Van Eck today launched six ETFs that until yesterday had been
exchange-traded HOLDRS, adding more than $2 billion to its assets
under management and an oil services fund that plays to its
strengths as a firm known for its natural resources
investments.
The new ETFs, which are retaining their previous tickers,
are:
- Market Vectors Biotech ETF (NYSEArca:BBH)
- Market Vectors Bank and Brokerage ETF (NYSEArca:RKH)
- Market Vectors Oil Services ETF (NYSEArca:OIH)
- Market Vectors Pharmaceutical ETF (NYSEArca:PPH)
- Market Vectors Retail ETF (NYSEArca:RTH)
- Market Vectors Semiconductor ETF (NYSEArca:SMH)
The transfer offering is one more sign that the ETF juggernaut
is gathering steam. As of Dec. 20, investors had almost $1.045
trillion allocated to various U.S.-listed ETFs. Inflows into ETFs
have outpaced those into any other investment vehicle as investors
become more familiar with the benefits of the ETF structure.
HOLDRs, on the other hand, have had their day. The funds, which
are holding company depositary receipts Merrill Lynch launched in
the late 1990s and early 2000s, are narrowly focused portfolios
that, once created, never changed. They are exchange traded like
ETFs, but that set-and-forget aspect has made them increasingly
irrelevant as markets have evolved and companies have come and
gone.
A âSuccessfulâ Exchange Offer
Van Eck said in a press release yesterday that 70 percent of the
assets in the six HOLDRS, or $2.3 billion, became assets in the new
ETFs, and characterized the exchange offers as
âsuccessful.â
âThese funds are a great addition to the Van Eck platform and,
particularly in the case of OIH, a natural extension of the kinds
of products with which we have historically been associated,â
Adam Phillips, managing directors of ETFs at Van Eck, said in the
press release.
As of the beginning of this month, the six HOLDRs had more than
$3.5 billion in assets, with OIH the biggest on them all. It had
more than $2 billion in assets, and now, as an ETF, has about $1.16
billion, according to data compiled by IndexUniverse.
The six HOLDRS involved in the transaction made up around 90
percent of all the assets of the 17 HOLDRs originally rolled by
Merrill Lynch. Merrill has said in a regulatory filing that it will
shut the remaining 11 HOLDRS.
Trade in the six HOLDRs was halted yesterday morning, a crucial
final step that marked the end of the exchange offers Van Eck first
announced in August.
Van Eck said yesterday that the breakdown of the 70 percent
aggregate figure of assets that were successfully exchanged was as
follows:
- Oil Service HOLDRS (NYSEArca:OIH), 60.71 percent
- Semiconductor HOLDRS (NYSEArca:SMH), 71.02 percent
- Pharmaceutical HOLDRS (NYSEArca:PPH), 70.20 percent
- Biotech HOLDRS (NYSEArca:BBH), 63.69 percent
- Retail HOLDRS (NYSEArca:RTH), 57.34 percent
- Regional Bank HOLDRS (NYSEArca:RKH), 74.52 percent
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