Themes ETF Trust is closing three ETFs after the funds failed to attract sufficient investment assets. The funds — Themes US Cash Flow Champions ETF (NASDAQ:LGCF), Themes US Small Cap Cash Flow Champions ETF (NASDAQ:SMCF) and Themes Lithium & Battery Metal Miners ETF (BATS:LIMI) — will cease trading after the close of regular trading on Sept. 21.
The funds will stop accepting creation and redemption orders after Sept. 18.
The ETFs will increase cash holdings and reduce exposure to their underlying investments ahead of liquidation. Shareholders who continue to hold the funds will receive a pro-rata cash distribution around the Sept. 25 liquidation date, less applicable closing costs. The distribution will be taxable and may include capital gains and dividends.
The closures underscore how ETFs with insufficient asset growth can face liquidation even when their underlying investment themes remain active.
QUICK CONTEXT: Why ETFs Get Liquidated
ETF sponsors can close funds when they fail to attract enough assets to keep operating economically. Low assets can make it difficult to cover a fund’s operating costs while maintaining an efficient product for shareholders.
When an ETF is liquidated, investors generally have two options. They can sell their shares before the fund stops trading, subject to normal brokerage costs, or continue holding the ETF until liquidation. In the latter case, the fund sells its remaining investments and distributes the resulting cash to shareholders on a pro-rata basis.
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