The Wall Street Journal reports (subscription required) that XShares will close 15 of its 19 HealthShares ETFs, redesign the remaining four, and launch a few new HealthShares ETFs sometime in the fourth quarter.

XShares will, of course, bill this as a strategic shift but closing 15 of 19 funds is hardly an indicator of success and the HealthShares funds were pretty hyped up. More than a year ago, MarketWatch columnist Chuck Jaffe trashed the funds, calling them his "Stupid Investment of the Week."

The HealthShares ETFs failed to catch on with investors, and that's probably good: with expense ratios that were quite high for ETFs, and holdings that were very limited and gimmicky (An ETF that invests only in companies in the field of dermatology? Michael Jackson is out of money: Short it!), this isn't exactly a surprising failure.

For most investors, I don't think ETFs are the new paradigm that they've been made out to be: the ability to trade them like stocks on major exchanges may lead many to over-trade and, while a diabetes ETF might seem cool, most people would be better off just buying a total market index fund.