The number of listed exchange traded funds (“ETFs”) and exchange traded notes (“ETNs”) surpassed the 1,700 for the first time. Seventeen new ETFs were introduced during April, while only one was closed. At the end of the month, the product count stood at 1,703, consisting of 1,496 ETFs and 207 ETNs. The number of actively managed ETFs increased from 124 to 126.
ETN product growth has stagnated after peaking about three years ago. The quantity of ETNs topped out at 218 in July 2012. Since then, there have been only 40 new ETNs issued. Meanwhile, 51 have closed and liquidated for a net decrease of 11. During the same period, 444 ETFs were launched and 216 closed, resulting in a net increase of 228. Investors clearly prefer the safety provided by the asset-backed structure of ETFs over the unsecured debt structure of ETNs.
Asset levels for US listings now stand at $2.13 trillion, which represents a 2.1% increase for the month and a 6.6% gain year-to-date. Actively managed ETFs saw assets rise 4.2%, landing above the $20 billion mark for the first time. The number of funds with more than $10 billion in assets increased from 49 to 51. While representing only 3.0% of the product quantity, these 51 account for 58.8% of overall industry assets. There are 268 products above the $1 billion mark and 835 with $100 million or more in assets. However, the median asset size is just $95.2 million, and it requires the combined assets of the 848 (49.8%) smallest products to equal just 1% of overall industry assets.
Multi-factor strategies and currency hedging remain popular themes for new launches. Ten of April’s product introductions employ a multi-factor approach to security selection. BlackRock rolled out an iShares sub-brand called FactorSelect specifically to address this area of smart beta investing. The five initial iShares FactorSelect ETFs each track a new MSCI Diversified Multi-Factor Index targeting different stock universes. The four factors used in these ETFs are quality, momentum, value, and (small) size. Additional information is available in the FactorSelect overview.
In addition to the five FactorSelect funds, other new multi-factor ETF launches included the Innovator IBD 50 Fund (FFTY) that uses IBD’s seven CAN SLIM factors, PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio (XRLV), WisdomTree Japan Hedged Dividend Growth Fund (JHDG), SPDR MSCI USA Quality Mix ETF (QUS), and the AlphaMark Actively Managed Small Cap ETF (SMCP).
Three more currency-hedged funds came to market in April despite signs that this year’s run in the US Dollar is losing steam. Deutsche Bank brought out currency-hedged international REIT and global infrastructure funds, while WisdomTree added a currency-hedged Japanese dividend fund to its lineup.
Trading activity declined nearly 16% in April with $1.39 trillion worth of products changing hands. Only seven ETFs averaged more than a $1 billion per day in trading, but they accounted for 48.3% of April’s activity. The monthly turnover ratio ($ volume / assets) came in at 0.65, down from 0.79 for March.
|April 2015 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,497||207||1,703|
|Listed as of 12/31/2014||1,451||211||1,662|
|New Introductions for Month||17||0||17|
|Delistings/Closures for Month||1||0||1|
|Net Change for Month||+16||0||+16|
|New Introductions 6 Months||99||5||104|
|New Introductions YTD||74||3||77|
|Net Change YTD||+45||-4||+41|
|Assets Under Mgmt ($ billion)||$2,101||$28.8||$2,129|
|% Change in Assets for Month||+2.1%||+5.6%||+2.1%|
|% Change in Assets YTD||+6.5%||+7.1%||+6.5%|
|Qty AUM > $10 Billion||51||0||51|
|Qty AUM > $1 Billion||263||5||268|
|Qty AUM > $100 Million||793||42||835|
|% with AUM > $100 Million||53.0%||20.3%||49.0%|
|Monthly $ Volume ($ billion)||$1,348||$46.2||$1,394|
|% Change in Monthly $ Volume||-15.8%||-14.1%||-15.7%|
|Avg Daily $ Volume > $1 Billion||7||0||7|
|Avg Daily $ Volume > $100 Million||85||4||89|
|Avg Daily $ Volume > $10 Million||310||12||322|
|Actively Managed ETF Count (w/ change)||126||+2 mth||+1 ytd|
|Actively Managed AUM ($ billion)||$20.1||+4.2% mth||+16.6% ytd|
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):
- Deutsche X-trackers Dow Jones Hedged International Real Estate ETF (DBRE), launched 4/9/15, tracks an index with exposure to a broad range of international REITs and real estate operating companies while mitigating exposure to fluctuations between the US Dollar and 17 foreign currencies. The ETF has an expense ratio of 0.48% (DBRE overview).
