After jumping with both feet into the ETF market, Ameristock
is pulling one foot out. On June 10, five of the firm's ETFs targeting specific Treasury index maturities will be pulled from the trading floor. Ameristock will liquidate the funds on June 20. The WSJ Fund Track column reports
that the liquidation comes due to the failure of the ETFs to catch on.
Meanwhile, Ameristock is keeping one foot in the ETF game through its sister company Victoria Bay Asset Management
, which sponsors the US Oil Fund and the US Natural Gas Fund.
None of the five Ameristock/Ryan Treasury ETFs holds more than $3 million in assets, according to the paper.
Each of the five ETFs was each based on a Ryan Treasury index. The Ryan indices were the same ones used by the ETF Advisors
FITRs ("Fixed-Income Trust Receipts") that liquidated in late 2002.
In a statement (see pdf
), the trustees of the funds wrote that they "determined that closing the Funds was in the best interests of the Funds and their shareholders because the Funds have not gathered sufficient assets to continue their business and operations in an economically viable manner."
Ameristock's decision to pull out of the ETF market seems to be part of a growing industry shakeout. Last month XTF Funds
completed the sale of its funds-of-ETFs business in a trio of deals. Northstar's CLS Investment Firm
purchased the fund firm's annuity products while Efficient Market Advisors
purchased its separately managed account business and Marco Polo
purchased the rump of its corporate assets.
The hurdle faced by a number of niche players in the market is how to develop viable products in what has turned into a commodity market of like-index products. Small ETFs are at a disadvantage as they lack the trading liquidity of their larger brethren. Smaller ETFs are also more likely to less closely track their index during the trading day and to carry higher expense ratios than larger ETFs.
Sean Hanna, Editor in Chief
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