The quantity of ETP listings at the end of September was 18 fewer for the month and 20 fewer for the quarter, the largest declines ever. The one-month closure tally of 24 also established a new record. The current ETP listing count stands at 1,456 and consists of 1,252 ETFs and 204 ETNs. As stated a month ago – the consolidation has begun.
It’s not just due to the fact that closures have jumped – declines in new product launches are also a factor. The 61 new products coming to market during the past half year is the lowest 6-month count since October 2009. Only six new ETPs (five ETFs and one ETN) arrived on the market in September, the second month in a row for such a low total.
There are no signs of improvement either. October will set another new record for closures with 29 liquidations already announced.
Many ETF reports would lead you to believe Russell has already closed 25 ETFs this year, pushing the year-to-date closure count above 80. However, the reality is no Russell ETFs have been closed or liquidated yet. Back in August, Russell “announced plans” to close and liquidate all ETFs but one in its product line. Those plans provided for the continued listing and trading of the affected ETFs through October 16. The 25 Russell ETFs are still in existence today, so don’t count your de-listings before they close. The year-to-date actual closure count now stands at 59.
The spike in closures and resulting product consolidation are not signs of industry weakness. Quite the opposite, they are traits of a healthy industry. Not every product will be a winner. A thoughtful pruning process is both necessary and beneficial.
Increasing assets under management is evidence of health, and assets grew another 5% in September to about $1.3 trillion. The number of funds with more than $10 billion in assets rose from 24 to 28. ETPs exceeding the $1 billion threshold climbed from 166 to 173.
Trading activity finally picked up after months of declining results. Total dollar volume climbed back above $1 trillion, even though September had 17% fewer trading days than August (19 versus 23). SPDR S&P 500 (NYSEARCA:SPY) fell short of being responsible for a third of all ETP trading for the first time in memory. It managed to capture “only” a 33.2% share.
ETPs averaging more than $1 billion per day in trading added one member to their ranks and captured 53.4% of all ETP trading activity. Products averaging more than $100 million per day surged from 53 to 73 while capturing 88.0% of trading activity. The quantity with more than $10 million of daily trading also increased, jumping from 208 to 236 while grabbing 97.3% of trading dollars. Unfortunately, that means the remaining 1,200+ products, about 84%, had to fight for the last 2.7% of trading scraps. While the overall ETF industry is healthy, it’s clearly a case of the haves and the have-nots.
|September 2012 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,252||204||1,456|
|Listed as of 12/31/2011||1,166||203||1,369|
|New Introductions for Month||5||1||6|
|Delistings/Closures for Month||9||15||24|
|Net Change for Month||-4||-14||-18|
|New Introductions 6 Months||54||7||61|
|New Introductions YTD||130||16||146|
|Net Change YTD||+86||+1||+87|
|Assets Under Mgmt ($ billion)||$1,281||$17.6||$1,299|
|% Change in Assets for Month||+5.1%||-1.1%||+5.0%|
|Qty AUM > $10 Billion||28||0||28|
|Qty AUM > $1 Billion||170||3||173|
|Qty AUM > $100 Million||541||24||565|
|Monthly $ Volume ($ billion)||$1,024||$18.6||$1,043|
|% Change in Monthly $ Volume||+5.2%||+0.0%||+5.2%|
|Avg Daily $ Volume > $1 Billion||6||0||6|
|Avg Daily $ Volume > $100 Million||71||2||73|
|Avg Daily $ Volume > $10 Million||227||9||236|
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):
- RBS US Large Cap Alternator ETN (NYSEARCA:ALTL)
- iShares MSCI Frontier 100 Index Fund (NYSEARCA:FM)
