Fund ETF Conversion in Employer Accounts

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gtwhitegold
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Joined: Fri Sep 21, 2012 1:55 pm

Fund ETF Conversion in Employer Accounts

Post by gtwhitegold »

With Bridgeway likely converting BOTSX - Bridgeway Tax Managed Omni Small Cap Value Fund and DFA, JP Morgan, Fidelity and other companies either already converted funds or are in the process of doing so, how does this work for accounts that are not set up to hold ETFs like certain 401k, 403b, and similar types of accounts? Are they normally liquidated before the conversion or is the fund still held? As more fund managers convert their funds into ETFs, this definitely becomes more of an issue to investors.
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jeffyscott
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Joined: Tue Feb 27, 2007 9:12 am

Re: Fund ETF Conversion in Employer Accounts

Post by jeffyscott »

I did not even know this was a thing, but went looking and found that Fidelity says:
Shareholders who hold fund shares through an IRA or group retirement plan whose plan sponsor does not have the ability to hold shares of ETFs on its platform may need to redeem their shares prior to the applicable conversion, or their broker or intermediary may transfer their investment in a fund to a different investment option prior to the conversion.
https://www.fidelity.com/bin-public/060 ... -funds.pdf
And so it goes, And so it goes, And so it goes, And so it goes, But where it's goin' no one knows
TropikThunder
Posts: 3792
Joined: Sun Apr 03, 2016 5:41 pm

Re: Fund ETF Conversion in Employer Accounts

Post by TropikThunder »

jeffyscott wrote: Tue Jan 24, 2023 10:49 pm I did not even know this was a thing, but went looking and found that Fidelity says:
Shareholders who hold fund shares through an IRA or group retirement plan whose plan sponsor does not have the ability to hold shares of ETFs on its platform may need to redeem their shares prior to the applicable conversion, or their broker or intermediary may transfer their investment in a fund to a different investment option prior to the conversion.
https://www.fidelity.com/bin-public/060 ... -funds.pdf
Yeah that sounds like what they do when switching 401k or 403b custodians if the new one doesn’t offer funds the current one has. In other words, it’s not a process to unique BOTSX.
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