One of the frustrating aspects of ETF investing is seeing a fund you own liquidated. The biggest disadvantage when this happens is the forced sale may result in an unexpected tax bill for any capital gains. But a second problem is that once you\u2019ve got the cash from the sale or liquidation, you now have to decide how to redeploy those funds.<\/p>\n
State Street recently announced the closure of 19 of its SPDR ETFs. One is a fixed income ETF and two are currency-hedged vehicles that simply held another SPDR ETF, but the remaining 16 are \u201cplain vanilla\u201d equity funds. Any investors who haven\u2019t already sold should receive proceeds from the funds\u2019 liquidation in their brokerage accounts on or around August 1, 2017, according to the press release<\/a>.<\/p>\n Replacing these ETFs will be easier for some than for others. We used our Overlap Tool<\/a> to find the closest match for each of the 16 plain vanilla ETFs that have closed. As you can see from Table 1, the percentage of overlap between the closed SPDR ETF and its closest match ranges from a high of 78% for QESP\u2019s best match, the iShares MSCI Spain ETF (EWA<\/a>), to just 13% for IPK\u2019s closest match\u2014if you can even call it that\u2014the Deutsche X-Trackers MSCI Japan Hedged ETF (DBJP<\/a>).<\/p>\n Another downside to this latest group of fund closures is that with only two exceptions the closest match is more expensive than the SPDR fund it replaces. It is somewhat surprising to us that many of these funds didn\u2019t make it commercially, given their lower costs and relative uniqueness (low overlap) in many cases.<\/p>\n Take the SPDR S&P International sector funds. These would seem to be the ideal foreign compliment to State Street\u2019s domestic \u201cSector SPDR\u201d family of ETFs, the proverbial 800 lb. gorillas of the category. Yet the iShares Global <\/em>sector funds, which are 7 basis points more expensive and include U.S. stocks\u2014and therefore overlap any domestic sector exposure investors already have\u2014are far bigger in terms of assets than the SPDR funds. We chalk it up to iShares\u2019 nearly two-year first mover advantage for these funds (launched in September 2006, versus July 2008 for the SPDR funds), or iShares\u2019 marketing prowess, or both.<\/p>\n <\/p>\n Table 1: Potential Replacements for Liquidated SPDR ETFs<\/strong><\/span><\/p>\n Note:\u00a0<\/strong>Cost Difference is the expense ratio of the replacement fund minus the expense ratio of the closed SPDR ETF. One of the frustrating aspects of ETF investing is seeing a fund you own liquidated. The biggest disadvantage when this happens is the forced sale may result in an unexpected tax bill for any capital gains. But a second problem is that once you\u2019ve got the cash from the sale or liquidation, you now have…<\/p>\n","protected":false},"author":2,"featured_media":657,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[156],"tags":[169,30,157,127,163,158,160,165,168,162,164,161,167,159,166],"class_list":["post-655","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-overlap","tag-dbjp","tag-eufn","tag-ewa","tag-ewp","tag-exi","tag-eza","tag-ilf","tag-ixc","tag-ixj","tag-ixp","tag-kxi","tag-mxi","tag-rbl","tag-rsx","tag-rxi","description-off"],"_links":{"self":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts\/655","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/comments?post=655"}],"version-history":[{"count":5,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts\/655\/revisions"}],"predecessor-version":[{"id":662,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/posts\/655\/revisions\/662"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/media\/657"}],"wp:attachment":[{"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/media?parent=655"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/categories?post=655"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.etfrc.com\/articles\/index.php\/wp-json\/wp\/v2\/tags?post=655"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\n
\n Liquidated SPDR ETF<\/strong><\/td>\n Potential Replacement ETF<\/strong><\/td>\n <\/td>\n<\/tr>\n \n Ticker<\/strong><\/td>\n Name<\/strong><\/td>\n Ticker<\/strong><\/td>\n Name<\/strong><\/td>\n Overlap<\/strong><\/td>\n Cost Diff*<\/strong><\/td>\n<\/tr>\n \n QESP<\/td>\n SPDR MSCI Spain Quality Mix<\/td>\n EWP<\/a><\/td>\n iShares MSCI Spain<\/td>\n 78.2%<\/td>\n +18 bp<\/td>\n<\/tr>\n \n QAUS<\/td>\n SPDR MSCI Australia Quality Mix<\/td>\n EWA<\/a><\/td>\n iShares MSCI Australia<\/td>\n 73.2%<\/td>\n +18 bp<\/td>\n<\/tr>\n \n GAF<\/td>\n SPDR S&P Emerging Middle East & Africa<\/td>\n EZA<\/a><\/td>\n iShares MSCI South Africa<\/td>\n 70.6%<\/td>\n +15 bp<\/td>\n<\/tr>\n \n RBL<\/td>\n SPDR S&P Russia ETF<\/td>\n RSX<\/a><\/td>\n VanEck Vectors Russia ETF<\/td>\n 69.8%<\/td>\n +3 bp<\/td>\n<\/tr>\n \n GML<\/td>\n SPDR S&P Emerging Latin America<\/td>\n ILF<\/a><\/td>\n iShares S&P Latin America 40<\/td>\n 58.6%<\/td>\n 0 bp<\/td>\n<\/tr>\n \n IRV<\/td>\n SPDR S&P Int\u2019l Materials<\/td>\n MXI<\/a><\/td>\n iShares S&P Global Materials<\/td>\n 56.7%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPF<\/td>\n SPDR S&P Int\u2019l Financial<\/td>\n EUFN<\/a><\/td>\n iShares MSCI Europe Financial Sector<\/td>\n 53.3%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IST<\/td>\n SPDR S&P Int\u2019l Telecom<\/td>\n IXP<\/a><\/td>\n iShares S&P Global Telecom<\/td>\n 47.7%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPN<\/td>\n SPDR S&P Int\u2019l Industrials<\/td>\n EXI<\/a><\/td>\n iShares Global Industrials<\/td>\n 44.6%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPS<\/td>\n SPDR S&P Int\u2019l Consumer Staples<\/td>\n KXI<\/a><\/td>\n iShares S&P Global Consumer Staples<\/td>\n 43.2%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPW<\/td>\n SPDR S&P Int\u2019l Energy<\/td>\n IXC<\/a><\/td>\n iShares S&P Global Energy Sector<\/td>\n 39.7%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPD<\/td>\n SPDR S&P Int\u2019l Consumer Discretionary<\/td>\n RXI<\/a><\/td>\n iShares S&P Global Consumer Discretionary<\/td>\n 35.6%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPU<\/td>\n SPDR S&P Int\u2019l Utilities Sect<\/td>\n JXI<\/a><\/td>\n iShares S&P Global Utilities<\/td>\n 35.3%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n GUR<\/td>\n SPDR S&P Emerging Europe ETF<\/td>\n RBL<\/a><\/td>\n SPDR S&P Russia ETF<\/td>\n 34.1%<\/td>\n -10 bp<\/td>\n<\/tr>\n \n IRY<\/td>\n SPDR S&P Int\u2019l Health Care<\/td>\n IXJ<\/a><\/td>\n iShares S&P Global Healthcare<\/td>\n 30.5%<\/td>\n +7 bp<\/td>\n<\/tr>\n \n IPK<\/td>\n SPDR S&P Int\u2019l Technology<\/td>\n DBJP<\/a><\/td>\n Deutsche X-trackers MSCI Japan Hedged<\/td>\n 13.2%<\/td>\n +5 bp<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n\u00a0Source: <\/strong>ETF Research Center
\n<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"