Fifteen launches in February make it forty new ETFs so far in 2014. If the remainder of the year can maintain the pace of the first two months, it could see the highest launch activity of the past three years. However, launch activity is never consistent or predictable, so we will have to wait to see how the year eventually turns out.
One thing appears probable though, 2014 will likely establish a record for actively managed ETF introductions. Six of February’s new ETFs fit the actively managed definition, bringing the year-to-date count to fourteen. With ten months remaining in 2014, the previous record of twenty actively managed launches (occurring in both 2012 and 2013) is in jeopardy. In percentage terms, 35% of this year’s launch activity has been actively managed ETFs, and the quantity of actively managed ETFs has jumped from 71 to 85, for a 19.7% increase in just two months.
Actively managed ETFs are still an extremely small portion of the industry. These 85 funds represent 5.4% of the 1,586 ETPs currently listed for trading, but their combined assets of $15.2 billion equates to only 0.9% of the entire pie.
Like January, none of the launches in February were ETNs. The fifteen launches and four closures produced a net increase of eleven ETFs. The month-end count stood at 1,568 (1,366 ETFs and 202 ETNs). Assets increased by 4.9% to a new record high of $1.73 trillion. There are now 226 products with more than $1 billion, and they account for 88.7% of all ETP assets.
February had only 19 trading days, so it was not surprising to see trading activity diminish. Total monthly dollar volume dropped 2.3% to $1.4 trillion. The number of products averaging more than $1 billion in trading per day increased from eight to ten and grabbed 55.7% of all the action.
|February 2014 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,366||202||1,568|
|Listed as of 12/31/2013||1,332||204||1,536|
|New Introductions for Month||15||0||15|
|Delistings/Closures for Month||4||0||4|
|Net Change for Month||+11||0||+11|
|New Introductions 6 Months||92||7||99|
|New Introductions YTD||40||0||40|
|Net Change YTD||+34||-2||+32|
|Actively-Managed Listings||85 (+6)||n/a||85 (+6)|
|Assets Under Mgmt ($ billion)||$1,704||$24.7||$1,729|
|% Change in Assets for Month||+4.9%||+5.7%||+4.9%|
|Qty AUM > $10 Billion||39||0||39|
|Qty AUM > $1 Billion||219||7||226|
|Qty AUM > $100 Million||683||33||716|
|% with AUM > $100 Million||50.0%||16.3%||45.7%|
|Monthly $ Volume ($ billion)||$1,369||$54.4||$1,423|
|% Change in Monthly $ Volume||-2.7%||+9.9%||-2.3%|
|Avg Daily $ Volume > $1 Billion||9||1||10|
|Avg Daily $ Volume > $100 Million||84||3||87|
|Avg Daily $ Volume > $10 Million||287||10||297|
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 February (sorted by launch date):
- iShares Currency Hedged MSCI EAFE ETF (HEFA), launched 2/4/14, uses a fund-of-funds approach to provide local currency performance of stocks in EAFE countries by investing in iShares MSCI EAFE ETF (EFA) and hedging against currency fluctuations to the U.S. dollar. The fund has an expense ratio of 0.39% (HEFA overview).
- iShares Currency Hedged MSCI Germany ETF (HEWG), launched 2/4/14, uses a fund-of-funds approach to replicate the local performance of German stocks by holding iShares MSCI Germany ETF (EWG) and hedging against currency fluctuations between the U.S. dollar and euro. Investors will pay 0.53% to own this fund (HEWG overview).
- iShares Currency Hedged MSCI Japan ETF (HEWJ), launched 2/4/14, uses a fund-of-funds approach to replicate the local performance of Japanese stocks by holding iShares MSCI Japan ETF (EWJ) and hedging against currency fluctuations between the U.S. dollar and Japanese yen. The fund’s total expense ratio is 0.48% (HEWJ overview).
- iShares Treasury Floating Rate Bond ETF (TFLO), launched 2/4/14, will provide exposure to U.S. Treasury Floating Rate Notes (FRNs). The U.S. Treasury began issuing FRNs in January 2014, and they are issued for a term of two years. They pay interest quarterly in varying amounts, based on discount rates in auctions of 13-week Treasury bills. The fund’s underlying index is from Barclays, and the average yield to maturity is 0.13%. Fees will be waived (0.0%) through 2/28/15 and are then expected to be 0.15% (TFLO overview).
- WisdomTree Bloomberg Floating Rate Treasury Fund (USFR), launched 2/4/14, also seeks to provide exposure to the newly introduced U.S. Treasury Floating Rate Notes (FRNs), whose interest will be tied to 13-week Treasury bill auction rates. This fund will use an index run by Bloomberg and lists a 0.0% average yield to maturity. The fund’s expense ratio is 0.15% (USFR overview).
- iShares 2019 AMT-Free Muni Term ETF (MUAH), launched 2/6/14, will invest in U.S. municipal bonds that mature in 2019. The average yield to maturity is 1.23%, and the fund has an expense ratio of 0.30% (MUAH overview).
- AdvisorShares Gartman Gold/British Pound ETF (GGBP), launched 2/12/14, is an actively managed ETF investing in the gold market using the British pound instead of the U.S. dollar and is managed by Treesdale Partners. The pound is obtained through the sale of either exchange-traded currency futures or foreign exchange forward contracts. The fund sports an expense ratio of 0.65% (GGBP overview).
