1Q ETF Doldrums: More Closures, Fewer Launches

Closures in the quarter triple to 56 as market woes take their toll.

Reviewed by: Heather Bell
Edited by: Heather Bell

Fewer exchange-traded funds launched and more closed in the first quarter, as ETFs reflected the rising interest rates and bank collapses weighing on markets. 

Ninety ETFs debuted during the quarter, down from 114 in the same period last year. Fifty-six funds closed during the quarter, far outpacing the 18 in last year’s first quarter, according to etf.com data.  

The launch and closure counts likely reflect the effects of the bear market, rising inflation and the threat of looming recession. When the economy gets rough, issuers tend to be more conservative with their launches and less inclined to keep funds with low assets up and running. 



That slowdown continued into January of this year, which had just 21 launches, fewer ETFs than rolled out in the first months of the two previous years. This year, things started picking up in February, and in March 2023, we saw more launches than we saw during the same month in either 2021 or 2022.  

While last year wasn’t a record-breaker for launches, it was off to a strong start until Russia’s invasion of Ukraine at the end of February. Things cooled further as inflation began to climb during the summer. 

Active Continues to Outpace Passive 

During the last few years, more actively managed ETFs have launched than passively managed ones. About 60% of launches during the past few years have been actively managed, and that hasn’t deviated too significantly—64% during the first quarter. Of those 90 launches, 58 were actively managed, while 32 were passive.  

There were also 57 equity ETFs that launched during the quarter, but only 22 falling within the fixed income category. The remainder of launches included funds in the commodities, asset allocation and currency categories.  

And of those equity ETFs, 18 could be considered thematic.  

This year, we are again seeing Invesco close a wide swath of funds, but at 18 ETFs, it’s just a little less than the number of funds it shut down in 2020’s first quarter. There were originally 26 funds from Invesco set to close in the first quarter, but eight were rescheduled to complete in the second quarter.  


Contact Heather Bell at [email protected]   

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.