XShares Advisors says the board of directors of its flagship ETF family, HealthShares, has approved a reorganization of 19 HealthShares ETFs, which includes liquidating 15 funds.

The redesigned HealthShares suite of ETFs will include four of the current HealthShares ETFs — each of which is expected to carry a significantly lower expense ratio – as well as the closing of 15 HealthShares ETFs and the expected introduction of new HealthShares ETFs in the coming months. Changes in the composition of the proprietary HealthShares indexes will result in the remaining HealthShares ETFs holding a greater number of constituent companies and generally higher minimum capitalization requirements than before.

“Health care and life sciences remain the most exciting sectors for investment in the global economy,” says Joseph L. Schocken, chairman and interim chief executive officer of XShares Group, Inc., parent company of XShares Advisors. “We believe that significant, untapped demand exists for specialized health care investment vehicles that focus on the innovation taking place outside the sector’s large-cap and mega-cap companies.”

After taking a long, careful look at the HealthShares ETFs and the health care sector, these strategic redesigns reflect a sharper differentiation in the investment rationales of the continuing HealthShares ETFs. “In addition,” continues Schocken, “we also pared back those ETFs that didn’t resonate with investors. We expect these changes will make HealthShares ETFs more attractive to a wider array of individual and institutional investors.”

The following HealthShares ETFs will keep trading:

– HealthShares Cancer Exchange Traded Fund (HHK)

– HealthShares European Drugs Exchange Traded Fund (HRJ)

– HealthShares Diagnostics Exchange Traded Fund (HHD)

– HealthShares Enabling Technologies Exchange Traded Fund (HHV)

HealthShares Enabling Technologies Exchange Traded Fund is being renamed HealthShares Drug Discovery Tools Exchange Traded Fund.

Changes in the construction of the HealthShares indexes will result in an increased number of constituent companies in each of the five remaining HealthShares ETFs. Currently, HealthShares indexes generally contain as few as 22 companies; the redesigned indexes, though, will result in HealthShares ETFs holding between 40 and 100 companies.

The board of HealthShares has also approved a reduction in the expense caps currently in place for the four HealthShares ETFs listed above. The cancer, diagnostic and drug discovery ETFs, which currently have expense caps of 75 basis points (bps), will be capped at 60 bps. The European Drugs ETF, which currently has an expense cap of 95 bps, will be capped at 72 bps. The Asian Health ETF will remain at 95 bps. The reduced expense caps will become effective Oct. 1, 2008.

Sept. 19 is expected to be the last day of trading on the NYSE Arca for the ETFs being liquidated. Shareholders may sell their holdings through Sept. 19, incurring a transaction fee from their broker-dealer. From Sept. 22-30, shareholders may be able to sell their shares to certain broker-dealers, but there can be no assurance that there will be a market for the ETFs. All shareholders remaining on Sept. 30 will receive the value of their shares as of Sept. 30, which will include any capital gains and dividends, in the cash portion of their brokerage accounts.