Worst-Performing Stock ETFs for the Month

Stock exchange-traded funds, or equity ETFs, are often low-cost, tax-efficient instruments for investors to track popular indexes or leverage experienced manager choices to beat the market. The best ones serve as low-cost building blocks in a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.

In May 2024, the worst performers included ARK Innovation ETF ARKK and ProShares S&P MidCap 400 Dividend Aristocrats ETF REGL. Data in this article is sourced from Morningstar Direct.

You can also read about the month’s best-performing ETFs.

Screening for the Worst-Performing ETFs

To find the month’s worst-performing stock ETFs, we screened the Morningstar US Equity category for ones that trade within the United States. We excluded exchange-traded notes and ETFs with less than $100 million in total assets. Among the worst-performing ETFs, three were from the mid-cap growth category, where funds gained 2.48% in May.

The 10 Worst-Performing ETFs for May 2024

1. ARK Innovation ETF ARKK
2. ProShares S&P MidCap 400 Dividend Aristocrats ETF REGL
3. Hennessy Stance ESG ETF STNC
4. Invesco S&P 500 High Beta ETF SPHB
5. Nuveen ESG Mid-Cap Growth ETF NUMG
6. iShares Morningstar Mid-Cap Growth ETF IMCG
7. SRH US Quality ETF SRHQ
8. VictoryShares THB Mid Cap ETF MDCP
9. VictoryShares Dividend Accelerator ETF VSDA
10. Pacer US Small Cap Cash Cows 100 ETF CALF

Metrics for the Worst-Performing Stock ETFs

ARK Innovation ETF

• Morningstar Rating: 1 star
• Expense Ratio: 0.75%
• Morningstar Category: Mid-Cap Growth

The worst-performing ETF in May was the $6.2 billion ARK Innovation ETF, which lost 2.41%. The actively managed ARK ETF underperformed the average 2.48% gain on funds in the mid-cap growth category. Over the past 12 months, the ARK Innovation ETF rose 4.85%, placing it in the 98th percentile within its category and underperforming the 20.35% return on the average fund.

The ARK Innovation ETF has a Negative Morningstar Medalist Rating, meaning our analysts expect it to be one of the worst performers within its category and think it is unlikely to deliver positive returns after fees.

ProShares S&P MidCap 400 Dividend Aristocrats ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.40%
• Morningstar Category: Mid-Cap Blend

With a 0.45% gain, the $1.5 billion ProShares S&P MidCap 400 Dividend Aristocrats ETF was the second-worst-performing ETF on our list for May. The passively managed ProShares ETF underperformed the average 3.49% gain on funds in the mid-cap blend category. Over the past 12 months, the ProShares S&P MidCap 400 Dividend Aristocrats ETF gained 15.93%, placing it in the 91st percentile within its category and underperforming the 23.88% return on the average fund.

The Neutral-rated ProShares S&P MidCap 400 Dividend Aristocrats ETF was launched in February 2015.

Hennessy Stance ESG ETF

• Morningstar Rating: 2 stars
• Expense Ratio: 0.85%
• Morningstar Category: Large Blend

The third-worst-performing ETF in May was the $112 million Hennessy Stance ESG ETF, which rose 0.70%. The Hennessy ETF, which is actively managed, underperformed the average 4.24% gain on funds in the large blend category. Over the past 12 months, the ETF rose 15.95% to place in the 94th percentile within its category, underperforming the category’s average one-year return of 25.88%.

The Hennessy Stance ESG ETF takes environmental, social, and governance criteria into consideration. This fund has a Morningstar Medalist Rating of Negative.

Invesco S&P 500 High Beta ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.25%
• Morningstar Category: Mid-Cap Blend

The $638 million Invesco S&P 500 High Beta ETF was the fourth-worst-performing ETF in May, with a return of 1.50%. The passively managed Invesco ETF performed worse than the average 3.49% gain on funds in the mid-cap blend category. Over the past year, the ETF gained 22.03% to land in the 66th percentile within its category, underperforming the category’s average one-year return of 23.88%.

The Silver-rated Invesco S&P 500 High Beta ETF was launched in May 2011.

Nuveen ESG Mid-Cap Growth ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.31%
• Morningstar Category: Mid-Cap Growth

Fifth-worst was the $381 million Nuveen ESG Mid-Cap Growth ETF, which gained 1.54% in May. The passively managed Nuveen ETF performed roughly in line with the average 2.48% return on funds in the mid-cap growth category. Over the past year, the Nuveen ESG Mid-Cap Growth ETF rose 16.05%, finishing in the 74th percentile within its category. It underperformed the category’s average one-year return of 20.35%.

