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ETF Stats For December 2015: Actively Managed ETF Assets Overtake ETNs

Assets in actively managed ETFs climbed 3.3% to $22.9 billion in December, while assets in ETNs dropped 4.5% to $21.5 billion. This is a significant milestone for actively managed ETFs, marking the first time that their asset levels have surpassed those of ETNs. Overall U.S. industry assets shrunk 1.1% in December to end the year at $2.12 trillion, producing a 6.0% one-year growth. December saw 23 new introductions and two closures. The month and year ended with 1,845 U.S.-listed products, consisting of 1,644 ETFs and 201 ETNs. For the year, the 284 launches and 101 closures resulted in a net increase of 183 products. Product quantity and asset levels have historically tracked relatively closely at about $1 billion in assets for every ETF. Calendar year 2015 ended with an average of $1.15 billion per product, down from $1.20 billion a year ago. The quantity of actively managed ETFs increased by only 9.6% during 2015, growing from 125 to 137. This belies the 33.0% surge in assets, which shot from $17.3 billion to $22.9 billion. As mentioned earlier, this is the first time actively managed ETF assets have been greater than ETN assets, even though ETNs outnumber actively managed ETFs 201 to 137. Fund-of-fund ETFs also saw growth in 2015, increasing from 44 to 77 with assets surging to $14.8 billion (an increase of more than 224%). Much of 2015’s growth was spurred by new currency-hedged international ETFs, which buy an unhedged ETF and then add a currency overlay. Although the 77 fund-of-fund ETFs are included in the industry product counts, their reported asset levels are excluded. If they were included, it would result in double counting because the assets in these ETFs are already reflected in the asset levels of the funds they purchase. The quantity of funds with more than $10 billion in assets decreased from 52 to 51 for December, but this tiny 2.8% of the products hold 59.4% of the assets. The number of products with at least $1 billion in assets increased by two to 256, and they account for 89.9% of the assets. Just 814 ETFs and ETNs can claim an asset level above $100 million, a level some analysts believe is required for profitability, leaving 1,031 (55.9%) in a questionable state. Trading activity surged 38.9% in December to $1.86 trillion. This represents a turnover ratio ($ volume / industry assets) of 87.8% for the month. There were 13 funds averaging more than $1 billion in daily trading during December, and they accounted for 57.6% of the industry trading activity. The quantity of ETFs and ETNs with more than $100 million in average daily dollar volume was 107, and 364 posted more than $10 million in daily trading activity. Liquidity remains a concern for many products, with 236 not trading on the last day of the year and 19 going the entire month with zero volume. December 2015 Month End ETFs ETNs Total Currently Listed U.S. 1,644 201 1,845 Listed as of 12/31/2014 1,451 211 1,662 New Introductions for Month 23 0 23 Delistings/Closures for Month 2 0 2 Net Change for Month +21 0 +21 New Introductions 6 Months 153 8 161 New Introductions YTD 272 12 284 Delistings/Closures YTD 79 22 101 Net Change YTD +193 -10 +183 Assets Under Mgmt ($ billion) $2,097 $21.5 $2,118 % Change in Assets for Month -1.0% -4.5% -1.1% % Change in Assets YTD +6.3% -20.2% +6.0% Qty AUM > $10 Billion 51 0 51 Qty AUM > $1 Billion 251 5 256 Qty AUM > $100 Million 778 36 814 % with AUM > $100 Million 47.3% 17.9% 44.1% Monthly $ Volume ($ billion) $1,786 $74.0 $1,860 % Change in Monthly $ Volume +38.8% +41.5% +38.9% Avg Daily $ Volume > $1 Billion 12 1 13 Avg Daily $ Volume > $100 Million 100 7 107 Avg Daily $ Volume > $10 Million 348 16 364 Actively Managed ETF Count (w/ change) 137 +2 mth +12 ytd Actively Managed AUM ($ billion) $22.9 +3.3% mth +33.0% 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 December (sorted by launch date): SPDR S&P 500 Fossil Fuel Free ETF ( SPYX ) , launched 12/1/15, will target S&P 500 companies that do not own fossil fuel reserves, which currently excludes 25 stocks. The fund uses capitalization weighting, has a yield of 1.9%, and an expense ratio of 0.20% ( SPYX overview ). MomentumShares U.S. Quantitative Momentum ETF (BATS: QMOM ) , launched 12/2/15, is an actively managed ETF that selects stocks using its Quantitative Momentum Process that includes