Market Vectors ETF Trust announced today that it has launched the Market Vectors Israel ETF (NYSEArca:ISRA), an exchange-traded fund (ETF) designed to provide investors with broad exposure to Israel’s dynamic equity market.
“Israel is uniquely positioned to offer investors emerging market growth characteristics with a developed market approach to economic management,” said Amrita Bagaria, ETF Product Manager with Market Vectors. “The country has a vibrant economy with broad sector representation. With that in mind, we have selected an index for ISRA that best represents the Israeli market and captures the full spectrum of economic growth potential.”
ISRA seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the BlueStar Israel Global Index (BLSTR), a rules-based index of Israeli and Israeli-linked companies intended to track the overall performance of the largest and most liquid companies, as well as mid-cap and small-cap companies that display sufficient liquidity. To qualify for inclusion in BLSTR, a company must be listed, domiciled, or founded in Israel, or it must generate the majority of its revenues in Israel. Stocks in the index generally trade on the Tel Aviv Stock Exchange but also include Israeli-domiciled companies listed outside of the country.
“In designing the Index, we wanted to set a high bar for inclusion,” said Steven Schoenfeld of BlueStar Global Investors LLC. “It was important that each constituent have a deep involvement in Israel’s growth. We believe we’ve been able to accomplish that, and we are pleased to provide the underlying index for ISRA.”
As of June 24, 2013, the Index’s top three sectors were Information Technology (representing 29.9 percent of the holdings), Health Care (26.3 percent) and Financials (19.1 percent).
Market Vectors noted that an investment of this kind is not without risks, including those associated with investments in foreign securities, in particular Israeli issuers, which include, among others, greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity, and political instability, including territorial disputes, historical animosities, or security concerns, and heavy dependence upon trade relationships.
ISRA is the latest addition to Market Vectors’ family of international equity ETFs, which also includes the Market Vectors Indonesia Index Etf(NYSEARCA:IDX), Indonesia Small-Cap ETF (NYSEARCA:IDXJ), Market Vectors Brazil Small Cap ETF (NYSEARCA:BRF), Market Vectors India Small Cap Index ETF (NYSEARCA:SCIF), Market Vector Russia ETF Trust (NYSEARCA:RSX), Russia Small-Cap ETF (NYSEARCA:RSXJ), Market Vectors Vietnam ETF. (NYSEARCA:VNM), and more.
ISRA, Market Vectors’ 53rd ETF, has a gross expense ratio of 0.73 percent and a net expense ratio of 0.59 percent, with the fund’s expenses capped at 0.59 percent until May 1, 2015.
About Market Vectors ETFs
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 totaled $23.7 billion in assets under management, making it the seventh largest ETP family in the U.S. and tenth largest worldwide as of May 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 managed approximately $32 billion in investor assets as of May 31, 2013.
The Fund is subject to elevated risks, including those associated with investments in foreign securities, in particular Israeli issuers, which include, among others, greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity and political instability. Israel’s relations with the Palestinian Authority and certain neighboring countries such as Lebanon, Syria and Iran, among others, have at times been strained due to territorial disputes, historical animosities or security concerns, which may cause uncertainty in the Israeli markets and adversely affect the overall economy. Furthermore, Israel’s economy is heavily dependent upon trade relationships with key counter parties around the world. Any reduction in these trade flows may have an adverse impact on the Fund’s investments. In addition, companies with medium and small capitalizations are subject to elevated risks, which include, among others, greater volatility, lower trading volume and less liquidity than larger companies and tend to have narrower product lines, fewer financial resources, less management depth and experience and less competitive strength. Investors should be willing to accept a high degree of volatility and the potential of significant loss. The Fund may loan its securities, which may subject it to additional credit and counterparty risk.
The Fund’s assets may be concentrated in a particular sector or sectors or industry or group of industries to the extent the Index concentrates in a particular sector or sectors or industry or group of industries, which include information technology, health care, and financials. To the extent that the Fund’s investments are concentrated in a particular sector or industry, the Fund will be susceptible to loss due to adverse occurrences effecting that sector or industry.
The “BlueStar Israel Global IndexTM,” is the exclusive property and a trademark of BlueStar Global Investors LLC and has been licensed for use for certain purposes by Van Eck Associates Corporation for Market Vectors Israel ETF (the “ETF”) based on the BlueStar Israel Global IndexTM. The ETF is not sponsored, endorsed, sold or promoted by BlueStar Global Investors LLC, and BlueStar Global Investors LLC makes no representation regarding the advisability of trading in such product(s).
The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.
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 substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. Please refer to the prospectus for complete risk information. To obtain a prospectus and summary prospectus, which contains this and other information, call 888.MKT.VCTR or visit marketvectorsetfs.com. Please read the prospectus and summary prospectus carefully before investing.
Van Eck Securities Corporation, Distributor, 335 Madison Avenue, New York, NY 10017
Mike MacMillan/Chris Sullivan, 212-473-4442