Markets

IndexIQ Emerging ETF Heads For Ash Heap

IndexIQ, the Rye Brook, N.Y.-based ETF firm known for its hedge fund replication strategies, is closing its IQ Emerging Markets Mid Cap ETF (NYSEArca:EMER) at the end of the trading session today, after the fund gathered less than $1.7 million in assets since its launch in July 2011.

Shareholders who don't sell their shares by today will have their shares automatically redeemed on Dec. 28, the company said early this month in a press release. The New York Stock Exchange confirmed today in an emailed communique that the fund will be suspended from trading on Arca before the open on Dec. 19.

The shutdown is one of many this year that together cement 2012's place in the record books in terms of ETF closures, and by a large measure. This year, 95 funds have been shuttered to date, compared with 30 in 2011; 49 in 2010; 56 in 2009; 59 in 2008 and none in 2007, according to data compiled by IndexUniverse.

Three more funds were put on the chopping blocks this week-three strategies from Direxion Shares, the Newton, Mass.-based purveyor of leveraged and inverse ETFs and other niche strategies.

But even as fund closures have accelerated this year and fund launches have slowed down, money keeps flowing into ETFs. Assets on Monday, Dec. 17 reached almost $1.338 trillion-just shy of a record set last week, according to data compiled by IndexUniverse.

Shareholders who still hold their positions in EMER as of the Dec. 18 liquidation date will receive a cash distribution equal to the net asset value of their shares as of that date, including remaining income and capital gains. They won't be charged transaction fees in connection with the liquidation.

Other costs of closing the funds will be borne by IndexIQ Advisors LLC. Additional information about the fund is available at www.IndexIQ.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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