With Exchange-Traded Funds (ETFs) multiplying faster than mosquitoes in a puddle of water these days, it is worth examining how some of the more established ones are faring with respect to trading volumes and total assets. To find out, I looked up data on ETFs introduced before 2008 by iShares and Claymore and obtained the average trading volume data from the TSX website.
The ETFs in the two spreadsheets below are sorted on how much in fees (column 5) each ETF earns for the vendor (total fees = total assets * management fee). The idea is to figure out which ETFs are more likely to be liquidated due to too little assets or too little trading volumes. This isn’t mere idle speculation — ETF closures are reaching epidemic proportions south of the border.
Ron Rowland, a money manager, maintains an ETF Deathwatch on the Invest with an Edge website. To qualify, an US-listed ETF must be at least 6 months old and have an average daily value trade of $100,000 or less (which according to Mr. Rowland is the cut-off for a sustainable fund). The good news is that the vast majority of iShares and Claymore ETFs appear sustainable according to Mr. Rowland’s criterion. The bad news? iShares CDN Jantzi Social Index Fund (XEN) and Claymore S&P Global Water Index Fund (CWW) would have qualified for the list.
