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As filed with the
Securities and Exchange Commission on April 27, 2007 Registration
Statement Under the Securities Act Of 1933 x Pre-Effective Amendment
No. o Post Effective
Amendment No. 6 x and/or Registration
Statement Under the Investment Company Act of 1940 x Amendment No. 10 x o Immediately upon filing pursuant to
paragraph (b) x On May 1, 2007 pursuant to paragraph (b) o 60 days after filing pursuant to
paragraph (a)(1) o On [date] pursuant to paragraph (a)(1) o 75 days after filing pursuant to
paragraph (a)(2) o On [date] pursuant to paragraph (a)(2) of
rule 485 Prospectus Market VectorsEnvironmental Services ETF, Market
VectorsGold Miners ETF and Market VectorsSteel ETF (the Funds) are
distributed by Van Eck Securities Corporation and track the Amex Environmental
Services Index, Amex Gold Miners Index and Amex Steel Index, respectively,
which are published by the American Stock Exchange (the Amex). The
Amex does not sponsor, endorse, or promote the Funds and bears no liability
with respect to any such Funds or security. For more detailed information about
the Funds, see the Statement of Additional Information, dated May 1, 2007
(SAI), which is incorporated by reference into this Prospectus.
Additional information about each Funds investments is available in each
Funds annual and semi-annual reports to shareholders. In each Funds annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Funds performance during its last
fiscal year. Call Van Eck at 1.888.MKT.VCTR to request, free of charge,
the annual or semi-annual reports, the SAI or other information about the Funds
or to make shareholder inquiries. You may also obtain the SAI or the Funds
annual or semi-annual reports by visiting the Funds website at
www.vaneck.com/etf. Information about the Funds (including the SAI) can also be
reviewed and copied at the Securities and Exchange Commission (the SEC)
Public Reference Room in Washington, D.C. Information about the operation of
the Public Reference Room may be obtained by calling 1.202.551.8090. Reports and other information about the Funds are
available on the EDGAR Database on the SECs internet site at
http://www.sec.gov. In addition, copies of this information may be obtained,
after paying a duplicating fee, by electronic request at the following email
address: publicinfo@sec.gov, or by writing the SECs Public Reference Section,
Washington, DC 20549-0102. Transfer Agent: SEC Registration Number: The Trusts registration number The Bank of New York 333-123257 811-10325 MARKET
VECTORS ETF TRUST No person has been authorized to give any information
or to make any representations other than those contained in this Prospectus in
connection with the offer of a Funds shares, and, if given or made, the
information or representations must not be relied upon as having been
authorized by the Funds. Neither the delivery of this Prospectus nor any sale
of shares shall under any circumstance imply that the information contained
herein is correct as of any date after the date of this Prospectus.
Dealers effecting transactions in a Funds shares, whether or not participating
in this distribution, may be generally required to deliver a Prospectus. This
is in addition to any obligation of dealers to deliver the Prospectus when
acting as underwriters. Market Vectors ETF Trust (the Trust)
currently has five investment portfolios, the Market VectorsEnvironmental
Services ETF, Market VectorsGlobal Alternative Energy ETF, Market VectorsGold
Miners ETF, Market VectorsRussia ETF and Market VectorsSteel ETF. This
Prospectus relates to the offering of shares (the Shares) of the
Market VectorsEnvironmental Services ETF, Market VectorsGold Miners ETF and
Market VectorsSteel ETF. This Prospectus, dated May 1, 2007, explains
concisely the information you ought to know before investing in a Fund. We
suggest that you keep it for future reference. TABLE OF CONTENTS 2 2 2 3 4 4 5 5 6 6 7 8 8 9 9 10 10 11 12 12 13 13 14 15 16 16 16 17 18 19 19 19 20 22 22 25 26 26 26 29 29 -i- The Shares of each of the Funds are listed on the
American Stock Exchange (the Amex) and trade in the secondary market
at prices that may differ to some degree from their net asset value (NAV).
Unlike conventional mutual funds, the Trust issues and redeems its Shares on a
continuous basis at NAV only in large specified blocks each called a Creation
Unit. Creation Units are issued and redeemed principally in-kind for securities
generally included in each Funds respective index. Except when aggregated in
Creation Units, Shares are not redeemable securities of the Trust. The Funds may be suitable for long term investment in
the market or market segment represented by its respective index. Shares of the
Funds may also be used as an asset allocation or speculative trading vehicle.
Unlike many conventional mutual funds which are only bought and sold at closing
NAVs, the Shares have been designed to be tradable in a secondary market on an
intraday basis and to be created and redeemed in-kind in Creation Units at each
days market close. These arrangements are designed to protect ongoing
shareholders from adverse effects on a Funds portfolio that could arise from
frequent cash purchase and redemption transactions that affect the NAV of the
Fund. Moreover, in contrast to conventional mutual funds where frequent
redemptions can have an adverse tax impact on taxable shareholders because of
the need to sell portfolio securities which, in turn, may generate taxable
gain, the in-kind redemption mechanism of the Funds generally is not expected
to lead to a tax event for shareholders. MARKET VECTORSENVIRONMENTAL SERVICES ETF Principal Investment Objective and Strategies Investment Objective.
The Funds investment objective is to replicate as closely as possible, before
fees and expenses, the price and yield performance of the Amex Environmental
Services Index (the Environmental Services Index). Indexing Investment
Approach. The Fund is not managed according to
traditional methods of active investment management, which involve the buying
and selling of securities based upon economic, financial and market analysis
and investment judgment. Instead, the Fund, utilizing a passive or indexing
investment approach, attempts to approximate the investment performance of the
Environmental Services Index by investing in a portfolio of securities that
generally replicate the Environmental Services Index. The Adviser
anticipates that, generally, the Fund will hold all of the securities which
comprise the Environmental Services Index in proportion to their weightings in
the Environmental Services Index. However, under various circumstances, it may
not be possible or practicable to purchase all of those securities in these
weightings. In these circumstances, the Fund may purchase a sample of
securities in the Environmental Services Index. There also may be instances in
which the Adviser may choose to overweight another security in the
Environmental Services Index, purchase securities not in the Environmental
Services Index which the Adviser believes are appropriate to substitute for
certain securities in the Environmental Services Index or utilize various
combinations of other available investment techniques in seeking to replicate
as closely as possible, before fees and expenses, the price and yield
performance of the Environmental Services Index. The Fund may sell securities
that are represented in the Environmental Services Index in anticipation of
their removal from the Environmental Services Index or purchase securities not
represented in the Environmental Services Index in anticipation of their
addition to the Environmental Services Index. The Adviser expects that, over
time, the correlation between the Funds performance and that of the
Environmental Services Index before fees and expenses will be 95% or better. A
figure of 100% would indicate perfect correlation. Although the
Environmental Services Index is generally not expected to be subject to
frequent or large changes, giving the Funds portfolio many of the
characteristics of a long-term investment, periodic changes in the
Environmental Services Index may occur as a result of capital changes, e.g., mergers,
spin-offs or a change in the business or character of a component company
within the Environmental Services Index. Because of the passive investment
management approach of the Fund, the portfolio turnover rate is expected to be
under 30%, generally a lower turnover rate than for many other investment
companies. Sales as a result of Environmental Services Index changes could
result in the realization of short or long-term capital gains in the Fund
resulting in tax liability for shareholders subject to U.S. federal income tax.
See Shareholder InformationTax Matters. Market Capitalization.
The Environmental Services Index is only comprised of companies with market
capitalization greater than $100 million, a three-month trading price
greater than $3.00 and a daily average traded volume of at least
$1 million over the past three months. The total market capitalization of
the Environmental Services Index as of December 31, 2006 was in excess of
$190 billion.
Borrowing Money.
The Fund may borrow money from a bank up to a limit of one-third of the market
value of its assets, but only for temporary or emergency purposes. To the
extent that the Fund borrows money, it may be -2- leveraged; at
such times, the Fund may appreciate or depreciate in value more rapidly than
its benchmark, the Environmental Services Index. Principal Risks of Investing in the Fund Market Risk.
The prices of the securities in the Fund are subject to the risk associated
with investing in the stock market, including sudden and unpredictable drops in
value. An investment in the Fund may lose money. Sector Risk.
Because the Fund primarily invests in stocks and ADRs of companies that are
involved in a variety of activities related to environmental services and
consumer and industrial waste management, it is subject to certain risks
associated with such companies. Competitive pressures may have a significant
effect on the financial condition of such companies. These prices may fluctuate
substantially over short periods of time so the Funds Share price may be more
volatile than other types of investments. These companies are also affected by
changes in government regulation, world events and economic conditions. In
addition, these companies are subject to liability for environmental damage
claims. Non-Diversified.
The Fund is a separate investment portfolio of the Trust, which is an open-end
investment company registered under the 1940 Act. The Fund is classified as a
non-diversified investment company under the 1940 Act. As a result, the Fund
is subject to the risk that it will be more volatile than a diversified fund
because the Fund may invest its assets in a smaller number of issuers or may
invest larger proportions of the assets of the Fund in a single company within
the industries that comprise the Environmental Services Index. As of
December 31, 2006, the Environmental Services Index included 26 securities.
As a result, the gains and losses on a single security may have a greater
impact on the Funds NAV and may make the Fund more volatile than diversified
funds. Because the Funds investments are concentrated in the environmental
services industry, it will be more susceptible to any single economic,
political or regulatory occurrence than an investment company that is more
broadly diversified. Investing in Small-
or Mid-Cap Companies. The Fund may invest in small- or
mid-cap companies. If it does so, it may be subject to certain risks associated
with small- or mid-cap companies. These companies are often subject to less
analyst coverage and may be in early and less predictable periods of their
corporate existences. In addition, these companies often have greater price
volatility, lower trading volume and less liquidity than larger more
established companies. These companies tend to have smaller revenues, narrower
product lines, less management depth and experience, smaller shares of their
product or service markets, fewer financial resources and less competitive
strength than larger companies. -3- Trading Issues.
Trading in Shares on the Amex may be halted due to market conditions or for
reasons that, in the view of the Amex, make trading in Shares inadvisable. In
addition, trading in Shares on the Amex is subject to trading halts caused by
extraordinary market volatility pursuant to Amex circuit breaker rules. There
can be no assurance that the requirements of the Amex necessary to maintain the
listing of the Fund will continue to be met or will remain unchanged. Fluctuation of Net
Asset Value. The NAV of the Shares will fluctuate with
changes in the market value of the Funds securities holdings. The market
prices of Shares will fluctuate in accordance with changes in NAV and supply
and demand on the Amex. The Adviser cannot predict whether Shares will trade
below, at or above their NAV. Price differences may be due, in large part, to
the fact that supply and demand forces at work in the secondary trading market
for Shares will be closely related to, but not identical to, the same forces
influencing the prices of the securities of the Environmental Services Index
trading individually or in the aggregate at any point in time. However, given
that Shares can be created and redeemed daily in Creation Units (unlike shares
of closed-end funds, which frequently trade at appreciable discounts from, and
sometimes at premiums to, their NAV), the Adviser believes that large discounts
or premiums to the NAV of the Shares should not be sustained. This table
describes the fees and expenses that you may pay if you buy and hold Shares of
the Fund.(a)(b) Shareholder Expenses None Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) Management
Fee 0.50% Other
Operating Expenses(c) 0.90% Total Gross
Annual Fund Operating Expenses(d) 1.40% Fee Waivers
and Expenses Assumption(e) 0.85% Total Net
Annual Fund Operating Expenses(e) 0.55% (a) When buying or selling
Shares through a broker, you will incur customary brokerage commissions and
charges. (b) If a Creation Unit is
purchased or redeemed outside the usual process through the National
Securities Clearing Corporation or for cash, a variable fee of up to four
times the standard creation or redemption transaction fee will be charged. (c) Other operating expenses
are based on estimated amounts for the current fiscal year and calculated as
a percentage of Fund net assets. -4- (d) For the period May 1,
2007 to April 30, 2008, the Adviser has contractually agreed to waive
fees and/or pay Fund expenses to the extent necessary to prevent the
operating expenses of the Fund (excluding interest expense, offering costs
and other trading expenses, taxes and extraordinary expenses) from exceeding
0.55% of average daily net assets. (e) The offering costs excluded
from the 0.55% expense cap are: (a) legal fees pertaining to the Funds
Shares offered for sale; (b) SEC and state registration fees; and
(c) initial fees paid to be listed on an exchange. This example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the Fund. The Fund sells
and redeems Shares in Creation Units principally on an in-kind basis for
portfolio securities of the Environmental Services Index. Shares in less than
Creation Units are not redeemable. An investor purchasing a Creation Unit on an
in-kind basis would pay the following expenses on a $10,000 investment (payment
with a deposit of securities included in the Environmental Services Index),
assuming a 5% annual return and that the Funds operating expenses remain the
same. Investors
should note that the presentation below of a $10,000 investment is for
illustration purposes only as Shares will be issued by the Fund only in
Creation Units. Further, the return of 5% and estimated expenses are for
illustration purposes only, and should not be considered indicators of expected
Fund expenses or performance, which may be greater or less than the estimates.
Based on these assumptions, your costs would be: YEAR EXPENSES 1 $ 56 3 $ 359 Creation Transaction Fees and Redemption
Transaction Fees -5- MARKET VECTORSGOLD MINERS ETF Principal Investment Objective and Strategies Investment Objective.
The Funds investment objective is to replicate as closely as possible, before
fees and expenses, the price and yield performance of the Amex Gold Miners
Index (the Gold Miners Index). Indexing Investment Approach.
The Fund is not managed according to traditional methods of active investment
management, which involve the buying and selling of securities based upon
economic, financial and market analysis and investment judgment. Instead,
the Fund, utilizing a passive or indexing investment approach, attempts to
approximate the investment performance of the Gold Miners Index by investing in
a portfolio of securities that generally replicate the Gold Miners Index. The Adviser
anticipates that, generally, the Fund will hold all of the securities which
comprise the Gold Miners Index in proportion to their weightings in the Gold
Miners Index.
However, under various circumstances, it may not be possible or
practicable to purchase all of those securities in these weightings. In
these circumstances, the Fund may purchase a sample of securities in the Gold
Miners Index.
There also may be instances in which the Adviser may choose to
overweight another security in the Gold Miners Index, purchase securities not
in the Gold Miners Index which the Adviser believes are appropriate to
substitute for certain securities in the Gold Miners Index or utilize various
combinations of other available investment techniques in seeking to replicate
as closely as possible, before fees and expenses, the price and yield
performance of the Gold Miners Index. The Fund may sell securities that are
represented in the Gold Miners Index in anticipation of their removal from the
Gold Miners Index or purchase securities not represented in the Gold Miners
Index in anticipation of their addition to the Gold Miners Index. The
Adviser expects that, over time, the correlation between the Funds performance
and that of the Gold Miners Index before fees and expenses will be 95% or
better. A
figure of 100% would indicate perfect correlation. Although the
Gold Miners Index is generally not expected to be subject to frequent or large
changes, giving the Funds portfolio many of the characteristics of a long-term
investment, periodic changes in the Gold Miners Index may occur as a result of
capital changes, e.g., mergers, spin-offs or a change in the business or
character of a component company within the Gold Miners Index. Because
of the passive investment management approach of the Fund, the portfolio
turnover rate is expected to be under 30%, generally a lower turnover rate than
for many other investment companies. Sales as a result of Gold Miners Index
changes could result in the realization of short or long-term capital gains in
the Fund resulting in tax liability for shareholders subject to U.S. federal
income tax. See Shareholder InformationTax Matters. Market Capitalization.