trend quality and seasonality. It typically concentrates its portfolio at around 60 holdings and has an expense ratio of 0.79% ( QMOM overview ). Direxion Daily Healthcare Bear 3x Shares (NYSEARCA: SICK ) , launched 12/3/15, seeks to provide 300% of the inverse daily performance of the Health Care Select Sector Index. This is the second life for this ETF, as it was previously launched on 6/15/11 and subsequently closed on 9/5/12. Its expense ratio will be capped at 0.95% ( SICK overview ). Direxion Daily Natural Gas Related Bear 3x Shares (NYSEARCA: GASX ) , launched 12/3/15, seeks to provide 300% of the inverse daily performance of the ISE-Revere Natural Gas Index. This is the second life for this ETF, as it was previously launched on 7/14/10 and subsequently closed on 9/23/14. Its expense ratio will be capped at 0.95% ( GASX overview ). Direxion Daily S&P Biotech Bear 1x Shares (NYSEARCA: LABS ) , launched 12/3/15, seeks to provide the daily inverse return of the S&P Biotechnology Select Industry Index and has an expense ratio of 0.45% ( LABS overview ). SPDR Russell 1000 Low Volatility Focus ETF (NYSEARCA: ONEV ) , launched 12/3/15, tracks a smart-beta index using multiple factors (value, quality, and size) with a focus on low volatility. It has an expense ratio of 0.20% ( ONEV overview ). SPDR Russell 1000 Momentum Focus ETF (NYSEARCA: ONEO ) , launched 12/3/15, tracks a smart-beta index using multiple factors (value, quality, and size) with a focus on high momentum. It has an expense ratio of 0.20% ( ONEO overview ). SPDR Russell 1000 Yield Focus ETF (NYSEARCA: ONEY ) , launched 12/3/15, tracks a smart-beta index using multiple factors (value, quality, and size) with a focus on high yield. It has an expense ratio of 0.20% ( ONEY overview ). Tierra XP Latin America Real Estate ETF (NYSEARCA: LARE ) , launched 12/3/15, tracks the performance of all major listed companies in the real estate industry in Latin America. The underlying index is comprised of 52 locally listed equities ranked overall by market capitalization, dividend yield, and liquidity. Its expense ratio is 0.79% ( LARE overview ). Elkhorn FTSE RAFI U.S. Equity Income ETF (BATS: ELKU ) , launched 12/10/15, is designed to track the performance of high-yield stocks in the U.S. that have been screened to target sustainable income. Index constituents are selected and weighted using four fundamental factors, and the fund sports a 0.39% expense ratio ( ELKU overview ). iShares FactorSelect MSCI Emerging ETF (BATS: EMGF ) , launched 12/10/15, seeks to track the investment results of an index composed of stocks of large- and mid-capitalization companies in emerging markets that have favorable exposure to quality, value, size, and momentum factors. Its expense ratio is capped at 0.65% through 12/31/2016 ( EMGF overview ). Pacer Autopilot Hedged European Index ETF (BATS: PAEU ) , launched 12/15/15, uses a dynamic currency hedge on a static portfolio of stocks tracking the FTSE Eurobloc Index. The currency hedge is based on a 20-day and 130-day moving average crossover of the euro and U.S. dollar relative strength. The fund has an expense ratio of 0.65% ( PAEU overview ). Pacer Trendpilot European Index ETF (BATS: PTEU ) , launched 12/15/15, alternates between 100% exposure to the FTSE Eurobloc Index, 100% exposure to 3-month T-bills, and a 50/50 exposure between the two based on the relationship of the FTSE Eurobloc Index to its 200-day moving average. PTEU has an expense ratio of 0.65% ( PTEU overview ). Guggenheim Dow Jones Industrial Average Dividend ETF (NYSEARCA: DJD ) , launched 12/16/15, offers an alternative, strategic beta approach to the 30 stocks of the Dow Jones Industrial Average by weighting each security by its dividend yield, rather than price. The ETF has an initial yield of 2.7% and an expense ratio 0.30% ( DJD overview ). SPDR S&P North American Natural Resources ETF (NYSEARCA: NANR ) , launched 12/16/15, tracks an index of large- and mid-cap U.S. and Canadian companies in the natural resources and commodities businesses that have energy, materials, or agriculture classifications. It has 59 holdings, a current yield of 2.7%, and an expense ratio 0.35% ( NANR overview ). JPMorgan Diversified Return Europe Equity ETF (NYSEARCA: JPEU ) , launched 12/21/15, provides developed Europe equity exposure across 10 equally weighted sectors. The underlying index selects stocks using a bottom-up multi-factor stock-ranking process