The BetaShares Nasdaq 100 ETF (ASX: NDQ) is one popular example. However, many ASX investors have funds ranging from the BetaShares Global Cybersecurity ETF (ASX: HACK) to the BetaShares Australia 200 ETF (ASX: A200) as well.

But if you're a fan of the ASX ETFs provided by Betashares, this might be difficult news to read.

Yesterday, Betashares announced that it would be closing no fewer than nine of its exchange-traded fund products. In all cases, investors have until mid to late January or early February to decide whether to sell out of their existing units. Otherwise, they will be redeemed for cash when the funds are formally wound up.

ETF closures are quite rare events on the ASX. With the passive ETF industry receiving seemingly endless additional inflows every year, it's far more common to see new funds open up rather than existing ones closed down.

Nine ETFs: Rule them out in 2024

Yet not all ETFs have proven to be a hit with ASX investors, and as such, many are uneconomical to run long term. This seems to be the fate that has befallen nine Betashares ETFs.

Here are the nine funds Betashares has announced will shut up shop early next year:

• BetaShares Online Retail and E-Commerce ETF (ASX: IBUY)
• BetaShares Metaverse ETF (ASX: MTAV)
• BetaShares Future of Payments ETF (ASX: IPAY)
• BetaShares Future of Food ETF (ASX: IEAT)
• BetaShares Solar ETF (ASX: TANN)
• BetaShares Digital Health and Telemedicine ETF (ASX: EDOC)
• BetaShares Martin Currie Equity Income Fund (ASX: EINC)
• BetaShares Martin Currie Emerging Markets Fund (ASX: EMMG)
• BetaShares Martin Currie Real Income Fund (ASX: RINC)

It seems that the reason for all nine of these ETFs' impending closure is the same: money. Here's how Betashares has justified its decision to wind up these funds:

The decision to close the Fund recognises that, since its launch, it has not achieved sufficient scale to be sustainable and is not likely to do so.

Why are these nine ETFs leaving the ASX?

Funds management is a business that is all about scale. Investors are usually unwilling to entrust their cash to an ETF if it charges a high management fee, say north of 1%, for argument's sake. That means a fund with $10 million in assets under management will only produce an income stream worth $50,000 a year if it has a fee of 0.5%.

As such, funds have to hit tens of millions of dollars in assets under management for them to be considered a viable product.

Let's take the Betashares Future of Food ETF as a case study. Right now, Betashares tells us that this particular fund has just $2.32 million in assets under management. Since IEAT charges a fee of 0.67%, Betashares would be making approximately $15,544 in annual revenues from this fund right now

So you can see why it's probably not worth the providers' while to keep IEAT's doors open, even if it has returned a respectable 16.5% over the 12 months to 29 November.

Let's see what Betashares' next ETFs look like.

The post Big news: BetaShares to close 9 ASX ETFs appeared first on The Motley Fool Australia.

According to provider BetaShares, this new IEAT ETF is designed as follows:

The BetaShares Future of Food ETF (ASX: IEAT) provides a convenient, cost-effective way to access the growth potential of the 'future of food' revolution, a segment of the global food industry that focuses on more sustainable, humane and healthier ways to produce the food we eat.

IEAT aims to track the performance of an index (before fees and expenses) that provides exposure to a portfolio of some of the world's most innovative companies in the areas of global food production and supply. 

This ETF charges an annual management fee of 0.67% per annum. Its current top holdings include Danone SA, Archer-Daniels-Midland Co, International Flavors & Fragrances Inc, Bunge Ltd and FMC Corp. It has a fairly large weighting to the United States at 53.2% of the underlying portfolio as it currently stands. But other countries like Sweden (11.4%), Denmark (8.6%), Japan (3.3%) and Britain (2.2%) are also present.

The ASX welcomes another new ETF

IEAT tracks the Foxberry Next Generation Foods USD Net Total Return Index, which has struggled in recent years. As of 31 May, it had gone backwards by 16.55% over the preceding 12 months, but had netted a positive 4.76% per annum on average over the past five years.

So how has IEAT fared?

Well, this ETF began life at around $11.83 per unit last Thursday. By the end of its first trading day, it had slipped slightly to $11.82. But today, IEAT units are being priced at $11.87. That's up 1.02% for the day so far, and represents a gain of 0.34% from its listing price.

But IEAT may not be the last new ETF we get from BetaShares in 2022. According to the provider, two new energy-based ETFs are coming to the ASX "soon". These will be the BetaShares Solar ETF (ticker code to be TANN), and the BetaShares Global Uranium ETF (ticker URNM).

So lots to keep an eye out for in the ASX exchange-traded fund space over the next few months.

The post 1 week in: Here's how the ASX's newest ETF is tracking appeared first on The Motley Fool Australia.