The ETF Deathwatch list decreased in size in December. Eleven exchange-traded products (“ETPs”) were added to the list, and 21 funds were removed. Of the removals, 13 were removed due to increased health and eight were due to asset managers closing their funds. During December, the bull market of 2019 continued with a strong, positive trend in equities, so the decrease was to be expected.

The funds added in December were a mix of actively managed, international, fixed-income, and niche products. Two funds were added because their assets under management (AUM) were consistently below $5 million for three months. The rest were added due to low average daily volume. These additions may have enough AUM to keep them from closure; however, our system takes into account both AUM and volume, so it’s likely that should volume and interest remain low, these funds may be considered for closure. The low volume in these funds could be due to the nature of the investment product. Many of the funds on the Deathwatch list are actively managed funds or hedge funds. Because equity markets have remained strong for the majority of last year, investors may be opting to stick with passive equity funds rather than actively managed funds.

The addition of niche ETF products to the list wasn’t a surprise. The returns in the overall U.S. equity market have been very strong, giving investors less reason to move money to actively managed and niche products. China and the U.S. made progress toward a phase-one trade agreement in December, leading to an increase in investor and business confidence in the near term. Unemployment also clocked in at about 3.5% in December, indicating continued resilience in the job market. This could have led to an increase in consumer confidence, which, in turn, leads to investor and business confidence as well. The fewer additions to the Deathwatch list compared to removals points toward last year’s strong economic performance, which continued through December.

Fifty-two ETFs and ETNs on Deathwatch this month have been in the market for more than 10 years. This is a long time for ETPs to exist while remaining on our Deathwatch list. Leveraged and short ETF instruments, as well as a number of commodity ETPs, dominate our list of funds older than 10 years. It’s possible that the fund companies managing these products will allow them to remain active, as they may play a larger role for their clients that are interested in active management.

The average asset level of the threatened ETFs on ETF Deathwatch increased from $8.29 million to $8.35 million, and 63 products had less than $2 million in assets. The average age of products on the list increased from 49.41 to 50.53 months, and the number of products more than 5 years of age increased from 130 to 131. The largest ETF on the list had an AUM of $24.95 million, while the smallest had assets of just $492,000.

Here is the Complete List of 481 ETFs and ETNs on ETF Deathwatch for December 2019 compiled using the objective ETF Deathwatch Criteria.

The 11 ETFs/ETNs added to ETF Deathwatch for December:

  1. Innovator IBD Breakout Opportunities ETF (BOUT)
  2. iM DBi Managed Futures Strategy ETF (DBMF)
  3. Franklin FTSE Asia ex Japan ETF (FLAX)
  4. Goldman Sachs Motif Data-Driven World ETF (GDAT)
  5. iShares iBonds 2024 Term High Yield and Income ETF (IBHD)
  6. Invesco S&P SmallCap Consumer Discretionary ETF (PSCD)
  7. RYZZ Managed Futures Strategy Plus ETF (RYZZ)
  8. Sofi 50 ETF (SFYF)
  9. Innovator S&P 500 Ultra ETF April (UAPR)
  10. Barclays Women in Leadership ETN (WIL)

The 8 ETFs/ETNs that were closed:

  1. CSOP MSCI China A International Hedged ETF (CNHX)
  2. Innovation Alpha Global ETF (INAG)
  3. Innovation Alpha United States ETF (INAU)
  4. AGFiQ US Market Neutral Size Fund (SIZ)
  5. Tortoise Cloud Infrastructure Fund (TCLD)
  6. Innovation Alpha Trade War ETF (TWAR)
  7. United States 3x Short Oil Fund (USOD)
  8. Defiance Future Tech ETF (VIDG)

The 13 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. Global X Health & Wellness Thematic ETF (BFIT)
  2. Oppenheimer Global ESG Revenue ETF (ESGF)
  3. Franklin FTSE Brazil ETF (FLBR)
  4. Cambria Foreign Shareholder Yield ETF (FYLD)
  5. Global X Longevity Thematic ETF (LNGR)
  6. ProShares Ultra SmallCap600 (SAA)
  7. First Trust Dorsey Wright Momentum & Value ETF (DVLU)
  8. Direxion Daily Natural Gas Related Bear 3X Shares (GASX)
  9. KraneShares Zacks New China ETF (KFYP)
  10. Direxion Russell Small/Large (RWSL)
  11. Global X TargetIncome Plus 2 ETF (TFLT)
  12. Columbia EM Core ex-China ETF (XCEM)
  13. SPDR Solactive Hong Kong ETF (ZHOK)

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