The Lowest-Performing ETFs of 2024

Exchange-traded funds, or ETFs, are often low-cost instruments for investors to track popular indexes or leverage experienced manager choices in an attempt to beat the market. The best ones serve as building blocks for a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.

In 2024, the worst performers included Harvest Clean Energy ETF HCLN and BMO Clean Energy Index ETF ZCLN. Data in this article is sourced from Morningstar Direct.

Read here about last year’s best-performing ETFs.

Screening for the Worst-Performing ETFs

To find the year’s worst-performing ETFs, we screened equity, allocation, and fixed-income funds that trade within Canada for those with at least C$10 million in total assets. We narrowed the list to only ETFs with parent pillars for their Morningstar Medalist Ratings of average or above, meaning our analysts believe they’re backed by industry-standard asset management companies. We also excluded exchange-traded notes, known as ETNs.

Among the worst-performing ETFs, two were from the global fixed-income category, where funds gained 7.44% in 2024.

The 10 Worst-Performing ETFs for 2024

1. Harvest Clean Energy ETF HCLN
2. BMO Clean Energy Index ETF ZCLN
3. iShares S&P/TSX Capped REIT Index ETF XRE
4. Harvest Energy Leaders Plus Income ETF HPF
5. BMO Long Federal Bond Index ETF ZFL
6. TD Canadian Long Term Federal Bond ETF TCLB
7. iShares US IG Corporate Bond Index ETF (CAD-Hedged) XIG
8. Invesco Long Term Government Bond Index ETF PGL
9. BMO Long-Term US Treasury Bond Fund ETF ZTL
10. Vanguard US Aggregate Bond Index ETF (CAD-hedged) VBU

Worst-Performing ETFs in Canada

Source: Morningstar Direct.

Metrics for the Worst-Performing ETFs

Harvest Clean Energy ETF

• Morningstar Rating: 1 star
• Expense Ratio: 0.69%
• Morningstar Category: Global Small/Mid Cap Equity

The worst-performing ETF in 2024 was the C$19 million Harvest Clean Energy ETF, which lost 21.33%. The actively managed ETF underperformed the average 23.50% gain on funds in the global small/mid-cap equity category in 2024. Over the past three years, the ETF fell 19.34%, placing it in the 100th percentile within its category and underperforming the 1.69% return on the average fund.

The Harvest Clean Energy ETF takes environmental, social, and governance criteria into consideration. This fund has a Morningstar Medalist Rating of Bronze.

BMO Clean Energy Index ETF

• Morningstar Rating: 1 star
• Expense Ratio: 0.39%
• Morningstar Category: Global Small/Mid Cap Equity

With a 20.06% loss, the C$52 million BMO Clean Energy Index ETF was the second-worst-performing ETF on our list for 2024. The passively managed ETF underperformed the average 23.50% gain on funds in the global small/mid-cap equity category. Over the past three years, the ETF lost 13.63%, placing it in the 90th percentile within its category and underperforming the 1.69% return on the average fund.

The Neutral-rated BMO Clean Energy Index ETF launched in January 2021.

iShares S&P/TSX Capped REIT Index ETF

• Morningstar Rating: 1 star
• Expense Ratio: 0.61%
• Morningstar Category: Real Estate Equity

The third-worst-performing ETF in 2024 was the C$1.4 billion iShares S&P/TSX Capped REIT Index ETF, which fell 2.97%. The iShares ETF, which is passively managed, underperformed the average 19.64% gain on funds in the real estate equity category. Over the past three years, the ETF fell 6.52% to place in the 93rd percentile within its category, falling further than the category’s average loss of 0.48%.

The iShares S&P/TSX Capped REIT Index ETF has a Negative Morningstar Medalist Rating, meaning our analysts expect it to be one of the worst performers within its category and think it is unlikely to deliver positive returns after fees.

Harvest Energy Leaders Plus Income ETF

• Morningstar Rating: 2 stars
• Expense Ratio: 0.99%
• Morningstar Category: Energy Equity

The C$48 million Harvest Energy Leaders Plus Income ETF was the fourth-worst-performing ETF in 2024, with a loss of 2.68%. The actively managed ETF performed worse than the average 15.64% gain on funds in the energy equity category. Over the past three years, the ETF gained 11.32% to land in the 85th percentile within its category, underperforming the category’s average one-year return of 18.73%.

The Bronze-rated Harvest Energy Leaders Plus Income ETF launched in October 2014.

