Friday, May 22nd, 2015

ETF Deathwatch for May 2015: Back Above 300

By Ron Rowland
16:01 pm CDT

The ETF Deathwatch membership rolls jumped higher for May.  Twenty names were added to the list, while only four came off.  The net increase of 16 pushed the total count from 299 to 315, consisting of 221 ETFs and 94 ETNs.  The industry hit a major milestone earlier this month when the number of ETF and ETN closures reached 500.

No funds came off of the list due to closure this month.  Only one fund closed in April, the Source EURO STOXX 50 ETF (ESTX), and it managed to stay off the list for the few days it was eligible.  It was launched last September, and Source announced its closure on March 26 after being on the market only six months and three days.  It was 199 days old when its listing was removed.

ESTX was Source’s only US-listed ETF, which makes Source the shortest-lived sponsor of ETFs ever.  The previous record stood for ten years and belonged to ETF Advisors and their “FITRs” brand of fixed-income ETFs.  The four Treasury FITRs were launched on November 1, 2002.  They had their last day of trading on May 21, 2003 when they were 202 days old, and the firm never sponsored any additional ETFs.

ETF newcomers ARK, Infracap, and Fallah have funds joining ETF Deathwatch this month, and all three firms now have 100% of their ETF product line on the list.  This amounts to just one fund each for Infracap and Fallah, but ARK sponsors four ETFs that are currently struggling.

The average asset level of products on ETF Deathwatch increased from $6.4 million to $6.9 million, and 45 currently have less than $2 million in assets.  The average age increased from 47.1 to 47.2 months, and 96 are now more than five years old.

Here is the Complete List of 315 Products on ETF Deathwatch for May 2015 compiled using the objective ETF Deathwatch Criteria.

The 20 ETPs added to ETF Deathwatch for May:

  1. AdvisorShares Accuvest Global Long Short (AGLS)
  2. AdvisorShares Madrona International (FWDI)
  3. Direxion Daily Mid Cap Bull 2x (MDLL)
  4. ETFS Physical White Metal Basket Shares (WITE)
  5. First Trust Developed Markets x-US Small Cap AlphaDEX (FDTS)
  6. Global X Junior MLP ETF (MLPJ)
  7. Guggenheim BulletShares 2022 HY Corp Bond (BSJM)
  8. iPath Bloomberg Natural Gas TR ETN (GAZ)
  9. iPath US Treasury Steepener ETN (STPP)
  10.  iShares Asia Developed Real Estate (IFAS)
  11. PowerShares S&P Emerging Markets High Beta (EEHB)
  12. PowerShares S&P SmallCap Materials (PSCM)
  13. ProShares Short SmallCap600 (SBB)
  14. ALPS STOXX Europe 600 ETF (STXX)
  15. ARK Genomic Revolution Multi-Sector ETF ARKG)
  16. ARK Innovation ETF (ARKK)
  17. Falah Russell-IdealRatings U.S. Large Cap (FIA)
  18. InfraCap MLP ETF (AMZA)
  19. iShares MSCI Emerging Markets Horizon ETF (EMHZ)
  20. Renaissance International IPO ETF (IPOS)

The 4 ETPs removed from ETF Deathwatch due to improved health:

  1. First Trust China AlphaDEX (FCA)
  2. iShares MSCI Colombia Capped (ICOL)
  3. ProShares Ultra Euro (ULE)
  4. ProShares UltraShort Utilities (SDP)

The ETPs removed from ETF Deathwatch due to delisting:

none

ETF Deathwatch Archives

Disclosure covering writer:  No positions in any of the securities mentionedNo 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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Tuesday, May 19th, 2015

500 ETF Closures

By Ron Rowland
18:06 pm CDT

As of today (May 19, 2015), 500 ETFs and ETNs have closed, delisted, and are no longer with us.  500 deaths is a major milestone for the ETF industry.  Although it may not be a welcome and celebrated milestone, it is healthy and necessary for the industry to move forward.

To put this number in perspective, a grand total of 2,207 ETFs and ETNs have been listed on US exchanges.  The 500 closures represents a 22.7% mortality rate.  Those aren’t exactly great odds, but it could be worse.  Of the 1,712 products still remaining and listed for trading today, a full 315 are on the May ETF Deathwatch list.  Another 113 were introduced in the last six months and are not included in the Deathwatch statistics.

