Fourteen new ETFs came to market in August, and one closed. The net increase of thirteen pushes the listed exchange traded product count above 1,500 for the first time. The month ended with 1,504 ETPs (1,299 ETFs and 205 ETNs) listed and available for trading in U.S. markets, even though 164 did not see any action on the last day of the month.
Analysts seem to be concerned about the magnitude of outflows. Multiple sources are reporting that the more than $17 billion in U.S. ETP outflows is the largest on record. However, according to data we compiled, overall U.S. ETP assets under management (”AUM”) declined by $49 billion for the month. Outflows were a contributing factor, but they were dwarfed by the nearly $32 billion decrease caused by market losses. In fact, the 3.2% decline in AUM is very similar to the 3.0% pullback in the SPDR S&P 500 ETF (SPY) and the 3.2% drop in the iShares Russell 2000 ETF (IWM). Clearly, market action had a larger impact than investor action.
Despite all the hoopla regarding flows, industry AUM sits just shy of $1.5 trillion. The number of ETFs exceeding $10 billion in assets decreased from 35 to 33, yet this small handful of ETFs account for more than 52% of all ETP assets. ETPs with more than $1 billion in assets now number 202 and have an 88.1% market share.
August is historically associated with declines in volume and overall market activity. This year, monthly dollar volume took its biggest hit in July with a 27.4% decrease from June levels. August levels were down from July, but only by 1.3% to $1.19 trillion. The monthly turnover ratio (total dollar volume divided by assets under management) came in at 0.80, which was very similar to July’s 0.79 ratio.
|August 2013 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,299||205||1,504|
|Listed as of 12/31/2012||1,239||206||1,445|
|New Introductions for Month||14||0||14|
|Delistings/Closures for Month||1||0||1|
|Net Change for Month||+13||0||+13|
|New Introductions 6 Months||76||6||82|
|New Introductions YTD||91||8||99|
|Net Change YTD||+60||-1||+59|
|Actively-Managed Listings||63 (+1)||n/a||63 (+1)|
|Assets Under Mgmt ($ billion)||$1,463||$21.4||$1,484|
|% Change in Assets for Month||-3.3%||+4.0%||-3.2%|
|Qty AUM > $10 Billion||33||0||33|
|Qty AUM > $1 Billion||197||5||202|
|Qty AUM > $100 Million||624||30||654|
|% with AUM > $100 Million||48.0%||14.6%||43.5%|
|Monthly $ Volume ($ billion)||$1,167||$26.2||$1,193|
|% Change in Monthly $ Volume||-1.4%||+0.4%||-1.3%|
|Avg Daily $ Volume > $1 Billion||6||0||6|
|Avg Daily $ Volume > $100 Million||66||2||68|
|Avg Daily $ Volume > $10 Million||241||11||252|
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 August (sorted by launch date):
- KraneShares CSI China Internet ETF (KWEB), launched 8/1/13, has one of the least informative objectives of any ETF. It “seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of a specific foreign equity securities benchmark.” The KWEB overview page does not say what this “benchmark” is, but the fund’s name implies it is the CSI China Internet Index. This is the second product from new ETF sponsor KraneShares, and the fund has a 0.68% expense ratio.
- Nashville Area ETF (NASH), launched 8/1/13, tracks an index of publicly traded companies headquartered in the Nashville, Tennessee region, weighted by a proprietary formula that accounts for positive earnings, momentum, and valuation metrics. This is the first product offered by LocalShares, and the fund has a 0.49% expense ratio (NASH overview).
- WisdomTree Emerging Markets Dividend Growth Fund (DGRE), launched 8/1/13, tracks an index comprised of the top 50% of companies from the WisdomTree Emerging Markets Dividend Index having the best combined rank of growth and quality factors. DGRE has a 0.63% expense ratio and an expected yield of 3.1% (DGRE overview).
- First Trust Morningstar Managed Futures Strategy Fund (FMF), launched 8/2/13, is an actively managed ETF that seeks to “exceed” the Morningstar Managed Futures Index by managing contract selection and rolls with a 0.95% expense ratio. FMF intends to qualify as a Regulated Investment Company (“RIC”) and issue 1099 statements by not investing directly in any futures contracts. Instead, it will invest in a wholly-owned, non-registered off-shore subsidiary with the same investment objective as FMF (FMF overview).
