A month ago, we bemoaned the slowdown in ETF activity during September. October produced the opposite effect with 30 launches occurring, the most torrid pace in 20 months. Increased activity didn't stop with introductions as the 15 closures were the most in a year. The spike in new products pushed the year-to-date launch count to 136, although this is still the slowest pace since 2009. Closures occurring in 2013 now total 56, or about one closure for every 2.4 introductions. The quantity of listings at the end of October stood at 1,319 ETFs and 206 ETNs, for a combined total of 1,525 ETPs.
Themes for new products varied widely in October with currency hedged, dividend, infrastructure, short-term bond, IPO, leveraged, and robotic funds among the offerings. Fidelity finally made its long awaited expansion into the ETF arena with its rollout of 10 indexed sector funds.
Closures consisted of a dozen emerging market sector funds from EGShares and three ETNs from JPMorgan. Unfortunately, JPMorgan only liquidated two of its ETNs, stranding holders of its KEYnotes First Trust Enhanced 130/30 Large Cap Index ETN (former ticker JFT) with unmarketable securities.
ETP assets climbed to $1.64 trillion, a 4.8% increase from September levels and about a 21% increase since the end of 2012. This means the "average" fund has more than $1 billion in assets, but averages can be deceiving. Only 210 ETPs, or 14%, have more than $1 billion in assets, and they constitute 88.6% of ETP assets. The "median" ETP has only $68 million, which implies 762 products have less than that amount, and their combined assets represent less than 1% of the total.
Trading activity is also skewed with just six products averaging more than $1 billion per day in trading while accounting for 51.6% of the total ETP dollar volume in October. Just 0.4% of the products provide the majority of trading activity.
|October 2013 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,319||206||1,525|
|Listed as of 12/31/2012||1,239||206||1,445|
|New Introductions for Month||28||2||30|
|Delistings/Closures for Month||12||3||15|
|Net Change for Month||+16||-1||+15|
|New Introductions 6 Months||84||9||93|
|New Introductions YTD||123||13||136|
|Net Change YTD||+80||0||+80|
|Actively-Managed Listings||66 (+2)||n/a||66 (+2)|
|Assets Under Mgmt ($ billion)||$1,615||$22.2||$1,638|
|% Change in Assets for Month||+4.8%||+2.2%||+4.8%|
|Qty AUM > $10 Billion||36||0||36|
|Qty AUM > $1 Billion||205||5||210|
|Qty AUM > $100 Million||645||29||674|
|% with AUM > $100 Million||48.9%||14.1%||44.2%|
|Monthly $ Volume ($ billion)||$1,447||$37.9||$1,485|
|% Change in Monthly $ Volume||+22.9%||+50.4%||+23.5%|
|Avg Daily $ Volume > $1 Billion||6||0||6|
|Avg Daily $ Volume > $100 Million||70||2||72|
|Avg Daily $ Volume > $10 Million||251||12||263|
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 October (sorted by launch date):
- db X-Trackers MSCI AC Asia Pacific ex Japan Hedged Equity Fund (NYSEARCA:DBAP), launched 10/1/13, is a currency-hedged version of iShares MSCI AC Asia ex-Japan (NASDAQ:AAXJ) with a 0.60% expense ratio.
- db X-Trackers MSCI Europe Hedged Equity Fund (NYSEARCA:DBEU), launched 10/1/13, provides exposure to equity securities in 16 developed European stock markets, while hedging out currency fluctuations with a 0.45% expense ratio.
- db X-Trackers MSCI United Kingdom Hedged Equity Fund (NYSEARCA:DBUK), launched 10/1/13, is a currency-hedged version of iShares MSCI United Kingdom (NYSEARCA:EWU) with a 0.60% expense ratio.
- RevenueShares Ultra Dividend Fund (NYSEARCA:RDIV), launched 10/1/13, tracks an index that selects the 60 highest yielding stocks from the S&P 900 (S&P 500 plus the S&P MidCap 400) and then weights them by revenue. RDIV has an expected yield of 4.4% and a 0.49% expense ratio.
