Complete List of 79 ETP Closures for 2014

Seventy-nine exchange traded products bit the dust in 2014, marking the second highest annual death toll in the history of the ETF industry.  The 72 ETF and 7 ETN closures were second only to the 102 closures of 2012.  Broken down by major categories, the closures of 2014 consisted of 22 sector, 15 style and strategy, 14 global and international, 13 bond, 7 inverse, 4 leveraged, and 4 commodity.  Of the 2,121 U.S. ETPs launched since the dawn of the industry in 1993, only 1,662 remain listed while 459 have closed.  Said another way, the historic probability of ETP survivability is 78.4%.

Closures affected 15 brands and sponsors in 2014.  Pax World was the only sponsor to exit the ETF space completely, and it did so in a very strange fashion.  ETF pundits have long discussed the possibility of a large quantity of mutual funds converting to ETFs.  However, no one ever thought conversions might go the other direction, but that is exactly what happened when all $64 million of the assets in the Pax MSCI EAFE ESG Index ETF (EAPS) suddenly became Institutional Class shares of the Pax World International ESG Index Fund (PXNIX), a traditional mutual fund.  See ‘This Wasn’t Supposed To Happen: ETF Converts To Mutual Fund’ for additional details.

Goldman Sachs is highly regarded on Wall Street, and it is often thought of as a firm that can do no wrong when it comes to making money.  However, it hasn’t figured out the ETF space yet.  Goldman attached its name and investment strategies to four ETFs sponsored by ALPS in 2012.  Apparently, the Goldman name carries no weight in ETF land, and all four ETFs closed in 2014 with combined assets of less than $11 million.

For a number of reasons, the most notable closures of the year belong to iShares.  First, 29 iShares ETFs had their last day of listed trading in 2014, giving iShares a 37% market share of closures.  No other brands came close to this figure, with Direxion and EGShares tying for second-place “honors” with just six closures each.  Second, iShares raised the bar on ETF survivability, as its 18 closings in October averaged more than $18 million in assets and two had about $70 million each.  At the time, 49% of all listed ETFs and ETNs had fewer assets.  Third, two of the liquidated funds (NY and NYC) had been on the market more than ten years.  Longevity does not assure survival.  Last, I can recall a BlackRock representative questioning why there were iShares funds on ETF Deathwatch when none had ever closed.  I reminded him that iShares practically invented ETF closures with three such occurrences in 2002.  He rebutted that Barclays owned the iShares brand at that time, and BlackRock had never closed an ETF.  Never say never.

Some ETPs have maturation dates, namely target-date maturity bond ETFs and all ETNs.  At their time of launch, these products inform investors of their likely closure and liquidation dates.  For example, the Guggenheim BulletShares series of target maturity bond ETFs retire a couple of funds at the end of each calendar year.  The two 2014 BulletShares ETFs (BSCE and BSJE) had their last day of trading on December 30, and next year we can expect the 2015 funds (BSCF and BSJF) to do the same.  These are planned from the time of inception and are not indicative of unhealthy or failing products.

Every ETN is also issued with a maturity date.  Typically, ETNs are launched with 30-year or 20-year maturities.  Since the first ETNs didn’t come to market until 2006, most investors thought they wouldn’t have to deal with ETN maturation for another 10 or 20 years.  However, in 2009 there were five ETNs issued as 5-year notes scheduled to mature in 2014.  Three of these five triggered early terminations, including Barclays ETN+ S&P 500 Short B ETN (BXDB) last April.  The two that escaped early termination, BXUC and BXUB, matured in November and were liquidated.

Most of 2014’s closures had become Zombie ETFs, and 58 of the 79 (73%) were on ETF Deathwatch at the time of their closure announcements.  The major exceptions included the maturing products discussed above and many of the iShares with large amounts of assets.  The average age of funds that closed in 2014 was 45.8 months (3.8 years).  This is greater than the 31.4-month average lifespan of all 459 closed products, suggesting sponsors are willing to subsidize these non-profitable products longer than in years past.

The interactive table below is currently sorted by product name.

Notes: 1) actively managed, 2) reached planned maturity, 3) hit early termination trigger, 4) launched in 2014 and less than 1 year old at time of closure, 5) converted to mutual fund.  All exchange traded notes are identified with “ETN” as part of their name description. 

Additional resources:

• List of 67 ETF Closures in 2013
• List of 102 ETF Closures in 2012
• List of 38 ETF Closures in 2011
• List of 49 ETF Closures in 2010
• 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.