Daily ETF Watch: iShares Shuts 10 Funds

January 26, 2014

Ten iShares ex-U.S. sector funds are getting the ax in March.

iShares is shuttering 10 All Country World Index (ACWI) ex-U.S. sector funds after the close of business on March 25, 2014, the result of weak asset gathering since the funds were launched more than three years ago.

The 10 funds, which currently altogether have about $54 million in assets, were brought to market on July 13, 2010.

The funds getting the ax, and their total assets under management, include:

iShares MSCI ACWI ex U.S. Consumer Discretionary (AXDI | F-61), $4.25 million

iShares MSCI ACWI ex U.S. Consumer Staples (AXSL | D-61), $7.71 million

iShares MSCI ACWI ex U.S. Energy (AXEN | F-78), $5.33 million

iShares MSCI ACWI ex U.S. Financials (AXFN | F-67), $5.16 million

iShares MSCI ACWI ex U.S. Healthcare (AXHE | D-65), $12.42 million

iShares MSCI ACWI ex U.S. Industrials (AXID | F-63), $3.37 million

iShares MSCI ACWI ex U.S. Information Technology (AXIT | F-62), $3.35 million

iShares MSCI ACWI ex U.S. Materials (AXMT | F-60), $2.45 million

iShares MSCI ACWI ex U.S. Telecommunication Services (AXTE | D-64), $3.18 million

iShares MSCI ACWI ex U.S. Utilities (AXUT | D-74), $6.6 million

The pace of closures has generally slowed in the U.S. ETF industry, which, on the whole is in a full-growth phase. More than 1,500 ETFs are now listed in the U.S., and total assets under management are now about $1.7 trillion, according to data compiled by ETF.com.

Filings

 

The New York Stock Exchange has filed paperwork with the SEC to adopt a new rule that would permit “nontransparent” ETFs to list and trade on its platform. Specifically, the NYSE’s filing granted permission to list and trade Precidian Investment’s three new funds, including the:

  • ActiveShares Large-Cap Fund, which will invest in stocks included in the Russell 1000 Index
  • ActiveShares Mid-Cap Fund, which will invest in stocks that are included in the Russell 2000
  • ActiveShares Multi-Cap Fund, which will invest primarily in securities included in the Russell 3000 Index and ETFs

Precidian last week filed in a prospectus detailing three proposed nontransparent ETFs that could go long or short. Under normal market conditions, their net long equity market exposure will not exceed 100 percent, and its net short equity market exposure will not exceed 30 percent. However, the portfolio managers may at times exceed these percentages, according to the filing.

The company’s proposal details the use of a blind trust at the center of the ETF creation/redemption process that would allow portfolio managers to keep portfolio constituents private for the three-month period—plus a 60-day lag—currently accorded to nontransparent open-end mutual funds.

Crucially, the coast won’t be clear for Precidian to actually launch the funds until the SEC itself grants the company’s petition to market such revolutionary nontransparent ETF using the blind trust.

 

 

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