Stock exchange-traded funds, or equity ETFs, are often low-cost, tax-efficient 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 August 2026, the worst-performing stock ETFs included mid-cap blend funds Inspire Growth ETF GLRY and Tema US Manufacturing & Reshoring ETF WELD. Data in this article is sourced from Morningstar Direct.Screening for the Worst-Performing ETFsWhen 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 stock ETFs, we screened the ones in the Morningstar US equity category that trade within the United States. We excluded exchange-traded notes and ETFs with less than $100 million in total assets. Within our list, four funds fell into the small blend category, where the average name fell 0.07% in August.The 10 Worst-Performing ETFs for August 2026Inspire Growth ETF GLRYTema US Manufacturing & Reshoring ETF WELDTema Electrification ETF VOLTInvesco S&P SmallCap Momentum ETF XSMOInvesco S&P SmallCap 600 Pure Growth ETF RZGBahl & Gaynor Small Cap Dividend ETF SCDVThrivent Small Cap Value ETF TSCVBancreek US Large Cap ETF BCUSInvesco S&P SmallCap Low Volatility ETF XSLVInvesco Dorsey Wright SmallCap Momentum ETF DWASMetrics for the Worst-Performing Stock ETFsInspire Growth ETFMorningstar Rating: ★★★Expense Ratio: 0.8%Morningstar Category: Mid-Cap BlendThe worst-performing ETF in August was the $165 million Inspire Growth ETF. The actively managed Inspire ETF declined 5.57%, underperforming the average mid-cap blend fund, which gained 0.94%. Over the last year, the fund has climbed 13.05%, underperforming the 16.85% gain on funds in its category, placing it in the 71st percentile for the period.The Neutral-rated Inspire Growth ETF launched in December 2020.Tema US Manufacturing & Reshoring ETFMorningstar Rating: ★★★★★Expense Ratio: 0.75%Morningstar Category: Mid-Cap BlendThe $272.7 million Tema US Manufacturing & Reshoring ETF was the second-worst-performing ETF in August, with a 4.46% loss. The actively managed ETF lagged the 0.94% gain on the average fund in Morningstar’s mid-cap blend category for the month. Over the last year, the fund has gained 29.55%, outperforming the 16.85% gain on funds in its category, placing it in the 8th percentile for the period.The Neutral-rated Tema US Manufacturing & Reshoring ETF launched in May 2023.Tema Electrification ETFMorningstar Rating: N/AExpense Ratio: 0.75%Morningstar Category: Mid-Cap BlendThe third-worst-performing ETF in August was the $713.9 million Tema Electrification ETF. The actively managed Tema ETFs ETF declined 3.93%, underperforming the average mid-cap blend fund, which gained 0.94%. Over the last year, the fund has climbed 31.82%, outperforming the 16.85% gain on funds in its category, placing it in the 5th percentile for the period.The Neutral-rated Tema Electrification ETF launched in December 2024.Invesco S&P SmallCap Momentum ETFMorningstar Rating: ★★★★★Expense Ratio: 0.36%Morningstar Category: Small BlendThe $2.9 billion Invesco S&P SmallCap Momentum ETF ranked fourth for the month, falling 3.55%. The Invesco ETF, which is passively managed, fell further than the 0.07% loss on the average small blend fund. Over the past year, the fund has risen 15.86%, underperforming the 20.82% gain on funds in its category, placing it in the 78th percentile for the period.The Silver-rated Invesco S&P SmallCap Momentum ETF launched in March 2005.Invesco S&P SmallCap 600 Pure Growth ETFMorningstar Rating: ★★★Expense Ratio: 0.35%Morningstar Category: Small GrowthThe fifth-worst-performing ETF in August was the $127.5 million Invesco S&P SmallCap 600 Pure Growth ETF. The passively managed Invesco ETF declined 2.84%, underperforming the average small growth fund, which gained 0.83%. Over the last year, the fund has climbed 23.87%, outperforming the 18.09% gain on funds in its category, placing it in the 30th percentile for the period.The Bronze-rated Invesco S&P SmallCap 600 Pure Growth ETF launched in March 2006.Bahl & Gaynor Small Cap Dividend ETFMorningstar Rating: N/AExpense Ratio: 0.7%Morningstar Category: Small BlendThe $155.7 million Bahl & Gaynor Small Cap Dividend ETF ranked sixth for the month, falling 2.78%. The Bahl & Gaynor ETF, which is actively managed, fell further than the 0.07% loss on the average small blend fund. Over the past year, the fund has risen 