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 remained the same size in November. Seventeen exchange-traded products (“ETPs”) were added to the list, and 17 funds were removed. Thirteen of those removals were due to increased health, and four were due to asset managers closing their funds. The major indexes rallied during November, which makes the low number of fund closures expected but the high number of additions a bit surprising.

A wide variety of products were added to the list in November, including international funds, U.S. equity and bond products, and some niche products. All but one of the additions were added because they had a low average daily volume for the past three months. These additions may have enough assets under management (“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 niche, actively managed, or hedged funds. Investors may have steered away from these hedged and actively managed products since these strategies tend to be more favorable in different market conditions than the one we saw in November.

The removals from the Deathwatch list due to improved health included equity, fixed-income, international, and niche products. With the markets rallying in November, it was expected that some funds would get dropped from the list due to improved health.

Forty-seven ETFs and exchange-traded notes (“ETNs”) on the Deathwatch list 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 their clients interested in active management.

The average asset level of the threatened ETFs on ETF Deathwatch increased from $8.39 million to $9.16 million, and 29 products had less than $2 million in assets. The average age of products on the list decreased from 55.45 months to 55.07 months, and the number of products more than 5 years of age decreased to 113. The largest ETF on the list had an AUM of $24.85 million, while the smallest had assets of just $333,375.

Here is the Complete List of 351 ETFs and ETNs on ETF Deathwatch for November 2020 compiled using the objective ETF Deathwatch Criteria.

The 17 ETFs/ETNs added to ETF Deathwatch for November:

  1. CSOP FTSE China A50 ETF/United States (AFTY)
  2. AltShares Merger Arbitrage ETF (ARB)
  3. AllianzIM US Large Cap Buffer10 Apr ETF (AZAA)
  4. AllianzIM US Large Cap Buffer20 Apr ETF (AZBA)
  5. ClearBridge Focus Value ETF (CFCV)
  6. First Trust TCW Securitized Plus ETF (DEED)
  7. ALPS Emerging Sector Dividend Dogs ETF (EDOG)
  8. Direxion Flight to Safety Strategy ETF (FLYT)
  9. Xtrackers High Beta High Yield Bond ETF (HYUP)
  10. iShares MSCI Colombia ETF (ICOL)
  11. iShares Evolved US Media and Entertainment ETF (IEME)
  12. John Hancock Multifactor Consumer Staples ETF (JHMS)
  13. ProShares UltraShort MidCap400 (MZZ)
  14. Syntax Stratified SmallCap ETF (SSLY)
  15. Trend Aggregation Aggressive Growth ETF (TAAG)
  16. Trend Aggregation ESG ETF (TEGS)
  17. Innovator S&P 500 Ultra Buffer ETF June (UJUN)

The 13 ETFs/ETNs removed from ETF Deathwatch due to improved health:

  1. iShares Asia/Pacific Dividend ETF (DVYA)
  2. Invesco S&P SmallCap 600 Equal Weight ETF (EWSC)
  3. iShares Focused Value Factor ETF (FOVL)
  4. Hull Tactical US ETF (HTUS)
  5. iShares Edge MSCI International Size Factor ETF (ISZE)
  6. John Hancock Multifactor Materials ETF (JHMA)
  7. KraneShares MSCI China Environment Index ETF (KGRN)
  8. Innovator Loup Frontier Tech ETF (LOUP)
  9. Principal Price Setters Index ETF (PSET)
  10. GraniteShares HIPS US High Income ETF (HIPS)
  11. KraneShares Zacks New China ETF (KFYP)
  12. Invesco PureBeta MSCI USA ETF (PBUS)
  13. ETRACS NYSE Pickens Core Midstream Index ETN (PYPE)

The 4 ETFs/ETNs that were closed:

  1. ETRACS Alerian Natural Gas MLP Index ETN (MLPG)
  2. Arrow QVM Equity Factor ETF (QVM)
  3. ETRACS Monthly Pay 2xLeveraged S&P Dividend ETN (SDYL)
  4. TigerShares China-US Internet (TTTN)

Comments are closed.