Yesterday (5/18/15) was the last day of trading for the five Deutsche X-trackers Target Date ETFs.  Launched in 2007, and originally under the xShares/TD America brand, these five funds had assets totaling more than $135 million when the closures were announced.  This $27-million average is higher than the assets of 548 other ETFs and ETNs still trading today.  Along with the massive closure of 18 iShares ETFs last October, Duetsche Bank (DB) and BlackRock (BLK) are redefining what it takes to survive in the ETF space.

Breaking down the launches and closures by ETFs and ETNs reveals that life is only slightly more difficult for ETNs.  Of the 2,207 product launches, 1,929 have been ETFs and 278 have been ETNs.  Meanwhile, the 500 closures consist of 430 ETFs and 70 ETNs.  So far, ETF survivability has been 77.7% and ETN survivability comes in at 74.8%.

Disclosure covering writer:  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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Monday, May 18th, 2015

ETF Stats for April 2015 – Product Count Tops 1700

By Ron Rowland
13:02 pm CDT

The number of listed exchange traded funds (“ETFs”) and exchange traded notes (“ETNs”) surpassed the 1,700 for the first time.  Seventeen new ETFs were introduced during April, while only one was closed.  At the end of the month, the product count stood at 1,703, consisting of 1,496 ETFs and 207 ETNs.  The number of actively managed ETFs increased from 124 to 126.

ETN product growth has stagnated after peaking about three years ago.  The quantity of ETNs topped out at 218 in July 2012.  Since then, there have been only 40 new ETNs issued.  Meanwhile, 51 have closed and liquidated for a net decrease of 11.  During the same period, 444 ETFs were launched and 216 closed, resulting in a net increase of 228.  Investors clearly prefer the safety provided by the asset-backed structure of ETFs over the unsecured debt structure of ETNs.

Asset levels for US listings now stand at $2.13 trillion, which represents a 2.1% increase for the month and a 6.6% gain year-to-date.  Actively managed ETFs saw assets rise 4.2%, landing above the $20 billion mark for the first time.  The number of funds with more than $10 billion in assets increased from 49 to 51.  While representing only 3.0% of the product quantity, these 51 account for 58.8% of overall industry assets.  There are 268 products above the $1 billion mark and 835 with $100 million or more in assets.  However, the median asset size is just $95.2 million, and it requires the combined assets of the 848 (49.8%) smallest products to equal just 1% of overall industry assets.

Multi-factor strategies and currency hedging remain popular themes for new launches.  Ten of April’s product introductions employ a multi-factor approach to security selection.  BlackRock rolled out an iShares sub-brand called FactorSelect specifically to address this area of smart beta investing. The five initial iShares FactorSelect ETFs each track a new MSCI Diversified Multi-Factor Index targeting different stock universes.  The four factors used in these ETFs are quality, momentum, value, and (small) size.  Additional information is available in the FactorSelect overview.

In addition to the five FactorSelect funds, other new multi-factor ETF launches included the Innovator IBD 50 Fund (FFTY) that uses IBD’s seven CAN SLIM factors, PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio (XRLV), WisdomTree Japan Hedged Dividend Growth Fund (JHDG), SPDR MSCI USA Quality Mix ETF (QUS), and the AlphaMark Actively Managed Small Cap ETF (SMCP).

Three more currency-hedged funds came to market in April despite signs that this year’s run in the US Dollar is losing steam.  Deutsche Bank brought out currency-hedged international REIT and global infrastructure funds, while WisdomTree added a currency-hedged Japanese dividend fund to its lineup.

Trading activity declined nearly 16% in April with $1.39 trillion worth of products changing hands.  Only seven ETFs averaged more than a $1 billion per day in trading, but they accounted for 48.3% of April’s activity.  The monthly turnover ratio ($ volume / assets) came in at 0.65, down from 0.79 for March.

