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ETF Deathwatch for August 2016: More than 40 Deaths

The 18 additions and 16 subtractions to ETF Deathwatch this month was nearly a wash, with 492 (383 ETFs and 109 ETNs) now on the list. The previous record of 30 closures in a single month took place in October 2012, when Russell’s strategic retreat from the index ETF business resulted in the shuttering of 25 funds. The final death toll for the month of August has not been tallied yet, but the count has already reached 41 closures, which will easily establish a new record.

This time, the closure wave is not coming from the actions of just one sponsor. State Street SPDRs is liquidating a dozen ETFs, including some bond funds that have been around for more than nine years and a muni bond ETF with $149 million in assets. BlackRock is closing 10 of its iShares ETFs, including four actively managed funds. ProShares is trimming its lineup by nine funds, and UBS is redeeming and closing nine ETNs. Calamos is getting out of the business entirely, closing its only ETF, an actively managed fund.

Currently, I exclude ETFs with more than $25 million in assets from ETF Deathwatch. Among the August closures, 13 funds had assets in excess of $25 million and were therefore not on the list. Doubling the threshold to $50 million would still have allowed seven of them to avoid being on the list. More than $1.1 billion were residing in these funds, nearly $28 million on average. Clearly, sponsors are starting to take a harder look at what it takes to be profitable and raising the bar on ETF survivability. I will have to do the same.

Six of this month’s additions to ETF Deathwatch are currency-hedged funds. Most of the ETFs in this category were launched after the U.S. dollar peaked in early 2015, making them late to the party. Today, 60 currency-hedged ETFs grace the list. Some will eventually gain traction and survive, but there are probably far more of them on the market than are necessary.

The average asset level of products on ETF Deathwatch held steady at $7.2 million, and the quantity of products with less than $2 million in assets shrunk from 96 to 93. The average age increased from 47.7 to 47.9 months, and the number of products more than five years of age remained at 197.

Here is the Complete List of 492 ETFs and ETNs on ETF Deathwatch for August 2016 compiled using the objective ETF Deathwatch Criteria.

The 18 ETFs and ETNs added to ETF Deathwatch for August:

  1. CS X-Links Multi-Asset High Income ETN (MLTI)
  2. Direxion Daily S&P Biotech Bear 1x (GCC)
  3. First Trust International Multi-Asset Diversified Income (YDIV)
  4. Guggenheim China All-Cap (YAO)
  5. iShares Adaptive Currency-Hedged MSCI EAFE (DEFA)
  6. iShares Adaptive Currency-Hedged MSCI Eurozone (DEZU)
  7. iShares Adaptive Currency-Hedged MSCI Japan (DEWJ)
  8. iShares Global Inflation-Linked Bond (GTIP)
  9. KraneShares E Fund China Commercial Paper (KCNY)
  10. PowerShares Russell Midcap Equal Weight (EQWM)
  11. Reality Shares DIVCON Dividend Defenders (DFND)
  12. Reality Shares DIVCON Dividend Guard (GARD)
  13. Reality Shares DIVCON Leaders Dividend (LEAD)
  14. SPDR FactSet Innovative Technology (XITK)
  15. VanEck Vectors Generic Drug (GNRX)
  16. WisdomTree Dynamic Currency-Hedged Europe Equity (DDEZ)
  17. WisdomTree Dynamic Currency-Hedged International SmallCap Equity (DDLS)
  18. WisdomTree Dynamic Currency-Hedged Japan Equity (DDJP)

The 14 ETPs removed from ETF Deathwatch due to improved health:

  1. ETRACS 2x Wells Fargo BDC Series B ETN (LBDC)
  2. ETRACS ISE Exclusively Homebuilders ETN (HOMX)
  3. First Trust Brazil AlphaDEX (FBZ)
  4. GaveKal Knowledge Leaders Developed World (KLDW)
  5. Global X SuperDividend REIT (SRET)
  6. Guggenheim China Real Estate (TAO)
  7. IQ Leaders GTAA Tracker (QGTA)
  8. iShares Currency Hedged MSCI United Kingdom (HEWU)
  9. PowerShares DB Silver (DBS)
  10. SPDR Barclays 1-10 Year TIPS (TIPX)
  11. SPDR Barclays International High Yield Bond (IJNK)
  12. SPDR S&P Russia (RBL)
  13. Tortoise North American Pipeline Fund (TPYP)
  14. WisdomTree Middle East Dividend (GULF)

The 2 ETFs removed from ETF Deathwatch due to delisting:

  1. Falah Russell-IdealRatings U.S. Large Cap (FIA)
  2. Direxion Daily Total Market Bear 1x (TOTS)

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.