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ETF Deathwatch For January 2016: Count Grows To 386

Calendar year 2016 gets underway with 386 ETFs and ETNs on Deathwatch. The January list is 5.5% larger than December’s 366 and is the result of 30 additions and 10 escapees. The overall count consists of 284 ETFs and 102 ETNs. I am considering revising the criteria for ETF Deathwatch due to the quantity of closures in 2015 that had asset levels above the current $25 million cutoff level. However, I will wait until the quantity hits a new high before making changes to avoid artificially creating a new high due to altered criteria. In case you are wondering, the peak was 403 in September 2012 , the only time it registered more than 400. I have been pointing out the rapid proliferation of currency-hedged funds over the past year. Their appearance on ETF Deathwatch is another sign that the segment is approaching saturation. The Direxion Daily MSCI Europe Currency-Hedged Bull 2x (NYSEARCA: HEGE ), Direxion Daily MSCI Japan Currency-Hedged Bull 2x (NYSEARCA: HEGJ ), ProShares Hedged FTSE Europe ETF (NYSEARCA: HGEU ), and WisdomTree International Hedged SmallCap Dividend (NYSEARCA: HDLS ) are four additions this month that are currency hedged. Currency hedging isn’t the only form of hedging evident among the new arrivals to ETF Deathwatch. The ETRACS S&P 500 VEQTOR Switch Index ETN (NYSEARCA: VQTS ) tracks an index that employs a dynamic volatility hedge with VIX futures. “HFR” stands for hedge fund replication in the names of the three Highland ETFs joining the list this month. All three of them employ equity hedging via long/short portfolios. The average asset level of products on ETF Deathwatch held steady at $6.9 million, and the quantity of products with less than $2 million jumped from 73 to 83. The average age increased from 48.2 to 48.8 months, and the number of products more than five years old increased from 130 to 137. Here is the complete list of 386 ETFs and ETNs on ETF Deathwatch for January 2016 compiled using the objective ETF Deathwatch criteria . The 30 ETFs and ETNs added to ETF Deathwatch for January: Barclays OFI SteelPath MLP ETN (NYSEARCA: OSMS ) BLDRS Asia 50 ADR (NASDAQ: ADRA ) Direxion Daily MSCI Europe Currency-Hedged Bull 2x ( HEGE ) Direxion Daily MSCI Japan Currency-Hedged Bull 2x ( HEGJ ) ETRACS S&P 500 VEQTOR Switch Index ETN ( VQTS ) Global X JPMorgan US Sector Rotator (NYSEARCA: SCTO ) Global X Southeast Asia ETF (NYSEARCA: ASEA ) Guggenheim China Real Estate (NYSEARCA: TAO ) Guggenheim Wilshire Micro-Cap (NYSEARCA: WMCR ) Highland HFR Equity Hedge ETF ( OTC:HHDG ) Highland HFR Event-Driven ETF (NYSEARCA: DRVN ) Highland HFR Global ETF (NYSEARCA: HHFR ) IQ Global Agribusiness Small Cap (NYSEARCA: CROP ) iShares Convertible Bond ETF (BATS: ICVT ) iShares MSCI Intl Developed Size Factor (NYSEARCA: ISZE ) iShares MSCI Intl Developed Value Factor (NYSEARCA: IVLU ) Market Vectors Global Spin-Off ETF (NYSEARCA: SPUN ) PowerShares FTSE RAFI Asia Pacific ex-Japan (NYSEARCA: PAF ) ProShares Hedged FTSE Europe ETF ( HGEU ) ProShares Ultra Homebuilders & Supplies (NYSEARCA: HBU ) ProShares Ultra Oil & Gas Exploration & Production (NYSEARCA: UOP ) ProShares UltraShort Homebuilders & Supplies (NYSEARCA: HBZ ) ProShares UltraShort Oil & Gas Exploration & Production (NYSEARCA: SOP ) ProShares UltraShort Utilities (NYSEARCA: SDP ) SPDR S&P International Financial (NYSEARCA: IPF ) Tortoise North American Pipeline Fund (NYSEARCA: TPYP ) TrimTabs Intl Free-Cash Flow ETF (NYSEARCA: FCFI ) ValueShares International Quantitative Value (BATS: IVAL ) WisdomTree International Hedged SmallCap Dividend ( HDLS ) WisdomTree Western Asset Unconstrained Bond (NASDAQ: UBND ) The 10 ETPs removed from ETF Deathwatch due to improved health: AlphaMark Actively Managed Small Cap (NASDAQ: SMCP ) Compass EMP U.S. 500 Volatility Weighted (NASDAQ: CFA ) Guggenheim MSCI Emerging Markets Equal Country Weight (NYSEARCA: EWEM ) iShares FactorSelect MSCI International (NYSEARCA: INTF ) iShares FactorSelect MSCI USA (NYSEARCA: LRGF ) iShares iBonds Dec 2023 Corporate (NYSEARCA: IBDO ) iShares iBonds Dec 2025 Corporate (NYSEARCA: IBDQ ) PowerShares DB Optimum Yield Diversified Commodity Strategy (NASDAQ: PDBC ) ProShares Russell 2000 Dividend Growers (NYSEARCA: SMDV ) SPDR Barclays International High Yield Bond (NYSEARCA: IJNK ) The ETPs removed from ETF Deathwatch due to delisting: None 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.

