Invest With An Edge

ETF Stats for June 2014 – Product Count Tops 1,600

Twenty-two new listings in June pushed the ETP count above the 1,600 threshold to close the month at 1,613 (1,408 ETFs and 205 ETNs). A total of 101 new products came to market in the first half of the year, while just 24 closed up shop. Although this is an improvement over the past two years, if this pace continues in the second half of the year, 2014 will end up being only the fifth best year for product introductions. Projecting the current trend into the future suggests listings might cross the 2,000 milestone sometime in 2017.

Assets continue to climb too, surpassing $1.8 trillion in June. Asset growth has been more robust than product growth, and assets could reach $2 trillion before the end of the year. You can bet the ETF industry will be celebrating that event.

New introductions in June consisted of eighteen ETFs and four ETNs. Most of the ETF launches were in the “smart beta” category including ten “quality mix” funds from State Street SPDRs and three BlackRock iShares pursuing “low volatility” strategies. BlackRock also beefed up its “Core” product line with four new products and the repositioning of five existing ETFs. Three of the ETN launches provide leveraged exposure to their underlying indexes.

Just 42 funds have more than $10 billion in assets, with their ranks increasing by one in June. These 42 represent just 2.6% of the product count while holding the majority (55.6%) of industry assets. The number of products exceeding $1 billion increased by three to 241 and account for 89.0% of all ETP assets.

Asset distribution is heavily skewed with the “average” ETF having $1.16 billion in assets while the “median” fund has just $86 million. Another indication of just how lopsided the industry is, the 809 smallest funds only account for 1% of assets. More than half of the products are fighting for the last 1% of assets.

Trading activity dropped 5.5% in June to $1.09 trillion, after plunging 21.3% in May. Either the summer slowdown arrived early this year, or August is going to be among the lowest volume months in years. For the second month in a row, the quantity of ETFs averaging more than $1 billion a day in trading activity was only four. However, these four were responsible for more than 46% of all ETP dollars traded.

June 2014 Month End ETFs ETNs Total
Currently Listed U.S. 1,408 205 1,613
Listed as of 12/31/2013 1,332 204 1,536
New Introductions for Month 18 4 22
Delistings/Closures for Month 0 0 0
Net Change for Month +18 +4 +22
New Introductions 6 Months 95 6 101
New Introductions YTD 95 6 101
Delistings/Closures YTD 19 5 24
Net Change YTD +76 +1 +77
Actively-Managed Listings 89 n/a 89 (+0)
Assets Under Mgmt ($ billion) $1,840 $27.8 $1,868
% Change in Assets for Month +3.7% +3.6% +3.7%
Qty AUM > $10 Billion 42 0 42
Qty AUM > $1 Billion 235 6 241
Qty AUM > $100 Million 722 37 759
% with AUM > $100 Million 51.3% 18.1% 47.1%
Monthly $ Volume ($ billion) $1,064 $30.3 $1,094
% Change in Monthly $ Volume -3.6% -43.3% -5.5%
Avg Daily $ Volume > $1 Billion 4 0 4
Avg Daily $ Volume > $100 Million 71 2 73
Avg Daily $ Volume > $10 Million 257 11 268

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 June (sorted by launch date):

