Industry Updates

Bring out your dead

David Tuckwell

More delistings today than any day this year

It's a well-noticed fact that the "ETF graveyard" is erecting more tombstones by the week. But today is unusual. Today more ETFs have been delisted than any other day this year.

There does not seem to be a common theme. Bringing out their dead, issuers have delisted the iShares Finland Gov't Bond ETF; Lyxor's MSCI Taiwan ETF; db-x Australian Dollar ETF; Samsung's Kodex Consumer Discretionary ETF—to name but four. The delistings are from all segments and from all over the world.

It may be a sign of things to come.

That so many ETFs are now getting delisted owes partly to the fact that so many ETFs are getting listed in the first place. As the market crowds, some funds have to fail. Not everyone can win. And if new ETFs fail to attract enough assets they'll be taken down: they are expensive to run.

Speaking of new listings, today's are…

Today's listings


Multi-asset ETF from VanEck

VanEck has listed a new multi-asset "ETF of ETFs" that adjusts its allocations between the S&P 500 and Treasury bills based on market signals. The VanEck Vectors Long/Flat US Equity ETF (LFEQ) uses a model developed by Ned Davis Research to adjust its holdings, which can vary from 100% in the S&P on sunny days to 100% in T-bills on rainy ones.

The prospectus is short on detail about how the model will work and what market signals will be read. It says it will use mean reversion and trend-following while applying a risk filter - but not much more. LFEQ uses other ETFs to achieve this exposure.


db-x trackers to list two dividend ETFs

db-x trackers is listing two new dividend ETFs on Xetra at some point this month. The db x-trackers Morningstar Global Dividend UCITS ETF DR (XMGD) will track companies in developed countries that pay robust dividends. The db x-trackers Morningstar US Dividend UCITS ETF DR (XMDU) will do the same, but only for US companies.

Today's news from around the web

Tips for dividend ETFs

Almost 90 percent of long-term stock market returns come from dividends. This is the logic behind dividend ETFs. But what should investors considered a dividend ETF know? One, watch out for high yields, they can be a siren song of failing companies (look instead for dividend growth). Two, avoid rate sensitive stocks as they collapse in rising rate environments. Three, go global, as average yields can be higher overseas.

Wait and see if ETFs are in a bubble: Deutsche Bank

There has been a lot of talk of ETFs being in a bubble recently, so Deutsche Bank, one of the largest European ETF issuers, went and investigated. Its team concluded that there is no solid evidence ETFs are in a bubble, as they make up only a tiny fraction of the assets spinning around financial markets. But warned that ETFs have never been properly tested in a sustained bear market.

Is Bitcoin gold for millennials?

Bitcoin is sometimes said to be poor man's gold and gold for millennials. Both posture as alternatives to the dollar. Both have the vote of the libertarians. But how accurate is it the comparison? Not very. Gold dwarfs bitcoin in assets. Dwarfs bitcoin in the history it has. And unlike bitcoin, gold has at least some industrial use.

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