Deutsche Closing Bulk Of ETNs

[Editor's Note: This article was updated as of March 26, 2019.]

Deutsche Bank will be delisting 12 of its 16 ETNs on April 11. Its four remaining ETNs offer short and long exposures to gold futures.

The ETNs due to delist include:

• DB Agriculture Double Long ETN (DAG)
• DB Agriculture Long ETN (AGF)
• DB Base Metals Double Short ETN (BOM)
• DB Base Metals Double Long ETN (BDD)
• DB Base Metals Short ETN (BOS)
• DB Commodity Double Long ETN (DYY)
• DB Commodity Short ETN (DDP)
• DB Crude Oil Long ETN   (SZO)
• DB Crude Oil Short ETN (OLO)
• Elements Dogs of the DOW Dow Jones High Yield Select 10 Total Return ETN (DOD)
• Elements Morningstar Wide Moat Focus Total Return Index ETN (WMW)
• FI Enhanced Global High Yield ETN (FIEG)

While nine of the ETNs fall under Deutsche’s commodity ETN lineup, two of the products are from the ELEMENTS ETN platform, and another is a product that was launched for the use of Fisher Investments in its own strategies. 

Although the ETNs are being delisted and will still be available on the over-the-counter market, ETF.com treats such actions as closures. In this case, issuances of new notes have been suspended since Jan. 1, 2016, and a press release from Deutsche Bank notes that the ETNs could see a "significant drop in liquidity" in the secondary market. It also adds that the minimum repurchase size has been lowered to 500 securities to facilitate investors exiting the products. 

"In many ways, delisting is the worst of all possible end-games for an exchange-traded product," said Dave Nadig, ETF.com's managing director. "Investors who may not have been paying attention end up with an extremely hard-to-liquidate position, with little hope they’ll get fair value when they do find a buyer. At least with an actual fund closure, investors get 'bought out' at fair value eventually."

"The level of closures this year has been high relative to previous years," added Nadig. "In 2018, ETF closures hit a record level, largely due to the shutdown of 50 iPath ETNs last April. However, launches have been coming along fairly fast and furious since the start of 2019."

By the end of the first quarter, more than 40 ETFs will have closed. The dozen ETNs shutting in April will put 2019 at roughly the same level of the prior year.

Deutsche Bank’s four remaining ETNs include:

• DB Gold Double Long ETN (DGP)
• DB Gold Double Short ETN (DZZ)
• DB Crude Oil Double Short ETN (DTO)
• DB Gold Short ETN (DGZ)

Contact Heather Bell at [email protected]