ETF Stats For August 2016: All About Those Closures

The 41 closures occurring in August make it the worst month ever for ETF mortality. With only 10 new products coming to market, the month ended with a net decline of 31 listings. The dismal showing leaves the product count at 1,914 (1,716 ETFs and 198 ETNs). Assets climbed 1.0% to $2.39 trillion, and despite the month’s reputation for lackluster volume, trading activity increased 0.3% over July levels to $1.39 trillion.

Closure activity is the big story for the month, as major sponsors pulled the plug on more than $1.1 billion of fund assets, including many individual ETFs with asset levels that many other sponsors can only dream about. UBS closed and redeemed nine ETNs, including the UBS AG FI Enhanced Big Cap Growth ETN (FBG), with its $151 million in assets. In all, UBS redeemed more than $293 million of its ETNs in August.

BlackRock shuttered 10 of its iShares products, including all four of its actively managed equity ETFs. The closures included iShares Enhanced U.S. Large-Cap (IELG), with $81 million in assets, and iShares Enhanced International Large-Cap (IEIL), with $68 million in assets. The iShares closures affected assets totaling $292 million.

State Street SPDRs had the largest industry impact, as its 12 closures totaled more than $496 million. These included SPDR Nuveen Barclays California Muni Bond (CXA) $149 million, SPDR Nuveen Barclays Build America Bond (BABS) $61 million, SPDR Nuveen Barclays New York Muni Bond (INY) $34 million, SPDR S&P BRIC 40 (BIK) $73 million, and SPDR Russell/Nomura Small Cap Japan (JSC) $54 million.

ProShares was another sponsor taking multiple ETFs off the market. Its nine closures accounted for only $29 million in assets and were part of its regular ongoing house-cleaning process. The largest of the bunch was ProShares Ultra Bloomberg Commodity (UCD), with $12 million in assets.

Regular readers of this column are aware that I have not been kind to AccuShares and its dysfunctional teeter-totter shares. The firm’s so-called “spot VIX” ETFs were launched amid a heap of positive praise on May 19, 2015. However, I was the dissenting voice, claiming the teeter-totter structure was unable to track spot prices, just like the previously failed MacroShares. Then it got worse when each AccuShares fund started issuing distributions of the opposite shares (owners of the VIX Up fund received distributions consisting of VIX Down shares). Despite the total failure of their VIX funds, the firm tried again in June of this year with a pair of oil funds, described here in “More Teeter-Totter Failures.” Today, I am pleased to inform you that AccuShares has pulled the plug on all four funds, with closures and liquidation occurring in September.

Industry inflows totaled $29.2 billion for the month, which more than offset the $6.4 billion in market losses. The median asset level of the 1,914 listings is just $73 million. Four of the funds closed in August had asset levels above the median. If this is a sign of things to come, then half of the industry’s current offerings are in jeopardy.

August 2016 Month End ETFs ETNs Total
Currently Listed U.S. 1,716 198 1,914
Listed as of 12/31/2015 1,644 201 1,845
New Introductions for Month 9 1 10
Delistings/Closures for Month 32 9 41
Net Change for Month -23 -8 -31
New Introductions 6 Months 116 7 123
New Introductions YTD 137 13 150
Delistings/Closures YTD 65 16 81
Net Change YTD +72 -3 +69
Assets Under Management $2,369 B $24.1 B $2,393 B
% Change in Assets for Month +1.0% -1.4% +1.0%
% Change in Assets YTD +13.0% +12.5% +13.0%
Qty AUM > $10 Billion 54 0 54
Qty AUM > $1 Billion 268 5 273
Qty AUM > $100 Million 818 37 855
% with AUM > $100 Million 47.7% 18.7% 44.7%
AUM Flows for Month +$29.20 B -$0.02 B +$29.18 B
AUM Flows YTD +$145.36 B +$2.28 B +$147.64 B
Monthly $ Volume $1,315 B $72.9 B $1,388 B
% Change in Monthly $ Volume -1.1% +35.5% +0.3%
Avg Daily $ Volume > $1 Billion 7 0 7
Avg Daily $ Volume > $100 Million 78 6 84
Avg Daily $ Volume > $10 Million 304 11 315
Actively Managed ETF Count (w/ change) 148 -3 mth +11 ytd
Actively Managed AUM $27.0 B +1.2% mth +17.8% ytd
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