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  • FIRST POST
    • Ogre De Flamme
    • By Ogre De Flamme 26th Aug 17, 12:49 PM
    • 85Posts
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    Ogre De Flamme
    Exchange traded funds: When ETFs go wrong - ETN pulled, forcing sale & loss
    • #1
    • 26th Aug 17, 12:49 PM
    Exchange traded funds: When ETFs go wrong - ETN pulled, forcing sale & loss 26th Aug 17 at 12:49 PM
    From those with experience, what options does the retail saver have when the ETF provider pulls the product forcing sale (and a loss). particularly when the same provider replaces it with an identical ETF, different ISIN/EPIC.
Page 1
    • kidmugsy
    • By kidmugsy 26th Aug 17, 2:01 PM
    • 9,853 Posts
    • 6,645 Thanks
    kidmugsy
    • #2
    • 26th Aug 17, 2:01 PM
    • #2
    • 26th Aug 17, 2:01 PM
    From those with experience, what options does the retail saver have when the ETF provider pulls the product forcing sale (and a loss). particularly when the same provider replaces it with an identical ETF, different ISIN/EPIC.
    Originally posted by Ogre De Flamme
    Ooh. Name the swine.
    • Malthusian
    • By Malthusian 29th Aug 17, 11:56 AM
    • 3,323 Posts
    • 5,066 Thanks
    Malthusian
    • #3
    • 29th Aug 17, 11:56 AM
    • #3
    • 29th Aug 17, 11:56 AM
    Reinvest the proceeds in the new ETF?

    That may not help if there is a capital gain, but if the ETF is actually identical the bed and breakfasting rule might apply. Anyway, the OP specified there was a loss, which he can report to HMRC and claim at a later date.

    That leaves dealing charges which would be annoying but should be almost irrelevant in the grand scheme.
    • Ogre De Flamme
    • By Ogre De Flamme 10th Sep 17, 1:35 PM
    • 85 Posts
    • 2 Thanks
    Ogre De Flamme
    • #4
    • 10th Sep 17, 1:35 PM
    ETF goes wrong - ETN pulled, forcing sale & loss
    • #4
    • 10th Sep 17, 1:35 PM
    Reinvest the proceeds in the new ETF?

    Anyway, the OP specified there was a loss, which he can report to HMRC and claim at a later date.
    Originally posted by Malthusian
    Thank you for the suggestion for ISA/SIPP, it is not possible to claim loss.
    New product released sometime after the old one closed.

    Ooh. Name the swine.
    Originally posted by kidmugsy
    Google etf redemption notice
    • grey gym sock
    • By grey gym sock 10th Sep 17, 4:01 PM
    • 4,131 Posts
    • 3,643 Thanks
    grey gym sock
    • #5
    • 10th Sep 17, 4:01 PM
    • #5
    • 10th Sep 17, 4:01 PM
    if the ETF is actually identical the bed and breakfasting rule might apply.
    Originally posted by Malthusian
    the bed and breakfasting rule only applies to an identical security, so it won't apply to a new ETF.

    Thank you for the suggestion for ISA/SIPP, it is not possible to claim loss.
    New product released sometime after the old one closed.
    Originally posted by Ogre De Flamme
    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.
    • bostonerimus
    • By bostonerimus 10th Sep 17, 4:25 PM
    • 1,133 Posts
    • 644 Thanks
    bostonerimus
    • #6
    • 10th Sep 17, 4:25 PM
    • #6
    • 10th Sep 17, 4:25 PM

    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).
    Originally posted by grey gym sock
    Yes. Stick with quality and well known fund families.
    Misanthrope in search of similar for mutual loathing
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