ETF Deathwatch for February 2010

The number of exchange traded products on ETF Deathwatch dropped below 100 for the first time since November 2008.  Whether this drop is permanent or temporary remains to be seen.  I believe it to be a temporary event caused by a slowdown in new product introductions a year ago.  Some 70 new funds introduced in the past six months are currently enjoying the six-month grace period which gives them a chance to develop some traction.  Many of these could be added to the list as their grace periods expire.

This month’s list contains 69 ETFs and 30 ETNs for a total of 99.  The $100,000 threshold in average daily trading activity is a relatively small amount and it doesn’t take much to push a product above or below the cutoff.  Those escaping the list this time could very well be back next month.

WisdomTree recently announced plans to close 10 funds in March.  Most of the affected products are regular members of ETF Deathwatch, but they somehow managed to escape the current list. WisdomTree was the first firm to announce closings in 2010, but I predict they won’t be the only one.

Elements Ben Graham Large Cap Value ETN (BVL) heads the ETF Deathwatch list again this month, trading on only five days in January.  BVL is joined by seven other Elements brand ETNs, and a large percentage of the products from E-TRACS.

Listed below are the 99 products that failed to generate at least $100,000 in average daily value traded (ADVT) during the past month.

ETF Deathwatch - February 2010

Rank	Ticker	Name	Age (mths)	Avg Daily Volume	Avg Daily Value Traded
1	BVL	Elements Ben Graham Large Cap Value ETN	18	226	$2,198
2	UBC	E-TRACS CMCI Livestock Total Return ETN	22	147	$2,701
3	EEH	Elements Spec LgCap US Sector Mo ETN	30	453	$3,790
4	PTD	E-TRACS CMCI Short Platinum Exc Ret ETN	21	174	$5,472
5	PGD	Barclays Asian&Gulf Currency Reval. ETN	20	111	$5,547
6	GWO	Elements CS Global Warming ETN	22	921	$6,878
7	JVS	Javelin DJ Islamic Market International	7	142	$6,884
8	PNXQ	PowerShares Nasdaq Next Q	22	316	$7,618
9	PQSC	PowerShares FTSE Nasdaq Small Cap	22	353	$7,932
10	UBG	E-TRACS CMCI Gold Total Return ETN	22	279	$8,492
11	JFT	First Trust Enhanced 130/30 Large Cap ETN	21	353	$9,322
12	UBD	Claymore U.S. Capital Markets Bond ETF	24	232	$11,292
13	BHH	HOLDRS B2B Internet ETF	121	26,005	$11,966
14	MKH	HOLDRS Merrill Lynch Market 2000+	115	268	$13,326
15	AYT	Barclays GEMS Asia 8 ETN	17	311	$14,468
16	JPX	ProShares UltraShort MSCI Pacific ex-Japan	8	758	$14,750
17	EEN	Claymore/BNY Mellon EW Euro-Pacific LDRs	36	932	$17,322
18	BVT	Elements Ben Graham Total Mkt Value ETN	18	1,732	$18,244
19	JYF	WisdomTree Dreyfus Japan Yen	21	716	$20,563
20	URR	Market Vectors Double Long Euro ETN	21	654	$21,380
21	STH	Claymore/Sabrient Stealth	41	1,383	$21,410
22	UBN	E-TRACS CMCI Energy Total Return ETN	22	1,379	$22,226
23	EXB	Claymore/Beacon Global Exch, Brkrs, & Asst Mgrs	32	1,732	$22,635
24	FDD	First Trust DJ STOXX European Select Dividend	30	1,874	$26,530
25	ADZ	PowerShares DB Agriculture Short ETN	22	858	$27,414
26	JEM	Barclays GEMS Currency Index ETN	24	626	$28,174
27	PQY	PowerShares Active AlphaQ	22	1,237	$28,212
28	FAD	First Trust Multi Cap Growth AlphaDEX	33	1,263	$30,531
29	FUE	Elements MLCX Biofuels ETN	24	3,558	$30,672
30	GRN	iPath Global Carbon ETN	20	1,295	$31,355
31	CRO	Claymore/Zacks Country Rotation	31	2,000	$32,026
32	USV	E-TRACS CMCI Silver Total Return ETN	22	1,311	$34,046
33	INR	Market Vectors Indian Rupee/USD ETN	23	879	$34,100
34	PBTQ	PowerShares Global Biotech Portfolio	17	1,489	$35,811
35	ULQ	Claymore U.S. Cap Mkts Micro-Trm Fxd Inc	24	742	$36,995
36	IFEU	iShares FTSE EPRA/NAREIT Europe	27	1,279	$37,733
