A recap of the number of ETF closures and launches last quarter.
Filing and launch traffic is light today, so we’re taking a look back at ETF launch and closure activity in the first quarter.
U.S.-listed ETF assets reached all-time highs in the last quarter, aided by 53 new additions to the growing market, spanning the universe of short- and long-term investment-grade bond, value, dividend, income and currency-hedged funds.
Most notably, issuers such as Deutsche Bank and iShares continued to serve up currency-hedged ETFs covering all corners of the emerging and developed markets in an attempt to replicate the success of existing currency-hedged ETF such as the db X-trackers MSCI Japan Hedged Equity Fund (DBJP | B-60).
In cases where the dollar rose against a particular currency, currency-hedged ETFs returned more than nonhedged funds last year. For example, DBJP gained 41.1 percent last year, while the nonhedged iShares MSCI Japan ETF (EWJ | B-96) rose 21.8 percent—a function of the yen’s slide against the dollar.
The three new DB funds, their associated fees and tickers are:
- db X-trackers MSCI All World ex US Hedged Equity Fund (DBAW), 0.40 percent, or $40 for every $10,000 invested
- db X-trackers MSCI South Korea Hedged Equity Fund (DBKO), 0.58 percent, or $58 for every $10,000 invested
- db X-trackers MSCI Mexico Hedged Equity Fund (DBMX) 0.50 percent, or $50 for every $10,000 invested.
iShares’ latest hedged offerings include:
- iShares Currency Hedged MSCI Japan ETF (HEWJ), 0.48 percent, or $53 for every $10,000 invested
- iShares Currency Hedged MSCI Germany ETF (HEWG), 0.53 percent, or $53 for every $10,000 invested
- iShares Currency Hedged MSCI EAFE ETF (HEFA), 0.39 percent, or $39 for every $10,000 invested
At the same time, the industry bid adieu to 17 ETFs that did not quite capture investors’ imaginations or asset flows.
On the closure front, issuers closed strategies targeting commodities and equity sectors while focusing on nurturing everything from plain-vanilla pure-beta funds to launching prospective products focused on dividends, minimum volatility and other factor tilts.
iShares stole the ETF graveyard spotlight last quarter, shelving 10 All Country World Index (ACWI) ex-U.S. sector funds because of weak asset gathering since the funds were launched more than three years ago.
The 10 funds, which together had about $54 million in assets when the closure plan was announced in January, were brought to market on July 13, 2010.
The funds getting the ax, and their total assets under management at the time of closure, include:
iShares MSCI ACWI ex U.S. Consumer Discretionary (AXDI), $4.25 million
iShares MSCI ACWI ex U.S. Consumer Staples (AXSL), $7.71 million
iShares MSCI ACWI ex U.S. Energy (AXEN), $5.33 million
iShares MSCI ACWI ex U.S. Financials (AXFN , $5.16 million
iShares MSCI ACWI ex U.S. Healthcare (AXHE), $12.42 million
iShares MSCI ACWI ex U.S. Industrials (AXID), $3.37 million
iShares MSCI ACWI ex U.S. Information Technology (AXIT), $3.35 million
iShares MSCI ACWI ex U.S. Materials (AXMT), $2.45 million
iShares MSCI ACWI ex U.S. Telecommunication Services (AXTE), $3.18 million
iShares MSCI ACWI ex U.S. Utilities (AXUT), $6.6 million
To be sure, the pace of closures has generally slowed in the U.S. ETF industry, which, on the whole, is in a full-growth phase.
More than 1,500 ETFs are now listed in the U.S., and total assets under management are now at an all-time high of about $1.757 trillion, according to data compiled by ETF.com.