Specifically, SYLD invests in 100 stocks with market caps greater than $200 million that rank among the highest in (a) paying cash dividends, (b) engaging in net share repurchases, and (c) paying down debt on their balance sheets.  The manager believes that a focus on all three factors – a trio collectively known as shareholder yield – produces a portfolio of companies that offer strong free cash flow characteristics.

The SYLD Investment Case asserts the following:  focusing on dividends alone misses the broader picture, share repurchases have historically outpaced dividends, free cash flow is a classic value investment approach, diversification is ensured through maximum sector percentage caps, SYLD is the first ETF to focus on shareholder yield, and actively managed ETFs have advantages.  Additional background on the investment philosophy is contained the book “Shareholder Yield: A Better Approach to Yield Investing” by Mebane Faber.

SYLD intends to focus on large cap domestic securities while allowing for stocks as small as $200 million in market capitalization and foreign issuers with U.S. listed ADRs to be included.  Current capitalization allocations are 56% large cap, 34% mid cap, and 10% small cap.

Cambria, the fund’s manager, appears to take an equal weight approach when allocating the ETF’s 100 holdings.  The largest positions as a result of recent market action include Boston Scientific (BSX), Usana Health Sciences (USNA), Nu Skin Asia Pacific (NUS), Mastec (MTZ), and Harte-Hanks (HHS).  Sector breakdown currently comes in at Financials 20%, Consumer Discretionary 17%, Technology 15%, Industrials 13%, and Consumer Staples 13%.

The new ETF has an expense ratio of 0.59%, and additional background information is contained in the press release (pdf).  Cambria becomes a new ETF sponsor with the launch of SYLD.  However, the investment firm is not new to the ETF world.  Cambria, and portfolio managers Mebane Faber and Eric Richardson, are the team behind the AdvisorShares Cambria Global Tactical ETF (GTAA) [GTAA: ETF Version Of The Ivy Portfolio].

Analysis/Opinion:  Contrary to what its name might suggest, the Cambria Shareholder Yield ETF is neither a dividend nor an income fund.  According to the SYLD home page, its stated objective is “absolute return” with dividends being paid only once per year.  This unusual twist is confirmed by the fact sheet (pdf).  Presumably, this will force investors to focus on the total return aspect of the fund instead of current dividend yield, which the fund’s advisor believes misses the broader picture.

Additionally, the “absolute return” designation might also fail to meet expectations.  I could not find any description of how the fund’s risk-management techniques and investment approach would fit any common definition of absolute return.  SYLD appears to be a fully invested, long-only, investment methodology.  It is hard to see how it will meet its absolute return objective.  The prospectus (pdf) contains an additional objective though, one that emphasizes income and capital appreciation.

The expense ratio of 0.59% is lower than the average actively managed equity ETF and significantly below the 1.41% of Cambria’s other fund offering, the AdvisorShares Cambria Global Tactical ETF (GTAA).  By going it alone and removing the fund-of-fund expenses associated with GTAA, Cambria is able to cut shareholder expenses by more than half.

The fund literature provides no clues as to what SYLD’s shareholders should expect in the way of dividend yield or total shareholder yield.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

STREAM S&P Dynamic Roll Commodities Fund (BNPC) was the single ETF delisted in April.  It provides a real-time example of why investors should sell shares prior to delisting and avoid the liquidation process.  BNP Paribas, the sponsor of the ETF formerly known as BNPC, did not liquidate the portfolio and has not announced any plans to do so.  The BNPC website has been taken down.  Technically, the fund still exists as CUSIP 86324B103.  If you own shares, good luck trying to find a buyer at a fair price.

For our purposes, we count ETPs as being born on the first day their listing becomes active on a U.S. exchange.  Likewise, delisting constitutes death, since the product is no longer easily accessible to retail investors.  BNPC died after the close of trading on April 12.  The future of BNP Paribas as a viable participant in the U.S. ETF market probably died the same day.  This is a competitive market with little tolerance for sponsors that are not shareholder friendly.

Nine products went the entire month of April without any trades.  iPath Short Enhanced MSCI EAFE ETN (MFSA) last traded on October 9, 2012.  Barclay’s long version of that product, iPath Enhanced MSCI EAFE ETN (MFLA) hasn’t traded in about seven weeks and was quoted today with a $72.00/$216.00 Bid/Ask spread.  Helloooo, Barclay’s iPath, is anybody minding the store?  A total of 157 ETPs had zero volume on the last day of the month.

