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Vanguard Liquidates An Exchange-Traded Fund For First Time

Baystreet - Tue Sep 27, 2022

The Vanguard Group is closing one of its U.S. exchange-traded funds (ETF) for the very first time.

The $40 million U.S. Vanguard U.S. Liquidity Factor ETF (VCE) will be liquidated and shut down at the end of November, the company said in a news release.

Vanguard, which is based in Valley Forge, Pennsylvania, said the fund is being closed because it failed to gain scale since its 2018 debut.

The closure marks the first time that a Vanguard ETF has been closed.

One of the largest fund managers in the world, Vanguard controls $1.8 trillion U.S. in assets across 82 ETFs and is known for its low fees.

The liquidation comes amid stock market volatility as central banks around the world work to dampen inflation. The volatility has hit the $6 trillion U.S. ETF industry, where 91 funds have closed so far this year compared with 71 funds that shut down in all of last year.

The Vanguard U.S. Liquidity Factor ETF strives to take advantage of the premium associated with less-liquid stocks. The fund has lost 24% of its value this year and is currently trading at $87.46 U.S.

Provided Content: Content provided by Baystreet. The Globe and Mail was not involved, and material was not reviewed prior to publication.