Effective on or about June 21, 2013, the Market Vectors Africa Index ETF (NYSEARCA:AFK) will begin tracking a new benchmark, the Market Vectors® GDP Africa Index (MVAFKTR). At the same time, the Market Vectors Gulf States Index ETF (NYSEARCA:MES) will also begin tracking a new benchmark, the Market Vectors® GDP GCC Index (MVMESTR). Both indexes employ a gross domestic product (GDP) weighted methodology to determine the country weighting within the index.
“Compared to market-capitalization weighted indices, GDP weighted indices tend to favor countries whose economic impact may be greater than their equity markets alone may imply.”
“GDP weighting is an economic-based approach which we expect will help AFK and MES offer a more current picture of the potential opportunities in each region,” said Ed Lopez, Marketing Director at Market Vectors. “Compared to market-capitalization weighted indices, GDP weighted indices tend to favor countries whose economic impact may be greater than their equity markets alone may imply.”
In addition to the GDP weighting feature of MVAFKTR and MVMESTR, both indexes follow a similar methodology to other Market Vectors indexes which are built with a focus on liquidity, pure-play revenue-based exposure, and diversification. The indexes track the performance of the largest and most liquid companies in their respective regions and companies are included in the indexes only if they generate at least 50 percent of their revenues from the relevant region. Limits on constituent weights also help drive diversification within the index and avoid over concentration in a few large holdings.
MVAFKTR and MVMESTR were developed, and are published by Market Vectors Index Solutions GmbH (MVIS), a Germany-based wholly owned subsidiary of Van Eck Associates Corporation. MVIS develops, markets and licenses Market Vectors indexes. In total, over $13.8 billion in assets under management are linked to exchange-traded products using Market Vectors indexes, as of March 31, 2013. Detailed information regarding MVIS is available at www.marketvectorsindices.com.
About Market Vectors
Market Vectors exchange-traded products have been offered since 2006 and span many asset classes, including equities, fixed income (municipal and international bonds) and currency markets. The Market Vectors family currently totals $26.1 billion in assets under management, making it the fifth largest ETF family in the U.S. and the ninth largest worldwide as of March 31, 2013.
Market Vectors ETFs are sponsored by Van Eck Global. Founded in 1955, Van Eck Global was among the first U.S. money managers helping investors achieve greater diversification through global investing. Today, the firm continues this tradition by offering innovative, actively managed investment choices in hard assets, emerging markets, precious metals including gold, and other alternative asset classes. Van Eck Global has offices around the world and manages approximately $35.0 billion in investor assets as of March 31, 2013.
GDP Index Concept
While traditional regional or global indices are weighted by market capitalization, GDP indices assign country weightings based on a country’s gross domestic product (GDP). Indices with conventional weighting schemes have a strong focus on the exchange-listed segments of equity markets, thus tend to underweight countries with less-developed capital markets such as emerging markets. Country allocation in a GDP-weighted index therefore might look significantly different when market capitalization weightings are applied in the same index. The GDP index concept provides an alternative, thus complimentary, view of markets.
The Market Vectors Africa Index ETF is subject to various risks including those associated with making investments in Africa such as the absence of developed legal structures, national policies, expropriation, potentially greater price volatility in, significantly smaller capitalization of, and relative illiquidity of the equity markets in Africa. The Fund may loan its securities, which may subject it to additional credit and counterparty risk.
The Market Vectors Gulf States Index ETF is subject to various risks including those associated with making investments in the Arab States of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates) such as the absence of developed legal structures, national policies, expropriation, potentially greater price volatility in, significantly smaller capitalization of, and relative illiquidity of the equity markets in the Arab States of the Gulf Cooperation Council. The Fund may loan its securities, which may subject it to additional credit and counterparty risk.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.
Investing involves risk, including possible loss of principal. An investor should consider the investment objective, risks, and charges and expenses of the investment carefully before investing. To obtain a summary prospectus and prospectus, which contain this and other information, call 888.MKT.VCTR or visit vaneck.com/etf. Please read the summary prospectus and prospectus carefully before investing.