Many of the closures in the U.S. market this year have resulted from Russell and FocusShares throwing in the towel on entire ETF lineups. [ETF Shutdowns Reveal Fierce Competition]
“You’ve got firms keeping these products on a shorter leash and the patience level is definitely lower on the part of product providers,” said Robert Goldsborough, ETF analyst at Morningstar, in the Ignites story. “Managers are probably thinking, ‘These products aren’t taking off and they’re not going to take off, and if they’re not going to come to fruition, why are we throwing good money after bad?’”
He added: “The world has changed a little bit. I think it’s the sign of a maturing industry and I think it’s a sign that there are a lot of providers that aren’t willing any longer to prop up unsuccessful products.”
PowerShares said the 13 affected ETFs will liquidate in the first quarter of 2013.
“We regularly review our ETF portfolios, evaluating numerous factors such as investment results, length of time in the market and investor interest,” said Ben Fulton, Invesco PowerShares managing director of global ETFs, in a press release. “Based on this assessment, we believe the time is right to make these moves and refocus our resources to better meet investors’ needs.”