9 November 2012

Co-Authors

Alex Kemmsies

Associate

Justin Schack

Managing Director

Rosenblatt Securities Inc.
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TRADING TALK
Rosenblatt’s Monthly ETP Review: October

WisdomTree to Shut 3 ETFs With Low Assets

—Index Universe

WisdomTree Investments, the ETF firm known for its quasi-active index funds that use selection screens targeting dividends and earnings, is closing three ETFs—one a U.S. equities fund and the other two currency funds focused on the South African rand and the Japanese yen.

Our Take: The increasingly crowded ETP space is experiencing some growing pains, including decisions by such issuers as Russell Investments (all 25 of its passive ETFs), UBS (a dozen volatility-tracking ETNs) and WisdomTree to shut down so-called zombie ETFs that have not attracted significant assets or trading volumes. But as assets continue to flow into ETFs and out of traditional mutual funds, leading asset managers that lack significant ETF units — like Fidelity — likely will continue to be drawn into the space.

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