The ETF industry roared back in February after beginning the year with a negative start in January. Twenty-two new products came to market during the month and seven shuttered operations. Assets jumped 5.3% to $2.1 trillion, which by our calculations allowed month-end assets to close above the $2 trillion mark for the first time. Readers should note that we exclude fund-of-fund assets in our calculations to avoid double counting. As such, our year-end 2014 data put assets just a sliver short of that threshold.
February’s net addition of 15 active listings brought the year-to-date count back into positive territory at plus five. The month’s launches were heavily skewed with 21 ETFs and just one ETN coming to market. Additionally, six of the seven closures were ETNs, putting month-end listings at 1,667 consisting of 1,462 ETFs and 205 ETNs.
Actively managed ETFs saw four additions and one closure. Their count now stands at 123, which is a decline of two for the year. However, actively managed assets surged 10.6% for the month, are up 13.0% year-to date, and now total $19.5 billion.
ETFs with more than $10 billion of assets increased by two and now number 49. Although they represent less than 3% of products, they hold more than 58% of industry assets. Products with $1 billion or more in assets increased by nine to 259 and have a better than 89% market share. The smallest 830 products (nearly half) account for just 1% of assets.
Trading activity plunged more than 28% with just $1.3 trillion worth of ETFs and ETNs changing hands. There were only 19 trading days in the month, which only partially accounts for the decline. The quantity of products averaging more than $1 billion a day in trading activity dropped from twelve to eight, yet they still accounted for 48.7% of industry dollar volume.
|February 2015 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,462||205||1,667|
|Listed as of 12/31/2014||1,451||211||1,662|
|New Introductions for Month||21||1||22|
|Delistings/Closures for Month||1||6||7|
|Net Change for Month||+20||-5||+15|
|New Introductions 6 Months||98||6||104|
|New Introductions YTD||34||1||35|
|Net Change YTD||+11||-6||+5|
|Assets Under Mgmt ($ billion)||$2,058||$27.6||$2,085|
|% Change in Assets for Month||+5.3%||+5.4%||+5.3%|
|% Change in Assets YTD||+4.3%||+2.7%||+4.3%|
|Qty AUM > $10 Billion||49||0||49|
|Qty AUM > $1 Billion||254||5||259|
|Qty AUM > $100 Million||765||39||804|
|% with AUM > $100 Million||52.4%||19.5%||48.2%|
|Monthly $ Volume ($ billion)||$1,282||$50.2||$1,333|
|% Change in Monthly $ Volume||-28.6%||-28.2%||-28.6%|
|Avg Daily $ Volume > $1 Billion||7||1||8|
|Avg Daily $ Volume > $100 Million||80||3||83|
|Avg Daily $ Volume > $10 Million||296||12||308|
|Actively Managed ETF Count (w/ change)||123||+3 mth||-2 ytd|
|Actively Managed AUM ($ billion)||$19.5||+10.6% mth||+13.0% 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 February (sorted by launch date):
- RevenueShares Global Growth Fund (RGRO), launched 2/2/15, holds about 100 securities based on two main selection criteria. First, 5 developed and 5 emerging countries will be chosen by selecting those with the highest percentage growth of their year over year GDP from the prior 2 quarters, with each country getting a 10% weighting. Second, the top 10 revenue-producing companies in each country are weighted by revenue, but they are limited to a 5% portfolio allocation. The expense ratio will be capped at 0.70% until 11/25/15 (RGRO overview).
- ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN (SMHD), launched 2/4/15, is an exchange-traded note that provides 2x (200%) leveraged exposure (reset monthly) to an index of small-cap stocks having dividend yields that are relatively high compared to other small-cap stocks in the U.S. market. The ETN pays a variable monthly coupon linked to two times the cash distributions paid by index constituents. SMHD has an estimated yield of 16.8% and sports an expense ratio of 0.85% (SMHD overview).
- Fidelity MSCI Real Estate Index ETF (FREL), launched 2/5/15, is designed to represent the performance of the real estate sector in the U.S. equity market. The fund will not hold all of the positions in the underlying index, MSCI USA IMI Real Estate Index, but will instead select a representative sample of securities that collectively has an investment profile similar to the index. Investors will pay 0.12% annually to own this fund (FREL overview).
- ProShares Russell 2000 Dividend Growers ETF (SMDV), launched 2/5/15, invests in the companies of the Russell 2000 Index with at least 10 consecutive years of dividend growth. The fund will hold a minimum of 40 stocks equally weighted, and right now it holds 55. The top sectors represented in the fund are Financials and Utilities, each at about 23%. SMDV has an estimated yield of 2.4% and expects to pay dividends quarterly. The fund’s expense ratio will be capped at 0.40% until 9/30/16 (SMDV overview).
- ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL), launched 2/5/15, will invest in the companies of the S&P 400 MidCap Index that have at least 15 consecutive years of dividend growth. The fund will hold a minimum of 40 stocks equally weighted, and right now it holds 47. Financials leads the sector lineup at nearly 30%, and the next closest is Materials at 17%. The estimated yield for REGL is 1.8%. The fund’s expense ratio will be capped at 0.40% until 9/30/16 (REGL overview).
- SPDR S&P 500 Buyback ETF (SPYB), launched 2/5/15, provides exposure to companies in the S&P 500 that have high buyback ratios compared to other stocks. The fund may either hold all of the positions in the underlying index, S&P 500 Buyback Index, or it could instead select a representative sample of securities that collectively has the same risk and return characteristics of the Index. The Index provides exposure to the 100 companies in the S&P 500 that have the highest buyback ratio in the last 12 months, and currently the fund holds 101 positions. The fund sports a 0.35% expense ratio (SPYB overview).
- Guggenheim S&P High Income Infrastructure ETF (GHII), launched 2/11/15, invests in 50 high-yielding securities of companies in developed markets that engage in various infrastructure-related industries. Sector representations in the fund include Utilities 50.2%, Industrials 33.2%, and Energy 16.7%. Investors will pay 0.45% annually to own this fund (GHII overview).
- KraneShares FTSE Emerging Markets Plus ETF (KEMP), launched 2/13/15, invests in large- and mid-cap companies in emerging market countries and weights the country allocations by gross domestic product. As of the end of 2014, the largest markets represented were China (43.5%), India (17.7%), Brazil (5.2%), Mexico (4.5%), and Russia (3.9%). The fund’s largest holding at 17.5% is KraneShares Bosera MSCI China A ETF (KBA), and it has a 0.68% expense ratio (KEMP overview).
- ProShares Ultra Gold Miners (GDXX), launched 2/13/15, seeks a daily return that is 2x (200%) the daily performance of an index made up of publicly traded companies involved in gold and silver mining. Companies whose revenues lean toward silver mining are limited to 20% of the holdings. Canada has the largest geographic allocation at 60%. The expense ratio will be capped at 1.11% until 9/30/16 (GDXX overview).
- ProShares Ultra Junior Miners (GDJJ), launched 2/13/15, seeks a return that is 2x (200%) the daily performance of an index made up of micro- and small-cap companies involved in gold and silver mining that generate at least 50% of their revenues from those activities. Companies whose revenues lean toward silver mining are limited to 20% of the holdings. Canada takes top billing in the geographic allocation at 64%. The expense ratio will be capped at 1.12% until 9/30/16 (GDJJ overview).
- ProShares UltraShort Gold Miners (GDXS), launched 2/13/15, seeks a daily return that is 2x inverse (-200%) the daily performance of the same index underlying GDXX. The expense ratio will be capped at 0.95% until 9/30/16 (GDXS overview).
- ProShares UltraShort Junior Miners (GDJS), launched 2/13/15, seeks a daily return that is 2x inverse (-200%) the daily performance of the same index underlying GDJJ. The expense ratio will be capped at 0.95% until 9/30/16 (GDJS overview).
- AdvisorShares Pacific Asset Enhanced Floating Rate ETF (FLTR), launched 2/19/15, is an actively managed ETF designed to produce a high level of current income. The ETF invests in senior secured and unsecured floating rate loans, secured second lien floating rate loans, and other floating rate debt securities of domestic and foreign issuers. The portfolio manager can choose to invest as little as 80% of the fund or can leverage the portfolio up to 130%. Although the fund is focused on income, an estimated yield is not currently provided on the fund’s website. The expense ratio will be capped at 1.10% until at least 2/13/16 (FLTR overview).
- Sit Rising Rate ETF (RISE), launched 2/19/15, has an objective to profit from rising interest rates by using futures contracts and options on futures on 2-, 5-, and 10-year U.S. Treasury securities. The underlying index targets a negative 10 year duration, making it an inverse bond fund. The weighting of the instruments are expected to be from 30% to 70% for the shorter duration securities and 5% to 25% for those with 10 year maturities. RISE will issue K-1 tax reports instead of the easier to use 1099. It has an expense ratio of 1.64% based on the breakeven analysis in the prospectus (RISE overview).
