Exchange-traded funds (ETFs) can close as a result of low investor interest or a lack of assets. A fund’s board may conclude that liquidation is in the best interest of the fund and its shareholders.
Once a fund closes, it will no longer be available on its listed exchange (e.g. NYSE or Nasdaq), and therefore, it will no longer be available on investing platforms like Public.
For shareholders, this could mean:
The automatic sale of fund assets held as of the liquidation date. In this case, your holdings would convert to cash in your account.
A taxable event once shares are sold as part of the liquidation event. A shareholder may be subject to the relevant capital gains tax in these cases.
The inability to further trade the ETF as of the date of liquidation.
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