Jefferies Shuts Down Another ETF

April 19, 2012

Financial firm has just one ETF left in its portfolio.

Jefferies Asset Management will close down its TR/J CRB Wildcatters Exploration & Production Equity ETF (NYSEArca: WCAT) and liquidate the fund’s assets on May 2, according to ETF Trends. A representative from Jefferies confirmed the closure via phone, citing “lack of interest.” WCAT only managed to attract $9.5 million in assets in its two-year life, and its exit from the stage leaves the Stamford, Conn. firm with only one ETF to offer advisors.

WCAT, which comprised two-thirds of its holdings in natural gas exploration companies, launched into an already-saturated environment, competing with such powerhouses as the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) with nearly $850 million in AUM, according to IndexUniverse data, or the more-focused $338.4 million First Trust ISE-Revere Natural Gas ETF (NYSEArca: FCG).

The fund’s potential for success was premised on natural gas prices rising, which, as anyone who has held UNG knows, hasn’t happened. IndexUniverse Global Head of Editorial Matt Hougan predicted the WCAT could take a step back if commodity prices fell, in a blog he wrote in January 2010 shortly after the fund launched.

The death of WCAT follows similar fund closures from the firm. The TR/J CRB Global Agricultural Equity ETF (NYSEArca: CRBA) had only $8.58 million and the TR/J CRB Global Industrial Metals Equity ETF (NYSEArca: CRBI) had only $3.18 million when they were shut down in December 2011.

These closures have not come as a surprise. Along with their paltry AUM and minimal trading volumes, CRBA and CRBI both scored “high” in terms of closure risk in the ETF rating system developed by IndexUniverse’s Analytics team. WCAT scored “medium” in terms of risk.

The demise of WCAT leaves Jefferies with just one fund left: the Jefferies TR/J CRB Global Commodity Equity Index Fund (NYSEArca: CRBQ), which has $88.9 million in assets as of April 18, 2012, according to IndexUniverse data.


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