The Nuveen ESG Mid-Cap Growth ETF has a Morningstar Medalist Rating of Silver. It was launched in December 2016.

iShares Morningstar Mid-Cap Growth ETF

• Morningstar Rating: 4 stars
• Expense Ratio: 0.06%
• Morningstar Category: Mid-Cap Growth

The sixth-worst-performing ETF in May was the $2 billion iShares Morningstar Mid-Cap Growth ETF, which gained 1.57%. The passively managed iShares ETF performed roughly in line with the average 2.48% gain on funds in the mid-cap growth category. Over the past 12 months, the iShares Morningstar Mid-Cap Growth ETF rose 20.53%, placing it in the 42nd percentile within its category and roughly in line with the 20.35% return on the average fund.

The iShares Morningstar Mid-Cap Growth ETF has a Morningstar Medalist Rating of Gold. It was launched in June 2004.

SRH US Quality ETF

• Morningstar Rating: N/A
• Expense Ratio: 0.35%
• Morningstar Category: Mid-Cap Blend

With a 1.59% gain, the $134 million SRH US Quality ETF was the seventh-worst-performing ETF on our list for May. The passively managed SRH Funds ETF underperformed the average 3.49% gain on funds in the mid-cap blend category. Over the past 12 months, the SRH US Quality ETF gained 24.27%, placing it in the 48th percentile within its category and putting it roughly in line with the 23.88% return on the average fund.

The SRH US Quality ETF, launched in October 2022, has a Morningstar Medalist Rating of Silver.

VictoryShares THB Mid Cap ETF

• Morningstar Rating: N/A
• Expense Ratio: 0.55%
• Morningstar Category: Mid-Cap Blend

The eighth-worst-performing ETF in May was the $102 million VictoryShares THB Mid Cap ETF, which rose 1.61%. The Victory Capital ETF, which is actively managed, underperformed the average 3.49% gain on funds in the mid-cap blend category. Over the past 12 months, the ETF rose 18.42% to place in the 84th percentile within its category, underperforming the average one-year return of 23.88%.

The VictoryShares THB Mid Cap ETF, launched in October 2021, has a Morningstar Medalist Rating of Neutral.

VictoryShares Dividend Accelerator ETF

• Morningstar Rating: 2 stars
• Expense Ratio: 0.35%
• Morningstar Category: Large Blend

The $242 million VictoryShares Dividend Accelerator ETF was the ninth-worst-performing ETF in May, with a return of 1.64%. The passively managed Victory Capital ETF performed worse than the average 4.24% gain on funds in the large blend category. Over the past year, the ETF gained 16.08% to land in the 94th percentile, underperforming the category’s average one-year return of 25.88%.

The VictoryShares Dividend Accelerator ETF has a Morningstar Medalist Rating of Neutral. It was launched in April 2017.

Pacer US Small Cap Cash Cows 100 ETF

• Morningstar Rating: 4 stars
• Expense Ratio: 0.59%
• Morningstar Category: Small Value

Tenth-worst was the $9.7 billion Pacer US Small Cap Cash Cows 100 ETF, which gained 1.67% in May. The passively managed Pacer ETF underperformed the average 4.44% return on funds in the small value category for the month. Over the past year, the Pacer US Small Cap Cash Cows 100 ETF rose 28.92%, finishing the period in the 22nd percentile within the small value category. It outperformed the category’s average one-year return of 24.34%.

The Bronze-rated Pacer US Small Cap Cash Cows 100 ETF was launched in June 2017.

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 have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.

ETFs offer investors an efficient way to gain exposure to the markets, often with low fees and ease of buying and selling. They also generally offer higher tax efficiency than open-end funds.

Stock ETFs: More Ideas to Consider

Investors who would like to find more ETF investment ideas can do the following:

• Read Morningstar’s guide to ETF investing.
• Explore the best ETFs and how they fit into your portfolio.
• Review the full list of US Stock ETFs. Funds with at least 70% of assets in US stocks are placed within the US equity categories.
• Use the Morningstar Investor 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.
• Use Morningstar Investor to build a watchlist of the best ETFs and easily follow their valuations, ratings, and fees.
• Watch our ETF video series, hosted by Daniel Sotiroff, for ideas to consider.

This article was compiled by Bella Albrecht and edited by Lauren Solberg.