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Vanguard, the No. 2 U.S. exchange-traded fund issuer, is closing its $42 million Vanguard U.S. Liquidity Issue ETF (VFLQ), its first ETF to shut for the reason that agency entered the market 21 years in the past.
The issuer, with $1.8 trillion in property beneath administration, mentioned in a press release that the fund, the smallest in Vanguard’s lineup of 82 ETFs, “has not gained scale since its 2018 debut” and could be closed on or round Nov. 22. VFLQ is a part of the lineup of so-called issue ETFs Vanguard rolled out as its foray into actively managed ETFs within the U.S. market.
Vanguard continues to “remove funds that lack a definite position in buyers’ portfolios,” Dan Reyes, head of Vanguard’s Portfolio Assessment division, mentioned in a press release. The fund was managed by John Ameriks, international head of Vanguard’s Quantitative Fairness group, and had a 0.13% expense ratio, based on Vanguard’s fund description web page. It’s gained 5.73% since its launch, lower than the Russell 3000 Index, which gained 9.64% over the identical interval.
Vanguard’s first ETF was the Vanguard Complete Inventory Market ETF (VTI), issued in 2001. The issuer’s ETFs common round $22 billion every in property beneath administration. BlackRock Inc., with 400 ETFs managing round $2.1 trillion, is the No. 1 issuer within the U.S.
Issue ETFs search to attenuate danger by selecting investments based mostly upon traits like worth, momentum, liquidity and extra. At Vanguard, the liquidity issue was thought-about a substitute for the small measurement issue.
The funds grew slowly, which was uncharacteristic at Vanguard. The agency focuses on core asset courses and is strategic with respect to product launches. VFLQ’s prime holding was electronics maker Amphenol Corp.
To this point this 12 months, 115 ETF closures have been introduced or accomplished, in contrast with 79 for all of final 12 months, which was the slowest 12 months for closures in roughly a decade.
Contact Heather Bell at heather.bell@etf.com
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