A decade-long bull market should have been a golden age for fund investors, but a new analysis of Morningstar’s database reveals that fifteen specific funds managed to destroy billions in shareholder value between 2016 and 2025. The study, which measured dollar-weighted value creation by subtracting total inflows and outflows from asset growth, found that speculative strategies and poorly timed investments were the primary culprits behind the losses.
Seven of the worst offenders were inverse equity funds designed to profit when markets fall. ProShares UltraProShort QQQ alone accounted for an estimated $12.5 billion in shareholder losses despite occasionally posting strong years like 2022. The fund’s flows tell a familiar story: investors pulled money out when the market was down and piled back in during rallies, essentially buying high and selling low. This pattern, combined with volatility decay from daily compounding, made these funds a wealth destroyer even for traders who intended to use them only briefly.
Leveraged bets on everything from long-duration Treasuries to natural gas also devastated portfolios, while narrowly focused funds like KraneShares CSI China Internet ETF burned through an estimated $5.2 billion by concentrating on a single battered sector. ARK Innovation ETF became perhaps the most cautionary tale on the list, ranking fourth with roughly $5 billion in losses despite actually posting a positive total return over the full period. The problem was timing: investors flooded into the fund after its meteoric 2020 surge, just before a brutal 67 percent collapse in 2022 left them deeply underwater.
The takeaway for everyday investors is refreshingly simple. While flashy thematic funds and leveraged products grab headlines, the most reliable wealth creators over the past decade have been plain-vanilla offerings from families like Vanguard, Fidelity, and American Funds that make straightforward investments across major market segments. The funds on this list serve as a reminder that even in a generally rising market, speculation and poor timing can turn potential gains into very real losses.