How Do You Liquidate Liquidity? Inside Vanguard's First ETF Closure

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Vanguard on Monday announced plans to liquidate its liquidity exchange-traded fund in what will be its first ETF liquidation since inception.

What To Know: Vanguard will close its $44.2 million Vanguard U.S. Liquidity Factor ETF (VLFQ) in late November following a comprehensive review of its global product lineup, according to a press release from the firm.

“We continue to add new products that have investment merit and meet investors’ preferences, change advisors and mandates to improve investor outcomes, and eliminate funds that lack a distinct role in investors’ portfolios,” said Dan Reyes, head of Vanguard’s portfolio review department.

“Despite the ETF’s capable advisor and sound approach to factor investing, it has not gained scale since its 2018 debut.”

Shareholders will have the opportunity to sell their shares prior to the ETF’s delisting, which is anticipated on or around Nov. 22. The ETF will redeem all of its outstanding shares at the net asset value of such shares. All remaining ETF assets will be sold and distributed on the liquidation date, on or around Nov. 28. 

Vanguard said it continues to believe in the long-term investment case for factor investing, which targets value, momentum, quality, liquidity and minimum volatility. The firm’s remaining U.S. factor products have a combined $3.4 billion in assets.

Check This Out: Best Exchange Traded Funds (ETFs)

VLFQ Price Action: VFLQ is down about 23% year-to-date. 

It closed down 0.79% on Monday at $87.46, according to Benzinga Pro.

Photo: pasja1000 from Pixabay. 

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Image and article originally from www.benzinga.com. Read the original article here.