ETF Deathwatch For September 2018

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Includes: AXJV, BDRY, DWCR, EMBU, EMTY, FLRU, GARD, GENY, HAHA, HCOR, HECO, HEWC, HEWY, HFXE, HNDL, HQBD, IECS, IEDI, IEFN, IEHS, IEIH, IFRA, JHMU, KOIN, KOR, KORP, LOGO, MRRL, MSUS, MYY, PAGG, PMPT, PSET, RPUT, SCIN, SFHY, SHNY, SOVB, UGE, UHN, USAG
by: Invest With An Edge

By Jason Teed

For the month of September, the ETF Deathwatch slightly increased in size. Twenty-one exchange-traded products ("ETPs") were added to the list, and 19 funds were removed. Of the removals, nine were removed due to increased health and 10 were due to asset managers closing their funds. It's likely that many of the fund closures were the result of fund managers wanting to "clean up" their business lines at the end of the quarter.

For September, eight of the new additions to the list were young funds, having just come out of their incubation period. This initial six-month period is allowed to let new funds gather assets and interest before considering them as "at risk" assets. However, three of the new additions were more than 5 years old, which is a particularly bad sign as it indicates declining interest in an established product. These older ETFs include leveraged, short, and other niche products that may not always garner enough interest. Nearly all additions to the list were products serving only a niche of the financial markets.

All additions this month were due to low average daily volume rather than low assets under management (AUM). It is possible that these additions may have enough AUM to keep them from closure. However, our system takes into account both AUM and volume, so should volume and interest remain low, these funds may be considered for closure.

There are 53 ETFs and ETNs on Deathwatch this month that have been in the market for more than 10 years. This is a long time for ETPs to exist while remaining on our Deathwatch list. Invesco's Agriculture ETF (NASDAQ:PAGG) just hit the 10-year mark, while a plethora of leveraged and short ETF instruments dominate our list of funds older than 10 years. It's possible that the fund companies managing these products will allow them to remain active, as they play a larger role for their clients that are interested in active management.

The average asset level of the threatened ETFs on ETF Deathwatch increased slightly from $7.87 million to $7.92 million, and the number of products with less than $2 million in assets was 40. The average age of products on the list increased slightly from 48.45 to 49.06 months, and the number of products more than 5 years of age increased from 126 to 128. The largest ETF on the list had an AUM of $24.76 million, while the smallest had assets of just $405,270.

Here is the Complete List of 423 ETFs and ETNs on ETF Deathwatch for September 2018 compiled using the objective ETF Deathwatch Criteria.

The 21 ETF/ETNs added to ETF Deathwatch for September:

  1. Breakwave Dry Bulk Shipping ETF (NYSEARCA:BDRY)
  2. Arrow DWA Country Rotation ETF (NASDAQ:DWCR)
  3. ProShares Decline of the Retail Store ETF (NYSEARCA:EMTY)
  4. Franklin FTSE Russia ETF (NYSEARCA:FLRU)
  5. Principal Millennials Index ETF (NASDAQ:GENY)
  6. IndexIQ ETF Trust - IQ 50 Percent Hedged FTSE Europe ETF (NYSEARCA:HFXE)
  7. Strategy Shares NASDAQ 7 HANDL ETF (NASDAQ:HNDL)
  8. iShares Evolved US Consumer Staples ETF (BATS:IECS)
  9. iShares Evolved US Discretionary Spending ETF (BATS:IEDI)
  10. iShares Evolved US Financials ETF (BATS:IEFN)
  11. iShares Evolved US Healthcare Staples ETF (BATS:IEHS)
  12. iShares Evolved US Innovative Healthcare ETF (BATS:IEIH)
  13. iShares US Infrastructure ETF (BATS:IFRA)
  14. Innovation Shares NextGen Protocol ETF (NYSEARCA:KOIN)
  15. LHA Market State US Tactical ETF (BATS:MSUS)
  16. ProShares Short MidCap 400 (NYSE:MYY)
  17. Principal Price Setters Index ETF (NASDAQ:PSET)
  18. WisdomTree CBOE Russell 2000 PutWrite Strategy Fund (BATS:RPUT)
  19. Columbia India Small Cap ETF (NYSEARCA:SCIN)
  20. Cambria Sovereign Bond ETF (BATS:SOVB)
  21. ProShares Ultra Consumer Goods (NYSEARCA:UGE)

The 9 ETF/ETNs removed from ETF Deathwatch due to improved health:

  1. Strategy Shares EcoLogical Strategy ETF (NYSEARCA:HECO)
  2. iShares Currency Hedged MSCI Canada ETF (NYSEARCA:HEWC)
  3. iShares Currency Hedged MSCI South Korea ETF (NYSEARCA:HEWY)
  4. John Hancock Multifactor Utilities ETF (NYSEARCA:JHMU)
  5. American Century Diversified Corporate Bond ETF (NYSEARCA:KORP)
  6. ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN Series B (NYSEARCA:MRRL)
  7. iShares Edge MSCI Min Vol Asia ex Japan ETF (NYSEARCA:AXJV)
  8. Reality Shares DIVCON Dividend Guard ETF (BATS:GARD)
  9. WisdomTree Fundamental US Short-Term High Yield Corporate Bond Fund (BATS:SFHY)

The 10 ETFs/ ETN that were closed:

  1. Direxion Daily Emerging Markets Bond Bull 3x Shares (NYSEARCA:EMBU)
  2. CSOP China CSI 300 A-H Dynamic ETF (NYSEARCA:HAHA)
  3. Hartford Corporate Bond ETF (NYSEARCA:HCOR)
  4. Hartford Quality Bond ETF (NYSEARCA:HQBD)
  5. AdvisorShares KIM Korea Equity ETF (NYSEARCA:KOR)
  6. Global X Iconic US Brands ETF (BATS:LOGO)
  7. iSectors Post-MPT Growth ETF (NASDAQ:PMPT)
  8. Direxion Daily Silver Miners Index Bull 2X Shares (NYSEARCA:SHNY)
  9. United States Diesel-Heating Oil Fund LP (NYSEARCA:UHN)
  10. United States Agriculture Index Fund (NYSEARCA:USAG)