9.35%, underperforming the 20.82% gain on funds in its category, placing it in the 92nd percentile for the period.The Neutral-rated Bahl & Gaynor Small Cap Dividend ETF launched in December 2024.Thrivent Small Cap Value ETFMorningstar Rating: ★★★★Expense Ratio: 0.6%Morningstar Category: Small ValueThe seventh-worst-performing ETF in August was the $177.5 million Thrivent Small Cap Value ETF. The actively managed Thrivent ETF declined 2.74%, underperforming the average small value fund, which was flat. Over the last year, the fund has climbed 18.55%, underperforming the 21.96% gain on funds in its category, placing it in the 71st percentile for the period.The Silver-rated Thrivent Small Cap Value ETF launched in March 2022.Bancreek US Large Cap ETFMorningstar Rating: N/AExpense Ratio: 0.7%Morningstar Category: Large BlendThe $151.6 million Bancreek US Large Cap ETF ranked eighth for the month, falling 2.55%. The Bancreek Capital Advisors ETF, which is actively managed, lagged the 2.39% gain on the average large blend fund. Over the past year, the fund has risen 8.32%, underperforming the 18.00% gain on funds in its category, placing it in the 94th percentile for the period.The Bancreek US Large Cap ETF has a Negative Morningstar Medalist Rating, meaning Morningstar analysts expect it to underperform the average fund in its category over a market cycle.Invesco S&P SmallCap Low Volatility ETFMorningstar Rating: ★★Expense Ratio: 0.25%Morningstar Category: Small BlendThe $248.9 million Invesco S&P SmallCap Low Volatility ETF was the ninth-worst-performing ETF in August, with a 2.53% loss. The passively managed Invesco ETF fell further than the 0.07% loss on the average fund in Morningstar’s small blend category for the month. Over the last year, the fund has gained 12.27%, underperforming the 20.82% gain on funds in its category, placing it in the 87th percentile for the period.The Neutral-rated Invesco S&P SmallCap Low Volatility ETF launched in February 2013.Invesco Dorsey Wright SmallCap Momentum ETFMorningstar Rating: ★★Expense Ratio: 0.6%Morningstar Category: Small BlendThe $408.3 million Invesco Dorsey Wright SmallCap Momentum ETF ranked tenth for the month, falling 2.50%. The Invesco ETF, which is passively managed, fell further than the 0.07% loss on the average small blend fund. Over the past year, the fund has risen 22.75%, outperforming the 20.82% gain on funds in its category, placing it in the 43rd percentile for the period.The Neutral-rated Invesco Dorsey Wright SmallCap Momentum ETF launched in July 2012.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.ETFs offer investors an efficient way to gain exposure to the markets, often with low fees and an ease of buying and selling. They also generally offer higher tax efficiency than open-end funds.How to Find Top ETFs for the Long TermETFs are often equated with low-cost indexing. However, the ETF marketplace has grown increasingly complicated. Some ETFs track a very narrow part of the market or pursue specific themes. Some ETFs invest based on a particular factor or a combination of them. And now there are actively managed ETFs.Use these Morningstar resources to help find the best ETFs for the long term:Learn about the types of exchange-traded funds, their costs, and how to invest in them by reading Morningstar’s Guide to ETF Investing.Find the highest-rated ETFs across all investment categories in The Best ETFs and How They Fit in Your Portfolio.Review Morningstar director of personal finance Christine Benz’s suggested ETF portfolios for those saving for or already in retirement, including Tax-Efficient Retirement-Saver Portfolios for ETF Investors, Tax-Sheltered Retirement-Saver Portfolios for ETF Investors, ESG Tax-Sheltered Retirement-Saver Portfolios for ETF Investors, Tax-Sheltered Retirement-Bucket Portfolios for ETF Investors, and Tax-Sheltered ESG Retirement-Bucket Portfolios for ETF Investors.Research ETFs based on your personal selection criteria by using our Morningstar Investor Screener. The tool, which is available to Morningstar Investor members, allows investors to screen ETFs based on various criteria, including asset class, Morningstar Category, Medalist Rating, and fee level.Visit Morningstar’s ETF page for the latest articles and videos from our ETF specialists.