#USA #Charlotte #Northern Lights #Sterling Capital #Focus Equity ETF

Liquidation of the Focus Equity ETF

Sterling Capital Management, a prominent investment advisory firm, has made a significant announcement regarding the future of its Focus Equity ETF (NYSE Arca LCG). The decision to liquidate the fund comes after an extensive analysis carried out by the Board of Trustees of the Northern Lights Fund Trust IV, which oversees the ETF. The Board made its recommendation following observations of the ETF's sustained underperformance and ongoing challenges in attracting adequate investment assets.

Reason for Liquidation

Despite the best efforts put forth by Sterling Capital, the Focus Equity ETF has not met the necessary performance metrics that would allow it to thrive in today's competitive market. The Board concluded that liquidating the fund is in the best interest of shareholders, allowing for a more orderly exit from the investment, instead of allowing it to linger in an unproductive state.

The last day for trading the Fund’s shares on the NYSE Arca is scheduled for November 17, 2025, which is also the day when the Fund will cease accepting creation units from authorized participants. Investors will still have the opportunity to sell their holdings in the ETF prior to this date; however, typical brokerage charges will apply.

Timeline of Events

Following the closing date, the ETF will continue with an orderly process to liquidate its assets. On November 24, 2025, shareholders will be able to receive their cash distribution, which will represent the net asset value attributable to their shares, inclusive of any capital gains and dividends that may have accrued by then. It’s vital for shareholders to be aware that the liquidation process may trigger tax implications, thus it is advisable to consult with a tax advisor for guidance on potential tax liabilities arising from this event.

From the closing day until the liquidation date, the ETF’s portfolio will gradually transition towards holding a greater proportion of cash and cash equivalents, resulting in a reduced alignment with the original investment objectives as defined in the fund’s prospectus. This strategic decision aims to ensure that investors receive their due distributions with minimal risk.

Shareholder Insights

For shareholders who may choose to hold on to their shares until the liquidation date, the anticipated cash distribution should be considered a direct compensation for their ownership stakes. However, market conditions at that time may not guarantee active trading of the Fund's shares, putting further emphasis on the critical nature of the recommended timeline for divestment.

Ultimately, the liquidation of the Focus Equity ETF serves as a cautionary tale for investors regarding the importance of performance metrics and the necessity for funds to adapt to changing market conditions.

About Sterling Capital Management

Founded in 1970, Sterling Capital Management (SCM) operates as a wholly-owned subsidiary of Guardian Capital Group Limited. Based in Charlotte, North Carolina, SCM specializes in providing diversified investment advisory services through various products including mutual funds and model portfolios. Their expertise spans across several investment strategies, catering to a wide array of client needs.

Despite the challenges faced by the Focus Equity ETF, SCM remains committed to its mission of providing top-tier investment management and advisory services, and they continue to innovate their offerings to adapt to changing market landscapes.

In conclusion, the decision to liquidate the Focus Equity ETF reflects prudent risk management on the part of Sterling Capital and serves as a proactive measure to safeguard shareholder interests in light of the fund’s persistent challenges.