Invest With An Edge

ETF Stats for December 2014 – $1.999 Trillion

The ETF industry crossed above the $2 trillion threshold in December but was unable to hold it as the month and year ended.  By our calculations, at the close of business on December 31, 2014, U.S.-listed ETFs had $1.972 trillion in assets and ETNs stood at $26.9 billion, for a combined total of $1.999 trillion.  If not for the market pullback on the last day of the year, the major threshold would have held.  Rounding is perfectly acceptable when dealing with large numbers, so no one is going to claim foul if you say $2 trillion.

If fund-of-funds ETFs are included, then assets are indeed above the $2 trillion mark.  We exclude these in our monthly calculations as it amounts to double counting.  For example, when a $1 billion fund-of-funds ETF has all of its assets invested in other ETFs, the underlying ETFs will already be reflecting that same $1 billion in their asset values.

Thirteen new ETFs and two ETNs were introduced in December, putting the launch count for the year at 193.  A dozen closures last month brought the yearly total to 79.  December’s net increase of three ETPs produced a year-end listing count of 1,662 products, consisting of 1,451 ETFs and 211 ETNs.  This is a net increase of 126 for the year, or 8.2% growth in products available to investors.

Asset growth was more robust, climbing 1.0% in December and 17.8% for the year.  The average exchange traded product now has $1.2 billion in assets.  However, average is not typical.  Just 221 ETFs can count themselves as above-average when it comes to assets.  That’s just 13.3% of all ETPs, relegating the remaining 86.7% to below-average status.  The median asset level, the level at which half of all products have more and half have less, is just $82 million.  As you can see, typical is a far cry from average.  It’s not every day you see a dataset where the average is 14.6 times greater than the median.

Actively managed ETFs continue to gain a foothold in the industry.  Their count increased by three in December, bringing the number of listings to 125.  The year began with just 71 actively managed funds, so this represents a huge 76% growth.  Assets remain relatively low in these products at just $17.2 billion.  The actively managed product count has 7.6% market share while their AUM has just a 0.8% share.

Trading activity jumped 63% in December over November’s level, with nearly $1.9 trillion of shares changing hands.  This is the second highest level in three years, with only the $2.3 trillion surge two months ago in October being larger.  The number of ETPs averaging more than $1 billion a day in trading increased from seven to nine and captured 55.4% of all trading activity.

 

December 2014 Month End ETFs ETNs Total
Currently Listed U.S. 1,451 211 1,662
Listed as of 12/31/2013 1,332 204 1,536
New Introductions for Month 13 2 15
Delistings/Closures for Month 12 0 12
Net Change for Month +1 +2 +3
New Introductions 6 Months 96 8 104
New Introductions YTD 191 14 205
Delistings/Closures YTD 72 7 79
Net Change YTD +119 +7 +126
Actively-Managed Listings 125 (+3) n/a 125 (+3)
Assets Under Mgmt ($ billion) $1,972 $26.9 $1,999
% Change in Assets for Month +1.0% -1.8% +1.0%
Qty AUM > $10 Billion 44 0 44
Qty AUM > $1 Billion 245 5 250
Qty AUM > $100 Million 745 37 782
% with AUM > $100 Million 51.3% 17.5% 47.1%
Monthly $ Volume ($ billion) $1,796 $60.6 $1,856
% Change in Monthly $ Volume +62.26% +92.4% +63.1%
Avg Daily $ Volume > $1 Billion 8 1 9
Avg Daily $ Volume > $100 Million 95 4 99
Avg Daily $ Volume > $10 Million 318 14 332

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 December (sorted by launch date):

