Exchange-traded funds, or ETFs, are often low-cost instruments for investors to track popular indexes or leverage 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 ETFs included China equity - a shares funds KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF KSTR and Invesco Markets II PLC - Invesco ChiNext 50 UCITS ETF CN50. 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 ETFs, we screened those in Morningstar’s equity, allocation, or fixed-income categories that are available in the UK. We excluded ETFs with less than USD 25 million (£18.6 million) in total assets. We also excluded funds that fall into Morningstar’s “trading” categories, as these funds are designed for active traders and are not suitable for long-term investors.
Within our list, two funds fell into the China equity - a shares category, where the average name fell 11.10% in July.
The 10 Worst-Performing ETFs for July 2026
- KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF KSTR
- Invesco Markets II PLC - Invesco ChiNext 50 UCITS ETF CN50
- VanEck Rare Earth and Strategic Metals UCITS ETF REMX
- VanEck Space Innovators UCITS ETF JEDI
- iShares MSCI Global Semiconductors UCITS ETF SEMI
- HSBC NASDAQ Global Semiconductor UCITS ETF HNSS
- iShares AI Innovation Active UCITS ETF IART
- VanEck Semiconductor UCITS ETF SMH
- First Trust Bloomberg Global Semiconductor Supply Chain UCITS ETF CHPS
- Global X AI Semiconductor & Quantum UCITS ETF CHPX
Metrics for the Worst-Performing ETFs
KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF
- : ★★★Morningstar Rating
- : 0.82%Expense Ratio
- : China Equity - A SharesMorningstar Category
The worst-performing ETF in July was the £46.2 million KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF. The passively managed Krane ETF declined 26.99%, falling further than the average China equity - a shares fund, which dropped 11.10%. Over the last year, the fund has climbed 61.36%, outperforming the 25.94% gain on funds in its category, placing it in the fourth percentile for the period.
The KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF has a Negative Morningstar Medalist Rating, meaning that 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.
Invesco Markets II PLC - Invesco ChiNext 50 UCITS ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.49%
- Morningstar Category: China Equity - A Shares
The £210.2 million Invesco Markets II PLC - Invesco ChiNext 50 UCITS ETF ranked second for the month, falling 26.79%. The Invesco ETF, which is passively managed, fell further than the 11.10% loss on the average China equity - a shares fund. Over the past year, the fund has risen 58.04%, outperforming the 25.94% gain on funds in its category, placing it in the sixth percentile for the period.
The Neutral-rated Invesco Markets II PLC - Invesco ChiNext 50 UCITS ETF was launched in June 2024.
VanEck Rare Earth and Strategic Metals UCITS ETF
- Morningstar Rating: ★
- Expense Ratio: 0.59%
- Morningstar Category: Equity Natural Resources
The third worst-performing ETF in July was the £876.8 million VanEck Rare Earth and Strategic Metals UCITS ETF. The passively managed VanEck ETF declined 25.71%, falling further than the average equity natural resources fund, which dropped 1.49%. Over the last year, the fund has climbed 33.03%, underperforming the 42.56% gain on funds in its category, placing it in the 69th percentile for the period.
The Neutral-rated VanEck Rare Earth and Strategic Metals UCITS ETF was launched in September 2021.
VanEck Space Innovators UCITS ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.55%
- Morningstar Category: Equity Industrial Materials
The £1.4 billion VanEck Space Innovators UCITS ETF was the fourth worst-performing ETF in July, with a 22.95% loss. The passively managed VanEck ETF fell further than the 2.37% loss on the average fund in Morningstar’s equity industrial materials category for the month. Over the last year, the fund has gained 57.86%, outperforming the 17.13% gain on funds in its category, placing it in the fourth percentile for the period.
The Negative-rated VanEck Space Innovators UCITS ETF was launched in June 2022.
iShares MSCI Global Semiconductors UCITS ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.35%
- Morningstar Category: Equity Technology
The fifth worst-performing ETF in July was the £4.2 billion iShares MSCI Global Semiconductors UCITS ETF. The passively managed iShares ETF declined 21.89%, falling further than the average equity technology fund, which dropped 10.26%. Over the last year, the fund has climbed 123.71%, outperforming the 29.11% gain on funds in its category, placing it in the second percentile for the period.
The Neutral-rated iShares MSCI Global Semiconductors UCITS ETF was launched in August 2021.
HSBC NASDAQ Global Semiconductor UCITS ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.35%
- Morningstar Category: Equity Technology
The £180.2 million HSBC NASDAQ Global Semiconductor UCITS ETF ranked sixth for the month, falling 21.23%. The HSBC ETF, which is passively managed, fell further than the 10.26% loss on the average equity technology fund. Over the past year, the fund has risen 122.23%, outperforming the 29.11% gain on funds in its category, placing it in the second percentile for the period.
The Neutral-rated HSBC NASDAQ Global Semiconductor UCITS ETF was launched in January 2022.
iShares AI Innovation Active UCITS ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.73%
- Morningstar Category: Equity Technology
The seventh worst-performing ETF in July was the £224.5 million iShares AI Innovation Active UCITS ETF. The actively managed iShares ETF declined 21.19%, falling further than the average equity technology fund, which dropped 10.26%. Over the last year, the fund has climbed 33.77%, outperforming the 29.11% gain on funds in its category, placing it in the 30th percentile for the period.
The Silver-rated iShares AI Innovation Active UCITS ETF was launched in January 2025.
VanEck Semiconductor UCITS ETF
- Morningstar Rating: ★★★★★
- Expense Ratio: 0.35%
- Morningstar Category: Equity Technology
The £6.4 billion VanEck Semiconductor UCITS ETF ranked eighth for the month, falling 20.52%. The VanEck ETF, which is passively managed, fell further than the 10.26% loss on the average equity technology fund. Over the past year, the fund has risen 108.32%, outperforming the 29.11% gain on funds in its category, placing it in the third percentile for the period.
The Neutral-rated VanEck Semiconductor UCITS ETF was launched in December 2020.
First Trust Bloomberg Global Semiconductor Supply Chain UCITS ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.6%
- Morningstar Category: Equity Technology
The £27.9 million First Trust Bloomberg Global Semiconductor Supply Chain UCITS ETF was the ninth worst-performing ETF in July, with a 19.28% loss. The passively managed First Trust ETF fell further than the 10.26% loss on the average fund in Morningstar’s equity technology category for the month. Over the last year, the fund has gained 97.22%, outperforming the 29.11% gain on funds in its category, placing it in the seventh percentile for the period.
The Neutral-rated First Trust Bloomberg Global Semiconductor Supply Chain UCITS ETF was launched in December 2024.
Global X AI Semiconductor & Quantum UCITS ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.35%
- Morningstar Category: Equity Technology
The £47.5 million Global X AI Semiconductor & Quantum UCITS ETF ranked tenth for the month, falling 18.99%. The Global X ETF, which is passively managed, fell further than the 10.26% loss on the average equity technology fund. The fund was first launched in November 2025, and as a result, it does not have a one-year record.
The Global X AI Semiconductor & Quantum UCITS ETF has not yet been awarded a Morningstar Medalist Rating.
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.
The Best ETFs: More Ideas to Consider
- Read the latest articles on ETFs.
- Use the ETF screener 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.
