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ETF Deathwatch For April 2016: 35 Names Added

A whopping 35 ETFs and ETNs joined ETF Deathwatch this month. However, seven came off the list thanks to improved health, and another 11 exited due to their demise and liquidation. The net increase of 17 products pushes the count to an all-time high of 435. Despite the 585 lifetime product closures, 25 of which have occurred this year, the quantity of funds in jeopardy of increasing the death toll continues to grow. The primary reason is that all of the major investment categories are covered. New products coming to market tend to target a narrow niche, or they add a small twist to an existing strategy in an effort to be unique. Most of the 35 products joining the list fit into one of these descriptions. Even though the 331 ETFs on Deathwatch account for 76% of the 435 total, ETNs continue to have the highest representation. There are 204 ETNs listed for trading and 104 are on Deathwatch. That is more than half. Ten years ago, when ETNs first arrived on the scene, they offered exposure to many market segments that ETFs were avoiding. However, ETF offerings continue to evolve and have been encroaching on territories that were once the domain of ETNs. Today, most successful ETNs target MLPs, VIX futures, leveraged commodity futures, leveraged dividend plays or they are customized products for specific asset managers. There are only 33 ETNs with asset levels above $100 million. Actively managed ETFs also have above-average representation with 39 of the 136 (28.7%) actively managed funds finding themselves on Deathwatch. The 145 smart-beta funds on this list equates to 24.4% of that group. Traditional capitalization-weighted index ETFs appear to have the best chance of survival with just 15.8% of them currently in jeopardy. Combined, the 331 ETFs in these three ETF segments says that one in every five (20%) ETFs is on Deathwatch. The average asset level of products on ETF Deathwatch increased from $6.2 million to $6.6 million, and the quantity of products with less than $2 million inched higher from 97 to 98. The average age decreased from 46.6 to 46.4 months, and the number of products more than five years old increased from 138 to 148. The fact that sponsors have continued to subsidize 148 unprofitable funds for more than five years indicates they are either extremely patient or in denial. ETF Deathwatch is not just about closure risk. Liquidity risk should be a primary concern if you are considering any of these funds. On the last day of March, 277 ETFs posted zero volume, and 23 went the entire month without a single trade. Being lucky enough to get your purchase order filled within a reasonable bid/ask spread is one thing. Finding a buyer when you are ready to sell can be quite another. The 35 ETFs and ETNs added to ETF Deathwatch for April Cambria Value and Momentum (NYSEARCA: VAMO ) DB Agriculture Double Long ETN (NYSEARCA: DAG ) Direxion Daily Cyber Security Bear 2x (NYSEARCA: HAKD ) Direxion Daily Cyber Security Bull 2x (NYSEARCA: HAKK ) Direxion Daily Pharmaceutical & Medical Bear 2x (PILS) Direxion Daily Pharmaceutical & Medical Bull 2x (PILL) Direxion S&P 500 RC Volatility Response (NYSEARCA: VSPY ) EGShares EM Core ex-China (NYSEARCA: XCEM ) First Trust China AlphaDEX (NASDAQ: FCA ) First Trust Strategic Income (NASDAQ: FDIV ) First Trust Taiwan AlphaDEX (NASDAQ: FTW ) FlexShares Credit-Scored US Long Corp Bond (NASDAQ: LKOR ) FlexShares US Quality Large Cap (NASDAQ: QLC ) iPath S&P 500 Dynamic VIX ETN (NYSEARCA: XVZ ) IQ Hedge Strategy Macro Tracker (NYSEARCA: MCRO ) IQ Leaders GTAA Tracker (NYSEARCA: QGTA ) iShares Currency Hedged International High Yield Bond (NYSEARCA: HHYX ) iShares MSCI Saudi Arabia Capped (NYSEARCA: KSA ) John Hancock Multifactor Consumer Discretionary (NYSEARCA: JHMC ) John Hancock Multifactor Financials (NYSEARCA: JHMF ) John Hancock Multifactor Mid Cap (NYSEARCA: JHMM ) John Hancock Multifactor Technology (NYSEARCA: JHMT ) KraneShares Bosera MSCI China A (NYSEARCA: KBA ) ProShares Hedged FTSE Japan (NYSEARCA: HGJP ) ProShares MSCI Europe Dividend Growers (NYSEARCA: EUDV ) ProShares S&P 500 Ex-Financials (NYSEARCA: SPXN ) ProShares S&P 500 Ex-Health Care (NYSEARCA: SPXV ) ProShares S&P 500 