The number of exchange-traded products on Deathwatch decreased for the second month in a row. It would be premature to declare that the peak is now behind us, because I would not be surprised to see additional recession-related declines in trading activity for some ETFs in the months ahead. This month’s list contains 155 names, down from 162 last month and down from the record high of 171 for the March list. The current list consists of 114 ETFs and 41 ETNs that are at least six months old and failed to have an Average Daily Value Traded (ADVT) of at least $100,000 during April.
Elements Ben Graham Large Cap Value ETN (BVL) heads up the list this month with a pathetic 38 shares traded per day – an ADVT of just $242. Closer inspection reveals that BVL only traded on five separate days in April, and its highest-volume day was just 200 shares. The two other Elements Ben Graham products are on the list as well. The second entry on the list is Barclays GEMS Asia 8 ETN (AYT) which only traded one day last month. A grand total of 400 shares traded hands, all on April 7.
PowerShares has the largest number of products on the list with 37 (30 ETFs, 6 ETNs, and 1 BLDR), or nearly 24% of the list. PowerShares took a step last Friday to improve their standing by announcing the closure of 19 ETFs. However, only ten of those funds are on ETF Deathwatch. That means that after the closures, there will still be 26 PowerShares products on ETF Deathwatch plus one BLDR, which is now sponsored by PowerShares.
Clearly, more than just trading activity goes into the decision of whether or not to close an ETF. One potentially better gauge is assets under management (AUM) for the fund. However, getting AUM data in a timely manner is tough, and then one would need to determine what percentage is “real investor” money versus “seed money” from the sponsor. Nearly every fund on this list is composed primarily of the original seed money. I have found that ADVT does a great job of pointing out where the problems are.
It has also been suggested that perhaps looking at the creation/redemption ratio can provide additional insights. However, look again at the volume for the ETFs on this list, keeping in mind that most ETFs can only create new shares in blocks of 50,000 shares. If an ETF is only trading 2,000 shares per day, then 25 days of trading volume are needed to create new shares, assuming that all 25 days of activity were “buy” oriented and drove demand for new share creation. BVL would need more than five years of trading volume to equal one creation unit. For the most part, there are no new shares be created or redeemed for the products on this list.
This brings up another point: If there is not enough volume to justify the creation or redemption of shares, then it is not possible to keep the price aligned with the indicative value. The funds on this list are more likely than others to be trading at premiums and discounts to their value.
The fund’s sponsor also has a bearing on whether or not a given fund is ultimately closed. For example, the iShares and SPDR products on the list have a reasonable chance of survival since they are part of broad and successful product lines. Also, I don’t expect the four HOLDRS products on the list to liquidate anytime soon either. Their expenses were covered years ago and the sponsor is just sitting back collecting the fees. I have them on this list to warn potential buyers that there are liquidity concerns with these products. The risk of liquidation might be lower than with other products, but you still have to wonder if someone is going to take the other side of your trade when it comes time for you to sell.
