What Happens When An ETF Closes
June 25th, 2009
The Euro’s Demise Has Been Set in Motion: Are you protected?
"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."
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Bob Pisani, from CNBC, spoke on this topic in a recent segment called “ETF-101.” Bob states that your investment is safe although there is a process in the dissolution of the fund. Following the closing announcement, the ETF trades for about a month. After that period, the ETF closes and all trading stops. At that point the fund company has a few weeks to liquidate the holdings and distribute the proceeds to the shareholders. Since the value of the holdings is determined at the point of sale, you should sell your ETF before it closes. (see video below)
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