  1. Credit Suisse S&P MLP Index ETN (MLPO), launched 12/3/14, is an exchange traded note with returns linked to the S&P MLP Index.  The index includes master limited partnerships and publicly traded limited liability companies that have tax treatment similar to MLPs.  To be included the securities must have oil and gas operations, at least $300 million in market cap, and $2 million in daily traded value.  The index currently has about 80 constituents and institutes a 15% weighting cap.  Coupons are expected to be paid quarterly, and the expense ratio is 0.95%.  Credit Suisse has not yet deemed the ETN worthy of being posted on its website, but here is a link to the MLPO filing on the SEC website.
  2. ETRACS S&P 500 VEQTOR Switch Index ETN (VQTS), launched 12/3/14, is an exchange traded note whose returns will be linked to a strategy utilizing the S&P 500 and VIX futures.  The strategy will include allocations to the S&P 500 as well as short positions in VIX futures when volatility drops and long positions when volatility spikes.  The note’s annual expenses are 0.95% (VQTS overview).
  3. KraneShares E Fund China Commercial Paper ETF (KCNY), launched 12/3/14, invests in commercial paper denominated in renminbi and issued by sovereign, quasi-sovereign, and corporate issuers in China.  Holdings will be investment-grade and have remaining maturities of no more than one year and no less than one month.  The current average maturity is 128 days, but no yield information is provided.  The fund sports an expense ratio of 0.56% (KCNY overview).
  4. iShares iBonds Dec 2020 Corporate ETF (IBDL), launched 12/4/14, will hold U.S. dollar-denominated, investment-grade corporate bonds maturing in 2020.  The fund has a current yield of 2.7% and an effective duration of 4.7 years.  IBDL has an expense ratio of 0.10% (IBDL overview).
  5. iShares MSCI ACWI Low Carbon Target ETF (CRBN), launched 12/9/14, invests in large- and mid-capitalization equities that have lower carbon exposure relative to the broad market.  Stocks will be selected from developed and emerging markets.  The fund’s expense ratio will be capped at 0.20% until 11/30/16 (CRBN overview).
  6. Cambria Global Asset Allocation ETF (GAA), launched 12/10/14, is a fund-of-funds seeking to provide exposure to a diversified portfolio of assets, including domestic and foreign stocks, bonds, real estate, commodities, and currencies.  The underlying funds combine to hold over 20,000 securities.  Some media hype surrounding the launch implied the fund is free to investors.  While GAA may have a 0.0% direct management fee, the 29 ETFs it invests in all have management fees that get passed on to shareholders.  In the end, GAA has a total expense ratio of 0.29% (GAA overview).
  7. Deutsche X-trackers MSCI EMU Hedged Equity ETF (DBEZ), launched 12/10/14, provides investors access to Eurozone equities while hedging against the impact of currency fluctuations between the U.S. dollar and the euro.  Investors will pay 0.45% annually to own this fund (DBEZ overview).
  8. Validea Market Legends ETF (VALX), launched 12/10/14, is an actively managed ETF that holds 100 stocks from a wide variety of investment styles, including value, growth, momentum, and income.  Validea uses a proprietary selection process based on its interpretation of the published investment strategies of high-profile Wall Street personalities.  VALX sports a 0.79% expense ratio (VALX overview).
  9. WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (XSOE), launched 12/10/14, invests in emerging market companies that are less than 20% owned by the respective government.  Since excluding government owned enterprises can affect the overall allocations of countries and sectors in the universe, XSOE adjusts the weightings to target close to the initial universe.  The fund’s expense ratio is 0.58% (XSOE overview).
  10. BioShares Biotechnology Clinical Trials Fund (BBC), launched 12/17/14, invests in clinical trials-stage biotechnology companies, which are usually younger and smaller companies that do not have any FDA approved drugs.  These companies are focused on testing their experimental drug candidates in Phase 1, 2, or 3 human clinical trials.  BBC has an expense ratio of 0.85% (BBC overview).
  11. BioShares Biotechnology Products Fund (BBP), launched 12/17/14, invests in products-stage biotechnology companies, which are more established companies that have already traversed much of the failure and risk associated with clinical trials.  They typically have a drug that has been FDA approved.  Investors will pay 0.85% annually to own this fund (BBP overview).
  12. ValueShares International Quantitative Value ETF (IVAL), launched 12/17/14, is an actively managed ETF that will invest in about 50 international value stocks that it views as cheap, yet high quality.  Its quantitative screens include forensic accounting to analyze financial statements for signs of financial distress, valuation for low enterprise values relative to operating earnings, and quality for long-term business fundamentals and current financial strength.  IVALS’s expense ratio ekes in just under the 1% threshold at 0.99% (IVAL overview).
  13. Reality Shares DIVS ETF (DIVY), launched 12/18/14, is an actively managed fund designed to provide exposure to the aggregate value of ordinary dividends expected to be paid on a portfolio of large U.S. equities, irrespective of the activity in the trading price of the equities.  The strategy tries to isolate the dividend payments from the stock price.  DIVY uses a combination of options, dividend swaps, futures, and forwards on indexes or other representations of large cap securities.  The fund sports a 0.85% expense ratio (DIVY overview).
  14. PowerShares Russell 1000 Equal Weight Portfolio (EQAL), launched 12/23/14, invests in the stocks of the Russell 1000 index with a two-step weighting process.  First, the stocks are grouped into nine sectors with each sector given an equal allocation.  Then, stocks in the sector groups are equally weighted.  The fund will be rebalanced quarterly.  The ETF’s expense ratio is 0.20% (EQAL overview).
  15. ALPS Medical Breakthroughs ETF (SBIO), launched 12/31/14, seeks to replicate the performance of the Poliwogg Medical Breakthroughs Index, by investing in the U.S.-listed stocks of mid cap and small cap companies operating in the biotechnology and pharmaceutical sectors.  SBIO has an expense ratio of 0.50% (SBIO overview).

Product closures/delistings in December:

  1. Market Vectors Bank and Brokerage (RKH)
  2. Market VectorsColombia(COLX)
  3. Market VectorsGermanySmall-Cap (GERJ)
  4. Market VectorsLatin AmericaSmall-Cap (LATM)
  5. Market Vectors Renminbi Bond (CHLC)
  6. Teucrium Natural Gas (NAGS)
  7. Teucrium WTI Crude Oil (CRUD)
  8. EGShares Emerging Markets Dividend Growth (EMDG)
  9. EGShares Emerging Markets Dividend High Inc (EMHD)
  10. Direxion Daily Gold Bear 3x Shares (BARS)
  11. Guggenheim BulletShares 2014 Corporate Bond (BSCE)
  12. Guggenheim BulletShares 2014 High Yield Corporate Bond (BSJE)

Product changes in December:

  1. Direxion Junior Gold Miners Bull 3x Shares (JNUG) had a 1:10 reverse split and Direxion Russia Bull 3x Shares (RUSL) had a 1:6 reverse split effective December 23.

Announced Product Changes for Coming Months:

  1. ProShares will close 17 ETFs with the last day of trading occurring on January 8 (press release).
  2. EGShares Low Volatility Emerging Markets Dividend ETF (HILO) will be renamed EGShares EM Quality Dividend ETF (HILO) and begin tracking a new index effective January 26.
  3. Russell plans to close its last remaining ETF, the actively managed Russell Equity ETF (ONEF), with its last day of trading on January 26.  Russell closed its other 25 ETFs more than two years ago (October 2012).

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.