After the expiration of the exchange offers, the six HOLDRS will no longer trade on the NYSE Arca or any other national securities exchange and will no longer use HOLDRS ticker symbols. Therefore, there may not be any means for an investor to sell receipts in those six HOLDRS after the exchange offers expire.
As of the close of trading on November 9, 2011, the six HOLDRS subject to Van Eck’s exchange offers had approximately $3.5 billion in aggregate assets and a combined 30-day average daily trading volume of approximately 17.36 million shares.
New Market Vectors ETFs
Trading in the new ETFs is expected to begin on the first trading day immediately following the expiration of the exchange offers. The new products will join the Market Vectors family, which currently totals $21.7 billion in assets under management, making it the sixth largest ETF family in the U.S. and the ninth largest worldwide as of September 30, 2011.Each new ETF will have a net expense ratio of 35 basis points (0.35%). Expenses for the new ETFs will be capped contractually at 0.35%, subject to certain exceptions, through at least April 30, 2013, but could be extended at Van Eck’s discretion. In contrast, HOLDRS have a custody fee of $0.02 per HOLDRS share per quarter ($8 per year per 100 HOLDRS shares), which is subtracted from any cash dividends or distributions paid by the underlying securities. Van Eck notes that while its ETF fees will be higher than those charged for HOLDRS, in part due to the portfolio management required by an ETF as opposed to the static structure of the HOLDRS, it views the fees as competitive with existing comparable mutual fund and ETF sector products. The underlying indices for the new Market Vectors ETFs seek to represent the most liquid stocks within that particular industry. The top 25 constituents based on full market capitalization and three-month average daily trading volume are included in each index. The indices include companies that derive most of their revenues from the relevant industry; individual company weightings are capped at 20%. The indices will be rebalanced semi-annually, with weighting caps applied quarterly. Index information, including constituents, can be found on vaneck.com/holdrs. For More Information Investors may call D.F. King & Co., Inc., the Information Agent, for more details pertaining to the exchange (800.290.6424). Investors interested in obtaining details about the exchange offers can visit vaneck.com/holdrs. This site includes important information such as an outline of the choices available to current HOLDRS investors, details on the mechanics of the exchange offers, tax information and more. Subscriptions for Email Updates can be found on the site, providing investors and financial advisors the opportunity to receive periodic notifications regarding important information related to the exchange offers. Investors should obtain and read documents made available in connection with the exchange offers and evaluate these choices carefully with the help of their own financial and tax advisors. Important Disclosure The prospectus (or Statement of Additional Information) contained in the registration statement for the new ETFs is not an offer to sell the securities referenced therein and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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