The firm’s yuan-denominated bond ETF gets pruned after withering on the vine.
Guggenheim Investments, the fund sponsor behind the successful S&P 500 Equal Weight ETF, RSP, is closing its Chinese yuan-focused bond ETF next month because it has attracted only $2.61 million since its launch in the fall of 2011.
The shutting of the Guggenheim Yuan Bond ETF (NYSEArca: RMB), a fund based on an AlphaShares index developed with the help of indexing legend Burton Malkiel, is the 10th shuttering this year of an ETF by the Lisle, Ill.-based company. It shut nine ETFs in February—also due to low assets.
“ETF closures are a healthy part of the maturation of the industry, and enable providers to free up capital to develop new and innovative product offerings for investors,” William Belden, managing director for Guggenheim Investments, said in a press release.
Fund closures this year now total 32 funds—a healthy clip relative to most years in the industry’s 20-year history, but well off last year’s pace that led to more than 100 strategies shutting down. Industry sources generally echo Belden’s words about closures being a sign of a maturing industry, and many say also that fund sponsors are now less willing to try bringing to market any type of fund and are instead much more likely to carefully consider what the market will bear before investing resources in a rollout.
RMB’s last trading day will be June 14, and it will be liquidated on or about June 21, the company said. It also said it will suspend the fund’s May dividend distribution, which should maximize the amount RMB shareholders will receive at liquidation.
Guggenheim has four other China-focused ETFs that are also based on AlphaShares indexes that together have around $390 million in combined assets. The funds and their assets are:
- Guggenheim China All-Cap ETF (NYSEArca: YAO), $59.2 million
- Guggenheim China Real Estate ETF (NYSEArca: TAO), $53.3 million
- Guggenheim China Small Cap ETF (NYSEArca: HAO), $252.4 million
- Guggenheim China Technology ETF (NYSEArca: CQQQ), $20.5 million
Guggenheim is the No. 8 U.S. ETF sponsor, with total assets of $14.76 billion, according to IndexUniverse’s latest daily “League Table.” The Guggenheim S&P 500 Equal Weight ETF (NYSEArca: RSP), which is celebrating its 10th anniversary this year, has about $4 billion in assets.