Bulletin
Investor Alert

New York Markets Open in:

The Tell Archives | Email alerts

May 11, 2020, 9:11 a.m. EDT

ETF survival of the fittest shows just what’s going on in financial markets

So far in 2020, more ETFs have closed than opened

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Vanguard S&P 500 ETF (VOO)
  • X
    iShares Core S&P 500 ETF (IVV)
  • X
    Vanguard Mid-Cap ETF (VO)

or Cancel Already have a watchlist? Log In

By Andrea Riquier


Everett Collection
It’s not exactly “the Hunger Games,” but ETF survival is becoming more contested.

As the market for exchange-traded funds matures, it’s coalescing around a few winners and leaving laggards behind, allowing ETF trends to more clearly reflect what’s going on in broader financial markets.

That’s the conclusion of a Wednesday research note from DataTrek Research Co-founder Nicholas Colas.

So far in 2020, 77 new ETFs have launched, but 123 have closed, Colas noted: “We’ve been actively covering the ETF industry since the Financial Crisis and cannot recall ever seeing the number of ETFs actually shrink.”

Related: These are the companies that open — and close — the most ETFs

But it’s not the ETF universe that’s shrinking: funds have attracted $108 billion of new money in the year to date. Rather, market churn is designating clear winners and losers. Colas calls it “peak Darwin” for ETFs. Out of nearly 2,300 funds, just over a dozen are emerging as the heavyweights, and they’re mostly concentrated into three broad categories, as shown in the table below.

US equities (47%, among 8 funds:)
Vanguard S&P 500 ETF /zigman2/quotes/201209218/composite VOO  
 iShares Core S&P 500 ETF /zigman2/quotes/204263249/composite IVV  
Vanguard Mid-Cap ETF /zigman2/quotes/209412709/composite VO  
Vanguard Total Stock Market ETF /zigman2/quotes/202677318/composite VTI  
Vanguard Growth ETF /zigman2/quotes/209170287/composite VUG  
Invesco QQQ Trust /zigman2/quotes/208575548/composite QQQ  
Health Care Select Sector SPDR Fund /zigman2/quotes/205918244/composite XLV  
Energy Select Sector SPDR Fund /zigman2/quotes/206420077/composite XLE  
Fixed income (25% of total, in 4 funds:)
SPDR Bloomberg Barclays 1-3 Month T-Bill ETF /zigman2/quotes/209499658/composite BIL  
iShares Barclays Short Treasury Bond Fund /zigman2/quotes/204686525/composite SHV  
iShares Barclays 1-3 Year Treasury Bond Fund /zigman2/quotes/204549300/composite SHY  
iShares iBoxx $ Investment Grade Corporate Bond ETF /zigman2/quotes/206919681/composite LQD  
Commodities (18% in 3 funds)
SPDR Gold Trust /zigman2/quotes/200593176/composite GLD  
iShares Gold Trust /zigman2/quotes/210005244/composite IAU  
United States Oil Fund /zigman2/quotes/203483736/composite USO  

“Investors are largely allocating capital to US large caps, short term Treasuries, investment grade corporates, gold,” Colas noted.

See: Vanguard blew away the competition in Q1, fund flow data show

2020’s winners and losers in terms of returns also tell a story about how industry and the economy is changing.

The biggest winner so far, with a 36% return, is ProShares Long Online/Short Stores ETF /zigman2/quotes/207285925/composite CLIX +3.23%  , a popular way to play the coronavirus-induced stay-at-home orders. The biggest loser, reflecting the global oil price war and glut, is the Invesco Dynamic Oil & Gas /zigman2/quotes/200133030/composite PXJ -5.02%  fund, down more than 60%.

See: Retail investors are getting ‘hosed’ with the biggest oil ETF down more than 30% this week

/zigman2/quotes/201209218/composite
US : U.S.: NYSE Arca
$ 288.90
-1.48 -0.51%
Volume: 3.16M
July 9, 2020 4:00p
loading...
/zigman2/quotes/204263249/composite
US : U.S.: NYSE Arca
$ 315.72
-1.61 -0.51%
Volume: 3.31M
July 9, 2020 4:00p
loading...
/zigman2/quotes/209412709/composite
US : U.S.: NYSE Arca
$ 164.95
-1.33 -0.80%
Volume: 788,693
July 9, 2020 4:00p
loading...
/zigman2/quotes/202677318/composite
US : U.S.: NYSE Arca
$ 159.24
-0.99 -0.62%
Volume: 2.47M
July 9, 2020 4:00p
loading...
/zigman2/quotes/209170287/composite
US : U.S.: NYSE Arca
$ 211.63
+0.92 +0.44%
Volume: 839,929
July 9, 2020 4:00p
loading...
/zigman2/quotes/208575548/composite
US : U.S.: Nasdaq
$ 262.18
+2.19 +0.84%
Volume: 40.31M
July 9, 2020 4:00p
loading...
/zigman2/quotes/205918244/composite
US : U.S.: NYSE Arca
$ 100.95
-0.80 -0.79%
Volume: 10.52M
July 9, 2020 4:00p
loading...
/zigman2/quotes/206420077/composite
US : U.S.: NYSE Arca
$ 34.44
-1.79 -4.94%
Volume: 30.54M
July 9, 2020 4:00p
loading...
/zigman2/quotes/209499658/composite
US : U.S.: NYSE Arca
$ 91.53
0.00 0.00%
Volume: 1.52M
July 9, 2020 4:00p
loading...
/zigman2/quotes/204686525/composite
US : U.S.: Nasdaq
$ 110.73
+0.01 +0.0090%
Volume: 1.42M
July 9, 2020 4:00p
loading...
/zigman2/quotes/204549300/composite
US : U.S.: Nasdaq
$ 86.57
+0.02 +0.02%
Volume: 2.51M
July 9, 2020 4:00p
loading...
/zigman2/quotes/206919681/composite
US : U.S.: NYSE Arca
$ 136.12
+0.76 +0.56%
Volume: 9.81M
July 9, 2020 4:00p
loading...
/zigman2/quotes/200593176/composite
US : U.S.: NYSE Arca
$ 169.63
-0.46 -0.27%
Volume: 13.33M
July 9, 2020 4:00p
loading...
/zigman2/quotes/210005244/composite
US : U.S.: NYSE Arca
$ 17.24
-0.03 -0.17%
Volume: 25.43M
July 9, 2020 4:00p
loading...
/zigman2/quotes/203483736/composite
US : U.S.: NYSE Arca
$ 28.41
-0.77 -2.64%
Volume: 5.60M
July 9, 2020 4:00p
loading...
/zigman2/quotes/207285925/composite
US : U.S.: NYSE Arca
$ 84.28
+2.64 +3.23%
Volume: 126,457
July 9, 2020 3:58p
loading...
/zigman2/quotes/200133030/composite
US : U.S.: NYSE Arca
$ 2.27
-0.12 -5.02%
Volume: 46,827
July 9, 2020 3:59p
loading...

This Story has 0 Comments
Be the first to comment
More News In
Investing

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.