Amy Arnott, a portfolio strategist for Morningstar Research Services, recently shared her analysis of the fifteen funds that have destroyed the most investor wealth.

Arnott's analysis shows that the worst value-destroyers by Morningstar Category are a hodgepodge of highly volatile and specialized categories. Two of these categories include energy limited partnership and commodities broad basket funds that have fared better so far in 2022 because of soaring energy prices and resurgent inflation.

Arnott's study further revealed that the remaining categories have little investment merit. For example, the study found that trading-inverse equity funds destroyed an estimated $46.9 billion over the trailing 10-year period. Arnott also noted that leveraged and inverse ETFs are intended for short-term bets on market moves, not for long-term investments. Regulators have long warned that losses can compound quickly when the funds are held for long periods, and firms have been fined for improperly recommending those funds to clients, according to ThinkAdvisor.

Arnott concluded that, "Investors have been far better served by the plain-vanilla fund categories that dominated the winner's list, such as large-cap blend, allocation – 50% - 70% percent equity, and foreign large blend."

See the list below for the 15 funds that destroyed the most value for investors over the trailing 10 years through 2021.

Alerian MLP ETF (AMLP)
ProShares UltraPro VIX Short-Term Futures (UVXY)
ProShares UltraPro Short QQQ ETF (SQQQ)
PIMCO Commodity Real Return Strategy A (PCRAX)
ProShares UltraShort S&P500 (SDS)
iShares MSCI Brazil ETF (EWZ)
ProShares Short S&P500 (SH)
ProShares UltraPro Short S&P500 (SPXU)
KraneShares CSI China Internet ETF (KWEB)
PIMCO StocksPLUS Short Fund A (PSSAX)
VelocityShares Daily 2x VIX Short Term ETN (TVIXF)
Direxion Daily Small Cap Bear 3X ETF (TZA)
Velocity Shares 3x LongNAtural Gas ETN (UGAZF)
ProShares UltrsShort 20+ Year Treasury (TBT)
Direxion Daily S&P 500 Bear 3X ETF (SPXS)

Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.