Tag Archives: japan

ETF Deathwatch For May 2016: List Jumps To 450

The quantity of exchange-traded funds (“ETFs”) and exchange-traded noted (“ETNs”) continues to zoom higher. There are now 450 products on the list, and the growth trajectory is on a path to surpass 500 by the end of the year. 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 (NYSE: 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. The average asset level of products on ETF Deathwatch increased from $6.6 million to $6.8 million, and the quantity of products with less than $2 million fell from 98 to 96. The average age increased from 46.4 to 46.8 months, and the number of products more than five years of age surged from 148 to 177. The driving force behind the huge jump in five-year-old products on the list is that unloved family of iPath “Pure Beta” ETFs have now been on the market that long. Despite the lack of investor interest in these ETNs, Barclays continues to sponsor them, and the NYSE continues to collect a listing fee. Here is the Complete List of 450 ETFs and ETNs on ETF Deathwatch for May 2016 compiled using the objective ETF Deathwatch Criteria . The 26 ETFs and ETNs added to ETF Deathwatch for May: AlphaMark Actively Managed Small Cap (NASDAQ: SMCP ) CSOP China CSI 300 A-H Dynamic (NYSEARCA: HAHA ) CSOP MSCI China A International Hedged (NYSEARCA: CNHX ) Deutsche X-trackers CSI 300 China A-Shares Hedged Equity (NYSEARCA: ASHX ) ELEMENTS Rogers ICI Energy ETN (NYSEARCA: RJN ) ETRACS 2x Leveraged Long Wells Fargo BDC Series B ETN (NYSEMKT: LBDC ) ETRACS Monthly Pay 2x Leveraged Mortgage REIT ETN Series B (NYSEARCA: MRRL ) ETRACS UBS Bloomberg CMCI Series B ETN (NYSEARCA: UCIB ) Guggenheim MSCI Emerging Market Equal Country Wtd (NYSEARCA: EWEM ) iShares Currency Hedged MSCI South Korea (NYSEARCA: HEWY ) John Hancock Multifactor Healthcare (NYSEARCA: JHMH ) Morgan Stanley Cushing MLP High Income ETN (NYSEARCA: MLPY ) PowerShares Developed EuroPacific Hedged Low Volatility (NYSEARCA: FXEP ) PowerShares Dynamic Networking (NYSEARCA: PXQ ) PowerShares Japan Currency Hedged Low Volatility (NYSEARCA: FXJP ) PowerShares S&P 500 Momentum (NYSEARCA: SPMO ) PowerShares S&P 500 Value (NYSEARCA: SPVU ) PowerShares Zacks Micro Cap (NYSEARCA: PZI ) RBC Yorkville MLP Distribution Growth Leaders Liquid PR ETN (NYSEARCA: YGRO ) Reaves Utilities (NASDAQ: UTES ) SPDR MSCI China A Shares IMI (NYSEARCA: XINA ) The Restaurant ETF (NASDAQ: BITE ) VanEck Vectors Solar Energy (NYSEARCA: KWT ) WisdomTree BofA ML HY Bond Zero Duration (NASDAQ: HYZD ) WisdomTree Europe Local Recovery (BATS: EZR ) WisdomTree Global ex-U.S. Hedged Real Estate (BATS: HDRW ) The 7 ETPs removed from ETF Deathwatch due to improved health: Barclays Return on Disability ETN (NYSEARCA: RODI ) Global X Permanent (NYSEARCA: PERM ) Global X Scientific Beta US (NYSEARCA: SCIU ) IQ 50 Percent Hedged FTSE Japan (NYSEARCA: HFXJ ) iShares Global Inflation-Linked Bond (NYSEARCA: GTIP ) O’Shares FTSE Europe Quality Dividend (NYSEARCA: OEUR ) PureFunds ISE Junior Silver (NYSEARCA: SILJ ) The 4 ETFs removed from ETF Deathwatch due to delisting: Highland HFR Equity Hedge (NYSEARCA: HHDG ) Highland HFR Event-Driven (NYSEARCA: DRVN ) Highland HFR Global (NYSEARCA: HHFR ) DB Commodity Long ETN (NYSEARCA: DPU ) 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.

What’s Driving The Global ETF Industry?

Amid continued volatility in the oil price and the instability in the stock markets, assets invested under global ETFs/ETPs touched an all-time high of $3.138 trillion in April. While equities failed to impress the ETF space, fixed income led the way. As per data from ETFGI’s April 2016 global ETF and ETP industry insights report , the Global ETF/ETP industry had a whopping 6,297 ETFs/ETPs from 283 providers on 65 exchanges at the end of April 2016. As per the report, inflows were witnessed across the globe with record levels of assets being gathered in the U.S. ($2.217 trillion), Canada ($77.42 billion), Europe ($533.34 billion), Japan ($145.93 billion) and other countries in the Asia-Pacific region ($125.21 billion) (read: Will European ETFs Continue to Underperform SPY? ). In April, global ETFs/ETPs witnessed net inflows of $10.13 billion, led by fixed income ETFs/ETPs which gathered the largest net inflows with $7.73 billion. This is not surprising considering the upcoming U.S. election, Brexit vote and the impact of quantitative easing across the globe which have ruffled investors. Below we have discussed a couple of areas which saw the highest inflow last month. Bond ETFs Record flows in bond ETFs could be attributed to the low-yield environment in most developed markets across the world. Disappointing macroeconomic data, global market turbulence and threats to the stability of the U.S. economy have been making headlines since the beginning of the year, leading to volatility across all asset classes. Because of these factors, bond ETFs have lately gained a lot of popularity as investors continue to look for attractive and stable yield in this ultralow rate interest environment (read: Time for Investment Grade Corporate Bond ETFs? ). In fact, these uncertainties led the central bank to lower the number of hikes and the projected federal funds rate this year. It now expects the federal funds rate to rise to 0.875% by the end of the year, instead of the previously expected 1.375%, implying only two rate hikes as compared to the four projected in December. The double blessing of easy monetary policy globally and a delayed rate hike in the U.S. made fixed-income securities a winner in the month, as investors scurried to safer assets. Funds which saw maximum inflows were the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEARCA: LQD ) – $1.2 billion, the Vanguard Total Bond Market ETF (NYSEARCA: BND ) – $ 834.3 billion and the iShares Core Total U.S. Bond Market ETF (NYSEARCA: AGG ) – $829.6 million. Minimum Volatility ETFs With mixed data flowing in from various quarters and widespread fear among investors about the direction of the market, it’s not surprising that investors are looking to follow a proper trading strategy which ensures stability. With that in mind investors sought low volatility ETFs with funds like the iShares MSCI USA Minimum Volatility ETF (NYSEARCA: USMV ) and the iShares MSCI EAFE Minimum Volatility ETF (NYSEARCA: EFAV ) witnessing inflows of $1.2 billion and $601.2 million, respectively. Link to the original post on Zacks.com

