TrillionsMore than 1,000 ETFs have been liquidated and sent to the proverbial ETF graveyard. But a select few have been resurrected by issuers who think that either the time is right for the idea or they have the ways and means to make it work.
On this episode of Trillions, Eric and Joel speak with Athanasios Psarofagis of Bloomberg Intelligence about his "Lazarus List"—ETFs that have failed, sometimes at inopportune moments, only to later get another chance. The list includes target-date ETFs as well thematic ETFs—which track airlines, shipping and luxury goods—and two exotic offerings.
Woking our trillions.
I'm Joel Webber and I'm Eric Belchunis.
Eric. One thing that you and I both love this time of year is doing a Halloween themed episode. We've done like ETF graveyards before, but then we started kicking this idea around and you had maybe the best one yet.
Yeah, so we have this phrase.
We use the team called the Lazarus List, which is obviously the guy in the Bible who Jesus resurrected, and this is could We argued we could have done this on Easter, but because it does involve ETFs that have been deceased. And then somebody else comes along and says, hey, I think I can make this work. Even though it failed for this issuer, somebody tries it again and they sort of resurrect the idea put it back in the market. There's even been cases where it's been tried two or three times and every now and then and it's like the third Times of Charm situation.
At first if you don't succeed, dry again.
Yeah, And so we just kind of find this a quirky little wing of the ETF world when people look at something that didn't work and have the I guess vision or gumption to think I can make this work.
To walk us through this version of the ETF graveyard, We're going to be joined by Bloomberg Intelligence ETF analysts Sarah Vegas, this time on trillions. The Lazarus List, Athanasios, Welcome back to Trillians.
Glad to be back.
Okay, so you have put together a little bit of a list. These ETFs were ones that died went to the ETF graveyard, only they weren't dead yet.
No, And I think that speaks to where we are in the ETF market.
Right.
There's there's a good idea out there, and it maybe really was a good idea. Maybe maybe the timing wasn't quite right.
Yeah, exactly, and we're back to like recycling ideas. Right, a lot of stuff's been tested that they're like, hey, you know what, this may be closed too soon, or you know, we maybe could give it another shot or rebrand it through a different you know, or maybe.
Or maybe it really wasn't meant to live, right, So yeah, I mean that's be fair point.
Maybe these might close again. If you close twice, that's a tough pill to swallow, I think, right, if you try two times.
Okay, so what's the first one that you think embodies this idea.
Let's start with probably something most recently. I Shares brought back these target date ETFs. They tried this I think it was twenty fourteen. So basically what this does is like their asset allocation ETF, they hold a little bit of everything, stocks, bonds. It's made to just be a one stop shop. Hey, Eric, what it's one of the tickers for this.
So one of them, jol is it D This is the I Shares life path target date twenty four five twenty forty five ETF. So the twenty forty five would be the year that you're supposed to retire, So as a gener exer like myself, that would be where I'm aiming for. Hopefully all will be retired even before then if I'm lucky.
But this is designed to.
Be in all equities early on and then slowly shift to some portion of fixed income. I believe right now this one is I want to say, eighty five to ninety percent equity still and forty percent is international.
So look, this is like.
You've actually brought this up in occasional episodes. You're like, why isn't there an ETF that just does everything. Well, this is kind of it. It uses other I shares ETFs to give you, like what would be a complete portfolio that an advisor would set up with you using many puzzle pieces. This one does it in one shot and it moves as you get closer to retirement. So these are very popular in four to one K plans, but they failed almost all the time in the ETF world because again, advisors are the main customers of ETFs, and advisors, to quote George W. Bush, want to be the deciders. They want to pick which funds you go into. They can't have one fund and show the client that you're in one ticker and the tick clients, why do I need you? And so this is why this idea has failed in the past, but I shares resurrecting it is interesting, but that's what these ETFs are. There's I think six to eight of them for the different retirement years.
So they bit the dust. What happened?
It's a fair question. I think they were a little ahead of their time. Remember like twenty fourteen ETFs weren't you know all the rage that they are now and they've been they're really trying to go after like clients that don't have four to one K plans, because these are pretty popular options in those kind of instructures. So I think the market is a much more mature place, people more comfortable with ETFs. Again to xpoint, I don't know if they're gonna have a ton of success, but I think they might have a better go at it than they did in twenty fourteen.
