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

The ETF Deathwatch list shrank in March. Twelve exchange-traded products (“ETPs”) were added to the list, and 34 funds were removed. Twenty-eight of those removals were due to increased health. This is no surprise given the strong performance of the S&P 500 Index and the Dow Jones Industrial Average in March.

Various niche products were added to the Deathwatch last month. Ten of the 12 were added because they had a low average daily volume for the past three months. The other two were added because their assets under management (“AUM”) were below $5 million for three consecutive 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. Two of the funds on the Deathwatch list are Treasury/bond investments, which makes sense given that interest rates have remained near all-time lows. Investors may be avoiding these types of investments, hoping to capture more gains in riskier assets. Two of the funds on the Deathwatch are smart-beta funds, which tend to keep volatility lower and stay on the defensive side. Investors may have become more aggressive with their equity allocations in March, leading to low volume and AUM in these types of funds.

A wide variety of funds were removed from the Deathwatch due to improved health. As consumer confidence has continued to rise throughout 2021, the demand for these funds has increased. Investors are likely confident that increased vaccinations will continue to improve the economic outlook worldwide.

Forty ETFs and exchange-traded notes (“ETNs”) on Deathwatch 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 $9.56 million to $9.40 million, and 20 products had less than $2 million in assets. The average age of products on the list increased from 55.78 to 56.27, and the number of products more than 5 years of age remained at 104. The largest ETF on the list had an AUM of $24.70 million, while the smallest had assets of just $559,510.

Here is the complete list of 298 ETFs and ETNs on ETF Deathwatch for March 2021 compiled using the objective ETF Deathwatch criteria.

The 12 ETFs/ETNs added to ETF Deathwatch for March:

  1. SPDR Bloomberg Barclays 3-12 Month T-Bill ETF (BILS)
  2. Natixis U.S. Equity Opportunities ETF (EQOP)
  3. Nifty India Financials ETF (INDF)
  4. JPMorgan US Minimum Volatility ETF (JMIN)
  5. TrueShares Structured Outcome October ETF (OCTZ)
  6. Global X MSCI Portugal ETF (PGAL)
  7. Emles Real Estate Credit ETF (REC)
  8. ProShares Short SmallCap600 (SBB)
  9. Innovator 20+ Year Treasury Bond 9 Buffer ETF–July (TBJL)
  10. Natixis Vaughan Nelson Mid Cap ETF (VNMC)
  11. Natixis Vaughan Nelson Select ETF (VNSE)
  12. Global X S&P 500 Covered Call & Growth ETF (XYLG)

The 28 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. VictoryShares US Small Cap Volatility Wtd ETF (CSA)
  2. Invesco DB G10 Currency Harvest Fund (DBV)
  3. Fidelity International Value Factor ETF (FIVA)
  4. Hull Tactical US ETF (HTUS)
  5. Innovator IBD ETF Leaders ETF (LDRS)
  6. Pacer Lunt Large Cap Multi-Factor Alternator ETF (PALC)
  7. Pacer Lunt MidCap Multi-Factor Alternator ETF (PAMC)
  8. Invesco S&P SmallCap Materials ETF (PSCM)
  9. Principal Value ETF (PY)
  10. Large Cap US Equity Select ETF (RNLC)
  11. First Trust SMID Cap Rising Dividend Achievers ETF (SDVY)
  12. AlphaMark Actively Managed Small Cap ETF (SMCP)
  13. ProShares Russell US Dividend Growers ETF (TMDV)
  14. Pacer CSOP FTSE China A50 ETF (AFTY)
  15. iShares MSCI Argentina and Global Exposure ETF (AGT)
  16. AI Powered International Equity ETF (AIIQ)
  17. Global X Founder–Run Cos ETF (BOSS)
  18. Invesco BulletShares 2028 Municipal Bond ETF (BSMS)
  19. Fidelity Stocks for Inflation ETF (FCPI)
  20. First Trust Latin America AlphaDEX Fund (FLN)
  21. iPath Series B Carbon ETN (GRN)
  22. iPath Series B Bloomberg Agriculture Subindex Total Return ETN (JJA)
  23. Invesco Exchange-Traded Fund Trust II–Invesco PurebetaSM 0-5 Yr Us Tips ETF (PBTP)
  24. VanEck Vectors ETF Trust–VanEck Vectors Real Asset Allocation ETF (RAAX)
  25. Hartford Multifactor Small Cap ETF (ROSC)
  26. Reverse Cap Weighted US Large Cap ETF (RVRS)
  27. iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG)
  28. Direxion Daily 7-10 Year Treasury Bear 3x Shares (TYO)

The 6 ETFs/ETNs that were closed:

  1. VictoryShares Emerging Market Volatility Wtd ETF (CEZ)
  3. Cambria Global Tail Risk ETF (SOVB)
  4. AGF Investments Trust–AGFiQ Dynamic Hedged US Equity ETF (USHG)
  5. SPDR Solactive United Kingdom ETF (ZGBR)
  6. SPDR Solactive Hong Kong ETF (ZHOK)

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