March was the only month of the past twelve that failed to produce a net increase in the number of ETP listings. A dozen new ETFs and one ETN came to market, but those figures were offset by thirteen ETF closures. The net change of zero leaves the overall count at 1,568 (consisting of 1,365 ETFs and 203 ETNs). The actively managed fund count also held steady at 85 with one new introduction and one closure.
One of the more interesting events occurring during the month was the conversion of an ETF to an old fashion open-end mutual fund. To our knowledge, this is a first for the U.S. ETF industry and probably caught some shareholders off-guard. March 21 was the last day of trading for the Pax MSCI EAFE ESG Index ETF (EAPS). Ten days later, shareholder statements were showing a different holding – the Pax World International ESG Index Fund (PXNIX), a newly formed mutual fund that reused an existing ticker symbol while keeping the track record of EAPS. There have been many forecasts and predictions about the ETF industry, but this is one thing that wasn’t supposed to happen.
ETP assets grew by 0.8% in March and now total $1.74 trillion. The number of products exceeding $1 billion shrunk by one to 225, and they account for 88.4% of all ETP assets. Funds with more than $10 billion now number 38, and while that represents just 2.4% of listings, they account for the majority (53.7%) of assets. The 782 smallest products add up to only 1% of industry assets.
March trading activity increased 8.6% over the February level, reaching $1.55 trillion. This falls short of industry asset levels, resulting in a 89% turnover rate for the month. As usual, the SPDR S&P 500 ETF (SPY) grabbed the lion’s share, accounting for 30.7% of all ETP dollar volume for the month.
|March 2014 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,365||203||1,568|
|Listed as of 12/31/2013||1,332||204||1,536|
|New Introductions for Month||12||1||13|
|Delistings/Closures for Month||13||0||13|
|Net Change for Month||-1||+1||0|
|New Introductions 6 Months||100||5||105|
|New Introductions YTD||52||1||53|
|Net Change YTD||+33||-1||+32|
|Actively-Managed Listings||85 (+1-1)||n/a||85 (+1-1)|
|Assets Under Mgmt ($ billion)||$1,717||$25.7||$1,748|
|% Change in Assets for Month||+0.8%||+4.2%||+0.8%|
|Qty AUM > $10 Billion||38||0||38|
|Qty AUM > $1 Billion||217||8||225|
|Qty AUM > $100 Million||697||33||730|
|% with AUM > $100 Million||51.1%||16.3%||46.6%|
|Monthly $ Volume ($ billion)||$1,498||$50.4||$1,549|
|% Change in Monthly $ Volume||+9.4%||-7.4%||+8.6%|
|Avg Daily $ Volume > $1 Billion||10||1||11|
|Avg Daily $ Volume > $100 Million||84||2||86|
|Avg Daily $ Volume > $10 Million||262||10||272|
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 March (sorted by launch date):
- Horizons Korea KOSPI 200 ETF (HKOR), launched 3/4/14, will invest in the KOSPI 200 Index, which is a market capitalization weighted index comprised of 200 blue chip companies listed on the Korea Exchange. Investors should be aware that nearly 22% of the fund is invested in Samsung Electronics. With the exception of Hyundai Motor at 5.7%, the remaining constituents are under 5%. The fund has an expense ratio of 0.38% (HKOR overview).
- AdvisorShares YieldPro ETF (YPRO), launched 3/5/14, is an actively managed fund-of-funds that will allocate the majority of the portfolio to long and short positions across all segments of the “fixed income” market. Current holdings include MLPs and REITs. The fund has the capability to hedge against what it sees as unfavorable conditions in certain segments of the bond market. No yield information is provided. The expense ratio is a bit on the high side for an ETF at 1.42% (YPRO overview).
- KraneShares Bosera MSCI China A ETF (KBA), launched 3/5/14, is part of the recent influx of fund companies taking advantage of the easing of restrictions by the Chinese government for foreigners to invest directly in Chinese companies. The underlying index is the MSCI China A Index, providing comprehensive coverage of large, mid and small cap segments, while holding about 450 securities. Investors will pay 1.1% annually to own this fund (KBA overview).
- First Trust Dorsey Wright Focus 5 ETF (FV), launched 3/6/14, is a fund-of-funds ETF managed by First Trust (“FT”) that invests in other ETFs from FT. The fund employs a relative strength sector rotation strategy designed to provide targeted exposure to the five industry and sector ETFs the underlying index believes offer the greatest potential to outperform. Current holdings include FT NYSE Arca Biotechnology (FBT), FT Dow Jones Internet (FDN), FT Health Care AlphaDEX (FXH), FT Consumer Discretionary AlphaDEX (FXD), and FT Consumer Staples AlphaDEX (FXG). The fund has an expense ratio of 0.95% (FV overview).
- First Trust RBA American Industrial Renaissance ETF (AIRR), launched 3/11/14, targets small and mid size companies in the industrial and community bank sectors. Included companies must have U.S. sales of at least 75% and have positive 12-month forward earnings estimates. Banks will be chosen from states considered to be traditional manufacturing hubs and will be limited to 10% of the portfolio. The fund will charge investors 0.70% per year (AIRR overview).