ETF DEATHWATCH – MAY 2009
| Rank | Ticker | Name | Age (mths) | Avg Daily Volume | Avg Daily Value Traded |
|---|---|---|---|---|---|
| 1 | BVL | Elements Ben Graham Large Cap Value ETN | 9 | 38 | $242 |
| 2 | AYT | Barclays GEMS Asia 8 ETN | 8 | 19 | $828 |
| 3 | BVT | Elements Ben Graham Total Mkt Value ETN | 9 | 171 | $1,171 |
| 4 | UBN | E-TRACS CMCI Energy Total Return ETN | 13 | 100 | $1,278 |
| 5 | PTD | E-TRACS CMCI Short Platinum Exc Ret ETN | 12 | 43 | $1,529 |
| 6 | MZO | Claymore/Mrngstr Services SuperSector | 21 | 138 | $1,822 |
| 7 | MZN | Claymore/Mrngstr Inform. SuperSector | 21 | 205 | $3,197 |
| 8 | USV | E-TRACS CMCI Silver Total Return ETN | 13 | 200 | $3,562 |
| 9 | UBD | Claymore U.S. Capital Markets Bond ETF | 15 | 81 | $3,683 |
| 10 | GBB | iPath GBP/USD Exchange Rate ETN | 24 | 100 | $3,979 |
| 11 | JFT | First Trust Enhanced 130/30 Large Cap ETN | 11 | 190 | $4,190 |
| 12 | PTRP | PowerShares Glb Progressive Transport. | 7 | 248 | $4,480 |
| 13 | STH | Claymore/Sabrient Stealth | 32 | 429 | $4,942 |
| 14 | BHH | HOLDRS B2B Internet ETF | 112 | 16,548 | $5,045 |
| 15 | EEH | Elements Spec LgCap US Sector Mo ETN | 21 | 833 | $5,624 |
| 16 | JEM | Barclays GEMS Currency Index ETN | 15 | 143 | $5,725 |
| 17 | UBC | E-TRACS CMCI Livestock Total Return ETN | 13 | 300 | $5,773 |
| 18 | PWD | PowerShares FTSE RAFI Europe Small Mid | 19 | 638 | $7,001 |
| 19 | INR | Market Vectors Indian Rupee/USD ETN | 14 | 200 | $7,001 |
| 20 | JJT | iPath DJ AIG Tin ETN | 10 | 281 | $7,702 |
| 21 | GWO | Elements CS Global Warming ETN | 13 | 1,605 | $8,131 |
| 22 | RTW | Rydex Inverse 2x S&P; Technology | 11 | 229 | $8,502 |
| 23 | CZA | Claymore/Zacks Mid-Cap Core ETF | 25 | 552 | $9,062 |
| 24 | GCE | Claymore CEF Index GS Connect ETN | 17 | 800 | $9,181 |
| 25 | FUE | Elements MLCX Biofuels ETN | 15 | 1,362 | $9,557 |
| 26 | OTR | Claymore/Ocean Tomo Growth | 25 | 624 | $10,787 |
| 27 | OTP | Claymore/Ocean Tomo Patent | 29 | 671 | $11,416 |
| 28 | IFEU | iShares FTSE/EPRA NAREIT Europe | 18 | 581 | $11,888 |
| 29 | JJS | iPath DJ AIG Softs ETN | 10 | 333 | $12,109 |
| 30 | IPU | SPDR S&P; International Utilities | 9 | 776 | $14,086 |
| 31 | IPK | SPDR S&P; International Technology | 9 | 795 | $14,645 |
| 32 | DOY | MacroShares $100 Oil Down | 10 | 1,948 | $15,444 |
| 33 | ROB | Claymore/Robb Report Global Luxury | 21 | 1,405 | $15,860 |
| 34 | CRO | Claymore/Zacks Country Rotation | 22 | 1,338 | $15,954 |
| 35 | ERO | iPath EUR/USD Exchange Rate ETN | 24 | 319 | $16,386 |
| 36 | GRU | Elements MLCX Grains Total Return ETN | 15 | 2,857 | $16,875 |
| 37 | FVI | First Trust Value Line Equity Allocation | 29 | 1,414 | $17,322 |
| 38 | IIH | HOLDRS Internet Infrastructure | 112 | 8,748 | $18,056 |
