ETF Stats For September 2015 - Assets Back Below $2 Trillion

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Includes: EUDV, GCE, GSC, VAMO, VXDN, VXUP, XCEM
by: Ron Rowland

Thirty new ETFs and ETNs came to market in September, putting this year's launch total at 214. Closures numbered 11 and now stand at 89 for the year. Assets fell by 2.2% during the month, which puts them back below $2 trillion and down 1.3% for the year. As the month came to a close, there were 1,787 products (1,592 ETFs and 195 ETNs) listed for trading with industry assets totaling $1.97 trillion.

One of the most widely covered ETF stories of the month was the "entry" of Goldman Sachs (NYSE:GS) into the ETF business. The word entry is in quotes because nearly every article failed to mention the other attempts made by Goldman Sachs to enter the ETF arena. Below are the two existing and four closed ETFs and ETNs the firm was involved with:

  • GS Connect S&P GSCI Enhanced Commodity ETN (NYSEARCA:GSC), issued by Goldman Sachs and launched in July 2006, has about $124 million in assets. GSC became a broken product on June 9, 2015 when Goldman Sachs discontinued issuing new shares.
  • Claymore CEF Index GS Connect ETN (NYSEARCA:GCE), issued by Goldman Sachs and launched in December 2007, has about $7 million in assets. When Guggenheim acquired Claymore, this product was not included in the transaction. Adding to the embarrassment, Goldman does not maintain a website for its GS Connect products.
  • Four ETFs tracking Goldman Sachs' smart beta indexes were launched in December 2012. The four ETFs in the ALPS | Goldman Sachs Index Series closed less than two years later in August 2014 due to lack of assets. Apparently, Goldman Sachs was not willing to put any client money into these ETFs.

This is Goldman's fourth attempt, and this time it looks like they are taking it more seriously by being the sponsor, the index provider, and offering aggressive pricing. Although the new ETFs are called ActiveBeta, investors need to understand these are not actively managed funds. Instead, each will track a multi-factor index that updates its constituents on a quarterly basis.

AccuShares have been nothing short of an unmitigated disaster since their arrival on May 19, 2015. Their launch was accompanied by a heap of praise because they were designed to track the "spot" price of the CBOE Volatility Index instead of tracking VIX futures like existing volatility ETFs and ETNs do. However, as I noted, the teeter-totter structure was akin to that used by MacroShares, another product set that was doomed to failure from the start.

The AccuShares Spot CBOE VIX Fund Up (NASDAQ:VXUP) and AccuShares Spot CBOE VIX Fund Down (NASDAQ:VXDN), which even went so far as to include "spot" in their names, make "normal" distributions, "special" distributions, and "corrective" distributions in a feeble attempt to keep the ETFs tracking their index. These distributions caused the funds to gush cash, and now both are trading at less than $8 per share after being launched at split-adjusted prices of $100 or more just five months ago.

In September, rather than doing a cash distribution, the firm decided to do something novel - it made a distribution of the opposite ETFs to each shareholder. Those holding "Up" shares received "Down" shares and vice versa. It was the last thing that everyone making a bet on the direction of volatility wanted - offsetting shares. These products will be put on ETF Deathwatch as soon as possible.

September 2015 Month End ETFs ETNs Total
Currently Listed U.S. 1,592 195 1,787
Listed as of 12/31/2014 1,451 211 1,662
New Introductions for Month 29 1 30
Delistings/Closures for Month 11 0 11
Net Change for Month +18 +1 +19
New Introductions 6 Months 151 3 154
New Introductions YTD 208 6 214
Delistings/Closures YTD 67 22 89
Net Change YTD +141 -16 +125
Assets Under Mgmt ($ billion) $1,952 $22.1 $1,974
% Change in Assets for Month -2.1% -12.6% -2.2%
% Change in Assets YTD -1.0% -17.9% -1.3%
Qty AUM > $10 Billion 50 0 50
Qty AUM > $1 Billion 242 5 247
Qty AUM > $100 Million 757 33 790
% with AUM > $100 Million 47.6% 16.9% 44.2%
Monthly $ Volume ($ billion) $1,768 $87.6 $1,855
% Change in Monthly $ Volume -13.3% +8.4% -12.5%
Avg Daily $ Volume > $1 Billion 12 1 13
Avg Daily $ Volume > $100 Million 92 5 97
Avg Daily $ Volume > $10 Million 314 13 327
Actively Managed ETF Count (w/ change) 134 +1 mth +9 ytd
Actively Managed AUM ($ billion) $21.6 +1.5% mth +25.0% ytd

