ETF reverse share splits have become fairly common occurrences in recent weeks—and the pace is only speeding up.
Since March 1, 19 ETFs have seen share splits, 17 of which were reverse splits. Issuers have announced reverse share splits for another 23 ETFs in the coming days.
Most, but not all, of the impacted funds have been leveraged and inverse ETFs and ETNs. There’s a good reason for that, and it stems from why ETFs reverse-split in the first place.
Source: FactSet; data as of April 15, 2020
Just like for stocks, when an ETF splits its shares, it means the number of outstanding shares has been increased, while the price has been decreased, by some set factor.
So, in a 2-for-1 share split, the number of outstanding ETF shares would double, while the ETF’s per-share price would be halved.
In a reverse share split, however, the opposite occurs: The
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