ETF Closure Wave Continues

This year has been unexpected in many ways, and perhaps nobody predicted the deluge of ETF closures that would be sparked by the coronavirus pandemic. Certainly, the year was off to a strong start for shutdowns, with Invesco closing more than 40 ETFs in February, but there were no real indications of what would happen.

Year to date, 128 ETFs and ETNs have shut down. But we’re also seeing a slew of announcements for more to come during the summer. Another 20 ETFs are slated to close by mid-August, including eight from BlackRock’s iShares arm, the world’s largest ETF issuer.

Most recently, IndexIQ announced it would be shutting down five of its ETFs, or one-fifth of its lineup, as of Aug. 5. They are among the smallest of IndexIQ’s ETFs, and each has less than $13 million in assets under management. The targeted ETFs include the following:

• IQ Global Agribusiness Small Cap ETF (CROP)
• IQ 50 Percent Hedged FTSE Europe ETF (HFXE)
• IQ 50 Percent Hedged FTSE Japan ETF (HFXJ)
• IQ Leaders GTAA Tracker ETF (QGTA)
• IQ Short Duration Enhanced Core Bond U.S. ETF (SDAG)

More On The Way

Additional closures are scheduled from Principal, which will see its Principal Sustainable Momentum Index ETF (PMOM) and Principal Contrarian Value Index ETF (PVAL) cease trading after Aug. 14. Both ETFs currently have less than $5 million in assets under management.

Other ETF shutdowns, their tickers and final days of trading are as follows:

• LHA Market State U.S. Tactical ETF (MSUS), June 25
• Xtrackers MSCI Latin America Pacific Alliance ETF (PACA), June 26
• Amplify EASI Tactical Growth ETF (EASI), July 6
• Hartford Multifactor REIT ETF (RORE), Aug. 7
• Hartford Multifactor Low Volatility U.S. Equity ETF (LVUS), Aug. 7

Once these closures are completed, nearly 150 ETFs will have shuttered during 2020. For comparison, by mid-August last year, just 72 ETFs had shut down, and in 2018—a very strong year for closures—124 had closed by mid-August. Remember that 2018 also saw 50 iPath ETNs close in April, significantly boosting the total count.

Contact Heather Bell at [email protected]