The financial industry’s evolution from mutual funds to exchange-traded-funds (ETFs) has been a huge victory for investors. In the old days, investors typically had to pay a load (sales fee) simply to buy a mutual fund. These were often as high as 6%. That meant that when an investor put $10,000 into a fund, they lost $600 of it immediately just in commission. ETFs, by contrast, are essentially free to buy and usually have low ongoing fees as well. Not all index funds are low fee, however.

In fact, investors may have given these products a bit too much latitude. While these index funds have been great on the whole, there are a few bad apples to be careful of. These seven index funds carry high expense ratios and often questionable investment styles or portfolio compositions:

• iPath S&P 500 VIX Short-Term Futures ETN (BATS:VXX)
• InfraCap MLP ETF (NYSEARCA:AMZA)
• Virtus Infracap U.S. Preferred Stock ETF (NYSEARCA:PFFA)
• Global X MSCI Argentina (NYSEARCA:ARGT)
• iShares MSCI Peru ETF (NYSEARCA:EPU)
• Breakwave Dry Bulk Shipping ETF (NYSEARCA:BDRY)
• Teucrium Corn Fund (NYSEARCA:CORN)

iPath S&P 500 VIX Short-Term Futures ETN (VXX)

The iPath VIX Short-Term Futures exchange-traded-note (ETN) product follows the volatility index (VIX). In theory, this allows folks to hedge against market risk by profiting when market volatility rises.

In practice, however, it hasn’t worked out well. The volatility ETFs and ETNs have done so poorly that many have been delisted after losing 99%+ of their capital. VXX itself was closed and then reopened a few years ago after many years of dreadful performance.

VXX stock did spike with the coronavirus pandemic, as you’d expect. However, it gave back all those gains and much, much more. In fact, VXX is down 75% since March 31, 2020. The way the volatility products are constructed, they suffer from volatility drag, hitting performance even more than you might expect. A bulky 0.9% annual expense ratio adds to VXX’s long-term woes. Market timing is a difficult game, and especially so with a flawed product like VXX. You can insure your portfolio against downside with better options than this.

InfraCap MLP ETF (AMZA)

The InfraCap MLP ETF has become infamous in high-yield investing circles. AMZA stock uses leverage on high-yielding master limited partnerships (MLPs). Throw leverage on top of stocks that already often yield 10% or more and you appear to have a huge dividend. AMZA stock has yielded 20% a year or more on several occasions since 2016.

However, that income comes with a few strings attached. For one, the quality of the underlying MLPs is quite low. They’re, by and large, heavily indebted energy companies who have seen their share prices plunge in recent years. A longtime top AMZA holding, Energy Transfer (NYSE:ET) has fallen from $20 to $7 in recent years, for example.

The other issue with AMZA is specific to this fund, however. The fund managers charge huge fees — currently around 2% per year. That might be okay if AMZA added alpha in its sector. However, the fund managers have made numerous hedging plays, such as shorting energy futures, that have cost even more performance.

All told, AMZA’s stock price has fallen (on a split-adjusted basis) from $250 in 2014 to just $23 now. The dividend yield hardly makes up for that terrible performance. As such, there’s no way investors should be paying such a huge management fee for such dour results.

Virtus InfraCap U.S. Preferred Stock ETF (PFFA)

From the same InfraCap family, we have its U.S. Preferred Stock ETF. This one hasn’t been an abject disaster in terms of price performance, so it beats AMZA in that regard. However, similar to AMZA, it comes with a bulky expense ratio.

But let’s back up a second. Why a preferred stock index ETF? Preferred stocks are an alternative to bonds for higher yield. Preferred shares pay a fixed interest rate, often in the 5-7% range, making them a source of high income in a low interest rate world. However, the upside on preferred shares is pretty limited. Preferred stocks are callable (meaning the issuer can redeem them if it chooses) for a fixed price (usually $25 per share). So preferreds naturally don’t trade much above that price, capping gains beyond the interest payments.

Here’s the problem with PFFA. It has a expense ratio of 1.5% per year! That’s a massive sum out of an asset class where you should only expect 5-7% annual returns as is. The expenses could easily eat up 25% of the potential annual gains here. Instead, consider much cheaper alternatives such as the iShares Preferred and Income Securities ETF (NASDAQ:PFF), which has a management fee of just 0.5%. You might be surprised, but 1% a year makes a huge difference. That’s especially true in a fund category where returns are not particularly high to begin with.

Global X MSCI Argentina (ARGT)

One trap that often trips up funds is that they are too niche. ETFs offer investors a wide variety of specific investment themes. However, sometimes these end up focused on such a narrow topic that it’s hard to build a quality fund. Such is the case with Global X’s Argentina ETF.