  1. iShares MSCI Asia ex Japan Minimum Volatility ETF (AXJV), launched 6/5/14, will provide exposure to stocks in Asia, except Japan, while attempting to reduce volatility when compared to the broader Asian equity market.  It will invest in both developed and emerging market countries, with considerable exposure to China and South Korea.  Investors should expect a high concentration in financials, technology, and telecom.  The fund has an expense ratio of 0.35% (AXJV overview).
  2. iShares MSCI Europe Minimum Volatility ETF (EUMV), launched 6/5/14, will provide exposure to European equities, while attempting to reduce volatility when compared to the broader European market.  Financials, consumer staples, and health care represent the largest sector allocations.  Investors will pay 0.25% annually to own this ETF (EUMV overview).
  3. iShares MSCI Japan Minimum Volatility ETF (JPMV), launched 6/5/14, will provide exposure to Japanese stocks, while attempting to reduce volatility when compared to the broader Japanese market.  The industrials and consumer discretionary sectors each account for about 20% of the holdings.  The ETF sports an expense ratio of 0.30% (JPMV overview).
  4. SPDR EURO STOXX Small Cap ETF (SMEZ), launched 6/5/14, is designed to provide a representation of small-cap companies across the countries that have adopted the Euro as their currency.  The ETF currently holds 98 stocks, with financials at 33% and consumer discretionary at 20% constituting the majority of the holdings.  The fund sports a 0.45% expense ratio (SMEZ overview).
  5. SPDR MSCI EAFE Quality Mix ETF (QEFA), launched 6/5/14, will invest in large- and mid-cap companies across 22 developed markets in Europe, Australasia, and the Far East.  Countries with more than a 10% allocation include the U.K. at 26%, Japan 18%, and Switzerland 13%.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  There is no shortage of holdings with about 900 positions.  The ETF has an expense ratio of 0.30% (QEFA overview).
  6. SPDR MSCI Emerging Markets Quality Mix ETF (QEMM), launched 6/5/14, will invest in large- and mid-cap equities across 21 emerging markets.  Countries with a more than 10% allocation include China at 21%, South Korea 15%, and Taiwan 13%.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  The ETF has a good number of holdings, totaling near 600, and it has an expense ratio of 0.30% (QEMM overview).
  7. SPDR MSCI World Quality Mix ETF (QWLD), launched 6/5/14, will invest in large- and mid-cap equities across 24 developed markets worldwide.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  The U.S. has by far the largest allocation at nearly 60%, with the next being the U.K at just over 8%.  QWLD tops the other SPDR MSCI Quality Mix ETFs introduced this month with 1,025 holdings and has the same expense ratio of 0.30% (QWLD overview).
  8. Credit Suisse FI Large Cap Growth Enhanced ETN (FLGE), launched 6/11/14, is an exchange-traded note designed to give investors 2x leveraged performance of the Russell 1000 Growth Index Total Return.  The ETN’s expense ratio is 0.85%.  We’d like to point you to the FLGE overview, but one is not provided by the sponsor.  We would suggest you think twice before purchasing an ETP that doesn’t care enough about investors to put up a webpage.
  9. ETRACS Wells Fargo MLP Ex-Energy ETN (FMLP), launched 6/11/14, is an exchange-traded note linked to the performance of a group of master limited partnerships that are not energy-related and have a market cap of at least $100 million.  The coupon will be variable and paid monthly.  As of early July, the yield was 6.8% after deducting the expense ratio of 0.85% (FMLP overview).
  10. UBS AG FI Enhanced Large Cap Growth ETN (FBGX), launched 6/11/14, is an exchange-traded note designed to return to investors 2x leveraged performance of the Russell 1000 Growth Index Total Return. It has an expense ratio of 0.85%.  You’ll notice the description is the same as FLGE, just with a different sponsor, allowing the possibility to mitigate credit risk of the issuer by splitting up an investment.  As with FLGE, there is no overview available from the issuer for this ETN.
  11. iShares Core Dividend Growth ETF (DGRO), launched 6/12/14, is set to give investors low cost exposure to U.S. stocks focused on dividend growth.  To be included, a stock must have annual dividend growth for the past 5 years, no more than 75% of earnings paid as dividends, and a positive earnings forecast.  To maintain diversification, stocks will be capped at a 3% weighting.  The fund sports a 0.12% expense ratio (DGRO overview).
  12. iShares Core MSCI Europe ETF (IEUR), launched 6/12/14, is designed to provide broad exposure to stocks in European developed markets and will include small-cap as well as mid- and large-cap equities.  The U.K. represents about 28% of the fund, while France, Switzerland, and Germany all come in at about 13%.  The ETF’s expense ratio is 0.14% (IEUR overview).
  13. iShares Core MSCI Pacific ETF (IPAC), launched 6/12/14, will invest in a broad range of stocks in Australia, Hong Kong, Japan, New Zealand, and Singapore.  Size capitalization can be from small to large, and Japan takes the lion’s share of the portfolio at a 63% allocation.  Investors will pay 0.14% annually to own this fund (IPAC overview).
  14. iShares Core Total USD Bond Market ETF (IUSB), launched 6/12/14, seeks to provide income to investors and will take advantage of more than just investment grade bonds.  IUSB will also reach into the high yield and emerging market bond segments in an attempt to achieve higher yields.  It will aim to meet its objective with an expense ratio of 0.15% (IUSB overview).
  15. SPDR MSCI Australia Quality Mix ETF (QAUS), launched 6/12/14, will invest solely in Australian companies.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  Financials sits atop the sector allocation at 33%, with the nearest competitor being materials at 20%.  The fund holds around 70 companies and has an expense ratio of 0.30% (QAUS overview).
  16. SPDR MSCI Canada Quality Mix ETF (QCAN), launched 6/12/14, will invest in companies located in Canada.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  Financials has the largest sector allocation at 31%, but energy is not far behind at 26%.  The fund is approaching 100 holdings.  The ETF’s expense ratio is 0.30% (QCAN overview).
  17. SPDR MSCI Germany Quality Mix ETF (QDEU), launched 6/12/14, will invest in companies domiciled in Germany.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  Consumer Discretionary rules the sector allocations at 25%, with the next two in line being financials and industrials around 14% each.  The fund currently invests in 55 companies and has an expense ratio of 0.30% (QDEU overview).
  18. SPDR MSCI Japan Quality Mix ETF (QJPN), launched 6/12/14, will invest solely in Japanese companies.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  Abenomics is counting on consumers getting out of their deflationary mindset, and perhaps that is reflected in the consumer discretionary sector having the largest allocation at 22%.  This ETF boasts the record for number of holdings for the country-specific Quality Mix ETFs introduced this month at 270.  It sports an expense ratio of 0.30% (QJPN overview).
  19. SPDR MSCI Spain Quality Mix ETF (QESP), launched 6/12/14, will invest in companies located in Spain.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  Financials sits atop the sector allocation at a whopping 38%, while the utilities sector comes in second with about 16%.  The fund has just 25 stocks, losing the race in the holdings department among the country-specific Quality Mix ETFs introduced this month.  QESP has a 0.30% expense ratio (QESP overview).
  20. SPDR MSCI United Kingdom Quality Mix ETF (QGBR), launched 6/12/14, will invest in companies domiciled in the United Kingdom.  Stocks will fit in one of the following three categories:  value, low volatility, or quality factor selection.  The sector allocation is fairly balanced with six representing between 11-18% each.  The fund currently invests in 106 companies.  The fund’s expense ratio is, you guessed it, 0.30% (QGBR overview).
  21. JPMorgan Diversified Return Global Equity ETF (JPGE), launched 6/17/14, is following the FTSE Developed Diversified Factor Index.  The index uses a multi-factor ranking process that includes relative valuation, size, price momentum, and low volatility.  The fund has an expense ratio of 0.64%, but it will be capped at 0.38% until February 2016 (JPGE overview).
  22. ETRACS Monthly Pay 2xLeveraged Wells Fargo MLP Ex-Energy ETN (LMLP), launched 6/25/14, is an exchange-traded note linked to 2 times (2x) the performance of a group of master limited partnerships that are not energy-related and have a market cap of at least $100 million.  The coupon will be variable and paid monthly.  The initial yield to investors is expected to be 14.4% after the 0.85% annual tracking fee (LMLP overview).

