It's all fun and games to look at the big stock market winners and fantasise about riding it to life changing gains. However, monitoring the stocks and exchange-traded funds (ETFs) that have fallen in recent years can help investors find value.
Earlier this week I covered the ETFs that had outperformed the S&P/ASX 200 Index (ASX: XJO) in the past 12 months.
However it can be difficult to pull the trigger on funds that appear to be at or above fair value.
Looking at pooled investment options that have fallen can be a great way to gain exposure to a sector or themed fund that has struggled in recent times, but has long term upside.
Let's look at some ETFs that have fallen considerably in the last year.
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BetaShares Australian Resources Sector ETF (ASX: QRE)
This fund tracks the performance of an index comprising the largest ASX-listed companies in the resources sector, including BHP, Rio Tinto, Woodside Petroleum and more.
Its largest holding by weight is BHP Group Ltd (ASX: BHP) which makes up 35.5% of the fund.
With thematic ETFs such as this one, you face increased volatility if the sector struggles.
In the last year, the fund has fallen 8.03%.
QRE carries high sector and commodity risk, significant volatility, concentration exposure, liquidity and tracking risks. It can offer strong returns when resource markets rally, but moves sharply on weak demand or global slowdowns.
This fund might suit investors who believe there is upside in the Australian resources and mining sectors despite having a tough past year.
Global X S&P Biotech ETF (ASX: CURE)
This fund seeks to invest in companies that potentially stand to benefit from further advances in the field of genomic science, such as companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics, and biotechnology.
It is made up of roughly 124 holdings, with no individual company representing more than 3.3% of the fund.
Being another specifically themed ETF, this fund can face volatility when the sector faces difficulties.
The fund is down 9.73% over the past year.
The fund may appeal to investors looking for exposure in the health care sector which is underrepresented here in Australia.
Vaneck Vectors Global Clean Energy ETF (ASX: CLNE)
CLNE ETF gives investors a diversified portfolio of 30 of the largest and most liquid companies involved in clean energy production and associated technology and clean energy equipment globally.
The fund includes independent power producers & energy traders, utilities companies and electrical equipment companies.
These companies are largely from the US (34.7% of the portfolio) and New Zealand (12.2%).
Despite this ESG fund focussing on an environmentally positive theme, it has struggled to bring investors returns.
Over the last 12 months the fund is down 3.56% in the last year, and more than 40% since 2021.
However, as the world transitions toward renewables, CLNE ETF offers diversified access to companies essential to this shift.
It may appeal to investors looking for diversified entry into this sector or investors interested in ESG strategies.
