Comments on: Just Too Many ETFs out There: Claymore to Close 11 Funds that Nobody Wants

By: PowerShares Shut down 19 ETFs

PowerShares Shut down 19 ETFs — Mon, 04 May 2009 20:05:21 +0000

[...] each day for some while most having trading volumes in the hundreds. This is also the case when Claymore Securities closed 11 ETFs last [...]

By: Oil ETFs: Time to Invest in Anticipation of a Rebound in Oil Price?

Oil ETFs: Time to Invest in Anticipation of a Rebound in Oil Price? — Wed, 14 Jan 2009 21:53:55 +0000

[...] showing above. I left out those with very small trading volumes. As it happened last year to some Claymore ETFs, if nobody trades an ETF, it won’t last, no matter how good the concept is. So when you [...]

By: Time to Invest in Alternative Energy?

Time to Invest in Alternative Energy? — Wed, 05 Nov 2008 18:55:40 +0000

[...] the asset size of the fund, in addition to cost (expense ratio) and investment holdings. Early this Claymore Securities had to close 11 ETFs because nobody traded them. If you found information on this Diary helpful, please consider [...]

By: Green Your Portfolio with Claymore’s Solar ETF

Green Your Portfolio with Claymore’s Solar ETF — Wed, 23 Apr 2008 03:38:15 +0000

[...] Claymore has also created some exotic ETFs in the past, but had to shut them down early this year after the funds failed to get investors attention. Hope this new offering can avoid [...]

By: Jonathan Clements’ Rules of “Getting Going” | The Suns Financial Diary | A Personal Finance Blog on Saving and Investing

Tue, 11 Mar 2008 02:46:12 +0000

[...] new, exotic ETFs are be introduced every day and some disappeared as quickly as they came out, how should regular investors embrace the flood of new investments? Mr. [...]

By: Weekly Dividend Investing Roundup - February 8, 2008 » The Dividend Guy Blog

Fri, 08 Feb 2008 15:03:07 +0000

[...] classes and leave it at that. Don’t try to get fancy and go into real niche index funds. This article from Sun talks about the huge number of ETFs in the [...]

By: Sun

Sun — Wed, 06 Feb 2008 04:54:39 +0000

It seems that ETF is now a lucrative business and everybody wants a piece of it. Since ETFs until now all track some kind of indices, financial firms so far have been very creative in creating new indices so that new ETFs can be launched. Think about it, if there is a Vaccine index, why can’t there be a Wine index or Beer index? More indices are going to be introduced and more ETFs will follow. And sure more funds will not survive.

I just heard today that actively managed ETFs will soon be on the table. I wonder how much the active ETF will cost.

By: CiaranFromChance

CiaranFromChance — Wed, 06 Feb 2008 04:18:13 +0000

I think we’ll be seeing more and more of this. Going forward new ETF’s will only survive if they are covering new or emerging markets and are new to the marketplace.

ETF’s track indexes (for the most part) and the first so called ‘pioneers’ to the marketplace stake their claim, much like the GoldRush 150 years ago. That will be Vanguard, Barclays, StateStreet, etc.

Actively managed funds, hedge funds will always come out with new offerings and some will survive because it’s about absolute performance, ETF’s are all about relative performance, its a commoditized business, that comes down cost for the most part.

If you like cola and launch a new brand and try and compete against Coke or Pepsi, how can you? No chance. You can only compete if you bring something new and exciting to the marketplace, a Vitamin Water.

More of this to come for sure…

By: Jeremy

Jeremy — Wed, 06 Feb 2008 02:42:59 +0000

Jonathan, I’m guessing by what was said in the post that people who still hold assets in the funds as of Feb. 28th will just have their positions liquidated. This is quite a raw deal if people just recently invested in these funds and will have to take a loss thanks to the market lately.

Kind of reminds me of the whole mortgage mess. For decades we had just simple straightforward mortgages, and things chugged along just fine. Then along come all sorts of exotic loans to entice more people into the market, and look what happened. Same thing with a lot of the ETFs being created. They have abandoned their roots, attracted more investors, and now people are going to get screwed.

By: Jonathan

Jonathan — Wed, 06 Feb 2008 02:21:52 +0000

This is actually kind of funny, Global Vaccine ETF? I wonder what happens if you hold these ETFs – do you just get cashed out at NAV one day?

By: The Dividend Guy

The Dividend Guy — Tue, 05 Feb 2008 22:27:42 +0000

One of the biggest benefit of index funds is the simplicity. The index fund companies have done a disservice to investors by creating all these niche funds. Keep things simple and invest in broad asset classes.
Just my two cents.

By: Jeremy

Jeremy — Tue, 05 Feb 2008 18:38:19 +0000

I do think we’re getting flooded with too many ETFs, and it is eventually going to do investors a disservice. It is almost as if they will create an index out of anything just for the sake of doing it. I’m surprised we don’t have an ETF that tracks mid-cap value funds of companies that only start with the letter M.

It is great that investors have access to a wide range of investments with low fees, but you can have too much of a good thing. Choice is good, but too many choices can cause paralysis. Even worse is that some of these very specialized ETFs end up being no less diversified than an individual stock in the grand scheme of things. Investors who maybe have heard that ETFs are a great low-cost way to obtain diversification might be putting all of their money in a few ETFs that focus on just a few specific niches.

And of course, if we begin to see more of these funds closing like this, investors may very well get screwed as their assets are liquidated at a potential loss and be faced with finding alternative places to put their money, and incurring another trade commission to do so.