| 39 | PEH | PowerShares Dynamic Europe Portfolio | 23 | 1,790 | $18,214 |
| 40 | PHW | PowerShares Dynamic Hrdwr & Cons Elec | 41 | 2,162 | $18,940 |
| 41 | JYN | iPath JPY/USD Exchange Rate ETN | 24 | 324 | $19,511 |
| 42 | MKH | HOLDRS Merrill Lynch Market 2000+ | 106 | 500 | $19,930 |
| 43 | PQSC | PowerShares FTSE Nasdaq Small Cap | 13 | 1267 | $20,548 |
| 44 | DPU | PowerShares DB Commodity Long ETN | 12 | 1,567 | $20,757 |
| 45 | BOS | PowerShares DB Base Metals Sht ETN | 11 | 557 | $20,851 |
| 46 | EXB | Claymore/Clear Global Exchanges & Brokers | 22 | 2,052 | $20,851 |
| 47 | FPX | First Trust IPOX-100 Index Fund | 37 | 1,471 | $20,949 |
| 48 | IST | SPDR S&P; International Telecom | 9 | 1,152 | $21,237 |
| 49 | UAG | E-TRACS CMCI Agriculture TR ETN | 13 | 1,148 | $21,256 |
| 50 | UCI | E-TRACS CMCI Total Return ETN | 13 | 1,414 | $21,291 |
| 51 | FDD | First Trust DJ STOXX Select Dividend 30 | 20 | 2,176 | $21,473 |
| 52 | ADZ | PowerShares DB Agriculture Short ETN | 13 | 633 | $22,807 |
| 53 | JPP | SPDR Russell/Nomura PRIME Japan | 30 | 729 | $23,113 |
| 54 | PMA | PowerShares Active Mega-Cap Portfolio | 13 | 1,310 | $23,336 |
| 55 | RHO | Rydex Inverse 2x S&P; Health Care | 10 | 390 | $23,381 |
| 56 | FUD | E-TRACS CMCI Food Total Return ETN | 13 | 1,276 | $24,383 |
| 57 | UEM | Claymore U.S.-1-The Capital Markets | 15 | 690 | $24,530 |
| 58 | BSC | Elements Ben Graham Small Cap Value ETN | 9 | 3,538 | $24,682 |
| 59 | LVL | Claymore/BBD High Income | 23 | 2,795 | $25,625 |
| 60 | IPS | SPDR S&P; International Consumer Staples | 9 | 1,300 | $25,706 |
| 61 | UBM | E-TRACS CMCI Industrial Metals TR ETN | 13 | 1,914 | $26,380 |
| 62 | PBTQ | PowerShares Global Biotech Portfolio | 7 | 1,348 | $26,610 |
| 63 | JJP | iPath DJ AIG Precious Metals ETN | 10 | 586 | $26,901 |
| 64 | PJO | PowerShares FTSE RAFI Japan | 23 | 867 | $27,116 |
| 65 | DOD | Elements Dogs of the Dow Total Return ETN | 18 | 5,490 | $27,550 |
| 66 | PGD | Barclays Asian&Gulf; Currency Reval. ETN | 11 | 567 | $28,134 |
| 67 | BDG | PowerShares DB Base Metals Lng ETN | 11 | 1,905 | $28,548 |
| 68 | WMW | Elements Mrngstr Wide Moat Focus ETN | 19 | 3,848 | $28,889 |
| 69 | IRY | SPDR S&P; International Health Care | 9 | 1,348 | $29,431 |
| 70 | CSD | Claymore/Clear Spin-Off ETF | 29 | 2,371 | $29,497 |
| 71 | PSTL | PowerShares Global Steel Portfolio | 7 | 2,233 | $30,511 |
| 72 | PNXQ | PowerShares Nasdaq Next Q | 13 | 1,819 | $30,938 |
| 73 | URR | Market Vectors Double Long Euro ETN | 12 | 1,076 | $30,981 |
| 74 | PAO | PowerShares Auto Balanced Growth NFA | 12 | 3,443 | $31,238 |
| 75 | PQY | PowerShares Active AlphaQ | 13 | 1,976 | $32,343 |
| 76 | EEN | Claymore/Robeco Developed Intl Equity | 26 | 2,619 | $33,358 |
| 77 | XGC | Claymore/Great Companies Lg-Cap Growth | 25 | 2,605 | $34,684 |
