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* (5/1/15)

Year

 2015 

 2014 

 2013 

 2012 

 2011 

 2010 

 2009 

2008 

ETP Closings 

23

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 - May 2015

Criteria #1

 

Criteria #2

 

Criteria #3

Assets Under Management < $5M

 

       ETP Age > 2 Years

 

Negative Fund Performance (ttm)

189 ETPs

 

1,322 ETPs

 

627 ETPs

 

 

Down  
 

Right

All 3 Criteria

Left

 

 

 

91 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 

       

 

 

 

 

 

201520142013