- Deutsche X-trackers S&P Hedged Global Infrastructure ETF (DBIF), launched 4/9/15, tracks an index with diversified exposure to the global infrastructure industry while mitigating exposure to currency fluctuations. It is essentially a currency-hedged version of the SPDR S&P Global Infrastructure ETF (GII) and has an expense ratio of 0.45% (DBIF overview).
- Innovator IBD 50 Fund (FFTY), launched 4/9/15, is an actively managed ETF that will invest in the top 50 growth stocks selected by Investor’s Business Daily known as the IBD 50. Driven by specific fundamental and technical indicators in IBD’s CAN SLIM System, the fund will be “conviction weighted” with a higher percentage in the highest ranked stocks. It will not track the IBD 50 Index, which uses a price-weighted methodology. The fund will cap its expense ratio at 0.80% through 3/30/16 (FFTY overview).
- PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio (XRLV), launched 4/9/15, tracks an index composed of the 100 constituents of S&P 500 that exhibit both low volatility and low interest rate risk. It is designed to include stocks exhibiting low volatility characteristics, after removing stocks that historically have performed poorly in rising interest rate environments. Constituents are weighted relative to the inverse of their volatility, and the fund will have an expense ratio of 0.25% (XRLV overview).
- WisdomTree Japan Hedged Dividend Growth Fund (JHDG), launched 4/9/15, tracks a fundamentally weighted index that measures the performance of dividend-paying common stocks with growth characteristics while neutralizing exposure to fluctuations between the Yen and the US Dollar. The index selects 300 companies based on their combined ranking of growth, quality, and valuation factors. Companies are then weighted by annual cash dividends paid. Please note this is not a traditional “dividend growth” methodology, as no measurement of dividend growth is used in either the selection or weighting. The fund has a yield of 1.4% and an expense ratio of 0.43% (JHDG overview).
- Direxion Daily CSI 300 China A Share Bull 2x Shares (CHAU), launched 4/16/15, seeks daily investment results, before fees and expenses, of 200% of the performance of the CSI 300 Index. It is a daily leveraged version of the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) and is implemented with swaps. It has an expense ratio of 0.95% (CHAU overview).
- SPDR MSCI USA Quality Mix ETF (QUS), launched 4/16/15, will track a multi-factor index of Large- and Mid-Cap US companies. The underlying index is an equal-weighted combination of the MSCI USA Value Weighted Index, the MSCI USA Quality Index, and the MSCI USA Minimum Volatility Index. The fund has an initial yield of 1.3% and an expense ratio of 0.15% (QUS overview).
- AlphaMark Actively Managed Small Cap ETF (SMCP), launched 4/21/15, is designed to invest in US listed securities (including ADRs), which are less than $5 billion in market capitalization. AlphaMark takes a “bottoms up” approach to target stocks exhibiting consistent growth, earnings, and cash flow. It is an actively managed ETF of 25-40 stocks based on earnings momentum, cash flows relative to capital spending, and reviews of financial statements, enterprise value, and corporate management. The expense ratio is 0.90% (SMCP overview).
- Global X MSCI Pakistan ETF (PAK), launched 4/23/15, seeks results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI All Pakistan Select 25/50 Index. Pakistan is classified as a Frontier Market, and the fund’s current sector exposure includes Financials 32.7%, Energy 24.2%, and Materials 23.0%. The expense ratio is 0.88% (PAK overview).
