Typically, investing in an ETF is a significantly safer play than investing in individual companies. With risk spread out across over dozens of different equities, it's rare to see an ETF just eat it for extended periods of time. Rare, but not at all unheard of, unfortunately. While one can mitigate risk with ETFs, one can most definitely not eliminate it. Particularly with more focused ETFs, where a crash in the price of a certain commodity, the economy of a certain country, or the future of a certain industry can mean your ETF gets hammered. But then again, when you're lucky, the same risk can mean your ETF takes off like a soaring eagle.
So, here are some of the equities ETFs that have had utterly dismal years thus far in 2013. Warning, in the even that you invested in a basket of ETFs in January and decided to crawl under a rock for 11 months then decided today to just pop online and see how your investment is doing, the rest of this article could be traumatizing.
A quick glance at the top of the list for worst-performing ETFs of 2013 reveals a pretty clear trend: this was not a good year to be a gold-mining comany. Goodness no. It's not a complicated story, really. The price of gold started the year at about $1,675 a troy ounce. Then it fell. Dipped under $1,250 in late June and again in early July, and currently sits at a little over $1,300 an ounce. And if you don't understand why a 21 percent decline in the value of the commodity a company is mining might seriously hurt that company's potential earnings, maybe investing in mining companies is not for you.
Of course, the plunging price of gold, paired with the expectation that Quantitative Easing, while given a stay of execution, is still probably not long for this world, means that the gold they're mining now could be worth even less by the time it hits the open market (or not, you never know with gold). As a result, this year's worst non-leveraged, non-inverse ETF has been the Global X Gold Explorers ETF ($GLDX) with has posted a loss of just under 55 percent since January. And it's just narrowly beating out the Market Vectors Junior Gold Miners ETF ($GDXJ), which is off 53.26 percent, year-to-date. And from there, the losses aren't as bad, but it's still a bloodbath. The Market Vectors Gold Miners ETF ($GDX) is down 47.59 percent, the iShares MSCI Global Gold Miners EF (RING) is off 46.09 percent, and the Global X Pure Gold Miners ETF ($GGGG) has been pure hell for investors with a 42.18 percent decline.
Okay, this is a pretty similar story to the gold miners. Guess what? Silver's off just under 25 percent in 2013. And guess what else? That has not gone well for silver miners. And the results are pretty predictable. The PureFunds ISE Silver Junior ETF (SILJ) is down 45.27 pecent, the Global X Silver Miners ETF ($SIL) is off 44.59 percent, and they're both doing at least a little better than the iShares MSCI Global Silver Miners ETF (SLVP) has fallen 45.37 percent.
While the rest of the mining industry hasn't been hit as hard, it's still slogging through a pretty rough year. The Dow Jones Emerging Markets Metals & Mining Titans ($EMT) has plunged 31.17 percent, the Global X Copper Miners ETF ($COPT) is down 26.48 percent, the Global X Uranium ETF ($URA) shed 26.58 percent, and the Market Vectors Rare Earth/Strategic Metals ETF ($REMX) lost 24.43 percent.
Emerging Markets Small Caps
Mercifully leaving the mining world, another subset that's been hammered have been emerging market small-cap ETFs. It's been a somewhat tough year for emerging markets as a whole, with the iShares MSCI Emerging Markets ETF (EEM) losing 4.76 percent, but the small-cap companies in those countries have been hit harder than the bigger players. The EGA India Small Cap ETF ($SCIN) is off 27.07 percent, the Market Vectors Brazil Small Cap ETF ($BRF) has lost 24.92 percent, the iShares MSCI All Peru Capped ETF (EPU) plunged 23.93 percent, and the Market Vectors Latin America Small-Cap Index ETF ($LATM) has gone down 18.07 percent.