Coming Wavelet Of ETN Closures

Although it cannot be compared to April, which saw 50 iPath ETNs close or delist, June will be having its own little storm of ETN shutdowns. UBS is closing five ETRACS and three VelocityShares ETNs.

The eight products will see their last day of trading on June 25. The notes, their tickers and their assets under management are as follows:

• ETRACS 1x Monthly Short Alerian MLP Infrastructure TR ETN (MLPS), $1.9 million
• ETRACS UBS Bloomberg CMCI Livestock Total Return ETN (UBC), $2.4 million
• ETRACS UBS Bloomberg CMCI Industrial Metals Total Return ETN (UBM), $1.9 million
• ETRACS UBS Bloomberg CMCI Energy Total Return ETN (UBN), $2.1 million
• ETRACS Monthly Reset 2x Leveraged S&P 500 Total Return ETN (SPLX), $5.8 million
• VelocityShares VIX Tail Risk ETN (BSWN), $2.2 million
• VelocityShares VIX Variable Long/Short ETN (LSVX), $3 million
• VelocityShares VIX Short Volatility Hedged ETN (XIVH), $4.8 million

Clearly, none of the shuttering ETNs have gathered much in the way of assets. UBS currently is the issuer backing 45 different ETNs, and the closures will bring the total number down to 37.

However, the eight UBS closures are not the only ETN closures in June. On June 4, Barclays shut its Fisher Investments bespoke ETN, the Barclays ETN+FI Enhanced Global High Yield ETN (FIGY). Shortly before it closed, FIGY had nearly $85 million in assets under management, but because of its bespoke nature, Fisher, as the product’s main investor and backer, could have triggered the shutdown due to a change in the company strategy and simply pulled its client assets from the ETN.

Total completed ETF closures for the year currently stand at 83. If you subtract the outlier shutdown of 50 iPath ETNs in April, the amount of closures for 2018 so far exactly matches the 33 closures that had taken place by this time in 2017. Given last year was a record-breaking one in terms of the amount of closures, it looks like we have another banner year for ETF shutdowns ahead of us.

Contact Heather Bell at [email protected]