For years I've invested in an S&P 500 Mutual Fund which was managed by E-Trade. Moments ago I received an email (below) which, loosely translated, means we are selling your shares in our mutual fund at its lowest price in years and giving you the cash. You want to be a long term investor? Too bad. We are forcing you to sell it.
Uh, I need a little help here. Financially, I know what it means to me, but is this a sign of bad things to come? I know I'm shipping my money out of E-trade once the sell occurs. I've never heard of anything like this.
The email:
After long and serious consideration, E*TRADE Securities has made the decision to discontinue our family of proprietary index mutual funds. As a result, the E*TRADE S&P 500 (ETSPX), Russell 2000 (ETRUX), Technology (ETTIX), and International (ETINX) Index Funds will be liquidated on a date no later than March 27, 2009 (the "Liquidation Date").
Of course, even though we are discontinuing these funds, as an E*TRADE customer, you have access to over 7,000 funds to help you find the right alternative.
Here are a few important points to keep in mind:
Effective as of the close of business on February 23, 2009, no purchases of the funds may be made and any applicable redemption fees or account fees charged by the funds will be waived.
If you do not redeem your shares yourself, your shares will be automatically converted to cash equal to their net asset value on the Liquidation Date. You will receive proceeds equal to the net asset value of the shares you held on the Liquidation Date after provision for all charges, expenses, and liabilities of the fund.
The redemption is treated as a taxable transaction, and you will have to pay taxes on the proceeds of the liquidation, even if your shares are automatically redeemed on the Liquidation Date.
Please be assured that this decision has nothing at all to do with the financial health of E*TRADE FINANCIAL, which has been, and continues to be, very well capitalized by every applicable regulatory standard.
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2.23.2009
Holy Crap!
For years I've invested in an S&P 500 Mutual Fund which was managed by E-Trade. Moments ago I received an email (below) which, loosely translated, means we are selling your shares in our mutual fund at its lowest price in years and giving you the cash. You want to be a long term investor? Too bad. We are forcing you to sell it.
Uh, I need a little help here. Financially, I know what it means to me, but is this a sign of bad things to come? I know I'm shipping my money out of E-trade once the sell occurs. I've never heard of anything like this.
The email:
After long and serious consideration, E*TRADE Securities has made the decision to discontinue our family of proprietary index mutual funds. As a result, the E*TRADE S&P 500 (ETSPX), Russell 2000 (ETRUX), Technology (ETTIX), and International (ETINX) Index Funds will be liquidated on a date no later than March 27, 2009 (the "Liquidation Date").
Of course, even though we are discontinuing these funds, as an E*TRADE customer, you have access to over 7,000 funds to help you find the right alternative.
Here are a few important points to keep in mind:
Effective as of the close of business on February 23, 2009, no purchases of the funds may be made and any applicable redemption fees or account fees charged by the funds will be waived.
If you do not redeem your shares yourself, your shares will be automatically converted to cash equal to their net asset value on the Liquidation Date. You will receive proceeds equal to the net asset value of the shares you held on the Liquidation Date after provision for all charges, expenses, and liabilities of the fund.
The redemption is treated as a taxable transaction, and you will have to pay taxes on the proceeds of the liquidation, even if your shares are automatically redeemed on the Liquidation Date.
Please be assured that this decision has nothing at all to do with the financial health of E*TRADE FINANCIAL, which has been, and continues to be, very well capitalized by every applicable regulatory standard.
