The ETF Deathwatch decreased in size in February. Four exchange-traded products (“ETPs”) were added to the list, and 35 funds were removed. Twelve of those funds were removed due to increased health and 23 were due to asset managers closing their funds. The major U.S. equity indexes lost more than 10% in the span of a week in late February, so the low number of additions to the Deathwatch in February comes as a surprise.

The funds added in February were a mix of niche products. One fund was added because its 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 niche funds. Because equity markets have been going up smoothly since the beginning of 2019, investors may not want to place their funds into niche products at this time. Fund managers have likely been sticking to passive investing in overall markets rather than moving their clients’ money around, causing a decline in average daily volume during the last few months.

The removal of 12 ETPs from the Deathwatch and the addition of only four in February is interesting. Markets reached all-time highs in the second-to-last week of February, but coronavirus fears caused index prices to revert to what we saw in the summer of 2019. Because of this, one would expect to see an increase in the number of ETPs on the Deathwatch list as investors move their funds to money markets and other safe-haven assets. Of the 12 removals from the Deathwatch due to increased health, only two were niche products. The other 10 were more passive ETPs that provided broader exposure to markets—ETPs that one would expect to increase in AUM and volume in February. With the recent correction in markets and the coronavirus continuing to occupy the daily headlines, the Deathwatch list for March may be more interesting.

Fifty-two ETFs and ETNs on the February Deathwatch 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 clients interested in active management.

The average asset level of the threatened ETFs on ETF Deathwatch decreased from $8.01 million to $7.47 million, and 65 products had less than $2 million in assets. The average age of products on the list increased from 51.45 months to 52.42 months, and the number of products more than 5 years of age decreased from 131 to 126. The largest ETF on the list had an AUM of $24.56 million, while the smallest had assets of just $450,800.

Here is the Complete List of 437 ETFs and ETNs on ETF Deathwatch for February 2020 compiled using the objective ETF Deathwatch Criteria.

The 4 ETFs/ETNs added to ETF Deathwatch for February:

  1. First Trust EIP Carbon Impact ETF (ECLN)
  2. Market Vectors Rupee/USD ETN (INR)
  3. Natixis Seeyond International Minimum Volatility ETF (MVIN)
  4. Reverse Cap Weighted US Large Cap ETF (RVRS)

The 12 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. Franklin FTSE Switzerland ETF (FLSW)
  2. ETF Series Solutions-Brand Value ETF (BVAL)
  3. Horizons DAX Germany ETF (DAX)
  4. iShares MSCI Japan Value ETF (EWJV)
  5. Franklin FTSE India ETF (FLIN)
  6. iShares Gold Strategy ETF (IAUF)
  7. iShares Evolved US Healthcare Staples ETF (IEHS)
  8. iShares Evolved US Media and Entertainment ETF (IEME)
  9. Direxion Dly Cons Staples Bull (NEED)
  10. WisdomTree Fundamental US Short-Term Corporate Bond Fund (SFIG)
  11. Tortoise Global Water ESG Fund (TBLU)
  12. Direxion Daily Consumer Bull (WANT)

The 23 ETFs/ETNs that were closed:

  1. Invesco BLDRS Asia 50 ADR Index Fund (ADRA)
  2. Invesco BLDRS Europe Select ADR Index Fund (ADRU)
  3. ETFS Bloomberg Energy Commodity Longer Dated Strategy K-1 Free ETF (AOIL)
  4. Invesco MSCI Emerging Markets Equal Country Weight ETF (EWEM)
  5. Invesco CurrencyShares Chinese Renminbi Trust (FXCH)
  6. Invesco CurrencyShares Swedish Krona Trust (FXS)
  7. Invesco CurrencyShares Singapore Dollar Trust (FXSG)
  8. Invesco Corporate Income Defensive ETF (IHYD)
  9. Invesco Corporate Income Value ETF (IHYV)
  10. Invesco Multi-Factor Defensive (IMFD)
  11. Invesco LadderRite 0-5 Year Corporate ETF (LDRI)
  12. Oppenheimer Russell 1000 Momentum Factor ETF (OMOM)
  13. Oppenheimer Russell 1000 Quality Factor ETF (OQAL)
  14. Oppenheimer Russell 1000 Size Factor ETF (OSIZ)
  15. Oppenheimer Russell 1000 Value Factor ETF (OVLU)
  16. Oppenheimer Russell 1000 Low Volatility Factor ETF (OVOL)
  17. Oppenheimer Russell 1000 Yield Factor ETF (OYLD)
  18. Invesco Dynamic Retail ETF (PMR)
  19. Oppenheimer Emerging Markets Ultra Dividend Revenue ETF (REDV)
  20. Oppenheimer Emerging Markets Revenue ETF (REEM)
  21. Oppenheimer International Revenue ETF (REFA)
  22. Oppenheimer Global Revenue ETF (RGLB)
  23. Oppenheimer International Ultra Dividend Revenue ETF (RIDV)

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