Thursday, April 28th, 2016

What Is Your Sell Criteria?

By Ron Rowland
8:37 am CDT

Every stock market cycle has its darlings—the stocks investors believe can do no wrong.  I remember 1999 all too well.  Microsoft (MSFT) and Dell (private since 2013) were two of the stocks that investors fell in love with during that era.  However, those investors soon learned that loving a stock could have nasty consequences, because it is difficult to part with something you love.

These stocks, and many others, were devastated in the ensuing months and years.  The “unattached” owners of these stocks disposed of their holdings as prices dropped or earnings failed to materialize.  These disciplined investors had pre-defined criteria to alert them it was time to sell.  The stock lovers lacked such discipline and went through various stages of denial, justification, rationalization and other emotions as they watched their beloved stocks sink lower and lower.

In the current market cycle, it’s hard to imagine a stock that is more loved than Apple (AAPL).  Back in 1999, it was despised, and many analysts were not convinced the company would even survive, let alone flourish.  Fast forward to 2012, it became the most valuable company in history in terms of market capitalization, surpassing Microsoft’s December 30, 1999 valuation.  Yesterday, it was still the largest component of the S&P 500 Index, accounting for 3.17% of the Index.

However, Apple’s stock price peaked 14 months ago at $133.  On Tuesday, it closed below $105, and yesrterday it closed below $98.  That is more than 26% drop in 14 months.  Apple released its quarterly earnings report, which is the reason for the new down draft.  Earnings fell short of expectations by coming in at $1.90 per share, which was 10 cents below expectations and 18.5% below a year ago.  Revenue fell by 13%, marking its first revenue decline in 13 years, and the first ever since the stock achieved “darling” status.  Apple also reported that iPhone sales fell for the first time in history.

Now might be a good time to ask yourself if you are an investor or lover of Apple stock.  It is already in a bear market, so if you haven’t sold it yet, then when will you sell it?  You didn’t sell when it dropped 15%, and you didn’t sell when it dropped 25%.  What will it take?  A 50% drop?  A 70% drop?  Two quarters of declining revenue?

Many people are selling their Apple shares, perhaps because it posted its first revenue decline in 13 years or perhaps because its price dropped below $100.  Then again, an equal number of shares are being bought.  It’s a high volume day for Apple.  I’m not predicting further demise for Apple stock, as this could turn out to be a great buying opportunity.  What I’m suggesting is that you objectively consider your criteria for selling Apple or any other stock.  Be sure to have an exit plan, preferably before you buy.

As expected, the Federal Reserve took no action at the conclusion of its FOMC meeting yesterday.  Analysts are parsing the contents of the press release, so you can expect to see some forecast revisions for when the Fed will make its next move.

Sectors:  Signs of a significant sector rotation are visible again this week.  The smokestack group of sectors, discussed here a week ago, are firmly in the leadership role again today.  Energy and Materials swapped the top two positions, with Energy now completing its climb from last to first in the span of three weeks.  Materials, now in second, has been no lower than fourth place for eight consecutive weeks.  The Industrials sector rounds out the trio by maintaining its third-place position.  Financials was a big upside mover, jumping from eighth to fourth.  Health Care also climbed four spots higher to grab sixth.  These ascents forced the higher yielding sectors lower with Telecom sliding one place to fifth, Real Estate dropping to eighth, and Utilities plunging to tenth.  Technology lost momentum, but it was able to hang on to its ninth-place ranking.  Consumer Staples is now the weakest sector and sits on the bottom for a second week.

Styles:  Small-Cap Value assumed the lead, ending Mid-Cap Value’s seven-week stint at the top.  Small-Cap Value has been the most volatile of the style categories, bouncing between second and sixth during these past seven weeks.  Mid-Cap Value did not fall far, easing just one spot lower to second, while remaining prepared to resume the lead if Small-Cap Value’s volatility returns.  Micro-Cap was the big upside mover, climbing three spots to third after being in last place just two weeks ago.  Mid-Cap Blend fell four places to seventh, becoming the largest casualty of the relative strength rankings.  However, it only gave up two momentum points in the process, while Mega-Cap lost six points and held its decline to a single spot.  Large-Cap Growth is on the bottom for a second week.

