{"id":3796,"date":"2021-10-15T11:16:15","date_gmt":"2021-10-15T11:16:15","guid":{"rendered":"https:\/\/investwithanedge.com\/?page_id=3796"},"modified":"2021-10-15T11:16:15","modified_gmt":"2021-10-15T11:16:15","slug":"etf-stats-for-november-2016-etns-unravel","status":"publish","type":"page","link":"https:\/\/investwithanedge.com\/etf-stats-for-november-2016-etns-unravel\/","title":{"rendered":"ETF Stats for November 2016: ETNs Unravel"},"content":{"rendered":"
November marked the largest month of inflows for exchange-traded funds (\u201cETFs\u201d) for the year, but exchange-traded notes (\u201cETNs\u201d) experienced net outflows. Investors added $50.8 billion to their favorite ETFs, while withdrawing nearly $1.3 billion from ETNs. The failure of ETNS to attract new investments during a positive market environment is a symptom of investor distrust in the products and the banks behind them.<\/p>\n
Sponsors brought out 13 new products in November, and nine went by the wayside. The net increase of four puts the overall count at 1,941 (1,752 ETFs and 189 ETNs). The quantity of actively managed ETFs increased by two to 161. Industry assets grew by 3.3% to $2.46 trillion.<\/p>\n
ETNs are exchange-traded notes, which means they are a single-issuer bond and not a fund organized as a separate entity such as mutual funds and ETFs. Even bond mutual funds and bond ETFs are organized as separate entities, making them impervious to the financial conditions of the sponsors. However, ETNs, even when they are tracking a stock or commodity index are still a bond, or as their literature states, they are uncollateralized debt obligations of the issuer.<\/p>\n
Two of the new product introductions in November were ETNs. However, if you look closely, you\u2019ll notice they were not actually new. Rather, they were replacement products for other flawed ETNs. Barclays ETN+ FI Enhanced Europe 50 ETN Series B (FLEU) is a replacement for the Barclays ETN+ FI Enhanced Europe 50 ETN (FEEU), and the iPath Series B S&P GSCI Crude Oil ETN (OILB) is a replacement for the iPath S&P GSCI Crude Oil ETN (OIL). The two products being replaced are still listed, but Barclays is no longer issuing new shares.<\/p>\n
Halting share issuance is commonplace among ETNs, and it reduces them to being broken products where market makers are unable to keep market prices in line with the underlying net asset values. In fact, all but four of the more than 65 broken products are ETNs.<\/p>\n
Surprise closings and redemptions are also an inconvenience that adds to investor distrust of ETNs. The UBS ETRACS leveraged MLP ETNs, with more than $200 million in assets, encountered anti-ruination triggers with automatic early redemptions back in January. In August, UBS closed and liquidated nine ETNs with $293 million in assets. Deutsche Bank closed and liquidated 10 ETNs in September, and all of their remaining ETNs are broken.<\/p>\n
Then we come to Credit Suisse. Credit Suisse has been notorious for its flippant attitude toward investors in its ETNs. They have a history of delisting products without liquidating them in a timely manner, depriving shareholders of easy access to their money. In November, Credit Suisse took shareholder-unfriendly actions against more than $2.2 billion worth of ETN assets.<\/p>\n
First was the Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN), which briefly held the title of second-largest ETP closure ever. The $508 million in assets in the ETN when the closure was announce on November 8, was second only to the $600 million in the PowerShares DB Crude Oil Double Long ETN (former ticker DXO) that took place seven years ago.<\/p>\n
Eight days later, Credit Suisse announced its intent to take additional successful products off the market by delisting the $1.56 billion VelocityShares 3x Long Crude Oil ETN (UWTI) and the $226 million VelocityShares 3x Inverse Crude Oil ETN (DWTI) after the close on December 8. However, to make matters worse, Credit Suisse decided against automatically redeeming the notes and returning money to shareholders. This story is still being played out, and updates can be found here.<\/p>\n
