Van Eck (Market Vectors) Files For Market Vectors Andean Equity ETF
Van Eck (Market Vectors) has filed paperwork with the SEC for a “Market Vectors Andean Equity ETF.” The Market Vectors Andean Equity ETF will seek to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Andean Index. The Index is a rules based index intended to give investors a means of tracking the overall performance of companies either domiciled and primarily listed on an exchange in an Andean Country or generating at least 50% of their revenues in Andean Countries. The Index is a modified capitalization weighted, float adjusted index comprised of publicly traded companies headquartered in Andean Countries, i.e., in Columbia, Peru and Chile or companies generating the majority of their revenues in Columbia, Peru and Chile.
Constituent stocks of the Index must have a market capitalization of greater than $150 million on a rebalancing date to be added to the Index. Stocks whose market capitalizations fall below $75 million as of any rebalancing date will be deleted from the Index. Stocks must have a three-month average daily turnover greater than $1 million to be included in the Index and issuers of such stocks must have traded at least 250,000 shares each month over the last six months. Only shares that trade on a recognized domestic or international stock exchange may qualify (e.g., National Stock Market stocks must be “reported securities” under Rule 11Aa3-1 of the Exchange Act. Similar criteria and standards apply to stocks with foreign listings).
As of December 1, 2010, the Index included 55 securities of companies with a market capitalization range of between approximately $450 million and $89 billion and an average market capitalization of $7.5 billion.
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The Index is calculated and maintained by Structured Solutions. Index values are calculated between the hours of approximately 6:00 p.m. (New York time) and 5:59 p.m. (New York time) Sunday through Friday. Index values are disseminated every 15 seconds.
The Index is calculated using a capitalization weighting methodology, adjusted for float, which is modified so as to ensure compliance with the diversification requirements of Subchapter M of the Internal Revenue Code. The Index is reconstituted quarterly, at the close of business on the third Friday of each quarter-end month, and companies are added and/or deleted based upon the Index eligibility criteria. Companies with recent stock exchange listings, i.e., recent initial public offerings, may be added to the Index on any quarterly rebalancing date, provided the companies meet all eligibility criteria and have been trading for more than 30 trading days. The share weights of the Index components are adjusted on each quarterly rebalancing date.
Rebalancing data, including constituent weights and related information, is posted on the Index’s web site prior to the start of trading on the first business day following the second Friday of the calendar quarter. A press announcement identifying additions and deletions to the Index is issued on the second Friday prior to a rebalancing date. Share weights of the constituents remain constant between quarters except in the event of certain types of corporate actions, including stock splits and reverse stock splits.
They did not specify a trading symbol or operating expenses in the initial filing.
Principal Investment Strategies
The Fund normally invests at least 80% of its total assets in securities that comprise the Fund’s benchmark index. The Fund’s benchmark index is comprised of securities of companies located in Columbia, Peru and Chile (“Andean Countries”). A company is considered to be from an Andean Country if it is domiciled and primarily listed on an exchange in an Andean Country or if it generates at least 50% of its revenues in Andean Countries. Such companies may include small- and medium-capitalization companies. The Fund’s 80% investment policy is non-fundamental and requires 60 days’ prior written notice to shareholders before it can be changed.
The Fund, using a “passive” or indexing investment approach, attempts to approximate the investment performance of the Index. The Adviser expects that, over time, the correlation between the Fund’s performance and that of the Index before fees and expenses will be 95% or better. A figure of 100% would indicate perfect correlation. Because of the practical difficulties and expense of purchasing all of the securities in the Index, the Fund does not purchase all of the securities in the Index. Instead, the Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s objective. As such, the Fund may purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index.
The Fund may also utilize depositary receipts to seek performance that corresponds to the Index. Investments that have economic characteristics that are substantially identical to the economic characteristics of the component securities of the Index will count towards the 80% investment policy discussed above.
The Fund may concentrate its investments in a particular industry or group of industries to the extent that the Index concentrates in an industry or group of industries.
For the complete filing click: HERE
Related ETFs: Global X/InterBolsa FTSE Colombia 20 ETF (NYSE:GXG), MSCI Chile Investible Market Index Fund (NYSE:ECH), MSCI All Peru Capped Index Fund (NYSE:EPU).
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