ETF Closures Slow, but Plenty Seen as Vulnerable

ETF Trends

At the start of this month, a mere four exchange traded products had been shuttered since 2014 began, indicating the pace of closures is moderating despite still robust new product proliferation.

However, a slower pace of ETF closures is not reflective of the number ETFs and ETNs that are vulnerable to elimination. Wealth Management’s list of ETPs in danger of closure resided at 91 at the start of February, up from 80 in late November 2013. [ETFs in Danger of Closure Rises]

“The February Liquidation Watch list is dominated by equity and commodity ETPs, accounting for 39 and 28 on the list, respectively. There are also 12 fixed income ETPs, eight currency ETPs and four multi-asset ETPs that round out the February report,” reports Michael Martin for Wealth Management.

More ETFs were closed earlier this week, when Invesco’s(IVZ) PowerShares unit, the fourth-largest U.S. issuer of ETFs, liquidated four funds. [PowerShares Portfolio Changes Take Effect]

One of those ETFs appears on Wealth Management’s ETP Liquidation Watch List. Three iShares ETFs on the list are part of a previously announced group of 10 funds that will be shuttered by the world’s largest ETF issuer, in essence bringing the number of ETFs on the list to 87. [iShares to Close 10 ETFs]

The ETP Liquidation Watch focuses on three criteria: Assets under management below $5 million, ETFs and ETNs that have been around more than two years and a negative trailing 12-month performance.

Of the 10 largest U.S. ETF issuers, only State Street Global Advisors, Vanguard and Charles Schwab (SCHW) do not currently have funds on the ETF Liquidation Watch List.

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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