Scottrade's FocusShares, a family of 15 low-cost exchange-traded funds, will be liquidated later this month, less than 18 months after they were launched.
FocusShares LLC, the registered investment advisor to the funds and an affiliate of discount broker-dealer Scottrade, announced yesterday that the ETFs, with about $100 million in assets, would be liquidated August 30. The last day of trading for the ETFs will be Friday, August 17, and will be closed to new investment Monday, August 20.
The news was announced the same day that Russell Investments, which manages about $152 billion, told Bloomberg News that it's reviewing its direct U.S. ETF business, which has about $300 million in assets. The firm, whose direct ETF team works mostly in San Francisco and New York, will cut about 30 jobs between the two offices, Steve Claiborne, a spokesman for Seattle-based Russell, told Bloomberg.
In making its decision to liquidate, the FocusShares Trust Board of Directors "considered current market conditions, the inability of the funds to attract significant market interest since their inception, and their future viability as well as prospects for growth in the funds' assets in the foreseeable future," the company said.
Jack Naudi, a FocusShares' spokesman, said the company could not provide much more information than what in the press release. All trading stops in the 15 ETFs on August 17, and the underlying securities will be sold. All remaining shareholders on August 30 will receive cash equal to the amount of the net asset value of their shares August 30 that will be deposited into their brokerage accounts the next day.
The ETFs were benchmarked to Morningstar indexes and include:
Focus Morningstar US Market Index ETF (FMU)
Focus Morningstar Large Cap Index ETF (FLG)
Focus Morningstar Mid Cap Index ETF (FMM)
Focus Morningstar Small Cap Index ETF (FOS)
Focus Morningstar Basic Materials Index ETF (FBM)
Focus Morningstar Communication Services Index ETF (FCQ)
Focus Morningstar Consumer Cyclical Index ETF (FCL)
Focus Morningstar Consumer Defensive Index ETF (FCD)
Focus Morningstar Energy Index ETF (FEG)
Focus Morningstar Financial Services Index ETF (FFL)
Focus Morningstar Health Care Index ETF (FHC)
Focus Morningstar Industrials Index ETF (FIL)
Focus Morningstar Real Estate Index ETF (FRL)
Focus Morningstar Technology Index ETF (FTQ)
Focus Morningstar Utilities Index ETF (FUI
FocusShares was acquired in June 2010 by Scottrade Financial Services Inc., the parent holding company of Scottrade Inc., and in March 2011 launched the ETFs, designed to track broad equity market and sector-specific Morningstar indexes.