MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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|
MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Tuesday, January 24, 2012 Nearly 20 Percent of ETFs Live on 'Death Watch' Even as record numbers of ETFs launch, more and more of those new ETFs are failing to attract enough assets. Active ETFs, in particular, have had a rough go so far. Will Bill Gross' Pimco Total Return ETF [profile] buck that trend? Ron Rowland, founder of advisory firm Capital Cities Asset Management, told CNNMoney's Hibah Yousuf that 368 exchange-traded funds, nearly 20 percent, are on what he calls "death watch," lacking at least $5 million in assets under management or average daily trading of $100,000 for three months, with a six-month grace period. According to XTF data, of the 308 new ETFs launched in 2011, 86 percent failed to bring it at least $30 million in assets. And ETF Database co-founder and managing director Michael Johnston added that more than 200 ETFs have liquidated since 2008. Yousuf highlights both stats in a CNNMoney piece asking, "Is the ETF bubble about to burst?" "A few years ago, it didn't take much to launch a successful ETF, as long as you were first to the market in a particular niche," Rowland told CNNMoney. "Now it takes a whole lot of marketing and media attention to get noticed. Most fund providers underestimate the amount of marketing dollars it will take to attract the asset levels they want." Rowland added that "actives have been a big bust so far." Yet Morningstar ETF research director Scott Burns wonders if the Pimco Total Return ETF could be a "game changer," because it's a "brand name manager." Global X Funds chief Bruno del Ama and Street One Financial ETF/options sales and trading chief Paul Weisbruch also weighed in for the article. Printed from: MFWire.com/story.asp?s=38918 Copyright 2012, InvestmentWires, Inc. All Rights Reserved |