that combines value, quality, and momentum factors. The new ETF has an expense ratio of 0.43% ( JPEU overview ). MomentumShares International Quantitative Momentum ETF (NYSEMKT: IMOM ) , launched 12/23/15, is an actively managed ETF that selects international stocks using its Quantitative Momentum Process that includes trend quality and seasonality. It typically concentrates its portfolio at around 60 equally weighted holdings and has an expense ratio of 0.99% ( IMOM overview ). WisdomTree Dynamic Bearish U.S. Equity Fund (NYSEMKT: DYB ) , launched 12/23/15, tracks an index that can range between 0% to 100% long U.S. large-cap low-volatility equities and is hedged with a 75%-100% bearish position consisting of short positons in large-cap cap-weighted stocks (and U.S. Treasury securities). The net equity exposure of this ETF can range from -100% to +25%, and it has an expense ratio of 0.48% ( DYB overview ). WisdomTree Dynamic Long/Short U.S. Equity Fund (NYSEMKT: DYLS ) , launched 12/23/15, tracks an index that is 100% long U.S. large-cap low-volatility equities and then hedged with a 0%-100% bearish position consisting of short positons in large-cap cap-weighted stocks (and U.S. Treasury securities). The net equity exposure of this ETF can range from 0% to +100%, and it has an expense ratio of 0.48% ( DYLS overview ). Legg Mason Developed ex-US Diversified Core ETF (NASDAQ: DDBI ) , launched 12/29/15, uses a proprietary diversification method designed to provide broad exposure balanced across developed international markets. It aims to be a core holding that can complement cap-weighted products and has an expense ratio of 0.40% ( DDBI overview ). Legg Mason Emerging Markets Diversified Core ETF (NASDAQ: EDBI ) , launched 12/29/15, uses a proprietary diversification method designed to provide broad exposure balanced across emerging markets. It aims to be a core holding that can complement cap-weighted products and has an expense ratio of 0.50% ( EDBI overview ). Legg Mason Low Volatility High Dividend ETF (NASDAQ: LVHD ) , launched 12/29/15, seeks income from sustainable dividends from U.S. stocks to provide a more reliable income stream, reduced volatility, and the potential for appreciation with an expense ratio of 0.30% ( LVHD overview ). Legg Mason US Diversified Core ETF (NASDAQ: UDBI ) , launched 12/29/15, uses a proprietary diversification method designed to provide broad exposure balanced across U.S. equities. It aims to be a core holding that can complement cap-weighted products and has an expense ratio of 0.30% ( UDBI overview ) Product closures in December and last day of listing : Guggenheim BulletShares 2015 Corporate Bond ETF (NYSEARCA: BSCF ) 12/30/15 Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (NYSEARCA: BSJF ) 12/30/15 Product changes in December: OppenheimerFunds, Inc. acquired VTL Associates and its RevenueShares ETFs effective December 2, 2015. The eight affected ETFs were rebranded as Oppenheimer ETFs. The First Trust Global Copper ETF (NASDAQ: CU ) underwent an extreme makeover, becoming the First Trust Indxx Global Natural Resources Income ETF (FTRI) effective December 21, 2015. The First Trust Global Platinum ETF (NASDAQ: PLTM ) underwent an extreme makeover, becoming the First Trust Indxx Global Agriculture ETF (FTAG) effective December 21, 2015. Announced Product Changes for Coming Months: WisdomTree will close on its acquisition of Greenhaven Commodity Services and its two ETFs with an effective date of January 4, 2016. The fund names will change from Greenhaven to WisdomTree, becoming the WisdomTree Continuous Commodity Index Fund (NYSEARCA: GCC ) and the WisdomTree Coal Fund (NYSEARCA: TONS ). Guggenheim Russell 1000 Equal Weight ETF (NYSEARCA: EWRI ) will cease to exist 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. Guggenheim Russell 2000 Equal Weight ETF (NYSEARCA: EWRS ) will become Guggenheim S&P SmallCap 600 Equal Weight ETF (EWSC), Guggenheim Russell MidCap Equal Weight ETF (NYSEARCA: EWRM ) will become Guggenheim S&P MidCap 400 Equal Weight ETF (EWMC), and Guggenheim Russell Top 50 Mega Cap ETF (NYSEARCA: XLG ) will become Guggenheim S&P 500 Top 50 ETF ( XLG ). Van Eck Global plans to acquire Yorkville MLP ETFs and hoped to close the transaction in the fourth quarter. The plans were approved on December 17, 2015 and the reorganizations are now expected to close on February 8, 2016 . 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.

