Van Eck has filed paperwork with the SEC for a “Market Vectors Non-Agency RMBS ETF.” The Market Vectors Non-Agency RMBS ETF (the “Fund”) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors [ ] Index. They did not specify a trading symbol or expense ratio 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 Index is [primarily] comprised of non-agency mortgage-backed securities backed by pools of residential mortgage loans (“RMBS”). Non-agency RMBS are collateralized by pools of mortgage loans assembled for sale to investors by non-government entities such as commercial banks, savings and loan associations and specialty finance companies. Non-agency loans have balances that may or may not fall within the limits set by the Federal Housing Finance Agency (“FHFA”) and do not qualify as collateral for securities that are issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). RMBS may include multiple class securities, including collateralized mortgage obligations (“CMOs”), real estate mortgage investment conduits (“REMICs”) pass-through or participation certificates and re-securitizations of real estate mortgage investment conduits (“Re-REMICs”). A REMIC is a CMO that qualifies for special tax treatment and invests in certain mortgages principally secured by interests in real property and other permitted investments. Re-REMICs involve the pooling of previous issues of RMBS and restructuring the combined pools to create new senior and subordinated securities. The credit enhancement on the senior tranches is improved through the resecuritization. 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 “Sub-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 and/or the Sub-Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s objective. As such, the Fund may purchase a subset of the RMBS in the Index in an effort to hold a portfolio of RMBS with generally the same risk and return characteristics of the Index.
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. As of the date of this Prospectus, the Index is concentrated in the real estate industry.
For the complete filing click: HERE