Global:  The upper tier of the global rankings remains very steady with Latin America and Canada supplying the one-two punch for nine consecutive weeks.  Pacific ex-Japan and Emerging Markets have not been as consistent as the top two, but the third and fourth place duo have held those spots the majority of these nine weeks.  The top three are all resource-rich regions, and they are benefiting from strength in the Materials and Energy sectors.  Fifth through tenth-place categories are compressed, allowing Japan to jump four places higher without much effort.  A week ago, China was above this grouping, but it plunged six places lower and now sits at the bottom.

Disclosure:  Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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Thursday, April 21st, 2016

Sector Rotation: Defensive to Smokestack

By Ron Rowland
10:24 am CDT

Sector analysis often reveals insightful information about the state of the economy, or at least investors’ perception of the economy.  However, it can often be confusing because the stock-market cycle is out of phase with the economic cycle.  We’ve all been told that the stock market is a discounting mechanism, but that does not mean it prices stocks at a discount to their true value.  No, in this context, discounting means the market is already considering future economic events.

If you enter “sectors and economic cycles” into your favorite search engine, you will see numerous graphic examples of the economic cycle overlaid with the stock-market cycle.  The charts segment the stock-market cycle into sectors and groups, showing which ones typically perform best during various phases of the economic cycle.  They make it all look so easy and academic.

While visually appealing, there are many obstacles with using these charts to time your sector buy and sell signals.  The first problem is obvious to any investor that has been through a complete cycle: the stock market and the economy never move as smoothly and predictably as illustrated.  Another hurdle is that many of these charts do not agree with each other.  In other words, many of the actors are reading from different scripts.

There are also many instances of sectors going off-script, going rogue, or otherwise not behaving as expected.  Early 2016 was a good example.  The market was declining, and the script called for “defensive” sectors to take the leadership.  Historically, that would mean Utilities, Consumer Staples, and Health Care would be the top performers.  However, Health Care was at the other end of the performance spectrum this time around.

Another major obstacle is the discounting nature of the market as discussed above.  Because of this, an investor cannot determine which sectors to buy and sell based on the state of the economy, because the economy will not be in that state for another six to 12 months.  You can try to predict where the economy will be in the future, but keep in mind that many professional economists have a poor record of doing that.

Instead of using these charts to let the state of the economy generate sector buy and sell signals, the typical usage has been just the opposite: using current sector strength and weakness help decipher where we are in the economic cycle.  It’s the classic chicken-and-egg conundrum, but when it comes to this subject matter, sector rotation usually occurs first.

I tend to have my own sector groupings and definitions.  You’ve probably heard me refer to the “defensive trio” of Utilities, Consumer Staples, and Health Care many times.  These three sectors typically produce the best relative strength during times of market weakness.  As shown above, this is not always the case.  Additionally, the high-dividend yields found in the Real Estate and Telecom sectors often allow them to be included in the defensive group.

“High growth” is another mode or sector grouping I use.  As you probably expect, Technology is the primary member of this group.  Strength in Consumer Discretionary is also usually evident when the market is in this mode.  The late 1990s was a great example, and the explosive Technology sector growth of that period produced outsized gains for Health Care and Telecommunications—two sectors mentioned above as belonging to the defensive group.

This week, our intermediate-term sector rankings suggest the market is now in what I refer to as “smokestack mode.”  Basic Materials, Energy, and Industrials are the sectors comprising this group.  Analysts often refer to these three as the sectors representing the old economy, the manufacturing economy, or the smokestack economy.  They represent the basic ingredients of a growing industrial base including raw materials, fuel, transportation, and manufacturing.  Analysts have suggested that the oil production boom in the U.S. of the past few years could lead to a resurgence of U.S. manufacturing strength, and perhaps we are now seeing the early signs of that.

If the market is indeed shifting from defensive to smokestack mode, then it is one more reason not to let sector and economic-cycle charts guide your investments.  Most of them say that strength in Energy and Materials occurs immediately before strength in Utilities and Consumer Staples—not afterward as current evidence suggests is now happening.  Instead, let the market be your guide.

