By Ansh Chaudhary
For the month of February, the ETF Deathwatch decreased in size. 12 exchange-traded products ("ETPs") were added to the list, and 30 funds were removed, making February a busier month in terms of removals. Of the removals, 13 were removed due to increased health and 17 were due to asset managers closing their funds. The high number of funds that were closed in February may have been due to an after-effect of the significant market correction and volatility that occurred in December 2018.
For February, the additions were mostly equity-based from a mix of different sectors and themes. In last month's edition of the ETF Deathwatch, six emerging markets ETFs were on the list. The troubles internationally continued in February as a few more were added this month. Emerging markets have been volatile in the last few months due to ongoing trade negotiations. As businesses start to feel the pressure on their bottom line because of tariffs, emerging market ETFs have also been bruised in the market conditions.
Another five of the additions were thematic-based ETFs. These types of ETFs are usually more volatile as they focus in on niche sectors, such as LGBT employment or NASDAQ Smartphone Index; they are newer products in the market, so the "theme" being tracked is also yet to play out. It makes sense to see additions of such ETFs to the Deathwatch in the meantime.
All but one 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. The Chinese Biopharmaceutical ETF was the sole fund added due to low assets. Coupling together the fact that the fund is very new, an August 2018 inception, and the fund tracks Chinese companies, which have been under increased scrutiny with the trade war, it does not come as a surprise that the Chinese biopharma index ETF is having trouble garnering interest at this point.
There are 46 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. There are also a fair number of commodity ETPs on Deathwatch that have been in the market for more 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 slightly decreased from $7.54 million to $7.39 million, and the number of products with less than $2 million in assets was 41. The average age of products on the list decreased slightly from 49.55 months to 48.33 months, and the number of products more than 5 years of age decreased from 126 to 117. The largest ETF on the list had an AUM of $24.86 million, while the smallest had assets of just $322,700.
Here is the Complete List of 423 ETFs and ETNs on ETF Deathwatch for February 2019 compiled using the objective ETF Deathwatch Criteria.
The 12 ETF/ETNs added to ETF Deathwatch for February:
|1)||WisdomTree Emerging Currency Strategy Fund||(NYSEARCA:CEW)|
|2)||Loncar China Biopharma ETF||(NASDAQ:CHNA)|
|3)||First Trust Dorsey Wright Momentum & Low Volatility ETF||(NASDAQ:DVOL)|
|4)||X-Trackers MSCI EAFE ESG Leaders Equity ETF||(NYSEARCA:EASG)|
|5)||First Trust China AlphaDEX Fund||(NASDAQ:FCA)|
|6)||First Trust NASDAQ Smartphone Index Fund||(NASDAQ:FONE)|
|7)||X-Trackers MSCI All World ex US High Dividend Yield Equity ETF||(NYSEARCA:HDAW)|
|8)||KraneShares Emerging Markets Healthcare Index ETF||(NYSEARCA:KMED)|
|9)||InsightShares LGBT Employment Equality ETF||(NYSEARCA:PRID)|
|10)||ETRACS NYSE Pickens Core Midstream Index ETN||(NYSEARCA:PYPE)|
|11)||Salt Trubeta High Exposure ETF||(NYSE:SLT)|
|12)||Impact Shares YWCA Women's Empowerment ETF||(NYSEARCA:WOMN)|
The 13 ETF/ETNs removed from ETF Deathwatch due to improved health:
|1)||Market Vectors Renminbi/USD ETN||(NYSEARCA:CNY)|
|2)||Amplify YieldShares CWP Dividend & Option Income ETF||(NYSEARCA:DIVO)|
|3)||Invesco S&P 500 Equal Weight Real Estate ETF||(NYSEARCA:EWRE)|
|4)||Franklin LibertyQ US Small Cap Equity ETF||(NYSE:FLQS)|
|5)||Claymore CEF GS Connect ETN||(NYSEARCA:GCE)|
|6)||US Global GO Gold & Precious Metal Miners ETF||(NYSEARCA:GOAU)|
|7)||X-Trackers High Yield Corp Bond-Interest Rate Hedged ETF||(NYSE:HYIH)|
|8)||ARK Israel Innovative Technology ETF||(NYSE:IZRL)|
|9)||John Hancock Multifactor Industrials ETF||(NYSEARCA:JHMI)|
|10)||ClearBridge Large Cap Growth ESG ETF||(NASDAQ:LRGE)|
|11)||IQ Hedge Market Neutral Tracker ETF||(NYSEARCA:QMN)|
|12)||Vaneck Vectors Etf Trust-Vaneck Vectors Real Asset Allocation Etf||(NYSEARCA:RAAX)|
|13)||Invesco S&P SmallCap High Dividend Low Volatility ETF||(NYSE:XSHD)|
The 17 ETFs/ ETN that were closed:
|1)||REX BKCM ETF||(NYSEARCA:BKC)|
|2)||Invesco Canadian Energy Income ETF||(NYSEARCA:ENY)|
|3)||Invesco Russell 2000 Equal Weight ETF||(NYSEARCA:EQWS)|
|4)||Invesco Multi-Factor Large Cap||(GMFL)|
|5)||Invesco Zacks International Multi-Asset Income ETF||(NYSEARCA:HGI)|
|6)||James Purpose Based Investment ETF||(JPBI)|
|7)||Invesco Multi-Strategy Alternatives ETF||(NASDAQ:LALT)|
|8)||Invesco S&P 100 Equal Weight ETF||(NYSEARCA:OEW)|
|9)||Invesco U.S. Large Cap Optimized Volatility ETF||(NYSEARCA:OVLC)|
|10)||Invesco FTSE RAFI Asia Pacific ex-Japan ETF||(NYSEARCA:PAF)|
|11)||Invesco Global Agriculture ETF||(NASDAQ:PAGG)|
|12)||Invesco WilderHill Progressive Energy ETF||(NYSEARCA:PUW)|
|13)||Invesco Emerging Markets Infrastructure ETF||(NYSEARCA:PXR)|
|14)||Invesco Zacks Micro Cap ETF||(NYSEARCA:PZI)|
|15)||Invesco S&P 500 Value With Momentum ETF||(BATS:SPVM)|
|16)||Invesco Wilshire US REIT ETF||(NYSE:WREI)|
|17)||Invesco China All-Cap ETF||(NYSEARCA:YAO)|
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.