- Direxion Daily Junior Gold Miners Index Bear 3x Shares (NYSEARCA:JDST), launched 10/3/13, provides -300% the daily performance of the Market Vectors Junior Gold Miners Index with a 0.95% expense ratio. It can be thought of as a -3x version of the Market Vectors Junior Gold Miners (NYSEARCA:GDXJ).
- Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEARCA:JNUG), launched 10/3/13, provides +300% the daily performance of the Market Vectors Junior Gold Miners Index with a 0.95% expense ratio. It can be thought of as a +3x version of the Market Vectors Junior Gold Miners (GDXJ).
- Credit Suisse FI Enhanced Global High Yield ETN (NYSEARCA:FIEG), launched 10/8/13, does not have a website, provides no pricing information, and debuted without a press release from its issuer. Based on other similar ETNs offered by Credit Suisse, this probably provides 2x leveraged exposure to a global high yield index with a 5-year maturity and does not reset its leverage. It appears that Credit Suisse does not want your business. You are welcome to search the SEC Edgar database if you would like additional information.
- FlexShares STOXX Global Broad Infrastructure Index Fund (NYSEARCA:NFRA), launched 10/9/13, is a global equity portfolio that will invest in companies with infrastructure ownership in the utility, energy, transportation, communications, and government outsourcing/social sectors. The fund expects to pay dividends quarterly and has a 0.48% total expense ratio.
- RiverFront Strategic Income Fund (NYSEARCA:RIGS), launched 10/9/13, is an actively managed ETF based on RiverFront's "time-tested fixed income strategy" using its "Price Matters disciplines to optimize duration and yield curve strategies to the current rate environment." The ETF's advisor, ALPS, will collect its 0.22% management fee while sub-advisor RiverFront will waive its 0.24% fee until 10/1/14.
- PowerShares China A-Share Portfolio (NYSEARCA:CHNA), launched 10/10/13, is an actively managed ETF that will utilize a quantitative, rules-based strategy to provide exposure to the largest 50 China A-Share companies on a cap-weighted basis by investing in futures contracts. Investors will pay a 0.50% management fee.
- ProShares S&P 500 Aristocrats ETF (NYSEARCA:NOBL), launched 10/10/13, seeks to track, before fees and expenses, the performance of the S&P 500 Dividend Aristocrats Index. The Index includes at least 40 of the S&P 500 constituents that have increased dividends every year for at least the last 25 years. The stocks are equally weighted, sector allocation is capped at 30%, and the index is rebalanced quarterly. The total operating expenses will be capped at 0.35% until 9/30/15.
- SPDR SSgA Ultra Short Term Bond ETF (NYSEARCA:ULST), launched 10/10/13, is looking to produce current income consistent with preservation of capital and daily liquidity by using short term, high quality instruments. The fund boasts a current yield of 1.67% and an expense ratio of 0.20%.
- Renaissance IPO ETF (NYSEARCA:IPO), launched 10/16/13, is designed to provide exposure to newly public companies after their Initial Public Offering ("IPO") but prior to their inclusion in core U.S. equity portfolios. Investors do not participate in the first day "pop" of IPOs. Stocks that meet liquidity and operational screens are included in the underlying rules-based Renaissance IPO Index at the end of the fifth day of trading, or upon quarterly reviews, weighted by float capitalization, capped at 10%, and removed after two years. The fund had a faulty IPO of its own and has a 0.60% expense ratio.
- iShares 0-5 Year High Yield Corporate Bond ETF (NYSEARCA:SHYG), launched 10/17/13, will invest in U.S. dollar-denominated, high-yield corporate bonds with remaining maturities of less than five years and will carry an expense ratio of 0.50%.
