Van Eck Files For Preferred Securities ex Financials ETF

Van Eck has filed paperwork with the SEC for a “Preferred Securities ex Financials ETF.” Market Vectors Preferred Securities ex Financials ETF (the “Fund”) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Preferred Securities ex Financials Index. The Index is designed to track the performance of convertible or exchangeable and non-convertible preferred securities listed on U.S. exchanges. The Index is comprised of preferred securities listed on U.S. exchanges and securities that, in the Index Provider’s judgment, are functionally equivalent to preferred securities including, but not limited to, convertible securities, depositary preferred securities and perpetual subordinated debt, excluding securities with a “financial” industry sector classification per the Bloomberg Professional® service (collectively, “Preferred Securities”). Functionally equivalent securities to preferred securities are securities that are issued and trade in similar manner to traditional perpetual preferred securities. Preferred Securities may be subject to redemption or call provisions and may include those issued by small- and medium-capitalization companies. Securities issued by real estate investment trusts (“REITs”) are not considered to be securities with a “financial” industry sector classification.

Preferred Securities (or, in the case of convertible or exchangeable Preferred Securities, the securities into which they are convertible or exchangeable) must be listed on the NYSE, the NYSE Arca or NASDAQ. Preferred Securities must maintain a minimum par value of $250 million or minimum of 10 million shares outstanding. For purposes of selecting securities, the Index Provider’s Index Review Committee (“IRC”) does not distinguish between affiliated and non-affiliated holders. Accordingly, securities would be deemed to be outstanding even if they are held entirely by affiliates of the issuer. Preferred Securities may have fixed or floating dividends or coupons, although dividends or coupons may be subject to deferral. Preferred Securities must be denominated in U.S. dollars. Issuers may be either U.S.-based or foreign-based. Preferred Securities must be publicly registered or exempt from registration under Section 3(a)(2) of the Securities Act. Unregistered, privately placed securities are not eligible for inclusion unless they are exchangeable for registered shares, assuming eligibility criteria are otherwise met. Preferred Securities do not include auction rate preferred securities, securities subject to sinking fund provisions, shares in closed-end funds, municipal securities, or repackaged securities linked to a security, a basket of securities or an index.

The Preferred Securities are reviewed and qualified for index inclusion and removal by the IRC. The IRC is responsible for oversight and review for re-balancing changes to the Index. The IRC is also responsible for ensuring that the Index complies with the Index rules and methodology.

The Index is rebalanced monthly as of the close of business on the final NYSE Arca trading day of each month (the “Monthly Rebalance Date”). Preferred Securities that have become ineligible since the previous rebalancing generally will be removed only at the next Monthly Rebalance Date except in the case of certain corporate actions or if the Preferred Security is delisted.

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 comprised of convertible or exchangeable and non-convertible preferred securities listed on U.S. exchanges and securities that, in [          ]’s (the “Index Provider”) judgment, are functionally equivalent to preferred securities including, but not limited to, convertible securities, depositary preferred securities and perpetual subordinated debt, excluding securities with a “financial” industry sector classification (collectively, “Preferred Securities”). Functionally equivalent securities to preferred securities are securities that are issued and trade in similar manner to traditional perpetual preferred securities. Securities issued by real estate investment trusts (“REITs”) are not considered to be securities with a “financial” industry sector classification. Preferred Securities may be subject to redemption or call provisions and may include those issued by 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 by investing in a portfolio of securities that generally replicates 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.

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 real estate, utilities and industrials sectors each represent a significant portion of the Index.

For the complete filing click: HERE

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