Car ETF In Focus Post Mixed Auto Earnings

After strong U.S. light-vehicle sales in March, April witnessed a record. As a result, sales on a seasonally-adjusted annualized rate basis improved significantly. The automobile sector has been seeing certain favorable elements such as low fuel prices and a low interest rate environment. However, these factors failed to translate into impressive growth numbers during the first quarter as a stronger yen stood in the way of realizing the sector’s full potential. As per our Earnings Trend report, Tech and Auto sectors suffered the most negative price reaction of all the 16 sectors during this earnings season. Below we have highlighted in detail quarterly results of some of the major auto companies that have reported recently. Auto Earnings in Detail The largest U.S. automaker’s, General Motors Co. (NYSE: GM ), adjusted earnings of $1.26 per share for the quarter beat the Zacks Consensus Estimate of $1.01 by a wide margin. Earnings increased 46.5% year over year. Revenues in the reported quarter were $37.3 billion, up 4.5% year over year, beating the Zacks Consensus Estimate of $35.7 billion. The stock has shed 5.2% since reporting earnings (as of May 13, 2016). The second-largest carmaker by sales, Ford Motor Co. (NYSE: F ) , posted adjusted earnings per share of 68 cents in the first quarter, up 39 cents from the prior-year quarter and ahead of the Zacks Consensus Estimate of 43 cents. Revenues increased 11% to $37.7 billion and surpassed the Zacks Consensus Estimate of $36.1 billion. For 2016, the company expects pre-tax profit, earnings per share, revenue and automotive operating margin to be equal to or higher than 2015 levels. The stock has lost 3.2% since releasing earnings. Japanese automaker, Honda Motor Co., Ltd. (NYSE: HMC ), reported a loss per share of ¥51.85 (46 cents) in the fourth quarter of fiscal 2016 (ended March 31, 2016) as against earnings of ¥45.45 (40 cents) in the year-ago quarter. The Zacks Consensus Estimate was for earnings of 49 cents per share. However, consolidated net sales and other operating revenues escalated 4.8% year over year to ¥3.66 trillion ($32.46 billion). The figure also surpassed the Zacks Consensus Estimate of $31.88 billion. The year-over-year increase can be attributed to higher revenues from automobile and financial services business operations. For fiscal 2017, Honda expects revenues to decline 5.8% to ¥13.75 trillion ($7.64 trillion). The stock lost 4.8% since it reported earnings. Another Japanese automaker, Toyota Motor Corporation (NYSE: TM ), posted earnings of $2.40 per ADR in its fiscal 2016 fourth quarter, beating the Zacks Consensus Estimate of $2.07. However, the company’s consolidated revenues fell 2.1% year over year to ¥6.97 trillion ($60.6 billion) and were short of the Zacks Consensus Estimate of $63.1 billion. Toyota’s consolidated revenue guidance of ¥26.5 trillion ($252.4 billion) for fiscal 2017 reflects a 6.7% decline from fiscal 2016. The stock is down 4.4% (as of May 13, 2016). While Ford and General Motors reported better-than-expected earnings and revenues for the first quarter, Honda’s quarterly earnings and revenues for the quarter fell short of estimates and Toyota reported mixed results. This puts the spotlight on the exclusive auto ETF, the First Trust NASDAQ Global Auto Index Fund (NASDAQ: CARZ ), which has a sizable exposure to the above-mentioned stocks. CARZ lost more than 2.7% (as of May 13, 2016) in the last 10 days. Let us take a look at this ETF in detail. CARZ in Focus This ETF tracks the NASDAQ OMX Global Auto Index, having exposure to the automobile manufacturers across the globe. The product holds 37 stocks in the basket with Honda, Ford, General Motors and Toyota placed among the top five holdings with a combined allocation of nearly 31.5% of fund assets. Other firms hold less than 5% of assets. In terms of country exposure, Japan takes the top spot at 35.4% while the U.S. takes the second spot having a 23.6% allocation, followed by Germany and South Korea with 19.5% and 8% allocations, respectively. The ETF is neglected with $39.6 million in AUM and sees light trading volume of around 9,500 shares. The product is a bit expensive with 70 bps in annual fees and currently has a Zacks ETF Rank #3 or “Hold” rating with a High risk outlook. Original post