Van Eck will begin trading its new “Market Vectors Mortgage REIT Income ETF” (NYSE:MORT) Wednesday, August 17, 2011. The Market Vectors Mortgage REIT Income ETF (the “Fund”) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors® Global Mortgage REITs Index. The Index is a rules based index intended to give investors a means of tracking the overall performance of publicly traded U.S. and non-U.S. mortgage REITs that derive at least 50% of their revenues from mortgage-related activity. As of the date of this Prospectus, the Index is comprised of stocks of publicly traded U.S. mortgage REITs that derive at least 50% of their revenues from mortgage-related activity. This includes companies or trusts that are primarily engaged in the purchase or service of commercial or residential mortgage loans or mortgage related securities, which may include mortgage-backed securities issued by private issuers and those issued or guaranteed by U.S. Government agencies, instrumentalities or sponsored entities. The Index is a modified capitalization weighted, float-adjusted index.
To be eligible for the Index, stocks must have a market capitalization of greater than $150 million on a rebalancing date. Constituent stocks of the Index whose market capitalizations fall below $75 million as of any rebalancing date will no longer be eligible to remain in the Index. Stocks must have a three month average daily trading volume value of at least $1 million to be eligible for the Index and issuers of such stocks must have traded at least 250,000 shares each month over the last six months. Only shares that trade on a recognized domestic or international stock exchange may qualify (e.g., National Stock Market stocks must be “reported securities” under Rule 11Aa3-1 under the Securities Exchange Act of 1934, as amended). Similar criteria and standards apply to stocks with foreign listings.
As of June 30, 2011, the Index included 25 securities of companies with a market capitalization range of between approximately $378 million to $14.6 billion and an average market capitalization of $1.7 billion. These amounts are subject to change.
The Index is calculated and maintained by Structured Solutions AG on behalf of the Index Provider. The Index Provider is not affiliated with the Fund. Index values are calculated daily and disseminated every 15 seconds between the hours of approximately 7:00 p.m. (New York time) and 5:30 p.m. (New York time) when either the U.S. equity market is open for trading or at least one of the components of the Index is available for trading.
The Index is calculated using a capitalization weighting methodology, adjusted for float, which is modified so as to ensure compliance with the diversification requirements of Subchapter M of the Internal Revenue Code. The Index is reconstituted semi-annually, at the close of business of the third Friday in March and September, and companies are added and/or deleted based upon the Index eligibility criteria. Companies with recent stock exchange listings (i.e., recent initial public offerings) may be added to the Index on a quarterly basis, provided the companies meet all eligibility criteria and have been trading for more than 30 trading days. The share weights of the Index components are adjusted on a quarterly basis (every second Friday in a quarter end month).
Rebalancing data, including constituent weights and related information, is posed on the Index Provider’s website prior to the start of trading on the first business day following the third Friday of the calendar quarter. A press announcement identifying additions and deletions to the Index is issued on the Wednesday prior to a rebalancing date. Share weights for the constituents remain constant between quarters except in the event of certain types of corporate actions, including stock splits and reverse stock splits.
Total Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement: 0.40%
Principal Investment Strategies
The Fund normally invests at least 80% of its total assets in securities that comprise the Fund’s benchmark index. While publicly traded U.S. and non-U.S. mortgage real estate investment trusts (“REITs”) that derive at least 50% of their revenues from mortgage-related activity are eligible for inclusion in the Index, as of the date of this Prospectus, the Index is comprised of stocks of publicly traded U.S. mortgage REITs that derive at least 50% of their revenues from mortgage-related activity. A mortgage REIT makes loans to developers and owners of properties and invests primarily in mortgages and similar real estate interests, and includes companies or trusts that are primarily engaged in the purchasing or servicing of commercial or residential mortgage loans or mortgage-related securities, which may include mortgage-backed securities issued by private issuers and those issued or guaranteed by U.S. Government agencies, instrumentalities or sponsored entities. The Index may include small-capitalization and mid-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 will concentrate its investments in the real estate sector.
For the complete prospectus click: HERE