The worst ETF performances are from niche products rather than major share markets or asset classes. Active ETFs were the worst performers with 5 returning a negative return this year. The average performance of a non-active ETF was 9.2% vs active of 7.3%.
K2 proved to be the worst performer with both their active strategies delivering negative returns. The K2 Australian Small Cap Fund (KSM) and the K2 Global Equities Fund (KII) returned -14.3% and -11.7% respectively.
Over the past year KSM failed to deliver a positive monthly return in 8 out of the 12 months. Considering the fund had close to 50% of its portfolio in cash, investors should consider why they are paying K2 fees of over 2% p.a.
The BetaShares Agriculture ETF (QAG) lost 11.7% on the back of decelerating global growth and demand for agricultural products, and a weakening Australian Dollar.
The iShares MSCI South Korea Capped Index ETF (IKO), which was down ~10% due to the emerging economy being heavily exposed to world trade which felt the full front of ongoing trade wars between the US and China.
IKO was actually one of the best performing ETFs the previous year (returning 21%), showing how last year’s winners can be in the loser’s column the following year.
BetaShares Global Banks ETF (BNKS) also suffered due to ongoing global economic concerns, a flattening yield curve and weaker earnings growth, sending the ETF down close to 10%.
Bottom 5 ETF performers (as of March 2019)*
|ASX Code||ETF Name||1 Year Total Return|
|KSM||K2 Australian Small Cap Fund (Hedge Fund)||-14.3%|
|QAG||BetaShares Agriculture ETF-Currency Hedged (Synthetic)||-11.7%|
|KII||K2 Global Equities Fund (Hedge Fund)||-11.7%|
|IKO||iShares MSCI South Korea Capped Index ETF||-9.8%|
|BNKS||BetaShares Global Banks ETF – Currency Hedged||-9.7%|
*Not including leveraged ETFs
Stockspot’s philosophy of preferring low cost index funds instead of active ETFs, and focusing on a blend of 5 asset classes as part of our asset allocation framework has helped avoid the worst performing ETFs.
Stockspot has a set of principles that guide how we advise clients and invest their savings. This is our DNA and what sets us apart from other products and investment managers.
See what the Best ETF Performers were over the last year.
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