Twelve EGShares have their last day of trading set for Oct. 4, 2013. If you own any of them, I advise you to dispose of your holdings prior to the delisting date. Emerging Global Advisors' press release suggests you will save yourself a brokerage commission fee by not selling your shares and going through the liquidation process instead.
However, if you read further, you will learn that "each fund's net asset value will reflect the costs of closing the fund as calculated on the liquidation date." If everyone sells except for you, then you will be stuck with the entire closure bill. (Post-publication update: Representatives of EGA contacted me to inform me that although shareholders remaining in the funds will bear the costs of closing, those costs will not exceed the annual expense ratio cap of 0.85%. Please see "Five Steps to Avoid Disaster When Your ETF Closes" for recommendations on how to avoid this potential fate.
The affected funds are:
- EGShares Basic Materials GEMS (LGEM)
- EGShares Consumer Goods GEMS (GGEM)
- EGShares Consumer Services GEMS (VGEM)
- EGShares Emerging Markets Metals & Mining (EMT)
- EGShares Energy GEMS (OGEM)
- EGShares Financials GEMS (FGEM)
- EGShares GEMS Composite (AGEM)
- EGShares Health Care GEMS (HGEM)
- EGShares Industrials GEMS (IGEM)
- EGShares Technology GEMS (QGEM)
- EGShares Telecom GEMS (TGEM)
- EGShares Utilities GEMS (UGEM)
All 12 of the closing ETFs are on ETF Deathwatch. Their closure cuts the number of offerings from EGShares in half, while preserving about 96% of the firm's assets under management. The changes will leave the EGShares product line in much healthier shape.
Non-U.S. sector fund families continue to have trouble finding investor acceptance. EGShares Global Emerging Market Sectors (GEMS) now join other sector suites that have closed in the past, including PowerShares FTSE RAFI Sectors, Claymore/Morningstar SuperSectors, WisdomTree International Sectors, Rydex Leveraged Sectors, HOLDRS, Focus Morningstar Sectors, and PowerShares Global Sectors.
Disclosure: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.