Lyrical Asset Management LP: Notice of Intent to Close U.S. Value ETF (USVT)

Rhea-AI Summary

Lyrical Asset Management LP has announced its intent to close the U.S. Value ETF (USVT) on May 14, 2024. Shareholders can sell their holdings before the Closing Date, but after that, selling will be The Fund will liquidate its portfolio between the Closing Date and May 24, 2024, potentially affecting its investment objective and strategies.

Financial Analyst

The decision by Lyrical Asset Management LP to close the U.S. Value ETF (USVT) is primarily a response to market dynamics that can influence the variety and viability of investment products available to investors. In this case, the closure of USVT might reflect underperformance, lack of investor interest, or strategic realignment within LAM's product offerings.

An ETF closure typically involves liquidating the holdings and returning the capital to investors. This process can affect the net asset value (NAV) as the fund may sell positions at market rates, which could be disadvantageous, especially if done hastily or in a down market. Retail investors should be mindful of the timing for selling their shares, as after the Closing Date, liquidity will likely decrease, potentially leading to price discounts relative to NAV.

In the long term, the liquidation of such funds could lead to consolidation in the ETF industry, possibly resulting in fewer choices but potentially more robust offerings from larger asset managers.

Market Research Analyst

ETF closures are part of the broader ecosystem of the investment world, providing insight into the competitiveness and saturation of investment products. The closure of USVT may indicate a shift in investor preference or saturation in the value-oriented ETF sector.

From a market research perspective, this event could signal a recalibration in the ETF market. Investors may look towards funds with innovative strategies or those that have shown resilience and adaptation to changing market conditions. The impact on the broader market is usually contained unless the fund is sizeable, which can cause more pronounced ripples across affected securities.

NEW YORK--(BUSINESS WIRE)-- Lyrical Asset Management LP (“LAM”) has filed a supplemental ‘sticker’ today notifying the shareholders and any potential investors in the U.S. Value ETF (the “Fund”) of LAM’s intent to close the Fund. A copy of the supplement can be found on the Fund’s webpage at https://lyricalam.com/funds/usvt/.

The Fund will cease trading on the NYSE Arca Exchange (the Exchange”) and will be closed to purchase by investors as of the close of regular trading on the Exchange on May 14, 2024 (the “Closing Date). The Fund will not accept purchase orders after the Closing Date.

Shareholders may sell their holdings prior to the Closing Date and customary brokerage charges may apply to these transactions. However, from the Closing Date through May 24, 2024 (the "Liquidation Date") 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 the Fund's shares. Between the Closing Date and the Liquidation Date, the Fund will be in the process of shutting down and liquidating its portfolio. This process will result in the Fund increasing its cash holdings and, thereby, diverging from its stated investment objective and strategies.

On or about the Liquidation Date, the Fund will liquidate its assets and distribute cash pro rata to all shareholders who have not previously redeemed or sold their shares. These distributions are taxable events. In addition, these payments to shareholders may include accrued capital gains and net investment income. As calculated on the Liquidation Date, the Fund's net asset value will reflect the costs of accrued expenses. Once the distributions have been completed, the Fund will terminate.

For more information, please call 1-833-Valu-ETF (or 1-833-825-8383).

Investors should carefully consider the investment objective, risks, charges, and expenses of ETFs. This and other information is contained in the Fund’s prospectus and should be read carefully before investing. For a prospectus, please call 1-833-Valu-ETF (or 1-833-825-8383) or visit the Fund’s website at https://lyricalam.com/funds/usvt/. USVT is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Northern Lights Distributors, LLC and Lyrical are not affiliated.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240418594310/en/

Media Contact:



Mike Geller

Prosek Partners

mgeller@prosek.com

Source: Lyrical Asset Management LP

FAQ

What is the Closing Date for the U.S. Value ETF (USVT) announced by Lyrical Asset Management LP?

The Closing Date for the U.S. Value ETF (USVT) announced by Lyrical Asset Management LP is May 14, 2024.

Where can shareholders find the supplement filed by Lyrical Asset Management LP regarding the U.S. Value ETF (USVT) closure?

Shareholders can find the supplement filed by Lyrical Asset Management LP regarding the U.S. Value ETF (USVT) closure on the Fund's webpage at https://lyricalam.com/funds/usvt/.

What will happen to the U.S. Value ETF (USVT) between the Closing Date and the Liquidation Date?

Between the Closing Date and the Liquidation Date, the U.S. Value ETF (USVT) will be in the process of shutting down and liquidating its portfolio.

Can shareholders sell their holdings after the Closing Date for the U.S. Value ETF (USVT)?

After the Closing Date for the U.S. Value ETF (USVT), shareholders may only be able to sell their shares to certain broker-dealers, and there is no assurance of a market for the Fund's shares.