Death of a Bond ETF

The announcement came with a press release from the Bear Stearns (BSC) website that tracked their stillborn baby, the Bear Stearns Active ETF Trust—their Current Yield Fund (YYY). Announced on March 10, 2008; it ceases operation on October 1, less than six months spent in suspended animation.

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It was no surprise.  Bear Stearns had the distinction of being the first actively managed bond ETF on the market, and it was announced at almost the exact hour that they went belly up and were handed over to JPMorgan (JPM) for pennies on the dollar. 

I began tracking it on the last day of April of this year. It was initially capitalized at $50 million—huge by most any standard, on March 10. 

The monthly totals of assets under management are:

• April 30: $50.297 million
• June 30: $50.335 million
• July 31: $50.334 million
• Sept. 9: $50.256 million

The ended up six months after launch with $250,000 more in assets than when they started. With a $50 million investment, no one should be surprised they pulled the plug.

I always dislike seeing bond options disappear, but in this case, it was humane that they put this one out of is misery. One more shoe dropping from the sub- prime debacle, but one hardly heard in a market filled with more expensive noise.

Disclosure: none