XShares Advisors LLC is closing 15 of its HealthShares exchange-traded funds and making significant changes to four others that will remain open, company officials confirmed on Thursday.

The last day of trading for the closing funds will be September 19.

The moves come after the niche ETF provider said in late June it would shutter its seven real-estate-focused ETFs under its Adelante Shares brand name. The seven funds carved up the real estate market by style, yield and subsectors. Since the end of September 2007 when they launched, the Adelante Shares set had attracted just $17 million in total assets. (See related story.) 

The HealthShares series has done much better in terms of gross assets under management. Since launching in March 2007, they've gathered roughly $100 million in combined assets. According to XShares, about half of that was held in the 15 ETFs that are closing, leaving the remaining four funds with an average of some $12.5 million each.

XShares is not the only company to shut down ETFs this year: Claymore Securities in January decided to shut 11 of its ETFs (see related story), and in May, Ameristock Corp. gave four bond ETFs the axe. (See story here.)  That makes a total of 37 ETFs that've been shuttered so far in 2008. The Claymore announcement marked the first ETF liquidations since 2006, when the SPDR O-Strip (OOO) ETF was eliminated due to low assets.

Many have been anticipating a new wave of ETF liquidations to occur this year, following the rash of product launches in 2007.

The following HealthShares ETFs will remain and continue to trade on the NYSEArca:

• HealthShares Cancer (HHK)
• HealthShares European Drugs (HRJ)
• HealthShares Diagnostics (HHD)
• HealthShares Enabling Technologies (HHV)

The HHV ETF will be renamed the Drug Discovery Tools fund.

XShares also plans to slash the expense ratios on the surviving portfolios effective Oct. 1. Three will drop from a cap of 0.75% to 0.60%. Meanwhile, HRJ will drop from 0.95% to 0.72%.

The new strategy calls for all four remaining ETFs to get reconstructed benchmarks. The number of constituents tracked, which now include as few as 22 different companies, is expected to increase to anywhere from 40 to 100.

In a statement obtained by IndexUniverse.com, the parent company's Interim Chief Executive Joseph Schocken emphasized that the firm remains convinced that health care is an important segment to target.

'Untapped Demand' 

"Healthcare and life sciences remain the most exciting sectors for investment in the global economy," said Schocken, who also serves as chairman of XShares Group Inc. "We believe that significant, untapped demand exists for specialized healthcare investment vehicles that focus on the innovation taking place outside the sector's large-cap and mega-cap companies."

He also observed that while paring back "those ETFs that didn't resonate with investors," the fund shop was expecting "these changes will make HealthShares ETFs more attractive to a wider array of individual and institutional investors."

XShares says it still plans to bring to market its previously announced HealthShares Asian Health ETF in coming months. The company adds that more HealthShares funds could also be introduced in the near term.

But with Adelante gone and HealthShares undergoing a significant reduction, XShares has only its five TDAX Independence ETFs in a much-reduced stable of funds. Those launched right after the Adelante family opened last September. The TDAX series, which operates in partnership with TD Ameritrade, came out in early October. (See related story.) 

As the first life cycle ETFs, they've proved relatively popular. But co-founder Anthony Dudzinski stepped down in mid-July as CEO of the ETF provider's XShares Advisors unit and a board member of the parent XShares Group. The firm also said at the time it had laid off a large part of its sales staff. (See story here.)