Exchange traded funds: When ETFs go wrong - ETN pulled, forcing sale & loss
Options
Ogre_De_Flamme
Posts: 97 Forumite
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.
0
Comments
-
Ogre_De_Flamme wrote: »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.
Ooh. Name the swine.Free the dunston one next time too.0 -
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.0 -
Malthusian wrote: »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.
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.
Google etf redemption notice0 -
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if there's a general lesson here, i think it's: be wary about buying the more obscure ETFs, because they may well be withdrawn if they aren't popular enough.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.0 -
grey_gym_sock wrote: »
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).
Yes. Stick with quality and well known fund families.“So we beat on, boats against the current, borne back ceaselessly into the past.”0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards