Invest With An Edge

ETF Deathwatch for November 2014: 20% of the Industry

Eighteen zombie ETPs joined ETF Deathwatch this month while six exited due to improved health and nine more were removed because they ceased operations. The net increase of three pushes the overall count to 331, consisting of 226 ETFs and 105 ETNs.

There were 1,652 products listed for trading at the end of October, and the 331 now on Deathwatch is the equivalent of 20%. The 114 new products brought to market in the past six months are excluded in order to give them time to attract attention. Another 442 products are not part of the current list because they have already closed and are no longer listed. Of the 2,094 new products launched in the past 21 years, 21% (442) have closed, so the 20% currently on Deathwatch is not out of line with historical closure rates.

About two years ago, a representative from BlackRock (BLK) was not pleased that I had iShares ETFs on ETF Deathwatch, claiming that they had never closed an ETF. I reminded him that iShares practically invented ETF closures, shutting down three ETFs in 2002. That was before BlackRock bought iShares from Barclays was the response. Since that conversation, BlackRock has shuttered 32 additional iShares ETFs, including 18 in October. Being the largest issuer of ETFs does not make you immune from product closures, and 16 additional iShares ETFs are still on ETF Deathwatch.

The average age of products on the list held steady at 46.2 months, and 94 are now more than five years in age. The average asset size is $6.5 million, same as a month ago, and 55 have asset levels of less than $2 million. Eight products went the entire month of October without any trades, and 163 (nearly 10%) had zero volume on the last day of the month.

Here is the Complete List of 331 Products on ETF Deathwatch for November 2014 compiled using the objective ETF Deathwatch Criteria.

The 18 ETPs added to ETF Deathwatch for November:

  1. AdvisorShares Madrona International (FWDI)
  2. AdvisorShares Meidell Tactical Advantage (MATH)
  3. AdvisorShares Pring Turner Business Cycle (DBIZ)
  4. Deutsche X-trackers Harvest MSCI All China (CN)
  5. Direxion Daily Gold Bear 3x Shares (BARS)
  6. Direxion Daily Gold Bull 3x Shares (BAR)
  7. EGShares Blue Chip ETF (BCHP)
  8. iPath Pure Beta Broad Commodity ETN (BCM)
  9. iShares Commodity Optimized Trust (CMDT)
  10. iShares MSCI All Country Asia x-Japan Small Cap (AXJS)
  11. iShares MSCI Colombia Capped (ICOL)
  12. iShares Yield Optimized Bond ETF (BYLD)
  13. Market Vectors Indonesia Small-Cap (IDXJ)
  14. ProShares UltraShort Consumer Goods (SZK)
  15. WisdomTree Global ex-U.S. Utility (DBU)
  16. WisdomTree Japan Hedged Capital Goods (DXJC)
  17. WisdomTree Japan Hedged Health Care (DXJH)
  18. WisdomTree Japan Hedged Tech, Media and Telecom (DXJT)

The 6 ETPs removed from ETF Deathwatch due to improved health:

  1. Deutsche X-trackers Muni Infrastructure Revenue Bond (RVNU)
  2. ETRACS Monthly Pay 2x DJ International Real Estate ETN (RWXL)
  3. First Trust Hong Kong AlphaDEX (FHK)
  4. First Trust Taiwan AlphaDEX (FTW)
  5. Forensic Accounting ETF (FLAG)
  6. WisdomTree Barclays US Aggregate Bond Negative Duration (AGND)

The 9 ETPs removed from ETF Deathwatch due to delisting:

  1. iShares MSCI Far East Financials (FEFN)
  2. iShares MSCI Emerging Markets Financials (EMFN)
  3. iShares MSCI Emerging Markets Materials (EMMT)
  4. iShares Retail Real Estate Capped (RTL)
  5. iShares Industrial/Office Real Estate Capped (FNIO)
  6. iShares Global Nuclear Energy (NUCL)
  7. iShares Target Date 2045 (TZW)
  8. Global X Canada Preferred (CNPF)
  9. Global X Pure Gold Miners (GGGG)