Complete List of 334 Products on ETF Deathwatch for May 2013 

The 18 ETPs added to ETF Deathwatch for May:

1. Barclays ETN+ Shiller CAPE ETN (CAPE)
2. EGShares Emerging Markets Core (EMCR)
3. EGShares GEMS Composite (AGEM)
4. EGShares India Small Cap (SCIN)
5. ELEMENTS MLCX Grains Total Return ETN (GRU)
6. First Trust CBOE S&P 500 VIX Tail Hedge (VIXH)
7. FlexShares Ready Access Variable Income (RAVI)
8. Market Vectors Fallen Angel High Yield Bond (ANGL)
9. PowerShares DB Agriculture Long ETN (AGF)
10. PowerShares DB German Bund Futures ETN (BUNL)
11. ProShares Ultra Investment Grade Corporate (IGU)
12. ProShares Ultra Russell2000 Value (UVT)
13. ProShares USD Covered Bond (COBO)
14. SPDR Nuveen S&P VRDO Municipal Bond (VRD)
15. SPDR S&P 1500 Momentum Tilt (MMTM)
16. SPDR S&P 1500 Value Tilt (VLU)
17. WisdomTree Commodity Country Equity (CCXE)
18. WisdomTree Large Cap Value (EZY)

The 7 ETPs removed from ETF Deathwatch due to improved health:

1. Direxion Daily 7-10 Year Treasury Bull 3x (TYD)
2. First Trust NASDAQ ABA Community Bank (QABA)
3. Global X Top Guru Holdings Index (GURU)
4. PowerShares KBW Capital Markets (KBWC)
5. PowerShares KBW Property & Casualty Insurance (KBWP)
6. PowerShares MENA Frontier Countries (PMNA)
7. ProShares UltraShort Nasdaq Biotechnology (BIS)

The 1 ETF removed from ETF Deathwatch due to death and delisting:

1. STREAM S&P Dynamic Roll Commodities Fund (BNPC) [BNPC To Delist: No Liquidation Plans Announced]

Additional Data/Resources:

Five Steps to Avoid Disaster When Your ETF Closes 

ETF Deathwatch Criteria (objective criteria used to generate list)

ETF Deathwatch Archives (past monthly issues)

Disclosure covering writer, editor, and publisher:  Long CUSIP 86324B103 to have a front row seat to this train wreck.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

However, the footnotes explain this is just an “estimate” because any estimate of deferred income tax expense “cannot be reliably predicted”.  Their words, not mine.  They are essentially claiming it is an estimate of something that cannot be estimated. 

The document further contradicts itself by stating, “The Fund’s accrued deferred tax liability, if any, is reflected each day in the Fund’s net asset value per share.”  In other words, it’s not an estimate at all and is known with enough precision to clip the NAV daily and issue an updated intraday NAV every 15 seconds.

Additionally, the 4% estimate has been far too low.  According to AMLP’s performance data page, AMLP has trailed its index by 28.36% since inception through March 31.  This equates to 8.44% per year.  Since AMLP’s stated objective is to track the index less fees and expenses, then fees and expenses must total 8.44% per year.  Therefore, my estimate of the deferred income tax expenses that shareholders have paid since inception is closer to 7.59% per year (8.44% underperformance minus 0.85% management fee).

According to AMLP’s holding data for May 2, 2013, AMLP has now taken $443,228,015.21 from shareholders to pay the fund’s taxes.  This is in addition to the taxes AMLP has already paid.  For most ETPs, investors scrutinize expense ratios closely, questioning every 0.1%.  AMLP shareholders seem to be either oblivious, blinded by the yield, or think 7.59% per year is a fair price to avoid a K-1 statement.

Related articles:

• Beware of MLPs in ETF Wrappers: AMLP 
• ALPS Responds To AMLP Article 
• AMLP’s Dirty Little Secret 
• Alerian MLP ETF Has Higher Expenses Than Hedge Funds 
• AMLP Makes Tax Payment and Raises Expense Ratio 
• AMLP Expense Ratio Surges To 4.86% 
• Open Letter to ETF Regulators 

Disclosure covering writer, editor, and publisher:  Long AMJ.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Unlike March, where 100% of new offerings were income oriented, April’s new arrivals had a good mixture of objectives: Two frontier funds, five emerging market ETFs (two with 3x leverage), three international dividend plays, three factor products (plus two actively managed ETFs using those factor tilts), five target maturity bond funds, and a silver covered-call ETN.

