Invest With An Edge

ETF Deathwatch for November 2018

For the month of November, the ETF Deathwatch significantly increased in size. Twenty-two exchange-traded products (“ETPs”) were added to the list and nine funds were removed. Of the removals, six were removed due to increased health and only three were due to asset managers closing their funds. It’s possible that many fund companies were more concerned with recent market action than looking at their product lineups.

For November, seven of the new additions to the list were young funds, having just come out of their incubation period. This initial period is allowed to let new funds gather assets and interest before considering them as “at risk” assets. However, three of the new additions were more than 4 years old, which is a particularly bad sign as it indicates declining interest in an established product. With the exception of an equally-weighted Russell Mid-Cap ETF, these older ETFs include leveraged, short, and other niche products that may not always garner enough interest. Nearly all additions to the list were products serving only a niche of the financial markets.

All but one of the additions this month were due to low average daily volume rather than low assets. It is possible that these additions may have enough assets under management (“AUM”) to keep them from closure; however, our system takes into account both AUM and volume. Should volume and interest remain low, these funds might be considered for closure. A triple-leveraged short natural gas ETN was the sole fund added due to low assets. Natural gas has enjoyed price increases this year, so it’s no surprise that this fund is having a hard time attracting assets.

There are 58 ETFs and ETNs on Deathwatch this month that 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. ProShares Ultra Yen (YCL) recently hit the 10-year mark, while a plethora of leveraged and short ETF instruments 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 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 slightly from $7.58 million to $7.85 million, and 42 products had less than $2 million in assets. The average age of products on the list increased slightly from 50.28 to 50.69 months, and the number of products more than 5 years of age decreased from 132 to 131. The largest ETF on the list had an AUM of $24.96 million, while the smallest had assets of just $432,000.

Here is the Complete List of 438 ETFs and ETNs on ETF Deathwatch for November 2018 compiled using the objective ETF Deathwatch Criteria.

 

The 22 ETF/ETNs added to ETF Deathwatch for November:

  1. AI Powered International Equity ETF (AIIQ)
  2. iPath Series B Bloomberg Cotton Subindex Total Return ETN (BAL)
  3. Amplify Advanced Battery Metals & Materials ETF (BATT)
  4. REX BKCM ETF (BKC)
  5. ETF Series Solutions-Brand Value Etf (BVAL)
  6. Innovator S&P Investment Grade Preferred ETF (EPRF)
  7. Invesco Russell MidCap Equal Weight ETF (EQWM)
  8. Barclays ETN+ FI Enhanced Europe 50 ETN Series B (FLEU)
  9. Franklin Liberty International Aggregate Bond ETF (FLIA)
  10. Direxion Daily Natural Gas Related Bear 3X Shares (GASX)
  11. US Global GO Gold & Precious Metal Miners ETF (GOAU)
  12. iShares Currency Hedged MSCI Spain ETF (HEWP)
  13. iShares Gold Strategy ETF (IAUF)
  14. Pacer Funds Trust-Pacer Benchmark Industrial Real Estate Sctr Etf (INDS)
  15. ARK Israel Innovative Technology ETF (IZRL)
  16. iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC)
  17. PortfolioPlus S&P Mid Cap ETF (PPMC)
  18. VanEck Vectors ETF Trust-VanEck Vectors Real Asset Allocation Etf (RAAX)
  19. Pacer Funds Trust-Pacer Benchmark Retail Real Estate Sctr Etf (RTL)
  20. Alphamark Actively Managed Small Cap ETF (SMCP)
  21. American Energy Independence ETF (USAI)
  22. Validea Market Legends ETF (VALX)

The 6 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. Market Vectors Double Short Euro ETN (DRR)
  2. First Trust Dow 30 Equal Weight ETF (EDOW)
  3. VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV)
  4. AGFiQ US Market Neutral Anti-Beta Fund (BTAL)
  5. iShares Interest Rate Hedged Emerging Markets Bond ETF (EMBH)
  6. ProShares UltraShort MSCI Japan (EWV)

The 3 ETFs that were closed:

  1. QuantX Risk Managed Multi-Asset Income ETF (QXMI)
  2. QuantX Risk Managed Real Return ETF (QXRR)
  3. Virtus Enhanced Short US Equity Etf (VESH)
  4. Looking for more? See our 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.