- AdvisorShares Gartman Gold/Euro ETF (GEUR), launched 2/12/14, is an actively managed ETF that invests in gold using the euro instead of the U.S. dollar and is managed by Treesdale Partners. Euros are obtained through the sale of either exchange-traded currency futures or foreign exchange forward contracts. The fund’s expense ratio is 0.65% (GEUR overview).
- AdvisorShares Gartman Gold/Yen ETF (GYEN), launched 2/12/14, is an actively managed ETF investing in gold using the Japanese yen instead of the U.S. dollar and is managed by Treesdale Partners. The yen is obtained through the sale of either exchange-traded currency futures or foreign exchange forward contracts. Investors will pay 0.65% per year (GYEN overview).
- AdvisorShares International Gold ETF (GLDE), launched 2/12/14, is an actively managed fund-of-funds ETF that invests in the gold market using several currencies. Its objective is to maintain a balanced allocation in each of the underlying ETFs, some of which may be affiliated with the fund. The affiliated ETFs are the three AdvisorShares Gartman Gold ETFs outlined above (GGBP, GEUR, and GYEN). The fund will also invest a proportion of its assets in one or more unaffiliated closed-end funds, ETFs, ETNs, and/or other ETPs to gain additional exposure to the international gold market. The fund’s expense ratio is 1.52% (GLDE overview).
- Workplace Equality Portfolio (EQLT), launched 2/25/14, invests in its own stock index that includes many of America’s leading equality-minded corporations. It consists of publicly-traded companies that support lesbian, gay, bisexual, and transgender (LGBT) equality in the workplace. Companies in the Index must score 100% on the Human Rights Campaign Corporate Equality Index or have the verifiable characteristics that would earn them such a score. The screening criteria generally include mandatory language in a company’s equal employment opportunity (EEO) statement prohibiting discrimination based on sexual orientation and gender identity, offering health benefits to same-sex partners or spouses, along with other corporate benefits and privileges. The fund has an expense ratio of 0.75% (EQLT overview).
- iShares Enhanced International Large-Cap ETF (IEIL), launched 2/27/14, is an actively managed ETF that invests in large-cap stocks of international developed markets. Stocks are selected on the following factors: quality – consistent and stable earnings, value – lower relative valuations, and size – lower relative market capitalization. The ETF sports an expense ratio of 0.35% (IEIL overview).
- iShares Enhanced International Small-Cap ETF (IEIS), launched 2/27/14, is an actively managed ETF that invests in small-cap stocks of international developed markets. Stocks are selected on the following factors: quality – consistent and stable earnings, value – lower relative valuations, and size – lower relative market capitalization. The fund’s expense ratio is 0.49% (IEIS overview).
- PowerShares International BuyBack Achievers Portfolio (IPKW), launched 2/27/14, will purchase the stock of foreign corporations that have effected a net reduction in shares outstanding of 5% or more in its most recent fiscal year. IPKW’s underlying index is reconstituted annually in July and rebalanced quarterly. Its expense ratio is 0.55% (IPKW overview).
- SPDR Barclays 0-5 Year TIPS ETF (SIPE), launched 2/27/14, seeks to provide investment results that correspond to performance of an index tracking the 0-5 year inflation protected sector of the United States Treasury market, after expenses. The current yield is 1.0% and modified adjusted duration is 1.8 years. Investors will spend 0.15% per year (SIPE overview).
Product closures/delistings in February:
- PowerShares Dynamic Magniquant (PIQ) [ETF Closings Not Always What They Seem]
- PowerShares KBW International Financial (KBWX)
- PowerShares Lux Nanotech (PXN)
- PowerShares MENA Frontier Countries (PMNA)
Product changes in February:
- EGShares changed the underlying indexes for three ETFs effective February 3. EGShares Brazil Infrastructure (BRXX) and EGShares Low Volatility Emerging Markets (HILO) moved from INDXX to FTSE supplied indexes. EGShares Emerging Markets Domestic Demand (EMDD) switched from INDXX to S&P.
- Effective February 19, Invesco PowerShares changed the names on 10 ETFs from “Dynamic” to “DWA…Momentum” reflecting a change in the underlying indexes to ones provided by Dorsey, Wright & Associates. The affected products include the nine Dynamic sector portfolios. Additionally, PowereShares Dynamic OTC (PWO) changed its name and ticker to PowerShares DWA NASDAQ Momentum Portfolio (DWAQ). Further details and the product list are available in the press release (pdf).
Announced Product Changes for Coming Months:
- Effective March 3, the iSharesBond Corporate ex-Financials Term and Corporate Term ETFs will add “Mar” in front of the maturity year to indicate their March maturity and termination.
- Pax MSCI EAFE ESG Index ETF (EAPS) will have its last day of trading March 21 and will be merged into Pax World International ESG Index Fund (a new open-end mutual fund).
- BlackRock announced (pdf) its intent to close and liquidate its iShares ACWI ex-US sector suite consisting of ten ETFs. The last day of trading for the affected funds will be March 25.
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.