Teucrium Trading, an exchange traded fund provider known for its commodity related investment options, announced that its crude oil and natural gas ETFs will be closed.
According to a press release, the Teucrium Natural Gas Fund (NYSEArca: NAGS) and Teucrium Crude Oil Fund ETF (NYSEArca: CRUD) will be shuttered after the close of business on December 18, 2014 due to the current market conditions and the Funds’ respective asset size.
NAGS has $1.2 million in assets under management, with a daily average volume of about 4,550 shares. CRUD has $1.8 million in assets, with an average daily volume of about 1,650 shares.
The closings are part of a healthy industry, reflecting providers’ responsiveness to investors’ needs. For instance, year-to-date, 189 new funds were launched while 67 ETFs were delisted, according to XTF data.
Investors shouldn’t be scared off by ETF closures. In the event an ETF closes, investors have one of two choices: sell the position before the final trading date, or wait for the fund to close and the check to come in. However, this can create tax consequences, so investors should be mindful.
Additionally, investors should be aware that over an ETF’s last few days of trading, sellers will be scrambling to dump their positions, which can lead to hefty losses. Due to the disparate number of sellers to buyers, the bid/ask spread tends to widen. Consequently, potential sellers should try to set up limit orders to better control trades.