Ron Rowland: Only six new exchange traded products came to market in September, evenly divided between ETFs and ETNs. One ETN closure puts the net increase at five for the month. The year-to-date figures for the first nine months of the year are 105 launches and 41 closures, for a net increase of 64. Currently listed products now stand at 1,509, consisting of 1,302 ETFs and 207 ETNs.
The current pullback in launch activity is proving to be worse than the 2009 decline. During the previous cycle, the 12-month moving average for new product introductions peaked at 24.3 before bottoming out at 10.0 per month, for a 58.8% decline. In the current cycle, the 12-month average peaked at 28.6 in February 2012. So far, the 9.6 per month established in March of this year is the low point, and even if it holds, it still represents a 66.4% decline.
Whether this softness is temporary or a permanent sign of a maturing industry is still unknown. The long-anticipated big wave of actively managed ETFs arriving on the scene has yet to become a reality, but it should revitalize launch activity if it does come. Meanwhile, just 63 products (4%) have active management, and they hold only $14.5 billion, or less than 1% of ETP assets.
Overall assets climbed 5.4% to $1.56 trillion in September, more than offsetting the “record outflows” of August that seemed to have everyone in a tizzy. Only 36 ETFs have more than $10 billion in assets, but this small minority holds the majority of assets at more than 54%. ETPs with more than $1 billion in assets now number 205 and have an 88.4% market share.
Trading activity only picked up 0.8% for the month with $1.20 trillion worth of ETPs changing hands. However, there were 10% fewer market days (20 versus 22) in September, so average daily activity showed a healthier increase. Only six ETFs averaged more than $1 billion per day in trading but accounted for 49.8% of all ETP dollars traded. The monthly turnover ratio (total dollar volume divided by assets under management) came in at 0.77, which was down from the August 0.80 ratio.
|September 2013 Month End||ETFs||ETNs||Total|
|Currently Listed U.S.||1,302||207||1,509|
|Listed as of 12/31/2012||1,239||206||1,445|
|New Introductions for Month||3||3||6|
|Delistings/Closures for Month||0||1||1|
|Net Change for Month||+3||+2||+5|
|New Introductions 6 Months||75||8||83|
|New Introductions YTD||94||11||105|
|Net Change YTD||+63||+1||+64|
|Actively-Managed Listings||63 (+0)||n/a||63 (+0)|
|Assets Under Mgmt ($ billion)||$1,542||$21.8||$1,563|
|% Change in Assets for Month||+5.4%||+1.7%||+5.3%|
|Qty AUM > $10 Billion||36||0||36|
|Qty AUM > $1 Billion||200||5||205|
|Qty AUM > $100 Million||628||29||657|
|% with AUM > $100 Million||48.2%||14.0%||43.5%|
|Monthly $ Volume ($ billion)||$1,177||$25.2||$1,202|
|% Change in Monthly $ Volume||+0.9%||-3.4%||+0.8%|
|Avg Daily $ Volume > $1 Billion||6||0||6|
|Avg Daily $ Volume > $100 Million||64||2||66|
|Avg Daily $ Volume > $10 Million||237||9||246|
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.