London-based exchange traded fund (ETF) provider Source announced that it would close two ETFs similar to ones run by Invesco (IVZ:NYQ), just two days before signing a takeover deal with this asset manager. Invesco is taking over Source, which runs ETFs with assets worth about $18bn (£13.94bn) in-house and offers ETFs run by external managers with assets worth roughly $7bn. The takeover will complete in the third quarter of 2017, the latest in a series of acquisitions in the European passive funds market by a US asset manager.
Source has informed shareholders that it is delisting Source FTSE RAFI UK Equity Income Physical UCITS ETF (DVUK) and Source FTSE RAFI US Equity Income Physical ETF (DVUS) from the London Stock Exchange (LSE) on 12 June. But Source says the decision to close the ETFs is not connected to the Invesco deal. It says they are being closed because they are "no longer economically viable".
Source FTSE RAFI US Equity Income has assets of just $7.4m, compared with PowerShares FTSE RAFI US 1000 UCITS ETF's (PRUS) $2.8bn-plus. Source FTSE RAFI UK Equity Income has assets of £7.4m, but this is more than PowerShares FTSE RAFI UK 100 UCITS ETF's (PSRU) assets of £7.2m. The ETFs track similar indices to each other.