With assets under management (AUM) held in Canadian-listed exchange-traded funds (ETFs) shrinking this month because of the global stock-market downturn, one of the few upward trends is the number of ETFs being terminated. Thirteen ETFs are in the process of being eliminated by ETF providers BlackRock Asset Management Canada Ltd. and First Asset Investment Management Inc. BMO Exchange Traded Funds, a division of Bank of Montreal, got rid of a trio of ETFs earlier this month.

The terminations are attributable mainly to the affected ETFs’ small size and poor prospects for new inflows, which make them unprofitable for the management firms to run. But while the ETF companies cut their operating losses, investors are in some instances being forced to have their units redeemed at market lows, incurring steep losses.

The terminating ETFs include the $9.9-million iShares Oil Sands Index (CLO), which is among the worst performing ETFs over the past year. It’s directly exposed to the poorest performing sector of the Canadian equity market, and the portion of that sector that has the highest production costs and the most vulnerability to plunging prices for crude oil. This ETF has a 12-month loss of 47.7% to July 31. The August numbers are very likely to look even worse.

In all, the iShares family sponsored by BlackRock, is delisted six ETFs from the Toronto Stock Exchange, effective Aug. 27, and terminating them effective Sept. 4. Another termination that will lock in significant losses is that of the $10.6-million iShares S&P/TSX Global Mining Index (CMW), down 33.9% for the 12 months ended in July.

The largest of the iShares ETFs being terminated is the $21.3-million iShares Broad Commodity Index (CBR), which has a 12-month loss to July 31 of 7.2%.

The Oil Sands, Global Mining and Broad Commodity ETFs, along with iShares China All-Cap Index (CHI), are all former members of the Claymore family of ETFs, which BlackRock acquired in 2012. The terminations also affect the advisor-class versions of these ETFs.

Also on the chopping block at iShares are two of its smallest offerings: iShares Latin America Index (XLA) and iShares S&P/TSX Venture Index (XVX) — each of which has AUM of less than $4 million. A total of roughly $60 million in AUM is affected by the six iShares terminations, though to put this in perspective it represents a minuscule portion of market leader BlackRock’s $45.8 billion in TSX-listed ETFs.

The ETF firm which has been the most active this month in trimming its line-up is First Asset. Seven of its ETFs were delisted from the TSX on Aug. 25, and are to be terminated effective Aug. 31. The funds affected have a combined total of about $20 million in AUM out of the roughly $1.7 billion managed by First Asset.

The largest ETF on the hit list is the $6.1-million First Asset Morningstar Emerging Markets Composite Bond Index (EXM). (Disclaimer: Morningstar licences selected indexes to First Asset but is not a sponsor or promoter of the firm’s ETFs.)

Also getting chopped at First Asset are three “Bond Barbell Index” ETFs, two that employ covered-call strategies and First Asset Active Canadian REIT (FRF). The real estate ETF became redundant because of the debut in mid-July of First Asset Cdn REIT (RIT), which First Asset converted from a closed-end fund to an ETF.

Earlier in August, BMO Asset Management. completed a modest cutback of three ETFs. Terminated, effective Aug. 7, were BMO’s Corporate Bond Target Maturity ETFs, which had been scheduled to mature in 2015, 2020 and 2025, respectively.

The new-product pipeline didn’t run dry in August: Horizons ETFs Management (Canada) Inc. launched Horizons Global Managed Opportunities (HGM), Horizons Active Cdn Municipal Bond (HMP) and Horizons Managed Multi-Asset Momentum (HMA) this month. For its part, BlackRock launched iShares S&P U.S. Mid-Cap Index (XMX), plus the currency-hedged version (XMH) of this mandate.

But with terminations outnumbering new launches, the number of ETFs at the end of August will dip modestly below the 367 reported at the end of July by the Canadian ETF Association. This is still well above the total of 340 at the end of 2014. ETF AUM totaled $85.7 billion at the end of July, up from $76.7 billion at the end of December.