Complete List of 247 New ETFs for 2016

U.S. ETF providers launched 247 new products in 2016, consisting of 229 exchange-traded funds (“ETFs”) and 18 exchange-traded notes (“ETNs”). Subtracting out the 128 closures results in a net increase of 119 for the year. The 247 launches ran ahead of the 10-year average of 226, while the net increase came in below the 10-year average of 158.

The ETF industry is still in its infancy by many measures, but the growth rates for new product introductions and overall product counts have stalled, which is a sign of maturity. Calendar year 2007 produced the largest net growth, and 2011 was not far behind.

For nearly a decade, some industry analysts have been predicting that a surge in actively managed ETF offerings was just over the horizon. While the 41 actively managed ETFs introduced in 2016 represents a record, the 15 closures also established an all-time high. Maybe it will happen someday, but so far, the 163 actively managed ETFs have yet to make a significant impact on the overall industry.

Investor acceptance of smart-beta ETFs is one of the reasons actively managed ETFs have not gained much traction. Smart-beta ETFs are active in a sense, but they are only active at the index level, while the ETFs themselves passively follow an active index. Smart-beta ETFs accounted for 152 (61.5%) of 2016’s product launches and now represent 692 (35%) of the 1,964 listed ETFs and ETNs.

Although the actively managed portion of the ETF pie is much smaller than the smart-beta slice, active management has been successful at grabbing market share from ETNs. Assets in actively managed ETFs overtook ETN assets a year ago. They are now 38% ahead of assets in ETNs ($29.9 billion versus $21.7 billion), and product count is on a path to surpass that of ETNs also. There were just 18 new ETNs launched in 2016 but 29 closures, resulting in a shrinkage of the ETN count by 11 to 190.

We separate ETFs into nine major groupings (shown here with the number of launches in each during 2016):

• Global and International: 73
• Style and Strategy: 61
• Sector: 46
• Bond: 34
• Leveraged: 11
• Inverse: 10
• Commodity: 7
• Volatility: 5
• Currency: 0

These groups are arranged by quantity of launches, and by sheer coincidence, they are in the same order as last year. Based on these divisions, the Global and International group was the largest contributor with 73 new products. Unlike 2015, when the majority of the new international ETFs employed currency hedging, only 16 took this approach last year. Instead, smart beta was the thrust in 2016, with 55 (75%) of the new foreign market ETFs falling into this classification.

The Style and Strategy group was home to the second-largest contingent of new ETFs in 2016. The primary data point to take away here is the fact that none of the 61 new ETFs in this group use traditional capitalization-weighted indexes. Instead, 51 employ a smart-beta index, and the other 10 are actively managed ETFs.

Sector funds remain popular, and 46 came to market in 2016, which is 53% more than in 2015. Smart beta is a theme within this category also, as 34 of the new sector ETF offerings use alternative selection or weighting schemes.

Bonds ETFs saw 34 introductions in 2016, with 12 being actively managed, eight having a smart-beta index, and 13 using a traditional index. Interest-rate hedging was a popular feature for bond ETFs launched in 2015, but none of 2016’s new Bond ETF arrivals include this feature.

Analyzing new ETFs based on features and characteristics is another way to observe industry trends. Using this approach, here are the new launch quantities with unique features:

• 152 Smart Beta
• 45 Dividend (including 5 MLP funds)
• 41 Actively Managed
• 28 Hedged (18 currency, 3 VIX, 2 equity, 2 gold, 2 managed futures, and 1 with option writing)
• 21 ESG
• 19 Thematic
• 16 Fund-of-Funds
• 5 MLP
• 2 C-Corporations

This breakdown reinforces the fact that smart beta is the dominant characteristic behind new ETF offerings, a trend that continues to accelerate. In 2014, a little more than 25% of new products were smart beta. In 2015, the percentage jumped to 59% and edged up to 61.5% for 2016.

Dividend-focused ETFs continue to be popular, especially in the current low interest-rate environment. However, the category is becoming saturated, as evidenced by the 22% drop from the 58 launches of 2015 to 45 this past year.

Various forms of hedging were included with 28 of the new offerings. As mentioned previously, there were no interest-rate-hedged ETFs brought out in 2016, but 18 employ currency hedging, three use volatility hedging, two have equity hedges (short selling), two are gold hedged, two use managed futures, and one hedges with option writing.

The burst of 21 new environmental, social, and governance (“ESG”) ETFs prompted a new category in our list. ESG is often used as a catchall designation for “socially responsible” investing, but the category can have somewhat fuzzy boundaries that may or may not include faith-based criteria.

Thematic investing also joins our list of characteristics this year with 19 new offerings. A thematic ETF is one that targets an identifiable area of the market, although its holdings are not confined to traditional sector boundaries. Thematic ETFs have been around for years, but there was a noticeable increase in launch activity in 2016. Some of the new themes are FinTech (Financial Technology), drones, longevity, millennials, 3D printing, and obesity.

As usual, BlackRock (BLK) launched the largest quantity of ETFs with 23 new products carrying the iShares brand name. Other sponsors with double-digit product introductions in 2016 included First Trust with 17, Elkhorn 13, WisdomTree (WETF) 12, and Direxion 10.

These 247 new ETFs were able to gather $6.3 billion in assets before the end of the year. The two largest were the UBS AG FI Enhanced Global Yield ETN (FIHD) $526 million and UBS AG FI Enhanced Europe 50 ETN (FIEE) $425 million, although both of these were created as customized securities for Fisher Investments. Other new ETFs with large end-of-year asset bases include WisdomTree Dynamic Currency-Hedged International Equity (DDWM) $300 million, SPDR SSGA Gender Diversity (SHE) $272 million, First Trust Dorsey Wright Dynamic Focus 5 (FVC) $253 million, and Franklin LibertyQ Emerging Markets (FLQE) $250 million. Since funds launched in January had 12 times as many months as those launched in December to attract assets, the year-end asset levels do not necessarily equate to the fastest-growing products.

It doesn’t happen very often, but three of 2016’s new launches were closed and liquidated by the end of the year. Two were crude-oil funds from AccuShares, which set records for the shortest life span of any ETF, lasting less than three months. They were saddled with an unworkable teeter-totter arrangement, and they were built on the dreaded C-corporation structure also. The third new product that failed to make it to the end of the year was the thematic CrowdInvest Wisdom ETF (former ticker WIZE), which lasted just five months. Apparently, the wisdom of crowds decided it was not a wise ETF.

The table below lists all 247 new products sorted by launch date, although you have the ability to sort on other columns. The SB/A column indicates whether it is a Smart Beta, Actively Managed, or traditional Index ETF. The IPO date is the first day the product was listed and available for purchase. An ETF’s first trade may be a later date in some cases, as a few products do not have any first-day volume. Additionally, the “inception date” listed for many ETFs from other data providers is typically a meaningless date, as it is often a day or more before it actually becomes listed and available for purchase.

Notes: 1) Fund-of-Funds, 2) employs hedging, 3) dividend focus, 4) closed before the end of the year. All exchange-traded notes are identified with “ETN” and C-corporations with “C-corp” as part of their name description.

List of 284 New ETPs for 2015

List of 205 New ETPs fo 2014

List of 158 New ETPs or 2013

List of 178 New ETPs for 2012

List of 308 New ETPs for 2011

List of 223 New ETPs for 2010

List of 136 new ETPs for 2009

Disclosure: 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.