BMO Long Federal Bond Index ETF

• Morningstar Rating: 2 stars
• Expense Ratio: 0.22%
• Morningstar Category: Canadian Long Term Fixed Income

Fifth worst was the C$3.7 billion BMO Long Federal Bond Index ETF, which lost 2.04% in 2024. The passively managed ETF fell short of the average 9.39% return on funds in the Canadian long-term fixed-income category. Over the past three years, the ETF fell 7.23%, finishing in the 86th percentile within its category. It dropped further than the category’s average loss of 3.30%.

The BMO Long Federal Bond Index ETF has a Morningstar Medalist Rating of Neutral. It launched in May 2010.

TD Canadian Long Term Federal Bond ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.23%
• Morningstar Category: Canadian Long Term Fixed Income

The sixth-worst-performing ETF in 2024 was the C$836 million TD Canadian Long Term Federal Bond ETF, which lost 0.83%. The actively managed TD ETF underperformed the average 9.39% gain on funds in the Canadian long-term fixed-income category. Over the past three years, the ETF fell 5.16%, placing it in the 43rd percentile within its category and falling further than the 3.30% loss on the average fund.

The TD Canadian Long Term Federal Bond ETF has a Morningstar Medalist Rating of Neutral. It launched in November 2019.

iShares US IG Corporate Bond Index ETF (CAD-Hedged)

• Morningstar Rating: 1 star
• Expense Ratio: 0.16%
• Morningstar Category: Global Corporate Fixed Income

With a 0.38% loss, the C$378 million iShares US IG Corporate Bond Index ETF (CAD-Hedged) was the seventh-worst-performing ETF on our list for 2024. The passively managed ETF underperformed the average 9.55% gain on funds in the global corporate fixed-income category. Over the past three years, the ETF lost 4.34%, placing it in the 100th percentile within its category and underperforming the 1.50% return on the average fund.

The iShares US IG Corporate Bond Index ETF (CAD-Hedged), launched in January 2010, has a Morningstar Medalist Rating of Neutral.

Invesco Long Term Government Bond Index ETF

• Morningstar Rating: 3 stars
• Expense Ratio: 0.27%
• Morningstar Category: Canadian Long Term Fixed Income

The eighth-worst-performing ETF in 2024 was the C$349 million Invesco Long Term Government Bond Index ETF, which fell 0.33%. The ETF, which is passively managed, underperformed the average 9.39% gain on funds in the Canadian long-term fixed-income category. Over the past three years, the ETF fell 6.04% to place in the 72nd percentile within its category, dropping further than the average one-year loss of 3.30%.

The Invesco Long Term Government Bond Index ETF, launched in June 2011, has a Morningstar Medalist Rating of Neutral.

BMO Long-Term US Treasury Bond Fund ETF

• Morningstar Rating: 1 star
• Expense Ratio: 0.22%
• Morningstar Category: Global Fixed Income

The C$491 million BMO Long-Term US Treasury Bond Fund ETF was the ninth-worst-performing ETF in 2024, with a decline of 0.20%. The passively managed ETF performed worse than the average 7.44% gain on funds in the global fixed-income category. Over the past three years, the ETF dropped 9.64% to land in the 100th percentile, falling further than the category’s average loss of 0.61%.

The BMO Long-Term US Treasury Bond Fund ETF has a Morningstar Medalist Rating of Neutral. It was launched in February 2017.

Vanguard US Aggregate Bond Index ETF (CAD-hedged)

• Morningstar Rating: 2 stars
• Expense Ratio: 0.23%
• Morningstar Category: Global Fixed Income

Tenth worst was the C$1.1 billion Vanguard US Aggregate Bond Index ETF (CAD-hedged), which gained 0.06% in 2024. The passively managed Vanguard ETF underperformed the average 7.44% return on funds in the global fixed-income category. Over the past three years, the ETF fell 3.35%, finishing in the 85th percentile within the global fixed-income category. It fell further than the category’s average one-year loss of 0.61%.

The Silver-rated Vanguard US Aggregate Bond Index ETF (CAD-hedged) launched in June 2014.

What are ETFs?

Exchange-traded funds are investments that trade throughout the day on stock exchanges, much like individual stocks. They differ from traditional mutual funds—known as open-end funds—which can only be bought or sold at a single price each day. Historically, ETFs have tracked indexes, but in recent years, more ETFs have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.

ETFs: More Ideas to Consider

Investors who would like to find more ETF investment ideas can do the following:

• Use the ETF Screener tool to find the best ETFs according to your specific criteria. You can search for funds based on their fees, Morningstar Medalist Ratings, manager tenures, and more.
• Find ideas specific to your needs, or learn more about ETFs, on our ETF Insights page.
• Compare funds and ETFs side by side and easily follow their valuations, ratings, and fees.

This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Nathalie Cordier.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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