The ETF Deathwatch list grew in November. Thirty-one exchange-traded products (“ETPs”) were added to the list, and 20 funds were removed. Of the removals, eight were removed due to increased health and 12 were due to asset managers closing their funds. November was a fairly positive month for the equity markets, so November’s increase comes as a surprise.

The funds added in November were a mix of actively managed, international, fixed-income, and 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 actively managed funds or hedge funds. Because equity markets have been strong for the majority of the year, investors may be opting to stick with passive equity funds rather than actively managed funds.

The addition of a few bond ETFs to the list was to be expected. Investor and consumer confidence has been fairly strong, despite headwinds from the U.S.–China trade war and constant headlines about fears of an impending recession.

The economy in Europe has not been the strongest, which may be why two European funds were added to the Deathwatch list this month. GDP growth in Germany dropped in the second quarter of this year and remained almost nonexistent in the third quarter. Brexit has also been a concern in Europe. European funds may not be attractive to investors or money managers at this time due to these concerns.

Forty-nine 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 $8.01 million to $8.29 million, and 69 products had less than $2 million in assets. The average age of products on the list decreased from 50.18 to 49.41 months, and the number of products more than 5 years of age decreased from 131 to 130. The largest ETF on the list had an AUM of $24.50 million, while the smallest had assets of just $520,200.

Here is the Complete List of 492 ETFs and ETNs on ETF Deathwatch for November 2019 compiled using the objective ETF Deathwatch Criteria.

The 31 ETFs/ETNs added to ETF Deathwatch for November:

  1. Qraft AI-Enhanced US Large Cap Momentum ETF (AMOM)
  2. Innovator S&P 500 Buffer ETF June (BJUN)
  3. ProShares MSCI Emerging Markets Dividend Growers ETF (EMDV)
  4. EquityCompass Risk Manager ETF (ERM)
  5. Credit Suisse FI Enhanced Europe 50 ETNs (FEUL)
  6. Freedom 100 Emerging Markets ETF (FRDM)
  7. Fidelity Small-Mid Factor ETF (FSMD)
  8. Goldman Sachs Motif Finance Reimagined ETF (GFIN)
  9. Sofi Gig Economy ETF (GIGE)
  10. AGFiQ Global Infrastructure ETF (GLIF)
  11. Goldman Sachs ActiveBeta Europe Equity ETF (GSEU)
  12. Goldman Sachs ActiveBeta Japan Equity ETF (GSJY)
  13. iShares iBonds 2022 Term High Yield and Income ETF (IBHB)
  14. iShares iBonds 2023 Term High Yield and Income ETF (IBHC)
  15. iShares iBonds 2025 Term High Yield and Income ETF (IBHE)
  16. Innovation Alpha Global ETF (INAG)
  17. Innovation Alpha United States ETF (INAU)
  18. iPath Series B Bloomberg Grains Subindex Total Return ETN (JJG)
  19. Amplify CrowdBureau Peer-to-Peer Lending & Crowdfunding ETF (LEND)
  20. VanEck Vectors Municipal Allocation ETF (MAAX)
  21. iShares Edge MSCI Multifactor USA Mid-Cap ETF (MIDF)
  22. Virtus Newfleet Multi-Sector Bond ETF (NFLT)
  23. Innovator S&P 500 Power Buffer ETF June (PJUN)
  24. WisdomTree Modern Tech Platforms Fund (PLAT)
  25. Qraft AI-Enhanced US Large Cap ETF (QRFT)
  26. Innovation Alpha Trade War ETF (TWAR)
  27. Innovator S&P 500 Ultra Buffer ETF June (UJUN)
  28. Invesco Russell 1000 Enhanced Equal Weight ETF (USEQ)
  29. AGFiQ Dynamic Hedged U.S. Equity ETF (USHG)
  30. Cambria Value and Momentum ETF (VAMO)
  31. Vanguard U.S. Quality Factor (VFQY)

The 12 ETFs/ETNs that were closed:

  1. GraniteShares S&P GSCI Commodity Broad Strategy no K-1 ETF (COMG)
  2. Xtrackers MSCI South Korea Hedged Equity ETF (DBKO)
  3. Xtrackers FTSE Emerging Comprehensive Factor ETF (DEMG)
  4. Xtrackers Russell 2000 Comprehensive Factor ETF (DESC)
  5. InsightShares Patriotic Employers ETF (HONR)
  6. Xtrackers Barclays International Corporate Bond Hedged ETF (IFIX)
  7. Xtrackers Barclays International Treasury Bond Hedged ETF (IGVT)
  8. InsightShares LGBT Employment Equality ETF (PRID)
  9. Cushing Energy & MLP ETF (XLEY)
  10. Cushing Energy Sply Chain ET (XLSY)
  11. Cushing Transport & MLP ETF (XLTY)
  12. Cushing Utility & MLP ETF (XLUY)

The 8 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. ETRACS Alerian MLP Index ETN Series B (AMUB)
  2. ETRACS Wells Fargo Business Development Company Index ETN Series B (BDCZ)
  3. Market Vectors Rupee/USD ETN (INR)
  4. ETRACS 2xMonthly Leveraged Wells Fargo BDC ETN Series B (LBDC)
  5. ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB)
  6. SPDR MSCI World StrategicFactors ETF (QWLD)
  7. ETRACS UBS Bloomberg Constant Maturity Commodity Indx CMCI Total Return ETN (UCIB)
  8. iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG)

Disclosure: No communication by Dynamic Performance Publishing or our employees to you should be deemed as personalized investment advice. Any investment recommended in this newsletter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Dynamic Performance Publishing, its affiliates, and clients may hold positions in the recommended securities. Results are not indicative of holdings for clients of Flexible Plan Investments. Forwarding, copying, or otherwise duplicating this information for the use by anyone other than the intended recipient is expressly forbidden. These results are not representative of those achieved by clients of Flexible Plan Investments, Ltd. (FPI) due to differences in security selection, timing of trades, transaction fees, and FPI’s management fees.