SPA ETFs and Some ELEMENTS ETNs Close Shop
March 17, 2009

SAN DIEGO (ETFguide.com) - Financial institutions, including ETF providers are feeling the economic pinch. While Barclays PLC is considering to sell its Barclays Global Investor/iShares unit, SPA ETFs has decided to close its entire line-up of MarketGrader ETFs.

SPA ETF which has also pulled ETFs from the U.K. and Italian exchanges has decided to delist the following six MarketGrader ETFs:

The SPA MarketGrader ETFs attempted to distinguish itself by applying  a quantitative security selection process to the investment universe. This process uses 24 different quantitative filters within four main areas: growth, value, profitability and cash flow. All components are weighted equally.

The PowerShares Dynamic series of ETFs uses a similar approach. MarketGrader ETFs have a 0.85% expense ratio while most of the Dynamic ETFs come with a smaller 0.60% price tag. The inflated expense ratio may have been part of the reason why the ETFs couldn’t gain enough traction.

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The ETFs will be liquidated by March 30th. SPA ETFs intends to remain in the ETF market place. In the unfortunate event of an ETF issuer bankruptcy, investors don’t have to worry about their funds. Unlike ETNs, Exchange-traded funds are legally set up as trusts separate from the bank’s corporations. The assets within these trusts cannot be touched during bankruptcy proceedings, as they belong wholly to the shareholders of the fund.

Credit Suisse announced that it will withdraw three of its ELEMENTS ETNs from listing on the NYSE Arca by April 3rd, 2009 due to insufficient trading volume. The average 3-month volume ranged between 8,000 -12,000 shares. There is a change that the three ETNs may continue to trade over the counter.

ELEMENTS MLCX Gold Index (NYSEArca: GOE)
ELEMENTS MLCX Livestock Index (NYSEArca: LSO)
ELEMENTS MLCX Precious Metals Plus Index (NYSEArca: PMY)

At this time, Credit Suisse has no intention to delist its ELMEMENTS Global Warming Index ETN (NYSEArca: GWO).

Last October, Deutsche Bank decided to delist five currency ELEMENTS. At this point, there are ten ELEMENTS ETNs that continue to be traded.

ETFguide’s ETF database is the only place that tracks closed ETFs. Over the past 18 months, 79 ETFs and ETNs (including the above) have been pulled by the issuer.