- Global X Guru Activist ETF (ACTX), launched 4/29/15, seeks to track an index that uses a proprietary methodology to compile the highest conviction ideas from a select pool of hedge funds where the 13F information is considered to be the most valuable. For example, hedge funds with high turnover are eliminated from the pool. ACTX has an expense ratio of 0.75% (ACTX overview).
- Recon Capital FTSE 100 ETF (UK), launched 4/29/15, seeks to track the US Dollar version of the FTSE 100, the headline index of UK stocks. The FTSE 100 includes the largest and most liquid companies on the London Stock Exchange and represents approximately 80% of the entire UK equity market. The underlying index is not currency hedged, so the fund’s performance will reflect fluctuations in the value of the British Pound and its 0.45% expense ratio (UK overview).
- iShares FactorSelect MSCI Global ETF (ACWF), launched 4/30/15, tracks a multi-factor index of global developed and emerging market Large- and Mid-Cap stocks. The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size. The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.50% (ACWF overview).
- iShares FactorSelect MSCI International ETF (INTF), launched 4/30/15, tracks a multi-factor index of international developed market Large- and Mid-Cap stocks. The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size. The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.45% (INTF overview).
- iShares FactorSelect MSCI Intl Small-Cap ETF (ISCF), launched 4/30/15, tracks a multi-factor index of international developed market Small-Cap stocks. The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size. The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.60% (ISCF overview).
- iShares FactorSelect MSCI USA ETF (LRGF), launched 4/30/15, tracks a multi-factor index of US Large- and Mid-Cap stocks. The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size. The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.35% (LRGF overview).
- iShares FactorSelect MSCI USA Small-Cap ETF (SMLF), launched 4/30/15, tracks a multi-factor index of US Small-Cap stocks. The underlying index focuses on the four well-known investment factors of value, quality, momentum, and low size. The fund seeks to maximize exposure to these factors while maintaining a similar risk level as the broad market at an expense ratio of 0.50% (SMLF overview).
- U.S. Global Jets ETF (JETS), launched 4/30/15, provides investors access to the global airline industry, including airline operators and manufacturers. The underlying index uses a tiered weighting approach with the four largest US airlines each receiving a 12% allocation, and the next five largest US airlines each getting a 4% weighting. This is the first ETF offered by U.S. Global Investors, and it has a 0.60% expense ratio (JETS overview).
Product closures/delistings in April:
- Source EURO STOXX 50 ETF (ESTX) had its last day of listed trading on April 10. Source’s foray into the US ETF market did not last long. ESTX, its first and only US product, was launched September 23, 2014, giving the product and firm just a 6.5-month US presence.
Product changes in April:
- BlackRock changed the name of iShares Core Short-Term USD Bond ETF (ISTB) to iShares Core 1-5 Year USD Bond ETF (ISTB) and iShares Core Long-Term USD Bond ETF (ILTB) to iShares Core 10+ Year USD Bond ETF (ILTB) effective April 15.
- ProShares changed the underlying indexes and names of ProShares Short KBW Regional Banking (KRS) to ProShares Short S&P Regional Banking (KRS) and ProShares Ultra KBW Regional Banking (KRS) to ProShares Ultra S&P Regional Banking (KRS) effective April 16.
Announced Product Changes for Coming Months:
- SPDR BofA Merrill Lynch Crossover Corporate Bond ETF will change its ticker symbol from XOVR to CJNK effective May 12.
- Deutsche Bank (DB) will close its five US-listed target date ETFs (TDX, TDD, TDH, TDN, and TDV), with May 18 being the last day of trading. Additional details are in DB’s Target Date ETF closure press release.
- Direxion will have reverse splits on eight leveraged ETFs and forward splits on eleven ETFs effective May 20. Additional details are available in the press release.
Previous monthly ETF statistics reports are available here.