The Gold Miners Index is only comprised of companies with market capitalization
greater than $100 million that have a daily average traded volume of at
least 50,000 shares over the past six months. The total market capitalization
of the Gold Miners Index as of December 31, 2006 was in excess of
$139 billion. Borrowing Money.
The Fund may borrow money from a bank up to a limit of one-third of the market
value of its assets, but only for temporary or emergency purposes. To the
extent that the Fund borrows money, it may be leveraged; at such times, the
Fund may appreciate or depreciate in value more rapidly than its benchmark Gold
Miners Index. -6- Principal Risks of Investing in the Fund Market Risk.
The prices of the securities in the Fund are subject to the risk associated
with investing in the stock market, including sudden and unpredictable drops in
value. An investment in the Fund may lose money. Sector Risk.
Because the Fund primarily invests in stocks and ADRs of companies that are
involved in the gold mining industry, it is subject to certain risks associated
with such companies. Competitive pressures may have a significant effect on the
financial condition of such companies in the gold mining industry. Also, gold
mining companies are highly dependent on the price of gold bullion. These
prices may fluctuate substantially over short periods of time so the Funds
Share price may be more volatile than other types of investments. In times of
significant inflation or great economic uncertainty, gold and other precious
metals may outperform traditional investments such as bonds and stocks.
However, in times of stable economic growth, traditional equity and debt
investments could offer greater appreciation potential and the value of gold
and other precious metals may be adversely affected, which could in turn affect
the Funds returns. Non-Diversified.
The Fund is a separate investment portfolio of the Trust, which is an open-end
investment company registered under the 1940 Act. The Fund is classified as a
non-diversified investment company under the 1940 Act. As a result, the Fund
is subject to the risk that it will be more volatile than a diversified fund
because the Fund may invest its assets in a smaller number of issuers or may
invest larger proportions of the assets of the Fund in a single company within
the industries that comprise the Gold Miners Index. As of December 31,
2006, the Gold Miners Index included 40 securities. As a result, the gains and
losses on a single security may have a greater impact on the Funds NAV and may
make the Fund more volatile than diversified funds. Because the Funds
investments are concentrated in the gold mining industry, it will be more
susceptible to any single economic, political or regulatory occurrence than an
investment company that is more broadly diversified. Investing in Small-
or Mid-Cap Companies. The Fund may invest in small- or
mid-cap companies. If it does so, it may be subject to certain risks associated
with small- or mid-cap companies. These companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
These companies tend to have smaller revenues, narrower product lines, less
management depth and experience, smaller shares of their product or service
markets, fewer financial resources and less competitive strength than larger
companies. -7- Trading Issues.
Trading in Shares on the Amex may be halted due to market conditions or for
reasons that, in the view of the Amex, make trading in Shares inadvisable. In
addition, trading in Shares on the Amex is subject to trading halts caused by
extraordinary market volatility pursuant to Amex circuit breaker rules. There
can be no assurance that the requirements of the Amex necessary to maintain the
listing of the Fund will continue to be met or will remain unchanged. Foreign Investments.
The Fund may invest in ADRs. These investments may involve additional risks and
considerations. These risks include, for example, those related to adverse
political and economic developments unique to a country or region, currency
fluctuations or controls and the possibility of expropriation, nationalization
or confiscatory taxation. As of December 31, 2006, of the 40 securities
that comprise the Gold Miners Index, five were ADRs which had a combined market
capitalization of approximately $34 billion, representing approximately
24% of the market value of the Gold Miners Index. Relationship to Gold
Bullion. The Gold Miners Index measures the
performance of gold shares and not gold bullion. Gold securities may under- or
over-perform gold bullion over the short-term or the long-term. The Fund
commenced operations on May 16, 2006 and therefore does not have a
performance history for a full calendar year. Visit www.vaneck.com/etf for
current performance figures. This table
describes the fees and expenses that you may pay if you buy and hold Shares of
the Fund.(a)(b) (fees paid
directly from your investment, but see Shareholder InformationCreation and
Redemption of Creation Units for a discussion of Creation and Redemption
Transaction Fees) None Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) Management
Fee 0.50% Other
Operating Expenses(c) 0.18% Total Gross
Annual Fund Operating Expenses(d) 0.68% Fee Waivers
and Expenses Assumption(e) 0.13% Total Net
Annual Fund Operating Expenses(e) 0.55% (a) When buying or selling
Shares through a broker, you will incur customary brokerage commissions and
charges. (b) If a Creation Unit is
purchased or redeemed outside the usual process through the National
Securities Clearing Corporation or for cash, a variable fee of up to four
times the standard creation or redemption transaction fee will be charged. (c) Other operating expenses
are calculated as a percentage of Fund net assets. (d) For the period May 1,
2007 to April 30, 2008, the Adviser has contractually agreed to waive
fees and/or pay Fund expenses to the extent necessary to prevent the
operating expenses of the Fund (excluding interest expense, offering costs
and other trading expenses, taxes and extraordinary expenses) from exceeding
0.55% of average daily net assets per year. -8- (e) The offering costs excluded
from the 0.55% expense cap are: (a) legal fees pertaining to the Funds
Shares offered for sale; (b) SEC and state registration fees; and
(c) initial fees paid to be listed on an exchange. This example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the Fund. The Fund sells
and redeems Shares in Creation Units principally on an in-kind basis for
portfolio securities of the Gold Miners Index. Shares in less than Creation
Units are not redeemable. An investor purchasing a Creation Unit on an in-kind
basis would pay the following expenses on a $10,000 investment (payment with a
deposit of securities included in the Gold Miners Index), assuming a 5% annual
return and that the Funds operating expenses remain the same. Investors
should note that the presentation below of a $10,000 investment is for
illustration purposes only as Shares will be issued by the Fund only in
Creation Units. Further, the return of 5% and estimated expenses are for
illustration purposes only, and should not be considered indicators of expected
Fund expenses or performance, which may be greater or less than the estimates.
Based on these assumptions, your costs would be: YEAR EXPENSES 1 $ 56 3 $ 204 Creation Transaction Fees and Redemption
Transaction Fees -9- Principal Investment Objective and Strategies Investment Objective.
The Funds investment objective is to replicate as closely as possible, before
fees and expenses, the price and yield performance of the Amex Steel Index (the
Steel Index). Indexing Investment
Approach. The Fund is not managed according to
traditional methods of active investment management, which involve the buying
and selling of securities based upon economic, financial and market analysis
and investment judgment. Instead, the Fund, utilizing a passive
or indexing investment approach, attempts to approximate the investment
performance of the Steel Index by investing in a portfolio of securities that
generally replicate the Steel Index. The Adviser
anticipates that, generally, the Fund will hold all of the securities which
comprise the Steel Index in proportion to their weightings in the Steel Index. However,
under various circumstances, it may not be possible or practicable to purchase
all of those securities in these weightings. In these circumstances, the Fund may
purchase a sample of securities in the Steel Index. There also may be instances
in which the Adviser may choose to overweight another security in the Steel
Index, purchase securities not in the Steel Index which the Adviser believes
are appropriate to substitute for certain securities in the Steel Index or
utilize various combinations of other available investment techniques in
seeking to replicate as closely as possible, before fees and expenses, the
price and yield performance of the Steel Index. The Fund may sell
securities that are represented in the Steel Index in anticipation of their
removal from the Steel Index or purchase securities not represented in the
Steel Index in anticipation of their addition to the Steel Index. The
Adviser expects that, over time, the correlation between the Funds performance
and that of the Steel Index before fees and expenses will be 95% or better. A
figure of 100% would indicate perfect correlation. Although the
Steel Index is generally not expected to be subject to frequent or large
changes, giving the Funds portfolio many of the characteristics of a long-term
investment, periodic changes in the Steel Index may occur as a result of
capital changes, e.g., mergers, spin-offs or a change in the business or
character of a component company within the Steel Index. Because of the passive
investment management approach of the Fund, the portfolio turnover rate is
expected to be under 30%, generally a lower turnover rate than for many other
investment companies. Sales as a result of Steel Index changes
could result in the realization of short or long-term capital gains in the Fund
resulting in tax liability for shareholders subject to U.S. federal income tax.
See Shareholder InformationTax Matters. Market Capitalization.
The Steel Index is only comprised of companies with market capitalization
greater than $100 million that have a daily average traded volume of at
least $1 million over the past three months. The total market
capitalization of the Steel Index as of December 31, 2006 was in excess of
$316 billion. Borrowing Money.
The Fund may borrow money from a bank up to a limit of one-third of the market
value of its assets, but only for temporary or emergency purposes. To the
extent that the Fund borrows money, it may be leveraged; at such times, the
Fund may appreciate or depreciate in value more rapidly than its benchmark
Steel Index. -10- Principal Risks of Investing in the Fund Market Risk.
The prices of the securities in the Fund are subject to the risk associated
with investing in the stock market, including sudden and unpredictable drops in
value. An investment in the Fund may lose money. Sector Risk.
Because the Fund primarily invests in stocks and ADRs of companies that are
involved in a variety of activities related to steel production, it is subject
to certain risks associated with such companies. Competitive pressures may have
a significant effect on the financial condition of such companies. Also, these companies
are highly dependent on the price of steel. These prices may fluctuate
substantially over short periods of time so the Funds Share price may be more
volatile than other types of investments. These companies are also affected by
changes in government regulation, world events and economic conditions. In
addition, these companies are at risk for environmental damage claims. Non-Diversified.
The Fund is a separate investment portfolio of the Trust, which is an open-end
investment company registered under the 1940 Act. The Fund is classified as a
non-diversified investment company under the 1940 Act. As a result, the Fund
is subject to the risk that it will be more volatile than a diversified fund
because the Fund may invest its assets in a smaller number of issuers or may
invest larger proportions of the assets of the Fund in a single company within
the industries that comprise the Steel Index. As of December 31, 2006, the
Steel Index included 38 securities. As a result, the gains and losses on a
single security may have a greater impact on the Funds NAV and may make the
Fund more volatile than diversified funds. Because the Funds investments are
concentrated in the steel industry, it will be more susceptible to any single
economic, political or regulatory occurrence than an investment company that is
more broadly diversified. Investing in Small-
or Mid-Cap Companies. The Fund may invest in small- or
mid-cap companies. If it does so, it may be subject to certain risks associated
with small- or mid-cap companies. These companies are often subject to less
analyst coverage and may be in early and less predictable periods of their
corporate existences. In addition, these companies often have greater price
volatility, lower trading volume and less liquidity than larger more
established companies. These companies tend to have smaller revenues, narrower
product lines, less management depth and experience, smaller shares of their
product or service markets, fewer financial resources and less competitive
strength than larger companies. -11- Trading Issues.
Trading in Shares on the Amex may be halted due to market conditions or for
reasons that, in the view of the Amex, make trading in Shares inadvisable. In
addition, trading in Shares on the Amex is subject to trading halts caused by
extraordinary market volatility pursuant to Amex circuit breaker rules. There
can be no assurance that the requirements of the Amex necessary to maintain the
listing of the Fund will continue to be met or will remain unchanged. Foreign Investments.
The Fund may invest in ADRs. These investments may involve additional risks and
considerations. These risks include, for example, those related to adverse
political and economic developments unique to a country or region, currency
fluctuations or controls and the possibility of expropriation, nationalization
or confiscatory taxation. As of December 31, 2006, of the 38 securities
that comprise the Steel Index, 10 were ADRs, which had a combined market
capitalization of approximately $242 billion, representing approximately
77% of the entire market value of the Steel Index. Relationship to Steel
Prices. The Steel Index measures the performance of
steel shares and not steel prices. Steel securities may under- or over-perform
steel prices over the short-term or the long-term. This table
describes the fees and expenses that you may pay if you buy and hold Shares of
the Fund.(a)(b) Shareholder Expenses (fees paid
directly from your investment, but see Shareholder InformationCreation and
Redemption of Creation Units for a discussion of Creation and Redemption
Transaction Fees) None Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) Management
Fee 0.50% Other
Operating Expenses(c) 0.84% Total Gross
Annual Fund Operating Expenses(d) 1.34% Fee Waivers
and Expenses Assumption(e) 0.79% Total Net
Annual Fund Operating Expenses(e) 0.55% (a) When buying or selling
Shares through a broker, you will incur customary brokerage commissions and
charges. (b) If a Creation Unit is
purchased or redeemed outside the usual process through the National
Securities Clearing Corporation or for cash, a variable fee of up to four
times the standard creation or redemption transaction fee will be charged. (c) Other operating expenses
are based on estimated amounts for the current fiscal year and calculated as
a percentage of Fund net assets. (d) For the period May 1,
2007 through April 30, 2008, the Adviser has contractually agreed to
waive fees and/or pay Fund expenses to the extent necessary to prevent the
operating expenses of the Fund (excluding interest expense, offering costs
and other trading expenses, taxes and extraordinary expenses) from exceeding
0.55% of average daily net assets per year. -12- (e) The offering costs excluded
from the 0.55% expense cap are: (a) legal fees pertaining to the Funds
Shares offered for sale; (b) SEC and state registration fees; and
(c) initial fees paid to be listed on an exchange. This example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the Fund. The Fund sells
and redeems Shares in Creation Units principally on an in-kind basis for portfolio
securities of the Steel Index. Shares in less than Creation Units are not
redeemable. An investor purchasing a Creation Unit on an in-kind basis would
pay the following expenses on a $10,000 investment (payment with a deposit of
securities included in the Steel Index), assuming a 5% annual return and that
the Funds operating expenses remain the same. Investors should note that the
presentation below of a $10,000 investment is for illustration purposes only as
Shares will be issued by the Fund only in Creation Units. Further, the return
of 5% and estimated expenses are for illustration purposes only, and should not
be considered indicators of expected Fund expenses or performance, which may be
greater or lesser than the estimates. Based on these assumptions, your costs
would be: EXPENSES 1 $ 56 3 $ 346 Creation Transaction Fees and Redemption
Transaction Fees -13- THE AMEX ENVIRONMENTAL SERVICES INDEX The
Environmental Services Index is weighted based on the market capitalization of
each of the component securities, which are applied in conjunction with the
scheduled quarterly adjustments to the Environmental Services Index: (1) the top four
components, ranked by market capitalization, are equally weighted to
collectively represent 40% of the Environmental Services Index by weight; (2) the bottom
five components, ranked by market capitalization, are equally weighted to
collectively represent 10% of the Environmental Services Index by weight; and (3) the
remaining components are equally weighted to collectively to represent 50% of
the Environmental Services Index. The
Environmental Services Index is reviewed quarterly so that the Environmental
Services Index components continue to represent the universe of companies
involved in the environmental services industry. The Amex may at any time and
from time to time change the number of securities comprising the group by
adding or deleting one or more securities, or replacing one or more securities
contained in the group with one or more substitute securities of its choice, if
in the Amexs discretion such addition, deletion or substitution is necessary
or appropriate to maintain the quality and/or character of the Environmental
Services Index. Changes to the Environmental Services Index compositions and/or
the component share weights in the Environmental Services Index typically take
effect after the close of trading on the third Friday of each calendar quarter
month in connection with the quarterly index rebalance. -14- The Amex Gold
Miners Index is a modified market capitalization weighted index comprised of
publicly traded companies involved primarily in the mining for gold. The Gold
Miners Index includes common stocks and ADRs of selected companies that are
involved in mining for gold and silver and that are listed for trading on the
NYSE, Amex or quoted on the NASDAQ. Only companies with market capitalization
greater than $100 million that have a daily average traded volume of at
least 50,000 shares over the past six months are eligible for inclusion in the
Gold Miners Index. The Gold
Miners Index is calculated using a modified market capitalization weighting
methodology. The Gold Miners Index is weighted based on the market
capitalization of each of the component securities, modified to conform to the
following asset diversification requirements, which are applied in conjunction
with the scheduled quarterly adjustments to the Gold Miners Index: (1) the weight
of any single component security may not account for more than 20% of the
total value of the Gold Miners Index; (2) the
component securities are split into two subgroupslarge and small, which are
ranked by market capitalization weight in the Gold Miners Index. Large stocks
are defined as having a Gold Miners Index weight greater than or equal to 5%.
