MutualFundWire.com: A Chicago Firm Pulls the Plug on its ETF Business

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Tuesday, January 27, 2009

A Chicago Firm Pulls the Plug on its ETF Business

Less than a year after making its foray into ETFs, Northern Trust is leaving the business. The Chicago firm plans to liquidate its 17 ETFs on February 20. The funds, which track single-country benchmarks, had about $33 million of assets as of December 31.

The board of trustees decided to shutter the ETFs, taking into account factors such as "current market conditions, the inability of the Funds to attract significant market interest since their inception, their future viability as well as prospects for growth in the Funds' assets in the foreseeable future," according to a Northern Trust press release.

February 9 is the final day of trading for the funds' shares on the NYSE Arca.

Some jobs are being eliminated as a result of the company's decision, though it was not immediately clear exactly how many. Northern Trust spokesman Doug Holt told The MFWire that the jobs being eliminated are part of the 450 company-wide job cuts Northern Trust first announced in December (see The MFWire, 12/15/08). The company said it would implement the cuts in 2009.

Northern Trust entered the ETF market in April of last year (see The MFWire, 04/09/08).

Company Press Release

CHICAGO, January 27, 2009 —Northern Trust announced today the scheduled closing of Northern Exchange Traded SharesTM (NETS) on Feb. 20, 2009.

The NETS Trust Board of Trustees' decision was made after consultation with Northern Trust Investments, N.A., the investment advisor to the 17 funds, which had approximately $33 million in assets as of December 31, 2008. The Funds were launched in 2008 and are designed to track international, single-country benchmarks.

The Board considered current market conditions, the inability of the Funds to attract significant market interest since their inception, their future viability as well as prospects for growth in the Funds' assets in the foreseeable future. The board determined that it was advisable and in the best interests of the Funds and their shareholders to liquidate the Funds, which are listed for trading on NYSE Arca, Inc.

Monday, Feb. 9, 2009, is scheduled to be the last day of trading for the shares of the Funds on NYSE Arca. Any person holding shares in the Funds after the delisting date will receive a cash distribution equal to the net asset value of their shares as determined on Feb. 20, the date of liquidation pursuant to the Funds' valuation policies. Shareholders receiving this cash distribution will not incur transaction fees in connection with this distribution or the cancellation of their shares in the Funds.

The affected Funds are:

Operational Funds

NETS™ S&P/ASX 200 Index Fund (Australia)
NETS™ BEL 20® Index Fund (Belgium)
NETS™ Hang Seng China Enterprises Index Fund
NETS™ Hang Seng China Enterprises Index Fund
NETS™ CAC40® Index Fund (France)
NETS™ DAX® Index Fund (Germany)
NETS™ Hang Seng Index Fund (Hong Kong)
NETS™ ISEQ 20™ Index Fund (Ireland)
NETS™ TA-25 Index Fund (Israel)
NETS™ S&P/MIB Index Fund (Italy)
NETS™ TOPIX® Index Fund (Japan)
NETS™ AEX-index® Fund (The Netherlands)
NETS™ PSI 20® Index Fund (Portugal)
NETS™ FTSE Singapore Straits Times Index Fund
NETS™ FTSE/JSE Top 40 Index Fund (South Africa)
NETS™ FTSE 100 Index Fund (United Kingdom)
NETS™ FTSE CNBC Global 300 Index Fund
NETS™ Tokyo Stock Exchange REIT Index Fund

For additional information about the liquidation, shareholders of the Funds may call the NETS™ Funds Center at 1-866-928-NETS or go to the NETS website: http://www.netsetfs.com.

Northern Trust is one of the world's largest managers of passive equity and fixed income index products, including separate accounts, collective and common funds, and mutual funds. Clients seeking international investment exposure can choose from a growing lineup of Northern Trust strategies available in mutual funds, collective and common funds, and separate accounts.

About Northern Trust
Northern Trust Corporation is a leading provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has a growing network of 85 offices in 18 U.S. states and has international offices in 15 locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2008, Northern Trust had assets under custody of US$3.0 trillion, and assets under investment management of US$575.5 billion. Northern Trust, founded in 1889, has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit http://www.northerntrust.com.

Northern Trust Global Investments (NTGI) is the trading name for the asset management activities of the entities that belong to the Northern Trust Corporation, a holding company based in Chicago. NTGI offers a full array of active, passive and enhanced products, as well as manager-of-managers programs for alternative and long-only investments. NTGI comprises The Northern Trust Company, Northern Trust Investments, N.A., Northern Trust Global Investments Limited, Northern Trust Global Investments Japan, K.K., and Northern Trust Global Advisors, Inc. and its subsidiaries. NTGIL and NTGAL are United Kingdom entities which are authorized and regulated in the United Kingdom by the Financial Services Authority. The Northern Trust Company (http://www.northerntrust.com) is the principal subsidiary of Northern Trust Corporation.