The announcement was made to the Australian Securities Exchange (ASX) yesterday by the scheme’s investment manager, Market Vectors – a large US-based ETF provider which only has a small presence in Australia through the Aii products – on behalf of Valuestream.
“The decision to terminate the scheme and related Aii ETFs has been driven by the low level of funds under management,” the statement read.
InvestorDaily understands the six ETFs had around $12 million in combined funds under management.
“The investment manager has been funding the scheme from its own resources. After considering all practical alternatives Valuestream and the investment manager formed the view that in order to continue operating the Aii ETFs, the management costs charge to Aii ETF unitholders would have to be significantly increased,” the statement continued.
“Having considered the alternatives, Valuestream has resolved that termination of the scheme is in the best interests of investors as a whole”.
The six ETFs are all based on the ASX 200 universe, focusing on different sectors: energy (ASX code ENY), financials (FIN), financials excluding Australian real estate investment trusts (FIX), industrials (IDD), metals and mining (MAM) and resources (RSR).
The manager and RE noted the immediate termination is a “departure” from the product disclosure statement, which requires three months' notice. Valuestream and Market Vectors said that under the circumstances, it is in the best interests of investors to sell down the assets and return money to investors as soon as possible to avoid adverse tax implications.
Investors will receive the final trading value of units, subject to market movements between now and the sale of the assets, in two payments – the first on June 24 and the second in mid to late July.
