Making money isn’t enough to survive in the fund industry anymore.

BlackRock Inc., the world’s largest asset manager, plans to shutter 10 exchange-traded funds this month, despite all posting gains this year. One soon-to-close fund, the iShares MSCI Emerging Markets Latin America ETF, is up 38 percent.

So why are these funds on the chopping block? Because in spite of their strong performance they’re just not that popular with investors. On average, the condemned ETFs -- which include portfolios focused on inflation-linked debt, high-yield bonds and emerging markets -- oversaw just $30 million of investors’ capital apiece; the Latin America fund managed $9 million.

Liquidation, once reputational suicide in the money management business, is fast becoming commonplace as a doubling in ETF assets under management over the past five years has encouraged fund companies to cull their failing products.

So-called zombie ETFs -- funds that have attracted little trading activity or investment -- are increasingly destined for the trash bin by providers seeking to streamline their offerings.

Industrywide casualties this year include ETFs designed to tap demand for Chinese assets and currency hedging -- both strategies that garnered billions of dollars for some funds but not for others.

Making A Mark

“It’s good to have the weeding out,” said David Perlman, an ETF strategist in New York at UBS Wealth Management. “From a performance perspective an ETF can be a success, but if no one’s owns it, it’s not going to survive. Assets are a big part of it -- it’s definitely not the only factor, but you need to hit a certain threshold to continue your existence.”

Far from signaling industry hardship, increasing liquidations reflect the ETF industry’s ebullient growth. More than 1,700 ETFs are competing for capital in the U.S., up from roughly 900 just five years ago.

This growth, however, has made it increasingly hard for products to make their mark on the $2.4 trillion market. Of the 226 funds started in the last 12 months, only 21 have gained more than $100 million of assets, data compiled by Bloomberg show. Funds need approximately $75 million to $100 million to survive, UBS’s Perlman estimates.