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No Worm For The Early Bird – 15 ETFs Closing
August 25, 2008
SAN DIEGO - (ETFguide.com) - About 18 months ago, XShares Advisors, LLC were the first to launch highly specialized medical sector ETFs. Last week, XShares Advisors announced that its Board of Directors has approved a “reorganization” of 19 HealthShares ETFs. Talk about putting a nice spin on bad news. As part of the reorganization, 15 ETFs will be closing, while four ETFs will be restructured.
The decision to close (pardon, “reorganize”) the ETFs is not based on lack of performance as 13 of the 19 HealthShares have outperformed the S&P500 over the past year. The funds simply did not gather enough assets. Since their launch in March 2007, the suite of HealthShares ETFs reported asset inflows of only $100 million. Approximately $50 million are tied up in the 15 ETFs to be closed.
Changes in the construction of the HealthShares indexes will result in an increased number of constituent companies in each of the remaining HealthShares ETFs. Currently, HealthShares indexes generally contain as few as 22 companies; the redesigned indexes will result in HealthShares ETFs holding between 40 and 100 companies.
The new and improved (surviving) HealthShares will also carry a lower price tag. The Cancer, Diagnostic and Drug Discovery ETFs, will drop to 0.60% from 0.75%. The European Drugs ETF will drop from 0.95% to 0.72%. The Asian Health ETF (expected to be launched within the next few months) will remain at 0.95%. The reduced expense caps will become effective October 1, 2008.
HealthShares to be re-designed:
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Name
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Ticker
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HealthShares Cancer Exchange Traded Fund
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HHK |
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HealthShares European Drugs Exchange Traded Fund
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HRJ |
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HealthShares Diagnostics Exchange Traded Fund
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HHD |
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HealthShares Enabling Technologies Exchange Traded Fund*
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HHV | * To be renamed HealthShares Drug Discovery Tools Exchange Traded Fund
For the remaining 15 ETFs, September 19, 2008 will be the last day of trading on the NYSE Arca.
In the June 10, 2008 article "The Abyss Of ETF Oblivion", ETFguide identified a number of HealthShares at risk of being liquidated. >>> See what other ETFs look "suspicious".
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HealthShares to be closed:
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Name
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Ticker
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HealthShares Autoimmune-Inflammation
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HHA |
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HealthShares Cardio Devices
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HHE |
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HealthShares Cardiology
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HRD |
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HealthShares Composite
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HHQ |
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HealthShares Dermatology & Wound Care
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HRW |
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HealthShares Emerging Cancer
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HHJ |
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HealthShares European Medical Products & Devices
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HHT |
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HealthShares GI/Gender Health
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HHU |
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HealthShares Infectious Disease
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HHG |
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HealthShares Metabolic-Endocrine Disorders
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HHM |
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HealthShares Neuroscience
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HHN |
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HealthShares Ophthalmology
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HHZ |
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HealthShares Orthopedic Repair
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HHP |
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HealthShares Patient Care Services
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HHB |
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HealthShares Respiratory/Pulmonary
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HHR |
Already earlier this year, XShares Advisors closed the Adelante series of ETFs, a set of seven real estate specific portfolios (read full story). Claymore was the first company ever to eliminate ETFs. In January, 2008 Claymore reduces their portfolio by 11 ETFs (read full story) while Ameristock shut four bond ETFs. All in all, 37 ETFs have been closed so far in 2008. The total would be 39 if you include the two MacroShares Oil ETFs (read full story).
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