Exchange Traded Concepts, REX to close gold-hedged EM ETF

May 22nd, 2017 | By | Category: Alternatives / Multi-Asset

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US white-label ETF provider Exchange Traded Concepts has announced that the REX Gold Hedged FTSE Emerging Markets ETF (NYSE Arca: GHE) is to close and liquidate. The fund, which was launched in collaboration with REX ETFs, was closed to orders for new creation units as of 18 May 2017, and the last day of trading of the fund’s shares on the NYSE Arca will be 1 June 2017.

Exchange Traded Concepts to close gold-hedged EM ETF

The ETF offered investors exposure to emerging market equities with a hedge against the gold price.

From 2 June 2017 through 6 June 2017, shareholders may only be able to sell their shares to certain broker-dealers, and there is no assurance that there will be a market for fund shares during that time period.

The fund will liquidate on or around 6 June 2017.  For the ordinary income distribution, the ex-date will be 31 May 2017, the record date will be 2 June 2017 and the pay date will be 5 June 2017.

The ETF, which was only launched in April 2016, offers exposure to the FTSE Emerging Markets Index in addition to gold futures contracts, the notional value of which is equal to the value of equity exposure. This strategy effectively hedges investors in emerging market equities from movements in the gold spot price. The fund had a net expense ratio of 0.65%.

On or about 19 May 2017, the fund will begin liquidating its portfolio assets. This will cause the fund to increase its cash holdings and deviate from the investment objective and strategies stated in the fund’s prospectus.

On or about the liquidation date, the fund will liquidate its assets and distribute cash pro rata to all remaining shareholders. These distributions are taxable events. In addition, the payments to shareholders will include accrued capital gains and dividends, if any. As calculated on the liquidation date, the fund’s net asset value will reflect the costs of closing the fund. Once the distributions are complete, the fund will terminate.

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