Blackrock’s (BLK) huge iShares closure takes place this week. The firm is shutting down 18 ETFs, including many that would be considered successful by most standards. The last day of trading will be Tuesday, October 14, with final shareholder distributions expected to be completed by October 21. To get your money sooner, and to avoid any liquidation surprises, we recommend selling shares prior to the impending delistings.

The affected funds, and their asset levels at the time of closure announcement:

  1. iShares MSCI Far East Financials ETF (FEFN), $4.5 million
  2. iShares MSCI Emerging Markets Financials ETF (EMFN), $6.6 million
  3. iShares MSCI Emerging Markets Materials ETF (EMMT), $7.6 million
  4. iShares Retail Real Estate Capped ETF (RTL), $11.8 million
  5. iShares Industrial/Office Real Estate Capped ETF (FNIO), $19.9 million
  6. iShares Global Nuclear Energy ETF (NUCL), $8.8 million
  7. iShares NYSE 100 ETF (NY), $69.6 million
  8. iShares NYSE Composite ETF (NYC), $73.3 million
  9. iShares Target Date 2010 ETF (TZD), $9.0 million
  10. iShares Target Date 2015 ETF (TZE), $30.8 million
  11. iShares Target Date 2020 ETF (TZG), $56.4 million
  12. iShares Target Date 2025 ETF (TZI), $43.7 million
  13. iShares Target Date 2030 ETF (TZL), $42.8 million
  14. iShares Target Date 2035 ETF (TZO), $34.9 million
  15. iShares Target Date 2040 ETF (TZV), $51.1 million
  16. iShares Target Date 2045 ETF (TZW), $8.7 million
  17. iShares Target Date 2050 ETF (TZY), $14.0 million
  18. iShares Target Date Retirement Income ETF (TGR), $13.5 million

Collectively, the 18 funds account for more than half a billion dollars in assets, an asset level many ETF sponsors would die for. Seven of the named ETFs are on ETF Deathwatch, including the first six listed above, and their closures come as no surprise.

However, the other eleven establish a new threshold for what it takes to be a viable product. Starting with iShares NYSE 100 ETF (NY) and iShares NYSE Composite ETF (NYC), these two have significant assets, with $69.6 million sitting in one fund and $73.3 million in the other. There are 809 products on the market with fewer assets. BlackRock’s size and scale of its ETF operations gives it a significant competitive advantage. If it no longer believes that a $70 million iShares ETF is a viable product, then what does that say about the 49% of the industry with smaller funds?

Target date funds are a staple of the 401(k) industry, and the iShares Target Date lineup of 10 funds extends all the way to products targeted at people retiring in 2050. However, these funds are also targeted for closure this week. With more than $300 million in assets, and the 401(k) industry trying to included ETF offerings, it is hard to believe there is not a future here for iShares.

Given that BlackRock has redefined what it means to be viable, other sponsors are going to have to perform a critical review of their current offerings. That also goes for the other 80 iShares ETFs with less than $70 million in assets and not included in this week’s closures.

Disclosure covering writer, editor, and publisher: 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.