The $7 trillion exchange-traded fund (ETF) industry has seen the pace of failures more than double this year due to volatile markets and intense competition. So far, 62 ETFs have been liquidated or delisted, according to Bloomberg data. This increase in closures highlights the challenges faced by issuers in the rapidly evolving market landscape.
Many of the ETFs that closed were launched toward the end of the post-pandemic market boom, making them casualties of poor timing, according to Nate Geraci, president of The ETF Store, an advisory firm. The list of closures serves as a reminder of the frothy period in the market as the pandemic started to subside.
The accelerated rate of ETF closures underscores the need for issuers to remain agile and responsive to market conditions. As competition and market volatility continue, ETF providers must be strategic in their product offerings and attentive to investor needs in order to survive and thrive in the industry.