The quantity of U.S.-listed ETNs peaked at 218 more than four years ago. Today\u2019s quantity of 189 is not yet a disastrous decline, but a few more months like November will wake investors up to the additional risks and headaches associated with ETNs.<\/p>\n
November 2016 Month End<\/th>\n | ETFs<\/th>\n | ETNs<\/th>\n | Total<\/th>\n<\/tr>\n<\/thead>\n |
---|---|---|---|
Currently Listed U.S.<\/td>\n | 1,752<\/td>\n | 189<\/td>\n | 1,941<\/td>\n<\/tr>\n |
Listed as of 12\/31\/2015<\/td>\n | 1,644<\/td>\n | 201<\/td>\n | 1,845<\/td>\n<\/tr>\n |
New Introductions for Month<\/td>\n | 11<\/td>\n | 2<\/td>\n | 13<\/td>\n<\/tr>\n |
Delistings\/Closures for Month<\/td>\n | 8<\/td>\n | 1<\/td>\n | 9<\/td>\n<\/tr>\n |
Net Change for Month<\/td>\n | +3<\/td>\n | +1<\/td>\n | +4<\/td>\n<\/tr>\n |
New Introductions 6 Months<\/td>\n | 113<\/td>\n | 8<\/td>\n | 121<\/td>\n<\/tr>\n |
New Introductions YTD<\/td>\n | 201<\/td>\n | 15<\/td>\n | 216<\/td>\n<\/tr>\n |
Delistings\/Closures YTD<\/td>\n | 93<\/td>\n | 27<\/td>\n | 120<\/td>\n<\/tr>\n |
Net Change YTD<\/td>\n | +108<\/td>\n | -12<\/td>\n | +96<\/td>\n<\/tr>\n |
Assets Under Management<\/td>\n | $2,437 B<\/td>\n | $22.2 B<\/td>\n | $2,459 B<\/td>\n<\/tr>\n |
% Change in Assets for Month<\/td>\n | +3.4%<\/td>\n | -4.7%<\/td>\n | +3.3%<\/td>\n<\/tr>\n |
% Change in Assets YTD<\/td>\n | +16.2%<\/td>\n | +3.3%<\/td>\n | +16.1%<\/td>\n<\/tr>\n |
Qty AUM > $10 Billion<\/td>\n | 55<\/td>\n | 0<\/td>\n | 55<\/td>\n<\/tr>\n |
Qty AUM > $1 Billion<\/td>\n | 278<\/td>\n | 5<\/td>\n | 283<\/td>\n<\/tr>\n |
Qty AUM > $100 Million<\/td>\n | 825<\/td>\n | 34<\/td>\n | 859<\/td>\n<\/tr>\n |
% with AUM > $100 Million<\/td>\n | 47.1%<\/td>\n | 18.0%<\/td>\n | 44.3%<\/td>\n<\/tr>\n |
AUM Flows for Month<\/td>\n | +$50.8 B<\/td>\n | -$1.29 B<\/td>\n | +$49.5 B<\/td>\n<\/tr>\n |
AUM Flows YTD<\/td>\n | +$232.2 B<\/td>\n | +$0.98 B<\/td>\n | +$233.2 B<\/td>\n<\/tr>\n |
Monthly $ Volume<\/td>\n | $1,823 B<\/td>\n | $77.6 B<\/td>\n | $1,901 B<\/td>\n<\/tr>\n |
% Change in Monthly $ Volume<\/td>\n | +38.5%<\/td>\n | +12.8%<\/td>\n | +37.2%<\/td>\n<\/tr>\n |
Avg Daily $ Volume > $1 Billion<\/td>\n | 14<\/td>\n | 1<\/td>\n | 15<\/td>\n<\/tr>\n |
Avg Daily $ Volume > $100 Million<\/td>\n | 103<\/td>\n | 6<\/td>\n | 109<\/td>\n<\/tr>\n |
Avg Daily $ Volume > $10 Million<\/td>\n | 363<\/td>\n | 11<\/td>\n | 374<\/td>\n<\/tr>\n |
Actively Managed ETF Count (w\/ change)<\/td>\n | 161<\/td>\n | +2 mth<\/td>\n | +24 ytd<\/td>\n<\/tr>\n |
Actively Managed AUM<\/td>\n | $28.6 B<\/td>\n | +1.7% mth<\/td>\n | +24.7% ytd<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 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.<\/p>\n New products launched in November<\/strong> (sorted by launch date):<\/p>\n Product closures in November and last day of listed trading:<\/strong><\/p>\n Product changes in November:<\/strong><\/p>\n Announced product changes for coming months:<\/strong><\/p>\n November marked the largest month of inflows for exchange-traded funds (\u201cETFs\u201d) for the year, but exchange-traded notes (\u201cETNs\u201d) experienced net outflows. Investors added $50.8 billion to their favorite ETFs, while withdrawing nearly $1.3 billion from ETNs. The failure of ETNS to attract new investments during a positive market environment is a symptom of investor distrust …<\/p>\n","protected":false},"author":4,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"acf":[],"_links":{"self":[{"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/pages\/3796"}],"collection":[{"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/comments?post=3796"}],"version-history":[{"count":0,"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/pages\/3796\/revisions"}],"wp:attachment":[{"href":"https:\/\/investwithanedge.com\/wp-json\/wp\/v2\/media?parent=3796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} |