- Global X MLP & Energy Infrastructure ETF (MLPX), launched 8/7/13, targets the energy infrastructure industry and is not an MLP fund since more than 75% of its holdings are comprised of tax-paying C-corporations. MLPX has an expense ratio of 0.45% (MLPX overview).
- iShares Dow Jones-UBS Roll Select Commodity Index Trust (CMDT), launched 8/9/13, seeks results that correspond “generally” but not “identical” to its underlying index. CMDT tries to avoid contango and minimize the cost of rolling each of the 22 contracts it holds. The fund will issue K-1 statements instead of 1099s and has an expense ratio of 0.75% (CMDT overview).
- EGShares EM Dividend High Income ETF (EMHD), launched 8/13/13, will track the FTSE Equal Weighted Emerging All Cap ex-Taiwan Diversified Dividend Yield 50 Index comprised of the highest yielding securities in its target universe. EMHD has a 0.85% expense ratio and an expected yield of 7.9% (EMHD overview).
- Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), launched 8/13/13, tracks the Russell Fundamental Emerging Markets Large Company Index with a 0.46% expense ratio. The underlying Research Affiliates Fundamental Indexing (“RAFI”) methodology uses retained operating cash flow, adjusted sales, and dividends plus buybacks to determine constituents and weightings (FNDE overview).
- Schwab Fundamental International Large Company Index ETF (FNDF), launched 8/13/13, tracks the RAFI developed Russell Fundamental Developed ex-U.S. Large Company Index with a 0.32% expense ratio (FNDF overview).
- Schwab Fundamental International Small Company Index ETF (FNDC), launched 8/13/13, tracks the RAFI developed Russell Fundamental Developed ex-U.S. Small Company Index with a 0.46% expense ratio (FNDC overview).
- Schwab Fundamental U.S. Broad Market Index ETF (FNDB), launched 8/13/13, tracks the RAFI developed Russell Fundamental U.S. Index with a 0.32% expense ratio (FNDB overview).
- Schwab Fundamental U.S. Large Company Index ETF (FNDX), launched 8/13/13, tracks the RAFI developed Russell Fundamental U.S. Large Company Index with a 0.32% expense ratio (FNDX overview).
- Schwab Fundamental U.S. Small Company Index ETF (FNDA), launched 8/13/13, tracks the RAFI developed Russell Fundamental U.S. Small Company Index with a 0.32% expense ratio (FNDA overview).
- First Trust International Multi-Asset Diversified Income Fund (YDIV), launched 8/23/13, seeks to track the NASDAQ International Multi-Asset Diversified Income Index consisting of 25% dividend paying equities, 20% REITs, 20% preferred securities, 20% infrastructure equity, and 15% iShares JP Morgan USD Emerging Markets Bond (EMB). YDIV has a 0.79% expense ratio, but yield information was not provided (YDIV overview).
Product closures/delistings in August:
- iShares 2013 S&P AMT-Free Muni Term ETF (MUAB) reached its planned maturity, had its last day of trading on August 15, and made its final liquidation payments on August 21.
Product changes in August:
- Guggenheim Canadian Energy Income ETF (ENY) changed its underlying index from the Sustainable Canadian Energy Income Index to the S&P/TSC High Income Energy Index effective August 1.
- Credit Suisse Cushing 30 MLP Index ETN (MLPN) changed its name to Credit Suisse Equal Weight MLP Index ETN (MLPN) effective August 14. This was a name change only, as the underlying index and its construction methodology did not change.
- Direxion performed splits on nine ETFs effective August 20, 2013 consisting of seven reverse splits (NUGT, SPXS, INDL, DRV, SOXS, DPK, and GASX) and two forward splits (DUST and CURE).
- United States Brent Oil Fund (BNO) underwent a 2-for-1 split effective August 29, 2013.
- VelocityShares performed 1-for-10 reverse splits on four Credit Suisse issued ETNs (TVIX, TVIZ, VIIX, and USLV) effective August 30, 2013.
Announced Product Changes for Coming Months:
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.