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BlackRock's iShares is the world's biggest exchange traded fund provider, bringing to market many large and well-known ETF strategies. Still, the money manager is not immune to finicky investors as the firm plans to close its first ETF in over a decade.

The firm will shut down its iShares Diversified Alternatives Trust (NYSEARCA:ALT) next month, reports Matt Hougan for IndexUniverse. In the meantime, ALT will trade normally, but it will liquidate its position on the final day of trading and return the proceeds to shareholders.

As a fund closes, investors should use limit orders to exit the fund. However, if you hold onto the fund until the bitter end, an investor will receive a full cash value equivalent to their exposure to the underlying holdings at the end price.

"iShares continually reviews its product range to ensure it meets the evolving needs of our clients," Patrick Dunne, head of Global Markets and Investments for BlackRock, said in the article. "Based on the review and client feedback, it appears this product has a limited role in today's investment portfolios, and we have seen little long-term demand."

Since its October 2009 inception, the fund has provided exposure to a mix of equity, fixed-income and currency futures and forwards as it attempted to generate steady returns with limited volatility, producing an annualized gain of 0.87% with relatively low volatility.

However, investors were not impressed as the fund experienced steady outflows over the past two years - ALT had $141 million in assets in 2011, but it now holds $57.6 million.

This is iShares' first fund closure since 2002. The firm closed two sector products based on chemical and internet industries and one linked to the S&P/TSE 60, which covers Canadian stocks, arguing that the products were too narrow or duplicated existing funds.

Some have pointed out that smaller ETFs tend to get the axe first, but ALT was not iShares' smallest ETF. Of the firm's 281 ETFs, 75 funds have less assets than ALT, with 32 under $10 million in assets under management.

Max Chen contributed to this article.

Source: iShares Plans First ETF Closure Since 2002