Sterling Capital Management Initiates Liquidation of ETF Fund
Sterling Capital Management Announces ETF Liquidation
Sterling Capital Management LLC has made a significant decision regarding the Focus Equity ETF (NYSE Arca: LCG). The Board of Trustees of the Northern Lights Fund Trust IV has opted for an orderly liquidation of the Fund based on several factors.
Reasons Behind the Liquidation
After thorough consideration, it was determined that the Focus Equity ETF had sustained underperformance issues and struggled to attract sufficient assets for investment. The Board concluded that liquidating the Fund would be the best option for protecting shareholders' interests.
Timeline for Liquidation
The trading of the Fund's shares will cease on November 17, which is referred to as the Closing Date. After this date, the Fund will stop accepting new creation units from authorized participants. Shareholders can sell their shares in the Fund before this date, though standard brokerage fees may apply. Authorized participants can redeem their shares for a pro-rated portion of the portfolio until the Closing Date.
Operation Cease and Asset Liquidation
Following the Closing Date, the Fund is expected to liquidate its assets and distribute the proceeds to shareholders on November 24, which is termed the Liquidation Date. During the interim period, shares may only be sold to specific broker-dealers, and there is no guarantee of market availability.
Impact on Shareholders
For shareholders still holding shares on the Liquidation Date, payments will be made at the net asset value of their holdings, which will include any potential capital gains and dividends. The cash distribution received will effectively act as payment for their shares. It is critical for shareholders to be aware that this liquidation might be considered a taxable event, and consulting a tax advisor is recommended to clarify any implications.
About Sterling Capital Management
Sterling Capital Management LLC, established in 1970 and wholly owned by Guardian Capital Group Limited, plays a pivotal role in the investment advisory sphere. With headquarters in Charlotte, the firm offers a wide range of investment services, including mutual funds, managed accounts, and model portfolios through various platforms.
Investment Strategies and Services
SCM operates five distinct investment teams, each providing asset management for fixed income, active equity, and multi-asset solutions. As the investment adviser for the Fund, SCM earns a fee for its advisory services while being separate from the Fund's distributor, Northern Lights Distributors, LLC.
Understanding the Risks of Investment
Investing always carries risks, including the potential loss of principal. The value of investments may fluctuate, which can result in shares being worth more or less than what was initially paid when redeemed.
Investment Considerations
Investors are encouraged to critically evaluate the Focus Equity ETF's investment objectives, associated risks, fees, and expenses. Comprehensive information regarding the Fund can be found in its prospectus, which is essential to review prior to making any investment decisions.
Frequently Asked Questions
What does the liquidation of the Focus Equity ETF mean?
The liquidation refers to the process of selling off the Fund's assets and returning the cash to shareholders, following the decision made by the Board of Trustees.
When will the Focus Equity ETF cease operations?
The ETF's operations are expected to conclude officially on the Liquidation Date, which is set for November 24.
Can shareholders sell their shares before the liquidation?
Yes, shareholders can sell their shares up until the aforementioned Closing Date, but may incur customary brokerage fees.
How will shareholders receive their cash distribution?
On the Liquidation Date, shareholders will receive cash at the net asset value of their shares, along with any applicable dividends and capital gains.
What should shareholders do in terms of tax obligations?
It is advisable for shareholders to consult with tax advisors to understand potential tax implications related to the liquidation of the Fund.
About The Author
Contact Owen Jenkins privately here. Or send an email with ATTN: Owen Jenkins as the subject to contact@investorshangout.com.
About Investors Hangout
Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/
The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.