37	DOD	Elements Dogs of the Dow Total Return ETN	27	5,595	$39,352
38	TZO	iShares S&P Target Date 2035 Index Fund	15	1,316	$39,365
39	PMA	PowerShares Active Mega-Cap Portfolio	22	1,732	$39,715
40	GBB	iPath GBP/USD Exchange Rate ETN	33	926	$40,319
41	TZD	iShares S&P Target Date 2010 Index Fund	15	1,405	$40,589
42	EKH	HOLDRS Europe 2001	110	647	$41,362
43	TZL	iShares S&P Target Date 2030 Index Fund	15	1,400	$42,375
44	PJO	PowerShares FTSE RAFI Japan	32	1,137	$43,382
45	RTW	Rydex Inverse 2x S&P Technology	20	2,256	$44,108
46	OTP	Claymore/Ocean Tomo Patent	38	1,947	$45,148
47	PTO	PowerShares Auto Growth NFA	21	4,200	$46,292
48	TWQ	ProShares UltraShort Russell3000	7	1,947	$49,197
49	IIH	HOLDRS Internet Infrastructure	121	18,453	$49,436
50	RHS	Rydex S&P Equal Weight Cons Staples	39	1,005	$50,183
51	PQZ	PowerShares Active Alpha Multi-Cap	22	2,968	$50,603
52	FVI	First Trust Value Line Equity Allocation	38	3,053	$53,096
53	PAO	PowerShares Auto Balanced Growth NFA	21	4,700	$54,094
54	ERO	iPath EUR/USD Exchange Rate ETN	33	1,016	$56,024
55	IPD	SPDR S&P International Consumer Discr	19	2,305	$57,834
56	TDX	TDX Independence In-Target	28	2,363	$59,221
57	PIC	PowerShares Dynamic Insurance	52	4,347	$59,379
58	TZE	iShares S&P Target Date 2015 Index Fund	15	2,032	$60,069
59	REC	Rydex Inverse 2x S&P Energy	20	12,479	$64,885
60	PYH	PowerShares Value Line Industry Rotation	39	3,574	$65,993
61	IRY	SPDR S&P International Health Care	19	2,205	$66,340
62	RWV	RevenueShares Navellier Overall A-100	12	2,142	$66,783
63	PWO	PowerShares Dynamic OTC	82	1,732	$69,069
64	AGF	PowerShares DB Agriculture Long ETN	22	3,947	$69,268
65	XRU	CurrencyShares Russian Ruble Shares	15	2,116	$70,586
66	ADRU	BLDRS Europe 100 ADR	88	3,379	$71,162
67	TZI	iShares S&P Target Date 2025 Index Fund	15	2,363	$71,361
68	IPU	SPDR S&P International Utilities	19	3,147	$71,553
69	OTR	Claymore/Ocean Tomo Growth	35	2,989	$71,654
70	TZG	iShares S&P Target Date 2020 Index Fund	15	2,489	$74,893
71	JPP	SPDR Russell/Nomura PRIME Japan	39	1,963	$75,767
72	BSC	Elements Ben Graham Small Cap Value ETN	18	6,953	$75,905
73	AGA	PowerShares DB Agriculture Dbl Short ETN	22	1,963	$76,019
74	GXG	Global X/InterBolsa FTSE Colombia 20 ETF	12	2,616	$77,137
75	MES	Market Vectors Gulf States	19	4,105	$78,640
76	RTL	iShares FTSE NAREIT Retail Capped	33	3,789	$79,217
77	SJL	ProShares UltraShort Russell Midcap Value	36	3,068	$80,678
78	UBM	E-TRACS CMCI Industrial Metals TR ETN	22	3,821	$81,696
79	BWV	iPath CBOE S&P 500 BuyWrite Index ETN	33	1,826	$81,767
80	PZJ	PowerShares Zacks Small Cap	48	4,647	$82,284
81	WMW	Elements Mrngstr Wide Moat Focus ETN	28	7,626	$82,602
82	PCA	PowerShares Auto Balanced NFA	21	6,942	$83,096
83	WMH	HOLDRS Wireless	113	1,837	$84,525
84	TZV	iShares S&P Target Date 2040 Index Fund	15	2,847	$86,190
85	IPF	SPDR S&P International Financial	19	4,242	$86,197
86	DPU	PowerShares DB Commodity Long ETN	21	5,621	$87,197
87	DEF	Claymore/Sabrient Defender	38	4,279	$89,157
88	PLK	PowerShares Active Low Duration	22	3,532	$89,484
89	DPN	WisdomTree Intl Consumer Staples	40	3,579	$90,060
90	MBG	SPDR Barclays Mortgage Backed Bond ETF	12	3,432	$90,816
91	UWC	ProShares Ultra Russell3000	7	1,537	$92,608
92	XRO	Claymore/Zacks Sector Rotation	41	4,604	$95,113
93	IRO	Claymore/Zacks Dividend Rotation	28	5,137	$95,796
94	QABA	First Trust NASDAQ ABA Community Bank	7	4,168	$96,937
95	GVT	Grail American Beacon Large Cap Value	9	3,158	$97,059
96	BDG	PowerShares DB Base Metals Lng ETN	20	4,332	$97,266
97	JJT	iPath DJ-UBS Tin ETN	20	2,337	$97,554
98	RGI	Rydex S&P Equal Weight Industrials	39	2,224	$97,567
99	IPS	SPDR S&P International Consumer Staples	19	3,437	$98,595

