ETF Deathwatch For March 2018

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Includes: ADRA, ADRU, AMJL, AMUB, ASEA, BDCZ, BSCH, BUZ, CHGX, CNDA, DBRT, DIVC, DLBS, DXJC, DXJH, DXJR, DXPS, DXUS, EMFM, EMSD, EQWM, ESGL, EZJ, GENY, HDRW, HTRB, ICOL, ICOW, IOIL, IPO, KROO, MLPB, MLPC, MLPY, MLQD, MMTM, OILX, OLEM, PBDM, PBEE, PBND, PBSM, PBTP, PBUS, PPSC, RALS, RFUN, TRSK, UTSL, VAMO, WUSAX, YMLI, ZBIO
by: Invest With An Edge

By Jason Teed

ETF Deathwatch for March had 14 closures and 18 exits. Eighteen of the funds left the Deathwatch list due to improved health, mainly resulting from an increase in assets under management (AUM). Fourteen were closed by their parent companies.

March also saw 22 additions to the list. Six of the added funds were ETNs, and the rest were ETFs. The addition of any ETNs (typically more financially creative products) indicates a declining appetite for investor risk, which makes sense given the recent increase in market volatility.

Half of the new additions to the list were young funds, having just come out of the six-month grace period given to all new ETFs. Since they haven't had a long time to attract investor interest, they still have a good chance of coming off the list down the road. Five additions, however, were older than 5 years, which indicates declining interest. This signals vulnerability to closure.

All but one addition to the list were added due to low trading volume rather than a decrease in AUM. Most additions were niche products, including commodities (such as crude oil) and a high-income ETN. Each product services a small portion of the market, indicating that perhaps these narrowly focused products were not as popular as originally expected.

With 14 closures this month, it appears that some fund managers are being more conservative in their approach to cost-cutting, favoring reducing expenses at the cost of potential future income. Over the past two decades, March has been the second-strongest month for the S&P 500 on average. However, this year has been different. The announcement of tariffs from the Trump administration and increasing interest rates jostled the financial markets, thus slowing the usual production. Also, as the month progressed and concerns calmed, the S&P 500 Index started climbing. This increased market volatility may have made fund families somewhat more careful in their fund management.

There are 47 ETFs and ETNs on Deathwatch this month that have been in the market for more than 10 years. These funds include BLDRS Asia 50 ADR ETF (NASDAQ:ADRA), BLDRS Europe 100 ADR (NASDAQ:ADRU), and five products that hit the 10-year mark this month. That is a long time to wait for investor interest to kick in.

The average asset level of the threatened ETFs on ETF Deathwatch decreased from $7.45 million to $6.78 million, and the number of products with less than $2 million in assets stayed at 83. The average age rose from 53.43 to 54.84 months, and the number of products more than 5 years of age dropped from 177 to 168. The largest ETF on the list had an AUM of $24.465 million, while the smallest had assets of just $286,000.

Here is the Complete List of 427 ETFs and ETNs on ETF Deathwatch for March 2018 compiled using the objective ETF Deathwatch Criteria.

The 16 ETFs added to ETF Deathwatch for March:

  1. Guggenheim BulletShrs 2017 Corp Bd ETF (NYSEARCA:BSCH)
  2. ETF S SOLUTIONS/CHANGE FIN DIVSFD I (NYSEARCA:CHGX)
  3. PowerShares Russell Midcap Equal Wt ETF (NYSEARCA:EQWM)
  4. Oppenheimer ESG Revenue ETF (NYSEARCA:ESGL)
  5. Hartford Total Return Bond ETF (NYSEARCA:HTRB)
  6. iShares 5-10 Year Invmt Grd Corp Bd ETF (NYSE:MLQD)
  7. UBS ETRACS S&P GSCI Crd OilTtl Rt ETN (NYSEARCA:OILX)
  8. PowerShares PureBeta FTSE Dv ex-Nrth Amr (NYSE:PBDM)
  9. PowerShares PureBeta FTSE Emerg Mkts (NYSE:PBEE)
  10. PowerShares PureBeta US Aggt Bd (NYSE:PBND)
  11. PowerShares PureBeta MSCI USA Small Cap Portfolio (NYSE:PBSM)
  12. PowerShares PureBeta 0-5 Yr US TIPS Portfolio (NYSE:PBTP)
  13. PowerShares PureBeta MSCI USA Portfolio (NYSE:PBUS)
  14. Direxion Daily Small Cap Bull 1.25x Share ETF (NYSEARCA:PPSC)
  15. VanEck Vectors High Inc Infras MLP ETF (NYSEARCA:YMLI)
  16. ProShares UltraPro Short Nasdaq Biotech (NASDAQ:ZBIO)

