XShares, Dreams Dashed, Sold To Deutsche

By
July 07, 2010
Share:

XShares, the company famous for slicing and dicing ETFs to a point many considered absurd, was sold to a unit of Deutsche Bank, ending a tale of unrealized dreams.

XShares Group, the parent of ETF sponsor XShares Advisors LLC, announced the sale of its ETF subsidiary, known for its ill-fated HealthShares family of finely calibrated healthcare funds, to a Deutsche Bank unit.

The sale of XShares appears to be the final chapter of a story of unrealized dreams for the fund sponsor. The HealthShares family of funds had difficulty attracting investors, which at one point sliced and diced the healthcare sector into 19 categories, including cardiology, cancer, dermatology and orthopedic repair.

In August 2008, XShares closed 15 of its 19 HealthShare funds. The four surviving funds were its Cancer ETF (NYSEArca: HHK), its European Drugs ETF (NYSEArca: HRJ), its Diagnostics ETF (NYSEArca: HHD) and its Enabling Technologies (NYSEArca: HHV) funds intact. But they too were shuttered in December.

XShares also made an ill-timed foray into U.S. real estate. In June 2008, XShares closed down its AdelanteShares family of real estate ETFs, which came to market after the U.S. housing bubble began deflating and just before financial markets went into a free fall following the collapse of Lehman Brothers. The AdelanteShares family of seven funds had accumulated only $17 million in assets when the end came.

XShares Advisors LLC has been rechristened DBX Strategic Advisors, according to David Lukas, a spokesman for XShares Group. Under terms of the sale, DBX Strategic Advisors will take over the day-to-day management of the remaining XShares ETFs, five TDX Independence target-date funds. An official at Deutsche Bank declined to comment.

The XShares Group, which will operate under the new moniker BNDRE Holdings, plans to focus on investments in distressed U.S. real estate.

ETF.COM CHANNELS

Interested in China? Use our China ETFs Channel, library, and ETF screener.

Interested in oil? Use our oil ETFs channel, library and ETF screener!

ETF DAILY DATA

The largest gold miners ETF lost assets on Thursday, April 28.

BlackRock's ETF assets gained $859 million on Thursday, April 28.

ETF.COM ANALYST BLOGS

By Drew Voros

With the broad equity ideas all taken, issuers look for thinner slices of exposure.

By David Lichtblau

How funds wash away capital gains through create/redeem process.

By Dave Nadig

End investors are the big winners; brokers—not so much.

By Dave Nadig

ETF industry petitions the SEC for market microstructure changes.

ETF INDUSTRY PERSPECTIVE

By Sprott Asset Management

New fund’s underlying index targets equities sentiment on social media.

By Kristi Kuechler

Avoid taking unrewarded—or unintended—risks.

By Vanguard

The investing giant outlines its expectations for the markets and global economy in 2016.