The ETFs are also closing just weeks after reaching their three-year anniversary, (Photo: Shutterstock)

(Bloomberg) –Legg Mason Inc., the Baltimore-based investment management company, plans to close a quarter of its ETFs next month.

The firm is shutting three funds that focus on the U.S., emerging markets and developed markets outside the U.S. following a review of its product lineup “to ensure it is relevant to investor demand,” the company said in a statement. Together the funds manage $28 million, just 3 percent of assets in Legg Mason's 12 ETFs, and a fraction of the firm's $727 billion.

The ETFs are also closing just weeks after reaching their three-year anniversary, the first point at which some institutional investors and brokerage platforms will consider a new fund. Legg Mason's decision to close these products suggests it's becoming increasingly hard for even large asset managers to support slow-going funds in their quest to make it big in the $3.7 trillion U.S. ETF industry.

“Running an ETF isn't free, and at some point it just becomes better to throw in the towel,” said Eric Balchunas, an ETF analyst at Bloomberg Intelligence. “These funds just didn't do anything to stick out from the growing number of smart-beta ETFs, they were just too middle of the road.”

Funds can cost hundreds of thousands of dollars a year to run, prompting issuers to liquidate ones that don't garner assets. Cumulative closures are on pace to cross 1,000 funds in 2019, with other issuers already announcing plans to close a sport sponsors ETF and one that skims social media to choose its stocks.

These are the funds facing liquidation:

• Legg Mason Developed ex-US Diversified Core ETF (Ticker: DDBI)
• Legg Mason Emerging Markets Diversified Core ETF (Ticker: EDBI)
• Legg Mason US Diversified Core ETF (Ticker: UDBI)

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