There are nearly 1,400 exchange traded funds and notes listed on U.S. exchanges, and it should come as no surprise that not every fund is going to make it. After the rapid growth experienced by the ETF business, a weeding-out process is normal as investors vote with their wallets and unpopular funds are shuttered.
Exchange traded products saw year-to-date net cash inflows of more than $100 billion through November, according to data from the National Stock Exchange. A big chunk of that went into bond ETFs as investors looked for safety.
Needless to say, some ETFs have had a difficult time gathering assets with so many investors content to hide out in cash.
Large ETF providers have already covered most of the major investment themes, capitalizing on their first-mover advantage, whereas new product launches are slicing the markets into ever smaller segments, The Wall Street Journal reports. According to XTF, around 53% of all U.S. ETFs have less than $50 million.
There were 1,176 ETFs and 200 ETNs at the end of November, according to National Stock Exchange. There were 511 ETFs with more than $100 million in assets, and 22 ETNs with over $100 million.
Ron Rowland, president of Capital Cities Asset Management, in the WSJ story points out that there are a record 242 funds, or about 17% of all offerings, on his “ETF Deathwatch.” Any fund that has held less than $5 million in assets or saw less than $100,000 daily trading volumes over the last three months are put into this deathwatch list.