FFCM LLC and O’Shares Investments are to close the O’Shares FTSE Europe Quality Dividend Hedged ETF (OEUH) and the O’Shares FTSE Asia Pacific Quality Dividend Hedged ETF (OAPH).
“Investors have shown great demand for several of the O’Shares ETFs, including O’Shares FTSE US Quality Dividend ETF (ticker OUSA) for US large caps and O’Shares FTSE Russell US Small Cap Quality Dividend ETF (ticker OUSM) for US small caps. However, we have had limited demand for our currency hedged ETFs investing in Europe and Asia. Due to the small size and limited demand for these products, the decision has been made to close the Funds, so we can direct resources to developing new O’Shares ETFs to meet investors’ demand for different strategies,” stated Connor O’Brien, CEO of O’Shares.
The Funds will cease trading on the NYSE Arca and will be closed to purchase by investors as of the close of regular trading on the NYSE on 30 November, 2017. The Funds will not accept creation unit orders from authorised participants after the Closing Date, and trading on the NYSE Arca for the shares of the Funds will be suspended prior to the open of business on 1 December, 2017. Shareholders may sell their holdings on or before the Closing Date and customary brokerage charges may apply to such transactions.
After the Closing Date until 8 December, 2017, the Funds will undertake the process of closing down and liquidating their respective portfolios. This process will result in the Funds increasing their cash holdings and not tracking their underlying indexes.
On or about 12 December, 2017, shareholders who do not sell their holdings on or before the Closing Date will receive cash equal to the amount of the net asset value of their shares as of the Liquidation Date, which will include the costs of liquidating the relevant portfolio and closing the Fund. These distributions may be taxable and will include any accrued capital gains and dividends. Once the liquidating distribution is completed by each Fund, it will terminate.
O’Shares Investments, the Funds’ sponsor, informed FFCM, the Funds’ investment adviser, and the Funds’ Board of Trustees that, due to limited investor demand for the Funds, the Funds could not conduct their business and operations in an economically efficient manner over the long term. Based on this assessment of the Funds’ viability, O’Shares and FFCM recommended the Funds’ liquidation to the Board. The Board determined, after considering this recommendation, that it is in the best interests of each Fund and its shareholders to liquidate and terminate the Funds as described above. Accordingly, the Board authorised the orderly liquidation of the Funds.