ETF Deathwatch membership rolls increased by only one for December, although additional activity took place under the surface. Twelve new names joined the list, while six escaped due to improved health and five others were removed as a result of their closures. The current count stands at 319, consisting of 211 ETFs and 108 ETNs.
The closures in November consisted of the five ETFs from FactorShares that simultaneously took long positions in one asset class while shorting another. The concept sounded good at the time of launch, but fees were not capped and came in above 33% for FactorShares 2X: S&P500 Bull/TBond Bear (FSE). Two other members of the family had fees above 25%. Needless to say, all five have been on Deathwatch since the day they became eligible.
As outrageous as these expense ratios were, the more significant problem was that industry regulators allowed FactorShares to market these ETFs as having just a 0.75% management fee (with an asterisk). Their closure raises the US ETP death toll to 61 so far in 2013 and the lifetime count to 374. The FactorShares ETFs lived for 33 months, which is much longer than the median age of 18.5 months of all closures.
The average age of products on Deathwatch increased to 40.5 months from 39.5 in November. Average asset size increased from $6.4 million to $6.7 million, and 53 of them have less than $2 million in assets. Eleven products had zero volume throughout the month of November, and iPath Short Enhanced MSCI Emerging Markets (EMSA) has now gone thirteen months without a trade, continuing its reign as the poster child of Zombie ETPs.
Here is the Complete List of 319 Products on ETF Deathwatch for December 2013 compiled using the objective ETF Deathwatch Criteria.
The 12 ETPs added to ETF Deathwatch for December:
- Direxion Daily Brazil Bear 3x Shares (BRZS)
- Direxion Daily South Korea Bear 3x Shares (KORZ)
- Global X Canada Preferred (CNPF)
- iPath DJ-UBS Industrial Metals ETN (JJM)
- iPath US Treasury 2-year Yield Bear ETN (DTUS)
- iShares MSCI ACWI ex US Healthcare (AXHE)
- PIMCO 3-7 Year U.S. Treasury Index (FIVZ)
- PowerShares Dynamic Lux Nanotech (PXN)
- PowerShares Fundamental Pure Large Value (PXLV)
- PowerShares Fundamental Emerging Markets Local Debt (PFEM)
- PowerShares MENA Frontier Countries (PMNA)
- SPDR Barclays 1-10 Year TIPS ETF (TIPX)
The 6 ETPs removed from ETF Deathwatch due to improved health:
- Claymore CEF Index GS Connect ETN (GCE)
- Direxion NASDAQ-100 Equal Weighted (QQQE)
- Global X NASDAQ China Technology (QQQC)
- Huntington US Equity Rotation Strategy (HUSE)
- iShares Target Date Retirement Income (TGR)
- YieldShares High Income ETF (YYY)
The 5 ETPs removed from ETF Deathwatch due to delisting:
- FactorShares 2X: S&P500 Bull/TBond Bear (FSE)
- FactorShares 2X: TBond Bull/S&P500 Bear (FSA)
- FactorShares 2X: S&P500 Bull/USD Bear (FSU)
- FactorShares 2X: Oil Bull/S&P500 Bear (FOL)
- FactorShares 2X: Gold Bull/S&P500 Bear (FSG)
Disclosure covering writer, editor, and publisher: 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.