SUMMARY

We rate Market Vectors Semiconductor ETF at A+. This overall rating indicates it is among the top 10% of all closed end mutual funds in its peer group. Positive factors that influence this rating include a low price volatility and low expense structure. The fund may be considered for investors seeking an Equity Income strategy.

POSITIVES AND RISKS

New Fund off to good start in the last year. The Market Vectors Semiconductor ETF has returned an annual rate of 19.50% since inception. More recently, the fund has generated a total return of 30.80% in the last year, 22.10% in the last six months, and 9.03% in the last three months. How does that compare to other equity funds? In the last year, it has outperformed 75% of them for the period ending 5/31/2013. On a year to date basis, SMH has returned 18.43%.

Downside risk has been below average. SMH has a draw down risk of -13.21%, which is the largest price decline experienced since the inception of the fund. This fund has a one year standard deviation of 9.2%. This fund has had a low level of volatility in its monthly performance over the last 12 months. As of 5/31/2013, the fund was trading at a price of $38.29, which is 1.8% below its 52-week high of $39.00 and 3.8% above its 52-week low of $36.88.

Low expense ratio helps performance. On total assets of $280.10 million, SMH maintains a low expense ratio compared to its Equity Income peers of just 0.35% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As SMH is an exchange traded fund, it has no front end or back end load.

The Market Vectors Semiconductor ETF is managed by George Cao at Van Eck Associates Corporation. This fund is one of 52 Van Eck Associates Corporation exchange-traded funds launched since 5/16/2006 that we track.