Small securities are defined as having an index weight below 5%; and (3) the
aggregate weight of those component securities which individually represent
more than 4.5% of the total value of the Gold Miners Index may not account
for more than 50% of the total Gold Miners Index value. The Gold
Miners Index is reviewed quarterly so that the Gold Miners Index components
continue to represent the universe of companies involved in the gold mining
industry. The Amex may at any time and from time to time change the number of
securities comprising the group by adding or deleting one or more securities,
or replacing one or more securities contained in the group with one or more
substitute securities of its choice, if in the Amexs discretion such addition,
deletion or substitution is necessary or appropriate to maintain the quality
and/or character of the Gold Miners Index. Changes to the Gold Miners Index
compositions and/or the component share weights in the Gold Miners Index
typically take effect after the close of trading on the third Friday of each
calendar quarter month in connection with the quarterly index rebalance. -15- The Amex Steel
Index is a modified market capitalization weighted index comprised of common
stocks and ADRs of selected companies that are primarily involved in a variety
of activities that are related to steel production, including the operation of
mills manufacturing steel, the fabrication of steel shapes or products, or the
extraction and reduction of iron ore, and that are listed for trading on the
NYSE, Amex or quoted on the NASDAQ. Only companies with market capitalization
greater than $100 million that have a daily average traded volume of at
least $1 million over the past three months are eligible for inclusion in
the Steel Index. The Steel
Index is weighted based on the market capitalization of each of the component
securities, modified to conform to the following asset diversification
requirements, which are applied in conjunction with the scheduled quarterly
adjustments to the Steel Index: (1) the weight
of any single component security may not account for more than 20% of the
total value of the Steel Index; and (2) the
aggregate weight of those component securities which individually represent
more than 4.5% of the total value of the Steel Index may not account for more
than 50% of the total Steel Index value. The Steel
Index is reviewed quarterly so that the Steel Index components continue to
represent the universe of companies involved in the steel mining industry. The
Amex may at any time and from time to time change the number of securities
comprising the group by adding or deleting one or more securities, or replacing
one or more securities contained in the group with one or more substitute
securities of its choice, if in the Amexs discretion such addition, deletion
or substitution is necessary or appropriate to maintain the quality and/or
character of the Steel Index. Changes to the Steel Index compositions and/or
the component share weights in the Steel Index typically take effect after the
close of trading on the third Friday of each calendar quarter month in
connection with the quarterly index rebalance. ADDITIONAL INVESTMENT STRATEGIES The Funds may
lend their portfolio securities to brokers, dealers and other financial
institutions desiring to borrow securities to complete transactions and for
other purposes. In connection with such loans, the Funds receive liquid
collateral equal to at least 102% of the value of the portfolio securities
being loaned. This collateral is marked-to-market on a daily basis. Although a
Fund will receive collateral in connection with all loans of its securities
holdings, the Fund would be exposed to a risk of loss should a borrower default
on its obligation to return the borrowed securities (e.g., the loaned
securities may have appreciated beyond the value of the collateral held by the
Fund). In addition, the Fund will bear the risk of loss of any cash collateral
that it invests. -16- Investment Manager.
Under the terms of an Investment Management Agreement between the Trust and Van
Eck Associates Corporation with respect to the Market VectorsGold Miners ETF
(the Gold Miners Investment Management Agreement) and an Investment
Management Agreement between the Trust and Van Eck Associates Corporation with
respect to each of the Market VectorsEnvironmental Services ETF and Market
VectorsSteel ETF (the Environmental Services and Steel Investment
Management Agreement), Van Eck Associates Corporation serves as the
adviser to the Funds and, subject to the supervision of the Board of Trustees,
is responsible for the day-to-day investment management of the Funds. Under the
Gold Miners Investment Management Agreement (but not the Environmental Services
and Steel Investment Management Agreement), the Adviser is obligated to provide
certain fund accounting services to the Market VectorsGold Miners ETF. The
Gold Miners Investment Management Agreement and the Environmental Services and
Steel Investment Management Agreement are each referred to as an Investment
Management Agreement. As of March 31, 2007, the Adviser managed
approximately $5 billion in assets. The Advisers principal business
address is 99 Park Avenue, 8th Floor, New York, New York 10016. A discussion
regarding the Board of Trustees approval of each Investment Management
Agreement is available in the Trusts annual report for the fiscal year ended
December 31, 2006. For the
services provided to each Fund under the relevant Investment Management
Agreement, Market VectorsEnvironmental Services ETF, Market VectorsGold
Miners ETF and Market VectorsSteel ETF will pay the Adviser monthly fees based
on a percentage of each Funds average daily net assets at the annual rate of
0.50%. From time to time, the Adviser may waive all or a portion of its fee.
Until at least April 30, 2008, the Adviser has contractually agreed to waive
fees and/or pay Fund expenses to the extent necessary to prevent the operating
expenses of each Fund (excluding interest expense, offering costs and other
trading expenses, taxes and extraordinary expenses) from exceeding 0.55% of
average daily net assets per year. The offering costs excluded from the 0.55% expense
cap are: (a) legal fees pertaining to the Funds Shares offered for sale;
(b) SEC and state registration fees; and (c) initial fees paid to be
listed on an exchange. Each Fund is
responsible for all of its expenses, including the investment advisory fees,
costs of transfer agency, custody, legal, audit and other services, interest,
taxes, brokerage commissions and other expenses connected with executions of
portfolio transactions, any distribution fees or expenses, offering fees or
expenses and extraordinary expenses. Distributor. Van Eck
Securities Corporation is the distributor of each Funds Shares. The
Distributor will not distribute Shares in less than Creation Units, and it does
not maintain a secondary market in the Shares. As noted in the section entitled
Shareholder InformationBuying and Selling Exchange-Traded Shares, the Shares
are traded in the secondary market. -17- The portfolio
managers who are currently responsible for the day-to-day management of each
Funds portfolio are Hao-Hung (Peter) Liao and Edward M. Kuczma, Jr. Mr. Liao has
been employed by the Adviser since the summer of 2004. Mr. Liao attended New
York University from 2000 to 2004 where he received a Bachelor of Arts majoring
in mathematics and economics. Mr. Liao has served as investment analyst for the
Worldwide Absolute Return Fund for the past two years where his role included
manager review, performance attribution, changes in manager mandates and risk
management. Mr. Kuczma has
been employed by the Adviser since January of 2004. Prior to Mr. Kuczmas
current role of investment analyst, he worked in Portfolio Administration for
the Adviser. After serving as a fund administrator for international
portfolios, Mr. Kuczma became an analyst for emerging market companies. He also
serves on a committee that reviews managers and changing mandates for a
multi-manager absolute return strategy. Mr. Kuczma attended Georgetown
University from 1999 to 2003. -18- Determination of Net Asset Value Buying and Selling Exchange-Traded Shares The Depository
Trust Corporation (DTC) serves as securities depository for the
Shares. (The Shares are held only in book-entry form; stock certificates are
not issued.) DTC, or its nominee, is the record or registered owner of all
outstanding Shares. Beneficial ownership of Shares are shown on the records of
DTC or its participants (described below). Beneficial owners of Shares are not
entitled to have Shares registered in their names, do not receive and are not
entitled to receive physical delivery of certificates in definitive form and
are not considered the registered holder thereof. Accordingly, to exercise any
rights of a holder of Shares, each beneficial owner must rely on the procedures
of: (i) DTC; (ii) DTC Participants, i.e., securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations,
some of whom (and/or their representatives) own DTC; and (iii) Indirect
Participants, i.e., brokers, dealers, banks and trust companies that clear
through or maintain a custodial relationship with a DTC Participant, either
directly or indirectly, through which such beneficial owner holds its
interests. The Trust understands that under existing industry practice, in the
event the Trust requests any action of holders of Shares, or a beneficial owner
desires to take any action that DTC, as the record owner of all outstanding
Shares, is entitled to take, DTC would authorize the DTC Participants to take
such action and that the DTC Participants would authorize the Indirect
Participants and beneficial owners acting through such DTC Participants to take
such action and would otherwise act upon the instructions of beneficial owners
owning through them. As described above, the Trust recognizes DTC or its nominee
as the owner of all Shares for all purposes. For more information, see the
section entitled Book Entry Only System in the SAI. Market Timing and
Related Matters. The Funds impose no restrictions on
the frequency of purchases and redemptions. In determining not to approve a
written, established policy limiting purchases and redemptions, the Board of
Trustees evaluated the nature of the Funds (i.e., a fund whose shares are expected to
trade intra-day) and the nature of the securities in which the Funds invest and
the fact that all of the Funds investments are traded in U.S. markets. In
particular, the Board of Trustees considered that, unlike traditional mutual
funds, the Funds generally issue and redeem their Shares at NAV per Share for a
basket of securities intended to mirror each Funds portfolio, plus a small
amount of cash, and each Funds Shares may be purchased and sold in the
secondary market at prevailing market prices. Given this
structure, the Board of Trustees determined that it is unlikely that (a) market
timing would be attempted by a Funds shareholders or (b) any attempts to
market time the Funds by shareholders would result in negative impact to the
Funds or their shareholders. However, creations and redemptions of Creation
Units consisting of a significant amount of cash, although expected to be rare,
could create the potential for market timing with its negative impact to the
Funds and their shareholders. -19- Creation and Redemption of Creation Units Fund Deposits.
The consideration for creation of Creation Units of the Funds generally
consists of the in-kind deposit of a designated portfolio of equity securities
(the Deposit Securities) constituting a replication of each Funds
benchmark index and an amount of cash computed as described below (the Cash
Component) and together with the Deposit Securities, the Fund Deposit.
The list of the names and numbers of shares of the Deposit Securities is made
available by the Administrator through the facilities of the National
Securities Clearing Corporation (the NSCC) immediately prior to the
opening of business each day of the Amex. The Cash Component represents the
difference between the NAV of a Creation Unit and the market value of the
Deposit Securities and may include a Dividend Equivalent Payment as described
in the SAI. Procedures for
Creation of Creation Units. To be eligible to place
orders with the Distributor to create Creation Units of the Funds, an entity or
person either must be: (1) a Participating Party, i.e., a broker-dealer or
other participant in the Clearing Process (the Clearing Process)
through the Continuous Net Settlement System of the NSCC, a clearing agency
that is registered with the SEC; or (2) a DTC Participant (see Book Entry
Only System); and, in either case, must have executed an agreement with
the Trust and with the Distributor with respect to creations and redemptions of
Creation Units outside the Clearing Process (Participant Agreement)
(discussed below). All Creation Units of the Funds, however created, are
entered on the records of the Depository in the name of Cede & Co. for the
account of a DTC Participant. All orders to
create Creation Units of the Funds must be placed in multiples of 50,000 Shares
(Creation Unit size). The Trust does not currently permit cash creations of
Creation Units. All orders to create Creation Units, whether through the
Clearing Process of the Continuous Net Settlement System of the NSCC or outside
the Clearing Process, must be received by the Distributor no later than the
closing time of the regular trading session on the NYSE (Closing Time)
(ordinarily 4:00 p.m. New York time) (3:00 p.m. for Custom Orders) in each case
on the date such order is placed in order for creation of Creation Units to be
effected based on the NAV of each Fund as determined on such date. The date on
which a creation order (or order to redeem as discussed below) is placed is herein
referred to as the Transmittal Date. Orders must be transmitted by
telephone or other transmission method acceptable to the Distributor pursuant
to procedures set forth in the Participant Agreement, as described below.
Severe economic or market disruptions or changes, or telephone or other
communication failure, may impede the ability to reach the Distributor, a
Participating Party or a DTC Participant. Orders to
create Creation Units of the Funds shall be placed with a Participating Party
or DTC Participant, as applicable, in the form required by such Participating
Party or DTC Participant. Investors should be aware that their particular
broker may not have executed a Participant Agreement, and that, therefore,
orders to create Creation Units of the Funds may have to be placed by the
investors broker through a Participating Party or a DTC Participant who has
executed a Participant Agreement. At any given time, there may be only a
limited number of broker-dealers that have executed a Participant Agreement.