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):

  1. EGShares EM Core ex-China ETF (NYSEARCA:XCEM), launched 9/2/15, is designed to deliver the performance of up to 700 emerging market companies, excluding those domiciled in China and Hong Kong. Countries representing more than 10% of the ETF include South Korea (18.3%), Taiwan (15.8%), and Brazil (13.6%). XCEM has an estimated yield of 2.4%. The expense ratio will be capped at 0.35% until 8/11/17 (XCEM overview).
  2. iShares iBonds Dec 2021 AMT-Free Muni Bond ETF (NYSEARCA:IBMJ), launched 9/3/15, adds to the iShares Muni Bond line with investment grade municipal bonds that mature in 2021. The estimated yield to maturity comes in at about 1.6%. The ETF's expense ratio is 0.18% (IBMJ overview).
  3. iShares iBonds Dec 2022 AMT-Free Muni Bond ETF (NYSEARCA:IBMK), launched 9/3/15, targets investment grade bonds maturing in 2022. Investors can expect an estimated yield to maturity of 1.8% and an expense ratio of 0.18% (IBMK overview).
  4. Cambria Value and Momentum ETF (BATS:VAMO), launched 9/9/15, is an actively managed fund that will hold 100 US stocks with market caps greater than $200 million. Selections will be made using a quantitative approach, factoring in both value and momentum. The fund managers can also tactically hedge the portfolio up to its full value. VAMO sports an expense ratio of 0.59% (VAMO overview).
  5. ProShares MSCI Europe Dividend Growers ETF (BATS:EUDV), launched 9/10/15, selects European equities that have seen year-over-year dividend growth during the past 10 consecutive years. The ETF will hold at least 25 stocks equally weighted, although it currently holds 51. Each sector's exposure will be limited to 30% of the portfolio and countries to 50%. The UK is already pushing the latter limit at 49.5%. Expenses will be capped at 0.55% until 9/30/16 (EUDV overview).
  6. SPDR MSCI International Dividend Currency Hedged ETF (NYSEARCA:HDWX), launched 9/15/15, invests in the 100 highest dividend-yielding stocks in the international market (excluding the US). To be included, stocks must have a market cap of at least $600 million for developed market stocks and $300 million for emerging market stocks, daily volume greater than $5 million, and three years of positive earnings growth and profitability. The fund will hedge against changes in value between the US dollar and constituent currencies by employing a one-month forward rate. The yield is estimated at 5.8%. The expense ratio will be capped at 0.48% until 1/31/17 (HDWX overview).
  7. SPDR MSCI International Real Estate Currency Hedged ETF (NYSEARCA:HREX), launched 9/15/15, will invest in companies outside the US that are engaged in the ownership, development, and management of various real estate property in industrial, office, retail, residential, health care, hotel and resort, data centers, and storage. To be selected, a company must derive at least 75% of its revenues from real estate activities related to those core property types. The fund will hedge against fluctuations in exchange rates between the underlying currencies and the US dollar with one-month currency forwards. Investors will pay 0.48% annually to own this ETF (HREX overview).
  8. Direxion Daily Cyber Security Bear 2X Shares (NYSEARCA:HAKD), launched 9/16/15, seeks daily, leveraged investment results of -200% (inverse) of the performance of the ISE Cyber Security Index. The index is comprised of domestic and foreign companies who generate key revenue from providing cyber security services or infrastructure (hardware/software developers). The expense ratio will be capped at 0.80% until 9/1/17 (HAKD overview).
  9. Direxion Daily Cyber Security Bull 2X Shares (NYSEARCA:HAKK), launched 9/16/15, is designed to return a leveraged daily return of 200% performance of the ISE Cyber Security Index. The index constituents are companies in both domestic and foreign markets who generate key revenue from providing cyber security services or infrastructure (hardware/software developers). Expenses will be capped at 0.80% until 9/1/17 (HAKK overview).
  10. Direxion Daily Pharmaceutical & Medical Bear 2X Shares (NYSEARCA:PILS), launched 9/16/15, seeks daily, leveraged investment results of -200% (inverse) of the performance of the Dynamic Pharmaceutical Intellidex Index. The index is comprised of US pharmaceutical companies involved in various aspects of the industry such as research, manufacture, distribution, and testing. The expense ratio will be capped at 0.80% until 9/1/17 (PILS overview).
