List of 49 ETF Closures for 2010

U.S. exchange traded product delistings and closures totaled 49 in 2010, consisting entirely of ETFs (no ETNs).  The lifetime tally now stands at 173 (160 ETFs and 13 ETNs).  The 49 closures represent a 12.5% drop from 2009 and mark the second straight year the quantity has declined.

Closures affected nine different sponsors, with two making a 100% exit from the market: Old Mutual decided to terminate its GlobalShares line and the NYSE initiated the delisting of Geary ETFs.  Sponsors closing a portion of their product lines included Claymore (now named Guggenheim), Direxion, Grail, Javelin/JETS, PowerShares, Rydex, and WisdomTree.

The reason for most closures is the failure to attract enough assets and generate enough fee revenue to be a profitable product for the sponsor.  There are of course exceptions, and the abrupt delisting of Claymore/Delta Global Shipping Index ETF (SEA) after the close on April 27 was just such a case.  The ETF was successful by nearly any measure you want to choose and had $152 million in assets.  Yet it failed to obtain a quorum of shareholders to approve a new management agreement with Guggenheim, forcing it to delist, liquidate, and close.  As a testament to its prior success, Guggenheim introduced its replacement in June.

Claymore/Sabrient Stealth ETF (STH) is no longer with us, but it is not part of the official closure statistics for 2010.  STH ceased to exist after August 19, but rather than close the fund, Claymore/Guggenheim decided to perform an extreme ETF makeover.  The next day it began trading as Wilshire Micro-Cap ETF (WMCR), with a new name, new ticker, new underlying index, and a new objective.

The average age of funds that closed in 2010 was 28.2 months.  This is significantly above the 19.6-month average lifespan of all 173 closed products.  This suggests that sponsors are becoming more patient with new funds, giving them a longer period in which to prove their viability.

ETF & ETN Closures of 2010

Additional resources:

• List of 56 ETF Closures in 2009
• List of 58 ETF Closures in 2008
• Free weekly newsletter to stay abreast of future ETF closings
• Catalog of ETF Closure Articles

Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.