- iShares 0-5 Year Investment Grade Corporate Bond ETF (NYSEARCA:SLQD), launched 10/17/13, will invest in U.S. dollar-denominated, investment-grade corporate bonds with remaining maturities of less than five years and has an expense ratio of 0.15%.
- WisdomTree Germany Hedged Equity Fund (NASDAQ:DXGE), launched 10/17/13, is designed to give investors exposure to German equities while hedging against fluctuations in the Euro. The underlying index focuses on dividend-paying companies that derive less than 80% of their revenue from sources in Germany, thereby focusing on companies with a global revenue base. The fund will charge investors a 0.48% fee.
- Credit Suisse FI Enhanced Big Cap Growth ETN (NYSEARCA:FIBG), launched 10/18/13, does not have a website, provides no pricing information, and debuted without a press release from Credit Suisse. Based on other similar ETNs, FIBG probably provides 2x leveraged exposure to the Russell 1000 Growth Index with a 5-year maturity and does not reset its leverage. It is probably the Credit Suisse version of the UBS AG FI Enhanced Big Cap Growth ETN (NYSEARCA:FBG). It appears that Credit Suisse does not want your business. You are welcome to search the SEC Edgar database if you would like additional information.
- Robo-Stox Global Robotics and Automation Index Fund (NASDAQ:ROBO), launched 10/22/13, invests in an index developed for the fund to select companies that are involved in robotics and automation. Over 60% of the current holdings are in the U.S. and Japan, and the largest sector weighting at 50.4% goes to Industrials. ROBO will charge a 0.95% management fee.
- First Trust Global Tactical Commodity Strategy Fund (NASDAQ:FTGC), launched 10/23/13, is actively managed and seeks to provide a relatively stable risk profile while investing in a commodity portfolio. The strategy will be implemented through a wholly-owned, off-shore subsidiary in order to provide investors with a 1099 instead of K-1 tax reports. Holdings will consist of 10-35 distinct commodities, the composition will change over time, and rebalancing will occur monthly (or more often if market conditions dictate). The expense ratio is 0.95%.
- Fidelity MSCI Consumer Discretionary Index ETF (FDIS), launched 10/24/13, will seek to track the MSCI USA IMI Consumer Discretionary Index. The IMI designation stands for Investable Market Index, which means the fund will attempt to cover 99% of the investable U.S. sector market by including small and mid cap stocks. The fund will carry a 0.12% expense ratio.
- Fidelity MSCI Consumer Staples Index ETF (NYSEARCA:FSTA), launched 10/24/13, will seek to track the MSCI USA IMI Consumer Staples Index with a 0.12% expense ratio.
- Fidelity MSCI Energy Index ETF (NYSEARCA:FENY), launched 10/24/13, will seek to track the MSCI USA IMI Energy Index with a 0.12% expense ratio.
- Fidelity MSCI Financials Index ETF (NYSEARCA:FNCL), launched 10/24/13, will seek to track the MSCI USA IMI Financials Index with a 0.12% expense ratio.
- Fidelity MSCI Health Care Index ETF (NYSEARCA:FHLC), launched 10/24/13, will seek to track the MSCI USA IMI Health Care Index with a 0.12% expense ratio.
- Fidelity MSCI Industrials Index ETF (NYSEARCA:FIDU), launched 10/24/13, will seek to track the MSCI USA IMI Industrials Index with a 0.12% expense ratio.
- Fidelity MSCI Information Technology Index ETF (NYSEARCA:FTEC), launched 10/24/13, will seek to track the MSCI USA IMI Information Technology Index with a 0.12% expense ratio.
- Fidelity MSCI Materials Index ETF (NYSEARCA:FMAT), launched 10/24/13, will seek to track the MSCI USA IMI Materials Index with a 0.12% expense ratio.
- Fidelity MSCI Telecommunication Services Index ETF (NYSEARCA:FCOM), launched 10/24/13, will seek to track the MSCI USA IMI Telecommunication Services 25/50 Index with a 0.12% expense ratio.
