Since the market meltdown started ramping up in late February, launches have virtually dried up, the most recent ones occurring on March 2. However, closures have taken off. In particular, a slew of exchange-traded notes are being taken off the market, either via closure or delisting. Below is a timeline of related developments:
On March 6, the iPath US Treasury Long Bond Bear ETN (DLBS) began the delisting process. It is now only available for over-the-counter trading.
Meanwhile, at around the same time, Credit Suisse annnouned that it would call the Credit Suisse X-Links Monthly Pay 2xLeveraged Alerian MLP Index ETN (AMJL) on March 18 after stopping creations on March 9. The ETN’s price had been in a drawn-out decline for years, but began to fall sharply after Feb. 20.
On March 13, three ETNs issued by UBS underwent mandatory redemptions after all three experienced sharp declines that drove them below their minimum required indicative values: The ETRACS Monthly Reset 2xLeveraged ISE Exclusively Homebuilders ETN (HOML), ETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B (MLPZ) and ETRACS Monthly Pay 2xLeveraged U.S. Small Cap High Dividend ETN (SMHD).
March 16 saw the shutdown of the Franklin Liberty International Opportunities ETF (FLIO), which launched in 2017 and had a little more than $1 million in assets under management.
On March 17, another round of mandatory redemptions was announced for six more UBS ETNs, all of them leveraged. They included the following:
- ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index ETN (BDCL)
- ETRACS Monthly Pay 2xLeveraged U.S. High Dividend Low Volatility ETN (HDLV)
- ETRACS 2xLeveraged Long Wells Fargo Business Development Company ETN Series B (LBDC)
- ETRACS Monthly Pay 2xLeveraged Wells Fargo MLP Ex-Energy ETN (LMLP)
- ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN (MORL)
- ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN Series B (MRRL)
Those were followed on March 18 by the announcement that there would be a mandatory redemption for the ETRACS Monthly Pay 2xLeveraged Diversified High Income ETN (DVHL).
But leveraged and inverse ETFs were also affected. ProShares announced that six of its triple exposure ETFs would shut down as of March 27. The affected funds scheduled to shut down include the following:
- ProShares UltraPro Financial Select Sector (FINU)
- ProShares UltraPro Short Financial Select Sector (FINZ)
- ProShares UltraPro 3x Short Crude Oil ETF (OILD)
- ProShares UltraPro 3x Crude Oil ETF (OILU)
- ProShares UltraPro Nasdaq Biotechnology (UBIO)
- ProShares UltraPro Short Nasdaq Biotechnology (ZBIO)
Contact Heather Bell at [email protected]