This question has been asked before but without a clear answer.
I get this question from folks when I tell them they're better off putting all their money in a portfolio of Vanguard ETFs. My thinking is that, in the unlikely event of a non-fraud type failure, the person still owns the securities that comprise the ETF and the Vanguard "wrapper" would come off but the securities would still be there. I'm really not sure how it would play out but this is the best response I can come up with.
Does anyone know the legal answer??