April 2015 Month EndETFsETNsTotal
Currently Listed U.S.1,4972071,703
Listed as of 12/31/20141,4512111,662
New Introductions for Month17017
Delistings/Closures for Month101
Net Change for Month+160+16
New Introductions 6 Months995104
New Introductions YTD74377
Delistings/Closures YTD29736
Net Change YTD+45-4+41
Assets Under Mgmt ($ billion)$2,101$28.8$2,129
% Change in Assets for Month+2.1%+5.6%+2.1%
% Change in Assets YTD+6.5%+7.1%+6.5%
Qty AUM > $10 Billion51051
Qty AUM > $1 Billion2635268
Qty AUM > $100 Million79342835
% with AUM > $100 Million53.0%20.3%49.0%
Monthly $ Volume ($ billion)$1,348$46.2$1,394
% Change in Monthly $ Volume-15.8%-14.1%-15.7%
Avg Daily $ Volume > $1 Billion707
Avg Daily $ Volume > $100 Million85489
Avg Daily $ Volume > $10 Million31012322
Actively Managed ETF Count (w/ change)126 +2 mth+1 ytd
Actively Managed AUM ($ billion)$20.1+4.2% mth+16.6% 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 April (sorted by launch date):

  1. Deutsche X-trackers Dow Jones Hedged International Real Estate ETF (DBRE), launched 4/9/15, tracks an index with exposure to a broad range of international REITs and real estate operating companies while mitigating exposure to fluctuations between the US Dollar and 17 foreign currencies.  The ETF has an expense ratio of 0.48% (DBRE overview).
  2. Deutsche X-trackers S&P Hedged Global Infrastructure ETF (DBIF), launched 4/9/15, tracks an index with diversified exposure to the global infrastructure industry while mitigating exposure to currency fluctuations.  It is essentially a currency-hedged version of the SPDR S&P Global Infrastructure ETF (GII) and has an expense ratio of 0.45% (DBIF overview).
  3. Innovator IBD 50 Fund (FFTY), launched 4/9/15, is an actively managed ETF that will invest in the top 50 growth stocks selected by Investor’s Business Daily known as the IBD 50.  Driven by specific fundamental and technical indicators in IBD’s CAN SLIM System, the fund will be “conviction weighted” with a higher percentage in the highest ranked stocks.  It will not track the IBD 50 Index, which uses a price-weighted methodology.  The fund will cap its expense ratio at 0.80% through 3/30/16 (FFTY overview).
  4. PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio (XRLV), launched 4/9/15, tracks an index composed of the 100 constituents of S&P 500 that exhibit both low volatility and low interest rate risk. It is designed to include stocks exhibiting low volatility characteristics, after removing stocks that historically have performed poorly in rising interest rate environments.  Constituents are weighted relative to the inverse of their volatility, and the fund will have an expense ratio of 0.25% (XRLV overview).
  5. WisdomTree Japan Hedged Dividend Growth Fund (JHDG), launched 4/9/15, tracks a fundamentally weighted index that measures the performance of dividend-paying common stocks with growth characteristics while neutralizing exposure to fluctuations between the Yen and the US Dollar. The index selects 300 companies based on their combined ranking of growth, quality, and valuation factors. Companies are then weighted by annual cash dividends paid.  Please note this is not a traditional “dividend growth” methodology, as no measurement of dividend growth is used in either the selection or weighting.  The fund has a yield of 1.4% and an expense ratio of 0.43% (JHDG overview).
  6. Direxion Daily CSI 300 China A Share Bull 2x Shares (CHAU), launched 4/16/15, seeks daily investment results, before fees and expenses, of 200% of the performance of the CSI 300 Index.  It is a daily leveraged version of the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) and is implemented with swaps.  It has an expense ratio of 0.95% (CHAU overview).
