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- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
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- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
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- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
Investments - Strategies
Beware of ‘Zombie ETFs’
[Zombies / IGN.com]
by Howard Haykin
So, what about “Zombie ETFs?” This unusual term – one which I had not heard until now - applies to funds that are not likely to survive long term. It’s common for Zombie ETFs to close down because they never reach a sustainable size of at least $100 million. Over the last 5 years (according to Wealth Management Magazine):
- 24% of all 1,662 ETFs that existed in December 2014 have since closed down.
- The ETFs that closed had median assets of $10 million as of December 2014.
- Nearly all closed ETFs (89%) never crossed the $100 million mark.
INVESTOR TAKE AWAYS. If you work with a financial adviser, rest easy. You’ll probably never invest in a Zombie ETF because most brokerage firms don’t allow their advisors to buy ‘small ETFs’ for customers. If, however, you’re someone who takes an independent approach to investing, look before buying an ETF to make sure it’s sufficiently large in size. And, if you’re thinking about investing in a highly specially international fund, bear in mind that many of these ETF-types also shut down.
Better yet, keep it simple and go with a top performer like the Vanguard S&P 500 ETF (symbol ‘VOO’).