Invest With An Edge

ETF Stats for May 2016: Another Forced Delisting

Twenty-two new exchange-traded funds (“ETFs”) and one exchange-traded note (“ETN”) came to market in May.  There were five closures, and the net increase of 18 listings puts the month-end count at 1,902 (1,699 ETFs and 203 ETNs).  May was the second month in a row that a securities exchange forced an ETF delisting.  Assets for the month inched 0.6% higher to $2.22 trillion, with $6.2 billion coming from inflows and the other $8.01 billion coming from market gains.

REX, a relatively new ETF sponsor, added two VIX funds to its lineup.  These are the first VIX-related ETFs to use weekly VIX futures in an attempt to reduce the typically wide performance differences between VIX “spot” prices and monthly futures contracts.  Additionally, the funds will issue 1099s instead of K-1s for tax reporting.  These features should make these new VIX ETFs popular with volatility traders.

Thematic investing seems to be the latest theme.  Global X introduced three thematic funds in May, and Janus is introducing a few more in June.  Millennials, longevity, fitness, obesity, and organics are among the new investment themes, along with two crowdsourcing-themed ETFs in April.

BlackRock (BLK) introduced its new iShares Edge brand in May.  It placed its 26 iShares single-factor and FactorSelect ETFs under the new brand and rolled out a suite of nine iShares Edge smart-beta sector ETFs.  The multifactor sector funds focus on the usual factors of value, quality, momentum, and size.  The Global Industry Classification System (“GICS”) is expanding from 10 to 11 sectors in August when real estate becomes its own sector instead of being included in the financials sector.  BlackRock missed an opportunity to get ahead of the change and also short-changed the telecommunications sector by not have a fund for it.

BlackRock is somewhat late to the smart-beta sector party, as the PowerShares Dynamic multifactor sector funds have been on the market for more than 10 years.  SPDR and Guggenheim started introducing equal-weighted sector and industry funds in 2006, and First Trust began bringing out its AlphaDEX multifactor sector ETFs in 2007.  John Hancock is also late, entering the multifactor sector fray last September.  It is probably safe to say the space is now overcrowded, and there will likely be casualties.

On the subject of casualties, the first currency-hedged funds to bite the dust did so in May with the closure of Direxion Daily MSCI Europe Currency Hedged Bull 2x (HEGE) and Direxion Daily MSCI Japan Currency Hedged Bull 2x (HEGJ).  Many currency-hedged ETFs are relatively new, and these two products did not survive long enough to see their first birthday.

Another developing trend, and one that I have long encouraged, is delistings initiated by the security exchanges.  In April, the NYSE forced the delisting of the DB Commodity Long ETN (former ticker DPU) for failure to maintain $400,000 in assets.  In May, the ProShares CDS North American HY Credit ETF (former ticker TYTE) met its demise when BATS forced its delisting due to the fund having fewer than 50 beneficial shareholders.  It’s a start, but with many funds having less than $2 million in assets and going months without any trading activity, listing requirements are still far too lenient to be in the best interest of the investing public.

 

May 2016 Month End ETFs ETNs Total
Currently Listed U.S. 1,699 203 1,902
Listed as of 12/31/2015 1,644 201 1,845
New Introductions for Month 22 1 23
Delistings/Closures for Month 4 1 5
Net Change for Month +18 0 +18
New Introductions 6 Months 108 7 115
New Introductions YTD 85 7 92
Delistings/Closures YTD 30 5 35
Net Change YTD +55 +2 +57
Assets Under Management $2,198 B $23.4 B $2,222 B
% Change in Assets for Month +0.6% +0.8% +0.6%
% Change in Assets YTD +4.8% +8.9% +4.9%
Qty AUM > $10 Billion 55 0 55
Qty AUM > $1 Billion 260 5 265
Qty AUM > $100 Million 797 36 833
% with AUM > $100 Million 46.9% 17.7% 43.8%
AUM Flows for Month $6.14 B $0.11 B $6.25 B
AUM Flows YTD $53.90 B $1.49 B $55.39 B
Monthly $ Volume $1,384 B $62.9 B $1,447 B
% Change in Monthly $ Volume -2.0% -5.0% -2.1%
Avg Daily $ Volume > $1 Billion 8 1 9
Avg Daily $ Volume > $100 Million 88 6 94
Avg Daily $ Volume > $10 Million 309 10 319
Actively Managed ETF Count (w/ change) 145 +2 mth +8 ytd
Actively Managed AUM $25.4 B +1.3% mth +10.8% 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 May (sorted by launch date):

