Market Vectors ETFs today announced changes to its Market Vectors® LatAm Aggregate Bond ETF (NYSE Arca:BONO®). On or about December 10, 2013, BONO will change its ticker, fund name, and investment strategy, and will be renamed the Market Vectors® Emerging Markets Aggregate Bond ETF (NYSE Arca:EMAG) to reflect its new investment objective which will be to seek to track, before fees and expenses, the price and yield performance of the Market Vectors® EM Aggregate Bond Index (MVEMAG). Fund shareholders are not required to take any action with respect to the foregoing.
The MVEMAG index includes the four major categories of emerging markets bonds: U.S. dollar and Euro denominated sovereigns, local currency sovereigns, U.S. dollar and Euro denominated corporates, and local currency corporates. Additionally, the index is expected to continue to include Latin American debt as an important component, and will include Asian, Eastern European, Middle Eastern, and African debt as well.
“By changing BONO to EMAG, we are seeking to introduce an efficient means for investors to gain access to a broad exposure of emerging markets bonds in a single ETF,” said Ed Lopez, Marketing Director with Market Vectors ETFs.
“A key feature of the MVEMAG index is that it has a relatively balanced exposure to both local currency and hard currency debt,” added Mr. Lopez. “We expect that this will allow the ETF to maintain broadly diversified exposure within the emerging markets debt universe, presenting an attractive option to investors who are not able to devote significant resources to researching currencies and credit ratings.”
Van Eck’s Market Vectors ETF family also includes Emerging Markets High Yield Bond ETF (NYSE Arca:HYEM), Emerging Markets Local Currency Bond ETF (NYSE Acra:EMLC), and Renminbi Bond ETF (NYSE Arca:CHLC).
EMAG is expected to have a gross expense ratio of 1.26 percent and a net expense ratio of 0.49 percent, which are the same expense ratios currently associated with BONO. Van Eck Global, which sponsors the Market Vectors family of ETFs, has agreed to waive fees and/or pay EMAG’s expenses to prevent the operating expenses of the Fund (excluding certain expenses, such as interest) from exceeding 0.49 percent of the fund’s average daily net assets per year until at least September 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 $22.3 billion in assets under management, making it the seventh largest ETP family in the U.S. and 10th largest worldwide as of August 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.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. Debt securities carry interest rate and credit risk. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. Credit risk is the risk of loss on an investment due to the deterioration of an issuer's financial health. The Fund’s underlying securities may be subject to call risk, which may result in the Fund having to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund’s income.
Market Vectors EM Aggregate Bond Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (the “Index Provider”), which has contracted with Solactive AG (the “Calculation Agent”) to calculate the Index. The Calculation Agent is not an adviser for or a fiduciary to any account, fund or ETF managed by Van Eck Associates Corporation. The Calculation Agent is not responsible for any direct, indirect, or consequential damages associated with indicative optimized portfolio values and/or indicative intraday values. Market Vectors Emerging Markets Aggregate Bond ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by the Index Provider, which makes no representation regarding the advisability of investing in the Fund.
Investments in emerging market securities are subject to elevated risks which include, among others, expropriation, confiscatory taxation, issues with repatriation of investment income, limitations of foreign ownership, political instability, armed conflict and social instability. As the Fund invests some of its assets in securities denominated in foreign currencies and some of the income received by the Fund will be in foreign currencies, changes in currency exchange rates may negatively impact the Fund’s return. The Fund will generally invest a portion of its assets in Rule 144A securities. Rule 144A securities are restricted securities. They may be less liquid than other investments because, at times, such securities cannot be readily sold in broad public markets and the Fund might be unable to dispose of such securities promptly or at reasonable prices. A restricted security that was liquid at the time of purchase may subsequently become illiquid.
The “net asset value” (NAV) of an ETF is determined at the close of each business day, and represents the dollar value of one share of the ETF; it is calculated by taking the total assets of an ETF subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as an ETF's intraday trading value. Investors should not expect to buy or sell shares at NAV. Total returns are based upon closing “market price” (price) of the ETF on the dates listed.
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. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain 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
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