April’s sore point was the decision by BNP Paribas to delist the STREAM S&P Dynamic Roll Commodities Fund (former ticker = BNPC) without liquidating it.  I vehemently warned the ETF community that BNP Paribas was not planning to liquidate this ETF, and unfortunately, that is the case.  When shareholders receive their monthly brokerage statements, they will be horrified to see those ETF shares still in their account but with a CUSIP number instead of a ticker symbol.  I bought a few shares prior to the delisting in order to have a front row seat to this train wreck.  BNP Paribas, welcome to the ETF Hall of Shame.  

Assets grew by 1.7% in April to $1.49 trillion.  The number of funds with more than $1 billion in assets now stands at a record 202, exceeding 200 for the first time ever.  These products represent less than 14% of the offerings, yet control nearly 89% of the assets. 

Trading activity picked up significantly for the month with $1.43 trillion of ETFs and ETNs changing hands, a 30% increase over March.  Nine products averaged more than $1 billion per day and accounted for 57.8% of all ETP dollars traded.  The monthly turnover rate (total dollar volume divided by assets under management) came in at 0.96. 

April 2013 Month End	ETFs	ETNs	Total
Currently Listed U.S.	1,251	208	1,459
Listed as of 12/31/2012	1,239	206	1,445
New Introductions for Month	20	1	21
Delistings/Closures for Month	1	0	1
Net Change for Month	+19	+1	+20
New Introductions 6 Months	53	9	62
New Introductions YTD	39	4	43
Delistings/Closures YTD	27	2	29
Net Change YTD	+12	+2	+14
Actively-Managed Listings	61	n/a	61
Assets Under Mgmt ($ billion)	$1,472	$18.1	$1,490
% Change in Assets for Month	+1.7%	+1.5%	+1.7%
Qty AUM > $10 Billion	31	0	31
Qty AUM > $1 Billion	199	3	202
Qty AUM > $100 Million	603	23	626
% with AUM > $100 Million	48.2%	11.1%	42.9%
Monthly $ Volume ($ billion)	$1,389	$40.6	$1,430
% Change in Monthly $ Volume	+30.8%	+10.3%	+30.1%
Avg Daily $ Volume > $1 Billion	8	1	9
Avg Daily $ Volume > $100 Million	68	2	70
Avg Daily $ Volume > $10 Million	260	13	273

Data sources:  Daily prices and volume of individual ETPs from Norgate Premium Data.  Fund counts and all other information compiled by Invest With An Edge.

New products launched in April (sorted by launch date):

1. Global X Central Asia & Mongolia Index ETF (AZIA) [AZIA overview]
2. Global X Nigeria Index ETF (NGE) [NGE overview]
3. SPDR Blackstone/GSO Senior Loan ETF (SRLN) [SRLN overview]
4. VelocityShares Emerging Asia DR ETF (ASDR) [ASDR overview]
5. VelocityShares Emerging Markets DR ETF (EMDR) [EMDR overview]
6. VelocityShares Russia DR ETF (RUDR) [RUDR overview]
7. Direxion Daily Brazil Bull 3X Shares (BRZU) [BRZU overview]
8. Direxion Daily South Korea Bull 3X Shares (KORU) [KORU overview]
9. FlexShares International Quality Dividend Defensive Index Fund (IQDE) [IQDE overview]
10. FlexShares International Quality Dividend Dynamic Index Fund (IQDY) [IQDY overview]
11. FlexShares International Quality Dividend Index Fund (IQDF) [IQDF overview]
12. Credit Suisse Silver Shares Covered Call ETN (SLVO) [SLVO overview]
13. iShares Enhanced U.S. Large-Cap ETF (IELG) [IELG overview]
14. iShares Enhanced U.S. Small-Cap ETF (IESM) [IESM overview]
15. iShares MSCI USA Momentum Factor ETF (MTUM) [MTUM overview]
16. iShares MSCI USA Size Factor ETF (SIZE) [SIZE overview]
17. iShares MSCI USA Value Factor ETF (VLUE) [VLUE overview]
18. iShares 2016 Investment Grade Corporate Bond ETF (IBCB) [IBCB overview]
19. iShares 2018 Investment Grade Corporate Bond ETF (IBCC) [IBCC overview]
20. iShares 2020 Investment Grade Corporate Bond ETF (IBCD) [IBCD overview]
21. iShares 2023 Investment Grade Corporate Bond ETF (IBCE) [IBCE overview]

