Thursday, January 9, 2014

ETF Liquidation Watch List

As new ETF issuance persists, we also continue to watch the parade of ETF closures - let' s take a quick look at yesterday’s release of the ETFG Monthly ETP Liquidation Watch.

On the January 2014 Liquidation Watch List there are 89 ETPs which is substantially more than the 72 ETFs that were on the December 2013 Liquidation Watch List.  Interestingly, out of the approximately 1,528 products in the ETP universe last month, there were 188 that had less than $5M in assets under management, an astounding 602 that had negative performance for the training twelve month period and 1,215 that were eligible because they were issued more than two years ago.

By way of background, the ETFG Liquidation Watch List is not meant to predict that each month’s listings are those ETPs on the brink of closing.  Rather, the list is intended to assist investors and financial professionals to simply be aware that these funds contain all three characteristics which we think would reasonably bring them under the scrutiny of their respective issuer and hopefully to the attention of any Investor or Advisor.  These three criteria are simple and very straightforward:
  1. Assets Under Management – AUM of less than $5 million
  2. Age – the ETP has been in existence more than 2 years
  3. Performance – Negative trailing twelve month performance
Combined, these parameters identify those ETPs that have had enough time (2 years) to gather meaningful assets ($5M) in order to become profitable but have not done so and additionally have had losing performance for the last twelve month period.

Please take a closer look at this month's Liquidation Watch List to understand if there are names on it in which you may be considering taking positions. 

Thank you for reading ETFG Daily Perspectives and please be sure to see our monthly commentary on this topic at

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.