ETF Watch: Q1 Launches Outpace 2016

April 04, 2017

With the first quarter of 2017 ending last week, it’s worth doing a recap of the launches and closures taking place in the ETF space. While we had two more launches in the first quarter of this year than we did in 2016, for a total of 46 this year, closures were down from the first quarter of 2016, falling from 25 to 21.

Launches

But this year is seeing some interesting trends. First, although a total of eight asset allocation ETFs launched in all of 2016, the first quarter of 2017 saw as many asset allocation funds roll out so far this year.

And although seven commodity ETFs (not including leveraged or inverse funds) rolled out in all of 2016, the first three months of this year have seen six such funds make their debuts—with still nearly nine months left to go on the year.

However, the largest ETF launch by far of 2017 to-date is the rollout of the PowerShares Treasury Collateral Portfolio (CLTL) in the first half of January. The fund currently has some $371 million in assets under management. Given that CLTL is targeted at institutions and other large investors looking for a liquid place to park their cash, it’s not really a surprise that it pulled in so much.

The runners-up are two ETFs from a new issuer. The QuantX Risk Managed Multi-Asset Total Return ETF (QXTR) and the QuantX Risk Managed Growth ETF (QXGG) currently have $68 million and $59 million in AUM, making them the second- and third-largest launches this year.

Closures

With 21 closures taking place in the first three months of 2017 versus 25 during the same time period last year, the most striking issue is the number of smart-beta funds in the mix. Most of the closing funds this year can be classified under that umbrella.

WisdomTree shut down seven funds on its own, five of which fell into the smart-beta bucket, while Elkhorn, ETF Securities and Oppenheimer closed two smart-beta funds apiece, not to mention offerings from Gavekal and RBC.

However, the five closures that took place on March 31 did not fall into that particular category. They included two actively managed fixed-income ETFs: the PIMCO Diversified Active Income ETF (DI) and the PIMCO Global Advantage Inflation-Linked Bond Active ETF (ILB). Also, Direxion shut down three of its inverse/leveraged ETFs:

  • Direxion Daily Cyber Security & IT Bear 2x Shares (HAKD)
  • Direction Daily Pharmaceutical & Medical Bull 2x Shares (PILL)
  • Direction Daily Pharmaceutical & Medical Bear 2x Shares (PILS)

Contact Heather Bell at [email protected].

 

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