Why ETF's Close And How To Avoid Buying One That May Close

Matt Thalman - INO.com Contributor - ETFs


As Exchange Traded Funds become more popular and more money flows into this asset class, it is inevitable that more ETF's will both open and unfortunately close. Currently there is more than $3 trillion in assets in ETF's spread across more than 2,000 different options to choose from.

In 2016 we saw 216 new Exchange Traded Funds. But we also saw 58 funds closed last year. While there can be a number of different reasons funds are closed, the bulk of ETF closures occur because of one of the following three reasons; a weak ETF issuer, low assets under management, or a low rank within its industry.

If you understand why these are the three main reasons an ETF will close, you will be able to avoid buying ETF's that show similar traits. Furthermore you will likely save yourself a big head-ache, and more importantly a lot of money. Continue reading "Why ETF's Close And How To Avoid Buying One That May Close"