Eric Balchunas: ETF closures rise as issuers liquidate younger funds

Eric Balchunas: ETF closures rise as issuers liquidate younger funds
ETF issuers close younger funds faster

ETF issuers are increasingly closing funds that have not performed as hoped, according to Eric Balchunas. He observes a notable rise in ETF closures, with issuers showing less patience and liquidating funds at a much younger age than before.

Balchunas highlights that the average age of a liquidated ETF this year is 1 year 9 months, which is about half of last year’s figure and substantially lower than the 4 years 7 months seen in 2024. The trend underscores a shift in how quickly the market moves to close underperforming funds.

In previous notes, Balchunas reported the USO oil ETF logged record weekly trading volume of $17 billion following an Iran strike, representing a 28 percent jump (USO ETF trades $17 billion volume pace). He also highlighted the launch of an ETF focused on companies enabling the post labor shift, offering investors exposure to AI-driven changes in the workforce (New ETF targets firms driving post labor transition). These developments reflect varied strategies from issuers as the ETF market continues to evolve.

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