ETF Stats for December 2015: Actively Managed ETF Assets Overtake ETNs
Ron Rowland: Assets in actively managed ETFs climbed 3.3% to $22.9 billion in December, while assets in ETNs dropped 4.5% to $21.5 billion. This is a significant milestone for actively managed ETFs, marking the first time that their asset levels have surpassed those of ETNs. Overall U.S. industry assets shrunk 1.1% in December to end the year at $2.12 trillion, producing a 6.0% one-year growth.
December saw 23 new introductions and two closures. The month and year ended with 1,845 U.S.-listed products, consisting of 1,644 ETFs and 201 ETNs. For the year, the 284 launches and 101 closures resulted in a net increase of 183 products.
Product quantity and asset levels have historically tracked relatively closely at about $1 billion in assets for every ETF. Calendar year 2015 ended with an average of $1.15 billion per product, down from $1.20 billion a year ago.
The quantity of actively managed ETFs increased by only 9.6% during 2015, growing from 125 to 137. This belies the 33.0% surge in assets, which shot from $17.3 billion to $22.9 billion. As mentioned earlier, this is the first time actively managed ETF assets have been greater than ETN assets, even though ETNs outnumber actively managed ETFs 201 to 137.
Fund-of-fund ETFs also saw growth in 2015, increasing from 44 to 77 with assets surging to $14.8 billion (an increase of more than 224%). Much of 2015’s growth was spurred by new currency-hedged international ETFs, which buy an unhedged ETF and then add a currency overlay. Although the 77 fund-of-fund ETFs are included in the industry product counts, their reported asset levels are excluded. If they were included, it would result in double counting because the assets in these ETFs are already reflected in the asset levels of the funds they purchase.
The quantity of funds with more than $10 billion in assets decreased from 52 to 51 for December, but this tiny 2.8% of the products hold 59.4% of the assets. The number of products with at least $1 billion in assets increased by two to 256, and they account for 89.9% of the assets. Just 814 ETFs and ETNs can claim an asset level above $100 million, a level some analysts believe is required for profitability, leaving 1,031 (55.9%) in a questionable state.
Trading activity surged 38.9% in December to $1.86 trillion. This represents a turnover ratio ($ volume / industry assets) of 87.8% for the month. There were 13 funds averaging more than $1 billion in daily trading during December, and they accounted for 57.6% of the industry trading activity. The quantity of ETFs and ETNs with more than $100 million in average daily dollar volume was 107, and 364 posted more than $10 million in daily trading activity. Liquidity remains a concern for many products, with 236 not trading on the last day of the year and 19 going the entire month with zero volume.
|December 2015 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,644||201||1,845|
|Listed as of 12/31/2014||1,451||211||1,662|
|New Introductions for Month||23||0||23|
|Delistings/Closures for Month||2||0||2|
|Net Change for Month||+21||0||+21|
|New Introductions 6 Months||153||8||161|
|New Introductions YTD||272||12||284|
|Net Change YTD||+193||-10||+183|
|Assets Under Mgmt ($ billion)||$2,097||$21.5||$2,118|
|% Change in Assets for Month||-1.0%||-4.5%||-1.1%|
|% Change in Assets YTD||+6.3%||-20.2%||+6.0%|
|Qty AUM > $10 Billion||51||0||51|
|Qty AUM > $1 Billion||251||5||256|
|Qty AUM > $100 Million||778||36||814|
|% with AUM > $100 Million||47.3%||17.9%||44.1%|
|Monthly $ Volume ($ billion)||$1,786||$74.0||$1,860|
|% Change in Monthly $ Volume||+38.8%||+41.5%||+38.9%|
|Avg Daily $ Volume > $1 Billion||12||1||13|
|Avg Daily $ Volume > $100 Million||100||7||107|
|Avg Daily $ Volume > $10 Million||348||16||364|
|Actively Managed ETF Count (w/ change)||137||+2 mth||+12 ytd|
|Actively Managed AUM ($ billion)||$22.9||+3.3% mth||+33.0% ytd|
Data sources: Daily prices and volume of individual ETPs from Norgate Premium Data. Fund counts and all other information compiled by Invest With An Edge.
New products launched in December (sorted by launch date):
- SPDR S&P 500 Fossil Fuel Free ETF (SPYX), launched 12/1/15, will target S&P 500 companies that do not own fossil fuel reserves, which currently excludes 25 stocks. The fund uses capitalization weighting, has a yield of 1.9%, and an expense ratio of 0.20% (SPYX overview).