Product closures/delistings in April (sorted by delisting date):

1. STREAM S&P Dynamic Roll Commodities Fund (BNPC) [BNPC To Delist: No Liquidation Plans Announced]

Product changes in April:

1. Effective April 2, Direxion reverse split 8 ETFs and forward split 8 ETFs.
2. After the close on April 15, Deutsche Bank (DB) reopened creations for the 26 PowerShares DB ETNs, reversing the halt it initiated on March 29.
3. Effective April 16, Vanguard transitioned nine of its funds from MSCI indexes to FTSE and CRSP indexes.
4. Effective April 23, ProShares changed the underlying indexes from MSCI to FTSE for ProShares Ultra Europe (UPV) and ProShares UltrShort Europe (EPV).
5. April 30 was the last day of commission-free trading for 10 iShares at Fidelity.

Announced Product Changes for Coming Months:

1. Effective May 1, the SPDR FTSE/Macquarie Infrastructure 100 ETF (GII) will become the SPDR S&P Global Infrastructure ETF (GII).
2. Effective May 1, two iShares ETFs will drop “index” from their names, becoming iShares MSCI Frontier 100 Fund (FM) and iShares MSCI Kokusai Fund (TOK).  They will continue to be passively managed index funds.
3. May 28 will be the last day of trading for iShares Diversified Alternatives Trust (ALT).
4. Effective June 21, the Sustainable North American Oil Sands ETF (SNDS) will undergo an extreme makeover, becoming the YieldShares High Income ETF (YYY) with a different investment objective.

Previous monthly ETF statistics reports are available here.

Disclosure covering writer, editor, publisher, and affiliates: Long the ETF formerly known as BNPC.   No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Launched in November 2009, ALT was the first ETF from iShares that sought to provide alpha instead of just beta exposure.  The actively managed ETF has stated objectives of 6%-8% annualized standard deviation and a Sharpe ratio of 0.50 to 0.75, which translates to annual returns of 4%-7%.  Since inception, ALT has generated just a +0.9% annual return at 6.7% standard deviation, for about a 0.12 Sharpe ratio.

The closure is somewhat surprising as ALT is not a zombie ETF, and there are at least 39 other iShares in worse shape on ETF Deathwatch.  It is the ninth largest of the 44 ETFs in the Alternative Strategies category of the ETF Field Guide.  With $57 million under management, it is has more assets than typical ETF closures.  It is far from being the largest closure though, as PowerShares DB Crude Oil Double Long ETN (former ticker DXO) held more than $600 million when it announced plans to liquidate.

Active management does not appear to be a contributing factor in the decision to close ALT, as more than 29% of Alternative Strategy ETFs fit the actively managed description.  However, it is the only ETF in the category to issue K-1 statements instead of 1099s, which could be a factor.  As always, we recommend selling your shares prior to delisting to avoid any unwelcome surprises.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

The “bond bubble” is now well into its fifth year.  Investors heeding the warnings of bond market fear-mongers missed an opportunity for substantial gains.  The iShares Barclays Aggregate Bond ETF (AGG) generated a cumulative total return of more than 23% since the end of 2008.  Shorting bonds since the bubble first appeared has been a losing proposition.

You might be asking how this is possible if interest rates reached historic lows in 2008.  The answer is simple – interest rates have continued to trend downward.  For any given market, a “historic” level is not an absolute limit.  The 10-year Treasury yield fell to nearly 2.0% that year, a level last reached in the 1940s and previously never seen by most investors alive today.  Furthermore, the decline did not stop there.  Today, the 10-year Treasury yields just 1.7%.

Can yields go lower still?  Of course they can. Germany’s 10-year yield is 1.3% and Japan’s is only 0.6%.  The secular decline in U.S. interest rates will eventually end.  It could happen this week, or it could happen years from now.  The bubble may burst, or it may slowly deflate.  Accurately forecasting the future is an uncertain endeavor.  There is an exception though, anyone buying a 10-year U.S. Treasury today will receive an annualized return of 1.7% (before inflation and taxes) if held to maturity in 2023.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Peaks in Deathwatch membership tend to lag peaks in new product introduction by about a year.  The same can be said about troughs, as a healthy and growing industry gradually absorbs the available products.  Launches are currently occurring at their slowest pace since 2006.  Therefore, if these relationships hold up in the future, I expect the number of products on Deathwatch to decline further throughout 2013.

