Sixty-two exchange-traded funds (ETFs) with a total AUM of approximately $7 trillion have ceased activity thus far in 2023, amidst increased market volatility and uncertainty regarding Fed rate hikes, Bloomberg reported on Monday, April 17.
The rate of failures in the first four and a half months of the year has been more than double that of the same time in 2022 when just 26 had ceased by mid-April.
Nate Geraci, president of The ETF Store, an advisory firm, stated a number of the closed ETFs were victims of poor market timing, as they were launched toward the tail end of the post-COVID-19 pandemic rally.
The NFT-focused Defiance Digital Revolution ETF (NFTZ), the Generation Z ETF ZGEN, AXS De-SPAC ETF (DSPC), and the thematic "fear of missing out" fund AXS FOMO ETF (FOMO) are among the funds being phased out. Two crypto and bitcoin mining ETFs, the Volt Crypto Industry Revolution and Tech ETF (BTCR) and the Viridi Bitcoin Miners ETF (RIGZ), have also vanished.
Top Five ETF By Inflows In 2023: The top 10 ETFs by inflows in 2023, according to ETFdb.com, include three equity-related ETFs and two Treasury ETFs.
Investors have thus far favored a defensive approach by investing in ETFs that monitor high-quality equities, low volatility, the broad equity market, and medium-to-long duration Treasury.
The iShares MSCI USA Quality Factor ETF QUAL had the biggest net inflows in 2023, with $8.2 billion as of mid-April. BlackRock Inc BLK manages the fund, which tracks an index that selects large- and mid-cap U.S. companies based on quality metrics such as stable earnings growth and low debt-to-equity.
The JPMorgan Equity Premium Income ETF JEPI had the second-biggest net flows in 2023, with $6.4 billion as of mid-April. JEPI is an actively managed fund that seeks returns by selling options on U.S. large-cap stocks, by choosing companies characterized by low-volatility and value metrics.
The Vanguard 500 Index Fund ETF VOO, which tracks the S&P 500 index, is third year-to-date by inflows.
The iShares 20+ Year Treasury Bond ETF TLT had the biggest inflows among bond ETFs, and ranked fourth in the overall ranking. The fund invests in U.S. Treasury securities with more than 20 years of remaining maturity.
| ETF Name | TICKER | Inflows YTD | AUM | Return YDT |
|---|---|---|---|---|
| iShares MSCI USA Quality Factor ETF | QUAL | $8.2 billion | $27.8 billion | 10.02% |
|
JPMorgan Equity Premium Income ETF |
JEPI | $6.4 billion | $24 billion | 2.96% |
|
Vanguard S&P 500 ETF |
VOO | $6.1 billion | $289.7 billion | 8.31% |
| iShares 20+ Year Treasury Bond ETF | TLT | $5.9 billion | $34.6 billion | 6.34% |
| iShares 7-10 Year Treasury Bond ETF | IEF | $5.7 billion | $29.4 billion | 3.91% |
Read Also: Best Exchange Traded Funds (ETFs)
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