Invesco PowerShares, the Chicago-based exchange-traded fund
company behind the successful "Qs" ETF of Nasdaq's 100-biggest
companies, will shut 10 ETFs on or about Dec. 21 to streamline its
product lineup and focus its resources on other funds.
Dec. 14 will be the final day of trading for the funds, and
shareholders who don't sell their holdings on or before that date
will receive a sum of cash, probably on Dec. 21, that will include
the net asset value of their shares, plus any capital gains and
dividends, the company said in a press release on Oct. 8.
PowerShares' decision to shutter 10 of its ETFs is the latest in
a string of closures in the past several weeks that has included
Geary Advisors; Grail Advisors, and Claymore (which is now called
Guggenheim Funds). Despite continued closings, the rate of fund
shutterings is slower than it was in 2008 or 2009, when sponsors
pulled 58 and 56 ETFs off the market, respectively, as Matt Hougan
wrote in his recent blog "Industry Should Close 200 More ETFs."
The funds, their tickers and their assets as of Sept 30 are:
- PowerShares Dynamic Healthcare Services Portfolio
(NYSEArca:PTJ), $14.6 million;
- PowerShares Dynamic Telecommunications & Wireless
Portfolio (NYSEArca:PTE), $16.3 million;
- PowerShares FTSE NASDAQ Small Cap Portfolio (Nasdaq:PQSC),
- PowerShares FTSE RAFI Europe Portfolio (NYSEArca:PEF), $12.2
- PowerShares FTSE RAFI Japan Portfolio (NYSEArca:PJO), $7.4
- PowerShares Global Biotech Portfolio (Nasdaq:PBTQ), $3.72
- PowerShares Global Progressive Transportation Portfolio
Nasdaq:PTRP), $5.65 million;
- PowerShares NASDAQ-100 BuyWrite Portfolio (Nasdaq:PQBW), $5.5
- PowerShares NXQ Portfolio (Nasdaq:PNXQ) $3.73 million;
- PowerShares Zacks Small Cap Portfolio (NYSEArca:PZJ), $14.4
"Closure is the last option, but we had a handful, these 10,
where we knew there was no other option," Ben Fulton, a managing
director of global ETFs at Invesco PowerShares, said in a telephone
interview. "We've had them for a couple of years, and at some point
you just have to realize that you can't do a marketing campaign,
there's not a real change you could make to these products, so the
one answer is to just close them."
Fulton noted that after the May 6, "flash crash," Invesco
PowerShares intensified the examination of its funds that haven't
collected significant assets and could possibly be vulnerable to
trading days when participants abandon the market.
"When you have a product that doesn't have many assets and not a
lot of people trading it, it might also have the propensity to not
have as many market makers. So the same way we're pushing exchanges
to change, maybe we should realize we're not getting the trading
and support from the marketplace and that under certain situations
a product like that might experience some kind of problem," Fulton
Fulton said he was satisfied that for now the company wasn't
likely to close any more funds soon, though he acknowledged that
such reviews are ongoing and any changes have to be approved by the
He also stressed that in addition to the 10 closures, Invesco
PowerShares has also added 12 new ETFs to its lineup over the past
year. Those funds, including the PowerShares International
Corporate Bond Portfolio (NYSEArca:PICB), have gathered $870
million, he said.
Invesco PowerShares is the fifth-largest U.S. ETF company by
assets, with $50.21 billion under management at the end of the
third quarter, according to data compiled by IndexUniverse.com.
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