The ETF industry is growing rapidly with more than 1,40
products for a combined $1.4 trillion in assets. While the new
products continue to find their way into the ETF world, closures
are also hitting the market. In 2012, over 100 funds failed to
attract investor interest and thus, closed their doors (read:
PowerShares Expands Low Volatility ETF
Line-ups
).
Following the trend of closures, Guggenheim, the New
York-based ETF issuer, recently announced that it would be
shuttering nine funds, bringing its total offering down to 68.
The nine
ETFs
are as follows:
ABC High Dividend ETF (
ABCS
)
MSCI EAFE Equal Weight ETF (
EWEF
)
S&P MidCap 400 Equal Weight ETF (
EWMD
)
S&P SmallCap 600 Equal Weight ETF (
EWSM
)
Airline ETF (
FAA
)
2x S&P 500 ETF (
RSU
)
Inverse 2x S&P 500 ETF (
RSW
)
Wilshire 5000 Total Market ETF (
WFVK
)
Wilshire 4500 Completion ETF (
WXSP
)
All these funds combine to have $148 million in assets and
account for nearly 1% of the issuer's total AUM. All were
probably losing money, and none showed any indication drawing
investor interest over the near term. So, Guggenheim felt that it
would be best to close down these unpopular products in order to
focus its energies elsewhere (read:
Three Surging ETFs with Strong Momentum
).
Some on the list, such as ABCS, EWMD, EWSM and WXSP had less
than $10 million in assets each and were generating meager
revenues for the firm. Still, some were relatively unique, the
cheaper options in the space or solid performers. Even if these
funds were not being taken advantage of for the time being, their
closure implies a loss for investors in general.
While these continuous closures are discouraging, investors
should note that there are other options in the space that offer
similar exposure (see more ETFs in the
Zacks
ETF Center
).
However, in the case of FAA, this marks the end of ETF
exposure to the airlines as no other fund currently on the market
focuses on this segment.
If you are currently an investor in any of the aforementioned
products, please note that the shares will stop trading on NYSE
Arca after the close of business on March 15, 2013. So, there is
some time before the shut down. Investors who do not exit by
March 21, will receive a cash payment equal to the NAV of their
shares, inclusive of capital gains and dividends as of the
liquidation date of March 22, 2013.
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GUGG-ABC HI DIV (ABCS): ETF Research Reports
GUGG-M E EW (EWEF): ETF Research Reports
GUGG-SP 400 EW (EWMD): ETF Research Reports
(EWSM.FAA): Get Free Report
GUGG-2X SP500 (RSU): ETF Research Reports
WILSHR-5000 TOT (WFVK): ETF Research Reports
WILSHR-4500 COM (WXSP): ETF Research Reports
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