Those placing orders to create Creation Units of the Funds through the Clearing
Process should afford sufficient time to permit proper submission of the order
to the Distributor prior to the Closing Time on the Transmittal Date. -20- All questions
as to the number of Shares of each security in the Deposit Securities and the
validity, form, eligibility and acceptance for deposit of any securities to be
delivered shall be determined by the Trust, and the Trusts determination shall
be final and binding. Creation of Transaction
Fee. A fixed creation transaction fee of $1,000, which
is paid to the Funds (the Creation Transaction Fee), is applicable to
each transaction regardless of the number of Creation Units purchased in the
transaction. An additional charge of up to four times the Creation Transaction
Fee may be imposed with respect to transactions effected outside the Clearing
Process (through a DTC Participant) or to the extent that cash is used in lieu
of securities to purchase Creation Units. See Creation and Redemption of
Creation Units in the SAI. The price for each Creation Unit will equal the
daily NAV per Share times the number of Shares in a Creation Unit plus the fees
described above and, if applicable, any transfer taxes. Shares of the
Funds may be issued in advance of receipt of all Deposit Securities subject to
various conditions, including a requirement to maintain on deposit with the
Funds cash at least equal to 115% of the market value of the missing Deposit
Securities. See Creation and Redemption of the Creation Units in the SAI. Redemption of
Creation Units. Shares may be redeemed only in
Creation Units at their NAV next determined after receipt of a redemption
request in proper form by the Distributor, only on a day on which the Amex is
open for trading and only through a participating party or a DTC participant
who has executed a Participant Agreement. The Trust will not redeem Shares in amounts less than
Creation Units. Beneficial owners also may sell Shares in the
secondary market, but must accumulate enough Shares to constitute a Creation
Unit in order to have such shares redeemed by the Trust. There can be no assurance,
however, that there will be sufficient liquidity in the public trading market
at any time to permit assembly of a Creation Unit. Investors should expect to
incur brokerage and other costs in connection with assembling a sufficient
number of Shares to constitute a redeemable Creation Unit. The
Administrator, through NSCC, makes available immediately prior to the opening
of business on the Amex (currently 9:30 a.m. Eastern time) on each day that the
Amex is open for business, the securities held by a Fund (Fund Securities)
that will be applicable (subject to possible amendment or correction) to
redemption requests received in proper form (as defined below) on that day. Fund
Securities received on redemption may not be identical to Deposit Securities
which are applicable to purchasers of Creation Units. Unless cash redemptions
are available or specified for the Funds, the redemption proceeds for a
Creation Unit generally consist of Fund Securities, plus cash in an amount
equal to the difference between the NAV of the shares being redeemed, as next
determined after a receipt of a request in proper form, and the value of the
Fund Securities, less the redemption transaction fee described below. The
redemption transaction fee of $1,000 is deducted from such redemption proceeds. Should
the Fund Securities have a value greater than the NAV of Shares being redeemed,
a compensating cash payment to the Trust equal to the differential, plus the
applicable redemption fee and, if applicable, any transfer taxes will be
required to be arranged for by or on behalf of the redeeming shareholder. The
basic redemption transaction fees are the same no matter how many Creation
Units are being redeemed pursuant to any one redemption request. The
Funds may adjust these fees from time to time based upon actual experience. An -21- Redemptions of
Shares for Fund Securities will be subject to compliance with applicable U.S.
federal and state securities laws, and the Funds (whether or not it otherwise
permits cash redemptions) reserves the right to redeem Creation Units for cash
to the extent that the Funds could not lawfully deliver specific Deposit
Securities upon redemptions or could not do so without first registering the
Fund Securities under such laws. Investors
interested in creating and/or redeeming Creation Units should refer to the more
detailed information Creation and Redemption of Creation Units in the SAI. Net Investment Income
and Capital Gains. As a Fund shareholder, you are
entitled to your share of the Funds distributions of net investment income and
net realized capital gains on its investments. The Funds pay out
substantially all of their net earnings to their shareholders as dividends
and/or distributions. The Funds
typically earn income dividends from stocks and interest from debt securities. These
amounts, net of expenses, are typically passed along to Fund shareholders as
dividends from net investment income. The Funds realize capital gains or losses
whenever they sell securities. Net realized capital gains are
distributed to shareholders as distributions from net realized capital gains. Net investment
income and capital gain distributions, if any, are declared and paid annually. Dividends
may be declared and paid more frequently to improve index tracking or to comply
with the distribution requirements of the Internal Revenue Code. In
addition, the Funds may determine to distribute at least annually amounts
representing the full dividend yield net of expenses on the underlying
investment securities, as if the Funds owned the underlying investment
securities for the entire dividend period in which case some portion of each
distribution may result in a return of capital. You will be notified
regarding the portion of the distribution which represents a return of capital. Dividends and
distributions in cash may be reinvested automatically in additional Shares of
your Fund only if the broker through which you purchased Shares makes such
option available. As with any
investment, you should consider how your Fund investment will be taxed. The
tax information in this Prospectus is provided as general information. You
should consult your own tax professional about the tax consequences of an
investment in the Funds. Unless your
investment in a Fund is through a tax-exempt entity or taxed-deferred
retirement account, such as a 401(k) plan, you need to be aware of the possible
tax consequences when: (i) the Fund makes distributions, (ii) you sell Shares
in the secondary market or (iii) you create or redeem Creation Units. -22- Dividends
and/or distributions in excess of a Funds current and accumulated earnings and
profits are treated as a tax-free return of capital to the extent of your basis
in the Shares, and as capital gain thereafter. A dividend/distribution will
reduce a Funds NAV per Share and may be taxable to you as ordinary income or
capital gain even though, from an economic standpoint, the
dividend/distribution may constitute a return of capital. If you are not
a citizen or resident alien of the United States, each Funds ordinary income
dividends (which include distributions of net short-term capital gains) will
generally be subject to a 30% U.S. withholding tax, unless a lower treaty rate
applies or unless such income is effectively connected with a U.S. trade or
business carried on through a permanent establishment in the United States. The
Funds may, under certain circumstances, designate all or a portion of a
dividend as an interest-related dividend that if received by a nonresident
alien or foreign entity generally would be exempt from the 30% U.S. withholding
tax, provided
that certain other requirements are met. The Funds may also, under certain
circumstances, designate all or a portion of a dividend as a short-term
capital gain dividend which if received by a nonresident alien or foreign
entity generally would be exempt from the 30% U.S. withholding tax, unless the
foreign person is a nonresident alien individual present in the United States
for a period or periods aggregating 183 days or more during the foreign
persons taxable year. However, the Funds do not expect to pay significant
amounts of interest-related dividends or short-term capital gains
dividends. Dividends and
interest from non-U.S. investments received by the Funds may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. By law, the
Funds must withhold a percentage of your distributions and proceeds if you have
not provided a taxpayer identification number or social security number. The
backup withholding rate for individuals is currently 28%. This is not an
additional tax and may be refunded, or credited against your tax liability,
provided certain required information is furnished to the Internal Revenue
Service. Taxes on the Sale of
Amex-Listed Shares. Currently, any capital gain or
loss realized upon a sale of Shares is generally treated as long-term capital
gain or loss if the Shares have been held for more than one year and as a
short-term capital gain or loss if held for one year or less. Taxes on Creations
and Redemptions of Creation Units. A person who
exchanges equity securities for Creation Units generally will recognize a gain
or loss. The gain or loss will be equal to the difference between the market
value of the Creation Units at the time of exchange, and the exchangers
aggregate basis in the securities surrendered, taking into consideration the
cash component paid. A person who exchanges Creation Units for equity
securities will generally recognize a gain or loss equal to the difference
between the exchangors basis in the Creation Units and the aggregate market
value of the securities received. The Internal Revenue Service, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing wash sales, or on the
basis that there has been no significant change in economic position. Persons
exchanging securities should consult their own tax adviser with respect to
whether wash sale rules apply and when a loss might be deductible. If you create
or redeem Creation Units, you will be sent a confirmation statement showing how
many Shares you created or sold and at what price. -23- -24- The Adviser
has entered into a licensing agreement with the Amex to use each Funds
respective benchmark index. Each Fund is entitled to use its respective
benchmark index pursuant to a sub-licensing arrangement with the Adviser. The
Shares of the Funds are not sponsored, endorsed, sold or promoted by the Amex.
The Amex as index compilation agent (the Index Compilation Agent)
makes no representation or warranty, express or implied, to the owners of the
Shares of the Funds or any member of the public regarding the advisability of
investing in securities generally or in the shares of the Funds particularly or
the ability of the indices identified herein to track stock market performance.
The Amex is the licensor of certain trademarks, service marks and trade names,
including the Amex Environmental Services Index, Amex Gold Miners Index and
Amex Steel Index. Each index is determined, composed and calculated without
regard to the Shares of the Funds or the issuer thereof. The Index Compilation
Agent is not responsible for, nor has it participated in, the determination of
the timing of, prices at, or quantities of the Shares of the Funds to be issued
or in the determination or calculation of the equation by which the Shares are
redeemable. The Index Compilation Agent has no obligation or liability to
owners of the Shares of the Funds in connection with the administration, marketing
or trading of the Shares of the Funds. Although the
Index Compilation Agent shall obtain information for inclusion in or for use in
the calculation of each index from sources which it considers reliable, the
Index Compilation Agent does not guarantee the accuracy and/or the completeness
of the component data of the index obtained from independent sources. The Index
Compilation Agent makes no warranty, express or implied, as to results to be
obtained by the Trust as sub-licensee, licensees customers and counterparties,
owners of the Shares, or any other person or entity from the use of each index
or any data included therein in connection with the rights licensed as
described herein or for any other use. The Index Compilation Agent makes no
express or implied warranties, and hereby expressly disclaims all warranties of
merchantability or fitness for a particular purpose with respect to each index
or any data included therein. Without limiting any of the foregoing, in no
event shall the Index Compilation Agent have any liability for any direct,
indirect, special, punitive, consequential or any other damages (including lost
profits) even if notified of an indexs possibility of such damages. -25- Market
Vectors ETF Trust For a share
outstanding throughout the period: Environmental Gold
Miners Steel ETF For the
Period For the
Period For the
Period Net Asset Value, Beginning of Period $ 39.93 $ 39.72 $ 40.51 Income From Investment Operations: Net Investment Income 0.02 0.11 0.08 Net Realized and Unrealized Gain on
Investments 4.65 0.16 5.94 Total from Investment Operations 4.67 0.27 6.02 Less: Dividend from Net Investment Income (0.05 ) (0.12 ) (0.09 ) Dividend from Return of Capital (0.06 ) Total Dividend (0.05 ) (0.12 ) (0.15 ) Net Asset Value, End of Period $ 44.55 $ 39.87 $ 46.38 Total Return (a) 11.70 %(c) 0.67 %(c) 14.85 %(c) Ratios/Supplementary Data Net Assets, End of Period (000s) $ 40,095 $ 440,696 $ 41,740 Ratio of Gross Expenses to Average Net
Assets 1.40 %(b) 0.68 %(b) 1.34 %(b) Ratio of Net Expenses to Average Net Assets 0.54 %(b) 0.55 %(b) 0.54 %(b) Ratio of Net Investment Income to Average
Net Assets 0.24 %(b) 0.69 %(b) 0.79 %(b) Portfolio Turnover Rate 3 % 4 % 1 % (a) Total return is calculated
assuming an initial investment of $10,000 made at the net asset value at the
beginning of the period, reinvestment of any dividends at net asset value on
the dividend payment date and a redemption of the last day of the period. The
return does not reflect the deduction of taxes that a shareholder would pay
on Fund dividends or the redemption of Fund shares. (b) Annualized. (c) Not annualized. * Commencement of operations. -26- The following information
shows the frequency distributions of premiums and discounts for each Fund. All
data presented here represents past performance, which is not indicative of
future results. Market
VectorsEnvironmental Services ETF Days in
Period Premium/Discount Range October 16*
through 1.4% > x
1.2% 0 1.2% > x
1.0% 1 1.0% > x
0.8% 0 0.8% > x
0.6% 1 0.6% > x
0.4% 0 0.4% > x
0.2% 0 0.2% > x
0.0% 17 0.0% > x
-0.2% 24 -0.2% > x
-0.4% 8 -0.4% > x
-0.6% 0 -0.6% > x
-0.8% 0 -0.8% > x
-1.0% 1 -1.0% > x
-1.2% 0 -1.2% > x
-1.4% 1 * First day of secondary
market trading. Market
VectorsGold Miners ETF Days in
Period Premium/Discount Range May 22*
through July 1
through October 1
through 1.0% > x
0.8% 0 0 0 0.8% > x
0.6% 0 0 1 0.6% > x
0.4% 1 0 0 0.4% > x
0.2% 1 7 8 0.2% > x
0.0% 15 36 27 0.0% > x
-0.2% 11 19 24 -0.2% > x
-0.4% 1 0 2 -0.4% > x
-0.6% 0 0 0 -0.6% > x
-0.8% 0 0 1 -0.8% > x
-1.0% 0 0 0 * First day of secondary
market trading. -27- Days in
Period Premium/Discount Range October 16*
through 1.2% > x
1.0% 0 1.0% > x
0.8% 0 0.8% > x
0.6% 0 0.6% > x
0.4% 0 0.4% > x
0.2% 2 0.2% > x
0.0% 18 0.0% > x
-0.2% 21 -0.2% > x
-0.4% 7 -0.4% > x
-0.6% 2 -0.6% > x
-0.8% 2 -0.8% > x
-1.0% 0 -1.0% > x
-1.2% 1 * First day of secondary
market trading. -28- Clifford
Chance US LLP serves as counsel to the Trust, including the Funds. Ernst &
Young LLP serves as the Funds independent registered public accounting firm
and will audit the Funds financial statements annually. The SAI, which
has been filed with the SEC, provides more information about the Funds. The SAI
is incorporated herein by reference and is legally part of this Prospectus. It
may be obtained without charge by writing to the Funds at Van Eck Securities
Corporation, each Funds distributor, at 99 Park Avenue, New York, NY 10016 or
by calling the distributor at the following number: Investor
Information: 1.888.MKT.VCTR. Shareholder
inquiries may be directed to a Fund in writing to 99 Park Avenue, 8th Floor,
New York, New York 10016. -29- MARKET
VECTORS ETF TRUST STATEMENT
OF ADDITIONAL INFORMATION This Statement of Additional Information (SAI)
is not a Prospectus. It should be read in conjunction with the Prospectus dated
May 1, 2007 (the Prospectus) for the Market Vectors ETF Trust
(the Trust), relating to Market VectorsEnvironmental Services ETF,
Market VectorsGold Miners ETF and Market VectorsSteel ETF (each a Fund
and, together, the Funds), as it may be revised from time to time. A
copy of the Prospectus for the Trust, relating to the Funds, may be obtained
without charge by writing to the Trust or the Distributor. The Trusts address
is 99 Park Avenue, 8th Floor, New York, New York 10016. Capitalized terms used
herein that are not defined have the same meaning as in the Prospectus, unless
otherwise noted. TABLE OF
CONTENTS PAGE 2 The Amex Environmental Services
Index and its Equity Markets 3 3 3 4 5 5 5 6 7 7 7 7 9 9 9 10 10 10 10 13 13 14 14 14 15 16 17 17 17 18 18 21 23 24 25 26 27 27 28 28 28 29 29 29 30 31 32 32 32 33 - i - TABLE OF
CONTENTS PAGE 33 34 34 35 35 35 36 37 38 38 38 39 40 41 42 43 43 A-1 - ii - The information contained herein regarding the Amex
Environmental Services Index, Amex Gold Miners Index and Amex Steel Index
(each, an Index) was obtained from the American Stock Exchange (the Amex)
while the information contained herein regarding the securities markets and The
Depository Trust Company (DTC) was obtained from publicly available
sources. EACH INDEX IS BASED ON EQUITY SECURITIES OF PUBLIC
COMPANIES SELECTED FROM THE UNIVERSE OF ALL U.S. TRADED STOCKS AND AMERICAN
DEPOSITORY RECEIPTS AND CLASSIFIED AS APPROPRIATE FOR INCLUSION BY THE AMEX. THE SHARES OF THE FUNDS ARE NOT SPONSORED, ENDORSED,
SOLD OR PROMOTED BY AMEX. THE INDEX COMPILATION AGENT MAKES NO REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF THE SHARES OF THE FUNDS OR
ANY MEMBER OF THE PUBLIC REGARDING THE ADVISABILITY OF INVESTING IN SECURITIES
GENERALLY OR IN THE SHARES OF THE FUNDS PARTICULARLY OR THE ABILITY OF EACH
INDEX IDENTIFIED HEREIN TO TRACK STOCK MARKET PERFORMANCE. THE AMEX IS THE
LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS AND TRADE NAMES, INCLUDING THE
AMEX ENVIRONMENTAL SERVICES INDEX, AMEX GOLD MINERS INDEX AND AMEX STEEL INDEX.
