Dynamic Active US Dividend ETF was the seventh-worst performing ETF on our list for July. The actively managed Dynamic Funds ETF underperformed the average 3.07% gain on funds in the US equity category. Over the past 12 months, the Dynamic Active US Dividend ETF gained 31.98%, placing it in the 7th percentile within its category and outperforming the 24.05% return on the average fund.
The Dynamic Active US Dividend ETF, launched in January 2017, has a Morningstar Medalist Rating of Gold.
Guardian i3 Global Quality Growth ETF Unhedged
• Morningstar Rating: 4 stars
• Expense Ratio: 0.81%
• Morningstar Category: Global Equity
The eighth-worst performing ETF in July was the C$30 million Guardian i3 Global Quality Growth ETF Unhedged, which fell 1.15%. The Guardian Capital ETF, which is actively managed, underperformed the average 1.59% gain on funds in the global equity category. Over the past 12 months, the ETF rose 32.12% to place in the 3rd percentile within its category, outperforming the average one-year return of 18.88%.
The Guardian i3 Global Quality Growth ETF Unhedged, launched in August 2020, has a Morningstar Medalist Rating of Neutral.
BMO NASDAQ 100 Equity Index ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.39%
• Morningstar Category: US Equity
The C$949 million BMO NASDAQ 100 Equity Index ETF was the ninth-worst performing ETF in July, with a decline of 0.72%. The passively managed BMO ETF performed worse than the average 3.07% gain on funds in the US equity category. Over the past year, the ETF gained 29.11% to land in the 15th percentile, outperforming the category’s average one-year return of 24.05%.
The BMO NASDAQ 100 Equity Index ETF has a Morningstar Medalist Rating of Neutral. It was launched in February 2019.
Global X NASDAQ-100 Index Corporate Class ETF
• Morningstar Rating: 5 stars
• Expense Ratio: 0.28%
• Morningstar Category: US Equity
Tenth-worst was the C$799 million Global X NASDAQ-100 Index Corporate Class ETF, which lost 0.67% in July. The passively managed Global X ETF underperformed the average 3.07% return on funds in the US equity category for the month. Over the past year, the Global X NASDAQ-100 Index Corporate Class ETF rose 29.46%, finishing the 12-month period in the 13th percentile within the US equity category. It outperformed the category’s average one-year return of 24.05%.
The Neutral-rated Global X NASDAQ-100 Index Corporate Class ETF was launched in April 2016.
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.
ETFs: More Ideas to Consider
Investors who would like to find more ETF investment ideas can do the following:
• Use the ETF Screener tool 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.
• Find ideas specific to your needs, or learn more about ETFs, on our ETF Insights page.
• 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 Andrew Willis.
This article was generated with the help of automation and reviewed by Morningstar editors.
