Worst-Performing Stock ETFs

Stock exchange-traded funds, or equity ETFs, are often low-cost, tax-efficient instruments for tracking popular indexes or leveraging experienced manager choices to beat the market. The best ones serve as low-cost building blocks in a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.

In July 2026, the worst-performing stock ETFs included large blend fund Tema Space Innovators ETF NASA and large growth fund Baron First Principles ETF RONB. Data in this article is sourced from Morningstar Direct.

Screening for the Worst-Performing ETFs

When evaluating ETFs, investors should focus on long-term returns across multiple years and market cycles. However, short-term returns can provide valuable information about biases within strategies.

To find the month’s worst-performing stock ETFs, we screened the Morningstar US equity category for those that trade within the United States. We excluded exchange-traded notes and ETFs with less than $100 million in total assets.

The 10 Worst-Performing ETFs for July 2026

1. Tema Space Innovators ETF NASA
2. Baron First Principles ETF RONB
3. ARK Autonomous Technology & Robotics ETF ARKQ
4. TCW Transform Systems ETF PWRD
5. MarketDesk Focused US Momentum ETF FMTM
6. Invesco Dorsey Wright SmallCap Momentum ETF DWAS
7. ERShares Private-Public Crossover ETF XOVR
8. Tema Electrification ETF VOLT
9. Invesco S&P Spin-Off ETF CSD
10. Goldman Sachs Hedge Industry VIP ETF GVIP

Metrics for the Worst-Performing Stock ETFs

Tema Space Innovators ETF

• Morningstar Rating
  : N/A
• Expense Ratio
  : 0.75%
• Morningstar Category
  : Large Blend

The $1.1 billion Tema Space Innovators ETF ranked first for the month, falling 28.69%. The fund, which is actively managed, fell further than the 0.03% loss on the average large blend fund. The fund launched in March 2026 and does not have a one-year record.

The Tema Space Innovators ETF has not yet been awarded a Morningstar Medalist Rating.

Baron First Principles ETF

• Morningstar Rating: N/A
• Expense Ratio: 1.0%
• Morningstar Category: Large Growth

The second-worst-performing ETF in July was the $327.2 million Baron First Principles ETF. The actively managed ETF declined 13.97%, falling further than the average large growth fund, which dropped 3.15%. The fund launched in December 2025 and does not have a one-year record.

The Baron First Principles ETF has not yet been awarded a Morningstar Medalist Rating.

ARK Autonomous Technology & Robotics ETF

• Morningstar Rating: ★★★★
• Expense Ratio: 0.75%
• Morningstar Category: Mid-Cap Growth

The $1.9 billion ARK Autonomous Technology & Robotics ETF ranked third for the month, falling 13.06%. The ARK ETF, which is actively managed, fell further than the 5.32% loss on the average mid-cap growth fund. Over the past year, the fund has risen 18.73%, outperforming the 7.60% gain on funds in its category, placing it in the 13th percentile.

The Bronze-rated ARK Autonomous Technology & Robotics ETF launched in September 2014.

TCW Transform Systems ETF

• Morningstar Rating: ★★★★★
• Expense Ratio: 0.75%
• Morningstar Category: Large Blend

The $1.5 billion TCW Transform Systems ETF was the fourth-worst-performing ETF in July, with a 12.24% loss. The actively managed TCW ETF fell further than the 0.03% loss on the average fund in Morningstar’s large blend category for the month. Over the last year, the fund has gained 14.17%, underperforming the 17.82% gain on funds in its category, placing it in the 78th percentile.

The Neutral-rated TCW Transform Systems ETF launched in February 2022.

MarketDesk Focused US Momentum ETF

• Morningstar Rating: N/A
• Expense Ratio: 0.45%
• Morningstar Category: Large Growth

The $255.8 million MarketDesk Focused US Momentum ETF ranked fifth for the month, falling 11.90%. The MarketDesk ETF, which is actively managed, fell further than the 3.15% loss on the average large growth fund. Over the past year, the fund has risen 41.86%, outperforming the 10.56% gain on funds in its category, placing it in the 1st percentile.

The MarketDesk Focused US Momentum ETF has not yet been awarded a Morningstar Medalist Rating.

