FFCM, the advisor to the QuantShares family of ETFs, announced the termination and liquidation of three of its funds. The last day of trading will be Friday, November 2, 2012. To avoid any surprises, I advise shareholders to dispose of their holdings prior to the delisting, use a limit order, and observe other precautions identified in Five Steps to Avoid Disaster When Your ETF Closes.
The liquidating ETFs are:
- QuantShares U.S. Market Neutral Anti-Momentum Fund (NOMO)
- QuantShares U.S. Market Neutral High Beta Fund (BTAH)
- QuantShares U.S. Market Neutral Quality Fund (QLT)
According to the press release (pdf), FFCM originally believed the demand would be larger for these ETFs. “FFCM has now refined those views based on, among other things, limited evidence of institutional demand for their shares. As a result of lower than anticipated levels of institutional and retail demand, the trading volume in their shares has been less than expected. As a result, liquidity in such shares has lagged.”
The three closing ETFs were part of a seven ETF market-neutral lineup rolled out in September of last year. FFCM believes its four other market-neutral ETFs can play a role in portfolios, even though two of the funds are on ETF Deathwatch and the four have combined assets of only about $40 million. Additionally, the firm plans to introduce six new ETFs that are not market-neutral.
The lifetime ETP closure count hit 300 last week. Calendar year 2012 closures already announced are now at 97 and on a pace to exceed 100.
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.