- AdvisorShares STAR Global Buy-Write ETF (NYSEARCA:VEGA)
- WisdomTree China Dividend Ex-Financials Fund (CHXF)
- FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (NYSEARCA:TLTD)
- FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (NYSEARCA:TLTE)
Product closures/delistings in September (sorted by name):
- Direxion Daily Agribusiness Bull 3x (COWL)
- Direxion Daily Agribusiness Bear 3x (COWS)
- Direxion Daily Basic Materials Bear 3x (MATS)
- Direxion Daily BRIC Bull 3x (NYSE:BRIL)
- Direxion Daily BRIC Bear 3x (NYSE:BRIS)
- Direxion Daily Healthcare Bear 3x (NYSEARCA:SICK)
- Direxion Daily India Bear 3x (NYSE:INDZ)
- Direxion Daily Latin America Bear 3x (NYSE:LHB)
- Direxion Daily Retail Bear 3x (NYSE:RETS)
- ETRACS 1-Month S&P 500 VIX Futures ETN (VXAA)
- ETRACS 2-Month S&P 500 VIX Futures ETN (VXBB)
- ETRACS 3-Month S&P 500 VIX Futures ETN (VXCC)
- ETRACS 4-Month S&P 500 VIX Futures ETN (VXDD)
- ETRACS 5-Month S&P 500 VIX Futures ETN (VXEE)
- ETRACS 6-Month S&P 500 VIX Futures ETN (VXFF)
- ETRACS Daily Short 1-Month S&P VIX Futures ETN (AAVX)
- ETRACS Daily Short 2-Month S&P VIX Futures ETN (BBVX)
- ETRACS Daily Short 3-Month S&P VIX Futures ETN (CCVX)
- ETRACS Daily Short 4-Month S&P VIX Futures ETN (DDVX)
- ETRACS Daily Short 5-Month S&P VIX Futures ETN (EEVX)
- ETRACS Daily Short 6-Month S&P VIX Futures ETN (FFVX)
- iPath Short Extended (-3x) Russell 1000 TR ETN (ROSA)
- iPath Short Extended (-3x) Russell 2000 TR ETN (NYSE:RTSA)
- iPath Short Extended (-3x) S&P 500 TR Index ETN (NYSE:SFSA)
Product changes in September:
- Global X changed the name, ticker symbol, and underlying index of the Global X S&P/TSX Venture 30 Canada ETF (TSXV) to Global X Junior Miners ETF (NYSEARCA:JUNR) effective September 6. Although Global X trumpeted JUNR as a “new” ETF launch (pdf), it was actually just a marketing ploy, as TSXV was already a junior miners ETF.
- ProShares Ultra VIX Short-Term Futures ETF (NYSEARCA:UVXY) underwent a 1-for-10 reverse split effective September 7, 2012.
- Guggenheim Russell Top 50 ETF (NYSEARCA:XLG) was renamed Guggenheim Russell Top 50 Mega Cap ETF (XLG) effective September 10, 2012.
- ETRACS Monthly 2xLeveraged Next Generation Internet ETN (NYSEARCA:EIPL) underwent a 1-for-4 reverse split effective September 12, 2012.
- Schwab cut the expense ratio on all 15 of its ETFs effective September 21, with each becoming the lowest cost offerings within their respective categories.
- Market Vectors Coal ETF (NYSEARCA:KOL) and Market Vectors Gaming ETF (NYSEARCA:BJK) changed from using third-party indexes to in-house indexes effective September 24, 2012.
Announced Product Changes for Coming Months:
- Vanguard will change the underlying indexes for 22 of its funds over the coming months. Six international funds will move from MSCI to FTSE indexes while 16 domestic products will transition from MSCI to CRSP indexes.
- Eight ProShares ETFs (TBT, SDS, SDOW, SMN, UBR, RXD, SZK, and GLL) will undergo a 1-for-4 reverse split and SVXY a 2-for-1 forward split effective October 5, 2012.
- Russell is making a strategic exit from the indexed ETF business by closing all 25 of its indexed ETFs, while leaving open its one actively managed ETF. The last day of trading will be October 16, 2012.
- Global X will close four of its struggling ETFs. October 18 will be the last day of trading for Global X Aluminum ETF (ALUM), Global X Auto ETF (VROM), Global X NASDAQ 400 Mid Cap ETF (QQQM), and Global X NASDAQ 500 ETF (QQQV).
- Guggenheim BulletShares 2012 Corporate Bond (NYSEARCA:BSCC) will terminate on or about December 31 due to its planned maturity and liquidation.
- Guggenheim BulletShares 2012 High Yield Corporate Bond (NYSE:BSJC) will terminate on or about December 31 due to its planned maturity and liquidation.
Previous monthly ETF statistics reports are available here.
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.