ETFs Close Lower in March as Stocks Bounce Back

Fewer exchange-traded funds closed in March than in February, as investors poured money into the rising stock market. Still, 2024 is expected to see more fund closures than last year.

Bloomberg data shows that 18 ETFs closed in March, down 541 TP3T from the 39 funds that closed in February and down from the 27 funds that closed in January. This is also down from the 29 funds that closed in March 2023, a significant decrease. More than half of the funds that closed have fallen in price year-to-date, underperforming the S&P 500, which had its best first quarter so far in 2019.

All of the closed funds are equity funds and cover categories such as international funds, ESG funds and thematic funds such asSubversive Mental Health ETF (SANE).

Even after last year's record high, fund closures are expected to break records this year, with a three-year high of 246 fund closures in 2023, up from 147 in 2022. However, this year's liquidations are set to be even higher, with 83 funds closing in the first three months of 2024, compared to 62 in the same period last year.

As more and more funds are launched, more and more issuers tend to abandon ETFs with little investor interest or poor returns after about two years, said Sumit Roy, an analyst at etf.com.

However, as the ETF industry continues to grow and set new records in terms of asset size, more and more funds are replacing those that have fallen by the wayside. Last year, a record 529 funds were launched, up from 419 in 2022 and 475 in 2021.

Poor performance leads to closure

Poor performance is often a key indicator of fund closures, and those that closed in March underperformed.

Most of the funds that closed this month had negative year-to-date returns, compared to 11% for the S&P 500 over the same time period. among the funds that closed.Simplified Tail Risk Strategy (CYA)has been the worst performer, down 88% year-to-date.

Many of the funds closed due to underperformance were international-focused ETFs.Global X MSCI Nigeria ETF (NGE), VanEck Egypt Index ETF (EGPT)respond in singingKraneShares China Innovation ETF (KGRO)) are closed in March.

Please pass [email protected]Contact Lucy Brewster The

Permalink | © Copyright 2024etf.com Press validate it