ETF Stats For November 2015: Fund-Of-Funds Count At 76
Twenty-one launches and two closures brought the quantity of U.S.-listed exchange traded products to 1,824 (1,623 ETFs and 201 ETNs) at the end of November. Overall assets climbed 1.0% for the month to $2.14 trillion, with actively managed funds garnering a 1.7% increase. Trading activity plunged 20.7% to $1.3 trillion, as fewer products changed hands in the holiday-shortened month. Fund-of-funds products accounted for nine of November’s launches, and their quantity now stands at 76. As their name implies, these are ETFs that own other ETFs (and ETNs) instead of directly owning the underlying stocks and bonds. Assets in fund-of-funds ETFs surpassed $13 billion in November. However, these assets are not included in the overall industry asset statistics, because doing so would amount to double counting. It is important to take note of the growth in this category, though, as their quantity has jumped from 43 to 76 this year, and assets have surged 191%. Although you don’t hear too much about these products, their asset levels are on a path to overtake ETNs next year and actively managed ETFs in 2017. The popularity of currency hedging is one of the reasons for the recent rapid growth in the fund-of-funds segment. Eight of the nine new fund-of-funds ETFs launched in November are currency-hedged versions of existing products. Rather than buying and holding the 356 stocks of iShares MSCI All Country World Minimum Volatility ETF (NYSEARCA: ACWV ), the new iShares Currency Hedged MSCI ACWI Minimum Volatility ETF (BATS: HACV ) just buys ACWV along with a currency overlay to hedge the currency exposure. Every dollar invested in HACV results in a one-dollar increase in ACWV’s reported assets. Industry-wide assets in the U.S. are now at $2.14 trillion, and represent a 7.1% increase for the year. Splitting out the two major groupings, ETFs have seen a 7.4% increase in 2015, while ETNs have experienced a 16.5% decline. Actively managed ETFs have jumped 28.7%, and, as mentioned previously, the fund-of-funds segment has seen a whopping 191% surge. The quantity of funds with more than $10 billion in assets held steady at 52, and they represent 60% of U.S. industry assets. The quantity of products with at least $1 billion in assets slipped by one to 254, and they account for 89.7% of the assets. The average product has $1.2 billion in assets, yet the median asset level is just $70.2 million, making for a very lopsided market. Trading activity remains concentrated in relatively few ETFs. Only seven averaged more than $1 billion a day in activity, but these seven grabbed a 47.5% market share. The quantity of ETFs and ETNs with more than $100 million in average daily dollar volume decreased from 94 to 90, and accounted for 86.5% of the action. A whopping 266 products (14.6%) did not trade on the last day of November, and 21 went the entire month without a trade. November 2015 Month End ETFs ETNs Total Currently Listed U.S. 1,623 201 1,824 Listed as of 12/31/2014 1,451 211 1,662 New Introductions for Month 21 0 21 Delistings/Closures for Month 2 0 2 Net Change for Month +19 0 +19 New Introductions 6 Months 160 8 168 New Introductions YTD 249 12 261 Delistings/Closures YTD 77 22 99 Net Change YTD +172 -10 +162 Assets Under Mgmt ($ billion) $2,119 $22.5 $2,141 % Change in Assets for Month +1.1% -4.8% +1.0% % Change in Assets YTD +7.4% -16.5% +7.1% Qty AUM > $10 Billion 52 0 52 Qty AUM > $1 Billion 249 5 254 Qty AUM > $100 Million 784 34 818 % with AUM > $100 Million 48.3% 16.9% 44.9% Monthly $ Volume ($ billion) $1,287 $52.3 $1,339 % Change in Monthly $ Volume -20.6% -22.9% -20.7% Avg. Daily $ Volume > $1 Billion 6 1 7 Avg. Daily $ Volume > $100 Million 85 5 90 Avg. Daily $ Volume > $10 Million 302 11 313 Actively Managed ETF Count (w/ change) 135 +2 mth. +10 ytd Actively Managed AUM ($ billion) $22.2 +1.7% mth. +28.7% ytd 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. New products launched in November (sorted by launch date): The iShares Currency Hedged MSCI ACWI Minimum Volatility ETF ( HACV ), launched on 11/2/15, is a fund-of-funds designed to track the investment results of a global index composed of developed and emerging market equities that have relatively low volatility characteristics, while mitigating exposure to fluctuations between the value of the component currencies and the U.S. dollar. The ETF holds the unhedged iShares MSCI All Country World Minimum Volatility ETF ( ACWV ), and then adds forwards to manage the currency risk. Twenty-four countries or regions are represented, and most holdings are consumer