- MomentumShares U.S. Quantitative Momentum ETF (QMOM), launched 12/2/15, is an actively managed ETF that selects stocks using its Quantitative Momentum Process that includes trend quality and seasonality. It typically concentrates its portfolio at around 60 holdings and has an expense ratio of 0.79% (QMOM overview).
- Direxion Daily Healthcare Bear 3x Shares (SICK), launched 12/3/15, seeks to provide 300% of the inverse daily performance of the Health Care Select Sector Index. This is the second life for this ETF, as it was previously launched on 6/15/11 and subsequently closed on 9/5/12. Its expense ratio will be capped at 0.95% (SICK overview).
- Direxion Daily Natural Gas Related Bear 3x Shares (GASX), launched 12/3/15, seeks to provide 300% of the inverse daily performance of the ISE-Revere Natural Gas Index. This is the second life for this ETF, as it was previously launched on 7/14/10 and subsequently closed on 9/23/14. Its expense ratio will be capped at 0.95% (GASX overview).
- Direxion Daily S&P Biotech Bear 1x Shares (LABS), launched 12/3/15, seeks to provide the daily inverse return of the S&P Biotechnology Select Industry Index and has an expense ratio of 0.45% (LABS overview).
- SPDR Russell 1000 Low Volatility Focus ETF (ONEV), launched 12/3/15, tracks a smart-beta index using multiple factors (value, quality, and size) with a focus on low volatility. It has an expense ratio of 0.20% (ONEV overview).
- SPDR Russell 1000 Momentum Focus ETF (ONEO), launched 12/3/15, tracks a smart-beta index using multiple factors (value, quality, and size) with a focus on high momentum. It has an expense ratio of 0.20% (ONEO overview).
- SPDR Russell 1000 Yield Focus ETF (ONEY), launched 12/3/15, tracks a smart-beta index using multiple factors (value, quality, and size) with a focus on high yield. It has an expense ratio of 0.20% (ONEY overview).
- Tierra XP Latin America Real Estate ETF (LARE), launched 12/3/15, tracks the performance of all major listed companies in the real estate industry in Latin America. The underlying index is comprised of 52 locally listed equities ranked overall by market capitalization, dividend yield, and liquidity. Its expense ratio is 0.79% (LARE overview).
- Elkhorn FTSE RAFI U.S. Equity Income ETF (ELKU), launched 12/10/15, is designed to track the performance of high-yield stocks in the U.S. that have been screened to target sustainable income. Index constituents are selected and weighted using four fundamental factors, and the fund sports a 0.39% expense ratio (ELKU overview).
- iShares FactorSelect MSCI Emerging ETF (EMGF), launched 12/10/15, seeks to track the investment results of an index composed of stocks of large- and mid-capitalization companies in emerging markets that have favorable exposure to quality, value, size, and momentum factors. Its expense ratio is capped at 0.65% through 12/31/2016 (EMGF overview).
- Pacer Autopilot Hedged European Index ETF (PAEU), launched 12/15/15, uses a dynamic currency hedge on a static portfolio of stocks tracking the FTSE Eurobloc Index. The currency hedge is based on a 20-day and 130-day moving average crossover of the euro and U.S. dollar relative strength. The fund has an expense ratio of 0.65% (PAEU overview).
- Pacer Trendpilot European Index ETF (PTEU), launched 12/15/15, alternates between 100% exposure to the FTSE Eurobloc Index, 100% exposure to 3-month T-bills, and a 50/50 exposure between the two based on the relationship of the FTSE Eurobloc Index to its 200-day moving average. PTEU has an expense ratio of 0.65% (PTEU overview).
- Guggenheim Dow Jones Industrial Average Dividend ETF (DJD), launched 12/16/15, offers an alternative, strategic beta approach to the 30 stocks of the Dow Jones Industrial Average by weighting each security by its dividend yield, rather than price. The ETF has an initial yield of 2.7% and an expense ratio 0.30% (DJD overview).
- SPDR S&P North American Natural Resources ETF (NANR), launched 12/16/15, tracks an index of large- and mid-cap U.S. and Canadian companies in the natural resources and commodities businesses that have energy, materials, or agriculture classifications. It has 59 holdings, a current yield of 2.7%, and an expense ratio 0.35% (NANR overview).
- JPMorgan Diversified Return Europe Equity ETF (JPEU), launched 12/21/15, provides developed Europe equity exposure across 10 equally weighted sectors. The underlying index selects stocks using a bottom-up multi-factor stock-ranking process that combines value, quality, and momentum factors. The new ETF has an expense ratio of 0.43% (JPEU overview).