Yeah, and we had Blackrock on ETFIQ on a recent show to talk about these, and they were saying that the reason they're doing this isn't to hit advisors or the four to one k market, but to go after the fifty percent of people who do not have exposure to equities. They feel like this is a very easy way to reach them, and they're trying to do a little bit of God's work here, Joel, to try to get those people invested. And I would say this is not being take advantage of. Honestly, there's so many things you can invest in if you don't know a lot about investments that are like bad, but this is like these charge eleven basis points and they're in very solid I shares ETFs. They usually pick the cheaper ones. It makes sense Honestly, Joel, if the government really wanted to clear the wealth gap, they would actually put every person in one of these when they are born and then make them, like, you know, pass some financial literacy tests and then you get the account when you're eighteen or something like that. Not saying to put them all in black rock, but something like this would make a lot of sense as something you get when you're born, versus say a social security system. So I think these are interesting in that regard, in that they are going after the fifty percent that don't have any exposure to the markets.
Okay, Athanasios, give me one that surprised you.
Another pretty recent one, luxury goods. This has been tried in the past. I think it was Roundhill that just brought it back. And if you look at the performance of luxury goods, it's really it's done like phenomenal. And I think it was rich people like to buy fancy stuff and it seems pretty it doesn't get impacted by the economy, right.
Like recession proof everything.
Yeah, and I think it was Louis Vaton was at one point like hit the highest market cap ever for European company, So that one's an interesting idea. It might be too niche I think for it to get quite a bit of assets, but the performance is really strong. If there's one area outside the US. You know, we tend to be very US focused. This one seemed to do pretty well. I don't know if the performance will be enough to get people enticed to invest in it, but I think it's a pretty interesting idea that gets overlooked.
Eric, what's the ticker on?
So there's actually two. There's l u X and l u x X, So two people have tried to resurrect this. They're both in the market, both not that big. I'll give you some of the holding's stroll. I mean, these are some of your favorite brands, Hermes ferrari A mens eric a me is it? Yeah? No, I'm from the other side of the tracks for sure. S They Lauder Royal, Caribbean Cruises, Las Vegas, Sands, Williams and Sonoma, Toll Brothers.
That's interesting.
That's like a home builders, Win Resorts, Hennessy, Louis Vatan.
So yeah, I mean you read through these names.
How does that compare with the other one?
Very similar, These have a lot of overlap. The one difference is l U X. The one with only one X is more concentrated, so it should have more volatility, which can be good and bad. LUXX has more holdings, and if you look at the assets, both are under ten million, which is you know, borderline life support area. So I don't know if they've really been able to resurrect this successfully. These two could end up right back in the same place if I'm being honest.
Okay, we talked about some ones that have had some difficulties walking through the graveyard, where there's maybe one that hasn't had such a hard time.
This would be one of the darlings of COVID during that time. And its jets.
Yeah, I remember this one.
Yeah, the airline ETF. It's been tried, like I think two issuers had an airline ETF direction and Googenheim was it, and now this is US Global Investors brought that back and it's one of the at one point is like one of the one of the fastest growing ETFs. You know, it was during COVID when airlines stopped and the trade started coming back and everyone started plying back into jets hit a couple of billion I think at one point. But that's one that had been resurrected and had done quite well in its second life.
Yeah, Joel, there were two airlines ETF FAA, which had twenty million dollars and closed, and then fliy X, which had two million in closed. So both of those were in like the twenty ten to twenty fifteen era. And then jets launches about seven years ago and it does nothing for three or four years. It looks like the luxury ETFs where there's like, oh my god, this is going to go down, and then bam the pandemic ironically because again who's flying during the pandemic. But the pandemic really got this thing going, you know. Funny story. We had the guy from Jets on ETFIQ the first iteration of the show, and it was the last show before they we went dark because of the COVID. And then we had the Jets guy talking and I remember going over the price to earnings ratio and I was like, I just ran the numbers and besides Nigeria, your ETF has the lowest price to earnings ratio. I think it was like four, which is really low. I mean the S and p's like twenty something. So and he was making the case for it, and we were kind of prescient because right after that, jets went up and now one point three billion. It charges sixty basis points, So they certainly are making a very profitable ETF here, even if it has come down a little bit from that, you know, sort of peaked during the pandemic.