Past issues of ETF Deathwatch are available here.

Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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The 26 Commission-Free ETFs at Fidelity

The longer I study Fidelity’s commission-free ETF announcement of last week (2/2/10), the more impressed I become.  This is not a hap-hazard list of ETFs that Fidelity and BlackRock threw together.  It is a solid lineup assembled from what many would consider the best iShares core offerings in domestic equities, international equities, and fixed income ETFs.

The domestic equity lineup includes both the S&P style index offerings familiar to retail investors as well as the Russell stock funds that institutional investors often prefer.  The S&P-based funds include the popular iShares S&P 500 Index Fund (IVV).  The Russell-based funds do not include the mid-cap offerings, but the Russell 3000 whole-market ETF is included.

The international lineup has the two grand-daddies of international ETF investing (EFA and EEM) as well as a small cap international and a whole world fund.  The fixed income lineup has a solid representative from each of five major bond sectors.  Last, but not least, is Fidelity’s own Nasdaq Composite ETF (ONEQ).

Below is the complete list of the 26 commission-free ETFs at Fidelity along with their current expense ratio and a link to their overview page with top holdings and other important details:

Russell Style Box ETFs

• iShares Russell 3000 Index (IWV) 0.21%
• iShares Russell 1000 Value Index (IWD) 0.20%
• iShares Russell 1000 Index (IWB) 0.15%
• iShares Russell 1000 Growth Index (IWF) 0.20%
• iShares Russell 2000 Value Index(IWN) 0.33%
• iShares Russell 2000 Index (IWM) 0.24%
• iShares Russell 2000 Growth Index (IWO) 0.25%

S&P Style Box ETFs

• iShares S&P 500 Value Index (IVE) 0.18%
• iShares S&P 500 Index (IVV) 0.09%
• iShares S&P 500 Growth Index (IVW) 0.18%
• iShares S&P Mid Cap 400 Value Index (IJJ) 0.28%
• iShares S&P Mid Cap 400 Index (IJH) 0.21%
• iShares S&P Mid Cap 400 Growth Index (IJK) 0.25%
• iShares S&P Small Cap 600 Value Index (IJS) 0.25%
• iShares S&P Small Cap 600 Index (IJR) 0.20%
• iShares S&P Small Cap 600 Growth Index (IJT) 0.25%

