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From meme stocks to crypto-themed products, exchange-traded fund closures are mounting in what were once some of the trendiest areas of the $6.8 trillion industry. Thematic ETFs that launched to target the buzziest market themes of the past two years are closing at a rapid pace, as rising interest rates hammer performance and send investors in search of safer options.
ZGEN, which launched less than two years ago as a thematic fund with a mission to invest in firms that are teenager-friendly, closed for purchases in March. Holding companies like Tesla Inc. and Duolingo Inc., the fund’s sub-advisor Alkali Fintech LLC attributed the closure to the “negative” macroeconomic climate. MEME was introduced in late 2021, a far cry from the days of epic short squeezes in GameStop Corp. and AMC Entertainment Holdings Inc. MEME, counting Block Inc. and First Republic Bank among its top holdings, has plunged over 60% since its December 2021 inception.
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