Worst Performing Mutual Fund Categories Of 2015

We have already shared with you the best and worst performing mutual funds in the Zacks Mutual Fund Commentary section, and last time we discussed the Top 5 Mutual Fund Sectors in 2015 . Now, let’s look at the worst performing mutual fund categories. Each of the quarters of 2015, save the final one, spelt agony for investors. Benchmarks saw their worst yearly finishes since 2008, and mutual fund investors too felt the pain. The year 2015 turned out to be anything but rewarding for most mutual funds. Stock funds also proved volatile, and bond funds delivered losses. While 87% of the funds gained in the first quarter of 2015, just 41% of mutual funds could manage to finish in the green in the second quarter. In the third quarter, a dismal 17% of mutual funds managed to finish in the green. The fourth quarter was the only saving grace, wherein many mutual fund categories attempted to reverse their year-to-date losses. Nonetheless, the majority of fund categories had ended in the red. The biggest category losers in 2015 were in line with certain key events of 2015. For example, the slump in crude prices continued through 2015, dragging the energy sector to the bottom. Meanwhile, the Latin American economies were under pressure, and mutual funds focused on that region too had to share the pain. Similarly, as the commodities were battered by a surging dollar, among other headwinds, these funds too ended deep in the red. Fund Category Losers Below, we present the 10 biggest mutual fund category losers of 2015: Fund Categories 2015 Return (%) Energy Limited Partnership -34.75 Latin America Stock -29.94 Equity Energy -27.16 Commodities Broad Basket -23.97 Equity Precious Metals -23.25 Natural Resources -22.16 Diversified Emerging Mkts -13.78 Commodities Precious Metals -12.16 Utilities -9.86 Pacific/Asia ex-Japan Stk -7.38 Source: Morningstar Energy Sector The downtrend started in mid-2014, and the slump for energy prices continued in 2015 as well. WTI Crude Oil was at $52.72 on Jan 2, 2015, while Brent Crude Oil was at $55.38. From those levels, both slumped to near $36 by the year-end. This obviously resulted in a slump in the energy sector and Equity Energy and Energy Limited Partnership were among the biggest mutual fund category losers in 2015, being 34.8% and 27.2% down, respectively. Moreover, not a single Equity Energy mutual fund ended in the green in 2015. As crude prices are hovering around their 7-year lows, the top energy companies have cut spending (particularly on the costly drilling projects) on the back of lower profit margins. This, in turn, has meant less work for the beleaguered drillers as offshore exploration for new oil and gas projects has almost come to a standstill. Moreover, the dollar surge is another headwind for the energy sector. In the absence of production cuts from OPEC, the resilience of North American shale suppliers to keep pumping despite crashing prices, and a weak European economy, not much upside is expected in oil prices in the near term. Fund to Sell Putnam Global Energy Fund A (MUTF: PGEAX ) seeks long term capital growth. PGEAX invests primarily in global large and mid-size companies involved in exploration, production and refinement of conventional and alternative sources of energy. PGEAX currently carries a Zacks Mutual Fund Rank #4 (Sell). In 2015, PGEAX had lost 35.8% and the 1-year loss is 38.8%. Also, the 3 and 5-year annualized losses now stand at 18.5% and 11.7%. The annual expense ratio of 1.27% is lower than the category average of 1.51%, but PGEAX carries a front-end sales load of 5.75%. Latin America The Latin America Stock fund category was the second biggest loser, which plunged nearly 30% in 2015. Latin America mutual funds had a torrid run in the last five years, witnessing heavy outflows and dismal performances. The year 2015 was no different for them, as they had to tackle the failure of its largest economy, Brazil, among other headwinds. Brazil is witnessing the worst recession in decades after its GDP nosedived 4.5% year on year in the third quarter. Meanwhile, the U.S.