NEW YORK--(BUSINESS WIRE)--Market Vectors ETF Trust announced today that it has launched Market Vectors Preferred Securities ex Financials ETF (NYSE Arca: PFXF), which is designed to offer investors access to the income potential of preferred securities without the volatility of financials. Among preferred securities-focused ETFs listed in the U.S., PFXF has the lowest published net expense ratio at the time of launch1.
PFXF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Wells Fargo® Hybrid and Preferred Securities ex Financials Index (Ticker: WHPSL), a rules-based index intended to track the overall performance of publicly traded non-financial preferred securities, including securities that, in Wells Fargo Securities LLC’s judgment, are functionally equivalent to preferred securities such as convertible securities, depository preferred securities and perpetual subordinated debt. Top industries in the index as of June 30, 2012 included REITs, electric, auto manufacturers and telecommunications. The index excludes financials, such as broker-dealers, banks, futures commission merchants, investment advisers and insurance companies.
“In developing PFXF, we wanted to offer access to the income potential of preferred securities but limit potential volatility by excluding financials, which has been the most volatile sector in recent years,” said Brandon Rakszawski, Product Manager with Market Vectors. “We’re please to be able to offer this unique take on the preferred securities market while also launching PFXF with the lowest published net expense ratio of the preferred securities-focused ETFs currently listed in the U.S.1”
Rakszawski noted that investing in preferred securities is not without risks, including the possibility that such securities may lose substantial value if distributions are deferred, suspended or not declared, the possibility of declining prices when interest rates rise, and the fact that preferred securities may be subordinate to traditional fixed income securities. Additionally, the fund’s holdings may be subject to call risk, concentration risk, and risks associated with investing in the real estate sector, among others.
“PFXF is the latest in a series of income-oriented ETFs we have brought to market over the past year,” said Jan van Eck, President of Market Vectors ETF Trust. “In the process of expanding our lineup, we have offered exposure to several underrepresented areas of the market underscoring our commitment to yield-focused investors.”
PFXF is the 50th ETF in the Market Vectors family, which is currently the 5th largest ETF family in the U.S., as measured by assets under management. The Fund joins a lineup of 14 income-oriented ETFs including six municipal income ETFs, high-yield bond ETFs such as Market Vectors Fallen Angel High Yield Bond ETF (ANGL) and Market Vectors International High Yield Bond ETF (IHY) and dividend-focused offerings, such as Market Vectors Mortgage REIT Income ETF (MORT).
PFXF has a gross expense ratio of 0.52 percent and a net expense ratio of 0.40 percent, which is capped at least until September 1, 2013. Cap excludes certain expenses, such as interest.
About Market Vectors ETFs
Market Vectors exchange-traded products (ETPs) 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 currently totals $23.8 billion in assets under management, making it the fifth largest ETP family in the U.S. and the eighth largest worldwide, as of June 30, 2012.
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. Van Eck Global has offices around the world and manages approximately $32.0 billion in investor assets as of June 30, 2012.
1Based on seven ETFs as of 6/30/2012. PFXF has a gross expense ratio of 0.52% and net expense ratio of 0.40%. Expenses for the fund are capped contractually until 9/1/2013. Cap excludes certain expenses, such as interest.
Investments in preferred securities are subject to fluctuations in value due to deferred or unpaid distributions, call features and decreases in value of common stock if security is convertible. Investments in fixed income securities are subject to credit risk and will decline in price when interest rates rise. Payments may be structurally subordinated such that creditors will have priority to assets over the Fund. Adverse economic, business or political developments affecting real estate could have an effect on the value of the Fund’s investments. Small- and medium-capitalization companies may be more volatile than large-capitalization companies. The Fund’s assets may be concentrated in a particular sector, such as real estate, utilities and consumer discretionary and may be subject to more risk than investments in a diverse group of sectors.
The Fund is not sponsored, endorsed, or advised by Wells Fargo & Company, Wells Fargo Securities, LLC (together, “Wells Fargo”), Index Calculation Agent or any of their subsidiaries and affiliates. WELLS FARGO AND INDEX CALCULATION AGENT DO NOT GUARANTEE THE ACCURACY AND/OR COMPLETENESS OF ANY DATA SUPPLIED BY THEM OR OF THE INDEX UNDERLYING THE ETF AND MAKE NO WARRANTY AS TO THE RESULTS TO BE OBTAINED FROM INVESTING IN THE ETF OR IN THE INDEX.
The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.
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 the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains 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