ETFs in 2022: The 10 Best and Worst Performing Funds

Bryce: [00:00:23] Welcome to Get Started Investing a podcast where we help you learn to invest in 15 minutes or less. Each episode we take one real world business story and apply a key investing lesson to help you build your investor toolkit. If you're joining us for the very first time, welcome. We strongly recommend that you scroll up and start at episode one. Now, while we are licenced, we are not aware of your personal circumstances. All information on this show is for education and entertainment purposes. Any advice is general advice only. So with that said, let's crack on. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you? 

Alec: [00:01:04] I'm very good. Bryce. Getting towards the end of the year. 

Bryce: [00:01:07] Here we. 

Alec: [00:01:07] We are looking forward to our summer series both on Equity Mates and on Get Started Investing. Before we do get there though, we do want to celebrate the year. That was 2022. The Equity Mates Awards are back for the second year. What do we need to know? 

Bryce: [00:01:23] Nominations are open. We are giving our community the opportunity to celebrate the people, the products and platforms that have helped us as retail investors on our journey. So there are four categories: Product of the Year, Person of the Year, Interview of the Year, Guest of the Year. However, you want to wrap it up. Stock of the Year is a new one and platform of the year. 

Alec: [00:01:42] Link for nominations is in the show notes for this episode. It's all across our socials and on our website. Nominations are open for a couple more days and then we'll have a shortlist for the finalists, which we want the Equity Mates community to vote on. We want to celebrate the voice of the retail investor. We want to amplify it. So make your voice heard. Head to the link in the show notes. But Bryce. Today we are talking about the best and the worst ETFs of the year. 

Bryce: [00:02:08] Performing ETFs. 

Alec: [00:02:10] Performing. 

Bryce: [00:02:10] Performing best and worst performing ETFs of 2022 to wrap out to wrap up the year. And you have no idea what they are. 

Alec: [00:02:21] So the context here is that Bryce has been doing some research and has kept it very quiet. 

Bryce: [00:02:28] Well, I mean, you can log into the doc and find information. So let's start with a bit of context. If we're going to wrap 2022 with the best and worst performing, it's probably worth having a quick discussion around what have been some of the driving forces of the market this year, some of the big thematics that could lead to outperformance or lead to some really poor performance. So I'll set the scene with how the markets have performed. Ren So the ASX 200 here in Australia is actually down 5% year to date, year to date. If you look at it over the 12 month period, I think we're pretty flat, but year to date down 5%. S&P 500 over in America is down 18% and the NASDAQ 100 is still down 30%. So markets across the board are down from the start of this year. Except India, nifty 50. That's the scene from a market point of view but from your side Ren, what have been some of the big thematics driving or that we've been discussing this year at a high level. 

Alec: [00:03:31] So I think no one can escape the interest rate and inflation story that's been a big part of it. The Russian invasion of Ukraine and the flow on effects of that. Higher food prices, higher oil prices has definitely been a big story. China's ongoing COVID zero and the associated impacts on the supply chains, on shipping and everything going on in China domestically. Protests, property market, slow moving collapse. That's been a big story, crypto meltdown, big story, FCX and everything else that came before. Three Arrows, Terra all of that Celsius yeah they are probably my headlines from indicate going oh. 

Bryce: [00:04:17] That's exactly what I had inflation, Covid, I had energy which is a by-product of the Ukraine. I had crypto. And then I think also broadly just the intensity of the tech sell off as well. That is a result of everything above well not crypto and whatnot, but especially inflation and interest rates. 

Alec: [00:04:39] There was definitely a bubble that burst. 

Bryce: [00:04:40] Yeah, absolutely. And, and could still be bursting in some areas. 

Alec: [00:04:45] To other thoughts. Coal has come roaring back in Australia. That's tied to the energy market. But Australia has been quite resilient because of how much stuff we have in the ground that we dig. 

Bryce: [00:04:58] Yes. Go Australia digging stuff. All right, let's. 

Alec: [00:05:01] Start a final thought. You know how people say we're culturally American because like so much of our culture comes from America? My biggest takeaway from this year is that we're financially American as well, because like this sentiment and how bad the markets have been have really bled into our sentiment here at home. Even though, you know, over the last 12 months the ASX 200 is flat. 

Bryce: [00:05:22] So with that in mind, all of those feel like they're a negative detractor on market performance. So then it makes you think, well. What have been the worst performing ETFs? I've got five of the worst performing ETFs over the past 12 months. With everything that we've just spoken about. 

Alec: [00:05:41] Do you want me to guess a specific ETF? 

Bryce: [00:05:43] No, if you can just. If you want to just let me. 

Alec: [00:05:45] Let me bucket the first category that I think will top the list, which is crypto. And so in there, there's those 21 shares, crypto ETFs that folded. There's Betashares, Crypto Innovators, and an ETF. 

Bryce: [00:05:57] Cosmos Guys folders. 

Alec: [00:05:59] Oh, sorry. No, I'm talking about Cosmos. 

Bryce: [00:06:01] Yeah. 

Alec: [00:06:01] Yeah. Betashares crypto innovators. And I think Global X has an Ethereum ETF as well.

