Only six new exchange traded products came to market in September, evenly divided between ETFs and ETNs. One ETN closure puts the net increase at five for the month. The year-to-date figures for the first nine months of the year are 105 launches and 41 closures, for a net increase of 64. Currently listed products now stand at 1,509, consisting of 1,302 ETFs and 207 ETNs.
The current pullback in launch activity is proving to be worse than the 2009 decline. During the previous cycle, the 12-month moving average for new product introductions peaked at 24.3 before bottoming out at 10.0 per month, for a 58.8% decline. In the current cycle, the 12-month average peaked at 28.6 in February 2012. So far, the 9.6 per month established in March of this year is the low point, and even if it holds, it still represents a 66.4% decline.
Whether this softness is temporary or a permanent sign of a maturing industry is still unknown. The long-anticipated big wave of actively managed ETFs arriving on the scene has yet to become a reality, but it should revitalize launch activity if it does come. Meanwhile, just 63 products (4%) have active management, and they hold only $14.5 billion, or less than 1% of ETP assets.
Overall assets climbed 5.4% to $1.56 trillion in September, more than offsetting the "record outflows" of August that seemed to have everyone in a tizzy. Only 36 ETFs have more than $10 billion in assets, but this small minority holds the majority of assets at more than 54%. ETPs with more than $1 billion in assets now number 205 and have an 88.4% market share.
Trading activity only picked up 0.8% for the month with $1.20 trillion worth of ETPs changing hands. However, there were 10% fewer market days (20 versus 22) in September, so average daily activity showed a healthier increase. Only six ETFs averaged more than $1 billion per day in trading but accounted for 49.8% of all ETP dollars traded. The monthly turnover ratio (total dollar volume divided by assets under management) came in at 0.77, which was down from the August 0.80 ratio.
|September 2013 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,302||207||1,509|
|Listed as of 12/31/2012||1,239||206||1,445|
|New Introductions for Month||3||3||6|
|Delistings/Closures for Month||0||1||1|
|Net Change for Month||+3||+2||+5|
|New Introductions 6 Months||75||8||83|
|New Introductions YTD||94||11||105|
|Net Change YTD||+63||+1||+64|
|Actively-Managed Listings||63 (+0)||n/a||63 (+0)|
|Assets Under Mgmt ($ billion)||$1,542||$21.8||$1,563|
|% Change in Assets for Month||+5.4%||+1.7%||+5.3%|
|Qty AUM > $10 Billion||36||0||36|
|Qty AUM > $1 Billion||200||5||205|
|Qty AUM > $100 Million||628||29||657|
|% with AUM > $100 Million||48.2%||14.0%||43.5%|
|Monthly $ Volume ($ billion)||$1,177||$25.2||$1,202|
|% Change in Monthly $ Volume||+0.9%||-3.4%||+0.8%|
|Avg Daily $ Volume > $1 Billion||6||0||6|
|Avg Daily $ Volume > $100 Million||64||2||66|
|Avg Daily $ Volume > $10 Million||237||9||246|
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 September (sorted by launch date):
- Credit Suisse FI Enhanced Europe 50 ETN (FIEU), launched 9/6/13, provides 2x leveraged exposure to the STOXX Europe 50 USD (Gross Return) Index. The ETN has just a 5-year maturity, does not reset its leverage, and appears to not have a website. FIEU has an investor fee of 0.05% and an exposure fee based on a financing fee of 3-month US Dollar LIBOR plus 0.76% (pricing supplement).
- ETRACS Diversified High Income ETN (DVHI), launched 9/19/13, was reviewed in New ETRACS Diversified High Income ETN an Attractive Offering.
- Guggenheim BulletShares 2019 High Yield Corporate Bond ETF (BSJJ), launched 9/24/13, holds U.S. dollar denominated high yield (below investment-grade) corporate bonds maturing in calendar year 2019. BSJJ has 23 holdings and an expense ratio of 0.42%. The BSJJ overview provides no information on expected yield or duration.
- Guggenheim BulletShares 2020 High Yield Corporate Bond ETF (BSJK), launched 9/24/13, holds U.S. dollar denominated high yield corporate bonds maturing in calendar year 2020. BSJK has 24 holdings and an expense ratio of 0.42%. The BSJK overview provides no information on expected yield or duration.
- C-Tracks Miller/Howard MLP Fundamental Index ETN (MLPC), launched 9/26/13, tracks an index of 25 MLPs selected quantitatively on factors including distribution growth, estimated capital expenditures, and distribution coverage. The ETNs are issued by and carry the credit risk of CitiGroup, which will asses a 0.95% annualized investor fee (MLPC overview).
- WisdomTree Emerging Markets Consumer Growth Fund (EMCG), launched 9/27/13, will track an income-weighted index of 150 consumer stocks and 100 non-consumer stocks selected by fundamental factors from a universe of emerging market stocks. EMCG has an expense ratio of 0.63% and an expected yield of 2.3% (EMCG overview).
Product closures / delistings in September:
- iPath Short Enhanced MSCI EAFE ETN (MFSA) triggered an early termination with 9/16/13 being its last day of trading.
Product changes in September:
- Guggenheim Enhanced Short Duration Bond ETF (GSY) dropped the word "Bond" from its name effective 9/30/13.
Announced Product Changes for Coming Months:
- ProShares Ultra Europe (UPV) and ProShares UltraShort Europe (EPV) will be renamed ProShares Ultra FTSE Europe (UPV) and ProShares UltraShort FTSE Europe (EPV) effective 10/1/13.
- JPMorgan Double Short U.S. 10 Year Treasury Futures ETN (DSXJ) and JPMorgan Double Short U.S. Long Bond Treasury Futures ETN (DSTJ) will have their last day of trading October 2 [JPMorgan Delisting Three ETNs But Only Liquidating Two].
- PowerShares will replace "Technical Leaders" with "Momentum" in the names of four ETFs effective 10/4/13. The new names are PowerShares DWA Momentum Portfolio (PDP), PowerShares DWA SmallCap Momentum Portfolio (DWAS), PowerShares DWA Developed Markets Momentum Portfolio (PIZ), and PowerShares DWA Emerging Markets Momentum Portfolio (PIE).
- KEYnotes First Trust Enhanced 130/30 Large Cap Index ETN (JFT) will have its last day of listed trading "on or about" October 9, but owners will not automatically get their cash back because JPMorgan is not redeeming the notes.
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.