Russell to close passively managed US ETFs
The board of trustees of Russell Exchange Traded Funds Trust has authorised the orderly termination and liquidation of its US passively managed family of exchange-traded funds on or before 24 October 2012.
In aggregate, the 25 funds affected by this decision had approximately USD310m in assets as of 31 July 2012.
The announcement does not impact the Russell Equity ETF (ONEF), which is an actively managed, asset allocated portfolio that aligns with Russell’s focus on multi-asset solutions. Russell will continue to operate the Russell Equity ETF, which is benchmarked to the Russell Developed Large Cap Index.
Russell will continue to focus on offering solutions in the actively managed, asset allocated ETF space as part of its core capability in investment strategy implementation as well as in the passive ETF space through its index licensing business.
While the innovation behind Russell’s next-generation ETF products received substantial interest in general, the market for them is still in its early days. Given challenging equity market conditions since the launch of these products, Russell determined that proposing the liquidation of the passively managed ETFs at this time is in the best interests of the ETFs and their shareholders.
The affected funds will be closed to new investment on 9 October 2012. The funds will be delisted from NYSE Arca or the Nasdaq Stock Market, as the case may be, effective at the close of trading on 16 October. Full liquidation of the funds is intended to be completed by 24 October 2012.
Shareholders may sell their holdings on the NYSE Arca or Nasdaq through 16 October, incurring any applicable transaction fees from their broker-dealer. All shareholders remaining on 16 October will receive cash equal to the amount of the net asset value of their fund shares, which will include any capital gains and dividends, into the cash portion of their brokerage accounts.
Shareholders receiving the final liquidation cash distribution will not incur transaction fees from their broker-dealer in connection with this distribution or the cancellation of their fund shares. Moreover, shareholders will not bear any expenses associated with the liquidation of the funds other than bearing indirectly the portfolio transaction costs incurred in liquidating the funds’ assets in advance of the funds’ closure.
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