arclays Global Investors will shut three of its iShares funds on December 5, marking the first closings of exchange-traded funds. The closings are in response to low asset levels, trading activity and shares outstanding.
The Dow Jones U.S. Chemicals Index Fund
(IYD), Dow Jones U.S. Internet Index Fund
(IYV) and S&P/TSE 60 Index Fund
(IKC) will be liquidated between December 6 and 13, a company spokesperson confirmed. Any remaining shareholders on December 13 will receive the net asset value of their shares as of December 13 plus capital gains and dividends.
Though performance was not a criterion, according to the spokesperson, year-to-date the U.S. Chemicals Index Fund fell 0.95 percent, the Internet fund plunged 52.22 percent and the S&P/TSE fund dropped 12.92 percent.
"The primary criterion was client demand," she said responding to an inquiry of why the funds are being shuttered.
, CEO of BGI's Individual Investor Business, explained in the release, "As the iShares product line expanded and some market segments such as the Internet industry have changed, the three funds to be closed weren't providing enough exposure to be useful to investors."
The funds will halt trading at the close of the U.S. stock market on December 5, 2002.
The iShares Dow Jones U.S. Chemicals Index Fund has $19 million in assets and the iShares Dow Jones U.S. Internet Index Fund $8 million in assets.
Shareholders are being notified via mail, while broker-dealers and other firms that make markets for the three funds have been notified. Shareholders may sell their holdings prior to December 5, incurring a transaction fee from their broker-dealer.
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