Bryce: [00:06:07] Yes, you've absolutely nailed it. The Betashares Crypto Innovators ETF. I think that the ticker is CRYP. It is down 76% year to date.

Alec: [00:06:19] So Betashares worst performing ETF of 2022.

Bryce: [00:06:22] Let's just be careful. But to give you perspective on where that sits, there are 2000 I think 2430 stocks listed on the ASX. This is in the bottom 100 worst performers of not only ETFs but of any listed products on the ASX. 

Alec: [00:06:43] Can I guess what the worst performing stock was just quickly? Yes, digital ones, correct? Yeah.

Bryce: [00:06:49] Down that's down 90 odd percent. It's 0.001%. 

Alec: [00:06:55] The celebration there for context in 2020, Bryce and I did digital wines as one of our summer series stocks, so you can go back and listen to that and we weren't fans of it there. Sometimes it takes a while for your thesis to play out. 

Bryce: [00:07:08] Yes. All right. So to close out the number one crypto Ren number three was also one that I hadn't heard of. It's the trust company limited 3IQ Coinshares Bitcoin feeder ETF. Okay, it's down 46% that came in number three. But that was the only two crypto related ETFs in the worst performing. What else do you think is in there? 

Alec: [00:07:30] I mean leveraged us would be higher so like a gear or a in which ones the US is a gear or 

Alec: [00:07:38] Just would be there. But also I reckon they'd probably be some leverage Nasdaq that I'm just not that's not coming to mind. So I'm going to say it's like a 3X Nasdaq ETF. 

Bryce: [00:07:49] Have you read my notes? 

Alec: [00:07:50] No, I'm in. 

Bryce: [00:07:51] But he's absolutely nailed it. 

Alec: [00:07:53] Really do. And investing podcast. 

Bryce: [00:07:57] He's absolutely nailed it. ETF Security's ultra long NASDAQ 100 hedge fund ETF is down 62%. Ultra long is leveraged and it's leveraged against the Nasdaq, which we know is down 30% year to date. 

Alec: [00:08:13] Yes. So for every 1%, it moves up the ETF, the NASDAQ moves up, the eighth was up 2%, vise versa. On the downside, yes, if it falls 1%, the ETF falls. 2%,. 

Bryce: [00:08:25] It might not be bang on 2%, but it is yes, leveraged. So that's why it is down 62% year to date. So that's the top three. And then there is number five is also the ETF Securities Fang plus ETF, which Is. 

Alec: [00:08:38] So crypto and tech. 

Bryce: [00:08:39] And so Fang Plus is ten technology stocks very concentrated. It is down 35%. 

Alec: [00:08:47] Okay. And then I'm going to have another guest. 

Bryce: [00:08:49] There's one more. Uh, I'll give you a hint. It's a thematic that wasn't widely discussed in what we spoke about there. It's quite a specific thematic. 

Alec: [00:09:01] Or is it like tech. 

Bryce: [00:09:03] Related. 

Alec: [00:09:04] Semiconductors?

Bryce: [00:09:05] Now it's the Betashares global robotics and artificial intelligence, right down 37%.

Alec: [00:09:11] Okay. I wouldn't have picked that.

Bryce: [00:09:14] Yeah, Betashares also had six and seven online retail and e-commerce down 34% and cloud computing down.

Alec: [00:09:20] I mean. You can't really criticise the ETF. 

Bryce: [00:09:22] No, absolutely not.

Alec: [00:09:23] They're not, they're tracking a theme and they're true to that theme. And when the theme goes down, you would expect that ETF to go down. Yeah, yeah. So yeah. Anyway, let's take a quick break and then I want to get to the winners because that's what we're here to celebrate. All right, Bryce So this is your episode. So I guess I'm doing the hosting duties and bringing us back from the break. We've just gone through the five worst performing ETFs on the ASX for 2022. 2022 year to date. Still a few weeks to go. 

Bryce: [00:09:53] Yes, that's true. It could be a massive turnaround. 

Alec: [00:09:55] Massive turnaround. But I want to get to the positive side. Give me the good news. Where are we celebrating? 

Bryce: [00:10:01] I will give you the good news. And just to be clear, if anyone disputes these fair calls, I have used the platform that we use to get our investing information TIKR. You can head to TIKR. If you go to tikr.com/equitymates, you can check it out. Awesome platform. But that's where I've got this information from. 

Alec: [00:10:23] Yeah, it is an awesome platform. Despite Bryce just completely hiding behind it right there. 

Bryce: [00:10:27] The best performing. We're going flip side of everything we just spoke about. What do you think is the number one performing? 

Alec: [00:10:34] Well, it would be like a concentrated coal portfolio incorrect.

Bryce: [00:10:40] It is the ETF securities ultra short. NASDAQ 100. Yeah, up 50%. So for those just joining us, essentially shorting means that you're taking out a position and betting that the price will go down. And if it does, you make money. So this is an ETF that inversely tracks the Nasdaq. Yeah. Yeah. So you make money when the Nasdaq 100 goes down, which it has, this this ETF is up 50%. What else do you reckon is in there, Ren? 