  1. REX VolMAXX Inverse VIX Weekly Futures Strategy ETF (VMIN), launched 5/3/16, is an actively managed ETF, regulated under the Investment Company Act of 1940, offering exposure to short-term (weighted expiration of less than one month) VIX futures.  Although the fund is actively managed, it seeks to retain 100% short (inverse) notional exposure to VIX futures contracts.  The ETF will issue 1099s instead of K-1s for tax reporting, and the expense ratio is 1.45% (VMIN overview).
  2. REX VolMAXX Long VIX Weekly Futures Strategy ETF (VMAX), launched 5/3/16, is an actively managed ETF, regulated under the Investment Company Act of 1940, offering exposure to short-term (weighted expiration of less than one month) VIX futures.  Although the fund is actively managed, it seeks to retain 100% long notional exposure to VIX futures contracts.  The ETF will issue 1099s instead of K-1s for tax reporting, and the expense ratio is 1.25% (VMAX overview).
  3. Global X Millennials Thematic ETF (MILN), launched 5/5/16, seeks to track the Indxx Millennials Thematic Index by investing in U.S.-listed companies that have a high likelihood of benefiting from the rising spending power and unique preferences of the U.S. Millennial generation (birth years ranging from 1980–2000). These companies come from a broad range of categories including social media and entertainment, food and dining, clothing and apparel, health and fitness, travel and mobility, education and employment, housing and home goods, and financial services.  The ETF has an expense ratio of 0.68% (MILN overview).
  4. Global X Health & Wellness Thematic ETF (BFIT), launched 5/10/16, seeks to track the Indxx Global Health & Wellness Thematic Index, which is designed to track the performance of companies listed in developed markets that provide products and services aimed at promoting physical wellness through active and healthy lifestyles.  Targeted industries include fitness equipment and technology, athletic apparel, nutritional supplements, and organic/natural food offerings.  BFIT has an expense ratio of 0.68% (BFIT overview).
  5. Global X Longevity Thematic ETF (LNGR), launched 5/10/16, seeks to track the Indxx Global Longevity Thematic Index by investing in companies listed in developed markets that directly or indirectly contribute to increasing the lifespans and extending the quality of life of the senior population of the world.  The ETF provides exposure to companies involved in biotechnology, medical devices, pharmaceuticals, senior living facilities, and specialized health care services.  The fund has an expense ratio of 0.68% (LNGR overview).
  6. Guggenheim U.S. Large Cap Optimized Volatility ETF (OVLC), launched 5/10/16, seeks to track a Guggenheim index, developed by Accretive, designed to optimize exposure to equity volatility based over various market conditions.  The fund seeks lower volatility in typical market conditions while attempting to obtain higher market returns when reward-to-risk is estimated to be higher.  It generally consists of 120 securities selected from the S&P 500 Index, and employs an optimizer to select a portfolio that maximizes the ratio between the reward and risk/volatility.  The fund constrains sector and security weightings, and it has an expense ratio of 0.30% (OVLC overview).
  7. IQ Enhanced Core Bond U.S. ETF (AGGE), launched 5/10/16, is a fund-of-funds that seeks to outperform the U.S. dollar–denominated, taxable, fixed-income universe by using a momentum investing strategy.  The underlying index includes exchange-traded products (“ETPs”) of U.S. dollar–issued investment-grade debt securities, uses a rules-based construction methodology, and is rebalanced monthly.  It measures momentum by comparing a 45-day moving average of returns to a 90-day moving average of returns, while taking into account the recent volatility of each sector.  The ETF has an estimated yield of 2.5%, and its expense ratio comes in at 0.34% (AGGE overview).
  8. IQ Enhanced Core Plus Bond U.S. ETF (AGGP), launched 5/10/16, is a fund-of-funds that seeks to outperform the U.S. dollar–denominated, taxable, fixed-income universe by using a momentum investing strategy.  The underlying index includes ETPs of U.S. dollar–issued investment-grade debt securities. The index can allocate up to 25% in U.S. high-yield debt and up to 5% in U.S. dollar–denominated debt of emerging-market issuers.  It uses a rules-based construction methodology and is rebalanced monthly.  It measures momentum by comparing a 45-day moving average of returns to a 90-day moving average of returns, while taking into account the recent volatility of each sector.  The ETF has an estimated yield of 2.28%, and its expense ratio is 0.35% (AGGP overview).