We’ve been hearing about the imminent wave of actively managed ETFs arriving on the scene for many years now.  If and when these predictions ever come true, the en masse arrival of actively managed ETFs will likely lead to another uptick in the quantity of struggling products.  A wild card that could alter this scenario would be easy access to ETFs for the majority of 401(k) accounts. 

I’m often asked why ETFs fail.  My usual response is that it is typically the result of an inadequate marketing plan as opposed to a bad product design.  Ben Johnson, director of passive fund research at Morningstar, recently summed it up nicely by stating, “This is a market defined by fairly low barriers to entry, but very high barriers to long-run success.”

Six names joined ETF Deathwatch for April and four of them were ETNs.  Twenty-four came off the list, with 19 of them showing improved health while the remaining five were delisted.  Nine products went the entire month of March without any trades.  The iPath Short Enhanced MSCI EAFE ETN (MFSA) last traded on October 9, 2012 and today has a bid/ask spread of $29/$87.  A total of 161 ETPs had zero volume on the last day of the month.

Complete List of 324 Products on ETF Deathwatch for April 2013 

The 6 ETPs added to ETF Deathwatch for April:

1. iShares Industrials Sector Bond (ENGN)
2. PowerShares DB 3x German Bund Futures ETN (BUNT)
3. PowerShares DB Commodity Short ETN (DDP)
4. PowerShares DB Crude Oil Short ETN (SZO)
5. ProShares UltraShort Industrials (SIJ)
6. RBS US Large Cap Alternator ETN (ALTL)

The 19 ETPs removed from ETF Deathwatch due to improved health:

1. AlphaClone Alternative Alpha (ALFA)
2. db X-trackers MSCI Japan Hedged Equity (DBJP)
3. First Trust Germany AlphaDEX (FGM)
4. First Trust ISE Global Platinum (PLTM)
5. First Trust Japan AlphaDEX (FJP)
6. First Trust Latin America AlphaDEX (FLN)
7. First Trust NASDAQ Clean Edge Green Energy (QCLN)
8. First Trust Switzerland AlphaDEX (FSZ)
9. First Trust United Kingdom AlphaDEX (FKU)
10. iShares B-Ca Rated Corporate Bond (QLTC)
11. iShares MSCI Emerging Markets Latin America (EEML)
12. iShares MSCI Emerging Markets Small Cap (EEMS)
13. PowerShares Dynamic Financials (PFI)
14. ProShares Ultra MSCI Mexico Capped IMI (UMX)
15. SPDR S&P International Consumer Discretionary (IPD)
16. SPDR S&P International Consumer Staples (IPS)
17. Teucrium Wheat (WEAT)
18. Vanguard S&P Small-Cap 600 Growth (VIOG)
19. WisdomTree Middle East Dividend (GULF)

The 5 ETPs removed from ETF Deathwatch due to death and delisting:

1. Pax MSCI North America ESG (NASI)
2. Guggenheim ABC High Dividend (ABCS)
3. Guggenheim S&P MidCap 400 Equal Weight (EWMD)
4. Guggenheim S&P SmallCap 600 Equal Weight (EWSM)
5. Guggenheim Wilshire 4500 Completion (WXSP)

Additional Data/Resources:

• Five Steps to Avoid Disaster When Your ETF Closes 
• ETF Deathwatch Criteria (objective criteria used to generate list)
• ETF Deathwatch Archives (past monthly issues)

Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

The price-based version of the index the financial media reports on every day does not account for dividends.  With dividends reinvested, the S&P 500 actually surpassed its old high last August.  Since including dividends provides a better comparison, we’ll use dividend-adjusted data in our sector performance discussion below.

Consumer Staples was the first sector to establish a new high and did so more than three years ago in March 2010.  Next to make a full recovery was Consumer Discretionary in January 2011.  April 2011 was a good month, as both Health Care and Industrials established new highs.  For more than a year, these were the only four sectors hitting new highs.  Utilities became the fifth and final one in June 2012, just two months before the S&P 500 accomplished the task.

Looking at a chart that only goes back to 2007 could fool you into thinking that Technology established a new high in January 2012, but that would be only partially correct.  Yes, Technology recovered from the financial bear market by early 2012, but it was still down nearly 50% from its 2000 peak.  Today, Technology is still 42% below its all-time high.

