What happens when an ETF I own gets delisted?
Best Answer
3963 points
MNSL answered 11 months ago …
Very interesting question. I read somewhere some ETFS will be delisted sooner than later. However I do not know what is going to happen once ETFS close.
Pl see following link:
http://investwithanedge.com/final-etf-death-toll-for-2008-58
A record number of new ETFs, more than 290, came to market in 2007. An industry of less than 200 products in 2004 exceeded the 800 level in early 2008. A four-fold increase in the number of ETFs in just three years was too much, too fast. There were simly more products than the market could absorb. The demise of 58 ETFs this year is nothing more than Economics 101 at work. There is still too much supply, and there will be more closures in 2009.
The 58 delisted ETFs of 2008 are itemized in the table below. A common theme for the failures: basing a product on a very narrow slice of the market. XShares Advisors suffered the most casualties, losing 26 products with the closure of seven Adelante real estate ETFs in July, 15 HealthShares in September, and another four HealthShares in December. Claymore lost a total of 13 during the year.
Answers
2082 points
alanj answered 11 months ago …
An ETF getting delisted? Is that even posible? I suppose it is, if just about every stock in it's portfolio is delisted. That would be like an index fund being delisted. Statistically speaking, virtually imposible. So, if you are concerned that the ETF you have is going to be delisted I just don't see it happening. But , if it where it would be treated like any other stock that has been delisted. It would trade in the cheaper markets. OTC, pink sheets for example. It will still have value.
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108 points
rnrinvest answered 11 months ago …
Sometimes ETFs are closed to due a lack of capital but your shares would be sold at market and sent to you. Or possibly you would have an option to tranfer funds to an alternative ETF that is similar. But delisting is very unlikely if not impossible, for marketing reason if nothing else.
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