The S&P 500 is lower by nearly 8 percent on a year-to-date basis, indicating it's going to take a lot of work in a short amount of time for the index to close 2018 on an upbeat note.
There are over 2,200 exchange traded funds and exchange traded notes listed in the U.S. As of Dec. 26, nearly 1,900 of those products are down year-to-date. The list of the worst offenders, those ETFs down 50 percent or more, is small and littered with leveraged products.
Trim the parameter to ETFs down 30 percent or more, and the list more than quadruples to over 100 funds, plenty of which are traditional beta products.
So without further ado, here is a look at some of 2018's most egregious offenders from the world of ETFs.
VanEck Vectors Rare Earth/Strategic Metals ETF REMX
Year-To-Date Loss: 55.47 percent
The list of U.S.-listed ETFs down 50 percent or more this year is populated by 25 funds, 24 of which are leveraged. The exception is the VanEck Vectors Rare Earth/Strategic Metals ETF. REMX has not closed above its 200-day moving average since May and the charts indicate little in the way of near-term improvement as the rare earths ETF is down almost 26 percent this month and more than 34 percent in the fourth quarter.
REMX is more than eight years old and when the fund debuted in October 2010, it debuted to a solid thesis. That being demand for rare earths would be boosted by the growing smart phone, electric and hybrid car and military equipment markets.
iShares U.S. Oil Equipment & Services ETF IEZ
YTD Loss: 45.71 percent
Another offender from the world of energy and raw materials. The iShares U.S. Oil Equipment & Services ETF and other oil services are usually highly correlated to oil prices in both directions. That has been the case during oil's recent swoon as highlighted by IEZ's fourth-quarter decline of almost 44 percent.
IEZ, which tracks the Dow Jones U.S. Select Oil Equipment & Services Index, needs Schlumberger NV SLB and Halliburton HAL to get going because that duo combines for almost 28 percent of the fund's weight.
Global X MSCI Argentina ETF ARGT
YTD Loss: 35.37 percent
Things weren't supposed to be this way for the Global X MSCI Argentina ETF and Argentine stocks in 2018. Stocks in South America's second-largest economy rallied last year amid homes the country would receive the coveted frontier-to-emerging markets promotion from index provider MSCI, something that did happen this year.
That wasn't nearly enough to prop up Argentine stocks, however, amid fears of another currency crisis. Argentina's efforts to keep its currency, the peso, above water have led to a jaw-dropping benchmark interest rate of 60 percent.
Along the way, ARGT's year-to-date loss is more than double that of the MSCI Emerging Markets Index. To be fair to ARGT, it's not the only offender among Argentina ETFs. The iShares MSCI Argentina and Global Exposure ETF AGT is down 36 percent this year.
First Trust Natural Gas ETF FCG
YTD Loss: 34.64 percent
The First Trust Natural Gas ETF has a rich tradition of being a dog, even when natural gas prices rise and that's again the case in 2018. Yes, natural gas prices have plunged this month, but it's deeply concerning for the FCG bull thesis, if that thesis still exists, that the United States Natural Gas Fund UNG is up 21 percent this year and FCG is down 34.64 percent.
The ETF has seen 2018 outflows of less than $40 million, but that's good for approximately a third of the assets under management the fund at the start of the year.
Global X Copper Miners ETF COPX
YTD Loss: 32.10 percent
The list of ETFs down 30 percent or more this year is littered with thematic funds, including the Global X Copper Miners ETF. What makes COPX's 2018 struggles alarming is that the copper miners fund's losses have easily overshot those of the largest copper ETN and the lone ETF tracking stocks in Chile, the world's largest copper producer.
The struggles of COPX and other copper-related ETFs can be tied to fears of a global economic slowdown, which market observers believe will ensnare the Chinese economy. The world's second-largest economy reported lower-than-expected third-quarter GDP growth, giving traders another reason to punish copper and the corresponding investment vehicles.
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