ETF Fund Revenues: A View from the Bottom

By Jim Wiandt

As the first follow-up to my popular tabulation of ETF fund revenues, I offer you a view from the bottom.

To summarize my original "ETF Geeks Dream Table II" blog, here are the key points I came out with. Again, I should point out that this is just a blog and it's just a little rough, but right in the ballpark. Some of the expense ratios and assets are a bit off, so we're scrubbing that now and I'll be coming out with some really fun industry analysis using our scrubbed and fully accurate database.

Here is a summary from the original blog:

• There are 664 ETFs in our database
• The equal-weighted average expense ratio was 57 basis points
• The median DOLLAR-Weighted Expense ratio was 35.4995 bps
• Sorting the 603 funds we actually have clean data for, total assets are $560 billion
• In that universe, ETF industry revenues come out to $1.99 BILLION

I then proceeded to list out the top 50 ETFs sorted by revenue per fund. As a refresher, here are those with revenues per fund of $25 million or more per year):

Fund Name	Ticker	Exp Ratio	Assets ($MM)	Revenue Per Fund
iShares MSCI Emerg Mkts	EEM	0.74	26,031	192,629,400
iShares MSCI EAFE	EFA	0.35	46,850	163,975,000
streetTRACKS Gold Shares	GLD	0.40	19,967	79,866,400
SPDRs (S&P 500)	SPY	0.10	66,487	66,486,500
iShares Brazil	EWZ	0.74	7,522	55,662,800
iShares Japan	EWJ	0.57	8,162	46,522,260
iShares FTSE/Xinhua China	FXI	0.74	6,156	45,550,700
PowerShares QQQQ	QQQQ	0.20	16,422	32,843,600
ProShares UltraShort S&P 500	SDS	0.95	2,923	27,763,750
iShares R1000 Growth	IWF	0.20	13,211	26,421,400
iPath DJ-AIG Commodity	DJP	0.75	3,348	25,109,250

Today - we'll expand on this theme and have a little more fun. As you may be aware, it's not all milk and honey in the ETF business. Those lofty $25 million in revenue funds at the top are a very long way from what the bottom 50 ETFs look like. Indeed, the 50^th ranked ETF in terms of smallest revenue per fund does not even reach 25 THOUSAND dollars in annual revenue per fund. Here's that bottom list:

