“By all appearances, the marketplace is not ready for these sector funds” stated the August 20 press release from Grail Advisors. It’s refreshing to see an honest statement on a subject that often falls victim to the spin machines.
Shareholders of Grail RP Technology ETF (RPQ) or Grail RP Financials ETF (RFF) don’t have much time if they want to avoid being involuntarily liquidated. The last day of trading will be Friday, August 27, 2010. As always, I recommend investors sell their shares in the open market prior to the delisting to avoid the liquidation process. Both are being quoted today with bid/ask spreads near 2% so be sure to use a limit order.
Grail decided to pull the plug on these two ETFs rather quickly. They were part of a four ETF introduction last October from Grail and RiverPark. Despite all the fanfare surrounding Grail’s “actively-managed” ETFs, all seven of their funds are part of the current ETF Deathwatch.
Actively-managed ETFs face five obstacles, and this batch is not the first to shut their doors. That dubious honor belongs to Bear Stearns Current Yield (former ticker YYY) back in 2008. The WisdomTree U.S. Short Term Government Income Fund (former ticker USY) is another actively-managed ETF that did not survive.
Disclosure covering writer, editor, publisher, and affiliates: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
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