ETF Deathwatch For September 2016: Largest One-Month Decline

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Includes: EPRO, EUDV, FCAN, FMF, FUT, GDJJ, GDXS, GSD, ICVT, JGBT, JHMF, JHMH, JHMT, JSML, MLPS, MLPY, OEUH, RJN, SAA, SCTO, SDP, SOVB, STPP, SYG, WREI
by: Ron Rowland

ETF Deathwatch logged its largest one-month drop in membership ever, with a net reduction of 32 products. The count for September stands at 460 (361 ETFs and 99 ETNs), the lowest level of the past four months. The decline does not change the overall upward trend. The count has zoomed 41% higher from a level of 325 in just the past 12 months.

Unfortunately, the reduction in names on the list is not the direct result of products getting healthier. Instead, the majority of the decline is attributed to deaths and liquidations of ETFs and ETNs. However, this may be an indirect sign that the overall industry is getting healthier by eliminating its weaker members. With the median ETF holding just $72 million in assets, a level many observers believe to be unprofitable, a clean bill of health is still a long way off for the majority of products.

A record 41 closures occurred in August, but only 25 of those products were on ETF Deathwatch. The other 16 closures were products with enough assets to exclude them from the list, which is evidence suggesting the current criteria may be too conservative. Nine new names were added to the list, and 16 came off due to increased assets, an upturn in trading activity, or both.

Despite the large change in membership this month, the demographics of the members changed very little. The average asset level of products on ETF Deathwatch declined from $7.2 million to $7.1 million, and the quantity of products with less than $2 million in assets shrank from 93 to 90. The average age increased from 47.9 to 48.5 months, and the number of products more than 5 years of age dropped from 197 to 183.

Here is the Complete List of 460 ETFs and ETNs on ETF Deathwatch for September 2016 compiled using the objective ETF Deathwatch Criteria.

The 9 ETFs and ETNs added to ETF Deathwatch for September:

  1. AdvisorShares EquityPro ETF (NYSEARCA:EPRO)
  2. Cambria Sovereign High Yield Bond ETF (BATS:SOVB)
  3. UBS ETRACS 1x Monthly Short Alerian MLP Infrastructure Total Return ETN (NYSEARCA:MLPS)
  4. First Trust Canada AlphaDEX (NASDAQ:FCAN)
  5. First Trust Morningstar Managed Futures Strategy ETF (NYSEARCA:FMF)
  6. Janus Small Cap Growth Alpha ETF (NASDAQ:JSML)
  7. ProShares Managed Futures Strategy ETF (NYSEARCA:FUT)
  8. SPDR MFS Systematic Growth Equity ETF (NYSEARCA:SYG)
  9. WisdomTree Global SmallCap Dividend ETF (BATS:GSD)

The 16 ETPs removed from ETF Deathwatch due to improved health:

  1. DB 3x Japanese Govt Bond Futures ETN (NYSEARCA:JGBT)
  2. ELEMENTS Rogers International Commodity Energy ETN (NYSEARCA:RJN)
  3. Global X JPMorgan U.S. Sector Rotator Index ETF (NYSEARCA:SCTO)
  4. Guggenheim Wilshire U.S. Real Estate Investment Trust ETF (NYSE:WREI)
  5. iPath U.S. Treasury Steepener ETN (NASDAQ:STPP)
  6. iShares Convertible Bond ETF (BATS:ICVT)
  7. John Hancock Multifactor Financials ETF (NYSEARCA:JHMF)
  8. John Hancock Multifactor Healthcare ETF (NYSEARCA:JHMH)
  9. John Hancock Multifactor Technology ETF (NYSEARCA:JHMT)
  10. Morgan Stanley Cushing MLP High Income Index ETN (NYSEARCA:MLPY)
  11. O'Shares FTSE Europe Quality Dividend Hedged ETF (NYSEARCA:OEUH)
  12. ProShares MSCI Europe Dividend Growers ETF (BATS:EUDV)
  13. ProShares Ultra Junior Miners ETF (NYSEARCA:GDJJ)
  14. ProShares Ultra SmallCap600 ETF (NYSEARCA:SAA)
  15. ProShares UltraShort Gold Miners ETF (NYSEARCA:GDXS)
  16. ProShares UltraShort Utilities ETF (NYSEARCA:SDP)

The 25 ETFs removed from ETF Deathwatch due to delisting:

  1. ETRACS Diversified High Income ETN (NYSEARCA:DVHI)
  2. ETRACS Monthly Pay 2x DJ International Real Estate ETN (NYSEARCA:RWXL)
  3. ETRACS Wells Fargo MLP Ex-Energy ETN (NYSEARCA:FMLP)
  4. ETRACS Wells Fargo MLP Index ETN (NYSEARCA:MLPW)
  5. ETRACS Daily Long-Short VIX ETN (NYSEARCA:XVIX)
  6. ETRACS S&P 500 Gold Hedged Index ETN (NYSEARCA:SPGH)
  7. ETRACS S&P 500 VEQTOR Switch Index ETN (NYSEARCA:VQTS)
  8. iShares B - Ca Rated Corporate Bond ETF (BATS:QLTC)
  9. iShares Enhanced International Small-Cap (NYSEARCA:IEIS)
  10. iShares Global Inflation-Linked Bond ETF (NYSEARCA:GTIP)
  11. iShares MSCI Emerging Markets Horizon ETF (BATS:EMHZ)
  12. iShares MSCI Emerging Markets Latin America ETF (NASDAQ:EEML)
  13. SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (NYSEARCA:EMCD)
  14. SPDR MSCI Emerging Market 50 ETF (NYSEARCA:EMFT)
  15. SPDR MSCI EM Beyond BRIC ETF (NYSEARCA:EMBB)
  16. SPDR SSgA Risk Aware ETF (NYSEARCA:RORO)
  17. ProShares Short Investment Grade Corporate ETF (NYSEARCA:IGS)
  18. ProShares Ultra Bloomberg Commodity ETF (NYSEARCA:UCD)
  19. ProShares Ultra Homebuilders & Supplies ETF (NYSEARCA:HBU)
  20. ProShares Ultra Investment Grade Corporate ETF (NYSEARCA:IGU)
  21. ProShares Ultra MSCI Pacific Ex-Japan ETF (NYSEARCA:UXJ)
  22. ProShares UltraShort Bloomberg Commodity ETF (NYSE:CMD)
  23. ProShares UltraShort Homebuilders & Supplies ETF (NYSEARCA:HBZ)
  24. ProShares UltraShort Junior Miners ETF (NYSEARCA:GDJS)
  25. ProShares UltraShort MSCI Pacific ex-Japan ETF (NYSEARCA:JPX)

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Disclosure: Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.