-domiciled Latin America funds saw their asset base slump 85% to $1.4 billion since 2010. South America’s second-largest economy, Argentina, has been plagued with weak growth, high inflation, declining currency and debt default issues. The macroeconomic outlook according to LatAmEconomy.org is not favorable either. They acknowledge that the high economic growth prospects experienced in the 2000s are over now. Per the website, “The region continues to deal with a deteriorating external environment that, without experiencing any major internal crises, is leading to modest growth rates. Medium-term growth projections, however, show further downward revisions.” Some experts fear that the outflows may continue, forcing many investors to stay away from the Latin America focused funds. Thus, the survival of some of these funds may well be in question. Fund to Sell Deutsche Latin America Equity Fund A (MUTF: SLANX ) invests most of its assets in Latin American common stocks. A maximum of 20% of assets may be invested in US and other non-Latin American issuers and debt securities that may include junk bonds. SLANX currently carries a Zacks Mutual Fund Rank #5. In 2015, SLANX had lost 30.4% and the 1-year loss is 35.3%. Also, the 3 and 5-year annualized losses now stand at 20.4% and 14.5%. The annual expense ratio of 1.54% is however lower than the category average of 1.75%. SLANX carries a maximum front-end sales load of 5.75%. Commodities, Precious Metals In addition to the slump in crude prices, imminent rate hike fears also kept the commodities under pressure. The U.S. dollar also kept surging in 2015, hitting multi-year high against the euro. Stronger dollar intensified the downward pressure on commodities. Dollar-denominated commodity prices, including crude oil, turned out less affordable to users of other currencies. Moreover, borrowings are set to be costlier and particularly so for high-yield firms. On that note, precious metals too were obviously affected. Remember, higher rates tend to weigh on precious metals, as they provide no yield and struggle to compete with interest paying assets in the wake of rising borrowing costs. As the Fed ended an era of extraordinary monetary policy easing by hiking interest rates in December last year, gold prices plummeted to six-year lows. The gold rout will also hit metal producers who are already reeling under a depressed pricing environment. Gold miners are trimming costs and shedding non-core assets to optimize their portfolio as they grapple with lower prices of the metal. Fund to Sell Vanguard Precious Metals and Mining Investor (MUTF: VGPMX ) invests in domestic and non-US firms that are primarily involved in exploration, mining, development, fabrication, processing, and marketing of metals or minerals such as gold, silver, platinum, diamonds, or other precious metals. A maximum of 20% of its assets may also be invested directly in gold or other precious metal bullion and coins. VGPMX currently carries a Zacks Mutual Fund Rank #4. In 2015, VGPMX had lost 29.6% and the 1-year loss is 35.6%. Also, the 3 and 5-year annualized losses now stand at 26.8% and 22.5%. The annual expense ratio of 0.29% is however lower than the category average of 1.43%. VGPMX carries no sales load. Diversified Emerging Markets & Asia Diversified Emerging Markets slumped 13.8% in 2015. According to Bank of America Merrill Lynch’s monthly survey, fund managers are the most underweight on emerging-market equities against developed-market equities since the survey began in 2001. Goldman Sachs projects that yuan traded at an offshore rate may weaken by 2.5% to 3% against the dollar in the next 2 months. Eventually, the devaluation of the yuan may impact other emerging market currencies, as they are often influenced by the monetary policies in the world’s second-largest economy, China. The bearish outlook is concentrated mostly on Asia. Investors are apprehensive about the slowdown in China’s economy while the U.S. central bank may hike rates. Perhaps, this explains why Pacific/Asia ex-Japan Stock category was the 10th biggest loser in 2015. However, the Japan category was the best gainer in 2015, justified by the multi-year record highs that Japan’s key index hit in 2015. Funds to Sell Rydex Emerging Markets 2X Strategy Fund A (MUTF: RYWTX ) seeks returns that are 200%, excluding fees and expenses, of the daily performance of the BNY Mellon Emerging Markets 50 ADR Index. RYWTX invests most of its assets in companies listed in the underlying index and in derivatives. RYWTX currently carries a Zacks Mutual Fund Rank #5. In 2015, RYWTX had lost 37.4% and the 1-year loss is 35.6%. Also, the 3 and 5-year annualized losses now stand at 26.1% and 22.9%. The annual expense ratio of 1.75% is however lower than the category average of 2.01%. RYWTX carries a maximum front-end sales load of 4.75%. Aberdeen Asia Pacific (ex-Japan) Equity Fund A (MUTF: APJAX ) invests most of its assets in companies from the Asia-Pacific region, but excluding Japan. The equity securities may be of any market capitalization. APJAX may also invest in emerging economies, without any limit. APJAX currently carries a Zacks Mutual Fund Rank #5. In 2015, APJAX had lost 17.6% and the 1-year loss is 19.3%. Also, the 3-year annualized loss now stands at 7.7%. The annual expense ratio of 1.50% is however lower than the category average of 1.57%. APJAX carries a maximum front-end sales load of 5.75%. Original Post