Sectors: The sector rankings are displaying significant changes in leadership this week.  Materials rose to the top a week ago and continues to occupy that position today.  Energy, which was on the bottom just two weeks ago, climbed three more rungs of the ladder to land in second place.  Materials and Energy are currently displaying much larger momentum scores than the other sectors, providing them with a significant advantage.  Industrials jumped four places higher to grab the third spot, completing the smokestack mode of sector strength described above.  The defensive mode sectors have all moved to the lower half.  Utilities dropped three places to sixth, Health Care held steady in tenth, and Consumer Staples plunged from sixth to last.  However, Consumer Staples is still sporting a momentum score of 20, so being last does not equate to being in danger at this time.  It means it is moving up, but it is doing so at a slower pace than the other sectors.  Other notable changes include the fall of Real Estate from second to fifth, the two-notch improvement for Consumer Discretionary, and the three-place jump out of last place for Financials.

Styles: All style categories gained strength, and since the lowest-ranked style has a momentum score of 24, it signifies a currently strong and healthy market.  Except for Mid-Cap Value, which held on to its first-place ranking for a seventh week, all of the other categories changed positions.  Upside movers included the five-spot jumps of Small-Cap Value to second, Small-Cap Blend to fourth, and Micro-Cap from last to sixth.  It was a show of strength for the smaller capitalization segments as even Small-Cap Growth managed a two-place climb.  Therefore, it was the Large-Cap categories giving up the most relative-strength ground.  Large-Cap Growth plunged from third to last, although it actually boosted its momentum in the process.  Mega-Cap dropped five places to ninth, and Large-Cap Blend slipped two spots lower.

Global: Changes to the global rankings were minimal compared to sectors and styles, although a similar theme is evident.  Latin America and Canada are occupying the top-two spots for an eighth week.  Today, Pacific ex-Japan joins them in third place.  The common denominator across these three categories is that they are all physically large and rich in natural resources.  In fact, this group is known by the acronym ABC, which stands for Australia, Brazil (the largest economy and land mass in Latin America), and Canada.  They are the global regions you would expect to be on top when Materials is the strongest sector.  The U.S. and the U.K. had the largest declines in relative strength despite gaining absolute strength.  The U.S. posted a 10-point increase in momentum, and the U.K. outdid that with an 18-point jump of its own.  However, they both fell three spots, with the U.S. now in seventh and the U.K. dropping to last.  Japan was the lone category remaining in the red last week. Its huge 27-point jump in momentum put an end to that and allowed Japan to move two places out of the basement.

Disclosure:  Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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Tuesday, April 19th, 2016

ETF Deathwatch for April 2016: 35 Names Added

By Ron Rowland
13:05 pm CDT

A whopping 35 ETFs and ETNs joined ETF Deathwatch this month.  However, seven came off the list thanks to improved health, and another 11 exited due to their demise and liquidation.  The net increase of 17 products pushes the count to an all-time high of 435.

Despite the 585 lifetime product closures, 25 of which have occurred this year, the quantity of funds in jeopardy of increasing the death toll continues to grow.  The primary reason is that all of the major investment categories are covered.  New products coming to market tend to target a narrow niche, or they add a small twist to an existing strategy in an effort to be unique.  Most of the 35 products joining the list fit into one of these descriptions.

Even though the 331 ETFs on Deathwatch account for 76% of the 435 total, ETNs continue to have the highest representation.  There are 204 ETNs listed for trading, and 104 are on Deathwatch.  That is more than half.  Ten years ago, when ETNs first arrived on the scene, they offered exposure to many market segments that ETFs were avoiding.  However, ETF offerings continue to evolve and have been encroaching on territories that were once the domain of ETNs.  Today, most successful ETNs target MLPs, VIX futures, leveraged commodity futures, leveraged dividend plays, or they are customized products for specific asset managers.  There are only 33 ETNs with asset levels above $100 million.

Actively managed ETFs also have above-average representation with 39 of the 136 (28.7%) actively managed funds finding themselves on Deathwatch.  The 145 smart-beta funds on this list equates to 24.4% of that group.  Traditional capitalization-weighted index ETFs appear to have the best chance of survival with just 15.8% of them currently in jeopardy.  Combined, the 331 ETFs in these three ETF segments says that one in every five (20%) ETFs is on Deathwatch.