  11. Direxion Daily Pharmaceutical & Medical Bull 2X Shares (NYSEARCA:PILL), launched 9/16/15, is designed to give investors a leveraged daily return of 200% performance of the Dynamic Pharmaceutical Intellidex Index. The index constituents are US companies involved in various aspects of the pharmaceutical industry such as development, sales, and facilitating regulatory approval. Expenses will be capped at 0.80% until 9/1/17 (PILL overview).
  12. iShares MSCI Saudi Arabia Capped ETF (NYSEARCA:KSA), launched 9/17/15, provides exposure to the Saudi Arabian stock market, which is an emerging market in the MSCI classification methodology. It currently holds 58 equities, with Financials representing about 55% of the ETF and Materials about 30%. The largest holding is Saudi Basic Industries Corp, which is a member of the Materials sector, at a significant 18.8%. KSA sports a 0.74% expense ratio (KSA overview).
  13. Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSEARCA:GSLC), launched 9/21/15, is passively managed to an index and is designed to deliver diversified exposure to equity securities of large-cap US issuers, currently with 432 holdings. Positions are selected based on the following factors: value, momentum, quality, and low volatility. The expense ratio is capped at 0.09% until 9/14/16 (GSLC overview).
  14. FlexShares Credit-Scored US Long Corporate Bond Index Fund (NASDAQ:LKOR), launched 9/23/15, seeks to provide investors the benefits of longer maturity corporate bonds while adding in a credit evaluation process and improved liquidity. The index starts with a universe that includes liquid issuers and then utilizes its own proprietary model for credit scoring. The strategy then optimizes the constituents to maximize the credit score while keeping duration and other characteristics similar to the universe. The estimated yield is 4.8% with an effective duration of 13.2 years. Investors will pay 0.22% annually to own this ETF (LKOR overview).
  15. FlexShares US Quality Large Cap Index Fund (NASDAQ:QLC), launched 9/23/15, invests in a selection of US large-cap securities, which are ranked and selected based on perceived characteristics of better quality, attractive valuation, and positive momentum. It currently has 120 holdings, with Information Technology leading the sector allocations at 21.2%. QLC's expense ratio is 0.32% (QLC overview).
  16. ProShares S&P 500 Ex-Energy ETF (NYSEARCA:SPXE), launched 9/24/15, is a product for investors wishing to achieve the broad exposure of the S&P 500 Index while avoiding the Energy sector. The ETF holds 462 of the 500 securities in the index, all except those relating to natural gas, oil, and petroleum industries. The ETF has an expense ratio of 0.27% (SPXE overview).
  17. ProShares S&P 500 Ex-Financials ETF (NYSEARCA:SPXN), launched 9/24/15, invests in all of the securities in the S&P 500 Index, with the exception of those in the Financials sector. SPXN holds 414 securities, and the ETF sports an expense ratio of 0.27% (SPXN overview).
  18. ProShares S&P 500 Ex-Health Care ETF (NYSEARCA:SPXV), launched 9/24/15, provides an option to invest in the S&P 500 Index while steering clear of the Health Care sector. Instead of tracking all 500 index stocks, SPXV does not hold the 54 that are in the Health Care sector. Investors will pay 0.27% annually to own this fund (SPXV overview).
  19. ProShares S&P 500 Ex-Technology ETF (NYSEARCA:SPXT), launched 9/24/15, is designed to give investors all of the exposure of the S&P 500 Index except for the stocks designated as Technology and Telecommunications. The ETF holds 428 of the 500 equities in the S&P 500. As with the other ProShares ETFs with this theme, the expense ratio is 0.27% (SPXT overview).
  20. Reaves Utilities ETF (NASDAQ:UTES), launched 9/24/15, is an actively managed ETF selecting its holdings from the Utilities sector. It employs both qualitative analysis (management interviews, field research, and macro factors) and quantitative processes (modeling, valuation, and technicals) in its selection methodology. The ETF is concentrated with only 21 holdings. The expense ratio is 0.95% (UTES overview).