- MomentumShares International Quantitative Momentum ETF (IMOM), launched 12/23/15, is an actively managed ETF that selects international stocks using its Quantitative Momentum Process that includes trend quality and seasonality. It typically concentrates its portfolio at around 60 equally weighted holdings and has an expense ratio of 0.99% (IMOM overview).
- WisdomTree Dynamic Bearish U.S. Equity Fund (DYB), launched 12/23/15, tracks an index that can range between 0% to 100% long U.S. large-cap low-volatility equities and is hedged with a 75%–100% bearish position consisting of short positons in large-cap cap-weighted stocks (and U.S. Treasury securities). The net equity exposure of this ETF can range from -100% to +25%, and it has an expense ratio of 0.48% (DYB overview).
- WisdomTree Dynamic Long/Short U.S. Equity Fund (DYLS), launched 12/23/15, tracks an index that is 100% long U.S. large-cap low-volatility equities and then hedged with a 0%–100% bearish position consisting of short positons in large-cap cap-weighted stocks (and U.S. Treasury securities). The net equity exposure of this ETF can range from 0% to +100%, and it has an expense ratio of 0.48% (DYLS overview).
- Legg Mason Developed ex-US Diversified Core ETF (DDBI), launched 12/29/15, uses a proprietary diversification method designed to provide broad exposure balanced across developed international markets. It aims to be a core holding that can complement cap-weighted products and has an expense ratio of 0.40% (DDBI overview).
- Legg Mason Emerging Markets Diversified Core ETF (EDBI), launched 12/29/15, uses a proprietary diversification method designed to provide broad exposure balanced across emerging markets. It aims to be a core holding that can complement cap-weighted products and has an expense ratio of 0.50% (EDBI overview).
- Legg Mason Low Volatility High Dividend ETF (LVHD), launched 12/29/15, seeks income from sustainable dividends from U.S. stocks to provide a more reliable income stream, reduced volatility, and the potential for appreciation with an expense ratio of 0.30% (LVHD overview).
- Legg Mason US Diversified Core ETF (UDBI), launched 12/29/15, uses a proprietary diversification method designed to provide broad exposure balanced across U.S. equities. It aims to be a core holding that can complement cap-weighted products and has an expense ratio of 0.30% (UDBI overview)
Product closures in December and last day of listing:
- Guggenheim BulletShares 2015 Corporate Bond ETF (BSCF) 12/30/15
- Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (BSJF) 12/30/15
Product changes in December:
- OppenheimerFunds, Inc. acquired VTL Associates and its RevenueShares ETFs effective December 2, 2015. The eight affected ETFs were rebranded as Oppenheimer ETFs.
- The First Trust Global Copper ETF (CU) underwent an extreme makeover, becoming the First Trust Indxx Global Natural Resources Income ETF (FTRI) effective December 21, 2015.
- The First Trust Global Platinum ETF (PLTM) underwent an extreme makeover, becoming the First Trust Indxx Global Agriculture ETF (FTAG) effective December 21, 2015.
Announced Product Changes for Coming Months:
- WisdomTree will close on its acquisition of Greenhaven Commodity Services and its two ETFs with an effective date of January 4, 2016. The fund names will change from Greenhaven to WisdomTree, becoming the WisdomTree Continuous Commodity Index Fund (GCC) and the WisdomTree Coal Fund (TONS).
- Guggenheim Russell 1000 Equal Weight ETF (EWRI) will cease to exist January 27, 2016. At that time, any remaining assets in the fund will be merged into the Guggenheim S&P 500 Equal Weight ETF (RSP).
- Guggenheim will change the name and underlying indexes for three of its ETFs effective January 27, 2016. Guggenheim Russell 2000 Equal Weight ETF (EWRS) will become Guggenheim S&P SmallCap 600 Equal Weight ETF (EWSC), Guggenheim Russell MidCap Equal Weight ETF (EWRM) will become Guggenheim S&P MidCap 400 Equal Weight ETF (EWMC), and Guggenheim Russell Top 50 Mega Cap ETF (XLG) will become Guggenheim S&P 500 Top 50 ETF (XLG).
- Van Eck Global plans to acquire Yorkville MLP ETFs and hoped to close the transaction in the fourth quarter. The plans were approved on December 17, 2015 and the reorganizations are now expected to close on February 8, 2016.
Previous monthly ETF statistics reports are available here.
This article is brought to you courtesy of Ron Rowland from Invest With an Edge.