Mackenzie ETF Liquidation: A Goldmine for Bold Investors?

The ETF world just got shaken up. Mackenzie Investments has pulled the plug on two funds—its Global Sustainable Dividend ETF (MDVD) and the USD units of its US Large Cap Equity Index ETF (QUU.U)—and investors are now scrambling to figure out what this means for their portfolios. But here's the thing: this isn't a disaster—it's an opportunity. Let me break down where the money is flowing and how you can profit from it.

The Liquidation Timeline: A Wake-Up Call for Investors

Mackenzie's decision to terminate these funds by June 4, 2025, wasn't arbitrary. The MDVD ETF, which tracked sustainable dividend stocks, saw its assets dwindle to $0.00K by its final days—a clear sign investors were already voting with their feet. Meanwhile, the USD units of QUU.U were scrapped, though its CAD units remain alive. This isn't just about pruning underperformers; it's about capital reallocation on a massive scale.

Where's the Money Going? Follow the Tax Bills

When an ETF liquidates, unitholders get a lump-sum payout—but not without tax consequences. MDVD investors, for instance, received CAD $28.13/unit, but their adjusted cost base (ACB) could trigger capital gains taxes. This isn't a reason to panic; it's a signal to reallocate strategically.

Opportunity 1: ESG Funds with Lower Fees

MDVD's termination highlights a flaw: it charged a 0.25% management fee for a fund that struggled to attract assets. Investors are now free to move into better-managed, lower-cost ESG ETFs. Consider the iShares Global Clean Energy ETF (ICLN) or Vanguard ESG Global Stock ETF (VEUR), which sport fees of 0.20% and 0.09%, respectively.

Opportunity 2: US Large Caps—But in CAD!

QUU.U's USD units may be gone, but its CAD units live on. If you were invested in QUU.U's USD shares, you've already been paid out. Now, ask yourself: Why hold USD-denominated funds when the CAD version offers the same exposure with currency stability? Stick with the CAD units of QUU (if they fit your strategy) or pivot to broader US equity ETFs like XIU (0.05% fee) or VUN (0.04% fee).

The Tax Twist: Turn Liabilities into Assets

Liquidation forces investors to settle their tax bills, but this can be a hidden advantage. If you're sitting on a capital gain, consider tax-loss harvesting by selling losing positions to offset gains. Meanwhile, reinvest in ETFs with tax-efficient distributions, like those that minimize capital gains pass-through.

The Bottom Line: Act Like a Contrarian

Mackenzie's moves aren't random—they're a reflection of investor sentiment. Capital is fleeing high-fee, niche ETFs and flowing into low-cost, broadly diversified funds. This isn't just a trend; it's a new normal.

Here's my advice: 1. Dump the deadwood: If you held MDVD or QUU.U's USD units, move quickly. 2. Go cheap and broad: Target ETFs with fees under 0.20% and proven track records. 3. Embrace ESG—but wisely: Focus on funds tied to clean energy or tech (not just vague “sustainability” labels).

This isn't the end of your portfolio—it's the start of smarter, more aggressive moves. Don't just react—dominate.

Stay hungry, stay bold. This is the Cramer way.