Found its moment.
Oh yeah, absolutely, it can't happen.
You know, what's the pie today?
It's still only ten, So like that's how that's how like if you're at four, you can rally a lot and still have even more to rally. That's how beat up airlines were. Again, that's only half of the S and P, and that's after a lot of rally. Although it's come down a little bit. But I'll give you some of the top holdings in this American Airlines, Southwest Airlines, Delta air Lines United. I mean, obviously I'm just going through all the airlines here that everybody knows. But it's even got stuff like Alaska Air Air Canada. So it definitely goes a little deeper into some of the like lesser known airlines. But I would say that almost all of it is pure airline plays.
There's some other things in there that are.
Related to the industry, but mostly it's it's airline holdings.
Athanasias, you got another one for me, I do. Ironically enough, this is another transportation one. I don't know why these ones seem to keep.
Them at after that, right, And and like you know, if you're if you're looking for like a sector that you can kind of hit on, like COVID made this probably an interest especially interesting one.
Uh yeah, And this one also I think kind of stems off of COVID and it's shipping. And this was during remember there was like a supply chain crisis for a while and the ships were just sitting out in the in the ocean for a little bit. There was one a shipping etf in the past. I think it was Googleheimen that closed. Just there's a new one that had come up. Boat again trying to go after the shipping theme. Something that gets overlooked. I think people don't don't give that one much thought. But this one hasn't done anything yet. It's not a Jets story, but it's definitely a whack.
One to watch. Yep, Eric, when do you why do you think this one hasn't taken off? Considering we all became so aware of supply chain issues and global shipping.
Yeah, this is a.
One of the most fascinating stories because C was around for I don't know, ten twelve years, right, and nothing really happened with it, and they closed up shop. And I remember acutely following this rate. When C closed, shipping went crazy. And if C was opened from the time it closed, it would have gone up like one hundred percent in like six months.
It literally had the right exposure, right idea, Yes, and it just happened to like shut down a little too early.
Like like literally a month or two too early. Every now and then we see this. The Coal ETF also did that, but after one hundred percent gain boat launches.
So between C barticular, I think boat overseas.
I know I'm on a boat, is what I keep thinking.
But certainly the different when C closed before Boat launched, that's when the majority of the gains and these stocks happened. So Sonic Shares, which has the boat ETF, still has twenty million, but it would be doing better if it had launched ahead of that. These are sort of one hundred percent gain that was missed by both ETFs. So just a kind of unfortunate situation. But it was the one hundred percent gain that I think caught the attention of the Sonic Chairs people who thought, man, I you know, this category is up, this sector is up so much. Why isn't there an ETF. Oh, this one closed, let's launch one. Takes seventy five days to get the ETF to market, you know, added up, and you missed a big chunk of the rally. And that's what happens A lot. A lot of people do not launch ETFs after a rough patch. They usually launch them after the good patch, when the area gets attention from the media.
That's why. Only on occasion is it something that launches after a.
Really rough rough period, like the uranium miners, which I tend to watch for those because a lot of times, at least the ETF's ready for when the moment arrives, as supposed to coming a little after the moment. But that seems to be with the case.
With both.
Athinasious.
We got one more, probably the most famous one of all.
Save the best for a last Yeah.
Rud Off, did you listen to Chris music? Already?
Not? Not yet? Too early.
There is red involved.
The Walmart is putting Christmas ads during the World Series last night. I'm like, come on, man, it's not even Halloween.
You're gonna make those make those numbers early.
But this one is XIV, the credit Swiss in Verse VIX one. You know the volmaged in all.
That twenty eighteen.
Yeah, everyone, you know it was a great trade. It worked for a while and then it suddenly like one day, like totally broken. Yeah, but that has you know, after some review Bold two to shares brought back this product. The tickers s fix.
Eric, what is different about it this time?
Yeah, So I'm gonna read this for beatam because it is doing the same thing there had There had been a bunch of product or some products that like did half of what XIV did, like almost like a diet version.
This one does go all the way.
