The 10 biggest fund flops of the year

Exchange-traded funds hit a big milestone this year, eclipsing the $2 trillion mark in assets, but don't thank new ETFs.

Of the 204 ETFs that launched in 2014, 92 have gained less than $10 million each in assets—that's a pretty high flop ratio. Or put another way, even if you put all 92 of those slow-to-grow ETFs together, they still would not equal the money raked in by the No. 1 new ETF of the year, which took in more than $1 billion all by itself.

Mistake flop
Michael Blann | Getty Images

It wasn't just "no-name" brands that failed. Some pretty high-profile fund companies with marketing armies were among the biggest losers when trotting out their latest concepts. And some existing home-run ETF strategies struck out when trying to extend their swings to additional asset classes.

If only every ETF were as well timed as PureFunds' ISE Cyber Security ETF (HACK), which launched in mid-November and has already attracted $100 million in assets. Thank you, Sony! And Seth Rogen, and North Korea, and Staples, and JPMorgan and Target. (Though it's never wise to focus on short-term performance, HACK has returned 7 percent since its launch on Nov. 13, three times the return of the Nasdaq Composite during the same brief span.)

What didn't work in 2014? Here are the 10 new ETFs that had the hardest time getting the attention of investors. But they might merit your attention yet.

Most neglected new ETFs
(Source: ETF.com, data through Dec. 22)

10. iShares MSCI Emerging Markets Horizon: $2.3 million
9. Global X Guru International: $2.2 million
8. Global X Guru Small Cap: $2 million
7. Renaissance International IPO: $1.97 million
6. SPDR SSgA Risk Aware: $1.96 million
5. WisdomTree Japan Hedged Health Care: $1.46 million
4. WisdomTree Japan Hedged Capital Goods: $1.43 million
3. Falah Russell-IdealRatings US Large Cap: $1.3 million
2. AdvisorShares International Gold: $636,000
1. AdvisorShares Gartman Gold/British Pound: $613,000

The 10 ETFs to make the list above ("be relegated to" might be the better term) speak to a few key points:

1. Big names don't necessarily lead to big bucks in ETF launches.

Among the most interesting failures is the "Boston brahmins" teaming up, SSgA's SPDR ETF family with MFS, a representative of the active manager mutual fund "old guard." How old guard? MFS can even claim to have invented the U.S. mutual fund—its Massachusetts Investor Trust launched in 1924.

"The failure of SSgA Risk Aware fascinates me," said Robert Goldsborough, Morningstar ETF analyst. "They have a great sales force and distribution, and they shouldn't be failing on any launch," he said. "It's just gotten harder for new launches to break through."

Paul Britt, ETF.com analyst, said the risk-on, risk-off approach of SSgA Risk Aware is something investors do every single day. "The concept is not crazy, but for whatever reason, there was no interest."

Read MoreThe latest batch of crazy ETFs—may not be so crazy after all

Goldsborough noted that the SSgA-MFS ETF family—which seemed poised to get in on the popular "smart beta" equity ETF space—was not the first high-profile teaming to fall flat on its face in ETFs. EG Shares recently teamed with TCW for three funds based on JPMorgan indexes, and all three ETFs have already been liquidated, Goldsborough said.

"It's surprising to me that the SSgA-MFS products have gone nowhere," said Todd Rosenbluth, S&P Capital IQ's head of ETF research. "That's two very strong brands." And he noted that SSgA has had success working with a big-name partner in the ETF space, Blackstone Group, with which it launched a senior loan ETF (SRLN) that has more than $560 million in assets.

Granted, there has been a lot more interest in senior loans as investors search for income than in active managers clawing their way into the ETF arena. But Rosenbluth said, "I would have thought two strong brands would have resonated with investors trying to sort through the active/passive debate."

2. Sequels have a history of not delivering, and in ETFs it's no different.

Half of the ETFs to make the list were extensions of popular ETF lines. Renaissance tried to double its IPO pleasure with the International IPO ETF, while Global X attempted to extend its Guru franchise—based on the top stock picks of hedge fund managers—to international as well. But it seems that U.S. investors don't care quite as much about international start-ups hitting it big or hedge fund managers based in the Cayman Islands.

"I get why they went with the line extension, because GURU had done quite well, but people are less interested in non-U.S. gurus," Goldsborough said. (Global X also struck out with the small-cap Guru concept.)

In the case of WisdomTree's finely sliced Japanese hedged equity ETFs, "niche within niche" is a tough sell. "They've gone too far," Goldsborough said.

"I don't think investors have wanted to slice the IPO market or Japan that finely," Rosenbluth said, calling the Renaissance and WisdomTree offerings "niche ETFs yet to find a niche."

3. Timing isn't everything? For now, at least, it is. ...

Sure, iShares, even with all of its ETF might, had a dud with its latest emerging markets offering, but no one was going anywhere near emerging markets in 2014, so not much of a failure story to tell.

In the case of AdvisorShares teaming up with noted investor (and CNBC regular) Dennis Gartman, it simply was not the year to get investors excited about gold, even if the hedged currency element of the ETFs was relevant to the current market environment and, in particular, international central bank monetary easing policies.

"If the call had been right on, you could have seen people piling into these things," ETF.com's Britt said. "It was all about timing."

S&P Capital IQ's Rosenbluth added, "You could not have picked a worse combination for investors sentiment. Everything was weak versus the dollar and commodities out of favor. You have to be a major contrarian, which Gartman is, to get investors to diversify into two out-of-favor investments."

Still betting on a brighter future

This isn't to say some of this year's biggest duds won't yet become popular ETFs—it's happened before, and it will happen again.

Consider the WisdomTree Japan Hedged Equity Fund (DXJ), which was launched in 2006 but didn't become a blockbuster until 2013 when suddenly everyone wanted to play the Abenomics trade. Or Global X Guru. Global X declined to comment, but it's worth noting that GURU didn't gather steam until after its first year had passed.

Taking a look at new ETFs isn't just an exercise in market schadenfreude—it's a chance to uncover some novel investing ideas whose time may yet come, and the backers of these ETFs still express confidence.

AdvisorShares CEO Noah Hamman said via email that his company got the timing half right: The timing was not great for gold, but perfect timing to have that exposure hedged with the yen and euro. He also noted that a gold investor usually has some amount of their portfolio consistently allocated to gold, whether it's going up or down at any given time. And he's happy overall with the past year: AdvisorShares experienced a 30 percent increase in assets for 2014.

Read MoreRookie ETFs that made a big impression on market in 2014

WisdomTree doesn't seem overly concerned about the fate of its Japanese hedged equity sector ETFs, either. The ETF company said in an email statement that currency hedged equity ETFs led its $4.2 billion in net inflows year-to-date through Dec. 19.

Dave Mazza, head of research for the SPDR ETFs and SSgA Funds, said the biggest challenge for the MFS-branded ETFs is lack of track record. "Investors want to see proof," he said, and SSgA remains confident that time will prove these strategies to be successful. In the case of the SSgA Risk Aware ETF, it hasn't helped that the market just keeps going up. "If we were to see a market correction, Risk Aware would see an uptick," Mazza said. And he added that the same might be true for the "smart beta" MFS ETFs.

"Investors get nervous during times of stress and look for managers with long-term track records," Mazza said. Presumably, maybe even if the ETFs those managers launched don't have much in the way of track records yet.