staples, financials, and healthcare companies. Its expense ratio is 0.23%. The iShares Currency Hedged MSCI EAFE Minimum Volatility ETF (BATS: HEFV ), launched on 11/2/15, is a fund-of-funds investing in equities of all capitalizations from Europe, Australia, Asia, and the Far East that display low volatility compared to other equities in the regions, while reducing the impact of changes between the value of the underlying currencies and the U.S. dollar. The ETF holds the unhedged iShares MSCI EAFE Minimum Volatility ETF (NYSEARCA: EFAV ), and manages the currency risk with forwards. Japan and the U.K. combine to hold over 50% of the allocations, and the majority of holdings come the from consumer staples, financials, and healthcare sectors. Investors will pay 0.23% annually to own this fund. The iShares Currency Hedged MSCI EM Minimum Volatility ETF (BATS: HEMV ), launched on 11/2/15, is a fund-of-funds aiming to track the investment results of a global index of emerging market equities that have relatively low volatility characteristics, while mitigating exposure to fluctuations between the value of the component currencies and the U.S. dollar. The ETF holds the unhedged iShares MSCI Emerging Markets Minimum Volatility ETF (NYSEARCA: EEMV ) and adds forwards to manage the currency risk. China, Taiwan, and South Korea each have over a 10% allocation, and the financials sector represents about 28% of the portfolio. The ETF has an expense ratio of 0.28%. The iShares Currency Hedged MSCI Europe Minimum Volatility ETF (BATS: HEUV ), launched on 11/2/15, is a fund-of-funds investing in large- or mid-capitalization companies in developed European countries that display low volatility compared to other European equities, while reducing the impact of changes between the value of the underlying currencies and the U.S. dollar. The ETF holds the unhedged iShares MSCI Europe Minimum Volatility ETF (NYSEARCA: EUMV ), and then adds currency forwards to offset value changes in the relevant currencies. The U.K. leads the geographic allocation at 35%, and the majority of holdings come from the consumer staples, financials, and healthcare sectors. The ETF sports a 0.28% expense ratio. The iShares Currency Hedged MSCI Europe Small-Cap ETF (BATS: HEUS ), launched on 11/2/15, is a fund-of-funds holding small-capitalization companies in developed European countries, while mitigating exposure to fluctuations between the value of the component currencies and the U.S. dollar. The ETF holds the unhedged iShares MSCI Europe Small-Cap ETF (NASDAQ: IEUS ), and then adds forwards to manage the currency risk. The largest country representation goes to the U.K. at 36%. Financials and industrials lead the sector allocations at around 23% each. The ETF has a 0.43% expense ratio. The BlueStar TA-BIGTech Israel Technology ETF (NASDAQ: ITEQ ), launched on 11/3/15, provides exposure to Israeli technology companies listed on global stock exchanges. The companies are not required to be domiciled in Israel to be included, but they must have significant ties to the country, such as a domicile, a strong presence of research, development, primary management, tax status, source of revenue, or location of employees. The companies represent a wide range of technological areas, including information, biotechnology, sustainable agriculture, and defense technologies. The ETF holds 65 positions, with just three representing 30% of the fund. Investors will pay 0.75% annually to own this ETF. The First Trust SSI Strategic Convertible Securities ETF (NASDAQ: FCVT ), launched on 11/4/15, is an actively managed ETF investing in global convertible securities. Convertible securities are considered hybrid securities because they offer upside potential through participation in equity returns, but also have a degree of downside protection through their bond-like attributes. They usually consist of debt or preferred securities that may be exchanged into a certain amount stock or other equity security. No yield information is provided. FCVT’s expense ratio is 0.95%. The PowerShares FTSE International Low Beta Equal Weight Portfolio (NASDAQ: IDLB ), launched on 11/5/15, provides investors with exposure to large- and mid-capitalization companies from developed markets (except the U.S.) that show less price sensitivity (low beta) compared to the overall market of the country in which the company is based. IDLB currently has 783 holdings, which are equally weighted upon rebalancing. The ETF sports a 0.45% expense ratio. The PowerShares Russell 1000 Low Beta Equal Weight Portfolio (NASDAQ: USLB ), launched on 11/5/15, selects its holdings