The average asset level of products on ETF Deathwatch increased from $6.2 million to $6.6 million, and the quantity of products with less than $2 million inched higher from 97 to 98.  The average age decreased from 46.6 to 46.4 months, and the number of products more than five years old increased from 138 to 148.  The fact that sponsors have continued to subsidize 148 unprofitable funds for more than five years indicates they are either extremely patient or in denial.

ETF Deathwatch is not just about closure risk.  Liquidity risk should be a primary concern if you are considering any of these funds.  On the last day of March, 277 ETFs posted zero volume, and 23 went the entire month without a single trade.  Being lucky enough to get your purchase order filled within a reasonable bid/ask spread is one thing.  Finding a buyer when you are ready to sell can be quite another.

Here is the Complete List of 435 ETFs and ETNs on ETF Deathwatch for April 2016 compiled using the objective ETF Deathwatch Criteria.

The 35 ETFs and ETNs added to ETF Deathwatch for April

  1. Cambria Value and Momentum (VAMO)
  2. DB Agriculture Double Long ETN (DAG)
  3. Direxion Daily Cyber Security & IT Bear 2x (HAKD)
  4. Direxion Daily Cyber Security & IT Bull 2x (HAKK)
  5. Direxion Daily Pharmaceutical & Medical Bear 2x (PILS)
  6. Direxion Daily Pharmaceutical & Medical Bull 2x (PILL)
  7. Direxion S&P 500 Volatility Response (VSPY)
  8. EGShares EM Core ex-China (XCEM)
  9. First Trust China AlphaDEX (FCA)
  10. First Trust Strategic Income (FDIV)
  11. First Trust Taiwan AlphaDEX (FTW)
  12. FlexShares Credit-Scored US Long Corp Bond (LKOR)
  13. FlexShares US Quality Large Cap (QLC)
  14. iPath S&P 500 Dynamic VIX ETN (XVZ)
  15. IQ Hedge Macro Tracker (MCRO)
  16. IQ Leaders GTAA Tracker (QGTA)
  17. iShares Currency Hedged International High Yield Bond (HHYX)
  18. iShares MSCI Saudi Arabia Capped (KSA)
  19. John Hancock Multifactor Consumer Discretionary (JHMC)
  20. John Hancock Multifactor Financials (JHMF)
  21. John Hancock Multifactor Mid Cap (JHMM)
  22. John Hancock Multifactor Technology (JHMT)
  23. KraneShares Bosera MSCI China A (KBA)
  24. ProShares Hedged FTSE Japan (HGJP)
  25. ProShares MSCI Europe Dividend Growers (EUDV)
  26. ProShares S&P 500 Ex-Financials (SPXN)
  27. ProShares S&P 500 Ex-Health Care (SPXV)
  28. ProShares S&P 500 Ex-Technology (SPXT)
  29. PureFunds ISE Mobile Payments (IPAY)
  30. Recon Capital DAX Germany (DAX)
  31. Renaissance IPO (IPO)
  32. SPDR MSCI International Dividend Currency Hedged (HDWX)
  33. SPDR MSCI International Real Estate Currency Hedged (HREX)
  34. WisdomTree Global Natural Resources (GNAT)
  35. WisdomTree Middle East Dividend (GULF)

The 7 ETPs removed from ETF Deathwatch due to improved health:

  1. AdvisorShares Madrona International (FWDI)
  2. AdvisorShares WCM/BNY Mellon Focused Growth ADR (AADR)
  3. ALPS Emerging Sector Dividend Dogs (EDOG)
  4. iPath Pure Beta Crude Oil ETN (OLEM)
  5. ProShares S&P MidCap 400 Dividend Aristocrats (REGL)
  6. ProShares Short Basic Materials (SBM)
  7. ValueShares International Quantitative Value (IVAL)

The 11 ETFs removed from ETF Deathwatch due to delisting:

  1. ETFS Physical White Metal Basket Shares (WITE)
  2. Recon Capital FTSE 100 (UK)
  3. PowerShares China A-Share (CHNA)
  4. PowerShares Fundamental Emerging Markets Local Debt (PFEM)
  5. PowerShares KBW Insurance (KBWI)
  6. Direxion Value Line Conservative Equity (VLLV)
  7. Direxion Value Line Mid- and Large-Cap High Dividend (VLML)
  8. Direxion Value Line Small- and Mid-Cap High Dividend (VLSM)
  9. ALPS Sector Leaders (SLDR)
  10. ALPS Sector Low Volatility (SLOW)
  11. ALPS STOXX Europe 600 (STXX)

ETF Deathwatch Archives

Disclosure:  Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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Thursday, April 14th, 2016

ETF Stats for March 2016: 17 Births, 17 Deaths

By Ron Rowland
16:15 pm CDT

The 17 fund closures cancelled out the 17 product launches of March, leaving the quantity of current listings unchanged at 1,863.  The product mix consists of 1,659 exchange-traded funds (“ETFs”) and 204 exchange-trade notes (“ETNs”).  The number of actively managed ETFs decreased by one to 136.

If you are having any doubts about the industry shift toward smart-beta products, the fact that all 17 of the March introductions carry a smart-beta designation should remove some of those doubts.  In addition to the popular factors of yield, momentum, value, quality, and volatility, the new ETF strategies include security selection and weighting schemes involving gender diversification, “drone score,” and sustainable pricing power.  Our database currently has 594 ETFs, or 32% of all listings, tagged as following a smart-beta strategy.

Assets under management (”AUM”) jumped by 7.4% to a new record of $2.17 trillion, slightly surpassing the previous record of $2.14 trillion established 10 months ago.  Inflows were quite strong at $33.1 billion; however, they only accounted for 22% of March’s AUM increase.  The vast majority of the $149.3 billion jump in assets were produced by the $116.2 billion in market gains.

The asset boost improved the overall health of the industry. The quantity of ETFs holding more than $10 billion in assets grew from 53 to 56, and they control 62.8% of the assets.  Funds with $1 billion or more in assets jumped from 246 to 257, and they have a 90.0% market share.  A whopping 430 ETFs and ETNs cannot muster even $10 million in assets, and half of all listings hold less than the median asset level of $66.7 million.

Despite the stellar market gains, trading activity declined another 10.1% in March.  The $1.68 trillion in dollar volume for the month is 22.6% below the level of January.  The quantity of funds averaging $1 billion or more in daily trading activity dropped from 15 to 11.  However, this small handful of ETFs still accounted for the majority (52.3%) of overall dollar volume.  At the other end of the spectrum, 23 funds went the entire month without a single trade, and 277 (14.9%) registered zero volume on the last day of the month.

March 2016 Month EndETFsETNsTotal
Currently Listed U.S.1,6592041,863
Listed as of 12/31/20151,6442011,845
New Introductions for Month17017
Delistings/Closures for Month17017
Net Change for Month000
New Introductions 6 Months10112113
New Introductions YTD37643
Delistings/Closures YTD22325
Net Change YTD+15+3+18
Assets Under Management$2,149 B$21.1 B$2,170 B
% Change in Assets for Month+7.4%+9.1%+7.4%
% Change in Assets YTD+2.5%-1.6%+2.4%
Qty AUM > $10 Billion56056
Qty AUM > $1 Billion2534257
Qty AUM > $100 Million78133814
% with AUM > $100 Million47.1%16.2%43.7%
AUM Flows for Month $32.67 B$0.47 B$33.14 B
AUM Flows YTD $35.80 B$0.83 B$36.63 B
Monthly $ Volume $1,612 B$68.0 B$1,680 B
% Change in Monthly $ Volume-9.9%-13.8%-10.1%
Avg Daily $ Volume > $1 Billion10111
Avg Daily $ Volume > $100 Million92597
Avg Daily $ Volume > $10 Million32512337
Actively Managed ETF Count (w/ change)136-1 mth-1 ytd
Actively Managed AUM $24.7 B+1.7% mth+7.7% ytd
Data sources:  Daily prices and volume of individual ETPs from Norgate Premium Data.  Fund counts and all other information compiled by Invest With An Edge.

