iShares decides to put an end to its lineup of target-date ETFs.
iShares and Pimco, pruning deadwood and freeing resources for more prospective product development, together plan to shutter a total of 22 different ETFs in the fall. The planned closings are the latest example of what analysts consider a healthy exercise in an industry that’s increasingly quick to invest in what’s hot and get rid of what’s not.
BlackRock’s iShares unit, the biggest ETF company in the world, plans to close a total of 18 exchange-traded funds having a total of almost $520 million assets. Among those funds are nine so-called target-date funds that combine equities and fixed income in varying amounts depending on how close or far a given investor is from retirement. The concept, once considered innovative and alluring, hasn’t resonated in an ETF package.
“The decision was based on ongoing reviews, client feedback and limited investor interest in the funds,” according to an iShares communique for clients obtained by ETF.com. The target-date funds that will be completely shut and liquidated by Oct. 21 have almost $300 million in assets.
Pimco, the world’s biggest bond fund manager, will close four fixed-income strategies, including one with $3.7 million in assets focused on German sovereign debt, that plain and simply were not gathering many assets. The four funds being closed have a total of $68 million in assets and are scheduled to be liquidated by Oct. 1, the Newport Beach, Calif.-based company said in a press release.
In the same press release, Pimco indicated that the launches of three new ETFs---the Pimco Fundamental IndexPlus AR Active ETF (USFI), the Pimco International Fundamental IndexPlus AR Strategy Active ETF (IFI) and the Pimco Foreign Bond Active ETF (U.S. Dollar Hedged) (FBH)---were mminent. It didn't give a specific date.
For iShares, the nine target-date funds have almost $300 million in assets, or about 58 percent of the nearly $520 million in assets under management affected by the San Francisco-based company’s decision.
The closures will bring to 45 the number of ETF closures this year—well off the pace of last year, which ended with 70 fund closures, according to data compiled by ETF.com. As noted, the 21-year-old ETF industry has developed a reputation of shuttering funds that are slow to attract assets.
The iShares funds that are closing, and their current assets under management, are as follows:
- iShares Target Date 2010 ETF (TZD), $9.1 million
- iShares Target Date 2015 ETF (TZE), $31.1 million
- iShares Target Date 2020 ETF (TZG), $56.9 million
- iShares Target Date 2025 ETF (TZI), $44.1 million
- iShares Target Date 2030 ETF (TZL), $43.3 million
- iShares Target Date 2035 ETF (TZO), $35.2 million
- iShares Target Date 2040 ETF (TZV), $53.9 million
- iShares Target Date 2045 ETF (TZW), $8.8 million
- iShares Target Date 2050 ETF (TZY), $14.2 million
- iShares Industrial/Office Real Estate Capped ETF (FNIO | C-55), $20.1 million
- iShares NYSE 100 ETF (NY | B-85), $70.2 million
- iShares NYSE Composite ETF (NYC | B-69), $73.9 million
- iShares Retail Real Estate Capped ETF (RTL | C-70), $12.1 million
- iShares Target Date Retirement Income ETF (TGR), $13.6 million
- iShares MSCI Far East Financials ETF (FEFN), $4.4 million
- iShares MSCI Emerging Markets Financials ETF (EMFN), $6.6 million
- iShares MSCI Emerging Markets Materials ETF (EMMT), $7.6 million
- iShares Global Nuclear Energy ETF (NUCL), $8.7 million
The Pimco funds that are closing, and their current assets under management, are as follows:
- Pimco Germany Bond ETF (BUND | F-59), $3.2 million
- Pimco Canada Bond ETF (CAD | D), $17.8 million
- Pimco Australia Bond ETF (AUD | D-68), $22.9 million
- Pimco Build America Bonds Strategy (BABZ | C-62), $24.1 million