WTF is going on with ETFs?

The great tariff downturn of 2025 has officially made its way to the land of exchange traded funds (ETFs).

The massively popular investment wrappers are still drawing in billions of dollars a week from everyday investors to institutional players alike, but the funds’ performance has stumbled this year.

Just look at the numbers: 90 of last year’s 100 best-performing ETFs are in the red this year, with an average loss of 13%, according to Bloomberg Intelligence data.

Plus, the newly SEC-approved private credit ETFs that were supposed to take 2025 by storm have flopped. Demand for some of these funds, which aim to bring the opaque and illiquid world of private credit to an easy-to-use investment vehicle, is pretty much nonexistent.

In fact, no money whatsoever has been put into Apollo Global and State Street’s SPDR SSGA IG Public & Private Credit ETF since March 4, according to Bloomberg.

The wild west of ETFs

While some ETFs are suffering, the equity downturn has boosted a corner of the fund market that doesn’t exactly look like your grandmother’s portfolio: leveraged and derivative funds.

Shares of the top 50 leveraged ETFs are up about 20% since Liberation Day, Bloomberg reported. These funds tend to be most popular among retail investors, and can offer investors double—or even triple—their returns. The catch? You get the same exponential loss if the stock dips into the red.

The popularity of these risky trading maneuvers in the form of ETFs is likely to spawn even more degenerate investing. Following the approval of spot cryptocurrency ETFs last year, asset managers have already filed with the SEC for funds that track digital assets such as Solana and XRP, as well as even more obscure tokens like $TRUMP and $MELANIA. And in October, the SEC approved options trading tied to cryptocurrency ETFs.—LB