It does short the short term futures, but it does time weighted average price to set closing values rather than the four pm VIC settlement price. I won't go into details, but that is a little tiny tweak that should help it from like a Volma Geden situation where XIV had to close. But really it does the same thing. And to go back to XIV and how spectacular both up and down that was listen to these numbers. XIV went up twenty four hundred percent since launching through twenty eighteen, so that's about seven years. It returned twenty four hundred percent, and then it went down ninety percent in like a day and a half. So yeah, this was just like, I don't know, some kind of supernova kind of situation where it just exploded. But it made a lot of money for a lot of people, and I think this issuer was like, Hey, this is a product that should exist. Let's make a couple of tweaks. Now, keep in mind they also launched a double leverage one, which is again like another new t VIX which also went down in a blazing glory. This one is eighty six million dollars and you've has one hundred and fifty million, so and this issue charges a high fee for both, so they're both profitable already, so they're going to be around for the foreseeable future. But again for investors out there, anything related to the VIX is immediately rated R. It's like going to a rated R movie. I really would look to see why it's rated R. In our case, this is rolling VIX futures. When it's XIV. It's the equivalent of selling insurance like hurricane insurance. You get the premium and that's nice, but when a hurricane hits, you're on the hook. And that's essentially what happened with XIV. There was just no hurricanes for a long time, and then bam there was a massive one, like a Andrew type hurricane called Vahmageddon. And so right now you know, obviously with lowvall you'll make more money in uvix, and then when the hurricane hits, that's when t VIX goes up and spikes. So again, these are very power tool type products. I'd be very careful with them if you're listening at home. But yeah, they're back on the market, resurrected Lazarus style.
Okay, I want to ask, is there one that when down that hasn't come back that you're like, oh, this is this is when to watch.
I mean there's a lot. I would bring back the coal one, so if you have the superpower. Yeah, there's a whole lineup from Bannack Coal Frack that I think got closed during this whole ESG craze, right, and now that story's being unwound a little bit, so I feel like they were unfairly criticized and closed during that time, so I feel like they should get like a get out of jail free card and be able to come back. So that's one i'd probably bring back. And I think it's I think it's a good trade. I think it's a it's pretty it's it's a pretty unique exposure.
Eric. When you're walking around around the graveyard, which one went too soon for you?
For some reason, For some reason, I just immediately think of the fishing ETF. But that's just because I love fishing. It has nothing to do with the performance. I just I just think the world's a better place with an ETF with fishing in the name. I just makes you think of going out there on the sea and fishing. This thing launched fish at the beginning of the financial crisis. I think it just had a bad timing.
Okay, wait, wait, I know that is nostalgic or something. I don't know what that was, but now give us a real one. Okay.
There was an ETF called the Short Squeeze ETF s q ZZ I think was the ticker, and it was an interesting product. It closed rate before all the game stop stuff where every stock that had a lot of high shorts in it was getting bought by the quote apes and the Reddit crowd, and it honestly, if it were around, it would have killed it during the Game stop era because all the stocks that were heavily shorted were being bought like crazy to try to create a short squeeze.
I think it's like a third example of one that closed like just when it's time was like it.
I know, we were actually trying to think of a term for that, where it's almost like you leave the movie right before like the exciting part, Like it's like, oh man, if you waited like two more minutes, you would have caught it.
You would have been fine.
Misconnection, I think that was what I mean, Yeah.
Misk connection.
But the short squeeze ETF would have been perfect for that era. But I do believe that in certain cases short squeeze, like in certain markets, those stocks that are heavily shorted, besides the sort of like Reddit crowd, can be a valuable tool for certain investors tool set. So that one was one I thought should have been resurrected. I thought somebody would have done it, especially as the Game Stop stuff was in full bloom. I thought somebody would have thrown that in the market, but a shame. I know the guy who put that out, and he's like a hedge fund manager at heart, and he closed it again, just prior to the whole game stop stuff.
Well there's still time and maybe you know there's another Halloween episode that Athanasios. Thanks very much for joining us on Trillions.
Oyeah, thanks for having me.
Happy Halloween, Eric, Happy Halloween.
Thanks for listening to Trillions until next time. You can find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you'd like to listen. We'd love to hear from you. We're on Twitter, I'm at Joel Webber Show. He's at Eric Balchuna's. This episode of Trillions was produced by Magnus Hendrickson.
Bye.
