Direxion Shares To Close Three ETFs

By
Olly Ludwig
December 17, 2012
Share:

Three more fund closures bring the ETF graveyard to the brink of the century mark in 2012.

Direxion Shares, the No.  2 exchange-traded fund sponsor by assets of leveraged and inverse strategies, is closing three ETFs that have failed to attract significant assets, bringing a record year of ETF closures to the brink of crossing the 100-fund mark.

The three funds that the Newton, Mass.-based company is shutting and their assets are as follows:

  • Direxion Large Cap Insider Sentiment Shares (NYSEArca: INSD), $4.13 million
  • Direxion S&P 1500 RC Volatility Response Shares (NYSEArca: VSPR), $4.25 million
  • Direxion S&P Latin America 40 RC Volatility Response Shares (NYSEArca: VLAT), $3.83 million

 

While total U.S.-listed ETF assets have been reaching record levels this year—most recently just shy of $1.338 trillion on Dec. 12—closures have been accelerating while fund launches have been slowing.

Industry sources say the industry is starting to mature and, moreover, the risk on/risk off flavor of markets since the 2008 crash has made fund sponsors more cautious in general about launching new ideas or defending ones that aren’t catching on very quickly.

The closures will bring to 95 the number of funds that are shutting so far this year. In 2011, 30 funds shut down, compared with 49 in 2010, 56 in 2009, 59 in 2008 and none in 2007, according to data compiled by IndexUniverse.

An official at Direxion said the company is paring down its presence in both the “insider sentiment” and “volatility response” slivers of the investment universe to just two funds. Those two ETFs and their assets are:

  • Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW), $4.38 million
  • Direxion S&P 500 RC Volatility Response Shares (NYSEArca: VSPY), $4.29 million

 

Details Of The Direxion Closures

The three funds being shut down were to stop trading Jan. 18 and be liquidated on Jan. 25, 2013, Direxion said in a press release.

The funds will close when all distributions are complete, the company said. The company said investors with questions about the shuttering should contact Direxion at 800-851-0511.

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

Vanguard's all-market fund 'VTI' led inflows on Thursday, April 23, as total U.S.-listed ETF assets reached a record of $2.163 trillion.

'VTI,' 'VB' and 'VGK' paced Vanguard's issuer-leading inflows on Thursday, April 23, as total U.S.-listed ETF assets rose to a record $2.163 trillion.

ETF.COM ANALYST BLOGS

By Dave Nadig

Buying and selling ETFs wisely means understanding the difference between being a buyer and a seller.

By Olivier Ludwig

Saving the world as an eco-conscious investor is a tough row to hoe, but ETFs make it a bit easier.

By Olivier Ludwig

If you’re puzzled by Israel’s relatively strong stock market performance, don’t forget you’re taking measure of a developed country.

By Olivier Ludwig

If only Fidelity could speak freely about all the positive things it does for investors.