Ron Rowland: The number of ETFs and ETNs listed for trading in US markets continues to march toward the 1,600 level. In April, ten ETFs and one ETN were introduced, while one ETN closed and liquidated. The net increase of ten for the month puts the count at 1,578 exchange traded products (“ETPs”), consisting of 1,375 ETFs and 203 ETNs.
All of the growth in product count is coming from the ETF side of the business. As seen in the chart below, ETN growth has stagnated with the ETN count at the same level it was in December 2011. Over the same period, the quantity of ETFs increased by 209, or 17.9%.
Currency-hedged funds seem to be the current fashion trend for new ETF launches since WisdomTree Japan Hedged Equity (DXJ) successfully attracted more than $10 billion in assets last year. Last month, WisdomTree rolled out a Japan currency-hedged sector series with the hopes the currency hedging characteristics can win over US investors that have tended to shy away from international sector suites.
The only closure during April came about due to an early termination trigger on a leveraged ETF that never reset its leverage. If leverage is not reset, then a 51% index loss would result in a 102% loss for a 2x leveraged product. Since ETP values can’t go below zero, and they can’t ask shareholders to cough up more money, these products must be designed with self-destruct mechanisms. Barclays ETN+ Short B Leveraged S&P 500 Total Return ETN (BXDB) triggered such a mechanism in April when its intraday value dropped below $10.
ETP assets grew 1.1% in April to $1.76 trillion. The number of products exceeding $1 billion increased by two to 227 and account for 88.4% of all ETP assets. Funds with more than $10 billion now number 38, and while they represent just 2.4% of the active listings, they account for the majority (53.7%) of assets. It takes the smallest 786 products to add up to 1% of industry assets. SPDR S&P 500 (SPY) is the largest ETF and accounts for 9.1% of industry assets all by itself. Starting at the other end of the asset size spectrum, it takes 1,300 smallest ETPs to encompass the same 9.1% market share as SPY. One ETF holds the same amount of assets as 82.4% of the product universe.
April trading activity declined 5.0% from the March level to $1.47 trillion. Only eight ETFs averaged more than $1 billion a day in trading. Products averaging more than $100 million in dollar volume dropped from 86 to 80, and those able to trade more than $10 million per day fell from 272 to 270.
April 2014 Month End | ETFs | ETNs | Total |
---|---|---|---|
Currently Listed U.S. | 1,375 | 203 | 1,578 |
Listed as of 12/31/2013 | 1,332 | 204 | 1,536 |
New Introductions for Month | 10 | 1 | 11 |
Delistings/Closures for Month | 0 | 1 | 1 |
Net Change for Month | +10 | 0 | +10 |
New Introductions 6 Months | 82 | 4 | 86 |
New Introductions YTD | 62 | 2 | 64 |
Delistings/Closures YTD | 19 | 3 | 22 |
Net Change YTD | +43 | -1 | +42 |
Actively-Managed Listings | 85 (+0) | n/a | 85 (+0) |
Assets Under Mgmt ($ billion) | $1,734 | $26.9 | $1,761 |
% Change in Assets for Month | +1.0% | +4.7% | +1.1% |
Qty AUM > $10 Billion | 38 | 0 | 38 |
Qty AUM > $1 Billion | 219 | 8 | 227 |
Qty AUM > $100 Million | 699 | 37 | 736 |
% with AUM > $100 Million | 50.8% | 18.2% | 46.6% |
Monthly $ Volume ($ billion) | $1,427 | $43.6 | $1,471 |
% Change in Monthly $ Volume | -4.7% | -13.5% | -5.0% |
Avg Daily $ Volume > $1 Billion | 7 | 1 | 8 |
Avg Daily $ Volume > $100 Million | 78 | 2 | 80 |
Avg Daily $ Volume > $10 Million | 261 | 9 | 270 |
Data sources: Daily prices and volume of individual ETPs from Norgate Premium Data.