Daily ETF Watch: Direxion To Close BARS

Firm known for leveraged/inverse funds is shutting down triple-short gold ETF.

Reviewed by: Heather Bell
Edited by: Heather Bell

Direxion Shares announced last week that it was shutting down its inverse ETF targeting the gold market.

The Direxion Daily Gold Bear 3x Shares (BARS) aims to provide returns equal to three times the inverse of the daily performance of a gold futures contract traded on the Chicago Mercantile exchange. It was launched in April of this year, and in its eight months of trading, it has accumulated less than $5 million in assets under management.

The fund’s net expense ratio is a rather pricey 1.56 percent, which could have something to do with its failure to thrive.

BARS is slated to cease trading on Dec. 26, with its liquidation set for Dec. 30.

Interestingly, BARS’ sister fund, the Direxion Daily Gold Bull 3x Shares (BAR) has even less in assets—barely more than $3 million—and will continue to trade.

Both BAR and BARS saw their tickers changed in August, just a few months after their initial launches; originally the funds had traded under the tickers GLDL and GLDS, respectively.

The pace of closures this year looks similar to a year ago, with 68 strategies shuttered or slated to close up shop so far this year—including BARS—compared with 69 closures last year.

So far in 2014, 196 new ETFs have been launched, compared with 162 launches in all of 2013, according to data compiled by ETF.com.

Total assets in more than 1,660 ETFs are now nearly $1.942 trillion. Assets keep flowing into ETFs, fund launches continue apace and markets have mostly been pushing upward into record territory almost six years after the subprime mortgage crisis cratered markets and brought the global economy to the brink of a full-scale meltdown.

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Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.