Earlier this year, we wrote about the 15 mutual funds and exchange-traded funds that created the most value for shareholders in dollar terms over the trailing 10-year period ended in 2024. To come up with the list, we ranked Morningstar’s database of U.S.-based mutual funds and ETFs, focusing on those that had the biggest increase in asset size over the 10-year period ended in 2024 after subtracting out total inflows and outflows over the same period. The resulting number reflects how much growth a fund has created from market appreciation in dollars.
This week, we’ll look at this from the opposite perspective, focusing on equity and alternative funds that have lost value for shareholders over the same period. For this list, we used a slightly different calculation based on how much appreciation (or depreciation, in this case) each fund generated in dollar terms over the trailing 10-year period. (For further details, see the “Methodology” discussion at the bottom of this article.)
Two important notes: This study doesn’t include bond ETFs or ETFs in the energy limited-partnership Morningstar Category because their income payouts can complicate how we estimate funds’ cumulative losses. It also focuses on results for long-only shareholders invested directly in each fund; it doesn’t capture changes in wealth for investors who might have invested in derivatives tied to these funds, such options on ETFs, or through short sales of ETFs. In other words, we focus on the assets that these funds charged fees on.
The Results
While the top wealth creators were all large, well-known names from some of the largest categories based on asset size, the wealth destroyers are mainly a motley crew of more-specialized fund categories.
Thirteen of the top 15 funds on our value destroyers list are exchange-traded products. ETFs have many things going for them—including low costs, tax efficiency, and typically a passive investment approach that makes them suitable building blocks for diversified portfolios—but they can have a dark side. For instance, some ETFs focus on narrowly defined sectors or themes, which can make them harder for investors to use successfully and can attract speculators. […]
— Read More: www.morningstar.com