- Greenhaven Coal Fund (TONS), launched 2/20/15, is designed to track the daily price movements of coal futures. The fund will hold an equal number of futures contracts in each of the three months making up the closest calendar quarter. The positions will be rolled over to the next calendar quarter four times a year. TONS will issue K-1 tax reports instead of the more investor friendly 1099. Based on the breakeven analysis in the prospectus, the expense ratio will be 1.23% (TONS overview).
- SPDR DoubleLine Total Return Tactical ETF (TOTL), launched 2/24/15, is an actively managed income fund designed to provide investors with maximum total return. The fund’s manager, Jeffrey Gundlach, invests in fixed income securities of any credit quality and may include mortgage-backed securities, high yield securities, foreign-denominated instruments, and securities tied to emerging market countries. TOTL characteristics include a current yield of 4.8% and a duration of 3.1 years. The fund’s expense ratio will be capped at 0.55% until 10/31/16 (TOTL overview).
- Tuttle Tactical Management U.S. Core ETF (TUTT), launched 2/25/15, is an actively managed fund-of-funds seeking to deliver relative returns during market uptrends and capital preservation during market downtrends. The fund will combine multiple, uncorrelated tactical strategies. The top two holdings are iShares 7-10 Year Treasury Bond (IEF) at 26.6% and Pimco Enhanced Short Maturity (MINT) at 20.0%. TUTT sports a 1.34% expense ratio (TUTT overview).
- iShares U.S. Fixed Income Balanced Risk ETF (INC), launched 2/26/15, is an actively managed ETF investing in U.S. dollar denominated investment-grade and high-yield fixed-income securities. The portfolio will be designed so that, in the aggregate, the fund’s exposure to credit spread risk and interest rate risk should be equal. In order to achieve the balanced goal, the fund may take short or long positions in U.S. Treasury futures. The fund is currently leveraged with a 25% short position in cash and/or derivatives. The expense ratio will be capped at 0.25% until 2/29/16 (INC overview).
- Lattice Developed Markets (ex-US) Strategy ETF (RODM), launched 2/26/15, invests in a broad range of companies showing favorable valuation, momentum, and quality characteristics that are located in major developed markets of Europe, Canada, and the Pacific Region. There are currently about 340 holdings. Japan leads the country allocation at 18.6%, and the U.K. follows with 13.7%. Investors will pay 0.50% annually to own this fund (RODM overview).
- Lattice Emerging Markets Strategy ETF (ROAM), launched 2/26/15, strives to balance risk across emerging market countries, currencies, and companies. It will provide increased exposure to smaller, more locally driven emerging economies and enterprises that have encouraging valuation, momentum, and quality characteristics. ROAM sports a 0.65% expense ratio (ROAM overview).
- Lattice U.S. Equity Strategy ETF (ROUS), launched 2/26/15, will invest in large-cap U.S. equities that have solid valuation, momentum, and quality characteristics. Financials leads the sector allocation at 19.2%, and Information Technology comes in second at 16.1%. ROUS has an expense ratio of 0.35% (ROUS overview).
- Arrow QVM Equity Factor ETF (QVM), launched 2/27/15, consists of 50 equally weighted domestic equities selected based on a combined ranking score of their quality, value, and momentum characteristics. To be considered, stocks must have daily dollar volume above $1 million for the last three months and at least a $5 share price. The portfolio is constructed at the end of January and July and is rebalanced quarterly to maintain equal weighting. The expense ratio will be capped at 0.65% until 5/31/16 (QVM overview).
Product closures/delistings in February:
- WisdomTree Euro Debt (EU)
- PowerShares DB 3x Italian T-Bond Futures ETN (ITLT)
- PowerShares DB 3x Long USD Index Futures ETN (UUPT)
- PowerShares DB 3x Short USD Index Futures ETN (UDNT)
- PowerShares DB Italian T-Bond Futures ETN (ITLY)
- PowerShares DB US Deflation ETN (DEFL)
- PowerShares DB US Inflation ETN (INFL)
Product changes in February:
- iShares moved its four allocation ETFs to its Core lineup effective February 2.
- Deutsche Bank and Invesco ended their agreement to market DB issued ETNs under the PowerShares brand. The 26 ETNs were renamed effective 2/24/15.
- The role of “managing owner” for 11 PowerShares DB ETFs transferred from Deutsche Bank to Invesco effective 2/25/15 resulting in the temporary suspension of creation units on the affected funds. Creations were resumed by the following day. The only disruption we noted was PowerShares DB Oil Fund (DBO) traded with about a 3.5% premium for a few hours the morning of 2/25/15.
Previous monthly ETF statistics reports are available here.