Exchange traded funds: When ETFs go wrong - ETN pulled, forcing sale & loss

Malthusian wrote: »

if the ETF is actually identical the bed and breakfasting rule might apply.

the bed and breakfasting rule only applies to an identical security, so it won't apply to a new ETF.

Ogre_De_Flamme wrote: »

Thank you for the suggestion for ISA/SIPP, it is not possible to claim loss.
New product released sometime after the old one closed.

the gap in time between the 2 ETFs is an issue, in the sense that you're out of the market for that period (assuming there are no similar alternative ETFs you could buy instead).

i'm not sure i follow your point about claiming the loss, though. in a taxable account, you can claim it and (if you don't already have gains to set it against) carry the loss forward to set against future gains. in ISA/SIPP, you can't use the loss, but then you won't be taxed on any gains either, so that is as expected.

if there's a general lesson here, i think it's: be wary about buying the more obscure ETFs, because they may well be withdrawn if they aren't popular enough. a huge number of pretty strange ETFs have been issued, and they're not all going to survive. none of this is likely to be an issue with the mainstream ETFs, which track major indices using physical replication (i.e. by actually holding the shares/bonds/etc which the index is made up of).

i do hold 1 obscure ETF, which might be closed if i'm unlucky. it invests in smaller, cheaper-looking european shares. i have in mind a similar (not identical) ETF which i could buy instead if it disappears. or perhaps i could buy a vaguely similar investment trust. it's nice to have a back-up plan. if you can't come up with a back-up plan, then perhaps ask yourself whether the investment is too obscure to be a good idea anyway.