Monday, February 1, 2010

The ETF Graveyard: Many ETFs Shutting Down, Lots More in 2010

Investors love ETFs, there is no question about it. There are over 800 ETFs that trade in the U.S (that we track). Investors are abandoning the high-fee mutual funds en masse.

However, the recent proliferation of ETFs is staring to cause fatal victims. Wizdom Tree has announced that it is shutting down 9 ETFs, among them, DBT, DPN, and DRF:

WizdomTree has specialized in international and fundamentally-weighted funds, among them, our favorite BZF (which is not shutting down). The ETFs being closed represent 3% of WisdomTree’s $6B in assets under management.

The ETFs will stop trading effective March 24th, 2010 and are being shut down because of insufficient liquidity.

The largest ETF dieing is the WisdomTree International Communications Sector Fund (DGG) which had roughly only $27M in assets.

The funds that will be closed are as follows:
  • International Technology Sector Fund (DBT)

  • International Financial Sector Fund (DRF)

  • International Health Care Sector Fund (DBR)

  • International Consumer Staples Sector Fund (DPN)

  • International Consumer Discretionary Sector Fund (DPC)

  • International Industrial Sector Fund (DDI)

  • International Communications Sector Fund (DGG)

  • Europe Total Dividend Fund (DEB)

  • Earnings Top 100 Fund (EEZ)

  • U.S. Short Term Government Income Fund (USY)

There are more than 150 ETFs with assets of less than $20M, the graveyard will get quite crowded.

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