  21. Goldman Sachs ActiveBeta Emerging Markets Equity ETF (NYSEARCA:GEM), launched 9/29/15, invests in equities of emerging market companies. The underlying index uses value, momentum, quality, and low volatility factors when selecting holdings. The expense ratio will be capped at 0.45% until 9/14/16 (GEM overview).
  22. John Hancock Multifactor Consumer Discretionary ETF (NYSEARCA:JHMC), launched 9/29/15, targets the US Consumer Discretionary sector. The strategy utilizes a multi-factor approach that emphasizes smaller capitalization, lower relative price, and higher profitability. The expense ratio will be capped at 0.50% until 8/31/17 (JHMC overview).
  23. John Hancock Multifactor Financials ETF (NYSEARCA:JHMF), launched 9/29/15, invests in a wide range of domestic Financial stocks. The underlying index utilizes a multi-factor approach that emphasizes smaller capitalization, lower relative price, and higher profitability. The expense ratio will be capped at 0.50% until 8/31/17 (JHMF overview).
  24. John Hancock Multifactor Healthcare ETF (NYSEARCA:JHMH), launched 9/29/15, aims its multi-factor strategy at US Health Care stocks. Holdings are selected based on factors that emphasize smaller capitalization, lower relative price, and higher profitability. The expense ratio will be capped at 0.50% until 8/31/17 (JHMH overview).
  25. John Hancock Multifactor Large Cap ETF (NYSEARCA:JHML), launched 9/29/15, targets a wide variety of US large-cap stocks with over 770 holdings. The index-based strategy utilizes a multi-factor approach that emphasizes smaller capitalization, lower relative price, and higher profitability. The expense ratio will be capped at 0.35% until 8/31/17 (JHML overview).
  26. John Hancock Multifactor Mid Cap ETF (NYSEARCA:JHMM), launched 9/29/15, invests in domestic mid-cap stocks and holds over 650 positions. The underlying index utilizes a multi-factor approach that emphasizes smaller capitalization, lower relative price, and higher profitability. The expense ratio will be capped at 0.45% until 8/31/17 (JHMM overview).
  27. John Hancock Multifactor Technology ETF (NYSEARCA:JHMT), launched 9/29/15, aims its index-based strategy at US Technology stocks. Holdings are selected based on a multi-factor approach that emphasizes smaller capitalization, lower relative price, and higher profitability. The expense ratio will be capped at 0.50% until 8/31/17 (JHMT overview).
  28. CS X-Links Multi-Asset High Income ETN (NYSEARCA:MLTI), launched 9/30/15, is an exchange-traded note designed to provide exposure to an index that is made up of a diversified mix of up to 120 high-dividend paying securities. Index constituents include other exchange-traded products, such as iShares iBoxx $ High Yield Corporate Bond Fund (NYSEARCA:HYG) at 8.5%, iShares US Preferred Stock ETF (NYSEARCA:PFF) at 8.1%, and iShares JPMorgan USD Emerging Market Bond ETF (NYSEARCA:EMB) at 6.7%. Currently, the estimated yield is 7.1%, and dividends are expected to be paid monthly. Investors will pay 0.84% annually to own this ETN (MLTI overview).
  29. IQ Leaders GTAA Tracker ETF (NYSEARCA:QGTA), launched 9/30/15, is designed to track the performance and risk characteristics of what it defines as the 10 leading global allocation mutual funds. The 10 leaders are selected based on size, returns, consistency of long-term performance, quality of short-term performance, and other factors. Instead of investing in those 10 funds, actual index components are selected so that their combination reflects the risk-return characteristics of the 10 leaders. The fund is typically 120% long and 20% short, although the prospectus allows up to a 130/30 long/short split. The current top holdings are Vanguard FTSE Developed Markets (NYSEARCA:VEA) at 21.2%, Vanguard Total Bond Market (NYSEARCA:BND) at 15.7%, and iShares Core U.S. Aggregate Bond (NYSEARCA:AGG) at 15.6%. The ETF has an expense ratio of 0.60% (QGTA overview).
  30. JPMorgan Diversified Return U.S. Equity ETF (NYSEARCA:JPUS), launched 9/30/15, invests in large- and mid-cap US equities that are chosen based on relative valuation, price momentum, and quality. It currently has 561 holdings, and up to 20% of its assets can be invested in futures. Expenses will be capped at 0.29% until 2/27/17 (JPUS overview).

