Market Overview

Scottrade to Liquidate FocusShares ETFs

Discount broker Scottrade announced it will liquidate all 15 ETFs sponsored by its FocusShares unit because the funds failed to attract sufficient assets under management. The 15 Funds, which were launched in March 2011, had approximately $100 million in aggregate assets as of July 31, 2012, according to a statement issued by FocusShares.

FocusShares ETFs will cease trading on August 17 and will be closed to new investment on August 20. All 15 funds have traded on the New York Stock Exchange.

The affected ETFs include:

  • Focus Morningstar US Market ETF (NYSE: FMU)
  • Focus Morningstar Large Cap ETF (NYSE: FLG)
  • Focus Morningstar Mid Cap ETF (NYSE: FMM)
  • Focus Morningstar Small Cap ETF (NYSE: FOS)
  • Focus Morningstar Basic Materials ETF (NYSE: FBM)
  • Focus Morningstar Communications Services ETF (NYSE: FCQ)
  • Focus Morningstar Consumer Cyclical ETF (NYSE: FCL)
  • Focus Morningstar Consumer Defensive ETF (NYSE: FCD)
  • Focus Morningstar Energy ETF (NYSE: FEG)
  • Focus Morningstar Financial Services ETF (NYSE: FFL)
  • Focus Morningstar Health Care ETF (NYSE: FHC)
  • Focus Morningstar Industrials ETF (NYSE: FIL)
  • Focus Morningstar Real Estate ETF (NYSE: FRL)
  • Focus Morningstar Technology ETF (NYSE: FTQ)
  • Focus Morningstar Utilities ETF (NYSE: FUI)

The failure of the FocusShares ETF suite may surprise some investors, as the ETFs were available on a commission-free basis to Scottrade clients and charged competitive fees. For example, the FocusShares sector funds charge 0.19 percent per year, which is in-line with rates for comparable Vanguard ETFs and close to the 0.18 percent per year charged by Select Sector SPDRs.

The Focus Morningstar Technology Index ETF gained some acclaim for its relatively large weighting to Apple (NASDAQ: AAPL). Apple currently accounts for almost 21 percent of that ETF's weight.

Scottrade's announcement to close FocusShares funds is the second wave of significant ETF closure news in less than a week. On August 3, Direxion announced it will shutter nine leveraged products due the funds' inability to attract sufficient assets.

Posted-In: News Sector ETFs Broad U.S. Equity ETFs Intraday Update Markets ETFs Best of Benzinga

 

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