Of the sectors yet to make new highs, Materials and Energy are the closest two, with each about 5% away.  Like Technology, Telecom is still reeling from the 2001-2002 bear market and is 46% below its former peak.  The Financials sector was at the heart of the recent bear market and is 45% below its previous high.

Sector performance typically displays a wide level of divergence in nearly every decade, and recent history is no exception.  Five sectors have been making new highs, and two are within a few percentage points of doing so.  The lagging trio of Financials, Technology, and Telecom are all more than 40% below their prior peaks.  Just think where the S&P 500 might be today without these three.

Sectors

Investor nervousness is now obvious in the Sector rankings.  All sectors remain in positive trends, but the relative order is revealing.  The defensive trio of Health Care, Consumer Staples, and Utilities now owns the top three spots.  Health Care pushed Consumer Staples aside to grab first place even though Consumer Staples added strength during the week.  Utilities jumped from fifth to third to complete the defensive alignment.  Consumer Discretionary and Financials managed to hold on to their upper tier rankings during the shakeup.  Real Estate moved up two spots to sixth as Industrials and Energy each slid a notch.  Telecom held its position, and there is a large drop in strength between it and the bottom two categories.  Technology’s absolute strength continued to decline, although on a relative basis it finally climbed out of last place.  Materials now holds that dubious honor.

Styles

The Style rankings are exhibiting more compression this week with only 10 points separating the top from the bottom.  However, the lineup fails to confirm the “defensive” posture of the Sector rankings because the expected relative strength in the blue chip Mega Cap and Large Cap categories is missing.  Mid Cap Value recaptured the top spot, after relinquishing it to Micro Cap for a couple of weeks.  Mid Cap Blend jumped from sixth to second, and Large Cap Value accomplished a similar feat climbing four spots to third.  Micro Cap fell to fourth as part of the reshuffling, which saw the three Small Cap categories all move from the upper half to lower half.  The changes haven’t affected the bottom two categories yet.  Large Cap Growth and Mega Cap continue to be the laggards.

Global

Japan ended the month of March on a high note and then tumbled hard as April trading got underway, dropping about 4% on the first day of the month.  The U.S. is now right on the heels of Japan and could move into first place if Japan continues to falter.  The next four regions in the lineup are nearly the same as last week, with only Pacific ex-Japan and World Equity swapping places.  Canada held its relative position and managed to edge itself across the demarcation line from barely negative to slightly positive.  The bottom four categories remain in downward trends.  Europe, Latin America, and Emerging Markets have been struggling to mount a sustainable rally while China’s troubles appear to be increasing.

Note:  The charts above depict both the relative strength and absolute strength of various market sectors, styles, and geographic locations on an intermediate-term basis.  Each grouping is sorted (top to bottom) by relative strength.  The magnitude of the displayed RSM value is a measure of absolute strength, which is our proprietary method of measuring and reporting the intermediate-term strength as an annualized value.

“If you’re in the right sector at the right time, you can make a lot of money very fast…but such profits can also disappear as quickly as they are made.”

Peter Lynch from Beating The Street

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.  This article was originally published April 3, 2013 in the Invest With An Edge weekly newsletter.

New offerings were all income oriented and included ETFs targeting high yield equities, a money market replacement, Treasury-hedged high yield bonds, target maturity municipal bonds, and an MLP ETN.  Closure activity included the withdrawal of Guggenheim from the leveraged and inverse ETF space.

Assets grew 3.0% in March to $1.47 trillion.  The number of ETFs with asset levels above $10 billion increased by one to 30.  Together, these 30 hold the majority of all ETP assets at 52.2%.  Products above $1 billion now total 197 and hold 88.7% of the assets.

SPDR S&P 500 (SPY) captured 32.9% of the trading activity, failing to achieve the one-third threshold for the first time in many months.  Seven ETPs surpassed $1 billion in average daily dollar volume, accounting for 52.4% of trading.  Products averaging more than $100 million per day increased from 69 to 70 and were responsible for 86.3% of the dollar volume.