Product closures/delistings in September:

  1. iShares iBonds Sep 2015 AMT-Free Muni Bond (NYSEARCA:IBMD)
  2. Deutsche X-trackers Regulated Utilities (NYSEARCA:UTLT)
  3. Deutsche X-trackers Solactive Investment Grade Subordinated Debt (NYSEARCA:SUBD)
  4. ProShares UltraShort Telecommunications (NYSEARCA:TLL)
  5. Market Vectors MSCI Emerging Markets Quality (NYSEARCA:QEM)
  6. Market Vectors MSCI Emerging Markets Quality Dividend (NYSEARCA:QDEM)
  7. Market Vectors MSCI International Quality (NYSEARCA:QXUS)
  8. Market Vectors MSCI International Quality Dividend (NYSEARCA:QDXU)
  9. PIMCO 3-7 Year U.S. Treasury Index ETF (NYSEARCA:FIVZ)
  10. PIMCO 7-15 Year U.S. Treasury Index ETF (NYSEARCA:TENZ)
  11. PIMCO Foreign Currency Strategy Active (NYSEARCA:FORX)

Product changes in September:

  1. The iShares MSCI USA ETF (NYSEARCA:EUSA), a capitalization-weighted fund, underwent an extreme makeover on September 1, becoming the iShares MSCI USA Equal Weighted ETF (EUSA).
  2. The iShares Japan large-Cap ETF (ITF), based on the S&P/TOPIX 150 Index, underwent an extreme makeover on September 4, becoming the iShares JPX-Nikkei 400 ETF (NYSEARCA:JPXN).
  3. State Street performed forward splits on ten of its SPDR industry ETFs effective September 10.
  4. VelocityShares 3x Long Crude Oil ETN (NYSEARCA:UWTI) had a 1-for-10 reverse split and VelocityShares 3x Long Natural Gas ETN (NYSEARCA:UGAZ) had a 1-for-5 reverse split effective September 10.
  5. Owners of AccuShares Spot CBOE VIX Up (VXUP) received a "corrective distribution" of one share of AccuShares Spot CBOE VIX Down (VXDN) for each share held effective September 16. Meanwhile, the owners of AccuShares Spot CBOE VIX Down (VXDN) received a "corrective distribution" of one share of AccuShares Spot CBOE VIX Up (VXUP) plus a regular distribution of $0.470145.
  6. PowerShares S&P 500 High Dividend (NYSEARCA:SPHD) was renamed PowerShares S&P 500 High Dividend Low Volatility (SPHD), effective September 25, to better reflect its existing strategy.
  7. AccuShares Spot CBOE VIX Up (VXUP) and AccuShares Spot CBOE VIX Down (VXDN) had 1-for-10 reverse splits effective September 25.

Announced Product Changes for Coming Months:

  1. Direxion performed reverse splits on six of its leveraged ETFs effective October 1 (originally scheduled for September 10).
  2. Market Vectors Emerging Markets Local Currency Bond ETF (NYSEARCA:EMLC) was renamed Market Vectors JPMorgan EM Local Currency Bond ETF (EMLC) effective October 1, 2015.
  3. AdvisorShares Pring Turner Business Cycle ETF (DBIZ) closed with October 2 being its last day of trading.
  4. EGShares Blue Chip ETF (NYSEARCA:BCHP) and EGShares Brazil Infrastructure ETF (NYSEARCA:BRXX) will close with their last day of trading on October 30.
  5. Van Eck Global plans to acquire Yorkville MLP ETFs (press release) and hopes to close the transaction in the fourth quarter.

Previous monthly ETF statistics reports are available here.

Disclosure covering writer: 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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