- Fidelity MSCI Utilities Index ETF (NYSEARCA:FUTY), launched 10/24/13, will seek to track the MSCI USA IMI Utilities Index with a 0.12% expense ratio.
- Vident International Equity Fund (NASDAQ:VIDI), launched 10/30/13 under the WisdomTree Trust, will invest in international equities based on its own index. The index's methodology is to: 1) assign weightings to countries and companies based on their expected losses to a wide variety of extreme economic events, 2) measure other fundamental risks (such as regulations, political stability, taxes, etc.) within each country relative to others, and 3) overweight countries exhibiting more favorable rankings and underweight the others. On 10/25/13, the index included 999 stocks, and the fund's expense ratio is 0.75%.
Product closures/delistings in October:
- JPMorgan Double ShortU.S.10 Year Treasury Futures ETN (NYSEARCA:DSXJ)
- JPMorgan Double ShortU.S.Long Bond Treasury Futures ETN (NYSEARCA:DSTJ)
- EGShares Basic Materials GEMS (NYSEARCA:LGEM)
- EGShares Consumer Goods GEMS (NYSEARCA:GGEM)
- EGShares Consumer Services GEMS (NYSEARCA:VGEM)
- EGShares Emerging Markets Metals & Mining (NYSEARCA:EMT)
- EGShares Energy GEMS (NYSEARCA:OGEM)
- EGShares Financials GEMS (NYSEARCA:FGEM)
- EGShares GEMS Composite (NYSEARCA:AGEM)
- EGShares Health Care GEMS (NYSEARCA:HGEM)
- EGShares Industrials GEMS (NYSEARCA:IGEM)
- EGShares Technology GEMS (NYSEARCA:QGEM)
- EGShares Telecom GEMS (NYSEARCA:TGEM)
- EGShares Utilities GEMS (NYSEARCA:UGEM)
- KEYnotes First Trust Enhanced 130/30 Large Cap Index ETN (NYSEARCA:JFT)
Product changes in October:
- ProShares Ultra Europe (NYSEARCA:UPV) and ProShares UltraShort Europe (NYSEARCA:EPV) were renamed ProShares Ultra FTSE Europe (UPV) and ProShares UltraShort FTSE Europe (EPV) effective 10/1/13.
- PowerShares replaced "Technical Leaders" with "Momentum" in the names of four ETFs effective 10/4/13. The new names are PowerShares DWA Momentum Portfolio (NYSEARCA:PDP), PowerShares DWA SmallCap Momentum Portfolio (NYSEARCA:DWAS), PowerShares DWA Developed Markets Momentum Portfolio (NYSEARCA:PIZ), and PowerShares DWA Emerging Markets Momentum Portfolio (NYSEARCA:PIE).
- WisdomTree Global ex-US Growth Fund (NYSEARCA:DNL) was renamed WisdomTree Global ex-US Dividend Growth Fund (DNL) effective 10/7/13.
- Vanguard S&P 500 ETF (NYSEARCA:VOO) underwent a 1-for-2 reverse split effective 10/24/13.
- EGShares Beyond BRICs ETF (NYSEARCA:BBRC) changed its underlying index from one supplied by INDXX to the FTSE Beyond BRICs Index effective 10/25/13.
- Global X changed the name and underlying Solactive index of Global X Top Guru Holdings Index ETF (NYSEARCA:GURU) to Global X Guru Index ETF (GURU) effective 10/25/13.
- Shareholders of STREAM S&P Dynamic Roll Commodities Fund (NYSEARCA:BNPC), an ETF delisted after trading on April 12, finally received payment on October 28, 2013. BNP Paribas took 199 days to render payments, providing an excellent example of why investors should sell shares prior to delisting and avoid the liquidation process.
- Guggenheim BRIC ETF (NYSEARCA:EEB) changed its underlying index from BNY Mellon BRIX Select ADR Index to BNY Mellon BRIX Select DR Index effective 10/31/13.
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.