A record number of exchange traded fund closures in 2012 and Russell Investments shutting down its passive ETF business illustrate the tough competition in the industry.

A total of 71 exchange traded products have announced closures in the U.S. this year, breaking the previous record from 2008, the Financial Times reports.

Although ETF assets continue to rise, profitability is falling as managers slash fees to compete and gain market share, according to the article.

Russell Investments is closing all its ETFs except one, and Scottrade’s FocusShares is exiting the business altogether. [ETF Closures Reveal Fierce Competition for Market Share]

“ETFs closures are a reflection of the trading and investment environment,” Deborah Fuhr, a partner at research company ETFGI, told the newspaper. “But if the market comes back, ETFs will come back even stronger and see even greater net inflows than they are already.”

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