ETF Update: 4 New Launches And 2 Closures

Welcome back to the SA ETF Update. My goal is to keep Seeking Alpha readers up to date on the ETF universe and to gain some visibility, both for the ETF community, and for me as its editor (so users know who to approach with issues, article ideas, to become a contributor, etc.) Every weekend, or every other weekend (depending on the reader response and submission volumes), we will highlight fund launches and closures for the week, as well as any news items that could impact ETF investors. So far January has not been the best month for buy and hold investing. As a long term investor I know stock dips are really opportunities to buy into strong companies that will not just recover but bloom again. However, even having studied behavioral portfolio management, I still get that flight response that all investors will feel at some time. As you can see in the fund flows YTD tables below, I am not the only person feeling this way. Top Redemptions Fund Name Net Flows in USD Millions SPDR S&P 500 Trust ETF (NYSEARCA: SPY ) -4,073.29 iShares Russell 2000 ETF (NYSEARCA: IWM ) -2,108.65 PowerShares QQQ Trust ETF (NASDAQ: QQQ ) -1,996.87 iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA: HYG ) -1,648.93 iShares MSCI Emerging Markets ETF (NYSEARCA: EEM ) -1,349.74 Data Source: ETF.com Top Creations Fund Name Net Flows in USD Millions iShares Short Treasury Bond ETF (NYSEARCA: SHV ) -4,073.29 Vanguard S&P 500 ETF (NYSEARCA: VOO ) -2,108.65 iShares 20+ Year Treasury Bond ETF (NYSEARCA: TLT ) -1,996.87 iShares 7-10 Year Treasury Bond ETF (NYSEARCA: IEF ) -1,648.93 iShares 1-3 Year Treasury Bond ETF (NYSEARCA: SHY ) -1,349.74 Data Source: ETF.com Inflows and outflows can be a great reflection of what investors and money managers actually think is happening in the markets. As I don’t offer investment advice, and none of my articles should be seen as advice, I will leave it to readers to decide what these data points mean in the comments section below. However, I do want to point out that most of the top new creations are Treasury ETFs, while the redemptions are funds tracking the popular U.S. equity indices. It is up to you to decide how (or if) this information from 3 weeks of market activity will affect your portfolio strategy. Even with the churning markets there were 4 new funds launched in the last 2 weeks, so let’s jump in: Fund launches for the week of January 11th, 2015 Van Eck launches the first generic pharmaceuticals ETF (1/13): The Market Vectors Generic Drugs ETF (NASDAQ: GNRX ) focuses on companies that make the majority of their revenues from generic medication. While there are other pharmaceutical ETFs avaliable to investors, the largest being the Dynamic Pharmaceuticals ETF (NYSEARCA: PJP ), GNRX is the first funds to highlight companies focused on the generic medication market. The fund currently holds 84 companies and the top holdings feature names biotech investors are likely already familiar with; Allergan Plc (NYSE: AGN ) (8.69%), Teva Pharmaceutical (NYSE: TEVA ) (8.60%) and Baxalta Inc (NYSE: BXLT ) (5.83%). Reality Shares launches 2 more DIVCON ETFs (1/14): Last week saw the launch of the Reality Shares DIVCON Leaders Dividend ETF (BATS: LEAD ) and the company already has two more out of the gate. However, the Reality Shares DIVCON Dividend Defender ETF (BATS: DFND ) and the Reality Shares DIVCON Dividend Guardian ETF (BATS: GARD ) are both long/short portfolios, which is new for the firm. As a refresher, the DIVCON methodology “rates companies’ dividend health based on seven weighted factors our research shows are correlated with dividend growth.” According to each ETFs homepage, DFND seeks to provide long-term capital appreciation through the use of a hedged equity portfolio, while GARD provides exposure to large-cap U.S. companies with the highest probability of increasing their dividends, as measured by their DIVCON Scores. However, GARD has some twists as well. It dynamically adjusts its market exposure based on the firm’s Guard Indicator market strength gauge, making it a much more complex fund. State Street (NYSE: STT ) rolls out its innovation ETF (1/14): The SPDR FactSet Innovative Technology ETF (NYSEARCA: XITK ) tracks an index of companies selected by FactSet meant to represent the most innovative segments of the technology and electronic media industries. As described on the fund homepage, “the Index Provider considers the most innovative segments of the Technology sector and Electronic Media sub-sector to be those with the highest revenue growth and believes that these companies are often involved in cutting edge research, innovative product and service development, disruptive business models, or a combination of these activities.” Top holdings include Rovi Corporation (NASDAQ: ROVI ) (2.22%), Super Micro Computer Inc. (NASDAQ: SMCI ) (1.49%) and CyberArk Software Ltd. (NASDAQ: CYBR ) (1.42%). There were no fund launches for the week of January 18th, 2015 There were no fund closures for the week of January 11th, 2015 Fund closures for the week of January 18th, 2015 ETRACS 2xMonthly Leveraged S&P MLP Index ETN (NYSEARCA: MLPV ) UBS ETRACS 2x Leveraged Long Alerian MLP Infrastructure Index ETN (NYSEARCA: MLPL ) Have any other questions on ETFs or ETNs? Please comment below and I will try to clear things up. As an author and editor I have found that constructive feedback is the best way to grow. What you would like to see discussed in the future? How can I improve this series to meet reader needs? Please share your thoughts on this first edition of the ETF Update series in the comments section below. Have a view on something that’s coming up or a new fund? Submit an article.