Alec: [00:11:12] I'm going to stick with my first answer, which is I think in the top five there will have to be an energy thematic. Yes. And let me guess, there's like a three times leveraged daily oil tracker. 

Bryce: [00:11:24] It is not. 

Alec: [00:11:24] That. Okay. I was I was excluding that one. I was saying something energy related, but not that one. 

Bryce: [00:11:30] Yeah, this is a broad one. It's the Betashares Global Energy Companies ETF. 

Alec: [00:11:34] Fair enough. But it says again, I think our takeaway before the break was that Betashares are in the low one's a lot. My takeaway now is just that betashares have a lot of. 

Bryce: [00:11:45] Yeah, they have three of the top five.

Alec: [00:11:46] Yes. Yes. 

Bryce: [00:11:49] So Betashares global energy companies ETF is up 41% and I'm just kicking myself. I didn't get on this. Try it. 

Alec: [00:11:56] Did the economy like that that is you got to take emotion. 

Bryce: [00:11:59] It's a learning for me learning from me.

Alec: [00:12:02] You can't chase performance as well but. 

Bryce: [00:12:04] You can if. 

Alec: [00:12:04] Someone's listening to this or if you're reflecting on this and you load up on energy. Now, like that might.

Bryce: [00:12:10] Not. I didn't say that, though. I didn't say. Well, let's be clear about that. So I didn't say I'm kicking myself, so I'm going to jump into it. What would you say? I'm kicking myself that 12 months ago, when it was clear what was going to happen to energy markets, I didn't jump on. 

Alec: [00:12:25] I think the thing that we've learnt as we do this is that themes last longer than we expect. And you know, so many times we've been like damn it with light on something so we don't act on it. But then that theme keeps going, keeps going. And that was the case with energy. Yeah. Anyway, I was sorry. 

Bryce: [00:12:42] Okay, so that was the second. Now there's also the Vaneck Australian Resources ETF, which came in at number two. That's up 20%, three and four though a difficult. 

Alec: [00:12:53] Although the same thing. 

Bryce: [00:12:53] No. 

Alec: [00:12:54] Give me a hint. Are they country specific or like index related or are they thematic?

Bryce: [00:13:00] They're very thematic. One of them is super specific. It came from. 

Alec: [00:13:05] Uranium.

Bryce: [00:13:05] No, it's one that we've spoken about, the idea of it in the somatic, we've spoken about on the dive. We've spoken about it with an expert and we've spoken about it on our show as well. 

Alec: [00:13:21] So you just make me sound like an idiot.

Bryce: [00:13:24] No, I don't think I'd get this one if I was on the other side. And Betashares. It's new to Betashares. I think they released it. 

Alec: [00:13:30] The royalty.

Bryce: [00:13:31] Yes. Number four Betashares global royalties is up 17% and to close out it's an ASG focussed one. It is Betashares solar ETF up 12%. 

Alec: [00:13:42] Oh yeah. Interesting. You know the story with solar. Can I get this done in a minute? About July, all the solar companies were getting whacked and the US lifted tariffs on solar panels from countries like Vietnam and a number of Southeast Asian countries, but not China. So then a lot of the solar exporters started taking Chinese solar panels and routing them through Vietnam and then exporting them to America. It Looks like the first solar chart has just gone thermo since July but the US and now Ray are looking at imposing those tariffs back on Vietnam and stuff the Commerce Department doing a report on it now because of all the Chinese solar panels getting routed through South East Asia. 

Bryce: [00:14:22] there you go. Solar in the minutes and that does bring us to our 15 minutes or so just to close it out. We were right with the themes and the themes have translated into best and worst performing, particularly on the worst side, tech, crypto and consumers and then on. On the plus side, it was shorting tech resources, resources and a better exchange sustainability. And so big question to your point, thematics always last longer than we anticipate. 

Alec: [00:14:51] Can I give one quick takeaway? No Active. No active ETFs. They were all either thematic passive ETFs or index passive ETFs. And what we mean by that is there's no stock picker buying and selling because that's a new trend in the eighth world. But it was all a lot of thematic ETFs, both in the best and the worst, or it was a leveraged index ETF. 

Bryce: [00:15:17] Yes. And most of these would fall in a satellite approach. I would say none of them. You're not saying your core ASX 200 in the S&P 500. 

Alec: [00:15:27] So that's reassuring. Like if you saw an ASX 200 in the best or the worst way, I would be surprised. 

Bryce: [00:15:33] Yeah. 

Alec: [00:15:33] They're the steady grinders of the world. 

Bryce: [00:15:36] Yes. All right. Well, we will. We'll leave it there. We are back next week with a recap of some of the lessons that we have from 2022. Then we're off for a week as we enjoy Christmas. And then our summer series kicks off six episodes back to back that you can enjoy as you are. As you take a bit of a holiday in January and think about your New Year's resolutions for 2023. 

Alec: [00:16:00] Last thing you have to do this year, get your nominations in for the Equity Mates Awards. Make your voice heard. Let's amplify the voice of the retail investor. Get on it, get on it. 

Bryce: [00:16:10] Alright, and we'll leave it there. We'll pick it up next week.