Let's assume, that I have purchased shares of some ETF. A few months later, this ETF decides to close its operation. How does this situation look like from an investor's point of view?

  1. Are shares being forcefully sold? Who determines the price?

  2. Does the market price of ETF that said, that is going to close lowers (it won't operate) or raises (someone will be forced to buy them from me) or does not change significantly?

  3. Is the situation treated differently depending on a country/stock exchange? Is closing it coordinated between stock exchanges (for example, we stop trading it at the end of day X)?

  4. To return money to owners first this money has to be acquired. Money is acquired by selling whatever ETF was holding. Selling incurs commission (nominally big with this size of assets). Does it mean that the last owners of ETF's shares are losing most?

The question has been created after spotting that FRL ( https://etfdb.com/etf/FRL ) has been closed, but question regards ETF overall. FRL may be just an example to precise answers.

1 Answer 1


An ETF issuer will announce some time in advance when the ETF will cease trading and be delisted. There's likely to be increased volume and perhaps a somewhat lower price initially but that should level out.

As a shareholder, you will get the cash equivalent of the ETF's assets at the time liquidation. That is different than the last trading price before fund closure because securities held by the ETF will continue to trade.

  • Thank you for your answer. It's good but I am looking for more detailed one (dates, prices, past examples).
    – spam
    May 2, 2020 at 13:42
  • @spam - If you want dates, prices, etc. you're going to have to do some leg work. Go to one of the ETF web sites for a list of closed ETFs. Some of these web sites will also provide stats on foreign ETFs. Then you're going to have to scrounge around to see if you can get prices. You're not going to get such stats and details from participants here. May 2, 2020 at 13:55
  • I have already done so with FRL. Official pages just say that it is "closed". I was hoping for someone who had this kind of ETF during the time when it was closed who could describe his first-hand experience.
    – spam
    May 2, 2020 at 14:31
  • Not sure what there is to be gained from personal experience. After the delist announcement, the ETF will trade for a month or so. For the most part, its price will be dependent on the underlying assets. That's public info (price and volume). The only variable is difference between the delisting price and the liquidation price and that depends on how soon they liquidate after the delist date. My short answer is that one should sell the ETF before the delist date because once delisted, you still have market risk but no way out unless it's trading OTC. If so, B/A spreads are likely to be wide. May 2, 2020 at 14:38

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