New products launched in March (sorted by launch date):

  1. Vanguard International Dividend Appreciation ETF (VIGI), launched 3/2/16, seeks to track the NASDAQ International Dividend Achievers Select Index, a benchmark that measures the investment return of non-U.S. companies that have a history of increasing dividends.  Its universe includes both developed and emerging markets.  The ETF employs a passively managed, full-replication strategy, with an expense ratio of 0.25% (VIGI overview).
  2. Vanguard International High Dividend Yield ETF (VYMI), launched 3/2/16, seeks to track the FTSE All-World ex US High Dividend Yield Index, a benchmark that measures the investment return of non-U.S. developed and emerging-market companies characterized by a high dividend yield.  It has an expense ratio of 0.30% (VYMI overview).
  3. Goldman Sachs ActiveBeta Europe Equity ETF (GSEU), launched 3/4/16, seeks to track the Goldman Sachs ActiveBeta Europe Equity Index, which uses a performance-seeking methodology that invests in issuers across 15 developed market countries in Europe.  The multifactor strategy targets good value, strong momentum, high quality, and low volatility, and has an expense ratio of 0.25% (GSEU overview).
  4. Goldman Sachs ActiveBeta Japan Equity ETF (GSJY), launched 3/4/16, seeks to track the Goldman Sachs ActiveBeta Japan Equity Index.  The multifactor strategy seeks to capture common sources of active equity returns, including value (the security’s price compared to market value), momentum (performance history), quality (profitability relative to total assets), and volatility (consistency of returns).  The ETF is reconstituted and rebalanced quarterly and carries an expense ratio of 0.25% (GSJY overview).
  5. SPDR SSGA Gender Diversity Index ETF (SHE), launched 3/8/16, seeks to track the performance of U.S. large-capitalization companies that are “gender diverse,” which are defined as companies that exhibit gender diversity in their senior leadership positions.  The methodology begins with the largest 1,000 U.S. companies, segregated into 10 sectors.  The methodology ranks these stocks by gender diversification within each sector, and then weights them by float-adjusted market cap to arrive at 10% sector weightings.  The new ETF has an expense ratio of 0.20% (SHE overview).
  6. PureFunds Drone Economy Strategy ETF (IFLY), launched 3/9/16, seeks to track the Reality Shares Drone Index.  Drone technology has seen rapid growth in recreational use by consumers and enthusiasts in addition to numerous commercial applications in agriculture, construction, real estate, energy, media, and government markets.  The underlying index categorizes companies as either primary or secondary, and then caps the overall weights for each category based on the drone component of their business.  Within each category, a committee determines the individual stock weightings based on their “drone score.”  The eligible universe includes all countries, and the ETF has an expense ratio of 0.75% (IFLY overview).
  7. PureFunds Video Game Tech ETF (GAMR), launched 3/9/16, seeks to provide investment results of the EEFund Video Game Tech Index, a benchmark of companies involved in the video game technology industry, including game developers, console and chip manufacturers, and game retailers.  Constituent companies (from both developed and emerging markets) are segmented into pure play, not pure, or conglomerate, with the conglomerate exposure limited to 10%.  Stocks are then equal weighted within each segment. The ETF has an expense ratio of 0.75% (GAMR overview).
  8. PowerShares DWA Tactical Multi-Asset Income Portfolio (DWIN), launched 3/10/16, is a fund-of-funds ETF tracking an index designed to select investments from a universe of income strategy ETFs.  The criteria for inclusion are based on a combination of relative strength and current yield.  Positions are evaluated monthly for potential rebalancing and reconstitution, with five ETFs being selected from a universe of seven segments plus a cash component.  The ETF has a management fee of 0.25% plus acquired fund fees and expenses of 0.44% for a total expense ratio of 0.69% (DWIN overview).
  9. First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC), launched 3/18/16, is a fund-of-funds tracking the Dorsey Wright Dynamic Focus Five Index.  The underlying index provides targeted exposure to five sector and industry ETFs sponsored by First Trust, along with a cash component.  The sector rotation strategy is based on momentum, with the underlying relative strength analysis conducted twice monthly.  The portfolio is rebalanced at each constituent change, with each ETF position being equally weighted.  The cash portion can vary between 0% and 95%, and cash changes are capped at 33% at each twice-monthly evaluation.  The ETF has a management fee of 0.30% plus acquired fund fees and expenses of 0.49% for a total expense ratio of 0.79% (FVC overview).
  10. Principal Price Setters Index ETF (PSET), launched 3/22/16, tracks an index of mid- and large-capitalization U.S. stocks of companies with sustainable pricing power, consistent sales growth, high/stable margins, quality earnings, low leverage, and high levels of profitability.  These characteristics are determined by a series of quantitative and qualitative factors, and the top-ranked securities are weighted by a proprietary methodology.  The ETF has an expense ratio of 0.40% (PSET overview).
  11. Principal Shareholder Yield Index ETF (PY), launched 3/22/16, tracks an index of mid- and large-capitalization U.S. stocks with sustainable shareholder yield, strong cash flow generation, and the capacity to increase dividends and/or buybacks.  The universe of securities is screened by a series of quantitative and qualitative factors, and the top-ranked securities are weighted by a proprietary weighting methodology.  PY comes with an expense ratio of 0.40% (PY overview).
  12. Victory CEMP Emerging Market Volatility Wtd Index ETF (CEZ), launched 3/23/16, tracks a volatility-weighted index of emerging-market stocks with consistent positive earnings.  The methodology begins with all publicly traded stocks from emerging-market countries.  It then screens for consistent net positive earnings over four consecutive quarters, selects the 500 largest, and inversely weights them based on their 180-day standard deviation.  The ETF is reconstituted every March and September, and its expense ratio is capped at 0.50% (CEZ overview).
  13. John Hancock Multifactor Consumer Staples ETF (JHMS), launched 3/29/16, tracks a Dimensional Fund Advisors (“DFA”) developed index targeting a wide range of U.S. consumer staples stocks.  The multifactor approach emphasizes the three characteristics of smaller capitalization, lower relative price, and higher profitability.  The expense ratio is capped at 0.50% (JHMS overview).
  14. John Hancock Multifactor Energy ETF (JHME), launched 3/29/16, tracks a DFA developed index targeting a wide range of U.S. energy stocks.  The multifactor approach emphasizes the characteristics of smaller capitalization, lower relative price, and higher profitability.  The expense ratio is capped at 0.50% (JHME overview).
  15. John Hancock Multifactor Industrials ETF (JHMI), launched 3/29/16, tracks a DFA developed index targeting a wide range of U.S. industrial stocks.  The multifactor approach emphasizes the characteristics of smaller capitalization, lower relative price, and higher profitability.  The expense ratio is capped at 0.50% (JHMI overview).
  16. John Hancock Multifactor Materials ETF (JHMA), launched 3/29/16, tracks a DFA developed index targeting a wide range of U.S. materials stocks.  The multifactor approach emphasizes the characteristics of smaller capitalization, lower relative price, and higher profitability.  The expense ratio is capped at 0.50% (JHMA overview).
  17. John Hancock Multifactor Utilities ETF (JHMU), launched 3/29/16, tracks a DFA developed index targeting a wide range of U.S. utilities stocks.  The multifactor approach emphasizes the characteristics of smaller capitalization, lower relative price, and higher profitability.  The expense ratio is capped at 0.50% (JHMU overview).

