ETF Deathwatch For May 2016: List Jumps To 450

For May, there are 26 new names joining the list and 11 coming off. Only seven of the removals were the result of improved health—the other four died and lost their listings. The current membership consists of 342 ETFs and 108 ETNs. Further segmentation of the ETF population reveals that 41 are actively managed funds, 151 have smart-beta labels, and the remaining 150 are traditional capitalization-weighted ETFs.

The surge of currency-hedged ETF introductions of the past two years continues to be problematic for the industry. The brief nine-month surge of the U.S. dollar in late 2014 and early 2015 generated a slew of currency-hedged ETF launches that continues to this day. However, with the dollar’s decline over the past 14 months, these funds have been at a performance disadvantage. As a result, they are failing to attract new assets, losing some of the assets they had, and ending up here on ETF Deathwatch. This month, six of the additions are currency-hedged ETFs.

Twenty-six funds went the entire month of April without a trade, and 269 did not trade on the last day of the month. Additionally, six products have yet to record their first trade of 2016. It remains a mystery why some of these products exist and why the exchanges allow them to have a listing.

The NYSE did take action against one ETN issued by Deutsche Bank (DB) in April. As outlined in ETF Stats for April, the NYSE suspended trading and delisted DB Commodity Long ETN (former ticker DPU) because its assets fell below $400,000.However, DB left shareholders holding the bag because it has no intention of automatically liquidating the ETNs and returning money to shareholders. Adding insult to injury, the notes do not mature for another 22 years. If owners are not willing to wait that long, then they will have to pursue the monthly round-lot redemption process or a sale in the over-the-counter markets. Keep this in mind before buying one of the 39 other DB-sponsored products that are currently on Deathwatch.