Ex-Technology (NYSEARCA: SPXT ) PureFunds ISE Mobile Payments ( IPAY ) Recon Capital DAX Germany (NASDAQ: DAX ) Renaissance IPO (NYSEARCA: IPO ) SPDR S&P International Dividend Currency Hedged (NYSEARCA: HDWX ) SPDR MSCI International Real Estate Currency Hedged (NYSEARCA: HREX ) WisdomTree Global Natural Resources (NYSEARCA: GNAT ) WisdomTree Middle East Dividend (NASDAQ: GULF ) The 7 ETPs removed from ETF Deathwatch due to improved health: AdvisorShares Madrona International (NYSEARCA: FWDI ) AdvisorShares WCM/BNY Mellon Focused Growth ADR (NYSEARCA: AADR ) ALPS Emerging Sector Dividend Dogs (NYSEARCA: EDOG ) iPath Pure Beta Crude Oil ETN (NYSEARCA: OLEM ) ProShares S&P MidCap 400 Dividend Aristocrats (NYSEARCA: REGL ) ProShares Short Basic Materials (NYSEARCA: SBM ) ValueShares International Quantitative Value (BATS: IVAL ) The 11 ETFs removed from ETF Deathwatch due to delisting: ETFS Physical White Metal Basket Shares (NYSEARCA: WITE ) Recon Capital FTSE 100 (NASDAQ: UK ) PowerShares China A-Share (NYSEARCA: CHNA ) PowerShares Fundamental Emerging Markets Local Debt (NYSEARCA: PFEM ) PowerShares KBW Insurance (NYSEARCA: KBWI ) Direxion Value Line Conservative Equity (NYSEARCA: VLLV ) Direxion Value Line Mid- and Large-Cap High Dividend (NYSEARCA: VLML ) Direxion Value Line Small- and Mid-Cap High Dividend (NYSEARCA: VLSM ) ALPS Sector Leaders (NYSEARCA: SLDR ) ALPS Sector Low Volatility (NYSEARCA: SLOW ) ALPS STOXX Europe 600 (NYSEARCA: STXX ) ETF Deathwatch Archives Disclosure: Author has no positions in any of the securities mentioned and no positions in any of the 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.

Healthcare Mutual Funds To Bounce Back After Q1 Debacle: 5 Picks

The healthcare space was mostly out of favor in the first quarter following Democratic Presidential Candidate, Hillary Clinton’s allegation on “price gouging.” The massive decline in Valeant Pharmaceuticals International, Inc.’s (NYSE: VRX ) shares also had an adverse impact on biotech stocks, eventually dragging the healthcare sector down. Healthcare mutual funds weren’t spared as the category turned out to be the worst performer in the first quarter. Foremost funds from the healthcare space failed to end in positive territory during the period. Despite this hiccup, investors shouldn’t be demoralized as the long term bodes well for such funds. The healthcare sector is poised to gain from an ageing population both at home and abroad. And with an increase in mergers, and innovative product pipelines and approvals, it’s just a matter of time before the sector bounces back. Not to forget that biotech stocks have already rebounded in the past few days after being torn apart in the first three months of the year. Banking on this optimism, it will be prudent to invest in healthcare funds that have given solid returns over a long period of time and also boast strong fundamentals. (Read: 3 Healthcare Funds to Buy on Biotech Rebound ) Healthcare Losing Ground in Q1 It’s been an awful first quarter for the healthcare sector. Political scrutiny about drug prices took a toll on healthcare stocks. Healthcare Equity Funds nosedived 13.28% during the first quarter, according to Morningstar. Among the worst performing drug makers were Mallinckrodt Public Limited Company (NYSE: MNK ), Horizon Pharma plc (NASDAQ: HZNP ) and Endo International plc (NASDAQ: ENDP ), whose shares plunged 17.9%, 21.4% and 54%, respectively, in the first quarter. If you think that was bad, then biotechs had it even worse. The iShares NASDAQ Biotechnology Index plummeted almost 23% in the first quarter. The Valeant Pharmaceuticals disaster was also responsible for the significant underperformance. U.S. lawmakers investigating Valeant’s pricing practices, accusations about accounting irregularities and delay in filing annual reports practically ruined the company. In the first quarter alone, Valeant’s shares plummeted 36.8%. With the new tax inversion rules the pain seems to have intensified. According to the U.S. Treasury Department and Internal Revenue Service, the rule bars U.S. companies from undertaking inversion transactions if they have done so in the past three years. These inversion deals were a ploy for U.S. drug companies to dodge tax bills by relocating their headquarters