Product closures in March and last day of listing:

  1. ETFS Physical White Metal Basket Shares (WITE) 3/2/16
  2. Recon Capital FTSE 100 (UK) 3/10/16
  3. MAXIS Nikkei 225 (NKY) 3/11/16
  4. PowerShares China A-Share (CHNA) 3/18/16
  5. PowerShares Fundamental Emerging Markets Local Debt (PFEM) 3/18/16
  6. PowerShares KBW Capital Markets (KBWC) 3/18/16
  7. PowerShares KBW Insurance (KBWI) 3/18/16
  8. ProShares Managed Futures Strategy (FUTS) 3/18/16
  9. Direxion Value Line Conservative Equity (VLLV) 3/23/16
  10. Direxion Value Line Mid- and Large-Cap High Dividend (VLML) 3/23/16
  11. Direxion Value Line Small- and Mid-Cap High Dividend (VLSM) 3/23/16
  12. ALPS Sector Leaders (SLDR) 3/24/16
  13. ALPS Sector Low Volatility (SLOW) 3/24/16
  14. ALPS STOXX Europe 600 (STXX) 3/24/16
  15. Global Commodity Equity (CRBQ) 3/24/16
  16. iShares iBonds Mar 2016 Term Corp ex-Financials (IBCB) 3/29/16
  17. iShares iBonds Mar 2016 Term Corporate (IBDA) 3/29/16