Invesco Dorsey Wright SmallCap Momentum ETF

• Morningstar Rating: ★★★
• Expense Ratio: 0.6%
• Morningstar Category: Small Blend

The $427.9 million Invesco Dorsey Wright SmallCap Momentum ETF was the sixth-worst-performing ETF in July, with a 11.86% loss. The passively managed Invesco ETF fell further than the 2.55% loss on the average fund in Morningstar’s small blend category for the month. Over the last year, the fund has gained 32.82%, outperforming the 28.46% gain on funds in its category, placing it in the 35th percentile.

The Neutral-rated Invesco Dorsey Wright SmallCap Momentum ETF launched in July 2012.

ERShares Private-Public Crossover ETF

• Morningstar Rating: ★
• Expense Ratio: 0.75%
• Morningstar Category: Large Growth

The $1.8 billion ERShares Private-Public Crossover ETF ranked seventh for the month, falling 11.53%. The EntrepreneurShares ETF, which is actively managed, fell further than the 3.15% loss on the average large growth fund. Over the past year, the fund has lost 3.30%, underperforming the 10.56% gain on funds in its category, placing it in the 94th percentile.

The Neutral-rated ERShares Private-Public Crossover ETF launched in November 2017.

Tema Electrification ETF

• Morningstar Rating: N/A
• Expense Ratio: 0.75%
• Morningstar Category: Mid-Cap Blend

The $764.5 million Tema Electrification ETF was the eighth-worst-performing ETF in July, with a 11.42% loss. The actively managed Tema ETFs ETF fell further than the 1.50% loss on the average fund in Morningstar’s mid-cap blend category for the month. Over the last year, the fund has gained 36.72%, outperforming the 19.61% gain on funds in its category, placing it in the 6th percentile for the period.

The Neutral-rated Tema Electrification ETF launched in December 2024.

Invesco S&P Spin-Off ETF

• Morningstar Rating: ★★★★
• Expense Ratio: 0.65%
• Morningstar Category: Mid-Cap Blend

The $230.8 million Invesco S&P Spin-Off ETF ranked ninth for the month, falling 11.32%. The Invesco ETF, which is passively managed, fell further than the 1.50% loss on the average mid-cap blend fund. Over the past year, the fund has risen 53.76%, outperforming the 19.61% gain on funds in its category, placing it in the 2nd percentile.

The Neutral-rated Invesco S&P Spin-Off ETF launched in December 2006.

Goldman Sachs Hedge Industry VIP ETF

• Morningstar Rating: ★★★★
• Expense Ratio: 0.45%
• Morningstar Category: Large Growth

The $564.7 million Goldman Sachs Hedge Industry VIP ETF was the tenth-worst-performing ETF in July, with a 10.59% loss. The passively managed Goldman Sachs ETF fell further than the 3.15% loss on the average fund in Morningstar’s large growth category for the month. Over the last year, the fund has gained 19.90%, outperforming the 10.56% gain on funds in its category, placing it in the 16th percentile for the period.

The Bronze-rated Goldman Sachs Hedge Industry VIP ETF launched in November 2016.

How to Find Top ETFs for the Long Term

ETFs are often equated with low-cost indexing. However, the ETF marketplace has grown increasingly complicated. Some ETFs track a very narrow part of the market or pursue specific themes. Some ETFs invest based on a particular factor or a combination of them. And now there are actively managed ETFs.

Use these Morningstar resources to help find the best ETFs for the long term:

• Learn about the types of exchange-traded funds, their costs, and how to invest in them by reading Morningstar’s Guide to ETF Investing.
• Find the highest-rated ETFs across all investment categories in The Best ETFs and How They Fit in Your Portfolio.
• Review Morningstar director of personal finance Christine Benz’s suggested ETF portfolios for those saving for or already in retirement, including Tax-Efficient Retirement-Saver Portfolios for ETF Investors, Tax-Sheltered Retirement-Saver Portfolios for ETF Investors, ESG Tax-Sheltered Retirement-Saver Portfolios for ETF Investors, Tax-Sheltered Retirement-Bucket Portfolios for ETF Investors, and Tax-Sheltered ESG Retirement-Bucket Portfolios for ETF Investors.
• Research ETFs based on your personal selection criteria by using our Morningstar Investor Screener. The tool, which is available to Morningstar Investor members, allows investors to screen ETFs based on various criteria, including asset class, Morningstar Category, Medalist Rating, and fee level.
• Visit Morningstar’s ETF page for the latest articles and videos from our ETF specialists.