abroad. On the earnings front, things are also looking gloomy. First-quarter earnings from the healthcare sector are anticipated to grow a meager 0.6% from the year-ago level compared with 9.3% growth witnessed in the previous quarter. (Read: Previewing the Q1 Earnings Season ) Tailwinds are Strong Even though healthcare witnessed a dismal first quarter, the sector is positioned to grow in the future thanks to an ageing American population. There are about 77 million U.S. baby boomers, which is quite a significant number. An ageing population bodes well for the healthcare sector as they require more medical attention. Along with it, an ageing China also provides long-term opportunities for both U.S. pharmaceutical and medical technology companies. The need to trim costs and tap growth opportunities are driving healthcare firms into mergers and acquisitions (M&A). Additionally, the Fed’s dovish outlook to proceed cautiously on hiking rates is also expected to boost M&A deals. Also, the first FDA-approved biosimilar, Zarxio, hit the market last year. Biotech companies are now vying to enter this high revenue generating space. Several other products such as Imlygic, Ibrance, Strensiq, Genvoya and, PCSK9 inhibitors, Praluent and Repatha also got approved. This in turn is expected to help companies from the healthcare space to generate steady revenues. Thanks to the mandated healthcare coverage in the U.S., more Americans are seeking treatment, which is also a net positive for healthcare firms. 5 Healthcare Mutual Funds to Invest In As discussed above, these tailwinds may collectively act as growth facilitators and help the healthcare sector overcome the drubbing it took in the first quarter. In case of inversion rules, healthcare companies will continue to seek creative ways to relocate their tax residence to avoid paying the lofty taxes at home, as per the Treasury Secretary Jacob J. Lew. Since the long run holds good for the healthcare sector, it will be wise to buy mutual funds associated with the sector. These funds have yielded positive returns for a long time despite being in the red in the first quarter. Moreover, these funds are fundamentally solid, which will eventually help them gain in the future as well. We have selected five healthcare mutual funds that have impressive 3-year and 5-year annualized returns and carry a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). These funds also possess a relatively low expense ratio and have minimum initial investment within $5000. T. Rowe Price Health Sciences Fund (MUTF: PRHSX ) invests a large portion of its assets in companies engaged in the development and distribution of health care products. PRHSX’s 3-year and 5-year annualized returns are 19.7% and 21.1%, respectively. Annual expense ratio of 0.76% is lower than the category average of 1.35%. PRHSX has a Zacks Mutual Fund Rank #1. Fidelity Select Health Care Portfolio (MUTF: FSPHX ) invests a major portion of its assets in companies involved in the manufacture and sale of products used in connection with health care. FSPHX’s 3-year and 5-year annualized returns are 19.2% and 18.8%, respectively. Annual expense ratio of 0.74% is lower than the category average of 1.35%. FSPHX has a Zacks Mutual Fund Rank #2. Hartford Healthcare Fund A (MUTF: HGHAX ) invests the majority of its assets in the equity securities of health care-related companies worldwide. HGHAX’s 3-year and 5-year annualized returns are 17.3% and 17.7%, respectively. Annual expense ratio of 1.28% is lower than the category average of 1.35%. HGHAX has a Zacks Mutual Fund Rank #2. Live Oak Health Sciences Fund (MUTF: LOGSX ) invests a large portion of its assets in equity securities of health sciences companies. LOGSX’s 3-year and 5-year annualized returns are 16.1% and 15.7%, respectively. Annual expense ratio of 1.08% is lower than the category average of 1.35%. LOGSX has a Zacks Mutual Fund Rank #2. Fidelity Select Biotechnology Portfolio (MUTF: FBIOX ) invests the majority of its assets in companies engaged in the manufacture and distribution of various biotechnological products. FBIOX’s 3-year and 5-year annualized returns are 16.1% and 23.7%, respectively. Annual expense ratio of 0.74% is lower than the category average of 1.35%. FBIOX has a Zacks Mutual Fund Rank #2. Link to the original post on Zacks.com