| 78 | EKH | HOLDRS Europe 2001 | 101 | 800 | $34,801 |
| 79 | FFR | First Trust FTSE EPRA/NAREIT Gbl Real Es | 20 | 1,710 | $35,268 |
| 80 | MZG | Claymore/Mrngstr Manufact. SuperSector | 21 | 2,243 | $35,571 |
| 81 | IPN | SPDR S&P; International Industrial | 9 | 2,124 | $35,950 |
| 82 | EEZ | WisdomTree Earnings Top 100 Fund | 27 | 1,333 | $36,141 |
| 83 | PRY | PowerShares FTSE RAFI Intl Real Estate | 16 | 3,362 | $36,845 |
| 84 | PTO | PowerShares Auto Growth NFA | 12 | 4,581 | $37,639 |
| 85 | DEF | Claymore/Sabrient Defender | 29 | 2,319 | $38,066 |
| 86 | GRN | iPath Global Carbon ETN | 10 | 1,557 | $38,079 |
| 87 | DPC | WisdomTree Intl Consumer Cyclical | 31 | 2,567 | $38,632 |
| 88 | EU | WisdomTree Dreyfus Euro | 12 | 1,805 | $38,675 |
| 89 | UBG | E-TRACS CMCI Gold Total Return ETN | 13 | 1,562 | $39,591 |
| 90 | DEW | WisdomTree Europe High-Yielding Equity | 35 | 1,390 | $40,302 |
| 91 | FRN | Claymore/BNY Mellon Frontier Markets | 11 | 3,371 | $40,740 |
| 92 | IPW | SPDR S&P; International Energy | 9 | 2,129 | $41,365 |
| 93 | IFNA | iShares FTSE NAREIT North America | 18 | 1,952 | $41,502 |
| 94 | PRFG | PowerShares FTSE RAFI Consumer Goods | 32 | 1,390 | $42,824 |
| 95 | TLL | ProShares UltraShort Telecom | 13 | 1,205 | $43,354 |
| 96 | RYJ | Claymore/Raymond James Strong Buy Eq | 8 | 3,933 | $44,122 |
| 97 | AFK | Market Vectors Africa ETF | 10 | 2,190 | $45,674 |
| 98 | AGF | PowerShares DB Agriculture Long ETN | 13 | 2,910 | $46,608 |
| 99 | IRO | Claymore/Zacks Dividend Rotation | 18 | 3,686 | $46,721 |
| 100 | DDP | PowerShares DB Commodity Short ETN | 12 | 995 | $47,711 |
| 101 | IFSM | iShares FTSE Dev Small Cap ex-N. Amer | 18 | 2,148 | $48,815 |
| 102 | REC | Rydex Inverse 2x S&P; Energy | 11 | 4,776 | $50,231 |
| 103 | FNX | First Trust Mid Cap Core AlphaDEX | 24 | 2,900 | $52,689 |
| 104 | RHS | Rydex S&P; Equal Weight Cons Staples | 30 | 1,357 | $52,762 |
| 105 | PDQ | PowerShares FTSE RAFI A-Pac x-Jpn Sml Md | 19 | 4,700 | $52,944 |
| 106 | PNQI | PowerShares Nasdaq Internet | 11 | 3,148 | $53,669 |
| 107 | GRI | Cohen & Steers Global Realty Majors | 12 | 2,519 | $53,974 |
| 108 | IPD | SPDR S&P; International Consumer Discr | 9 | 2,829 | $54,281 |
| 109 | RTL | iShares FTSE NAREIT Retail | 24 | 3,729 | $54,584 |
| 110 | UOY | MacroShares $100 Oil Up | 10 | 17,043 | $55,360 |
| 111 | RHM | Rydex 2x S&P; Health Care | 11 | 1,433 | $56,833 |
| 112 | ICI | iPath Optimized Currency Carry ETN | 13 | 1,424 | $63,111 |
| 113 | FAD | First Trust Multi Cap Growth AlphaDEX | 24 | 3,571 | $63,298 |
| 114 | PJG | PowerShares Dynamic Mid Cap | 29 | 4,033 | $63,724 |
| 115 | PHJ | PowerShares High Gr. Rate Div Achievers | 44 | 7,819 | $65,955 |
| 116 | IPF | SPDR S&P; International Financial | 9 | 4,752 | $67,264 |