There’s a lot of country ETFs out there. Many of them are quality investment products. However, some are not. For Argentina, seemingly there simply aren’t enough high-quality Argentine companies to round out a full ETF. So what do you do when you don’t have enough components for an ETF? You take huge positions in a few companies, along with including companies from other countries.

Consider ARGT. Its top five holdings make up fully 54% of the fund’s assets. E-commerce leader MercadoLibre (NASDAQ:MELI) alone is 19% of the Argentina ETF. Globant (NYSE:GLOB) is another 19%. Globant, for those unfamiliar, is a software company. Thus, nearly 40% of the Argentina ETF is in multinational tech companies that are only modestly tied to the fortunes of Argentina’s economy.

After that, you have Compañía de las Cervecerías Unidas (NYSE:CCU) and Embotelladora Andina (NYSE:AKO.B) as top holdings in the Argentina ETF. These are a leading grocery store group, beer brewer and soft drink producer, respectively. Problem is, they’re all based out of Chile, not Argentina.

Needless to say, if you’re buying this ETF expecting it to follow the fortunes of Argentina’s economy or politics, you might not get what you’re expecting. ARGT charges a 0.6% management fee. That’s pretty steep when you can recreate a large portion of the portfolio simply by buying MELI and GLOB stocks if you wish.

iShares MSCI All Peru Capped ETF (EPU)

Like Argentina, this is another country ETF that has underwhelming diversification. Peru’s economy is based on copper, with the base metal making up roughly 30% of the country’s total exports based on 2019 data. And that was before the price of copper doubled subsequently; between copper and precious metals, mining will likely account for more than half of Peru’s exports going forward. So it makes sense why investors are giving Peru a fresh look.

EPU may not be the best choice, however. EPU’s top two holdings make up 42% of the fund’s holdings. Those top holdings are a bank, Credicorp (NYSE:BAP) and a mining company, Southern Copper (NYSE:SCCO). After those two, you have a lot more mining companies. Six of the top 10 EPU holdings are mining firms or companies that distribute goods to the mining sector.

If you’re looking to profit from the rising Peruvian consumer and middle class, you’re not going to get much of that in this ETF. Like with Argentina, you can avoid the 0.59% management fee for EPU and get similar results simply by buying BAP stock and SCCO stock if you want. That gets you 40% of the ETF’s holdings in just two transactions with no management fee. Unless you really like mining companies, it’s easy to take a pass on the Peru ETF.

Breakwave Dry Bulk Shipping ETF (BDRY)

My next pick for this list comes with an alarming 3.5% annual expense ratio. Invest $10,000 in it, and within three years, you’ll have paid roughly $1,000 of that in expenses. Not ideal. But is the dry bulk index worth the huge expense? First off, what are we even discussing? From the sponsor, we find:

“The Breakwave Dry Bulk Shipping ETF (BDRY™) is an exchange-traded product designed to reflect the daily price movements of the near-dated dry bulk freight futures. BDRY™ offers investors unlevered exposure to dry bulk freight without the need for a futures account.”

To put that in English, the fund is betting on changes in futures contracts for the rates of shipping stuff around the world. This ETF offers speculators the chance to ride the shipping waves without buying futures themselves. However, there’s little reason for most investors to worry about dry bulk shipping rates, let alone buy an expensive ETF to speculate on them. This is a specialized field where most outside investors will be operating at a distinct information disadvantage.

Moreover, unlike most indexes such as the S&P 500 or Nasdaq, there’s little reason for dry bulk rates to appreciate over time. It’s a highly mean-reverting index. While the price of dry bulk shipping spikes occasionally, it usually settles back at where it started once the short-term event ends. Meanwhile, all the costs associated with rolling its futures contracts will likely trim whatever modest alpha might have been there in the first place. Not everything in the world needs an ETF, and I’d argue dry bulk shipping is one such case.

Teucrium Corn Fund (CORN)

This is another one similar to the Dry Bulk Shipping ETF. Fund sponsor Teucrium offers an ETF that tracks the price of corn. In theory, this might seem like a decent way to hedge against inflation and benefit from the world’s rising population.

The problem is that it’s not easy to store corn for long periods. You can’t just buy it and then stick it in a vault forever, as you’d do with gold or silver. As such, a corn fund has to constantly buy and sell corn futures contracts rather than just hoarding the actual grain.

All this corn futures trading causes substantial friction. The price of corn futures has fallen 25% over the past 10 years. However, if you bought the Teucrium Corn ETF in April of 2011, you’d now be down 60% by comparison. This sort of slippage is ruinous, as corn simply doesn’t go up quickly enough to offset such expense. Corn cost $3 per bushel back in 1948. The price has less than doubled in the subsequent 73 years. Needless to say, this is not a solid inflation hedge. Throw in huge slippage and a high management fee, and the Corn ETF is a bad way to bet on higher commodity prices.

On the date of publication, Ian Bezek held a long position in CCU, BAP and AKO.B stock.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.