  7. SPDR MSCI USA Quality Mix ETF (QUS), launched 4/16/15, will track a multi-factor index of Large- and Mid-Cap US companies.  The underlying index is an equal-weighted combination of the MSCI USA Value Weighted Index, the MSCI USA Quality Index, and the MSCI USA Minimum Volatility Index.  The fund has an initial yield of 1.3% and an expense ratio of 0.15% (QUS overview).
  8. AlphaMark Actively Managed Small Cap ETF (SMCP), launched 4/21/15, is designed to invest in US listed securities (including ADRs), which are less than $5 billion in market capitalization.  AlphaMark takes a “bottoms up” approach to target stocks exhibiting consistent growth, earnings, and cash flow.  It is an actively managed ETF of 25-40 stocks based on earnings momentum, cash flows relative to capital spending, and reviews of financial statements, enterprise value, and corporate management.  The expense ratio is 0.90% (SMCP overview).
  9. Global X MSCI Pakistan ETF (PAK), launched 4/23/15, seeks results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI All Pakistan Select 25/50 Index.  Pakistan is classified as a Frontier Market, and the fund’s current sector exposure includes Financials 32.7%, Energy 24.2%, and Materials 23.0%.  The expense ratio is 0.88% (PAK overview).
  10. Global X Guru Activist ETF (ACTX), launched 4/29/15, seeks to track an index that uses a proprietary methodology to compile the highest conviction ideas from a select pool of hedge funds where the 13F information is considered to be the most valuable.  For example, hedge funds with high turnover are eliminated from the pool.  ACTX has an expense ratio of 0.75% (ACTX overview).
  11. Recon Capital FTSE 100 ETF (UK), launched 4/29/15, seeks to track the US Dollar version of the FTSE 100, the headline index of UK stocks.  The FTSE 100 includes the largest and most liquid companies on the London Stock Exchange and represents approximately 80% of the entire UK equity market.  The underlying index is not currency hedged, so the fund’s performance will reflect fluctuations in the value of the British Pound and its 0.45% expense ratio (UK overview).
  12. iShares FactorSelect MSCI Global ETF (ACWF), launched 4/30/15, tracks a multi-factor index of global developed and emerging market Large- and Mid-Cap stocks.  The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size.  The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.50% (ACWF overview).
  13. iShares FactorSelect MSCI International ETF (INTF), launched 4/30/15, tracks a multi-factor index of international developed market Large- and Mid-Cap stocks.  The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size.  The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.45% (INTF overview).
  14. iShares FactorSelect MSCI Intl Small-Cap ETF (ISCF), launched 4/30/15, tracks a multi-factor index of international developed market Small-Cap stocks.  The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size.  The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.60% (ISCF overview).
  15. iShares FactorSelect MSCI USA ETF (LRGF), launched 4/30/15, tracks a multi-factor index of US Large- and Mid-Cap stocks.  The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size.  The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.35% (LRGF overview).
  16. iShares FactorSelect MSCI USA Small-Cap ETF (SMLF), launched 4/30/15, tracks a multi-factor index of US Small-Cap stocks.  The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size.  The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.50% (SMLF overview).
  17. U.S. Global Jets ETF (JETS), launched 4/30/15, provides investors access to the global airline industry, including airline operators and manufacturers. The underlying index uses a tiered weighting approach with the four largest US airlines each receiving a 12% allocation, and the next five largest US airlines each getting a 4% weighting.  This is the first ETF offered by U.S. Global Investors, and it has a 0.60% expense ratio (JETS overview).

