ETF Deathwatch For April 2019

By Ansh Chaudhary

For the month of April, the ETF Deathwatch increased in size. Thirty exchange-traded products (“ETPs”) were added to the list, and 26 funds were removed, making April a busier month in terms of additions. Of the removals, eight were removed due to increased health and 18 were due to asset managers closing their funds.

April was yet another strong month for domestic equity markets, so the number of funds added to the Deathwatch for the month was a bit surprising. A deeper analysis of the funds reveals that most of the additions were international funds and niche products. Both of these asset classes have been struggling for the last few months as investors re-allocate their portfolios to safe-haven investments.

For April, the additions were mostly equity ETFs. Three of the funds were added because their AUM has been consistently below $5 million for three months. The rest were added due to low average daily volume. It is possible that 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. One reason for low volume may be that investors are waiting to make changes to their portfolios, as markets have been rallying since December.

For the last few months, emerging-market and international funds have increasingly ended up on the Deathwatch list. Those funds continued to experience trouble, and about 13 additional international/global ETFs were added for the month. Most of the additions were niche products for niche sectors, and it makes sense for these funds to show up on the Deathwatch in a period like this. Despite most of these funds having positive performance for April, investors are starting to seek more defensive portfolios. The funds added to the list this month are considered more aggressive holdings. Many signals have been flashing that the global economy is in the late-stage cycle, contributing to a low trading volume in the funds added to the Deathwatch.

There are 37 ETFs and ETNs on Deathwatch this month that 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 a number of commodity ETPs, dominate our list of funds older than 10 years. It’s possible that the fund companies managing these products will allow them to remain active, as they play a part in a larger role for their clients that are interested in active management.

The average asset level of the threatened ETFs on ETF Deathwatch increased from $7.33 million to $7.55 million, and 33 products had less than $2 million in assets. The average age of products on the list decreased from 47.91 months to 46.33 months, and the number of products more than 5 years of age decreased from 117 to 107. The largest ETF on the list had an AUM of $24.94 million, while the smallest had assets of just $478,500.

Here is the Complete List of 433 ETFs and ETNs on ETF Deathwatch for April 2019 compiled using the objective ETF Deathwatch Criteria.

The 30 ETFs/ETNs added to ETF Deathwatch for April:

1. iShares Edge MSCI Min Vol Asia ex Japan ETF (NYSEARCA:AXJV)
2. Invesco DB G10 Currency Harvest Fund (NYSEARCA:DBV)
3. DB Gold Short Exchange Traded Notes (NYSEARCA:DGZ)
4. WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Fund (NYSE:DHDG)
5. Reality Shares Fundstrat DQM (NYSEARCA:DQML)
6. First Trust Developed Markets ex-US Small Cap AlphaDEX Fund (NASDAQ:FDTS)
7. Franklin FTSE Latin America ETF (NYSEARCA:FLLA)
8. Franklin FTSE Saudi Arabia ETF (NYSEARCA:FLSA)
9. Franklin FTSE South Africa ETF (NYSEARCA:FLZA)
10. First Trust Nasdaq Retail ETF (NASDAQ:FTXD)
11. Invesco CurrencyShares Swedish Krona Trust (NYSEARCA:FXS)
12. Reality Shares DIVCON Dividend Guard ETF (NYSE:GARD)
13. Claymore CEF GS Connect ETN (NYSEARCA:GCE)
14. VanEck Vectors Morningstar Global Wide Moat ETF (NYSEARCA:GOAT)
15. iShares Currency Hedged MSCI United Kingdom ETF (NYSEARCA:HEWU)
16. IndexIQ ETF Trust – IQ 50 Percent Hedged FTSE Japan ETF (NYSEARCA:HFXJ)
17. Legg Mason Global Infrastructure ETF (NASDAQ:INFR)
18. JPMorgan Long/Short ETF (NYSEARCA:JPLS)
19. Xtrackers MSCI Latin America Pacific Alliance ETF (NYSEARCA:PACA)
20. EventShares US Policy Alpha ET (NYSE:PLCY)
21. PGIM QMA Strategic Alpha Large Cap Core ETF (NYSEARCA:PQLC)
22. Global X S&P 500 Quality Dividend ETF (NYSE:QDIV)
23. QuantX Risk Managed Multi-Asset Total Return ETF (NYSE:QXTR)
24. RiverFront Dynamic Unconstrained Income ETF (NYSEARCA:RFUN)
25. The Obesity ETF (NASDAQ:SLIM)
26. Credit Suisse X-Links Silver Shares Covered Call ETN (NASDAQ:SLVO)
27. SPDR Kensho Clean Power ETF (NYSEARCA:XKCP)
28. SPDR Kensho Final Frontiers ETF (NYSEARCA:XKFF)
29. WisdomTree Global EX-Mexico Equity Fund (NYSEARCA:XMX)
30. Invesco S&P SmallCap Quality ETF (NYSE:XSHQ)

The 8 ETFs/ETNs removed from ETF Deathwatch due to improved health:

1. Invesco Russell MidCap Equal Weight ETF (NYSEARCA:EQWM)
2. Franklin Liberty Investment Grade Corporate ETF (NYSEARCA:FLCO)
3. Franklin LibertyQ Global Equity ETF (NYSEARCA:FLQG)
4. Strategy Shares NASDAQ 7 HANDL ETF (NASDAQ:HNDL)
5. iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF (NASDAQ:HYXE)
6. American Energy Independence ETF (NYSEARCA:USAI)
7. X-Links Crude Oil Shares Covered Call ETN (NASDAQ:USOI)
8. WisdomTree ICBCCS S&P China 500 Fund (NYSEARCA:WCHN)

The 18 ETFs/ETNs that were closed:

1. DB Agriculture Long Exchange Traded Notes (NYSEARCA:AGF)
2. DB Base Metals Double Long Exchange Traded Notes (NYSEARCA:BDD)
3. DB Base Metals Double Short Exchange Traded Notes (NYSEARCA:BOM)
4. DB Base Metals Short Exchange Traded Notes (NYSEARCA:BOS)
5. Virtus Cumberland Municipal Bond ETF (NYSEARCA:CUMB)
6. DB Agriculture Double Long Exchange Traded Notes (NYSEARCA:DAG)
7. Xtrackers MSCI United Kingdom Hedged Equity ETF (NYSEARCA:DBUK)
8. DB Commodity Short Exchange Traded Notes (NYSEARCA:DDP)
9. DB Commodity Double Long Exchange Traded Notes (NYSEARCA:DYY)
10. Alps Workplace Portfolio Fund (NYSEARCA:EQLT)
11. FI Enhanced Global High Yield ETN Linked to MSCI World High Dividend Yield USD (NYSEARCA:FIEG)
12. VanEck Vectors Generic Drugs ETF (NASDAQ:GNRX)
13. Xtrackers Germany Equity ETF (NYSE:GRMY)
14. DB Crude Oil Long Exchange Traded Notes (NYSEARCA:OLO)
15. VanEck Vectors Poland ETF (NYSEARCA:PLND)
16. VanEck Vectors Pre-Refunded Municipal Index ETF (NYSE:PRB)
17. DB Crude Oil Short ETN (NYSEARCA:SZO)
18. ELEMENTS Linked to the Morningstar Wide Moat Focus Total Return Index (NYSEARCA:WMW)

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.