Invest With An Edge

ETF Deathwatch for October 2019

The ETF Deathwatch list remained the same size in October. Twenty-one exchange-traded products (“ETPs”) were added to the list, and 21 funds were removed. Of the removals, 12 were removed due to increased health and nine were due to asset managers closing their funds. October was a fairly positive month for the equity markets, so the fact that the ETF Deathwatch list didn’t decrease in size is somewhat surprising.

The funds added in October were a mix of leveraged, small-cap, and international funds, as well as some niche products. Two funds were added because their 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. It’s also possible that investors may have wanted to hold off on purchasing these small-cap niche products in favor off staying in the broader markets, which did quite well in October.

The addition of international ETFs to the list was to be expected. Trade negotiations between China and the U.S. are still tense, and the trade war has been affecting trade globally. This could be the reason Japanese and Indian funds were added to the list. Quite a few leveraged and inverse bank funds were also added. Investors may have avoided these products because financial stocks and funds performed well in October.

Fifty 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 $7.97 million to $8.01 million, and 56 products had less than $2 million in assets. The average age of products on the list increased from 49.57 to 50.18 months, and the number of products more than 5 years of age increased from 129 to 131. The largest ETF on the list had an AUM of $24.79 million, while the smallest had assets of just $471,616.

Here is the Complete List of 481 ETFs and ETNs on ETF Deathwatch for October 2019 compiled using the objective ETF Deathwatch Criteria.

The 21 ETFs/ETNs added to ETF Deathwatch for October:

  1. Virtus Newfleet Dynamic Credit ETF (BUL)
  2. MicroSectors US Big Banks Index -3X Inverse Leveraged ETN (DYB)
  3. MicroSectors US Big Banks Index -2X Inverse Leveraged ETN (ECOW)
  4. Global X MSCI China Communication Services ETF (EMMF)
  5. iShares MSCI Japan Equal Weighted ETF (FLAU)
  6. iShares MSCI Japan Value ETF (FMK)
  7. First Trust Dow Jones Intl (GNOM)
  8. Franklin LibertyQ Global Equity ETF (HERD)
  9. First Trust Nasdaq Oil & Gas ETF (JPEU)
  10. Goldman Sachs Motif New Age Consumer ETF (KEMX)
  11. Goldman Sachs Motif Human Evolution ETF (LDRS)
  12. Goldman Sachs Motif Manufacturing Revolution ETF (PLCY)
  13. Hoya Capital Housing ETF (RISE)
  14. WisdomTree India EX-State-Owned Enterprises Fund (RODE)
  15. John Hancock Multifactor Media and Communications ETF (ROSC)
  16. MicroSectors US Big Banks Index Inverse ETN (SEIX)
  17. Salt Low Trubeta US Market ETF (SFYX)
  18. ETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B (SHYL)
  19. Invesco S&P SmallCap Materials ETF (TAWK)
  20. Direxion Russell Small/Large (UPV)
  21. WisdomTree Fundamental US Short-Term High Yield Corporate Bond Fund (USI)

The 9 ETFs/ETNs that were closed:

  1. Reality Shares Nasdaq Nexgen Economy China ETF (BCNA)
  2. Reality Shares Fundstrat DQM (DQML)
  3. Direxion Daily Euro Stoxx 50 Bull 3x Shares (EUXL)
  4. Direxion Daily High Yield Bear 2x Shares (HYDD)
  5. Hartford Multifactor Low Volatility International Equity ETF (LVIN)
  6. Hartford Multifactor Global Small Cap ETF (ROGS)
  7. Direxion Daily 7-10 Year Treasury Bear 1x Shares (TYNS)
  8. WisdomTree Global EX-Mexico Equity Fund (XMX)
  9. VanEck Vectors High Income Infrastructure MLP ETF (YMLI)

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

  1. BMO Elkhorn DWA MLP Select Index ETN (BMLP)
  2. Oppenheimer Russell 2000 Dynamic Multifactor ETF (OMFS)
  3. Innovator S&P 500 Ultra ETF April (UAPR)
  4. US Equity EX Dividend Fund-Series 2027 (XDIV)
  5. Invesco Russell MidCap Equal Weight ETF (XMHQ)
  6. ProShares Decline of the Retail Store ETF (EMTY)
  7. Goldman Sachs Access Inflation Protected USD Bond ETF (GTIP)
  8. iShares Evolved US Consumer Staples ETF (IECS)
  9. Legg Mason Global Infrastructure ETF (INFR)
  10. iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC)
  11. GraniteShares Platinum Trust (PLTM)
  12. X-Links Crude Oil Shares Covered Call ETN (USOI)

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