ETF Deathwatch for February 2013: 26.6% of Eligible ETPs are Zombies

February 11, 2013 by  
Filed under Commentary, ETF Deathwatch

ETF Deathwatch for February contains four fewer members than January.  Twelve new names joined the list while sixteen came off.  The departures consist of a dozen products showing health improvements and four that bit the dust.  February’s list contains 371 names, including 273 ETFs and 98 ETNs.  Additionally, 24 of the ETFs in the membership ranks are actively managed funds.

Factoring out the 49 products with temporary exclusion because they came to market in the past six months, more than a quarter (26.6%) of all eligible ETPs are now on ETF Deathwatch.  The percentage is highest among ETNs at 49.7%.  Actively managed ETFs are close behind with 24 of the 50 (48.0%) eligible funds fighting for survival.  Passively managed (indexed) ETFs are the “healthiest” group, yet they still have 21.7% of their constituents in jeopardy.

Many of these Zombie ETFs are no longer with us.  The lifetime delisting count now stands at 317, with 102 of those closures occurring last year.  Even with that many ETPs out of the way, the 1446 current listings are more than the market can absorb.  Many analysts are predicting a huge wave of actively managed ETFs to soon be unleashed on the market.  If so, the number of failing products is also likely to rise, and the closure count could be in triple digits again in 2013.  If one of your ETFs puts up a “going out of business” sign, be sure to consult the Five Steps to Avoid Disaster When Your ETF Closes.

Six products went the entire month of January without any trades.  The iPath Short Enhanced MSCI EAFE ETN (MFSA) is once again the poster child of unloved ETPs, having last seen action on October 9, 2012. 

Complete List of 371 Products on ETF Deathwatch for February 2013 

The 12 ETPs added to ETF Deathwatch for February:

  1. AdvisorShares Global Alpha & Beta (RRGR)
  2. Guggenheim ABC High Dividend (ABCS)
  3. Guggenheim Wilshire US REIT (WREI)
  4. Huntington US Equity Rotation Strategy (HUSE)
  5. PowerShares DB 3x Italian T-Bond Futures ETN (ITLT)
  6. PowerShares DB 3x Long USD Index Futures ETN (UUPT)
  7. PowerShares DB Italian T-Bond Futures ETN (ITLY)
  8. ProShares Ultra Australian Dollar (GDAY)
  9. ProShares Ultra MSCI EAFE (EFO)
  10. ProShares UltraPro Financials (FINU)
  11. ProShares UltraPro Short Financials (FINZ)
  12. ProShares UltraShort Australian Dollar (CROC)

The 12 ETPs removed from ETF Deathwatch due to improved health:

  1. EGShares China Infrastructure (CHXX)
  2. EGShares GEMS Composite (AGEM)
  3. ELEMENTS Morningstar Wide Moat Focus ETN (WMW)
  4. First Trust Small Cap Value AlphaDEX (FYT)
  5. Global X China Financials (CHIX)
  6. Guggenheim Wilshire Micro-Cap (WMCR)
  7. iShares Utilities Sector Bond (AMPS)
  8. Market Vectors LatAm Aggregate Bond (BONO)
  9. PowerShares DB Commodity Double Long ETN (DYY)
  10. PowerShares S&P SmallCap Industrials (PSCI)
  11. ProShares Ultra Consumer Services (UCC)
  12. SPDR S&P 400 Mid Cap Value (MDYV)

The 4 ETPs removed from ETF Deathwatch due to death and delisting:

  1. Barclays ETN+ S&P 500 Leveraged Short C ETN (BXDC) [January Closures]
  2. Direxion Large Cap Insider Sentiment (INSD)
  3. Direxion S&P 1500 DRRC Volatility Response (VSPR)
  4. Direxion S&P Latin America 40 DRRC Volatility Response (VLAT)

Additional Data/Resources:

ETF Deathwatch Criteria (objective criteria used to generate list)

ETF Deathwatch Archives (past monthly issues)

 

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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