EACH INDEX IDENTIFIED HEREIN IS DETERMINED, COMPOSED AND CALCULATED WITHOUT
REGARD TO THE SHARES OF THE FUNDS OR THE ISSUER THEREOF. THE INDEX COMPILATION
AGENT IS NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF
THE TIMING OF, PRICES AT, OR QUANTITIES OF THE SHARES OF THE FUNDS TO BE ISSUED
OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. THE INDEX COMPILATION AGENT HAS NO OBLIGATION OR LIABILITY TO
OWNERS OF THE SHARES OF THE FUNDS IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE SHARES OF THE FUNDS. ALTHOUGH THE INDEX COMPILATION AGENT SHALL OBTAIN
INFORMATION FOR INCLUSION IN OR FOR USE IN THE CALCULATION OF EACH INDEX FROM
SOURCES WHICH IT CONSIDERS RELIABLE, THE INDEX COMPILATION AGENT DOES NOT
GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE COMPONENT DATA OF EACH
INDEX OBTAINED FROM INDEPENDENT SOURCES. THE INDEX COMPILATION AGENT MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE TRUST AS
LICENSEE, LICENSEES CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE SHARES, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF EACH INDEX OR ANY DATA INCLUDED THEREIN
IN CONNECTION WITH THE RIGHTS LICENSED AS DESCRIBED HEREIN OR FOR ANY OTHER
USE. THE INDEX COMPILATION AGENT MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO EACH INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE INDEX COMPILATION
AGENT HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
EACH INDEXS POSSIBILITY OF SUCH DAMAGES. GENERAL DESCRIPTION OF THE TRUST The Trust offers and issues Shares at their net asset
value (NAV) only in aggregations of a specified number of Shares
(each, a Creation Unit), usually in exchange for a basket of specified
securities (together with the deposit of a specified cash payment). The Shares
are listed on the Amex and trade in the secondary market at market prices.
Those prices may differ from the Shares NAV. Similarly, Shares are also
redeemable by the Trust only in Creation Units, and generally in exchange for
specified securities held by each Fund and a specified cash payment. A Creation
Unit consists of 50,000 Shares of each Fund. The Trust reserves the right to offer a cash option
for creations and redemptions of Shares (subject to applicable legal
requirements) although it has no intention of doing so. In each instance of
such cash creations or redemptions, the Trust may impose transaction fees based
on transaction expenses in the particular exchange that will be higher than the
transaction fees associated with in-kind purchases or redemptions. In all
cases, such fees will be limited in accordance with the requirements of the
Securities and Exchange Commission (the SEC) applicable to management
investment companies offering redeemable securities. - 2 - THE AMEX ENVIRONMENTAL SERVICES INDEX AND ITS EQUITY
MARKETS The Amex Environmental Services Index (the Environmental
Services Index) is intended to give investors an efficient, modified equal
dollar weight investment designed to track the movements of stocks of certain
consumer waste and environmental service companies and ADRs traded within the
United States. The Environmental Services Index is a modified equal
dollar weighted index comprised of publicly traded companies that engaged in
business activities that may benefit from the global increase in demand for
consumer waste disposal, removal and storage of industrial by-products, and the
management of associated resources. The Environmental Services Index divisor
was initially determined to yield a benchmark value of 500.00 at the close of
trading on December 31, 2003. The Environmental Services Index is
calculated and maintained by the Amex. Similar to other stock indices
calculated by the Amex, the value of the Environmental Services Index will be
disseminated every 15 seconds over the Consolidated Tape Associations Network
B between the hours of approximately 9:30 am and 4:15 pm, under the
symbol AXENV. Eligibility
Criteria for Index Components The Environmental Services Index is calculated using a
modified equal-dollar weighting methodology. The Environmental Services Index
weighting modifications are based on the market capitalization of each of the
component securities, which are applied in conjunction with the scheduled
quarterly adjustments to the Environmental Services Index: (1) the top four components, ranked by market
capitalization, are equally weighted are to collectively represent 40% of the
Environmental Services Index by weight; (2) the bottom five components, ranked by market
capitalization, are equally weighted are to collectively represent 10% of the
Environmental Services Index by weight; and (3) the remaining components are equally weighted to
collectively to represent 50% of the Environmental Services Index. - 3 - The Environmental Services Index is reviewed quarterly
to ensure that at least 90% of the Environmental Services Index weight is
accounted for by Environmental Services Index components that continue to meet
the initial eligibility requirements. Components will be removed from the
Environmental Services Index during the quarterly review, if the market
capitalization falls below $75 million or the daily average traded value
fall below $750 thousand. In conjunction with the quarterly review, the share
weights used in the calculation of the Environmental Services Index are
determined based upon market prices at the close of trading on the third
business day prior to the last business day of each calendar quarter month and
the weighting methodology described in the Eligibility Criteria for Index
Components section above. The Environmental Services Index components and
their share weights are determined and announced prior to taking effect. The
share weight of each component security in the Environmental Services Index
portfolio remains fixed between quarterly reviews except in the event of
certain types of corporate actions such as stock splits, reverse stock splits,
stock dividends or similar events. The share weights used in the Environmental
Services Index calculation are not adjusted for shares issued or repurchased
between quarterly reviews. The Amex may substitute securities or change the
number of securities included in the Environmental Services Index, based on changing
conditions in the industry or in the event of certain types of corporate
actions, including mergers, acquisitions, spin-offs and reorganizations. In the
event of component or share weight changes to the Environmental Services Index
portfolio, the payment of dividends other than ordinary cash dividends,
spin-offs, rights offerings, re-capitalization or other corporate actions
affecting a component security of the Environmental Services Index; the
Environmental Services Index divisor may be adjusted to ensure that there are
no changes to the Environmental Services Index level as a result of non-market
forces. - 4 - THE AMEX GOLD INDEX AND ITS EQUITY MARKETS The Amex Gold Miners Index (the Gold Miners Index)
is intended to give investors an efficient, modified market capitalization
weighted investment designed to track the movements of certain gold and silver
mining stocks and ADRs traded within the United States. The Gold Miners Index is a modified market
capitalization weighted index comprised of publicly traded companies involved
primarily in the mining for gold and silver. The Gold Miners Index divisor was
initially determined to yield a benchmark value of 500.00 at the close of
trading on December 20, 2002. The Gold Miners Index is calculated and
maintained by the Amex. Similar to other stock indices calculated by the Amex,
the value of the Gold Miners Index is disseminated every 15 seconds over the
Consolidated Tape Associations Network B between the hours of approximately
9:30 a.m. and 4:15 p.m. Eligibility
Criteria for Index Components The Gold Miners Index includes common stocks or ADRs
of selected companies that are involved in mining for gold and silver and that
are listed for trading on the NYSE, Amex or quoted on the NASDAQ. Only
companies with market capitalization greater than $100 million that have
traded on average daily volume of at least 50,000 shares over the past six
months are eligible for inclusion in the Gold Miners Index. The Gold Miners Index is calculated using a modified
market capitalization weighting methodology. The Gold Miners Index is weighted
based on the market capitalization of each of the component securities,
modified to conform to the following asset diversification requirements, which
are applied in conjunction with the scheduled quarterly adjustments to the Gold
Miners Index: (1) the weight of any single component security may not
account for more than 20% of the total value of the Gold Miners Index; (2) the component securities are split into two
subgroupslarge and small, which are ranked by market capitalization weight
in the Gold Miners Index. Large securities are defined as having a Gold
Miners Index weight greater than or equal to 5%. Small securities are defined
as having a Gold Miners Index weight below 5%; and (3) the aggregate weight of those component securities
which individually represent more than 4.5% of the total value of the Gold
Miners Index may not account for more than 50% of the total Gold Miners Index
value. The Gold Miners Index is reviewed quarterly so that
the Gold Miners Index components continue to represent the universe of
companies involved in the gold mining industry. The Amex may at any time and
from time to time change the number of securities comprising the group by
adding or deleting one or more securities, or replace one or more securities
contained in the group with one or more substitute securities of its choice, if
in the Amexs discretion such addition, deletion or substitution is necessary
or appropriate to maintain the quality and/or character of the Gold Miners
Index. Changes to the Gold Miners Index compositions and/or the component share
weights in the Gold Miners Index typically take effect after the close of
trading on the third Friday of each calendar quarter month in connection with
the quarterly Gold Miners Index rebalance. At the time of the Gold Miners Index
quarterly rebalance, the weights for the components securities (taking into
account expected component changes and share adjustments) are modified in
accordance with the following procedures. DIVERSIFICATION RULE 1: If any component security
exceeds 20% of the total value of the Gold Miners Index, then all stocks
greater than 20% of the Gold Miners Index are reduced to represent 20% of the value
of the Gold Miners Index. The aggregate amount by which all component
securities are reduced is redistributed proportionately across the remaining
securities that represent less than 20% of the Gold Miners Index value. After
this - 5 - redistribution, if any other security then exceeds
20%, the security is set to 20% of the Gold Miners Index value and the
redistribution is repeated. DIVERSIFICATION RULE 2: The component securities
are sorted into two groups, the large group are component securities with a
starting Gold Miners Index weight of 5% or greater and the small group are
those component securities that are under 5% (after any adjustments for
Diversification Rule 1). Each group in aggregate will represent 50% of the
Gold Miners Index weight. The weight of each of the large component securities
will be scaled down proportionately with a floor of 5% so that the aggregate
weight of the large component securities will be reduced to represent 50% of
the Gold Miners Index. If any component security falls below a weight equal to
the product of 5% and the proportion by which the securities were scaled down
following this distribution, then the weight of the component security is set
equal to the product of 5% and the proportion by which the component securities
were scaled down, the components with weights greater than 5% will be reduced
proportionately. The weight of each of the small component securities will be
scaled up proportionately from the redistribution of the large component
securities. If any component security exceeds a weight equal to the product of
4.5% and the proportion by which the securities were scaled down following this
distribution, then the weight of the security is set equal to the product of
4.5% and the proportion by which the securities were scaled down. The
redistribution of weight to the remaining component securities is repeated
until the entire amount has been redistributed. Maintenance
of the Gold Miners Index - 6 - THE AMEX STEEL INDEX AND ITS EQUITY MARKETS The Amex Steel Index (the Steel Index) is
intended to give investors an efficient, modified market capitalization weight
investment designed to track the movements of certain steel and mining stocks
and ADRs traded within the United States. The Steel Index is a modified market capitalization
weighted index comprised of publicly traded companies involved primarily in the
production of steel products or mining and processing of iron ore. The Steel
Index divisor was initially determined to yield a benchmark value of 500.00 at
the close of trading on December 31, 2003. The Steel Index is calculated
and maintained by the Amex. Similar to other stock indices calculated by the
Amex, the value of the Steel Index will be disseminated every 15 seconds over
the Consolidated Tape Associations Network B between the hours of
approximately 9:30 am and 4:15 pm, under the symbol STEEL. Eligibility
Criteria for Index Components The Steel Index includes common stocks or ADRs of
selected companies that are involved in a variety of activities that are
related to steel production, including the operation of mills manufacturing
steel, the fabrication of steel shapes or products, or the extraction and
reduction of iron ore. Only those companies listed for trading on the NYSE,
Amex or quoted on the NASDAQ that have a market capitalization greater than
$100 million and a daily average traded volume of at least $1 million
dollars over the past three months are eligible to be considered for inclusion
in the Steel Index. The Steel Index is calculated using a modified market
capitalization weighting methodology. The Steel Index is weighted based on the
market capitalization of each of the component securities, modified to conform
to the following asset diversification requirements, which are applied in
conjunction with the scheduled quarterly adjustments to the Steel Index: (1) the weight of any single component security may not
account for more than 20% of the total value of the Steel Index; and (2) the aggregate weight of those component securities
which individually represent more than 4.5% of the total value of the Steel
Index may not account for more than 50% of the total Steel Index value. The Steel Index is reviewed quarterly so that the
Steel Index components continue to represent the universe of companies involved
in the iron ore mining or steel production. The Amex may at any time and from
time to time change the number of securities comprising the group by adding or
deleting one or more securities, or replace one or more securities contained in
the group with one or more substitute securities of its choice, if in the
Amexs discretion such addition, deletion or substitution is necessary or
appropriate to maintain the quality and/or character of the Steel Index to
which the group relates. Changes to the Steel Index compositions and/or the
component share weights in the Steel Index typically take effect after the
close of trading one business day prior to the last business day of each
calendar quarter month in connection with the quarterly Steel Index rebalance.
At the time of the Steel Index quarterly rebalance, the weights for the
components securities (taking into account expected component changes and share
adjustments) are modified in accordance with the following procedures. Maintenance
of the Steel Index The Steel Index is reviewed quarterly to ensure that
at least 90% of the Steel Index weight is accounted for by Steel Index
components that continue to meet the initial eligibility requirements.