Name	Ticker	Exp Ratio	Assets	Revenues Per ETF
Ameristock/Ryan 2 Year U.S. Treasury ETF	GKB	0.15	2.6	3,900
Ameristock/Ryan 1 Year U.S. Treasury ETF	GKA	0.15	2.6	3,900
Ameristock/Ryan 5 Year U.S. Treasury ETF	GKC	0.15	2.7	4,050
Ameristock/Ryan 10 Year U.S. Treasury ETF	GKD	0.15	2.7	4,050
Ameristock/Ryan 20 Year U.S. Treasury ETF	GKE	0.15	2.7	4,050
FocusShares ISE-CCM Homeland Security	MYP	0.60	1.1	6,600
First Trust S&P REIT	FRI	0.50	1.5	7,500
First Trust Fincls AlpDEX	FXO	0.70	1.5	10,500
First Trust ConDsc AlpDEX	FXD	0.70	1.6	11,200
First Trust Util AlpDEX	FXU	0.70	1.6	11,200
Claymore/Morningstar Services	MZO	0.40	3.2	12,800
Claymore/Morningstar Information	MZN	0.40	3.3	13,200
HealthShares Ophthal	HHZ	0.75	1.8	13,500
HealthShares Meta-Endo	HHM	0.75	1.8	13,500
Adelante Shares RE Shelter	AQS	0.68	2	13,600
Adelante Shares RE Value	AVU	0.68	2	13,600
Adelante Shares RE Composite	ACB	0.68	2	13,600
Adelante Shares RE Classics	ACK	0.68	2	13,600
Adelante Shares RE Yield Plus	ATY	0.68	2	13,600
HealthShares Inf Disease	HHG	0.75	1.9	14,250
HealthShares GI/Gender	HHU	0.75	1.9	14,250
Adelante Shares RE Growth	AGV	0.68	2.1	14,280
Claymore/Ocean Tomo Grwth	OTR	0.60	2.4	14,400
Claymore/Morningstar Manufacturing	MZG	0.40	3.8	15,200
HealthShares Derm & Wound	HRW	0.75	2.1	15,750
HealthShares Neuroscience	HHN	0.75	2.2	16,500
HealthShares Cardiology	HRD	0.75	2.2	16,500
First Trust Dow Jones Global Select Div	FGD	0.60	2.8	16,800
SPA MarketGrader Large Cap 100	SZG	0.85	2	17,000
HealthShares Auto-Inflam	HHA	0.75	2.3	17,250
PowerShares FTSE RAFI Intl Real Estate	PRY	0.75	2.3	17,250
HealthShares Orthopedic Repair ETF	HHP	0.75	2.4	18,000
First Trust ConStp AlpDEX	FXG	0.70	2.6	18,200
First Trust NASDAQ ExTech	QQXT	0.97	1.9	18,430
iShares FTSE NAREIT Resdn	REZ	0.48	4	19,200
Rydex S&P 600 Pure Growth	RZG	0.35	5.5	19,250
SPDR DJ Large Cap	ELR	0.21	9.2	19,320
Market Vectors-Leh Bro AMT-Free Int Muni	ITM	0.20	9.9	19,800
Rydex 2x S&P MidCap 400 ETF	RMM	0.70	2.9	20,300
Vanguard Extended Duration Treasury	EDV	0.14	14.5	20,300
HealthShares Euro Drugs	HRJ	0.95	2.2	20,900
iShares FTSE EPRA/NAREIT North America	IFNA	0.48	4.5	21,600
Market Vectors Leh bro AMT-Free Long Muni	MLN	0.24	9.1	21,840
HealthShares EuroMed&Dvcs	HHT	1.01	2.2	22,220
First Trust Matrl AlpDEX	FXZ	0.70	3.2	22,400
NYSE Arca Tech 100 ETF	NXT	0.50	4.8	24,000
FocusShares ISE SINdex Fund	PUF	0.60	4	24,000
HealthShares Emerging Cancer ETF	HHJ	0.75	3.2	24,000
SPDR DJ Mid Value	EMV	0.23	10.5	24,150
iShares FTSE EPRA/NAREIT Europe	IFEU	0.48	5.1	24,480

Here's a VERY interesting side note. Matt tells me that if oil stays high today, that the MACRO Oil funds would liquidate according to the prospectus. (He's posting a full blog on this soon.) A quick read also tells me that the UCR, the Up Macro, has $250 million in it...and at 160 basis points in fees, that, astoundingly represents $4 million in annual revenue for that fund. I bet none of you knew that. Well, Sam Masucci (MACRO head) - probably he knows.

Before you start thinking things are dire in the ETF business, you can remember that not only did fund No. 50 have over $8 million in annual revenue, but 51-100 are not doing too bad either. In fact, of the 603 ETFs in our sample here, the $1 million in revenues per fund mark falls out at fund No. 210 (the iShares Lehman MBS Fixed - MBB). So this looks like a pretty healthy industry to us, despite all the doom and gloom about loads of tiny funds. UCR that I mentioned with $4 million in annual revenue, is not even in the top 100!

