From the December 2010 issue of Research Magazine • Subscribe!

Invesco Closing 10 ETFs

InvescoPowerShares announced plans to eliminate 10 of the investment firm’s ETFs. “We regularly review portfolios carefully evaluating numerous factors such as investment results, length of time in the market, investor interest, and the potential for future growth,” said Ben Fulton, Invesco PowerShares managing director of global ETFs. “Based on this assessment, we believe that it’s in the best interest of our investors that we refocus our resources on areas that we believe are of greater client interest.”

All of the PowerShares funds being eliminated are equity ETFs and represent less than one percent of the company’s total ETF assets.

PowerShares joins other ETF firms that have either closed shop, like the GlobalShares ETFs or reduced the number of products in their ETF lineup like Guggenheim Funds (formerly known as Claymore ETFs).

Despite the mad rush by investment firms to launch new ETFs, the ETF marketplace has become a cluttered landscape with multiple funds that often duplicate the same investment strategy. As a result, many ETFs are struggling to survive because of low trading volume and not enough scale. Almost half of the 959 ETFs listed in the U.S. have assets under $100 million, according to the National Stock Exchange.

The final trading day for the PowerShares ETFs listed below will be Dec. 14. Shareholders who do not sell their holdings on or before this date will receive cash equal to the amount of the net asset value of their shares, which will include any capital gains and dividends, in the cash portion of their brokerage accounts on the liquidation date (currently scheduled for Dec. 21). Shareholders will generally recognize a capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares.

At the end of September, InvescoPowerShares had $49.38 billion under management in 125 ETFs.
The liquidating ETFs are listed below:

  • PowerShares Dynamic Healthcare Services Portfolio (PTJ)
  • PowerShares Dynamic Healthcare Telecommunications & Wireless Portfolio (PTE)
  • PowerShares FTSE NASDAQ Small Cap Portfolio (PQSC)
  • PowerShares FTSE RAFI Europe Portfolio (PEF)
  • PowerShares FTSE RAFI Japan Portfolio (PJO)
  • PowerShares Global Biotech Portfolio (PBTQ)
  • PowerShares Global Progressive Transportation Portfolio (PTRP)
  • PowerShares NASDAQ-100 BuyWrite Portfolio (PQBW)
  • PowerShares NXQ Portfolio (PNXQ)
  • PowerShares Zacks Small Cap Portfolio (PZJ)
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