Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

1st Quarter | 2022

Market insights and analysis


Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

ETF Deathwatch for January 2021

The ETF Deathwatch shrank a bit in January. Fifteen exchange-traded products (“ETPs”) were added to the list, and 24 funds were removed. Twenty-two of those removals were due to increased health and two were due to asset managers closing their funds. Last year was a record-setting year for fund closures, which could explain the smaller number of fund closures last month.

A wide variety of products were added to the list in January, including fixed-income, tactical, and inverse funds. Three were added because they had three straight months of low assets under management (“AUM”). The rest were added because they had a low average daily volume for the past three months. 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 low volume in these funds could be due to the nature of their investment product. Many of the funds on the Deathwatch list are inverse, tactically managed, or fixed-income funds. Financial advisers may be steering their clients away from products such as these in favor of passively allocated strategies in major U.S. indexes. January was more of a sideways-trading month for major equity indexes, so investors may begin to look into tactically managed and fixed-income funds in February for an added layer of defense in their portfolios.

The removals from the Deathwatch due to improved health included Treasury funds and international funds. These funds may have seen added volume and AUM last month as investors diversified their portfolios away from U.S. large-cap equities.

Forty-three ETFs and exchange-traded notes (“ETNs”) on the Deathwatch list this month 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, as well as several commodity ETPs, dominate our list of funds older than 10 years. The fund companies managing these products may allow them to remain active, as they likely play a larger role for clients interested in active management.

The average asset level of the threatened ETFs on ETF Deathwatch decreased from $9.54 million to $9.29 million, and 25 products had less than $2 million in assets. The average age of products on the list increased from 53.66 months to 55.21, and the number of products more than 5 years of age decreased from 110 to 109. The largest ETF on the list had an AUM of $24.50 million, while the smallest had assets of just $420,540.

Here is the Complete List of 339 ETFs and ETNs on ETF Deathwatch for January 2021 compiled using the objective ETF Deathwatch Criteria.

The 15 ETFs/ETNs added to ETF Deathwatch for January:

  1. Anfield Dynamic Fixed Income ETF (ADFI)
  2. VictoryShares Emerging Market Volatility Wtd ETF (CEZ)
  3. ProShares Short Oil & Gas (DDG)
  4. Franklin Liberty Ultra Short Bond ETF (FLUD)
  5. Global Beta Momentum-Growth ETF (GBGR)
  6. Global Beta Low Beta ETF (GBLO)
  7. First Trust Horizon Managed Volatility Small/Mid ETF (HSMV)
  8. Hull Tactical US ETF (HTUS)
  9. iShares iBonds Dec 2030 Term Treasury ETF (IBTK)
  10. American Century Mid Cap Growth Impact ETF (MID)
  11. Morgan Stanley Cushing MLP High Income Index ETN (MLPY)
  12. First Trust Multi-Manager Large Growth ETF (MMLG)
  13. ProShares UltraShort SmallCap600 (SDD)
  14. ProShares UltraShort Semiconductors (SSG)
  15. WBI Bullbear Trend Switch US Total Return ETF (WBIN)

The 2 ETFs/ETNs that were closed:

  1. FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund (TLDH)
  2. FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (TLEH)

The 22 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. Tortoise Global Water ESG Fund (EBLU)
  2. Invesco S&P 500 Equal Weig C (EWCO)
  3. iShares iBonds 2024 Term High Yield and Income ETF (IBHD)
  4. iShares iBonds Dec 2022 Term Treasury ETF (IBTB)
  5. iShares iBonds Dec 2023 Term Treasury ETF (IBTD)
  6. iShares iBonds Dec 2028 Term Treasury ETF (IBTI)
  7. iShares iBonds Dec 2029 Term Treasury ETF (IBTJ)
  8. iShares Inflation Hedged Corporate Bond ETF (LQDI)
  9. Qraft AI-Enhanced US Large Cap ETF (QRFT)
  10. Innovator IBD Breakout Opportunities ETF (BOUT)
  11. WisdomTree Emerging Currency Strategy Fund (CEW)
  12. Glbl MSCI China Large Cap (CHIL)
  13. IM Dbi Hedge Strategy ETF (DBEH)
  14. Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)
  15. VanEck Vectors Egypt Index ETF (EGPT)
  16. iShares MSCI Japan Value ETF (EWJV)
  17. ProShares Ultra MSCI Japan (EZJ)
  18. Fidelity Targeted Emerging Markets Factor ETF (FDEM)
  19. AAM Low Duration Preferred and Income Securities ETF (PFLD)
  20. Invesco Dynamic Oil & Gas Services ETF (PXJ)
  21. Sofi 50 ETF (SFYF)
  22. ProShares Ultra High Yield (UJB)

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