| 117 | ADRU | BLDRS Europe 100 ADR | 79 | 4,495 | $68,281 |
| 118 | EXT | WisdomTree Total Earnings | 27 | 2,362 | $69,723 |
| 119 | PIZ | PowerShares DWA Dev Mkts Tech Ldrs | 16 | 5,729 | $71,103 |
| 120 | NFO | Claymore/Sabrient Insider | 32 | 4,038 | $71,271 |
| 121 | PBS | PowerShares Dynamic Media | 47 | 9,176 | $71,538 |
| 122 | PDN | PowerShares Dev Markets ex-US Small-Mid | 19 | 5,190 | $72,281 |
| 123 | UHN | United States Heating Oil Fund LP | 13 | 3,576 | $74,282 |
| 124 | PLK | PowerShares Active Low Duration | 13 | 2,948 | $74,338 |
| 125 | LD | iPath DJ AIG Lead ETN | 10 | 1,948 | $74,494 |
| 126 | JJE | iPath DJ AIG Energy ETN | 18 | 3,338 | $74,505 |
| 127 | FXR | First Trust Industrials AlphaDex | 24 | 7,233 | $74,793 |
| 128 | FEX | First Trust Large Cap Core AlphaDEX | 24 | 4,486 | $75,074 |
| 129 | RYT | Rydex S&P; Equal Weight Technology | 30 | 2,386 | $75,628 |
| 130 | TDD | TDX Independence 2010 | 19 | 3,514 | $77,602 |
| 131 | CNY | Market Vectors Chinese Renminbi/USD ETN | 14 | 1,919 | $78,062 |
| 132 | PJM | PowerShares Dynamic Small Cap | 29 | 5,629 | $79,750 |
| 133 | PIQ | PowerShares Dynamic Magniquant | 31 | 4,952 | $80,708 |
| 134 | RGI | Rydex S&P; Equal Weight Industrials | 30 | 2,543 | $81,104 |
| 135 | DNL | WisdomTree Japan Hi-Yield Equity | 35 | 2,210 | $82,362 |
| 136 | FTC | First Trust Large Cap Growth Op AlphaDEX | 24 | 4,719 | $83,302 |
| 137 | EZM | WisdomTree Mid Cap Earnings | 27 | 2,833 | $83,585 |
| 138 | HGI | Claymore/Zacks Intl Yield Hog Index ETF | 22 | 7,310 | $84,673 |
| 139 | FYX | First Trust Small Cap Core AlphaDEX | 24 | 5,076 | $85,557 |
| 140 | EZY | WisdomTree Low P/E | 27 | 3,243 | $85,913 |
| 141 | PFP | PowerShares International Listed Private Eq | 19 | 10,552 | $87,399 |
| 142 | PVM | PowerShares Dynamic Deep Value | 29 | 5,629 | $87,814 |
| 143 | TDX | TDX Independence In-Target | 19 | 3,700 | $87,949 |
| 144 | RPV | Rydex S&P; 500 Pure Value | 38 | 6,514 | $90,036 |
| 145 | DXJ | WisdomTree Japan Total Dividend | 35 | 2,648 | $90,902 |
| 146 | QQXT | First Trust Nasdaq-100 Ex-Technology | 27 | 7,152 | $92,231 |
| 147 | PZJ | PowerShares Zacks Small Cap | 39 | 6,795 | $92,944 |
| 148 | FIO | iShares FTSE NAREIT Industrial Office | 24 | 6,238 | $94,464 |
| 149 | DFE | WisdomTree Europe SmallCap Dividend | 35 | 3,743 | $95,488 |
| 150 | RYU | Rydex S&P; Equal Weight Utilities | 30 | 2,548 | $95,833 |
| 151 | DBR | WisdomTree Intl Health Care | 31 | 5,462 | $96,693 |
| 152 | JJU | iPath DJ AIG Aluminum ETN | 10 | 4,348 | $96,952 |
| 153 | BAL | iPath DJ-AIG Cotton ETN | 10 | 3,433 | $97,230 |
| 154 | PGZ | PowerShares Dynamic Aggressive Growth | 29 | 6,329 | $97,878 |
| 155 | PTJ | PowerShares Dynamic Healthcare Services | 31 | 6,529 | $98,611 |
Disclosure: no positions.