Back to top

ETF News And Commentary

While it appeared as though the year of closures was finally over for the ETF world, it now looks as though one more big wave is due to hit the market on this front, this time courtesy of PowerShares. One of the dominant players in the industry, the Chicagoland-based firm revealed plans to shut down 13 ETFs from its lineup thus reducing its total below the 120 fund mark.

The impacted ETFs includes the following products:

Dynamic Insurance Portfolio

Morningstar StockInvestor Core Portfolio

Dynamic Banking Portfolio

Global Steel Portfolio

Active Low Duration Portfolio

Global Wind energy Portfolio

Active Mega Cap Portfolio

Global Nuclear Energy Portfolio

Ibbotson Alternative Completion Portfolio

RiverFront Tactical Balanced Growth Portfolio

RiverFront Tactical Growth & Income Portfolio

Convertible Securities Portfolio

The vast majority of the aforementioned products never really caught on or were unable to fight past a first mover advantage and were relegated to ‘me too’ status. As a result, the baker’s dozen of ETFs represents less than 1% of PowerShares total AUM, so it is unlikely to impact the bottom line too much, and instead may actually improve it by getting rid of some of the likely loss producing funds (also see PowerShares Slashes Fees on Six ETFs). 

For example, a few on the list, such as PSTL, PMA, PPLK, PTO, PWND, and CVRT, had less than $10 million in assets each and were thus generating meager revenues for the firm. Still, some were relatively unique, the cheaper option in the space, or were solid performers, so it is undoubtedly a loss for investors overall even if they weren’t being taken advantage of for the time being.

If you are currently an investor in any of the aforementioned products, it is worth noting that the final day of trading for the group will be on February 26th, so investors definitely have some time before the shut down takes place. For those who do not sell by February 26th, they will receive a cash payment equal to the NAV of their shares, inclusive of capital gains and dividends by the liquidation date of March 7th, 2013 (read 4 Best New ETFs of 2012).

There are direct competitors to pretty much every one of the above listed ETFs so it shouldn’t be too hard to find a replacement product that offers similar exposure. Still, let us hope that with the end of 2012 in sight that it also marks the conclusion of the record stretch of ETF closures as well.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Follow @Eric Dutram on Twitter

Please login to or register to post a comment.

If you wish to go to, click OK. If you do not, click Cancel.

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
PANTRY INC PTRY 21.02 +2.09%
INTEL CORP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%