In 2024, the average ETF that got shut down had lived for almost 5 years.
By 2026, that number had collapsed just 21 months.
More than 40 ETFs were liquidated in just the first two months of this year... compared to 33 in the same period last year. And the firms doing it aren't embarrassed about it anymore.
Here’s what a senior vice president at Tidal Financial Group (a company that helps funds issue ETFs) had to say….
"The idea of closing an ETF was almost embarrassing. These days, that's no longer the case — you launch a product, adopt some metric that if the fund isn't meeting in 12 to 18 months, let's close it and recycle the resources."
So what are they launching in such a hurry?
Well Bloomberg looked at every ETF launched in 2025.
Of those funds, 36% were either leveraged or cryptocurrency-based.
Now, most people hear the word ETF and think of something like SPY or VOO. Funds that track the S&P 500… charge you next to nothing in fees… and compound quietly in the background.
That's the product Jack Bogle spent his career building the case for.
These funds are not cut from the same cloth…
A leveraged ETF borrows money to amplify whatever it's tracking, usually 2 or 3x the daily movement.
If the index goes up 1%, you're up 2% or 3%. If it drops 1%, same thing in the other direction.
Sounds manageable until you understand that the losses compound asymmetrically, and many of these products are designed to be held for hours not years.
What’s more, most of them reset daily… which means even if the underlying asset goes up… you aren’t achieving 3x those returns.
So while the label might say ETF, the risk profile says something else entirely.
Plus, with these you aren’t getting close to 0 fees… you’re often paying 1% annually or more… which is exactly what ETFs were created to fight against!
There's a version of this where a new investor, having read that ETFs are a good idea, opens a Google or ChatGPT, searches "best ETFs" then picks one near the top of the results and assumes they're in safe, low-cost territory.
That version doesn't end well if what they bought is being recycled into something else by the time they check their account.
Meaning that the three letters on the tin tell you almost nothing about what's inside it.
So if you want a smarter way to use ETFs to boost portfolio performance… and even hedge against volatility… grab a copy of ETF Investing for Beginners
Oliver