ETF Deathwatch membership rolls declined by five for August and are now at their lowest level in 15 months. Eight new names joined the list while 13 came off. The count for August stands at 326, consisting of 218 ETFs and 108 ETNs. The average product on the list is 37 months old and has $6.2 million in assets. However, 73 have surpassed five years of age and an incredible 57 (not including those less than six months of age) continue to struggle along with less than $2 million in assets.
Some of the products joining the list this month showed great potential when they were launched, such as ETRACS Oil Futures Contango ETN (OILZ) that debuted in June 2011. However, investor interest proved fleeting, and now it only trades a few times a week. Other new members seem destined to be on the list only temporarily. For example, target date mutual funds are a staple of 401(k) plans, and the eventual success of iShares Target Date 2035 (TZO) would seem guaranteed once target date ETFs become part of 401(k) menus.
July's decline in trading activity had a magnified affect on the illiquidity concerns of many of the ETFs and ETNs on the Deathwatch list. The number of products that failed to register a single trade for the entire month jumped from eight in June to 11 in July. On the last day of July, 172 ETPs had zero volume, up sharply from the 154 that didn't trade on the last day of June. This means a full 11.5% of the 1,491 ETPs listed for trading didn't see any action that day. Good luck trying to sell your shares of an ETF that isn't trading.
The eight ETPs added to ETF Deathwatch for August:
- ETRACS Oil Futures Contango ETN
- ETRACS S&P 500 Gold Hedged Index ETN (SPGH)
- iPath DJ-UBS Platinum ETN (PGM)
- iPath DJ-UBS Softs ETN (JJS)
- iShares Financials Bond (MONY)
- iShares Target Date 2035
- ProShares Ultra MSCIMexicoCapped IMI (UMX)
- WisdomTree Global Corporate Bond (GLCB)
The 13 ETPs removed from ETF Deathwatch due to improved health:
- db X-trackers MSCI Emerging Markets Hedged Equity (DBEM)
- Direxion Daily 20+ Year Treasury Bear 1x (TYBS)
- Direxion Daily Natural Gas Related Bear 3x (GASX)
- First Trust Global Wind Energy (FAN)
- iPath US Treasury Steepener ETN (STPP)
- iShares Europe Developed Real Estate (IFEU)
- MarketVectorsGulfStates (MES)
- Market Vectors Indian Rupee/USD ETN (INR)
- ProShares UltraPro Financials (FINU)
- ProShares UltraShort Australian Dollar (CROC)
- ProShares UltraShort TIPS (TPS)
- RBSChinaTrendpilot ETN (TCHI)
- SPDR Nuveen S&P VRDO Municipal Bond (VRD)
No ETPs closed in July, so none were removed from ETF Deathwatch due to death and delisting.
Disclosure: 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.