Van Eck will begin trading its new “Market Vectors Investment Grade Floating Rate ETF” (NYSE:FLTR) Tuesday April, 26 2011. The Market Vectors Investment Grade Floating Rate Bond ETF (the “Fund”) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Investment Grade Floating Rate Bond Index. The Index consists of U.S. dollar-denominated floating rate notes issued by corporate issuers and rated investment grade by at least one of three rating services: Moody’s, S&P or Fitch. Investment grade securities are those rated Baa or higher by Moody’s or rated BBB or higher by S&P or Fitch. The Index is designed to be representative of the U.S. dollar-denominated investment grade floating rate bond market. The Index is comprised of approximately 193 floating rate bonds. The Index is market value weighted adjusted so that the weight of all BBB issuers is the minimum of 40% or two times the number of securities with a BBB rating in the Index. Any excess weight is distributed proportionally across the other bonds. Constituent bonds of the Index must have an amount outstanding of USD $500 million or greater. In addition, to be included in the Index, the bonds must be floating rate notes with a variable coupon, and must, as of each Index rebalance date, have a time to maturity of at least 0.5 years. The Index is rebalanced every month, on the last calendar day of the month after the last Index calculation even in the event that such rebalancing falls on a non-trading day. The composition of the Index is held constant for any given calendar month to ensure continuity during the month and to avoid changes unrelated to the price movements of the bonds. The Index is calculated and maintained by Markit Group Limited on behalf of the Index Provider. The Index Provider is not affiliated with the Fund. The Index is calculated daily, using a combination of dealer quotes and actual transaction prices when available.
The following types of instruments are excluded from the Index: preferred shares, convertibles, bonds with other equity features attached (e.g., options and warrants), bearer bonds, private placements, 144A bonds, Sukuk bonds, fixed-to-floater and dual currency bonds, and collateralized bonds (i.e. bonds secured against assets or pools of assets such as asset-backed securities, mortgage-backed securities and collateralized debt obligations). Bonds with simple credit enhancements are not treated as collateralized bonds and are eligible for inclusion in the Index. Debt issued by governments, sovereigns, quasi-sovereigns and government-backed or guaranteed entities are not eligible for inclusion in the Index.
Total Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement” 0.35%

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 is comprised of U.S. dollar-denominated floating rate notes issued by corporate issuers and rated investment grade by at least one of three rating services: Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s Rating Services (“S&P”), or Fitch, Inc. (“Fitch”). Investment grade securities are those rated Baa or higher by Moody’s or rated BBB or higher by S&P or Fitch. This 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 bonds in the Index in an effort to hold a portfolio of bonds with generally the same risk and return characteristics of the Index.

The Fund may also utilize convertible securities and derivative instruments, such as swaps, options, warrants, futures contracts, currency forwards, structured notes and participation notes 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.

For the full prospectus click: HERE

Related posts:

1. State Street To Begin Trading The SPDR Barclays Capital Investment Grade Floating Rate ETF Thursday, December 1st
2. State Street Files For SPDR Barclays Capital Investment Grade Floating Rate ETF
3. New ETF: Floating Rate Bond SPDR (FLRN, FLTR, AGG, FLOT)
4. PowerShares To Begin Trading The PowerShares Fundamental Investment Grade Corporate Bond Portfolio ETF (PFIG) Thursday, September 15th
5. Van Eck To Begin Trading The Market Vectors Renminbi Bond ETF Wednesday, October 12th

FUND LAUNCH, NYSE:FLTR