March 2013 Month End	ETFs	ETNs	Total
Currently Listed U.S.	1,232	207	1,439
Listed as of 12/31/2012	1,239	206	1,445
New Introductions for Month	4	1	5
Delistings/Closures for Month	10	0	10
Net Change for Month	-6	+1	-5
New Introductions 6 Months	44	10	54
New Introductions YTD	19	3	22
Delistings/Closures YTD	26	2	28
Net Change YTD	-7	+1	-6
Actively-Managed Listings	58	-	58
Assets Under Mgmt ($ billion)	$1,447	$17.8	$1,465
% Change in Assets for Month	+2.9%	+4.5%	+3.0%
Qty AUM > $10 Billion	30	0	30
Qty AUM > $1 Billion	194	3	197
Qty AUM > $100 Million	591	23	614
% with AUM > $100 Million	48.0%	11.1%	42.7%
Monthly $ Volume ($ billion)	$1,062	$36.8	$1,099
% Change in Monthly $ Volume	-2.2%	+4.0%	-2.0%
Avg Daily $ Volume > $1 Billion	6	1	7
Avg Daily $ Volume > $100 Million	68	2	70
Avg Daily $ Volume > $10 Million	243	9	252

Data sources:  Daily prices and volume of individual ETPs from Norgate Premium Data.  Fund counts and all other information compiled by Invest With An Edge.

New products launched in March (sorted by launch date):

1. Global X SuperDividend U.S. ETF (DIV) [Global X Launches U.S. SuperDividend ETF]
2. Barclays ETN+ Select MLP ETN (ATMP) [ATMP overview]
3. AdvisorShares Newfleet Multi-Sector Income ETF (MINC) [MINC overview]
4. iShares 2018 S&P AMT-Free Municipal Series (MUAG) [MUAG overview]
5. Market Vectors Treasury-Hedged High Yield Bond ETF (THHY) [THHY overview]

Product closures/delistings in March (sorted by delisting date):

1. Pax MSCI North America ESG (NASI) [Pax Closing ETF You Never Heard Of]
2. Guggenheim 2x S&P 500 (RSU) [Guggenheim Exits Leveraged and Inverse ETF Biz]
3. Guggenheim ABC High Dividend (ABCS)
4. Guggenheim Airline (FAA)
5. Guggenheim Inverse 2x S&P 500 (RSW)
6. Guggenheim MSCI EAFE Equal Weight (EWEF)
7. Guggenheim S&P MidCap 400 Equal Weight (EWMD)
8. Guggenheim S&P SmallCap 600 Equal Weight (EWSM)
9. Guggenheim Wilshire 4500 Completion (WXSP)
10. Guggenheim Wilshire 5000 Total Market (WVFK)

Product changes in March:

1. Columbia made minor adjustments to the names of four of its five actively managed ETFs effective March 1, with the fifth one occurring on March 25.
2. Fidelity increased its commission-free ETFs to 66 effective March 13.
3. Market Vectors Agribusiness (MOO) and Market Vectors Solar Energy (KWT) started using in-house underlying indexes effective March 18.
4. Vanguard changed indexes and names for two ETFs effective March 27 as part of its MSCI index provider replacement.  The new names are Vanguard FTSE Europe ETF (VGK) and Vanguard FTSE Pacific ETF (VPL).
5. Deutsche Bank created 26 broken products by halting new share issuance for 26 PowerShares DB ETNs effective March 29.

Announced Product Changes for Coming Months:

1. Direxion will reverse split 8 ETFs and forward split 8 ETFs effective April 2.
2. April 30 will be the last day for commission-free trading of 10 iShares at Fidelity.
3. Vanguard fired MSCI as the underlying index provider for 22 of its funds.  During the first half of 2013, six international funds will move from MSCI to FTSE indexes while 16 domestic products will transition from MSCI to CRSP indexes (Vanguard announcement of 10/2/12).

Previous monthly ETF statistics reports are available here.

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

I predicted a short life for this ETF when it launched just 10 months ago, stating that it “brings nothing new to the market (except an unfamiliar name), and will likely struggle to attract investor attention.”  BNP Paribas has only this one ETF, so its demise also marks the firm’s exit from the U.S. ETF market.  The fund currently has about $20 million in assets.

The press release does not give any indication that BNPC plans to liquidate its holdings.  In fact, it implies that no liquidation is forthcoming, as “The Fund has not arranged for listing or registration on another national securities exchange or for quotation of its security in a quotation medium.”

A delisting without liquidation will result in shareholders finding it extremely difficult to locate a buyer or to get a reasonable price if they find one.  No liquidation will also place BNP Paribas in the ETF Hall of Shame, along with Credit Suisse for taking four years to liquidate three ETNs and JPMorgan for delisting BSR in 2009 without liquidation. 

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.