The 6 ETNs added to ETF Deathwatch for March:

  1. UBS ETRACS Alerian MLP ETN Series B (NYSEARCA:AMUB)
  2. UBS ETRACS Wells Fargo Busn Dev Co ETN (NYSEARCA:BDCZ)
  3. AxelaTrader 3x Inverse Brent Crude Oil ETN (NYSEARCA:DBRT)
  4. UBS ETRACS Alerian MLPInfrs ETN SerB (NYSEARCA:MLPB)
  5. Morgan Stanley Cushing MLP High Income Index ETN (NYSEARCA:MLPY)
  6. iPath Pure Beta Crude Oil ETN (NYSEARCA:OLEM)

The 18 ETFs removed from ETF Deathwatch due to improved health:

  1. C-Tracks ETN Miller/Howard Strt Div Rinv (NYSEARCA:DIVC)
  2. C-Tracks ETN Bsd on Perf of M/H MLP Fdmt (NYSEARCA:MLPC)
  3. SPDR S&P 1500 Momentum Tilt ETF (NYSEARCA:MMTM)
  4. RiverFront Dynamic Unconstrained Inc ETF (NYSEARCA:RFUN)
  5. VAMO
  6. Credit Suisse X-Links MP 2x Lvg Alrn MLP ETN (NYSEARCA:AMJL)
  7. Global X FTSE Southeast Asia ETF ASIA (NYSEARCA:ASEA)
  8. BUZZ US Sentiment Leaders ETF ET (NYSEARCA:BUZ)
  9. iPath US Treasury Long Bond Bear ETN (NASDAQ:DLBS)
  10. Global X Next Emerging & Frontier ETF FRO (NYSEARCA:EMFM)
  11. ProShares Ultra MSCI Japan (NYSEARCA:EZJ)
  12. Principal Millennials ETF (NASDAQ:GENY)
  13. Direxion iBillionaire ETF (NYSEARCA:IBLN)
  14. iShares MSCI Colombia Capped ETF (NYSEARCA:ICOL)
  15. Pacer Dev Mkts Intl Csh Cows 100 ETF (NYSE:ICOW)
  16. Renaissance IPO ETF (NYSEARCA:IPO)
  17. ProShares RAFI Long/Short (NYSEARCA:RALS)
  18. Direxion Daily Utilities Bull 3X ETF (NYSEARCA:UTSL)

The 14 ETFs/ETN that were closed:

  1. IQ Canada Small Cap ETF (NYSEARCA:CNDA)
  2. WisdomTree Japan Hedged Capital Gds ETF (NYSEARCA:DXJC)
  3. WisdomTree Japan Hedged Health Care ETF (NYSEARCA:DXJH)
  4. WisdomTree Japan Hedged Real Estate ETF (NYSEARCA:DXJR)
  5. WisdomTree United Kingdom Hedged Eq ETF (NASDAQ:DXPS)
  6. WisdomTree Global ex-US Hedged Div ETF (NYSEARCA:DXUS)
  7. WisdomTree Strong Dlr Emerg Mkts Eq ETF (BATS:EMSD)
  8. WisdomTree Global ex-US Hdgd Rel Est ETF (BATS:HDRW)
  9. IQ Global Oil Small Cap ETF (NYSEARCA:IOIL)
  10. IQ Australia Small Cap ETF (NYSEARCA:KROO)
  11. Direxion Daily Small Cap Bull 1.25X ETF (LLSC)
  12. Janus Velocity Tail Risk Hdgd Lg Cp ETF (NYSEARCA:TRSK)
  13. WisdomTree US Export & Multinational ETF (WEXP)
  14. WisdomTree US Domestic Economy ETF (WUSA)

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.