Product closures/delistings in June:

none

Product changes in June:

  1. iShares Core Total U.S. Bond Market ETF (AGG) was renamed iShares Core U.S. Aggregate Bond ETF (AGG) effective June 3.
  2. Two iShares bond ETFs changed their names and underlying indexes to become iShares Core Short-Term USD Bond ETF (ISTB) and iShares Core Long-Term USD Bond ETF (ILTB) effective June 3.
  3. WisdomTree Global Corporate Bond Fund (GLCB) became the WisdomTree Strategic Corporate Bond Fund (CRDT) effective June 3.
  4. iShares moved five existing ETFs to its “Core” lineup effective June 12:  iShares Russell 3000 Growth ETF (IWZ) became iShares Core U.S. Growth ETF (IUSG), iShares Russell 3000 Value ETF (IWW) became iShares Core U.S. Value ETF (IUSV), iShares Credit Bond ETF (CFT) became iShares Core U.S. Credit Bond ETF (CRED), iShares High Dividend ETF (HDV) became iShares Core High Dividend ETF (HDV), and iShares U.S. Treasury Bond ETF (GOVT) became iShares Core U.S. Treasury Bond ETF (GOVT).
  5. iShares 10+ Year Credit Bond ETF (CLY) changed its underlying index to Barclays U.S. Long Credit Index effective June 30.

Announced Product Changes for Coming Months:

  1. iShares Dow Jones-UBS Roll Select Commodity Index Trust (CMDT) will change its name to iShares Commodity Optimized Trust (CMDT) effective July 1.
  2. ETRACS DJ-UBS Commodity Index Total Return ETN (DJCI) will become the ETRACS Bloomberg Commodity Index ETN (DJCI) effective July 1.
  3. ProShares UltraShort commodity ETFs will change their underlying indexes from DJ-UBS to Bloomberg along with their names to reflect the new indexes effective July 1.  Tickers of the affected funds include CMD, UCD, BOIL, KOLD, UCO, and SCO.
  4. iShares will change the tickers on its five target maturity AMT-Free Muni Bond ETFs effective July 7.  MUAD will become IBMD, MUAE to IBME, MUAF to IBMF, MUAG to IBMG, and MUAH to IBMH.
  5. iShares will change the names of the 10 ETFs under its iSharesBond brand by replacing the word “iSharesBond” with “iShares iBonds” effective July 7.
  6. Effective July 8, PowerShares will change the underlying indexes and replace “insured” with “AMT-Free” in the names of three municipal bond ETFs.  The new names will be PowerShares National AMT-Free Municipal Bond Portfolio (PZA), PowerShares New York AMT-Free Municipal Bond Portfolio (PZT), and PowerShares California AMT-Free Municipal Bond Portfolio (PWZ).

Previous monthly ETF statistics reports are available here.