Barron’s – ETF Deathwatch

The ETF Focus column on page 29 of this weekend’s Barron’s (see here) discussed the ETF Deathwatch list maintained by Ron Rowland. (You can find the latest list here.)  The basic criteria to get on the list are under $25M AUM and average trading volume below $100,000.  The latest list has 468 names, and none of the seventeen utility ETFs tracked in the Garnet Research Utility Stats Monthly is on the list.  However, a couple of the utility ETFs are potential prospects for the list in the future.  The name most at risk appears to be the iShares Edge MSCI Multifactor Utilities ETF (UTLF; fund website), which currently has only has $2.5M under management and a daily volume of 114 shares.  The fund only opened in the middle of 2016, so it may still be in its probationary period, but if the numbers don’t start going up soon it will make this list.  The John Hancock Multifactor Utility ETF (JHMU; fund website) is another fund that doesn’t seem to be catching on.  It opened last year but only has $15M in assets and an average trading volume of 683 shares.  Lastly, the Reaves Utilities ETF (UTES; fund website) could be a future deathwatch candidate.  The fund opened in 2015 and AUM is only about $13M, but trading volume is over 3,000 shares/day.  With shares at about $30 each, UTES is close to the $100,000 daily trading threshold to keep them off the list.  As discussed in the Barron’s article, the long-term viability of the ETF fund you invest in is important, because if the fund closes you could get hit with a number of extra costs and fees.