ETF Closures Drop While Openings Maintain Momentum

New ETFs dip from last month, while staying on track to beat last year’s total.

The number of exchange-traded funds that closed last month was barely one-fifth of last June’s total, and with new ETFs on track to top last year’s figure, investor enthusiasm for the funds appears to continue unabated. 

Ten ETFs closed last month, according to data from Bloomberg News, a steep decline from the 51 that shut in June 2023. Seven of the closures were Barclays iPath funds that the company decided to exercise an option on and liquidate, according to a June 17 press release. 

At the same time, new fund openings are humming along. Issuers opened 40 new funds last month, bringing this year’s total to 258 through June and well ahead of 2023’s year-to-date of 183, according to etf.com launch data. That was a few less than June 2023, when 49 funds opened, the same total for May 2024. 

New funds are opening as issuers tap into demand from advisors and investors who favor ETFs over mutual funds because of the former’s ease of trading and tax benefits. The U.S. industry recently topped $9 trillion in assets, according to ETFGI data, due in part to surging stock markets and investors departing safer investments like money markets. In May ETFs pulled in a net $87.4 billion. 

Click chart for full list of openings:

Last month’s launches included a variety of funds, ranging from specialized areas such as leveraged, buffered, equity, fixed income and crypto to traditional investments like large cap stocks. 

Fewer Openings in June

The fewer openings may indicate a saturation of existing fund varieties and subsectors, etf.com research lead Kent Thune suggested.

“I see a lack of new trends in 2024 compared to 2023,” he said. “Last year, investors couldn't get enough of JEPI-like covered call ETFs, Mag 7-based thematic funds, and defined outcome funds, aka ‘buffer ETFs.’” 

“Those funds are still popular, but I don't see as many new issues in those areas.” Thune said. “We've also seen a decline in popularity of ESG funds.” 

July is off to a quick start, with 15 new launches, according to an email sent by FactSet Monday morning. Allianz, Calamos, Innovator and BlackRock’s iShares were among the companies issuing new funds.