Vanguard Is Liquidating a US-Listed ETF for the First Time Ever

S&P 500

3,676.52

-16.71(-0.45%)

 

Dow 30

29,424.29

-166.12(-0.56%)

 

Nasdaq

10,877.65

+9.72(+0.09%)

 

Russell 2000

1,668.36

-11.23(-0.67%)

 

Crude Oil

77.28

-1.46(-1.85%)

 

Gold

1,640.00

-15.60(-0.94%)

 

Silver

18.69

-0.22(-1.14%)

 

EUR/USD

0.9619

-0.0069(-0.71%)

 

10-Yr Bond

3.8210

+0.1240(+3.35%)

 

GBP/USD

1.0675

-0.0182(-1.68%)

 

USD/JPY

144.5270

+1.2070(+0.84%)

 

BTC-USD

19,078.54

+27.73(+0.15%)

 

CMC Crypto 200

438.04

+4.94(+1.14%)

 

FTSE 100

7,020.95

+2.35(+0.03%)

 

Nikkei 225

26,431.55

-722.28(-2.66%)

 

(Bloomberg) — Asset-management giant Vanguard Group is shutting down one of its US exchange-traded funds for the first time.

Most Read from Bloomberg

John Paulson on Frothy US Housing Market: This Time Is Different

UK Market Selloff Slams Gilts, Pound, Piling Pressure on BOE

Wall Street Banks Prep for Grim China Scenarios Over Taiwan

Bank of England Says Paper Banknotes Only Good for One More Week

Interpol Issues Red Notice for Terra’s Do Kwon, Korea Says

The $39.7 million Vanguard U.S. Liquidity Factor ETF (ticker VFLQ) will be liquidated in late November, the firm said in a press release Monday. The fund “has not gained scale since its 2018 debut,” Vanguard said.

The closure will be the first and only liquidation of an American ETF for the Jack Bogle-founded firm since the $244 billion Vanguard Total Stock Market ETF (VTI) launched in 2001.

Malvern, Pennsylvania-based Vanguard controls nearly $1.8 trillion in assets across 82 US ETFs and is known chiefly for its ultra-low cost, index-hugging funds. Actively-managed VFLQ, which carries a fee of 13 basis points, was an “odd fit” from the get-go, according to VettaFi’s Dave Nadig.

“It’s not super surprising that they’d close the laggards down,” said Nadig, financial futurist at the data provider. “As for why now? Nobody cares when you close products in a bear market.”

The liquidation comes as volatility ripples across asset classes, with central banks around the globe attempting to cool red-hot inflation. That turmoil is showing up in the $6 trillion ETF industry, where 91 funds have shuttered so far this year compared with just 71 closures for all of 2021, Bloomberg data show.

VFLQ, which seeks to take advantage of the premium associated with less-liquid stocks, has lost about 23% this year. That compares to a 22% loss for the S&P 500 Total Return Index.

Vanguard’s decision to delist VFLQ also illustrates how crowded the ETF industry has become, in the eyes of Morningstar’s Ben Johnson.

“If the K-Pop ETF and filings for double-levered AMC ETFs weren’t good enough indicators that the ETF market is getting oversaturated, then maybe this Vanguard news will send a clearer signal,” said Johnson, Morningstar’s head of client solutions for asset management.

Most Read from Bloomberg Businessweek

The Sneaky Genius of Apple’s AirPods Empire

US Is Inflating Its Debt Away After Unprecedented Spending Binge

The Supreme Court Is About to Display Its Power Imbalance Again

To Find Success at Work, Match Your Job With Your Personality

This Is What Life’s Like in the World’s Strictest Covid Zero City

©2022 Bloomberg L.P.

Bloomberg

Throw-in-Towel Moment Is Yet to Come Even After Stock Selloff

(Bloomberg) — After hefty losses, stock market volatility is still on the rise and traders are rushing to bet on further equity downside, yet investors’ throw-in-the-towel moment may not have arrived. Most Read from BloombergJohn Paulson on Frothy US Housing Market: This Time Is DifferentUK Market Selloff Slams Gilts, Pound, Piling Pressure on BOEWall Street Banks Prep for Grim China Scenarios Over TaiwanBank of England Says Paper Banknotes Only Good for One More WeekInterpol Issues Red Notice

Bloomberg

Stock Market Bear Recommends Going ‘a Little Bit Long’ on Stocks

(Bloomberg) — The broad selloff in risk assets is offering a buy signal to contrarian investors.Most Read from BloombergJohn Paulson on Frothy US Housing Market: This Time Is DifferentUK Market Selloff Slams Gilts, Pound, Piling Pressure on BOEWall Street Banks Prep for Grim China Scenarios Over TaiwanBank of England Says Paper Banknotes Only Good for One More WeekInterpol Issues Red Notice for Terra’s Do Kwon, Korea SaysCount Dennis Gartman among them.The retired publisher of the long-running

Bloomberg

Buy US Treasuries to Prepare for 2023 Downturn, Citi Strategist Says

(Bloomberg) — Citigroup Inc.’s Steven Wieting says buying US Treasuries is the way to prepare for 2023, when an economic downturn will cut earnings and employment.Most Read from BloombergJohn Paulson on Frothy US Housing Market: This Time Is DifferentUK Market Selloff Slams Gilts, Pound, Piling Pressure on BOEWall Street Banks Prep for Grim China Scenarios Over TaiwanBank of England Says Paper Banknotes Only Good for One More WeekInterpol Issues Red Notice for Terra’s Do Kwon, Korea Says“We hav

Reuters

Google’s India policy head Gulati resigns – sources

Google’s head of public policy for India has resigned just five months after taking the job, two sources told Reuters, at a potentially critical time for the U.S. tech giant as it awaits the outcome of at least two antitrust cases in the country. The reasons for Archana Gulati’s resignation were not immediately clear. Gulati, who previously worked at Prime Minister Narendra Modi’s federal think-tank, declined to comment.

