Can anyone tell me why NIFTYEES - Edelweiss Nifty 50 ETF was suspended from trading in 2021? Can the same case happen for other etf too? Is it safe to park funds in etf?
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Searched the net to find out the reason, not a single article or newsitem. Strange, very strange.
What if we are holding etf units? Are those will be converted into mutual funds in this case?
Should be logically.
Did you hold them? Maybe check in coin if you use zero dha. it will show MFs in demat form
As @tallerballer pointed out, mostly ETF got converted in index fund. So holder of ETF would have got equivalent index fund unit and ETF got delisted.
Yes. While corporate actions in MF space is not regular, once in a while such things do happen.
A recent example of it was last year same AMC merged its Nifty Bank ETF with Large Midcap ETF
Edelweiss mutual funds: Edelweiss AMC announces merger of Edelweiss ETF- Nifty Bank with Edelweiss Nifty Large Midcap 250 Index Fund - The Economic Times (indiatimes.com)
AMC tend to take such decisions, when they are unable to get enough AUM to justify expenses for a separate fund. Or maybe when AMC philosophy changes.
Yes. ETF getting suspended does not mean it value went to zero and investor lost all money.
Generally they are allotted equivalent units of some other scheme.
Also, when such fundamental changes are made in Scheme, AMC is also required to provide an option to existing unitholders to exit, if they so whish, without any additional charges.
So it is bit of hassle, but you will not be loosing money due to such things.
The moral of the story is to choose your AMC wisely. I read the article, and it says they merged Nifty Bank with Nifty Large Midcap 250. Just dont understand the logic, Bank ETF with Large Midcap 250. The article is also silent as to why this AMC had to merge these two funds.
I did not get one single article of Nfityees merging and its reason. Not one single article in google search.
It did not have any volume and wasn’t popular. Why will someone report on that.
Plus why search news when you can directly check corporate actions on exchange
So can you please let me know the reason for the merger.
“Considering the AUM of ENB and given very minimal trading volumes on the exchange it is prudent to merge ENB with ELM250 to provide more liquidity to investors in ENB,” the fund house said in a letter to unitholders explaining the rationale behind the merger.
All the existing unit holders of merging scheme and surviving scheme, who do not agree with the proposed merger, will be given an option to exit i.e. redeem their units (fully or partly) or switch to other scheme(s) of the fund house at the applicable NAV of the scheme without any exit load.
ENB merger with ELM250 Letter - https://www.edelweissmf.com/Files/downloads/Notice-Cum-Addendum/Notice-Cum-Addendum/Published/Letter-to-Unitholders_04072023_102449_AM.pdf
Why there should be an article for each and every thing? If you were investor in it, fund house would have notified you.
Totally agree.
Fund would have sent out a communication to existing unitholder and that is sufficient. News article are not needed for each and everything. Especially something which hardly has any investors.
Why not? It is not necessary that only unit holders should know whats happening in a fund house. If that was the case how come there are so many articles about this fund getting merged with others etc.
going by that logic there was no reason for media to highlight FT issues.
I found it strange that there was nothing on this in the net when the author highlighted the same. Normally someone would have commented on it.
News article are needed for others to take a call. This is why its called news so that others are aware of it.
It is even more important that news cover funds who have few investors so they do not go and invest.
This is my point of view.
News covers whats popular. If Niftybees shuts down you’ll get more articles than it’s possible to read.
Because those get clicks.
You don’t have to inform everyone, just shareholders. Other people knowing is not necessary. Only useful for for general knowledge.
I have already expressed my opinion on this.
The original query was not about whether there were news articles or not. Hence no more replies on this will come.
I think we all agree here that most “news” these days is focused of popular events. Also often geared towards sensationalism, more interested in getting likes, shares, and subscribes, than factual reporting.
That said, i did find atleast one article posted in 2021 on an obscure “news” website that describes this event plainly and simply - Fund house converts 2 ETFs into 2 Index-mutual-funds, citing lack of liquidity.
[ Source]
Pretty likely that there would have been more articles posted when the event happened in 2021.
But, not sure why web-search doesn’t index/track/show them any more. 
This just goes to show how web-search has enshittified i guess. 