ETFs 51 To 100 Ranked By Revenues Per Fund

iShares S&P 600 Small	IJR	0.20	3919.9	7,839,800
ProShares Ultra S&P 500	SSO	0.95	801.8	7,617,100
iShares Russell Mid Growth	IWP	0.25	3046.2	7,615,500
iShares Australia	EWA	0.51	1479	7,542,900
UltraShort Real Estate ProShares	SRS	0.95	793.9	7,542,050
iShares Malaysia	EWM	0.51	1477.4	7,534,740
iShares COMEX Gold Trust	IAU	0.40	1872.5	7,490,000
iShares Mexico	EWW	0.51	1466.4	7,478,640
iShares NASD Biotech	IBB	0.50	1478.2	7,391,000
UltraShort FTSE/Xinhua China 25 ProShares	FXP	0.95	767.4	7,290,300
iShares DJ US Energy	IYE	0.60	1197.1	7,182,600
iShares C&S Realty	ICF	0.35	2043.8	7,153,300
iShares Rusell Mid Value	IWS	0.25	2814.6	7,036,500
iShares S&P 500 Value	IVE	0.18	3882.8	6,989,040
iShares Russell Midcap	IWR	0.20	3441.5	6,883,000
Vanguard Total Stock Market	VTI	0.07	9732.4	6,812,680
iShares R2000 Growth	IWO	0.25	2716.4	6,791,000
PowerShares FTSE RAFI 1000	PRF	0.76	868.6	6,601,360
Claymore/BNY BRIC ETF	EEB	0.60	1032.4	6,194,400
iShares S&P Glb Energy	IXC	0.65	942.5	6,126,250
UltraShort Oil & Gas ProShares	DUG	0.95	643.3	6,111,350
ProShares UltraShort Dow 30	DXD	0.95	635.9	6,041,050
streetTRACKS DJ Int RlEst	RWX	0.60	993.1	5,958,600
iShares U.K.	EWU	0.51	1150	5,865,000
ProShares UltraShort S&P 500	SDS	0.20	2922.5	5,845,000
Market Vectors Russia	RSX	0.69	833.5	5,751,150
iShares DJ Tech	IYW	0.60	948.2	5,689,200
Health Care Sel SPDR	XLV	0.23	2401.2	5,522,760
iShares Russell 3000	IWV	0.20	2747.1	5,494,200
iShares DJ Health	IYH	0.60	901.9	5,411,400
iShares Russell 1000	IWB	0.15	3512.6	5,268,900
Technology SPDR	XLK	0.23	2251.7	5,178,910
Consumer Staples SPDR	XLP	0.23	2240.4	5,152,920
Vanguard Euro Stock	VGK	0.18	2850.4	5,130,720
iShares S&P 400 Mid Value	IJJ	0.25	2048.4	5,121,000
Rydex S&P Equal Weight	RSP	0.40	1275.9	5,103,600
iShares GS$ InvesTop	LQD	0.15	3362.1	5,043,150
iShares MSCI EAFE Growth	EFG	0.40	1254.5	5,018,000
iShares S&P 400 Mid Growth	IJK	0.25	1983.6	4,959,000
Utilities SPDR	XLU	0.26	1866.5	4,852,900
iShares DJ Utilities	IDU	0.60	797	4,782,000
iShares DJ Basic Mat	IYM	0.60	788	4,728,000
iShares GSCI Commodity Id	GSG	0.75	619.2	4,644,000
iShares South Africa	EZA	0.74	582	4,306,800
iShares S&P Glb Health	IXJ	0.65	653.8	4,249,700
PowerShares DB G10 Currency Harvest	DBV	0.81	524.4	4,247,640
Ultra Financials ProShares	UYG	0.95	446.5	4,241,750
iShares MSCI EAFE Value	EFV	0.40	1027.3	4,109,200
PowerShares Dyn Lg Growth	PWB	0.64	639.8	4,094,720
iShares Lehman 7-10	IEF	0.15	2729.3	4,093,950

Obviously, there is a ton more that we can do with this data, and we will, breaking things down by expenses and revenue per product issuer, examining internal fund expenses, actual revenue per issuer and then breaking down profitability per issuer. We've got all of that data. And it's clear from the flood of email and comments we've gotten that you love this kind of thing...even in its simplest (above) form.

Of course, I'll also be working to put all of this into perspective by looking at some of the active shops and comparing their businesses and margins to the ETF business.

Comments

[Ames Tiedeman:]

Nice data! Thanks!

2008 Apr 27 05:20 PM