Bloomberg

China’s Commodities Demand Faces Another Headwind in Weaker Yuan

(Bloomberg) — Commodities in China dropped as a surge in the dollar heaped pressure on markets already plagued by concerns over Chinese growth.Tin led losses among base metals traded in Shanghai, with copper also falling sharply by the midday break. Crude tracked international markets lower. Producer stocks also fell, with the nation’s biggest listed oil company, PetroChina Co., and aluminum giant China Hongqiao Group hitting their lows for the year in Hong Kong.The greenback climbed to a recor

SmartAsset

Inflation Could Erode Your Retirement Savings. Here’s What to Do

Consumer prices rose 8.5% in July over the previous year, leaving many retirees and pre-retirees wondering how inflation impacts retirement savings. They have a right to worry. After all, living on a fixed income is tough when the price of … Continue reading → The post This Chart Shows How Inflation Can Erode Your Retirement Savings – 2022 Study appeared first on SmartAsset Blog.

SmartAsset

Vanguard: There’s a 65% Chance of a Recession. Here’s How to Prepare

Analysts at the mutual fund giant Vanguard estimate the likelihood that the U.S. will drop into a full-blown recession sometime during the next 12 months at 25%, and some time during the next 24 months at 65%. The Vanguard analysts … Continue reading → The post Vanguard Says There’s a 65% Chance of a Recession – Here’s What to Do appeared first on SmartAsset Blog.

TheStreet.com

How Much Does the S&P 500 Return Annually?

How many times have you read or heard that the S&P 500 returns 10% per year? The actual average return — after adjusting for inflation, reinvesting dividends, and assuming you pay no taxes– is almost half that. How is the oft-quoted figure promising 10% average annual returns so far off?

MarketWatch

Here’s exactly when Vanguard’s US chief economist now thinks we’re ‘most likely’ to enter a recession — and what may be the ‘biggest risk’ to you if we do

MarketWatch Picks has highlighted these products and services because we think readers will find them useful; the MarketWatch News staff is not involved in creating this content. With markets posting double-digit losses, inflation breaking decades-old records, and the Federal Reserve steadily increasing interest rates, among other factors, the likelihood of a full-blown recession may seem inevitable. What’s more, Roger Aliaga-Diaz, the fund manager’s U.S. chief economist and head of portfolio construction, told MarketWatch Picks that he thinks a recession is “most likely” to occur sometime in 2023.

Reuters

China’s yuan ends at 28-month low despite fresh policy step, nears daily lower limit

SHANGHAI (Reuters) -China’s yuan finished domestic trading session at a new 28-month low against the dollar on Monday, near its downside trading limit, despite the central bank taking steps to rein in the currency’s weakness. The People’s Bank of China (PBOC) said it would raise the foreign exchange risk reserves for financial institutions when purchasing FX through currency forwards to 20% from zero starting on Sept. 28. The announcement, along with another firmer-than-expected daily midpoint fixing, was meant to slow the pace of the yuan’s depreciation by making it more expensive to bet against it, traders said.

TheStreet.com

Here’s What Happens to Your Credit Card When The Fed Boosts Interest Rates

On Wednesday, September 21, the Federal Reserve raised the interest rate on its benchmark Fed Funds rate by 0.75% — the third time in a row it’s done so. What’s more, the Fed has signaled more rate hikes that will bring the Fed Funds rate up to between 4.0% and 4.50% by the end of 2022. In particular, though, the largest immediate impact of higher Federal Reserve rates may be on credit card interest rates.

The Wall Street Journal

Tata’s Potential—and Problems—Are Symbolic of India Itself

One of India’s oldest businesses, Tata Group, is getting into shape—an ambitious task given its unwieldy scale. On Friday, Tata Steel said it is merging seven smaller metal units with itself in a bid to reduce costs, simplify corporate structure and strengthen its balance sheet. The 154-year-old Tata Group, which makes everything from salt to software and owns British luxury-car maker Jaguar Land Rover, has been trying to slim down since Tata Sons Chairman Natarajan Chandrasekaran took the helm after a bitter boardroom battle in 2017.

The Wall Street Journal

Nasdaq, S&P 500 Move Higher Even as Growth Worries Linger

Major indexes erased their earlier losses to trade higher, a turnaround from last week’s dismal performance, when concerns about the world economy pushed financial markets into disarray.

TipRanks

‘It Could Get Worse Before It Gets Better’: Carl Icahn Uses These 2 Dividend Stocks to Protect His Portfolio

After a grisly 1H22 which represented the stock market’s worst performance since 1970, the second half is shaping up to be a bit of a disappointment too. After clawing back some of the losses, it’s been onto the slide again with the S&P 500 almost back to the mid-June lows. The bad news, according to billionaire investor Carl Icahn, is that things could still get worse from here. “I think a lot of things are cheap, and they’re going to get cheaper,” said Icahn, pointing to the economic malaise,

Leave A Reply

Your email address will not be published.