Invesco PowerShares today (5/1/09) announced plans to close and liquidate 19 ETFs. The last day of trading for the affected products (listed below) will be May 18, with liquidation and distribution amounts determined by the May 22 value.
The FAQ has some additional information about the closing. PowerShares warns that starting in early May, the closure process “will cause each fund’s holdings to deviate from the securities included in its underlying index and each fund to increase its cash holdings, which may lead to increased tracking error.” Therefore, I advise all shareholders to sell their holdings as soon as possible, and use a limit order when doing so.
The press release states that the 19 closures represent less than 1% of their ETF assets and PowerShares will remain “fully committed to the ETF industry and expect to offer new, exciting products in the months ahead.” Most of the closing funds are great products, and I will be sad to see them go. Unfortunately, they failed to attract enough investor interest to remain viable. The closures will raise the ETF death toll to 45 for calendar year 2009.
The process of determining which funds to close considered many factors and resulted in some surprises. All nine of the FTSE RAFI US sector funds are being closed, even though PowerShares FSTE RAFI Energy (PRFE) has developed a relatively significant following with $3.2 million in Average Daily Value Traded (ADVT) for the month of April, ranking it 293 out of 843 ETFs and ETNs.
PowerShares Dynamic Asia Pacific (PUA) is being eliminated while less popular offerings, like PowerShares FTSE RAFI Japan (PJO), are being kept open. All funds launched in 2008 were spared from this action, giving them more time to gain traction. Of the funds remaining open, 26 will still be included in our soon to be published ETF Deathwatch for May.
The press release states that PowerShares has “135 unique portfolios.” According to our database, there are currently 150 exchange traded products (131 ETFs and 19 ETNs) with the PowerShares name. Additionally, PowerShares is now the sponsor for the four BLDRS products, but (so far) they have not added “PowerShares” to their names. The 135 number apparently excludes ETNs while including BLDRS.
The 19 affected ETFs are:
- PowerShares Dynamic Aggressive Growth Portfolio (PGZ)
- PowerShares Dynamic Asia Pacific Portfolio (PUA)
- PowerShares Dynamic Deep Value Portfolio (PVM)
- PowerShares Dynamic Europe Portfolio (PEH)
- PowerShares Dynamic Hardware & Consumer Electronics Portfolio (PHW)
- PowerShares FTSE RAFI Asia Pacific ex-Japan Small-Mid Portfolio (PDQ)
- PowerShares FTSE RAFI Basic Materials Sector Portfolio (PRFM)
- PowerShares FTSE RAFI Consumer Goods Sector Portfolio (PRFG)
- PowerShares FTSE RAFI Consumer Services Sector Portfolio (PRFS)
- PowerShares FTSE RAFI Energy Sector Portfolio (PRFE)
- PowerShares FTSE RAFI Europe Small-Mid Portfolio (PWD)
- PowerShares FTSE RAFI Financials Sector Portfolio (PRFF)
- PowerShares FTSE RAFI Health Care Sector Portfolio (PRFH)
- PowerShares FTSE RAFI Industrials Sector Portfolio (PRFN)
- PowerShares FTSE RAFI International Real Estate Portfolio (PRY)
- PowerShares FTSE RAFI Telecommunications & Technology Sector Portfolio (PRFQ)
- PowerShares FTSE RAFI Utilities Sector Portfolio (PRFU)
- PowerShares High Growth Rate Dividend Achievers Portfolio (PHJ)
- PowerShares International Listed Private Equity Portfolio (PFP)
Disclosure: no positions