The tumultuous start to 2020 saw exchange-traded funds shutter at the fastest pace in almost three years.
A total of 72 ETFs with $1.4 billion in assets shut down and returned their money to investors in the first quarter as the coronavirus outbreak roiled markets, according to data compiled by Bloomberg. That’s the most since the third quarter of 2017, when 73 funds closed.
The liquidations came as the economic fallout from the virus unleashed volatility across asset classes, sending the S&P 500 Index into a bear market at the fastest pace on record.
That degree of turbulence sparked a reckoning for the myriad niche funds populating the nearly $4 trillion ETF market, according to WallachBeth Capital.
“With huge market movements, investors are going to flock to broad-based funds to hedge out risk, rather than smaller niche products,” said Mohit Bajaj, WallachBeth’s director of ETFs. “It was hard enough when the market was at its peak to get market share, even harder when the S&P is down over 20%.”
Invesco led the liquidations, shutting a total of 42 ETFs as part of plans to consolidate the company’s offerings after it bought OppenheimerFunds Inc. in 2019. ProShares and Direxion closed several leveraged ETFs, which use derivatives to amplify returns of the securities they track.
The still-elevated level of volatility has slowed the pace of ETF debuts as well. Just four funds started trading in March, the lowest monthly total since August and a steep drop from the 29 ETFs that came online in February.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