Components will be removed from the Steel Index during the quarterly review, if
the market capitalization falls below $75 million or the three-month daily
average traded volume falls below $750 thousand. In conjunction with the
quarterly review, the share weights used in the calculation of the Steel Index
are determined based upon current shares outstanding modified, if necessary, to
provide greater Steel Index diversification. The Steel Index components and
their share weights are determined and announced prior to taking effect. The
share weight of each component security in the Steel Index portfolio remains - 7 - fixed between quarterly reviews except in the event of
certain types of corporate actions such as stock splits, reverse stock splits,
stock dividends, or similar events. The share weights used in the Steel Index
calculation are not typically adjusted for shares issued or repurchased between
quarterly reviews. However, in the event of a merger between two components,
the share weight of the surviving entity may be adjusted to account for any
security issued in the acquisition. The Amex may substitute securities or
change the number of securities included in the Steel Index, based on changing
conditions in the industry or in the event of certain types of corporate
actions, including mergers, acquisitions, spin-offs and reorganizations. In the
event of component or share weight changes to the Steel Index portfolio, the
payment of dividends other than ordinary cash dividends, spin-offs, rights
offerings, re-capitalization or other corporate actions affecting a component
security of the Steel Index; the Steel Index divisor may be adjusted to ensure
that there are no changes to the Steel Index level as a result of non-market
forces. - 8 - INVESTMENT POLICIES AND RESTRICTIONS The Funds may invest in repurchase agreements with
commercial banks, brokers or dealers to generate income from its excess cash
balances and to invest securities lending cash collateral. A repurchase
agreement is an agreement under which a Fund acquires a money market instrument
(generally a security issued by the U.S. Government or an agency thereof, a
bankers acceptance or a certificate of deposit) from a seller, subject to
resale to the seller at an agreed upon price and date (normally, the next
business day). A repurchase agreement may be considered a loan collateralized
by securities. The resale price reflects an agreed upon interest rate effective
for the period the instrument is held by a Fund and is unrelated to the
interest rate on the underlying instrument. In these repurchase agreement transactions, the
securities acquired by a Fund (including accrued interest earned thereon) must
have a total value at least equal to the value of the repurchase agreement and
are held by the Trusts custodian bank until repurchased. In addition, the
Trusts Board of Trustees (Board or Trustees) monitors each
Funds repurchase agreement transactions generally and has established
guidelines and standards for review of the creditworthiness of any bank, broker
or dealer counterparty to a repurchase agreement with the Fund. No more than an
aggregate of 15% of each Funds net assets will be invested in repurchase
agreements having maturities longer than seven days and securities subject to
legal or contractual restrictions on resale, or for which there are no readily
available market quotations. The use of repurchase agreements involves certain
risks. For example, if the other party to the agreement defaults on its
obligation to repurchase the underlying security at a time when the value of
the security has declined, the Funds may incur a loss upon disposition of the
security. If the other party to the agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a court
may determine that the underlying security is collateral for a loan by a Fund
not within the control of the Fund and, therefore, the Fund may not be able to
substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement. While the Trusts
management acknowledges these risks, it is expected that they can be controlled
through careful monitoring procedures. Futures
Contracts, Options and Swap Agreements The Funds may utilize futures contracts, options and
swap agreements. Futures contracts generally provide for the future sale by one
party and purchase by another party of a specified instrument, index or
commodity at a specified future time and at a specified price. Stock index
futures contracts are settled daily with a payment by one party to the other of
a cash amount based on the difference between the level of the stock index
specified in the contract from one day to the next. Futures contracts are
standardized as to maturity date and underlying instrument and are traded on
futures exchanges. The Funds may use futures contracts, and options on futures
contracts based on other indexes or combinations of indexes that the Adviser
(defined below) believes to be representative of each Funds respective
benchmark index. Although futures contracts (other than cash settled
futures contracts including most stock index futures contracts) by their terms
call for actual delivery or acceptance of the underlying instrument or
commodity, in most cases the contracts are closed out before the maturity date
without the making or taking of delivery. Closing out an open futures position
is done by taking an opposite position (buying a contract which has
previously been sold, or selling a contract previously purchased) in an
identical contract to terminate the position. Brokerage commissions are
incurred when a futures contract position is opened or closed. Futures traders are required to make a good faith
margin deposit in cash or government securities with a broker or custodian to
initiate and maintain open positions in futures contracts. A margin deposit is
intended to assure completion of the contract (delivery or acceptance of the
underlying instrument or commodity or payment of the cash settlement amount) if
it is not terminated prior to the specified delivery date. Brokers may
establish deposit requirements which are higher than the exchange minimums.
Futures contracts are customarily purchased and sold on margin deposits which
may range upward from less than 5% of the value of the contract being traded. - 9 - After a futures contract position is opened, the value
of the contract is marked to market daily. If the futures contract price
changes to the extent that the margin on deposit does not satisfy margin
requirements, payment of additional variation margin will be required. Conversely, a change in the contract value may reduce
the required margin, resulting in a repayment of excess margin to the contract
holder. Variation margin payments are made to and from the futures broker for
as long as the contract remains open. The Funds expect to earn interest income
on their margin deposits. The Funds may use futures contracts and options
thereon, together with positions in cash and money market instruments, to
simulate full investment in each Funds respective Index. Liquid futures
contracts are not currently available for the benchmark index of each Fund.
Under such circumstances, the Adviser may seek to utilize other instruments
that it believes to be correlated to each Funds respective Index components or
a subset of the components. Restrictions
on the Use of Futures and Options Swap agreements are contracts between parties in which
one party agrees to make payments to the other party based on the change in
market value or level of a specified index or asset. In return, the other party
agrees to make payments to the first party based on the return of a different
specified index or asset. Although swap agreements entail the risk that a party
will default on its payment obligations thereunder, each Fund seeks to reduce
this risk by entering into agreements that involve payments no less frequently
than quarterly. The net amount of the excess, if any, of a Funds obligations
over its entitlements with respect to each swap is accrued on a daily basis and
an amount of cash or high liquid securities having an aggregate value at least
equal to the accrued excess is maintained in an account at the Trusts
custodian bank. The Funds may take advantage of opportunities in the
area of options, futures contracts, options on futures contracts, options on
the Funds, warrants, swaps and any other investments which are not presently
contemplated for use or which are not currently available, but which may be
developed, to the extent such investments are considered suitable for a Fund by
the Adviser. The Trust has adopted the following investment
restrictions as fundamental policies with respect to each Fund. These
restrictions cannot be changed without the approval of the holders of a
majority of the Funds outstanding voting securities. For purposes of the
Investment Company Act of 1940, as amended (the 1940 Act), a majority
of the outstanding voting securities of a Fund means the vote, at an annual or
a special meeting of the security holders of the Trust, of the lesser of
(1) 67% or more of the voting securities of the Fund present at such
meeting, if the holders of more than 50% of the outstanding voting securities
of the Fund are present or represented by proxy, or (2) more than 50% of
the outstanding voting securities of the Fund. Under these restrictions: - 10 - 1. Each Fund may not make loans, except that the Fund
may (i) lend portfolio securities, (ii) enter into repurchase
agreements, (iii) purchase all or a portion of an issue of debt
securities, bank loan or participation interests, bank certificates of
deposit, bankers acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and
(iv) participate in an interfund lending program with other registered
investment companies; 2. Each Fund may not borrow money, except as permitted
under the 1940 Act, and as interpreted or modified by regulation from time to
time; 3. Each Fund may not issue senior securities except as
permitted under the 1940 Act, and as interpreted or modified by regulation
from time to time; 4. Each Fund may not purchase a security (other than
obligations of the U.S. Government, its agencies or instrumentalities) if, as
a result, 25% or more of its total assets would be invested in a single
issuer; 5. Each Fund may not purchase or sell real estate,
except that the Fund may (i) invest in securities of issuers that invest
in real estate or interests therein; (ii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein; and (iii) hold and sell real estate acquired by the Fund as a
result of the ownership of securities; 6. Each Fund may not engage in the business of
underwriting securities issued by others, except to the extent that the Fund
may be considered an underwriter within the meaning of the Securities Act of
1933, as amended (the Securities Act), in the disposition of
restricted securities or in connection with its investments in other
investment companies; 7. Each Fund may not purchase or sell commodities,
unless acquired as a result of owning securities or other instruments, but it
may purchase, sell or enter into financial options and futures, forward and
spot currency contracts, swap transactions and other financial contracts or
derivative instruments and may invest in securities or other instruments
backed by commodities In addition, Market VectorsGold Miners ETF may invest
up to 25% of its total assets in gold and silver coins, which are legal
tender in the country of issue and gold and silver bullion, and palladium and
platinum group metals bullion; or 8. Each Fund may not purchase any security if, as a
result of that purchase, 25% or more of its total assets would be invested in
securities of issuers having their principal business activities in the same
industry, except that Market VectorsGold Miners ETF will invest 25% or more
of its total assets in the gold-mining industry and that Market
VectorsEnvironmental Services ETF and Market VectorsSteel ETF may invest
25% or more of the value of its total assets in securities of issuers in any
one industry or group of industries if the Index that the Fund replicates
concentrates in an industry or group of industries. This limit does not apply
to securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities. In addition to the investment restrictions adopted
as fundamental policies as set forth above, each Fund observes the following
restrictions, which may be changed by the Board without a shareholder vote.
Each Fund will not: 1. Invest in securities which are illiquid
securities, including repurchase agreements maturing in more than seven days
and options traded over-the-counter, if the result is that more than 15% of a
Funds net assets would be invested in such securities. 2. Mortgage, pledge or otherwise encumber its assets,
except to secure borrowing effected in accordance with the fundamental
restriction on borrowing set forth below. 3. Make short sales of securities. - 11 - 4. Purchase any security on margin, except for such
short-term loans as are necessary for clearance of securities transactions.
The deposit or payment by a Fund or initial or variation margin in connection
with futures contracts or related options thereon is not considered the
purchase of a security on margin. 5. Participate in a joint or joint-and-several basis in
any trading account in securities, although transactions for the Funds and
any other account under common or affiliated management may be combined or
allocated between the Fund and such account. 6. Purchase securities of open-end or closed-end
investment companies except in compliance with the 1940 Act, although the
Fund may not acquire any securities of registered open-end investment
companies or registered unit investment trusts in reliance on Sections
12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act. If a percentage limitation is adhered to at the time
of investment or contract, a later increase or decrease in percentage resulting
from any change in value or total or net assets will not result in a violation
of such restriction, except that the percentage limitations with respect to the
borrowing of money and illiquid securities will be continuously complied with. As long as the aforementioned investment restrictions are complied
with, each Fund may invest its remaining assets in money market instruments or
funds which reinvest exclusively in money market instruments, in stocks that
are in the relevant market but not the Index, and/or in combinations of certain
stock index futures contracts, options on such futures contracts, stock
options, stock index options, options on the Shares, and stock index swaps and
swaptions, each with a view towards providing each Fund with exposure to the
securities in its respective benchmark index. These investments may be made to
invest uncommitted cash balances or, in limited circumstances, to assist in
meeting shareholder redemptions of Creation Units. Each Fund also will not
invest in money market instruments as part of a temporary defensive strategy to
protect against potential stock market declines. - 12 - SPECIAL
CONSIDERATIONS AND RISKS Investment in
each Fund should be made with an understanding that the value of the Funds
portfolio securities may fluctuate in accordance with changes in the financial
condition of the issuers of the portfolio securities, the value of common
stocks generally and other factors. An investment
in each Fund should also be made with an understanding of the risks inherent in
an investment in equity securities, including the risk that the financial
condition of issuers may become impaired or that the general condition of the
stock market may deteriorate (either of which may cause a decrease in the value
of the portfolio securities and thus in the value of Shares). Common stocks are
susceptible to general stock market fluctuations and to volatile increases and
decreases in value as market confidence in and perceptions of their issuers
change. These investor perceptions are based on various and unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic and banking crises. Holders of
common stocks incur more risk than holders of preferred stocks and debt
obligations because common stockholders, as owners of the issuer, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Further, unlike debt securities which typically
have a stated principal amount payable at maturity (whose value, however, will
be subject to market fluctuations prior thereto), or preferred stocks which
typically have a liquidation preference and which may have stated optional or
mandatory redemption provisions, common stocks have neither a fixed principal
amount nor a maturity. Common stock values are subject to market fluctuations
as long as the common stock remains outstanding. Although most of
the securities in a Funds respective Index are listed on a national securities
exchange, the principal trading market for some may be in the over-the-counter
market. The existence of a liquid trading market for certain securities may
depend on whether dealers will make a market in such securities. There can be
no assurance that a market will be made or maintained or that any such market
will be or remain liquid. The price at which securities may be sold and the
value of a Funds Shares will be adversely affected if trading markets for the
Funds portfolio securities are limited or absent or if bid/ask spreads are
wide. The Funds are
not actively managed by traditional methods, and therefore the adverse
financial condition of any one issuer will not result in the elimination of its
securities from the securities held by the Fund unless the securities of such
issuer are removed from its respective Index. Shares are
subject to the risk of an investment in a portfolio of equity securities in an
economic sector in which each Index is highly concentrated. In addition,
because it is the policy of each Fund to generally invest in the securities - 13 - that comprise its respective Index, the portfolio of securities held by such
Fund (Fund Securities) also will be concentrated in that industry. Futures and Options Transactions Positions in
futures contracts and options may be closed out only on an exchange which
provides a secondary market therefor. However, there can be no assurance that a
liquid secondary market will exist for any particular futures contract or
option at any specific time. Thus, it may not be possible to close a futures or
options position. In the event of adverse price movements, the Funds would
continue to be required to make daily cash payments to maintain its required
margin. In such situations, if a Fund has insufficient cash, it may have to
sell portfolio securities to meet daily margin requirements at a time when it
may be disadvantageous to do so. In addition, the Funds may be required to make
delivery of the instruments underlying futures contracts they have sold. The Funds will
seek to minimize the risk that it will be unable to close out a futures or
options contract by only entering into futures and options for which there
appears to be a liquid secondary market. Utilization of
futures transactions by the Funds involves the risk of imperfect or even
negative correlation to each Funds respective benchmark index if the index
underlying the futures contracts differs from the benchmark index. There is
also the risk of loss by the Funds of margin deposits in the event of
bankruptcy of a broker with whom a Fund has an open position in the futures
contract or option. Certain
financial futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous days settlement price at the end of a
trading session. Once the daily limit has been reached in a particular type of
contract, no trades may be made on that day at a price beyond that limit. The
daily limit governs only price movement during a particular trading day and
therefore does not limit potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures contract prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of future positions and
subjecting some futures traders to substantial losses. The use of
swap agreements involves certain risks. For example, if the counterparty, under
a swap agreement, defaults on its obligation to make payments due from it as a
result of its bankruptcy or otherwise, the Funds may lose such payments
altogether or collect only a portion thereof, which collection could involve
costs or delay. U.S. Federal Tax Treatment of Futures
Contracts The Funds may
be required for federal income tax purposes to mark-to-market and recognize as
income for each taxable year their net unrealized gains and losses on certain
futures contracts as of the end of the year as well as those actually realized
during the year. The Funds may be required to defer the recognition of losses
on futures contracts to the extent of any unrecognized gains on related
positions held by the Funds. - 14 - gain realized
from the closing out of futures contracts will be considered gain from the sale
of securities and therefore will be qualifying income for purposes of the 90%
requirement. The Funds
distribute to shareholders annually any net capital gains which have been
recognized for U.S. federal income tax purposes (including unrealized gains at
the end of a Funds fiscal year) on futures transactions. Such distributions
are combined with distributions of capital gains realized on each Funds other
investments and shareholders are advised on the nature of the distributions. The method by
which Creation Units are created and traded may raise certain issues under
applicable securities laws. Because new Creation Units are issued and sold by
the Trust on an ongoing basis, at any point a distribution, as such term is
used in the Securities Act, may occur. Broker-dealers and other persons are
cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner which could render them statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act. For example, a
broker-dealer firm or its client may be deemed a statutory underwriter if it
takes Creation Units after placing an order with the Distributor, breaks them
down into constituent Shares, and sells such Shares directly to customers, or
if it chooses to couple the creation of a supply of new Shares with an active
selling effort involving solicitation of secondary market demand for Shares. A
determination of whether one is an underwriter for purposes of the Securities
Act must take into account all the facts and circumstances pertaining to the
activities of the broker-dealer or its client in the particular case, and the
examples mentioned above should not be considered a complete description of all
the activities that could lead to a categorization as an underwriter. Broker-dealers
who are not underwriters but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus dealing with
Shares that are part of an unsold allotment within the meaning of
Section 4(3)(C) of the Securities Act, would be unable to take advantage
of the prospectus-delivery exemption provided by Section 4(3) of the
Securities Act. This is because the prospectus delivery exemption in
Section 4(3) of the Securities Act is not available in respect of such
transactions as a result of Section 24(d) of the 1940 Act. As a result,
broker-dealer firms should note that dealers who are not underwriters but are
participating in a distribution (as contrasted with ordinary secondary market
transactions) and thus dealing with the Shares that are part of an
overallotment within the meaning of Section 4(3)(A) of the Securities Act
would be unable to take advantage of the prospectus delivery exemption provided
by Section 4(3) of the Securities Act. Firms that incur a prospectus
delivery obligation with respect to Shares are reminded that, under
Rule 153 of the Securities Act, a prospectus delivery obligation under
Section 5(b)(2) of the Securities Act owed to an exchange member in
connection with a sale on the Amex is satisfied by the fact that the prospectus
is available at the Amex upon request. The prospectus delivery mechanism
provided in Rule 153 is only available with respect to transactions on an
exchange. - 15 - The Shares of
each Fund are traded in the secondary market at prices that may differ to some
degree from their NAV. There can be no assurance that the requirements of the
Amex necessary to maintain the listing of Shares of the Funds will continue to
be met. The Amex may
but is not required to remove the Shares of the Funds from listing if:
(1) following the initial twelve-month period beginning upon the
commencement of trading of the Funds, there are fewer than 50 beneficial
holders of the Shares for 30 or more consecutive trading days, (2) the
value of each Funds respective underlying Index or portfolio of securities on
which a Fund is based is no longer calculated or available or (3) such
other event shall occur or condition exists that, in the opinion of the Amex,
makes further dealings on the Amex inadvisable. In addition, the Amex will
remove the Shares from listing and trading upon termination of the Trust. As in the case
of other stocks traded on the Amex, brokers commissions on transactions will
be based on negotiated commission rates at customary levels. The Indicative
Per Share Portfolio Value has an equity securities value component and a net
other assets value component, each of which are summed and divided by the total
estimated Fund Shares outstanding, including Shares expected to be issued by
each Fund on that day, to arrive at an Indicative Per Share Portfolio Value. The equity
securities value component of the Indicative Per Share Portfolio Value
represents the estimated value of the portfolio securities held by a Fund on a
given day. While the equity securities value component estimates the current
market value of the Funds portfolio securities, it does not necessarily
reflect the precise composition or market value of the current portfolio of
securities held by the Trust for the Fund at a particular point in time.
