BlackRock, Goldman Announce Handful of ETF Closures
- BlackRock is closing 3 ESG mutual funds along with 8 ETFs.
- Goldman will shutter 2 funds: GBUY and GSFP.
- The closures come as a record number of funds come to market.
BlackRock Inc. and Goldman Sachs Group Inc. are closing a handful of exchange-traded funds, with BlackRock also shuttering three mutual funds that focus on environmental, social and governance (ESG) issues.
BlackRock is closing eight ETFs with total assets of around $109 million, along with six mutual funds, according to a statement from the New York-based asset manager. BlackRock’s iShares is the biggest ETF issuer, managing $3.4 trillion in 470 ETFs in the U.S.
Goldman Sachs, manager of $41.9 billion in 47 ETFs, is shuttering the $17.2 million Goldman Sachs Future Consumer Equity ETF (GBUY) and the $12.5 million Goldman Sachs Future Planet Equity ETF (GSFP).
The BlackRock closures include three mutual funds focused on ESG, which has been maligned in recent years. That's due, in part, to criticism that the funds put social concerns ahead of fiduciary responsibility, and it comes as political trends turn away from diversity measures and sustainable energy loses out in favor of supporting carbon-based sources. BlackRock, State Street, Janus Henderson and other ETF issuers have closed ESG funds in the past few years.
Launches Outpace Closures
ETF issuers frequently cull funds that lose favor with investors, based upon outflows, relevance or price declines. Still, launches far outpace closures, and last year a record was set for new funds coming to market. About 4,300 ETFs currently trade.
Recent ETF launches—Source: Factset
BlackRock’s ETF closures are relatively small funds, and all are between six and three years old. The largest is the $42.2 million iShares Commodity Curve Carry Strategy ETF (CCRV), which launched in 2020 and had net outflows of $1.9 million this year. Tracking commodities futures, it's gained 1.8% over the past three years.
Neither of the Goldman funds caught on with investors, who pulled a net $17.5 million from GBUY and took $28.8 million from GSFP this year. GSFP’s 7.7% gain this year has easily beat the 2.3% gain in the S&P 500, as measured by the Vanguard S&P 500 ETF (VOO). It charges a relatively high 75-basis-point management fee.
