iShares and Pimco to shut 22 ETFs

The funds include iShares' target-date lineup and Pimco's foreign-bond trackers.
AUG 18, 2014
BlackRock and Pimco are planning to close 22 of their exchange-traded funds. The announcements came late Friday from BlackRock, the world's largest money manager, and from Pimco, the manager of the world's largest bond fund and the biggest provider of actively managed ETFs. Pacific Investment Management Co. said it will close three index funds invested in Australian, Canadian and German bonds (AUD, CAD and BUND, respectively) as well as the Build America Bond (BABZ). But Pimco also will launch three new funds, including a product managed by the firm's chief investment officer Bill Gross. The fund will be called the Fundamental IndexPLUS AR Active ETF. It's based in part on an index licensed from Rob Arnott's Research Affiliates, a “smart beta” proponent. Pimco mutual funds based on those indices have been among the firm's most successful funds this year. BlackRock's ETF division iShares plans to shut 18 of its funds, including its entire lineup of index-based target-date funds. That comes as firms like Fidelity, Vanguard and T. Rowe Price have seen continued success from their mutual fund target-date series. BlackRock said in a statement the closures were “based on ongoing product reviews and client feedback and limited investor interest in the funds.” The moves come in what had been a relatively light year for ETF closures. So far this year, 19 had shut down, compared to 69 in 2013, according to ETF.com, a research firm. The target-date series — many of which were started in 2008 — manage nearly $310 million in all. But none of them top the $100 million normally thought to be the break-even point for exchange-traded funds. BlackRock's mutual fund lineup of “CoRI" retirement funds will not be affected. BlackRock Inc. manages nearly $4.6 trillion in all. iShares also plans to shut two real estate funds (RTL, FNIO), a nuclear energy ETF (NUCL) and three international funds based on MSCI indices (FEFN, EMFN and EMMT). The iShares funds will be closed to new orders on Oct. 14, with trading to be closed before the market opens the day after. Pimco's funds are expected to trade for the final time on Sept. 26. Pimco manages nearly $2 trillion.

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