Invest With An Edge

ETF Deathwatch for June 2018

From the beginning of June to July 1, 2018, the ETF Deathwatch had 25 additions, 10 closures, and six exits. The funds that left the list exited due to improved health, mainly from an increase in assets under management (AUM). Ten funds were closed by their parent companies. More than half of the additions to the list were ETNs, and seven ETNs left the list. The presence of ETFs among the additions indicates an increased appetite for risk.

ETFs and ETNs less than 6 months of age are not considered for the ETF Deathwatch list. New ETFs and ETNs need time to attract attention from investors and gain momentum, so we consider their first 6 months an “incubation period.” For June, the majority of new additions to the list were young funds—launched in 2017 or 2018. Most of the new additions were less than 5 years old, which is a good sign because adding older funds to the list typically indicates declining interest in the long term for the funds, and potentially an aversion to market risk.

The only additions that would need to be reviewed due to overall declining interest are VelocityShares Daily 4X Long USD vs. EUR Index ETN (DEUR) and VelocityShares Daily 4X Long EUR vs. USD Index ETN (UEUR), since they had AUM below $5 million for three consecutive months. Apart from these funds, all of the funds added to the list in June were added due to low trading volume rather than a decrease in AUM. Like past months, the investment products were wide-ranging, addressing several areas in the market, from natural gas ETNs to smart mobility ETFs. There were also several leveraged ETNs.

June, which tends to be a slow month for market activity, saw fewer-than-usual closures—which consisted mostly of ETNs. In economic news, the strength of the U.S. economy and increasing interest rates caused the U.S. dollar to rise. Large-cap U.S. stocks underperformed the domestic market, even with relatively decent earnings. Geopolitical events such as the impending trade war between China and the U.S. created some short-term volatility during the month.

Fifty-one ETFs and ETNs on Deathwatch this month have been in the market for more than 10 years. These funds include BLDRS Asia 50 ADR ETF (ADRA) and BLDRS Europe 100 ADR (ADRU). Eight products hit their 10-year marks in June.

The average asset level of the threatened ETFs on ETF Deathwatch decreased from $7.75 to $7.175 million, and the number of products with less than $2 million in assets was 47. The average age increased from 49.01 to 52.77 months, and the number of products more than 5 years of age increased from 131 to 157. The largest ETF on the list had an AUM of $24.56 million, while the smallest had assets of just $244,600.

Here is the Complete List of 432 ETFs and ETNs on ETF Deathwatch for June 2018 compiled using the objective ETF Deathwatch Criteria.

The 26 ETFs added to ETF Deathwatch for June:

  1. VelocityShares Daily 4X Long USD vs. EUR Index ETN (DEUR)
  2. VelocityShares Daily 4X Long EUR vs. USD Index ETN (UEUR)
  3. DB Agriculture Double Short Exchange Traded Notes (AGA)
  4. iPath Pure Beta Copper ETN (CUPM)
  5. VelocityShares Daily 4x Long USD vs AUD Index ETN (DAUD)
  6. Invesco DB G10 Currency Harvest Fund (DBV)
  7. VelocityShares Daily 4X Long USD vs. CHF Index ETN (DCHF)
  8. iPath Seasonal Natural Gas ETN (DCNG)
  9. VelocityShares Daily 4X Long USD vs. GBP Index ETN (DGBP)
  10. VelocityShares Daily 4X Long USD vs. JPY Index ETN (DJPY)
  11. Arrow Dogs of the World ETF (DOGS)
  12. Hartford Municipal Opportunities ETF (HMOP)
  13. iPath Optimized Currency Carry ETN (ICITF)
  14. iPath Inverse S&P 500 VIX Short-Term FuturesTM ETN II (IVOP)
  15. James Biblically Responsible Investment ETF (JBRI)
  16. iPath Bloomberg Aluminum Subindex Total Return ETN (JJU)
  17. Natixis Loomis Sayles Short Duration Income ETF (LSST)
  18. iPath Long Extended Russell 2000 TR Index ETN (RTLA)
  19. iPath Long Extended S&P 500 TR Index ETN (SFLA)
  20. VelocityShares Daily 4X Long AUD vs. USD Index ETN (UAUD)
  21. VelocityShares Daily 4X Long CHF vs. USD Index ETN (UCHF)
  22. VelocityShares Daily 4X Long GBP vs. USD Index ETN (UGBP)
  23. VelocityShares Daily 4X Long JPY vs. USD Index ETN (UJPY)
  24. Wisdomtree Balanced Income Fund (WBAL)
  25. SPDR Kensho Intelligent Structures ETF (XKII)
  26. SPDR Kensho Smart Mobility ETF (XKST)

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

  1. FlexShares STOXX US ESG Impact Index Fund (ESG)
  2. FLAG-Forensic Accounting Long-Short ETF (FLAG)
  3. Xtrackers MSCI EAFE High Dividend Yield Equity ETF (HDEF)
  4. Direxion Daily MSCI Mexico Bull 3x Shares (MEXX)
  5. ProShares Ultra Consumer Services (UCC)
  6. SPDR S&P Internet ETF (XWEB)

The 10 ETFs/ ETN that were closed:

  1. AlphaClone International ETF (ALFI)
  2. VelocityShares VIX Tail Risk ETN (BSWN)
  3. REX Gold Hedged S&P 500 ETF (GHS)
  4. VelocityShares VIX Variable Long Short ETN (LSVX)
  5. ETRACS 1xMonthly Short Alerian MLP Infrastructure Total Return Index ETN (MLPS)
  6. ETRACS Monthly Reset 2xLeveraged S&P 500 Total Return ETN (SPLX)
  7. ETRACS CMCI Livestock Total Return ETN (UBC)
  8. ETRACS CMCI Industrial Metals Total Return ETN (UBM)
  9. ETRACS CMCI Energy Total Return ETN (UBN)
  10. Spirited Funds and ETFMG Whiskey & Spirits ETF (WSKY)

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.