Van Eck Global announced that it is lowering the expense cap of its Market
Vectors Investment Grade Floating Rate ETF (NYSE Arca: FLTR®) from
0.19% to 0.14%1, effective today.
“We expect the reduced pricing will make FLTR a more attractive option
for income investors looking to decrease interest rate sensitivity in
their portfolios,” said Meredith Larson, the fund’s product manager.
“FLTR offers investors exposure to investment-grade floating rate notes
(FRNs), and was recognized by Morningstar at the end of September with a
5-star overall rating2.”
Market Vectors Investment Grade Floating Rate ETF seeks to replicate as
closely as possible, before fees and expenses, the price and yield
performance of Market Vectors® U.S. Investment Grade Floating Rate Index
(MVFLTR), which consists of U.S. dollar-denominated floating rate notes
issued by corporate issuers and rated investment grade by at least one
of the three rating services: Moody’s, Standard & Poor’s, or Fitch. The
underlying index was designed to target corporate FRNs and have an
allocation bias to longer-maturity notes, which has helped reduce
duration and enhance yield potential. The FRN floating-rate feature
effectively reduces interest rate duration to near zero regardless of
years to maturity.3
Since 1955, Van Eck Global has sought to empower investors by combining
forward-thinking development with experience to deliver solutions for
evolving markets. Van Eck Global was the first ETF sponsor to offer a
U.S.-listed floating rate note ETF, as part of an effort to develop
investment solutions for a rising interest rate environment. Other such
ETFs include Market
Vectors Short High-Yield Municipal Index ETF (NYSE Arca: SHYD®), Short
Municipal Index ETF (NYSE Arca: SMB®), and Treasury-Hedged
High Yield Bond ETF (NYSE Arca: THHY®).
Investors have an array of Market Vectors Income ETFs to choose from to
help express their views on interest rate risk, credit risk,
international diversification, municipal bond investment, and
alternative equity income. As of September 30, 2014, the total assets
under management in these ETFs amounted to approximately $4.5 billion.
1About the Reduced Expense Ratios
Van Eck Associates Corporation has agreed to waive fees and/or pay the
Fund’s expenses to the extent necessary to prevent the Fund’s operating
expenses (excluding interest expense, offering costs, trading expenses,
taxes and extraordinary expenses) from exceeding 0.14% of the Fund’s
average daily net assets per year until at least September 1, 2015.
During such time, the expense limitation is expected to continue until
the Fund’s Board of Trustees acts to discontinue all or a portion of
such expense limitation. The gross expense ratio, before waivers and
reimbursements, is 0.54%.
2©2014 Morningstar, Inc. All Rights Reserved. The
information contained herein: (1) is proprietary to Morningstar; (2) may
not be copied or distributed; and (3) is not warranted to be accurate,
complete or timely. Neither Morningstar nor its content providers are
responsible for any damages or losses arising from any use of this
information. Past performance is no guarantee of future results. For
each fund with at least a three-year history, Morningstar calculates a
Morningstar Ratingtm based on a Morningstar Risk-Adjusted
Return measure that accounts for variation in a fund’s monthly
performance (including the effects of sales charges, loads, and
redemption fees), placing more emphasis on downward variations and
rewarding consistent performance. The top 10% of funds in each category
receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3
stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star.
(Each share class is counted as a fraction of one fund within this scale
and rated separately, which may cause slight variations in the
distribution percentages.) The Overall Morningstar Rating for a fund is
derived from a weighted average of the performance figures associated
with its three-, five- and ten-year (if applicable) Morningstar Rating
metrics. As of September 30, 2014, the Market Vector Floating Rate ETF
was rated against 96 U.S.-domiciled ultra-short bond funds over the last
three years. With respect to these ultra-short bond funds, the Market
Vectors Floating Rate ETF received a Morningstar Rating of 5 stars for
3-year rating. Past performance is no guarantee of future results.
3Floating rate notes (FRNs) are subject to credit and
interest rate risk. FRNs have historically been less sensitive to
interest rate changes than fixed income securities, but may decline in
value if their interest rate resets do not rise as much or as quickly as
interest rates in general. FLTR’s constituents are FRNs issued by
investment-grade rated corporations. This differs from floating rate
bank loans, which are typically issued by noninvestment-grade issuers. Interest
rate duration measures a bond’s sensitivity to interest rate changes
that reflects the change in a bond’s price given a change in yield.
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 approximately $22.9 billion in assets under management, as of
September 30, 2014, making it one of the largest ETF families in the
U.S. and worldwide.
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.
Market Vectors Investment Grade Floating Rate ETF is not sponsored,
issued or advised by Wells Fargo & Company, Wells Fargo Securities, LLC
or any of their affiliates. The Market Vectors US Investment Grade
Floating Rate Index is the exclusive property of Market Vectors Index
Solutions GmbH (a wholly owned subsidiary of the Adviser), which has
contracted with Wells Fargo to create and maintain and with Interactive
Data Pricing and Reference Data, LLC to calculate the Index. Neither
Wells Fargo nor Interactive Data Pricing and Reference Data, LLC
guarantees the accuracy and/or completeness of the Index or of any data
supplied by it or its agents or makes any warranty as to the results to
be obtained from investing in the Fund or tracking the Index. The Index
is calculated by Interactive Data Pricing and Reference, LLC, which is
not an adviser for or fiduciary to the Fund, and, like Wells Fargo, is
not responsible for any direct, indirect or consequential damages
associated with indicative optimized portfolio values and/or indicative
intraday values. The Market Vectors Investment Grade Floating Rate ETF
is not sponsored, endorsed, sold or promoted by Market Vectors Index
Solutions GmbH and Market Vectors Index Solutions GmbH makes no
representation regarding the advisability of investing in the Fund.
An investment in the Market Vectors Investment Grade Floating Rate ETF
may be subject to risk which include, among others, credit rating
downgrades, issuers may be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt, call risk, and
interest rate risk, all of which may adversely affect the Fund. The
Fund’s assets may be concentrated in a particular sector and may be
subject to more risk than investments in a diverse group of sectors.
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. Investments in
foreign and emerging markets securities may be subject to elevated risks
which may negatively impact the funds.
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.
Diversification does not assure a profit nor does it protect against a
loss.
Investing involves substantial risk and high volatility, including
possible loss of principal. Bonds and bond funds, in general, 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
Copyright Business Wire 2014