First Wave of ETF Closures for 2009

January 29, 2009 by  
Filed under Commentary, ETF Closings, ETFs

The number of ETF closures for 2008 was a record high 58. In all likelihood, that record will be shattered in 2009. On Tuesday, Northern Trust announced their plan to exit the ETF business and shut down all 17 of their NETS exchange traded funds.

The last day of trading for the affected products will be February 9, 2009. Shareholders are encouraged to sell shares before then to avoid going through the liquidation process. These are thinly traded ETFs, so be sure to use a limit order when placing your trades.

Most of the NETS ETFs track the primary stock market indexes of foreign countries. The German DAX, the French CAC, and Japan TOPIX are just few examples. The NETS family had the potential to be a good product set. The problem is they only attracted about $33 million in assets, not enough to make it as an economically viable business for Northern Trust.

These closings should come as no surprise to anyone following my ETF Deathwatch articles. The NETS products did not show up on my early ETF Deathwatch lists because ETFs less than six months old are granted immunity, and Northern Trust entered the ETF business just last April. Most of their ETFs made the list once they became eligible for inclusion. The January report called attention to a large percentage of NETS products on the list, suggesting they were in trouble.

The 17 ETFs that are closing and liquidating are:

  • NETS AEX Index (Netherlands) (AEX)
  • NETS BEL 20 Index (Belgium) (BRU)
  • NETS CAC 40 Index (France) (FRC)
  • NETS DAX Index (Germany) (DAX)
  • NETS FTSE 100 Index (London) (LDN)
  • NETS FTSE Singapore Straits Times Index (SGT)
  • NETS FTSE/JSE Top 40 Index (South Africa) (JNB)
  • NETS FTSE-CNBC Global 300 Index Fund (MYG)
  • NETS Hang Seng China Enterprises Index (SNO)
  • NETS Hang Seng Index (Hong Kong) (HKG)
  • NETS ISEQ 20 Index (Ireland) (IQE)
  • NETS PSI 20 Index (Portugal) (LIS)
  • NETS S&P/ASX 200 Index (Australia) (AUS)
  • NETS S&P/MIB Index (Italy) (ITL)
  • NETS TA-25 Index (Israel) (TAV)
  • NETS Tokyo Stock Exchange REIT Index (JRE)
  • NETS TOPIX Index (Japan) (TYI)

Disclosure: No positions.

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