International and Global Equity ETFs

• iShares MSCI EAFE Index (EFA) 0.35%
• iShares MSCI Emerging Markets Index (EEM) 0.72%
• iShares MSCI EAFE Small Cap Index (SCZ) 0.40%
• iShares MSCI ACWI Index (ACWI) 0.35%

Fixed Income ETFs

• iShares Barclays Aggregate Bond Fund (AGG) 0.24%
• iShares Barclays TIPS Bond Fund (TIP) 0.20%
• iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD) 0.15%
• iShares JPMorgan USD Emerging Markets Bond Fund (EMB) 0.60%
• iShares S&P National AMT-Free Municipal Bond Fund (MUB) 0.25%

Fidelity ETFs

• Fidelity Nasdaq Composite Index Tracking Stock (ONEQ) 0.30%

Fidelity also reduced commissions for other ETFs, stocks, and options.

Disclosure covering writer, editor, publisher, and affiliates: Long some positions in this list. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.  Our affiliate, Capital Cities Asset Management, uses Fidelity Brokerage Services and Ameritrade Institutional as custodians and brokerage for client accounts.

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How To Make $10,000 This Weekend

OK, it may take more than just the weekend, but you really could make $10,000.  The National Association of Active Investment Managers, or NAAIM, is looking for scholarly papers about active investment topics.  The winner will receive the coveted “Wagner Award,” $10,000 in cash and a free trip to Orlando to present the paper at NAAIM’s annual conference.  Second place gets $3,000 and third place $1,000.

Here is what they are looking for, according to the Call for Papers.

Paper Topics: The papers should cover an innovative topic in the area of active investing. This can be either a documented and justified investing approach or an exploration into the validity of active investing. Active investing topics can involve making investment decisions using technical analysis, quantitative analysis, etc. Papers can also address related topics such as position sizing techniques, money management approaches, scaling into and out of trades, exit strategies, etc.

Who may submit: The competition is open to all investment practitioners, academic faculty and doctoral candidates in the field.

In other words, they want to see academic-quality studies of trading systems, investment strategies, and related active management activities.  The key word here is active.  NAAIM is a professional association of people engaged in tactical asset allocation, market timing, sector rotation and other such techniques.  Passive strategies have their place, but NAAIM members are generally not interested in them.

The deadline for submissions is March 15, 2010.

Disclosure: I am a longtime member of NAAIM and also serve on its Board of Directors.

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PIMCO Adds Short-Term Munis to ETF Menu: SMMU

Fixed-income giant PIMCO launched its third actively-managed ETF on Wednesday (2/3/2010) of this week. PIMCO Short Term Municipal Bond Strategy Fund (SMMU) targets the short end of the tax-free muni bond space. Maturity of the fund’s holdings will be in the one-year to three-year range.

Intentionally or not, the SMMU introduction is well timed. Talk in Washington of increasing tax rates has many high-net-worth investors looking for tax-free places to park their assets. Meanwhile, stock market performance is anything but impressive so far in 2010. SMMU will compete with three other ETFs in its niche: iShares S&P Short-Term National Muni Bond (SUB), SPDR Barclays Short Term Municipal Bond (SHM), and Market Vectors Short Municipal (SMB).

SMMU differs from the others in being actively-managed. The portfolio will be run by veteran bond manager John Cummings. Whether his skill will translate into better investment results is unknown as yet, of course, but it may not matter. The PIMCO brand name carries a lot of weight, and their previous ETF offerings have been generally successful in attracting assets.

The new ETF has a gross expense ratio of 0.55%, currently capped by the sponsor at 0.35%. Sister fund PIMCO Intermediate Municipal Bond Strategy Fund (MUNI) has the same fee cap and came to market in December 2009. Net assets for MUNI are around $13 million as of this writing. We suspect that its lower risk profile will allow SMMU to grow to that size very soon and probably even larger.

PIMCO SMMU info page and Prospectus (PDF format)

Other posts mentioning PIMCO ETFs

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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