Van Eck Associates Corporation lowered the expense cap for its Market Vectors Emerging Markets Local Currency ETF (NYSE Arca: EMLC) from 49 basis points (bps) to 47 bps, effective September 1, 2012. The expense cap is effective through September 1, 2013 and excludes certain expenses, such as interest.
EMLC seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the J.P. Morgan GBI-EMG Core Index (GBIEMCOR), a rules-based, market capitalization-weighted index that is designed to be investible and includes only those countries that are accessible by most of the international investor base.
“We’re pleased to lower EMLC’s expense cap, which already had the lowest net expense ratio among the EM local currency and dollar-denominated ETFs in the marketplace,” said Adam Phillips, Chief Operating Officer of Market Vectors ETFs. “Wherever possible, we look to reduce fees and expenses and pass those savings along to investors.”
EMLC was the first U.S.-listed ETF to focus on local currency-denominated bonds of emerging markets governments at the time of its launch, and currently has over $791 million in AUM. The Fund was recently joined in the Market Vectors ETF lineup by another first-of-its-kind offering in emerging markets, Emerging Markets High Yield Bond ETF (NYSE Arca: HYEM), launched in May 2012 which seeks to track an index that focuses exclusively on dollar-denominated high-yield corporate bonds issued by companies from emerging markets countries. Together, EMLC and HYEM provide two different ways to invest in emerging markets debt.
“The development of EM debt markets over the past several years has been impressive”, said Ed Lopez, Marketing Director at Market Vectors ETFs. “Low default rates among corporate bond issuers, investment grade credit ratings among most sovereign issuers in EMLC’s index and generally higher yields currently than comparable developed world issuers make a compelling case for investing in emerging market bonds.”
EMLC and HYEM are part of the Market Vectors family of income-oriented ETFs that also includes municipal bond ETFs, an ETF of municipal closed-end funds and various slices of the global and international high-yield corporate bond markets such as High Yield Municipal Index ETF (NYSE Arca: HYD) , CEF Municipal Income ETF (NYSE Arca: XMPT) , Fallen Angel High Yield Bond ETF (NYSE Arca: ANGL); andInternational High Yield Bond ETF (NYSE Arca: IHY), among others.
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 currently totals $23.6 billion in assets under management, making it the fifth largest ETP family in the U.S. and 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 billion in investor assets as of June 30, 2012.
Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) is not sponsored, endorsed, sold or promoted by J.P. Morgan and J.P. Morgan makes no representation regarding the advisability of investing in EMLC. J.P. Morgan does not warrant the completeness or accuracy of the J.P. Morgan GBI-EMG Core Index. "J.P. Morgan" is a registered service mark of JPMorgan Chase & Co. © 2012. JPMorgan Chase & Co. All rights reserved.
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 Funds' underlying securities may be subject to call risk, which may result in the Funds having to reinvest the proceeds at lower interest rates, resulting in a decline in the Funds' income.
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 Funds invest in securities denominated in foreign currencies and some of the income received by the Funds will be in foreign currency, changes in currency exchange rates may negatively impact the Funds’ return. The Funds 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 Funds 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 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