ETF Global

ETF Global – ETP Liquidation Watch

Background:  Unlike some other investment instruments, a key risk when investing in ETPs is “Liquidation Risk” – the risk of an ETP being liquidated by its sponsor.  ETP liquidation can occur for a variety of reasons and this risk has become more pervasive as ETP sponsors have flooded the market with ETPs aimed at the perceived appetite of investors.  Unfortunately, the market has often failed to absorb the supply of new ETPs (see Annual ETP Closings table below).  As an example of this saturation, of the entire universe of ETPs, approximately 20% have $10 Million or less of Assets Under Management and 12% have $5 Million or less of AUM.

Annual ETP Closings* (9/1/15)

Year

 2015 

 2014 

 2013 

 2012 

 2011 

 2010 

 2009 

2008 

ETP Closings 

71

80

67 

94

30

49

56

58

                                                                                       * Funds added to list when closing is announced

“Liquidation” Watch:  As part of ETF Global’s overall risk assessment for individual ETPs, ETFG identifies those ETPs that may be in jeopardy of termination in the foreseeable future.  ETFG considers three primary factors to be the most indicative of a potential ETP liquidation:

ETFG Liquidation Watch - September 2015

Criteria #1

 

Criteria #2

 

Criteria #3

Assets Under Management < $5M

 

       ETP Age > 2 Years

 

Negative Fund Performance (ttm)

255 ETPs

 

1,346 ETPs

 

1,174 ETPs

 

 

Down  
 

Right

All 3 Criteria

Left

 

 

 

103 ETPs

 

 

For questions or inquiries regarding the ETF Global Liquidation Watch List or our Liquidation Watch Alerts, please call our research support desk at (412) 325-3971 or e-mail our research support team at research@etfg.com

ETFG Liquidation Watch List and History

Products on Liquidation Watch - Monthly

Year

 January 

 February 

March

April

May

June

July

August

 September 

 October 

 November 

 December

  2013

39

37 

45

43

64

71

73

73

67

56

66

72

  2014

89

91

98

80

74

68

50

59

68

88

100

95

  2015

99

92 

85

88

91 

100

97 

  104 

103

   

   

201520142013