by starting with the 1,000 U.S. companies that have the largest market capitalizations and then analyzing their price sensitivity. Those that show less price sensitivity (low beta) to market movements are eligible for inclusion. Currently, there are 418 equally weighted holdings, and the fund’s expense ratio is 0.35%. The AlphaClone International ETF (NYSEARCA: ALFI ), launched on 11/10/15, aims to provide value to investors by evaluating the performance of large hedge funds and institutional investors and purchasing select international companies via American Depository Receipts (ADRs) held by those entities. The strategy of the underlying index is to rank each manager’s performance by calculating the return of their publicly disclosed positions, such as from the Form 13F filings, and then select the 40-50 ADRs held by those with the highest rankings. The ETF can vary between being long-only and market-hedged based on a 200-day simple moving average of the S&P 500 Index. Investors will pay 0.95% annually to own this ETF. The FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund (NYSEARCA: TLDH ), launched on 11/10/15, is a fund-of-funds designed to provide broad exposure to developed equity markets outside the U.S. with enhanced weightings to small capitalization and value stocks, while mitigating the effects of currency fluctuations. The ETF holds the FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (NYSEARCA: TLTD ), and then uses forward contracts to hedge the currency exposure. The expense ratio will be capped at 0.47% until November 4, 2016. The FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (NYSEARCA: TLEH ), launched on 11/10/15, is a fund-of-funds focusing on emerging markets, but adjusts standard market-cap weighting to provide additional weights to small-capitalization and value stocks. It then hedges against changes in value between the U.S. dollar and constituent currencies. Its main holding is the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (NYSEARCA: TLTE ), and the currency exposure is mitigated using forward contracts. The expense ratio will be capped at 0.70% until November 4, 2016. The Goldman Sachs ActiveBeta International Equity ETF (NYSEARCA: GSIE ), launched on 11/10/15, uses an index-based strategy that gives all constituents in the MSCI World ex-USA Index a score based on measures of value, momentum, quality, and low volatility. Security scores higher than a fixed “cut-off score” are overweighted, while securities with a score below are underweighted. The expense ratio will be capped at 0.35% until September 14, 2016. The First Trust Heitman Global Prime Real Estate ETF (NYSEARCA: PRME ), launched on 11/12/15, is an actively managed ETF investing globally in shares of public real estate companies that own top-tier properties in the world’s prime markets and cities. “Prime” is defined by the managers as those “that benefit from global physical and/or financial trade, have high barriers to entry, dominate their regions or countries, or provide high-value niche goods and services.” The U.S. has the largest geographic allocation at 31%, and Japan comes in second at 14%. PRME has an expense ratio of 0.95%. The iShares Core International Aggregate Bond Fund (NYSEARCA: IAGG ), launched on 11/12/15, selects global non-U.S. dollar denominated, investment-grade bonds and then uses currency forward contracts to hedge against fluctuations in the relative value of the component currencies to the U.S. dollar. There are currently 534 holdings in 55 countries. The ETF sports a 0.15% expense ratio. The WisdomTree Global SmallCap Dividend Fund (BATS: GSD ), launched on 11/12/15, provides exposure to small-capitalization companies in developed countries and emerging markets that pay dividends. The underlying index selects the largest 1,000 companies in the bottom 5% of the WisdomTree Global Dividend Index that have a market capitalization of at least $200 million and average daily dollar volume of at least $100,000. Holdings are weighted based on dividends. The expense ratio is 0.43%. The Etho Climate Leadership U.S. ETF (NYSEARCA: ETHO ), launched on 11/19/15, invests in a broad range of U.S. companies that display the smallest carbon footprints in their respective industries. The strategy takes into account items such as greenhouse gas emissions from operations, fuel use, supply chain, and performance on environmental issues. It holds about 400 securities, but none in the energy, tobacco, aerospace and defense, gambling, gold, or silver industries. Investors will pay 0.75% annually to own this ETF. The WisdomTree Global Hedged SmallCap