ETF Deathwatch For June 2014: Downtrend Continues

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 |  Includes: BUNT, EMSH, ENFR, EWSS, HFIN, ITLT, ITLY, KBWC, PERM, RJZ, SDD, XVIX
by: Ron Rowland

ETF Deathwatch membership rolls peaked at 403 in August 2012 and have been steadily declining ever since. This month they total just 295, consisting of 201 ETFs and 94 ETNs. The 108-product reduction is impressive, but it didn't come easy. In fact, 158 ETFs and ETNs have closed their doors in that span, indicating the easiest way off the list has been through closure.

Historically, peaks and troughs in the Deathwatch quantity have tended to lag peaks and troughs in product launch activity by 12 to 18 months. If this relationship continues to hold up, then we would expect the count to resume an upward trend in the next few months. New product introductions hit their recent lows in the first quarter of 2013. The rebound since then has not been as robust as the growth surges that began in 2006 and 2009, yet there was a distinct change of trend in early 2013.

This month, twelve new names joined the list and fourteen came off. The list remains highly skewed toward exchange traded notes, with 94 of the available 201 ETNs (46.8%) currently on Deathwatch. In comparison, a much more healthy percentage of 14.5% of the 1,390 listed ETFs are struggling for survival. Two ETNs came off this month due to closure and liquidation. ETRACS Fisher-Gartman Risk Off ETN (NYSEARCA:OFF) and ETRACS Fisher-Gartman Risk On ETN (NYSEARCA:ONN) suffered from a fixed and outdated definition of risk that failed to meet investor needs.

The average age of products on the list climbed from 43.4 to 43.9 months, and 78 are more than five years in age, so it's not a case of constituents being new products that haven't had enough time to attract assets. The average asset size is now $6.7 million, down from $6.9 million a month ago, and 52 have asset levels below $2 million. With an average expense ratio of 0.81%, the typical fund on Deathwatch is generating less than $55,000 in annual revenue.

Here is the Complete List of 295 Products on ETF Deathwatch for June 2014 compiled using the objective ETF Deathwatch Criteria.

The 12 ETPs added to ETF Deathwatch for June:

  1. Alerian Energy Infrastructure ETF (NYSEARCA:ENFR)
  2. ELEMENTS Rogers ICI Metals ETN (NYSEARCA:RJZ)
  3. ETRACS Daily Long-Short VIX ETN (NYSEARCA:XVIX)
  4. Global X Permanent (NYSEARCA:PERM)
  5. Horizons S&P Financial Select Sector Covered Call (NYSEARCA:HFIN)
  6. iShares MSCI Singapore Small-Cap (NYSEARCA:EWSS)
  7. PowerShares DB 3x German Bund Futures ETN (NYSEARCA:BUNT)
  8. PowerShares DB 3x Italian T-Bond Futures ETN (NYSEARCA:ITLT)
  9. PowerShares DB Italian T-Bond Futures ETN (NYSEARCA:ITLY)
  10. PowerShares KBW Capital Markets (NYSEARCA:KBWC)
  11. ProShares Short Term USD Emerging Markets Bond (BATS:EMSH)
  12. ProShares UltraShort SmallCap600 (NYSEARCA:SDD)

The 12 ETPs removed from ETF Deathwatch due to improved health:

  1. Barclays ETN+ Shiller CAPE ETN (NYSEARCA:CAPE)
  2. Direxion All Cap Insider Sentiment (NYSEARCA:KNOW)
  3. Direxion S&P 500 DRRC Volatility Response (NYSEARCA:VSPY)
  4. EGShares India Infrastructure (NYSEARCA:INXX)
  5. ETRACS CMCI Livestock TR ETN (NYSEARCA:UBC)
  6. iPath DJ-UBS Nickel ETN (NYSEARCA:JJN)
  7. iShares Industrials Bond (NYSEARCA:ENGN)
  8. Market Vectors Renminbi Bond (NYSEARCA:CHLC)
  9. PowerShares DB Japanese Govt-Bond Futures ETN (NYSEARCA:JGBL)
  10. PowerShares Dynamic Semiconductors (NYSEARCA:PSI)
  11. ProShares Short FTSE China 25 (NYSEARCA:YXI)
  12. SPDR S&P International Financial (NYSEARCA:IPF)

The 2 ETPs removed from ETF Deathwatch due to delisting:

  1. ETRACS Fisher-Gartman Risk Off ETN (OFF)
  2. ETRACS Fisher-Gartman Risk On ETN (ONN)

ETF Deathwatch Archives

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.

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