Therefore, the Indicative Per Share Portfolio Value disseminated during Amex
trading hours should be viewed only as an estimate of a Funds NAV per share,
which is calculated at the close of the regular trading session on the NYSE
(ordinarily 4:00 p.m. Eastern time) on each Business Day. In addition to
the equity securities value component described in the preceding paragraph, the
Indicative Per Share Portfolio Value for each Fund includes a net other assets
value component consisting of estimates of all other assets and liabilities of
the Fund including, among others, current day estimates of dividend income and
expense accruals. - 16 - BOARD OF
TRUSTEES OF THE TRUST Trustees and Officers of the Trust The Board has
responsibility for the overall management and operations of the Trust, including
general supervision of the duties performed by the Adviser and other service
providers. The Board currently consists of five Trustees. Name,
Address1 Position(s)
Term of Principal
Occupation(s) During Number of Other David H.
Chow 49* Trustee Since 2006 Managing
Partner, Lithos Capital Partners LLC (private equity firm), January 2006 to
present; Managing Director, DanCourt Management LLC (strategy consulting
firm), March 1999 to present; Managing Director, AIG Horizon Partners, LLC
(venture capital firm), May 2000 to July 2002. 5 None. Phillip D.
DeFeo 60* Chairman and
Trustee Since 2006 Managing
Director, Lithos Capital Trustee Partners LLC., 2005 to present; Chairman and
CEO, Pacific Exchange, Inc., 1999 to 2005. 5 Director of
Visa USA, Computershare Limited, Reflow, Forward Asset Management, LLC and
Berea College. R. Alastair
Short 53* Trustee Since 2006 Managing
Director, The GlenRock Group, LLC (private equity investment firm), May 1,
2004 to present; President, Apex Capital Corporation (personal investment
vehicle), Jan. 1988 to present; President, Matrix Global Investments, Inc.
and predecessor company (private investment company), September 1995 to
January 1999. 14 None. Richard D.
Stamberger 47* Trustee Since 2006 Director,
President and CEO, SmartBrief, Inc. 14 None. 1 The address for each
Trustee and officer is 99 Park Avenue, 8th Floor, New York, New York 10016. 2 Each Trustee serves until
resignation, death, retirement or removal. Officers are elected yearly by the
Trustees. 3 The Fund Complex consists
of the Van Eck Funds, Van Eck Funds, Inc., Van Eck Worldwide Insurance Trust
and Market Vectors ETF Trust. - 17 - * Member of
the Audit Committee. Name,
Address and Position(s)
Term of Principal
Occupation(s) During Number of Other Jan F. van
Eck4 43 Trustee Since 2006 Director and
Executive Vice President, Van Eck Associates Corporation; Director, Executive
Vice President and Chief Compliance Officer, Van Eck Securities Corporation;
Director and President, Van Eck Absolute Return Advisers Corp. 14 Director,
Greylock Capital Associates LLC. 1 The address for each
Trustee and officer is 99 Park Avenue, 8th Floor, New York, New York 10016. 2 Each Trustee serves until
resignation, death, retirement or removal. Officers are elected yearly by the
Trustees. 3 The Fund Complex consists
of the Van Eck Funds, Van Eck Funds, Inc., Van Eck Worldwide Insurance Trust
and Market Vectors ETF Trust. 4 Interested person of the
Funds within the meaning of the 1940 Act. Mr. van Eck is an officer of the
Adviser. * Member of the Audit
Committee. The Officers
of the Trust, their addresses, positions with the Funds, ages and principal
occupations during the past five years are set forth below. Name,
Address1 Position(s)
Term of Principal
Occupation(s) During Past Five Years Charles T.
Cameron 46 Vice
President Since 2006 Director of
Trading, Van Eck Associates Corporation; Co-Portfolio Manager, Worldwide Bond
Fund Series; Officer of three other investment companies advised by the
Adviser. - 18 - Name,
Address1 Position(s)
Term of Principal
Occupation(s) During Past Five Years Keith
Carlson 50 Chief
Executive Officer and President Since 2006 President,
Van Eck Associates Corporation and President, Van Eck Securities Corporation
since February 2004; Private Investor, June 2003 January 2004; Independent
Consultant, Waddell & Reed, Inc., April 2003 - May 2003; Senior Vice
President, Waddell & Reed, Inc., December 2002 - March 2003;
President/Chief Executive Officer/Director/Executive Vice President/Senior
Vice President, Mackenzie Investment Management Inc., April 1985-December
2002; President/Chief Executive Officer/Director, Ivy Mackenzie Distributors,
Inc., June 1993 - December 2002; Chairman/Director/President, Ivy Mackenzie
Services Corporation, June 1993 - December 2002; Chairman/Director/Senior
Vice President, Ivy Management Inc., January 1992 - December 2002; Officer of
three other investment companies advised by the Adviser. Susan C.
Lashley 51 Vice
President Since 2006 Vice
President, Van Eck Associates Corporation; Vice President, Mutual Fund
Operations, Van Eck Securities Corporation; Officer of three other investment
companies advised by the Adviser. Thomas K.
Lynch 50 Chief
Compliance Officer Since 2006 Chief
Compliance Officer, Van Eck Associates Corporation and Van Eck Absolute
Return Advisers Corp., since December 2006; Vice President, Van Eck
Associates Corporation and Van Eck Absolute Return Advisers Corp., since
April 2005; Second Vice President, Investment Reporting, TIAA-CREF, January
1996 - April 2005; Senior Manager, Audits, Grant Thornton, December 1993
January 1996; Senior Manager, Audits, McGladrey & Pullen, December 1986 -
December 1993; Officer of three other investment companies advised by the
Adviser. Joseph J.
McBrien 58 Senior Vice
President and Secretary Since 2006 Senior Vice
President, General Counsel and Secretary, Van Eck Associates Corporation, Van
Eck Securities Corporation and Van Eck Absolute Return Advisers Corp., since
December 2005; Managing Director, Chatsworth Securities LLC, March 2001 -
November 2005; Private Investor/Consultant, September 2000 February 2001;
Executive Vice President and General Counsel, Mainstay Management LLC,
September 1999 August 2000; Officer of three other investment companies
advised by the Adviser. - 19 - Name,
Address1 Position(s)
Term of Principal
Occupation(s) During Past Five Years Alfred J.
Ratcliffe 59 Vice
President and Treasurer Since 2006 Vice
President, Van Eck Associates Corporation since November 2006; Vice President
and Director of Mutual Fund Accounting and Administration, PFPC, March 2000
to November 2006; First Vice President and Treasurer, Zweig Mutual Funds,
March 1995 to December 1999; Vice President and Director of Mutual Fund
Accounting and Administration, The Bank of New York, December 1987 to March
1995; Officer of three other investment companies advised by the Adviser. Jonathan R.
Simon 32 Vice
President and Assistant Secretary Since 2006 Vice
President, Associate General Counsel, Van Eck Associates Corporation, Van Eck
Securities Corporation and Van Eck Absolute Return Advisers Corp. since
August 2006, Associate, Schulte Roth & Zabel LLP, July 2004 - July 2006;
Associate, Carter Ledyard & Milburn LLP, September 2001 - July 2004;
Officer of three other investment companies advised by the Adviser. Bruce J.
Smith 51 Senior Vice
President and Chief Financial Officer Since 2006 Senior Vice
President and Chief Financial Officer, Van Eck Associates Corporation;
Senior Vice President, Chief Financial Officer, Treasurer and Controller,
Van Eck Securities Corporation and Van Eck Absolute Return Advisers
Corp.; Officer of three other investment companies advised by the Adviser. Derek S. van
Eck(3) 42 Executive
Vice President Since 2006 President of
Worldwide Hard Assets Fund series and the Worldwide Real Estate Fund series
of Van Eck Worldwide Insurance Trust and the Global Hard Assets Fund series
of Van Eck Funds; Director of Van Eck Associates Corporation; Director and
Executive Vice President, Van Eck Securities Corporation; Director and
Executive Vice President, Van Eck Absolute Return Advisers Corp.; Director,
Greylock Capital Associates LLC. Jan F. van
Eck (3) 43 Executive
Vice President Since 2006 Director and
Executive Vice President, Van Eck Associates Corporation; Director, Executive
Vice President and Chief Compliance Officer, Van Eck Securities
Corporation; Director and President, Van Eck Absolute Return Advisers
Corporation; Director, Greylock Capital Associates LLC. 1 The address for each
Officer is 99 Park Avenue, 8th Floor, New York, New York 10016. 2 Officers are elected yearly
by the Trustees. 3 Messrs. Jan F. van Eck and
Derek S. van Eck are brothers. The Board of
the Trust met four times during the fiscal year ended December 31, 2006. - 20 - The officers
and Trustees of the Trust, in the aggregate, own less than 1% of the Shares of
each Fund. Name Of Trustee Dollar Range of Equity Aggregate Dollar Range Of Equity David H.
Chow None None Phillip D.
DeFeo None None R. Alastair
Short None $10,001 $50,000 Richard D.
Stamberger None Over $100,000 Jan F. van
Eck None Over $100,000 As to each
Independent Trustee and his immediate family members, no person owned beneficially
or of record securities in an investment adviser or principal underwriter of
the Funds, or a person (other than a registered investment company) directly or
indirectly controlling, controlled by or under common control with the Adviser
or principal underwriter of the Funds. - 21 - Name of Trustee Aggregate Deferred Pension or Estimated Total David H.
Chow $ 5,000 $ 5,440 N/A N/A $ 10,440 Phillip D.
DeFeo $ 6,000 $ 6,528 N/A N/A $ 12,528 R. Alastair
Short $ 12,000 $ 0 N/A N/A $ 62,500 Richard D.
Stamberger $ 8,750 $ 1,360 N/A N/A $ 75,199 (2) Jan F. van
Eck $ 0 $ 0 N/A N/A $ 0 (1) The Fund Complex consists of Van Eck Funds, Van Eck Funds, Inc., Van
Eck Worldwide Insurance Trust and Market Vectors ETF Trust. (2) This includes
deferred compensation from the entire Fund Complex. - 22 - - 23 - - 24 - The Funds, the Adviser and the Distributor have each
adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940 Act,
designed to monitor personal securities transactions by their personnel (the Personnel).
The Code of Ethics requires that all trading in securities that are being
purchased or sold, or are being considered for purchase or sale, by the Funds
must be approved in advance by the Head of Trading, the Director of Research
and the Chief Compliance Officer of the Adviser. Approval will be granted if
the security has not been purchased or sold or recommended for purchase or sale
for a Fund within seven days, or otherwise if it is determined that the
personal trading activity will not have a negative or appreciable impact on the
price or market of the security, or is of such a nature that it does not
present the dangers or potential for abuses that are likely to result in harm
or detriment to the Funds. At the end of each calendar quarter, all Personnel
must file a report of all transactions entered into during the quarter. These
reports are reviewed by a senior officer of the Adviser. - 25 - PROXY VOTING POLICIES AND PROCEDURES The Trust is required to disclose annually each Funds
complete proxy voting record on Form N-PX covering the period July 1
through June 30 and file it with the SEC no later than August 31.
