We Hardly Knew Ye. Saying Good-Bye To State-Specific ETFs

When Geary Advisors introduced the Oklahoma Exchange-Traded Fund OOK and the Texas Exchange-Traded Fund TXF late last year, the ETF Professor thought the premise behind the ETFs was novel and one that could certainly be applied to other states as well. Given the dependence of the Oklahoma and Texas economies on the energy industry, OOK and TXF were basically energy ETFs, but Geary Advisors did an admirable job in diversifying the sector weights, particularly with TXF. And when they made their debuts, the expense ratios were a tad high, but again, Geary did the right thing and lowered those costs. Beyond that, OOK and TXF have both outperformed the Energy Select Sector SPDR XLE and the S&P 500 since inception. Everything is written in the past tense to this point because, in a testament to how fickle investors are and how tough the ETF game is becoming, Geary will shutter the two funds at the end of the month. Despite their solid performances, OOK and TXF were slow to attract assets and that usually means slack trading volume. A combination of the two factors is a toxic brew that usually leads to an ETF's closure. Assets are the name of the game as there plenty of ETFs with weak volume but decent asset piles that probably won't disappear anytime soon. OOK and TXF will be the 29th and 30th ETFs to leave us this year. Too bad given their performances. Beat the market consistently by receiving real-time trade alerts from the ETF Professor!