Product closures/delistings in April:

  1. Source EURO STOXX 50 ETF (ESTX) had its last day of listed trading on April 10.  Source’s foray into the US ETF market did not last long.  ESTX, its first and only US product, was launched September 23, 2014, giving the product and firm just a 6.5-month US presence.

Product changes in April:

  1. BlackRock changed the name of iShares Core Short-Term USD Bond ETF (ISTB) to iShares Core 1-5 Year USD Bond ETF (ISTB) and iShares Core Long-Term USD Bond ETF (ILTB) to iShares Core 10+ Year USD Bond ETF (ILTB) effective April 15.
  2. ProShares changed the underlying indexes and names of ProShares Short KBW Regional Banking (KRS) to ProShares Short S&P Regional Banking (KRS) and ProShares Ultra KBW Regional Banking (KRS) to ProShares Ultra S&P Regional Banking (KRS) effective April 16.

Announced Product Changes for Coming Months:

  1. SPDR BofA Merrill Lynch Crossover Corporate Bond ETF will change its ticker symbol from XOVR to CJNK effective May 12.
  2. Deutsche Bank (DB) will close its five US-listed target date ETFs (TDX, TDD, TDH, TDN, and TDV), with May 18 being the last day of trading.  Additional details are in DB’s Target Date ETF closure press release.
  3. Direxion will have reverse splits on eight leveraged ETFs and forward splits on eleven ETFs effective May 20.  Additional details are available in the press release.

Previous monthly ETF statistics reports are available here.

Disclosure covering writer: 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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Tuesday, April 28th, 2015

ETF Deathwatch for April 2015: Seventeen New Names

By Ron Rowland
17:13 pm CDT

ETF Deathwatch membership increased by six but is still just shy of the 300 mark.  Seventeen new names joined the list while eleven escaped.  Six of the departing products did so by improving their health through increased assets, increased trading activity, or both.  Five others are now “dearly departed” as they have met their final demise.  The current list has 299 products, consisting of 207 ETFs and 92 ETNs.  If you ever find yourself owning an ETF that has announced its intention to close, be sure to consult our Five Steps to Avoid Disaster When Your ETF Closes.

Most of the products joining the list this month just emerged from the six-month grace period bestowed upon all new funds to give them a chance to gain attention.  Eleven different sponsors are included in this month’s additions.  They are AdvisorShares, ARK, Direxion, Guggenheim, iShares, Market Vectors, PIMCO, PowerShares, SPDRs, (ALPS) Stock Split, and WisdomTree.  Most of these are familiar names, showing that it requires more than a powerful brand to make a product successful.

The average asset level of products on ETF Deathwatch decreased from $6.6 million to $6.4 million, and 46 currently have less than $2 million in assets.  Claims that these are just young products and need a chance to grow are countered by an average age of 47.1 months.  Additionally, 90 are more than five years old, and two of the WisdomTree funds are now more than eight years old.

Here is the Complete List of 299 Products on ETF Deathwatch for April 2015 compiled using the objective ETF Deathwatch Criteria.

The 17 ETPs added to ETF Deathwatch for April:

  1. AdvisorShares Morgan Creek Global Tactical (GTAA)
  2. AdvisorShares WCM/BNY Mellon Focused Growth ADR (AADR)
  3. ARK Industrial Innovation ETF (ARKQ)
  4. ARK Web x.0 ETF (ARKW)
  5. Direxion Daily 7-10 Year Treasury Bull 2x (SYTL)
  6. Direxion Daily Small Cap Bull 2x (SMLL)
  7. Guggenheim Emerging Markets Real Estate (EMRE)
  8. iShares Enhanced International Small-Cap (IEIS)
  9. Market Vectors Pre-Refunded Municipal (PRB)
  10. PIMCO Foreign Currency Strategy Active (FORX)
  11. PowerShares LadderRite 0-5 Year Corp Bond (LDRI)
  12. SPDR MSCI Mexico Quality Mix ETF (QMEX)
  13. SPDR MSCI South Korea Quality Mix ETF (QKOR)
  14. SPDR MSCI Taiwan Quality Mix ETF (QTWN)
  15. SPDR SSgA Risk Aware ETF (RORO)
  16. Stock Split Index Fund (TOFR)
  17. WisdomTree BofA ML HY Bond Negative Duration (HYND)

The 6 ETPs removed from ETF Deathwatch due to improved health:

  1. AdvisorShares Gartman Gold/Euro (GEUR)
  2. DB 3x Japanese Govt Bond Futures ETN (JGBT)
  3. Deutsche X-trackers MSCI ACAP x-Japan Hedged (DBAP)
  4. ETRACS S&P 500 Gold Hedged Index ETN (SPGH)
  5. iShares Commodity Optimized Trust (CMDT)
  6. ProShares Short Euro (EUFX)

The 5 ETPs removed from ETF Deathwatch due to delisting:

  1. SPDR Nuveen S&P VRDO Municipal Bond (VRD)
  2. SPDR S&P Mortgage Finance (KME)
  3. SPDR S&P Small Cap Emerging Asia Pacific (GMFS)
  4. United States Metals (USMI)
  5. Horizons S&P Financial Select Sector Covered Call (HFIN)

ETF Deathwatch Archives

Disclosure covering writer:  No positions in any of the securities mentionedNo 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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