- First Trust RBA Quality Income ETF (QINC), launched 3/11/14, will provide access to a diversified portfolio of income producing equity securities, no matter their size capitalization. The universe starts with high-yielding, global securities, and then is screened for debt levels and consistency of earnings/cash flow in an effort to weed out those that might be under pressure to cut dividends. QINC sports a 0.70% expense ratio (QINC overview).
- Global X Guru International Index ETF (GURI), launched 3/11/14, will track, excluding fees and expenses of course, the Solactive Guru International Index. The index will follow quarterly regulatory filings from a select group of hedge funds and institutional investors and invest in their highest conviction U.S. listed international holdings. Investors should expect quarterly adjustments to the holdings, which are equally weighted. The ETF has a 0.75% expense ratio (GURI overview).
- Global X Guru Small Cap Index ETF (GURX), launched 3/11/14, will track, excluding fees and expenses, the Solactive Guru Small Cap Index. It will follow quarterly regulatory filings from a select group of hedge funds and institutional investors and invest in their highest conviction U.S. listed small cap equities. As with GURI, investors should expect quarterly holding changes, equally weighting, and a 0.75% expense ratio (GURX overview).
- Cambria Global Value ETF (GVAL), launched 3/12/14, will invest in a proprietary Cambria Index. The methodology starts with a universe of 45 countries located in developed and emerging markets. The GVAL portfolio invests in the 25% cheapest markets in the world based on Cambria’s proprietary long term valuation metrics. A screen of over $200 million market capitalization is then applied, and the fund holds approximately 100 companies. The U.S. allocation is limited to 10%, so we will classify the fund as international instead of global. The fund will charge investors 0.69% per year (GVAL overview).
- SPDR Barclays International High Yield Bond ETF (IJNK), launched 3/13/14, will invest in high yield, fixed rate, fixed income corporate markets of non-U.S. issuers. Securities held will have a minimum $350 million market capitalization in local currency terms and at least 1 year remaining to maturity. The fund has a current yield of 6.4%, a modified adjusted duration of 3.6 years, and an expense ratio of 0.40% (IJNK overview).
- ETRACS Monthly Reset 2xLeveraged S&P 500 Total Return ETN (SPLX), launched 3/26/14, is an Exchange Traded Note (ETN) seeking to provide two times the performance of the S&P 500 Total Return Index with leverage reset monthly. Because it tracks a total return index, investors will not receive dividends. They will instead receive additional capital appreciation of about twice the S&P 500 yield. Investors will spend 0.85% annually to own this unsecured, debt obligation (SPLX overview).
- ProShares DJ Brookfield Global Infrastructure ETF (TOLZ), launched 3/27/14, will invest in companies whose primary business is to own and operate infrastructure. Companies focusing on services, such as engineering and construction, will be excluded. TOLZ is expected to have an initial yield of 3.4% with the expense ratio capped through 9/30/15 at 0.45% (TOLZ overview).
- ALPS Emerging Sector Dividend Dogs ETF (EDOG), launched 3/28/14, seeks to provide high dividend exposure in each of the 10 GICS sectors using the equities in the S-Network Emerging Markets Index. The fund invests across all 10 sectors by selecting the five highest yielding securities in each sector. The fund will generally hold 50 stocks, equally weighted. In addition, the country representation is capped at five securities. The fund’s expense ratio is 0.60% (EDOG overview).
Product closures/delistings in March:
- Guggenheim Enhanced Core Bond (GIY) [A Brief History Of A Doomed ETF]
- PIMCO Broad U.S. Treasury Index (TRSY) [PIMCO Closing First ETF]
- Pax MSCI EAFE ESG Index ETF (EAPS) [This Wasn’t Suppose To Happen: ETF Converts to Mutual Fund]
- iShares MSCI ACWI ex US Consumer Discretionary (AXDI) [Another International Sector Suite Bites The Dust]
- iShares MSCI ACWI ex US Consumer Staples (AXSL)
- iShares MSCI ACWI ex US Energy (AXEN)
- iShares MSCI ACWI ex US Financials (AXFN)
- iShares MSCI ACWI ex US Healthcare (AXHE)
- iShares MSCI ACWI ex US Industrials (AXID)
- iShares MSCI ACWI ex US Information Technology (AXIT)
- iShares MSCI ACWI ex US Materials (AXMT)
- iShares MSCI ACWI ex US Telecom Services (AXTE)
- iShares MSCI ACWI ex US Utilities (AXUT)
Product changes in March:
- The iSharesBond Corporate ex-Financials Term and iSharesBond Corporate Term ETFs added ‘Mar’ in front of the maturity year to indicate their March maturity and termination effective March 3.
- Market Vectors Uranium+Nuclear Energy ETF (NLR) changed its underlying index from DAXglobal Nuclear Energy to Market Vectors Global Uranium and Nuclear Energy Index effective March 24.
Announced Product Changes for Coming Months:
- Jefferies | TR/J CRB Global Commodity Equity Index Fund (CRBQ), an ETF issued by ALPS, will change its name to Global Commodity Equity ETF (CRBQ) effective April 1.
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.