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Terminated ETF: Sell now or wait until liquidated?

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  • Jul 10th, 2015 9:34 am
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[OP]
Newbie
Jul 14, 2014
82 posts
New Westminster, BC

Terminated ETF: Sell now or wait until liquidated?

I have never owned an ETF that was terminated so hopefully someone can help me out here. I own XVX in my TFSA - I received a letter today that it will be liquidated and shortly thereafter proceeds will be distrusted to shareholders after it pays out all its liabilities and obligations.

Should I sell at a loss before that date (unfortunately no tax benefit seeing as I was holding it in my TFSA) - or wait until it's liquidated, which will happen in about 2 months time in which case it provides unit holders a distribution?
10 replies
Penalty Box
Dec 27, 2013
8003 posts
4007 upvotes
Toronto
bcdriver wrote: I have never owned an ETF that was terminated so hopefully someone can help me out here. I own XVX in my TFSA - I received a letter today that it will be liquidated and shortly thereafter proceeds will be distrusted to shareholders after it pays out all its liabilities and obligations.

Should I sell at a loss before that date (unfortunately no tax benefit seeing as I was holding it in my TFSA) - or wait until it's liquidated, which will happen in about 2 months time in which case it provides unit holders a distribution?
same question for me as well.. and what sucks is that i get the letter now and it's tanked like 60 cents in 3 days.
Deal Fanatic
User avatar
Jul 19, 2003
8124 posts
749 upvotes
This is 2x ETFs now from Blackrock terminated.

Whats wrong with them? Some people hold ETFs for retirement. Was their any prior indication that this would happen?
hi!
Deal Fanatic
Feb 14, 2006
9907 posts
1267 upvotes
Any reason specified as to why they were terminating this ETF?

I hold XEF, XSB and XIC from BlackRock... I don't see these being terminated at all, but that's concerning.
Penalty Box
Dec 27, 2013
8003 posts
4007 upvotes
Toronto
masterhapposai wrote: This is 2x ETFs now from Blackrock terminated.

Whats wrong with them? Some people hold ETFs for retirement. Was their any prior indication that this would happen?
yeah it's annoying... it's funny because I get 2 letters.. .1 for XVX and 1 for CLO. lol

Doesn't say why. Just says that by end of August all the assets will be sold off.

The only reason I could think of is that they are relatively small funds and perhaps irock feels that after the number of years they've had them open they haven't grown their assets under management fast enough and perhaps with the recent oil/gas/venture exchange collapse, they fear that to much money will be taken out of the funds.

I'm pretty sure if the ishares fund you have has more than 100,000,000 under management, they won't shut it down.
Jr. Member
User avatar
Apr 5, 2010
194 posts
164 upvotes
Grimsby
That is quite a number.

[QUOTE]..plans today to terminate the following funds :
iShares Broad Commodity Index ETF (CAD-Hedged), CBR, CBR.A
iShares Oil Sands Index ETF, CLO, CLO.A
iShares China All-Cap Index ETF, CHI, CHI.A
iShares S&P/TSX Global Mining Index ETF, CMW, CMW.A
iShares Latin America Index ETF, XLA
iShares S&P/TSX Venture Index ETF, XVX[/QUOTE]

Several of these ETF's are on Scotia iTrade's commission free ETF list, which many people pick to build portfolio's from (to avoid trading fee's when rebalancing).
Deal Fanatic
Mar 24, 2008
6208 posts
2607 upvotes
Toronto
mcg wrote: Any reason specified as to why they were terminating this ETF?

I hold XEF, XSB and XIC from BlackRock... I don't see these being terminated at all, but that's concerning.
This fund has net assets of ~5 million, I doubt it was profitable for iShares to run and that is the most likely reason why it is being terminated.
TFSA: XAW | RRSP: AOR | Non-reg: XUU + GICs
[OP]
Newbie
Jul 14, 2014
82 posts
New Westminster, BC
So anyone have any idea on whether it's better to sell before the ETF is terminated or hold on for the distribution? Depending on what other assets/liabilities they have leftover I could see it going either way. I guess I could sell half - and hold onto the the other half - but anyone know for sure?
Deal Fanatic
Mar 24, 2008
6208 posts
2607 upvotes
Toronto
bcdriver wrote: So anyone have any idea on whether it's better to sell before the ETF is terminated or hold on for the distribution? Depending on what other assets/liabilities they have leftover I could see it going either way. I guess I could sell half - and hold onto the the other half - but anyone know for sure?
That ETF is worth whatever it's underlying holdings (S&P/TSX Venture Select Index) are worth. It does not matter if you sell it now or wait for them to liquidate it for you, you will get whatever that index is doing net of expenses.

I personally would just wait for them to send me a cheque.
TFSA: XAW | RRSP: AOR | Non-reg: XUU + GICs
Penalty Box
Dec 27, 2013
8003 posts
4007 upvotes
Toronto
ksgill wrote: That ETF is worth whatever it's underlying holdings (S&P/TSX Venture Select Index) are worth. It does not matter if you sell it now or wait for them to liquidate it for you, you will get whatever that index is doing net of expenses.

I personally would just wait for them to send me a cheque.
I agree except that i wanted to sell in the green not in the red lol

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