By Ansh Chaudhary
For the month of January, the ETF Deathwatch increased in size. Twenty-six exchange-traded products ("ETPs") were added to the list, and 15 funds were removed, making January a busier month in terms of additions. Of the removals, 14 were removed due to increased health and only one was due to asset managers closing their funds. The low number of fund closures may be due to the market rally in January.
For January, the funds added to ETF Deathwatch were mostly equity-based from a mix of different sectors and themes. Last month, eight emerging-markets ETFs were added to the list. International troubles continued in January and another six emerging-markets ETFs were added. Indexes around the world rallied on optimism about the trade negotiation meetings between the U.S. and China. If tensions escalate during the week, however, risk in the international equity space may persist.
Six funds from the defensive equity and fixed-income side were also added to the list in January. Although both of these asset classes saw positive performance in January, these portions of the market couldn't compare to the performance of the more aggressive sectors. This is to be expected after January's significant rally.
Four thematic-based ETFs were also added to the list. These types of ETFs are usually more volatile as they focus on niche sectors. They are newer products in the market, so the "theme" being tracked has yet to play out. In the meantime, it makes sense to see these types of funds on the list.
All but one of the additions this month were due to low average daily volume rather than low assets. 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 it's likely that should volume and interest remain low, these funds may be considered for closure. An equal-weighted seasonal sector-rotation ETF was the sole fund added due to low assets. It doesn't come as a surprise that this fund has failed to garner interest since it is very new (a July 2018 inception) and has been providing negative returns.
There are 55 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. 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 part in a larger role for their clients that are interested in active management.
The average asset level of the threatened ETFs on ETF Deathwatch increased from $7.26 million to $7.54 million and 45 products had less than $2 million in assets. The average age of products on the list decreased from 50.00 months to 49.55 months, and the number of products more than 5 years of age decreased from 127 to 126. The largest ETF on the list had an AUM of $24.43 million, while the smallest had assets of just $322,000.
Here is the Complete List of 441 ETFs and ETNs on ETF Deathwatch for January 2019 compiled using the objective ETF Deathwatch Criteria.
The 26 ETF/ETNs added to ETF Deathwatch for January:
- Defiance Future Tech ETF (AUGR)
- BMO Elkhorn DWA MLP Select Index ETN (NASDAQ:BMLP)
- WisdomTree Brazilian Real Strategy Fund (NYSEARCA:BZF)
- Xtrackers MSCI Germany Hedged Equity ETF (NYSEARCA:DBGR)
- Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV)
- AdvisorShares Dorsey Wright Micro-Cap ETF (NASDAQ:DWMC)
- Franklin Liberty Investment Grade Corporate ETF (NYSEARCA:FLCO)
- Franklin Liberty High Yield Corporate ETF (BATS:FLHY)
- Global X FTSE Nordic Region ETF (NYSEARCA:GXF)
- InsightShares Patriotic Employers ETF (NYSEARCA:HONR)
- Invesco Corporate Income Defensive ETF (NYSEARCA:IHYD)
- Invesco Corporate Income Value ETF (NYSEARCA:IHYV)
- Invesco Investment Grade Value ETF (NYSEARCA:IIGV)
- John Hancock Multifactor Materials ETF (NYSEARCA:JHMA)
- John Hancock Multifactor Industrials ETF (NYSEARCA:JHMI)
- Impact Shares NAACP Minority Empowerment ETF (NYSEARCA:NACP)
- WisdomTree 90/60 US Balanced Fund (NYSEARCA:NTSX)
- Pacer US Export Leaders ETF (NYSEARCA:PEXL)
- Oppenheimer Emerging Markets Ultra Dividend Revenue ETF (NYSEARCA:REDV)
- Oppenheimer International Ultra Dividend Revenue ETF (NYSEARCA:RIDV)
- Pacer CFRA-Stovall Equal Weight Seasonal Rotation Index ETF (NYSEARCA:SZNE)
- Global X TargetIncome 5 ETF (TFIV)
- Global X TargetIncome Plus 2 ETF (BATS:TFLT)
- FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund (NYSEARCA:TLDH)
- Vanguard US Liquidity Factor ETF (BATS:VFLQ)
- Invesco Investment Grade Defensive ETF (NYSEARCA:IIGD)
The 14 ETF/ETNs removed from ETF Deathwatch due to improved health:
- Oppenheimer ESG Revenue ETF (NYSEARCA:ESGL)
- Franklin FTSE United Kingdom ETF (NYSEARCA:FLGB)
- IQ Mackay Shields Municipal Insured ETF (NYSEARCA:MMIN)
- Natixis Seeyond International Minimum Volatility ETF (NYSEARCA:MVIN)
- Invesco DB G10 Currency Harvest Fund (NYSEARCA:DBV)
- iShares US Dividend and Buyback ETF (BATS:DIVB)
- iShares MSCI Emerging Markets ex China ETF (NASDAQ:EMXC)
- VanEck Vectors Environmental Services ETF (NYSEARCA:EVX)
- First Trust Nasdaq Retail ETF (NASDAQ:FTXD)
- The Long-Term Care ETF (NASDAQ:OLD)
- ProShares RAFI Long/Short (NYSEARCA:RALS)
- Large Cap US Equity Select ETF (NASDAQ:RNLC)
- Direxion Daily Robotics Artificial Intelligence & Automation Index Bull 3X Share (NYSEARCA:UBOT)
- ProShares Ultra Utilities (NYSEARCA:UPW)
The 1 ETF/ETN that was closed:
ProSports Sponsors ETF (BATS:FANZ)
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