First Trust Announces Approval of Liquidation of the First Trust TCW Emerging Markets Debt ETF

Rhea-AI Summary

First Trust Advisors L.P. has announced the upcoming liquidation of the First Trust TCW Emerging Markets Debt ETF (NYSE Arca: EFIX). The decision was approved by the Board of Trustees following FTA's recommendation.

Key dates include:

• Last trading day: April 8, 2025
• Final creation/redemption orders: April 8, 2025
• Expected liquidation: April 15, 2025

Shareholders can sell their holdings before April 8, 2025, or receive a cash redemption equal to the net asset value after the Fund settles all obligations. The Fund may increase cash holdings and deviate from stated investment strategies during the liquidation process, potentially affecting its ability to meet investment objectives. FTA currently manages approximately $266 billion in assets as of January 31, 2025.

Positive

• Orderly liquidation process with clear timeline provides shareholders time to adjust positions
• Shareholders will receive fair market value (NAV) for their holdings at liquidation

Negative

• Fund will cease operations and liquidate, forcing shareholders to find alternative investments
• Fund may deviate from stated investment objectives before liquidation
• Portfolio transition to cash may impact fund performance prior to liquidation

Insights

Financial Analyst

The announcement of First Trust TCW Emerging Markets Debt ETF (EFIX) liquidation represents a significant development for current fund shareholders. With final trading scheduled for April 8, 2025 and liquidation around April 15, 2025, investors face a forced exit from this emerging markets debt vehicle.

This liquidation creates several immediate implications: current shareholders must make decisions quickly - either sell shares on the open market before April 8 (potentially incurring brokerage fees) or wait for automatic redemption at NAV. The fund's shift toward cash holdings means it will likely deviate from its stated investment objectives during the wind-down period, potentially affecting short-term performance.

From a tax perspective, shareholders will generally recognize capital gains or losses upon redemption, creating potential tax consequences depending on their original purchase price and holding period. This liquidation eliminates a specialized emerging markets debt investment vehicle from investor options, requiring those seeking similar exposure to identify alternative funds.

The decision by First Trust Advisors (with $266 billion in assets under management) to liquidate EFIX likely reflects either inadequate fund assets to maintain operational efficiency or disappointing performance metrics that failed to attract sufficient investor interest. This development highlights the ongoing consolidation in the ETF marketplace, where products that fail to gain adequate traction are increasingly being eliminated.

WHEATON, Ill.--(BUSINESS WIRE)-- First Trust Advisors L.P. (“FTA”) announced today approval of the liquidation of First Trust TCW Emerging Markets Debt ETF (NYSE Arca: EFIX), a series of First Trust Exchange-Traded Fund VIII (the “Fund”).

Based upon the recommendation of FTA, the investment advisor of the Fund, the Board of Trustees of First Trust Exchange-Traded Fund VIII determined that it was in the best interests of the Fund to liquidate the Fund. Accordingly, the Board of Trustees approved the liquidation of the Fund pursuant to a plan of liquidation and termination.

Shareholders may sell their holdings in the Fund prior to the end of the trading day on April 8, 2025. Customary brokerage charges may apply to these transactions. The last day the Fund will accept creation and redemption orders is April 8, 2025, and the Fund’s shares will subsequently be de-listed. The Fund will liquidate on or around April 15, 2025. Any person holding shares in the Fund as of the applicable liquidation date will receive a cash redemption amount equal to the net asset value of such shares after the Fund has discharged and/or made reasonable provisions for the payment of all of its charges, taxes, expenses and liabilities. Shareholders generally will recognize a capital gain or loss on any redemption.

To prepare for the termination and liquidation of the Fund, the Fund’s portfolio managers may increase the Fund’s assets held in cash and similar instruments. As a result, the Fund may deviate from its stated investment strategies and policies and may no longer be managed to meet its investment objective prior to the cessation of trading in Fund shares on NYSE Arca on April 8, 2025. Under such circumstances, the Fund is not expected be able to achieve its investment objective.

FTA is a federally registered investment advisor and serves as the Fund’s investment advisor. FTA and its affiliate, First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $266 billion as of January 31, 2025 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and SMAs. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.

The Fund’s daily closing price and net asset value per share as well as other information can be found at www.ftportfolios.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250311944747/en/

First Trust Advisors L.P.

Press Inquiries: Ryan Issakainen, 630-765-8689

Analyst Inquiries: Chris Fallow, 630-517-7628

Source: First Trust Advisors L.P.

FAQ

When will the First Trust TCW Emerging Markets Debt ETF (EFIX) stop trading?

EFIX will stop trading on April 8, 2025, which is the last day for creation and redemption orders before delisting.

What happens to EFIX shareholders during the liquidation?

Shareholders can either sell their holdings before April 8, 2025, or receive cash redemption equal to the net asset value after fund obligations are settled.

Will EFIX maintain its investment strategy until liquidation?

No, EFIX may deviate from its investment strategies and increase cash holdings to prepare for liquidation, potentially affecting its ability to meet investment objectives.

What are the tax implications for EFIX shareholders during liquidation?

Shareholders will generally recognize a capital gain or loss on any redemption of their EFIX shares.