Beyond Miners, 5 ETFs Crushing The Market To Start Q2

Overriding concerns over weak corporate earnings, U.S. stocks hit fresh highs of 2016. This is especially true as conservative earnings estimates are actually setting the stage for positive surprises. In fact, a handsome earnings beat by one of the six largest banks – JPMorgan (NYSE: JPM ) – spread optimism into financial sector, which is the backbone of the global economy. As per the Zacks Earnings Trend , earnings beat ratio for 8.8% of the S&P 500 companies that have reported so far is impressive at 71.9%. Additionally, better-than-expected trade data in China eased global growth fears, sending the stocks higher. Further, stabilization of crude oil at around $40 per barrel is the greatest achievement in the current oversupplied oil market. Though the dollar has been weakening since the start of the second quarter, it has gained some momentum this week on more stimulus hopes from Bank of Japan (read: 5 ETFs to Buy if Oil Stays at $40 ). Apart from these recent developments, the dovishness of the Fed, an accelerating job market, a pick-up in inflation and increasing consumer confidence have continued to brace the market. Meanwhile, the appeal for government bonds and precious metals has diminished on risk-on investors’ sentiment. That being said, we highlight five ETFs that are surging to start the second quarter and are expected to continue this trend. ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) – Up 11.5% This fund targets companies with one or more drugs in Phase II or Phase III FDA clinical trials by tracking the Poliwogg Medical Breakthroughs Index. It is a small cap centric fund, having amassed $104.2 million in its asset base. The product holds 95 stocks in its basket with a well-diversified portfolio as each security holds less than 4.6% of assets. The product charges 50 bps in fees per year from investors and trades in a moderate average daily volume of about 77,000 shares. It has a Zacks ETF Rank of 3 or ‘Hold’ rating. WisdomTree Weak Dollar U.S. Equity ETF (NYSEARCA: USWD ) – Up 10.3% This fund offers exposure to export-oriented companies that may benefit from a weakening U.S. dollar by tracking the WisdomTree Weak Dollar U.S. Equity Index. It holds 201 securities in its basket with none accounting for more than 1.84% of assets. However, about one-fourth of the portfolio is dominated by information technology while industrials, health care, consumer discretionary and materials round off the next four spots with a double-digit exposure each. USWD is an unpopular an illiquid fund with AUM of $1.2 million and average daily volume of under 1,000 shares. Expense ratio came in at 0.33%. SPDR SSGA Risk Aware ETF (NYSEARCA: RORO ) – Up 10.3% This is an actively managed ETF that seeks to provide capital appreciation and competitive returns compared to the broad U.S. equity market. Holding 90 stocks in its portfolio, the fund is moderately concentrated across the firms with each holding less than 5.4% share. From a sector look, consumer discretionary, health care, consumer staples, financial services and utilities are the top sectors with a double-digit allocation each. It has managed $2 million in its asset base and charges 50 bps in annual fees. Volume is light exchanging less than 1,000 shares a day on average. United States Brent Oil Fund (NYSEARCA: BNO ) – Up 9.2% This fund provides direct exposure to the spot price of Brent crude oil on a daily basis through futures contracts. It has amassed $121.3 million in its asset base and trades in a good volume of roughly 267,000 shares a day. The ETF charges 75 bps in annual fees and expenses. SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA: XOP ) – Up 9.2% This fund provides an equal weight exposure to 60 firms by tracking the S&P Oil & Gas Exploration & Production Select Industry Index. Each holding makes up for less than 2.8% of the total assets. XOP is one of the largest and popular funds in the energy space with AUM of over $2 billion and expense ratio of 0.35%. It trades in heavy volume of around 19.1 million shares a day on average. The fund has a Zacks ETF Rank of 5 or ‘Strong Sell’ rating. Link to the original post on Zacks.com