  9. CS X-Links Monthly Pay 2xLeveraged Alerian MLP Index ETN (AMJL), launched 5/12/16, is an exchange-traded note (“ETN”) with monthly-compounded 2x leveraged long exposure to the price return of the Alerian MLP Index, which measures the composite performance of leading energy Master Limited Partnerships (“MLPs”).  The ETNs will pay a variable monthly coupon linked to the net cash distributions.  Investors will pay a tracking fee of 0.85% plus a 0.80% financing fee for a total expense ratio of 1.65% (AMJL overview).
  10. iShares Edge MSCI Multifactor Consumer Discretionary ETF (CNDF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the consumer discretionary sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size).  The fund has an expense ratio of 0.35% (CNDF overview).
  11. iShares Edge MSCI Multifactor Consumer Staples ETF (CNSF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the consumer staples sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size).  The fund has an expense ratio of 0.35% (CNSF overview).
  12. iShares Edge MSCI Multifactor Energy ETF (ERGF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the energy sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size).  The fund has an expense ratio of 0.35% (ERGF overview).
  13. iShares Edge MSCI Multifactor Financials ETF (FNCF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the financials sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size).  The fund has an expense ratio of 0.35% (FNCF overview).
  14. iShares Edge MSCI Multifactor Healthcare ETF (HCRF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the health care sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size).  The fund has an expense ratio of 0.35% (HCRF overview).
  15. iShares Edge MSCI Multifactor Industrials ETF (INDF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the industrials sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size). The fund has an expense ratio of 0.35% (INDF overview).
  16. iShares Edge MSCI Multifactor Materials ETF (MATF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the materials sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size). The fund has an expense ratio of 0.35% (MATF overview).
  17. iShares Edge MSCI Multifactor Technology ETF (TCHF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the technology sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size). The fund has an expense ratio of 0.35% (TCHF overview).
  18. iShares Edge MSCI Multifactor Utilities ETF (UTLF), launched 5/12/16, seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the utilities sector that have favorable exposure to targeted style factors.  The multifactor ETF focuses on inexpensive stocks (value), financially healthy firms (quality), trending stocks (momentum), and relatively smaller companies (size). The fund has an expense ratio of 0.35% (UTLF overview).
  19. JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME), launched 5/12/16, seeks to track the Russell Midcap Diversified Factor Index of U.S. mid-cap equities.  The multifactor approach excludes expensive, low-quality securities with weak momentum characteristics.  The risk allocation framework seeks to diversify risk across both sectors and individual securities.  The methodology includes quarterly rebalancing, liquidity screens, and turnover controls.  The new ETF has an expense ratio of 0.34% (JPME overview).
  20. Bullmark LatAm Select Leaders ETF (BMLA), launched 5/19/16, will provide exposure to the BullMark LatAm Select Leaders Index, which has a dividend income focus requiring constituents to have a trailing 12-month dividend yield of at least 2%.  The ETF from Recon Capital Management has an expense ratio of 0.70% (BMLA overview).
  21. First Trust Alternative Absolute Return Strategy ETF (FAAR), launched 5/19/16, is an actively managed ETF that seeks to provide investors with long-term total return using a long/short commodities strategy.  It intends to invest primarily in exchange-listed commodity futures contracts through a wholly owned foreign (Cayman) subsidiary, which will allow it to issue Form 1099s to shareholders instead of K-1s for tax reporting.  FAAR has an expense ratio of 0.95% (FAAR overview).
  22. iShares International Dividend Growth ETF (IGRO), launched 5/19/16, seeks to track a Morningstar index composed of international equities with a history of consistently growing dividends.  The methodology screens for companies with five years of dividend growth, a positive earnings forecast, dividend payouts that are less than 75% of earnings, and it imposes a 3% cap on the weighting of individual stocks.  IGRO can invest in companies from emerging and developed markets (excluding the U.S.) and has an expense ratio of 0.22% (IGRO overview).
  23. Elkhorn S&P High Quality Preferred ETF (EPRF), launched 5/24/16, tracks the S&P U.S. High Quality Preferred Stock Index, which selects fixed-rate investment-grade preferred issues (BBB- or higher) from U.S.-listed preferred stocks.  It maintains an allocation of 75% to cumulative preferreds and uses a modified equal-weighting approach.  The current yield estimate is 5.2%, and the expense ratio is 0.47% (EPRF overview).