Product changes in March and prior months:

  1. Compass EMP ETFs were renamed Victory CEMP ETFs effective October 28, 2015.
  2. EGShares Emerging Markets Domestic Demand (EMDD) became EGShares EM Strategic Opportunities (EMSO) and reduced its expense ratio to 0.65% effective March 1.  Despite the name and ticker change, the underlying index still claims to be “a 50-stock free-float market-capitalization-weighted index designed to measure the performance of companies in emerging markets that are tied to domestic demand.”
  3. Global X FTSE Greece 20 ETF (GREK) changed its underlying index and its name to Global X MSCI Greece (GREK) effective March 1.
  4. The names of the iShares iBonds target maturity ETFs were changed to include “Term”, and the “AMT-Free” funds were renamed “Muni Bond” ETFs effective March 1.
  5. VelocityShares performed a 1-for-10 reverse split of UWTI and 1-for-25 reverse split of UGAZ (press release) effective March 14.
  6. SPDR executed 1-for-2 reverse splits of TFI and SHM (press release) effective March 15
  7. Deutsche X-trackers FTSE Developed ex US Enhanced Beta ETF (DEEF) was renamed Deutsche X-trackers FTSE Developed Ex US Comprehensive Factor ETF (DEEF), and Deutsche X-trackers Russell 1000 Enhanced Beta ETF (DEUS) was renamed Deutsche X-trackers Russell 1000 Comprehensive Factor ETF (DEUS) effective March 16.
  8. Invesco PowerShares changed the names and underlying indexes on four ETFs, with two receiving new ticker symbols, effective March 21.
    1. PowerShares S&P Emerging Markets High Beta (EEHB) became PowerShares S&P Emerging Market Momentum (EEMO)
    2. PowerShares S&P International Developed High Beta (IDHB) became PowerShares S&P International Developed Momentum (IDMO)
    3. PowerShares S&P International Developed High Quality (IDHQ) became PowerShares S&P International Developed Quality (IDHQ)
    4. PowerShares S&P 500 High Quality (SPHQ) became PowerShares S&P 500 Quality (SPHQ)
    5. United States 12 Month Natural Gas Fund (UNL) became a “broken product” on March 21 when it suspended its ability to create new shares.
    6. United States Short Oil Fund (DNO) became a “broken product” on March 21 when it suspended its ability to create new shares.
    7. Direxion performed reverse splits on GUSH, GASL, INDL, LABU, BRZU, LBJ, EDC, and RUSL and forward splits on YANG and DRIO (press release) effective March 24.

Announced product changes for coming months:

  1. Highland will close its three hedge-fund replication ETFs.  April 11 will be the last day of trading for Highland HFR Equity Hedge ETF (HHDG), Highland HFR Global ETF (HHFR), and Highland HFR Event-Driven ETF (DRVN).
  2. ProShares 30 Year TIPS/TSY Spread (RINF) will become ProShares Inflation Expectations ETF (RINF), with a new underlying index effective April 15.
  3. Global X GF China Bond (CHNB) will close and liquidate, with its last day of trading set for April 18.
  4. Barclays is seeking shareholder approval to add an early termination trigger to the iPath S&P GSCI Crude Oil Total Return ETN (OIL) and reduce the investor fee from 0.75% to 0.70% effective April 29.
  5. Horizons Korea KOSPI 200 ETF (HKOR) will close and liquidate, with its last day of trading being April 29.
  6. Van Eck Global intends to unite all of its investment products under the VanEck brand.  As part of this effort, the entire lineup of Market Vector ETFs will become VanEck Vectors ETFs effective May 1.

Previous monthly ETF statistics reports are available here.

Disclosure: Author has no positions in any of the securities, companies, or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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