Dividend Fund (BATS: HGSD ), launched on 11/19/15, is a fund-of-funds providing exposure to 1,000 dividend-paying, small-capitalization companies in the bottom 5% of the WisdomTree Global Dividend Index, while hedging against currency risk. The ETF holds WisdomTree Global SmallCap Dividend Fund ( GSD ) and then uses forward contracts to mitigate the effects of changes in the relative value of foreign currencies and the U.S. dollar. The expense ratio will be capped at 0.43% until July 31, 2018. The Deutsche X-trackers FTSE Developed ex US Enhanced Beta ETF (NYSE: DEEF ), launched on 11/24/15, selects securities in developed countries outside the U.S. based on five investment factors. The factors are valuation ratios (value), 11-month cumulative return (momentum), leverage and profitability (quality), standard deviation of returns (volatility), and market capitalization (size). There are currently 828 holdings, with 31.8% in Japan and 20% each in financials and industrials. DEEF has an expense ratio of 0.35%. The Deutsche X-trackers Russell 1000 Enhanced Beta ETF (NYSE: DEUS ), launched on 11/24/15, selects a diversified group of US securities based on quality, value, momentum, low volatility, and size factors. The underlying index currently holds nearly 850 companies that were chosen based on these factors. The expense ratio is 0.25%. The FlexShares Real Assets Allocation Index Fund (NASDAQ: ASET ), launched on 11/24/15, is a fund-of-funds offering access to physical or tangible assets (examples of which are commodities, precious metals, oil, and real estate) by investing in three other FlexShares ETFs. The underlying ETFs and current allocations are the FlexShares STOXX Global Broad Infrastructure Index ETF (NYSEARCA: NFRA ) 49.8%, the FlexShares Global Quality Real Estate Index ETF (NYSEARCA: GQRE ) 40.5%, and the FlexShares Global Upstream Natural Resources Index ETF (NYSEARCA: GUNR ) 9.8%. The expense ratio will be capped at 0.57% until November 8, 2016. Product closures in November and last day of listing: EGShares Blue Chip ETF (NYSEARCA: BCHP ) – 10/30/2015 EGShares Brazil Infrastructure ETF (NYSEARCA: BRXX ) – 10/30/2015 Note: These two ETFs had their last day of listed trading on October 30. However, since they were still officially listed at the end of that month, their assets are included in the October statistics and their closures are included in the November statistics. Product changes in November: The AdvisorShares Sunrise Global Multi-Strategy ETF (NASDAQ: MULT ) underwent an extreme makeover on November 4, becoming the AdvisorShares Market Adaptive Unconstrained Income ETF (MAUI), with a new manager and subadvisor. The ProShares 3x Leveraged and 3x Inverse Financial Sector ETFs ( FINU and FINZ ) changed their underlying indexes to S&P Select Sector Indexes effective November 4. ProShares executed forward splits on two ETFs ( BZQ and ZSL ) and reverse splits on five ETFs ( GDXX , GDJJ , UOP , UBR , and UBIO ) effective November 13 . Global X had reverse splits on five ETFs ( COPX , GLDX , LIT , SIL , and URA ) effective November 18. The SPDR Barclays Aggregate Bond ETF changed its ticker symbol from LAG to BNDS effective November 20. Announced product changes for coming months: Van Eck Global plans to acquire Yorkville MLP ETFs and hopes to close the transaction in the fourth quarter, but it’s running out of time. Both ETFs ( YMLP and YMLI ) have lost more than 35% of their value since the August 3 announcement. The Guggenheim BulletShares 2015 Corporate Bond ETF (NYSEARCA: BSCF ) and the Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (NYSEARCA: BSJF ) are scheduled to mature and liquidate on December 31 , with December 30 being the last day of trading. The Guggenheim Russell 1000 Equal Weight ETF (NYSEARCA: EWRI ) will cease to exist on January 27, 2016. At that time, any remaining assets in the fund will be merged into the Guggenheim S&P 500 Equal Weight ETF (NYSEARCA: RSP ). Guggenheim will change the name and underlying indexes for three of its ETFs effective January 27, 2016. The Guggenheim Russell 2000 Equal Weight ETF (NYSEARCA: EWRS ) will become the Guggenheim S&P SmallCap 600 Equal Weight ETF (EWSC), the Guggenheim Russell MidCap Equal Weight ETF (NYSEARCA: EWRM ) will become the Guggenheim S&P MidCap 400 Equal Weight ETF (EWMC), and the Guggenheim Russell Top 50 Mega Cap ETF (NYSEARCA: XLG ) will become the Guggenheim S&P 500 Top 50 ETF ( XLG ). Previous monthly ETF statistics reports are available here . Disclosure: Author has no positions in any of the securities, companies, or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.