How to spot a doomed ETF
With fund firms launching a seemingly endless parade of exchange-traded funds, a dark side to this glut of offerings is emerging. Portfolio liquidations, once rare, are becoming increasingly commonplace. This recent trend is spooking advisers. Indeed, some said they are more than a little worried about getting stuck in an ETF that ends up being shut down.
“With the proliferation of ETFs, this is becoming a greater concern,” said Sailesh S. Radha, a vice president at CCM Investment Advisers LLC, a registered investment advisory firm that manages $2.5 billion in assets. “Telling an investor than an ETF is shutting down is not news you want to give them.” said.
So how can an adviser spot trouble before it strikes? Here are a few warning signs to look for.
Story by Jessical Toonkel