In the ETF world, some things are backwards. For example, October is a time for costumes, and Zombie costumes are a perennial favorite with healthy humans dressing up as the fictional walking dead. In the ETF world, there are actual Zombie products. However, many of them dress up in a fancy website costume with an NYSE listing mask in an attempt to make them appear healthy.
The sad fact is that more than a fourth of all listed ETPs are probably non-profitable entities for their sponsors. This month’s ETF Deathwatch contains 394 (293 ETFs and 101 ETNs) names out of the 1,456 products listed for trading. Some are so dead they can’t even justify a Zombie label because Zombies at least move. iPath Long Enhanced MSCI EAFE ETN (MFLA) hasn’t traded since January 18, 2012 (260 days ago but who’s counting) and is quoted today with a bid/ask of $67.73/$161.01. This product is beyond dead. The NYSE should be embarrassed to allow such a listing to exist.
I’m often told my list is not realistic because many of the named sponsors have never closed a fund. Guess what? Thirty-four different issuers have closed US-listed ETPs. All thirty-four of them could claim “they never closed an ETF” on the day before their first closure. There is a first time for everything.
Sixteen new names joined ETF Deathwatch for October. Twenty-five products that were on the list last month are no longer there. Seven of those came off due to increases in assets, trading activity, or both. The remaining eighteen came off because they actually closed.
The 16 ETPs added to ETF Deathwatch for October:
- AdvisorShares Madrona Domestic ETF (FWDD)
- ELEMENTS Morningstar Wide Moat Focus ETN (WMW)
- First Trust Mega Cap AlphaDEX Fund (FMK)
- First Trust NASDAQ ABA Community Bank (QABA)
- First Trust United Kingdom AlphaDEX (FKU)
- Global X China Financials ETF (CHIX)
- Guggenheim MSCI Emerging Markets Equal Weight (EWEM)
- iPath DJ-UBS Tin ETN (JJT)
- iPath GEMS Asia 8 ETN (AYT)
- iShares MSCI Emerging Markets Growth (EGRW)
- Market Vectors China A-Shares ETF (PEK)
- Market Vectors Indonesia Small-Cap ETF (IDXJ)
- PowerShares S&P SmallCap Industrials (PSCI)
- ProShares Short Oil & Gas (DDG)
- Russell Small Cap High Dividend Yield ETF (DIVS)
- Teucrium Agricultural Fund (TAGS)
The 7 ETPs removed from ETF Deathwatch due to improved health:
- ETRACS Wells Fargo BDC ETN (BDCS)
- iShares MSCI Global Select Metals & Mining Producers (PICK)
- iShares S&P Global Clean Energy (ICLN)
- Market Vectors CEF Municipal Income ETF (XMPT)
- PowerShares DB Agriculture Long ETN (AGF)
- PowerShares KBW Premium Yield Equity REIT (KBWY)
- Teucrium Soybean Fund (SOYB)
The 18 ETPs removed from ETF Deathwatch due to delisting and closure:
- Direxion Daily Agribusiness Bull 3x (COWL)
- Direxion Daily Agribusiness Bear 3x (COWS)
- Direxion Daily Basic Materials Bear 3x (MATS)
- Direxion Daily BRIC Bull 3x (BRIL)
- Direxion Daily BRIC Bear 3x (BRIS)
- Direxion Daily Healthcare Bear 3x (SICK)
- Direxion Daily India Bear 3x (INDZ)
- Direxion Daily Retail Bear 3x (RETS)
- ETRACS 1-Month S&P 500 VIX Futures ETN (VXAA)
- ETRACS 2-Month S&P 500 VIX Futures ETN (VXBB)
- ETRACS 3-Month S&P 500 VIX Futures ETN (VXCC)
- ETRACS 4-Month S&P 500 VIX Futures ETN (VXDD)
- ETRACS 5-Month S&P 500 VIX Futures ETN (VXEE)
- ETRACS 6-Month S&P 500 VIX Futures ETN (VXFF)
- ETRACS Daily Short 4-Month S&P VIX Futures ETN (DDVX)
- ETRACS Daily Short 5-Month S&P VIX Futures ETN (EEVX)
- ETRACS Daily Short 6-Month S&P VIX Futures ETN (FFVX)
- iPath Short Ext -3x Russell 1000 TR ETN (ROSA)
ETF Deathwatch: October 2012 (link to complete list of 394 ETPs on Deathwatch)
Additional Resources:
ETF Deathwatch Criteria (objective criteria used to generate list)
ETF Deathwatch Archives (past monthly issues)