 

Product closures in May and last day of listing:

  1. Horizons Korea KOSPI 200 (HKOR), 4/29/16 (Note: This ETF was listed on the last day of trading in April, which gives it a May closure date.)
  2. ProShares CDS North American HY Credit (TYTE), 5/18/16
  3. Direxion Daily MSCI Europe Currency Hedged Bull 2x (HEGE), 5/20/16
  4. Direxion Daily MSCI Japan Currency Hedged Bull 2x (HEGJ), 5/20/16
  5. C-Tracks Citi Volatility Index TR ETN (CVOL), 5/23/16

 

Product changes in May:

  1. Van Eck Global united all of its investment products under the VanEck brand with the Market Vector ETFs becoming VanEck Vectors ETFs effective May 1.
  2. First Trust Indxx Global Agriculture ETF (FTAG) and First Trust ISE-Revere Natural Gas (FCG) underwent 1-for-5 reverse splits effective May 2.
  3. Twenty-six iShares FactorSelect and iShares single-factor ETFs were renamed and made part of the new iShares Edge brand effective May 12.
  4. Direxion Daily Gold Miners Bear 3x Shares (DUST) and Direxion Daily Junior Gold Miners Bear 3x Shares (JDST) executed 1-for-10 reverse splits effective May 18.
  5. Guggenheim changed the index providers and names of two ETFs effective May 20.  The newly named Guggenheim S&P Spin-Off ETF (CSD) and Guggenheim MSCI Timber ETF (CUT) did not change their ticker symbols.

 

Announced product changes for coming months:

  1. Franklin Short Duration U.S. Government ETF (FTSD) to be renamed the Franklin Liberty Short Duration U.S. Government ETF (FTSD) effective June 1.
  2. KraneShares CSI New China ETF (KFYP) to be renamed KraneShares Zacks New China ETF (KFYP) effective June 1.
  3. Credit Suisse X-Links Merger Arbitrage ETN (CSMA) will close. June 10 will be its last day of listed trading.
  4. AdvisorShares TrimTabs Float Shrink ETF (TTFS) will change its subadvisor and be renamed the AdvisorShares Wilshire Buyback ETF (TTFS) effective July 1.
  5. Effective on or after July 1, 2016, iShares will change from Barclays to ICE U.S. Treasury Bond Index Series indexes for iShares Core U.S. Treasury Bond ETF (GOVT), iShares Short Treasury Bond ETF (SHV), and iShares 10-20 Year Treasury Bond ETF (TLH).

Previous monthly ETF statistics reports are available here.

Disclosure: Author has no positions in any of the securities, companies, or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.