The number of ETFs and ETNs listed for trading in US markets continues to march toward the 1,600 level. In April, ten ETFs and one ETN were introduced, while one ETN closed and liquidated. The net increase of ten for the month puts the count at 1,578 exchange traded products (“ETPs”), consisting of 1,375 ETFs and 203 ETNs.
All of the growth in product count is coming from the ETF side of the business. As seen in the chart below, ETN growth has stagnated with the ETN count at the same level it was in December 2011. Over the same period, the quantity of ETFs increased by 209, or 17.9%.
Currency-hedged funds seem to be the current fashion trend for new ETF launches since WisdomTree Japan Hedged Equity (DXJ) successfully attracted more than $10 billion in assets last year. Last month, WisdomTree rolled out a Japan currency-hedged sector series with the hopes the currency hedging characteristics can win over US investors that have tended to shy away from international sector suites.
The only closure during April came about due to an early termination trigger on a leveraged ETF that never reset its leverage. If leverage is not reset, then a 51% index loss would result in a 102% loss for a 2x leveraged product. Since ETP values can’t go below zero, and they can’t ask shareholders to cough up more money, these products must be designed with self-destruct mechanisms. Barclays ETN+ Short B Leveraged S&P 500 Total Return ETN (BXDB) triggered such a mechanism in April when its intraday value dropped below $10.
ETP assets grew 1.1% in April to $1.76 trillion. The number of products exceeding $1 billion increased by two to 227 and account for 88.4% of all ETP assets. Funds with more than $10 billion now number 38, and while they represent just 2.4% of the active listings, they account for the majority (53.7%) of assets. It takes the smallest 786 products to add up to 1% of industry assets. SPDR S&P 500 (SPY) is the largest ETF and accounts for 9.1% of industry assets all by itself. Starting at the other end of the asset size spectrum, it takes 1,300 smallest ETPs to encompass the same 9.1% market share as SPY. One ETF holds the same amount of assets as 82.4% of the product universe.
April trading activity declined 5.0% from the March level to $1.47 trillion. Only eight ETFs averaged more than $1 billion a day in trading. Products averaging more than $100 million in dollar volume dropped from 86 to 80, and those able to trade more than $10 million per day fell from 272 to 270.
|April 2014 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,375||203||1,578|
|Listed as of 12/31/2013||1,332||204||1,536|
|New Introductions for Month||10||1||11|
|Delistings/Closures for Month||0||1||1|
|Net Change for Month||+10||0||+10|
|New Introductions 6 Months||82||4||86|
|New Introductions YTD||62||2||64|
|Net Change YTD||+43||-1||+42|
|Actively-Managed Listings||85 (+0)||n/a||85 (+0)|
|Assets Under Mgmt ($ billion)||$1,734||$26.9||$1,761|
|% Change in Assets for Month||+1.0%||+4.7%||+1.1%|
|Qty AUM > $10 Billion||38||0||38|
|Qty AUM > $1 Billion||219||8||227|
|Qty AUM > $100 Million||699||37||736|
|% with AUM > $100 Million||50.8%||18.2%||46.6%|
|Monthly $ Volume ($ billion)||$1,427||$43.6||$1,471|
|% Change in Monthly $ Volume||-4.7%||-13.5%||-5.0%|
|Avg Daily $ Volume > $1 Billion||7||1||8|
|Avg Daily $ Volume > $100 Million||78||2||80|
|Avg Daily $ Volume > $10 Million||261||9||270|
Data sources: Daily prices and volume of individual ETPs from Norgate Premium Data. Fund counts and all other information compiled by Invest With An Edge.
New products launched in April (sorted by launch date):
- WisdomTree Japan Hedged Capital Goods Fund (DXJC), launched 4/8/14, is designed to provide exposure to Capital Goods companies in Japan, while at the same time hedging exposure to fluctuations between the value of the U.S. dollar and the Japanese yen. The fund’s expense ratio is 0.43% (DXJC overview).
- WisdomTree Japan Hedged Financials Fund (DXJF), launched 4/8/14, seeks to track the performance of Financial companies in Japan that is attributable solely to stock prices by hedging against movement between the U.S. dollar and the Japanese yen. Investors will pay 0.43% per year to own the fund (DXJF overview).
- WisdomTree Japan Hedged Health Care Fund (DXJH), launched 4/8/14, employs an investment approach designed to track the performance of Health Care companies in Japan, while hedging out changes between the U.S. dollar and the Japanese yen. The fund sports an expense ratio of 0.43% (DXJH overview).
