April 2025’s Worst-Performing Stock ETFs: A Closer Look

Introduction

As investment vehicles, exchange-traded funds (ETFs) have become increasingly popular due to their low cost and tax-efficient structures. However, not all ETFs perform equally well, as highlighted in the latest report from Morningstar reviewing the worst-performing stock ETFs of April 2025. Notably, the Direxion HCM Tactical Enhanced US Equity Strategy and the Simplify Volatility Premium ETFs ranked among the underperformers for the month. This article delves into the specifics of the ten worst-performing ETFs, providing insights into their performance metrics and categorization.

Methodology for Screening ETFs

To ascertain the worst-performing stock ETFs for April, Morningstar screened its US equity category, focusing on ETFs trading within the United States. Exchange-traded notes and ETFs with total assets below $100 million were excluded from this analysis. Interestingly, among these underperformers, five belonged to the small value category, which experienced an average drop of 4.39% during the month.

The Ten Worst-Performing ETFs in April 2025

1. Direxion HCM Tactical Enhanced US Equity Strategy ETF (HCMT)

   • Loss: 12.28%
   • Morningstar Rating: N/A
   • Expense Ratio: 1.17%
   • Category: Large Blend
   • This actively managed ETF experienced a significant decline compared to the average loss of 0.81% in the large blend category. Despite its recent inception in June 2023, the fund has struggled with a year-long return of just -3.06%, ranking in the 99th percentile of its category.

2. Simplify Volatility Premium ETF (SVOL)

   • Loss: 7.72%
   • Morningstar Rating: 2 stars
   • Expense Ratio: 0.72%
   • Category: Large Blend
   • Also positioned poorly, this $956 million fund outperformed the average loss in its category but still posted a concerning 12.41% decline over the past year.

3. Schwab US Dividend Equity ETF (SCHD)

   • Loss: 7.55%
   • Morningstar Rating: 4 stars
   • Expense Ratio: 0.06%
   • Category: Large Value
   • Despite its large size at $67.6 billion, this fund fell more than the 3.12% of its peers, although it has delivered a 4.57% return over the past year.

4. First Trust Small Cap Value AlphaDEX Fund (FYT)

   • Loss: 6.72%
   • Morningstar Rating: 1 star
   • Expense Ratio: 0.72%
   • Category: Small Value
   • This ETF underperformed with a one-year drop of 7.59%, placing it poorly in its category.

5. Invesco S&P SmallCap 600 Pure Value ETF (RZV)

   • Loss: 6.48%
   • Morningstar Rating: 2 stars
   • Expense Ratio: 0.35%
   • Category: Small Value
   • The fund has not only lost 6.48% in April but also dropped 5.66% in the preceding year.

6. Invesco S&P Ultra Dividend Revenue ETF (RDIV)

   • Loss: 6.31%
   • Morningstar Rating: 3 stars
   • Expense Ratio: 0.39%
   • Category: Mid-Cap Value
   • This ETF showcased resilience with an 8.74% return year-over-year, despite its April decline.

7. WisdomTree US SmallCap Quality Dividend Growth Fund (DGRS)

   • Loss: 6.31%
   • Morningstar Rating: 3 stars
   • Expense Ratio: 0.38%
   • Category: Small Value
   • Similar to the last, this fund also exhibited poor performance in April, registering a year-long loss of 4.70%.

8. Victoryshares Small Cap Free Cash Flow ETF (SFLO)

   • Loss: 6.25%
   • Morningstar Rating: N/A
   • Expense Ratio: 0.49%
   • Category: Small Value
   • The fund’s year-long performance showed a decline of 9.12%.

9. VictoryShares US Small Cap High Dividend Volatility Weighted ETF (CSB)

   • Loss: 5.98%
   • Morningstar Rating: 3 stars
   • Expense Ratio: 0.35%
   • Category: Small Value
   • Despite its losses, the ETF grew 4.08% over the year.

10. First Trust Mid Cap Value AlphaDEX Fund (FNK)

    • Loss: 5.75%
    • Morningstar Rating: 2 stars
    • Expense Ratio: 0.70%
    • Category: Mid-Cap Value
    • This fund ended the month with notable losses but remained an ongoing player in its category.

Conclusion

Investing in ETFs can offer various opportunities and risks, as this recent performance analysis clearly indicates. While investors often seek to include these funds in their portfolios for their tax efficiencies and index-tracking capabilities, the poor performance of these ten ETFs serves as a reminder to conduct thorough research and consider market conditions. Investors looking for more favorable options can find guidance in other Morningstar reports detailing top-performing ETFs in various categories.