Tactical Alert: Adjusting to ETF / ETN Fund Closures

The market volatility this year has put to bed many levered funds. The investors, financial advisors and portfolio manager currently invested in those funds tend to wonder:

“How do you adjust your portfolio in the wake of these redemptions and still maintain the type of diversification you want?”

Other websites have documented these liquidations well:

We will not go over the some of the more advanced topics such as:

  • Rebalancing your portfolio when one of your funds closes
  • Managing sudden capital gains distributions

I will walk through the top 9 recently closed funds here and document ETF / ETN alternatives that are not levered and haven’t closed yet.

Here’s and example of $100 of DVHL vs $100 of IYLD and $60 of MLPX

Clearly we can see the relative price of $DVHL as it underperforms IYLD and MLPX dramatically in the sell-off. Here’s a different view of the same price returns data above: the difference in returns of $IYLD and $MLPX vs $DVHL.

Look at our top 9 replacements for the levered funds which are closing / have closed

You can view each of these funds at https://app.portformer.com and sign up for a free 7-day trial

Consider $BIZD VanEck Vectors BDC Income ETF vs
$BDCL 2x Leveraged Wells Fargo Business Development Company ETN (CLOSED)

Consider $AOD & HPF Aberdeen Total Dynamic Dividend & John Hancock Preferred Income vs
$CEFL ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN (CLOSING Mar 27th)

Consider $TYO Direxion Daily 7-10 Year Treasury Bear 3X vs
$DLBS iPath US Treasury Long Bond Bear ETN (CLOSED)

Consider $IYLD & $MLPX Morningstar Multi-Asset Income Index ETF & Global X MLP & Energy Infrastructure ETF vs
$DVHL Monthly Pay 2xLeveraged Diversified High Income ETN (CLOSING)

Consider $UDOW & $UYG ProShares UltraPro Dow30 & ProShares Ultra Financials vs
$FINU ProShares UltraPro Financials (CLOSING)

Consider $RYU & $VTHR Invesco S&P 500® Equal Weight Utilities & Vanguard Russell 3000 vs
$HLDV ETRACS Monthly Pay 2xLeveraged US High Dividend Low Volatility ETN (CLOSING)

Consider $PSP & $VTHR Direxion Daily Mid Cap Bull 3X Shares & Invesco Global Listed Private Equity ETF vs
$LMLP ETRACS Monthly Pay 2xLeveraged Wells Fargo MLP Ex-Energy ETN (CLOSING)

Consider $SCHH Schwab US REIT ETF vs
$LRET Monthly Pay 2xLeveraged MSCI US REIT ETN (CLOSING)

Consider $REM iShares Mortgage Real Estate ETF vs
$MORL ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN (CLOSING)

Thank you for your time. Please click on the links above to explore the analysis directly in Portformer.

Sean Kruzel

Based in Boston, Sean is a portfolio manager, MIT grad, and founder of Portformer. When he’s not investing or programming, he’s probably sharpening his skis for the next icy, New England snowstorm. Check out his full bio here: https://www.portformer.com/our-team

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