- WisdomTree Japan Hedged Real Estate Fund (DXJR), launched 4/8/14, seeks to track the performance of Real Estate companies in Japan without the effect of currency fluctuations. The fund has an expense ratio of 0.43% (DXJR overview).
- WisdomTree Japan Hedged Tech, Media & Telecom Fund (DXJT), launched 4/8/14, employs an investment approach designed to track the performance of Tech, Media and Telecom companies in Japan and will hedge away currency fluctuations. As with all the WisdomTree Japan funds listed above, it will levy an expense ratio of 0.43% (DXJT overview).
- Direxion Daily Gold Bear 3x Shares (GLDS), launched 4/10/14, seeks to provide three times the inverse (-300%) daily performance of the benchmark gold futures contracts. The benchmark is the last daily sale price of the current active month gold futures contract. The fund is not registered under the Investment Company Act of 1940 since it is commodity based. Some in the industry are referring to products that provide investors exposure to non-stock underlying asset classes such as futures contracts, commodities, and currencies as ETVs, or exchange-traded vehicles. ETVs do not actually buy the commodity but, instead, buy derivative contacts in order to emulate the price of the underlying commodity. The fund will issue K-1 tax forms and has an expense ratio estimated to be 1.56% (GLDS overview).
- Direxion Daily Gold Bull 3x Shares (GLDL), launched 4/10/14, seeks to provide three times (300%) the daily performance of the benchmark gold futures contracts, which is the last daily sale price of the current active month gold futures contract. Like GLDS above, the fund will invest in commodity futures, issue K-1 tax forms, and have an expense ratio estimated at 1.56% (GLDL overview).
- EGShares Blue Chip ETF (BCHP), launched 4/23/14, will attempt to provide emerging market exposure by investing in developed market multinationals instead of investing directly in emerging market stocks. The fund will equally weight 30 stocks that have quality, meaningful, and growing revenue from emerging markets. The current dividend yield is estimated to be 1.96%, and the expense ratio is 0.60% (BCHP overview).
- Barclays OFI SteelPath MLP ETN (OSMS), launched 4/24/14, is designed to track the performance of a basket of direct interests in master limited partnerships and limited liability companies. While Barclay’s already has two existing ETN brands (ETN+, iPath), this product will not be using either. SteelPath’s MLP mutual funds are structured as corporations and therefore investors indirectly pay federal and state corporate income taxes. The ETN structure of OSMS avoids the corporate tax performance drag, although the monthly interest payments are taxable. Investors will pay 0.56% per year to own this ETN (OSMS overview).
- iShares Yield Optimized Bond ETF (BYLD), launched 4/24/14, is a fund-of-funds providing access to a variety of bonds attempting to deliver current income. BYLD has a weighted average yield to maturity of 2.6% and an effective duration of 5.1 years. The fund’s net expense ratio will be capped at 0.28% until February 2016 when it will increase to 0.55% (BYLD overview).
- db X-trackers Harvest MSCI All China Equity Fund (CN), launched 4/30/14, is designed to capture performance of large and mid cap companies representative of all China securities listed in China, Hong Kong, the U.S., and Singapore. The fund will include, among other security types, A-shares, H-shares, B-shares, Red chips, and P chips. Exposure to the China A share components will be completed by investing in the db X-trackers Harvest CSI 300 China A-Shares Fund (ASHR), an affiliated fund. The expense ratio will be capped at 0.71% until May 2016 when it will go up to 1.01% (CN overview).
Product closures/delistings in April:
- Barclays ETN+ Short B Leveraged S&P 500 Total Return ETN (BXDB) [Barclays Short Leveraged ETN+ Triggers Early Termination]
Product changes in April:
- Jefferies | TR/J CRB Global Commodity Equity Index Fund (CRBQ), an ETF issued by ALPS, changed its name to Global Commodity Equity ETF (CRBQ) effective April 1.
Announced Product Changes for Coming Months:
- Market Vectors RVE Hard Assets Producers ETF (HAP) will change its name to Market Vectors Natural Resources ETF (HAP) effective May 1.
- UBS AG ETRACS Fisher-Gartman Risk On ETN (ONN) and UBS AG ETRACS Fisher-Gartman Risk Off ETN (OFF) will freeze their values May 6 and cease trading May 8 [Lights Going Out For OFF and ONN].
Previous monthly ETF statistics reports are available here.
Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.