Form N-PX for the Funds is available through the Funds website, at
www.vaneck.com, or by writing to 99 Park Avenue, 8th Floor, New York, New York
10016. The Funds Form N-PX is also available on the SECs website at
www.sec.gov. - 26 - The following information supplements and should be
read in conjunction with the section in the Prospectus entitled Management. The Adviser serves as investment manager to the Funds
pursuant to an investment management agreement between Market VectorsGold
Miners ETF and the Adviser (the Gold Miners Investment Management Agreement)
and pursuant to an investment management agreement between Market
VectorsEnvironmental Services ETF, Market VectorsSteel ETF and the Adviser
(the Environmental Services and Steel Investment Management Agreement
and, together with the Gold Miners Investment Management Agreement, the Investment
Management Agreements). Under the Investment Management Agreements, the
Adviser, subject to the supervision of the Board and in conformity with the
stated investment policies of each Fund, manages the investment of the Funds
assets. The Adviser is responsible for placing purchase and sale orders and
providing continuous supervision of the investment portfolio of the Funds. Pursuant to the Investment Management Agreement, the
Trust has agreed to indemnify the Adviser for certain liabilities, including
certain liabilities arising under the federal securities laws, unless such loss
or liability results from willful misfeasance, bad faith or gross negligence in
the performance of its duties or the reckless disregard of its obligations and
duties. Term.
The Investment Management Agreements continue in effect until May 12,
2008. Thereafter, each Investment Management Agreement is subject to annual
approval by (1) the Board or (2) a vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of each Fund, provided
that in either event such continuance also is approved by a majority of the
Board who are not interested persons (as defined in the 1940 Act) of the Trust
by a vote cast in person at a meeting called for the purpose of voting on such
approval. Each Investment Management Agreement is terminable without penalty,
on 60 days notice, by the Board or by a vote of the holders of a majority
(as defined in the 1940 Act) of a Funds outstanding voting securities. Each
Investment Management Agreement is also terminable upon 60 days notice by
the Adviser and will terminate automatically in the event of its assignment (as
defined in the 1940 Act). Legal
Investigations and Proceedings. In connection with their
investigations of practices identified as market timing and late trading of
mutual fund shares, the Office of the New York State Attorney General (NYAG)
and the Securities and Exchange Commission (SEC) have requested and
received information from the Adviser. The Adviser will cooperate with such
investigations. If it is determined that the Adviser or its affiliates engaged
in improper or wrongful activity that caused a loss to a Fund, the Board of
Trustees of the Fund will determine the amount of restitution that should be
made to a Fund or its shareholders. At the present time, the amount of such
restitution, if any, has not been determined. In July 2004, the Adviser received a Wells Notice
from the SEC in connection with the SECs investigation of market-timing
activities. This Wells Notice informed the Adviser that the SEC staff is considering
recommending - 27 - Van Eck Associates Corporation also serves as
administrator for the Trust pursuant to each Investment Management Agreement.
Under each Investment Management Agreement, the Adviser is obligated on a
continuous basis to provide such administrative services as the Board of the
Trust reasonably deems necessary for the proper administration of the Trust and
the Funds. The Adviser will generally assist in all aspects of the Trusts and
the Funds operations; supply and maintain office facilities, statistical and
research data, data processing services, clerical, accounting (only with
respect to Market VectorsGold Miners ETF), bookkeeping and record keeping services
(including without limitation the maintenance of such books and records as are
required under the 1940 Act and the rules thereunder, except as maintained by
other agents), internal auditing, executive and administrative services, and
stationery and office supplies; prepare reports to shareholders or investors;
prepare and file tax returns; supply financial information and supporting data
for reports to and filings with the SEC and various state Blue Sky authorities;
supply supporting documentation for meetings of the Board; provide monitoring
reports and assistance regarding compliance with the Declaration of Trust,
by-laws, investment objectives and policies and with federal and state
securities laws; arrange for appropriate insurance coverage; calculate NAVs,
net income and realized capital gains or losses; and negotiate arrangements
with, and supervise and coordinate the activities of, agents and others to
supply services. The Distributor may also enter into sales and investor
services agreements with broker-dealers or other persons that are Participating
Parties and DTC Participants (as defined below) to provide distribution
assistance, including broker-dealer and shareholder support and educational and
promotional services but must pay such broker-dealers or other persons, out of
its own assets. - 28 - The Distribution Agreement provides that it may be
terminated at any time, without the payment of any penalty: (i) by vote of
a majority of the Independent Trustees or (ii) by vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities of the Funds, on
at least 60 days written notice to the Distributor. The Distribution
Agreement is also terminable upon 60 days notice by the Distributor and
will terminate automatically in the event of its assignment (as defined in the
1940 Act). The portfolio managers who are currently responsible
for the day-to-day management of the Funds portfolios are Hao-Hung (Peter)
Liao and Edward M. Kuczma, Jr. Mr. Liao has been employed by the Adviser since
the summer of 2004. Mr. Liao has served as investment analyst for the Worldwide
Absolute Return Fund for the past two years where his role included manager
review, performance attribution, changes in manager mandates and risk
management. Mr. Liao attended New York University from 2000 to 2004 where he
received a Bachelor of Arts majoring in mathematics and economics. Mr. Kuczma
has been employed by the Adviser since January of 2004. Prior to Mr. Kuczmas
current role of investment analyst, he worked in Portfolio Administration for
the Adviser. After serving as a fund administrator for international
portfolios, Mr. Kuczma became an analyst for emerging market companies. He also
serves on a committee that reviews managers and changing mandates for a
multi-manager absolute return strategy. Mr. Kuczma attended Georgetown
University from 1999 to 2003. Other than the three portfolios of the Trust,
Messrs. Liao and Kuczma do not manage any other registered investment
companies, pooled investment vehicles or other accounts. Portfolio
Manager Compensation Portfolio
Manager Share Ownership - 29 - When selecting brokers and dealers to handle the
purchase and sale of portfolio securities, the Adviser looks for prompt
execution of the order at a favorable price. Generally, the Adviser works with
recognized dealers in these securities, except when a better price and
execution of the order can be obtained elsewhere. The Funds will not deal with
affiliates in principal transactions unless permitted by exemptive order or
applicable rule or regulation. The Adviser owes a duty to its clients to
provide best execution on trades effected. Since the investment objective of
each Fund is investment performance that corresponds to that of an Index, the
Adviser does not intend to select brokers and dealers for the purpose of
receiving research services in addition to a favorable price and prompt
execution either from that broker or an unaffiliated third party. The Adviser assumes general supervision over placing
orders on behalf of the Trust for the purchase or sale of portfolio securities.
If purchases or sales of portfolio securities of the Trust and one or more
other investment companies or clients supervised by the Adviser are considered
at or about the same time, transactions in such securities are allocated among
the several investment companies and clients in a manner deemed equitable to
all by the Adviser. In some cases, this procedure could have a detrimental
effect on the price or volume of the security so far as the Trust is concerned.
However, in other cases, it is possible that the ability to participate in
volume transactions and to negotiate lower brokerage commissions will be
beneficial to the Trust. The primary consideration is best execution. - 30 - DTC acts as securities depositary for the Shares.
Shares of the Funds are represented by securities registered in the name of DTC
or its nominee and deposited with, or on behalf of, DTC. Certificates will not
be issued for Shares. DTC, a limited-purpose trust company, was created to
hold securities of its participants (the DTC Participants) and to
facilitate the clearance and settlement of securities transactions among the
DTC Participants in such securities through electronic book-entry changes in
accounts of the DTC Participants, thereby eliminating the need for physical
movement of securities certificates. DTC Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations, some of whom (and/or their representatives) own DTC. More
specifically, DTC is owned by a number of its DTC Participants and by the NYSE,
the Amex and the NASD. Access to the DTC system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or
indirectly (the Indirect Participants). Beneficial ownership of Shares is limited to DTC
Participants, Indirect Participants and persons holding interests through DTC
Participants and Indirect Participants. Ownership of beneficial interests in
Shares (owners of such beneficial interests are referred to herein as Beneficial
Owners) is shown on, and the transfer of ownership is effected only
through, records maintained by DTC (with respect to DTC Participants) and on
the records of DTC Participants (with respect to Indirect Participants and
Beneficial Owners that are not DTC Participants). Beneficial Owners will
receive from or through the DTC Participant a written confirmation relating to
their purchase of Shares. Conveyance of all notices, statements and other
communications to Beneficial Owners is effected as follows. Pursuant to the
Depositary Agreement between the Trust and DTC, DTC is required to make
available to the Trust upon request and for a fee to be charged to the Trust a
listing of the Shares holdings of each DTC Participant. The Trust shall inquire
of each such DTC Participant as to the number of Beneficial Owners holding
Shares, directly or indirectly, through such DTC Participant. The Trust shall
provide each such DTC Participant with copies of such notice, statement or
other communication, in such form, number and at such place as such DTC
Participant may reasonably request, in order that such notice, statement or
communication may be transmitted by such DTC Participant, directly or
indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each
such DTC Participant a fair and reasonable amount as reimbursement for the
expenses attendant to such transmittal, all subject to applicable statutory and
regulatory requirements. Share distributions shall be made to DTC or its
nominee, Cede & Co., as the registered holder of all Shares. DTC or its
nominee, upon receipt of any such distributions, shall credit immediately DTC
Participants accounts with payments in amounts proportionate to their
respective beneficial interests in Shares as shown on the records of DTC or its
nominee. Payments by DTC Participants to Indirect Participants and Beneficial
Owners of Shares held through such DTC Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in a
street name, and will be the responsibility of such DTC Participants. The Trust has no responsibility or liability for any
aspects of the records relating to or notices to Beneficial Owners, or payments
made on account of beneficial ownership interests in such Shares, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for any other aspect of the relationship between DTC and
the DTC Participants or the relationship between such DTC Participants and the
Indirect Participants and Beneficial Owners owning through such DTC
Participants. - 31 - CREATION AND REDEMPTION OF CREATION UNITS A Business Day with respect to the Funds is any day
on which the NYSE and the Amex are open for business. As of the date of the
Prospectus, the NYSE and the Amex observe the following holidays: New Years
Day, Martin Luther King, Jr. Day, Presidents Day (Washingtons Birthday), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. The Administrator, through the National Securities
Clearing Corporation (discussed below), makes available on each Business Day,
immediately prior to the opening of business on the Amex (currently
9:30 a.m., New York time), the list of the names and the required number
of shares of each Deposit Security to be included in the current Fund Deposit
(based on information at the end of the previous Business Day) as well as the
Cash Component for each Fund. Such Fund Deposit is applicable, subject to any adjustments
as described below, in order to effect creations of Creation Units of each Fund
until such time as the next-announced Fund Deposit composition is made
available. The identity and number of shares of the Deposit
Securities required for a Fund Deposit for each Fund changes as rebalancing
adjustments and corporate action events are reflected from time to time by the
Adviser with a view to the investment objective of the Fund. The composition of
the Deposit Securities may also change in response to adjustments to the
weighting or composition of the securities constituting each Funds respective
benchmark index. In addition, the Trust reserves the right to permit or require
the substitution of an amount of cash (i.e., a cash in lieu amount) to
be added to the Cash Component to replace any Deposit Security which may not be
available in sufficient quantity for delivery or which may not be eligible for
transfer through the Clearing Process (described below), or which may not be
eligible for trading by a Participating Party (defined below). Brokerage
commissions incurred in connection with acquisition of Deposit Securities not
eligible for transfer through the systems of the Depository and hence not
eligible for transfer through the Clearing Process will be at the expense of
each Fund and will affect the value of all Shares of the Fund; but the Adviser
may adjust the transaction fee to the extent the composition of the Deposit
Securities changes or cash in lieu is added to the cash component to protect ongoing
shareholders. The adjustments described above will reflect changes, known to
the Adviser on the date of announcement to be in effect by the time of delivery
of the Fund Deposit, in the composition of the Index or resulting from stock
splits and other corporate actions. In addition to the list of names and numbers of
securities constituting the current Deposit Securities of a Fund Deposit, the
Administrator, through the National Securities Clearing Corporation (discussed
below), also makes available (i) on each Business Day, the Dividend
Equivalent Payment, if any, effective through and including the - 32 - previous Business Day, per outstanding Shares of the
Fund, and (ii) on a continuous basis throughout the day, the Indicative
Per Share Portfolio Value. Procedures
for Creation of Creation Units All orders to create Creation Units of the Funds must
be placed in multiples of 50,000 Shares (i.e. Creation Unit). All orders to
create Creation Units, whether through the Clearing Process or outside the
Clearing Process, must be received by the Distributor no later than the closing
time of the regular trading session on the NYSE (Closing Time)
(ordinarily 4:00 p.m. New York time) (3:00 p.m. for Custom Orders) in
each case on the date such order is placed in order for creation of Creation
Units to be effected based on the NAV of the Funds as determined on such date.
The date on which a creation order (or order to redeem as discussed below) is
placed is herein referred to as the Transmittal Date. Orders must be
transmitted by telephone or other transmission method acceptable to the
Distributor pursuant to procedures set forth in the Participant Agreement, as
described below (see Placement of Creation Orders Using Clearing Process and
Placement of Creation Orders Outside Clearing Process). Severe economic or
market disruptions or changes, or telephone or other communication failure, may
impede the ability to reach the Distributor, a Participating Party or a DTC
Participant. Creation Units may be created in advance of the
receipt by the Trust of all or a portion of the Fund Deposit. In such cases,
the Participating Party will remain liable for the full deposit of the missing
portion(s) of the Fund Deposit and will be required to post collateral with the
Trust consisting of cash at least equal to a percentage of the marked-to-market
value of such missing portion(s) that is specified in the Participant
Agreement. The Participant Agreement for any Participating Party intending to
follow such procedures will contain terms and conditions permitting the Trust
to use such collateral to buy the missing portion(s) of the Fund Deposit at any
time and will subject such Participating Party to liability for any shortfall
between the cost to the Trust of purchasing such securities and the value of
such collateral. The Trust will have no liability for any such shortfall. The
Trust will return any unused portion of the collateral to the Participating
Party once the entire Fund Deposit has been properly received by the
Distributor and deposited into the Trust. Orders to create Creation Units of the Funds shall be
placed with a Participating Party or DTC Participant, as applicable, in the
form required by such Participating Party or DTC Participant. Investors should
be aware that their particular broker may not have executed a Participant
Agreement, and that, therefore, orders to create Creation Units of the Funds
may have to be placed by the investors broker through a Participating Party or
a DTC Participant who has executed a Participant Agreement. At any given time
there may be only a limited number of broker-dealers that have executed a
Participant Agreement. Those placing orders to create Creation Units of the
Funds through the Clearing Process should afford sufficient time to permit
proper submission of the order to the Distributor prior to the Closing Time on
the Transmittal Date. Orders for creation that are effected outside the
Clearing Process are likely to require transmittal by the DTC Participant earlier
on the Transmittal Date than orders effected using the Clearing Process. Those
persons placing orders outside the Clearing Process should ascertain the
deadlines applicable to DTC and the Federal Reserve Bank wire system by
contacting the operations department of the broker or depository institution
effectuating such transfer of Deposit Securities and Cash Component. Placement
of Creation Orders Using Clearing Process Fund Deposits created through the Clearing Process
must be delivered through a Participating Party that has executed a Participant
Agreement with the Distributor and with the Trust (as the same may be from time
to time - 33 - amended in accordance with its terms). The Participant
Agreement authorizes the Distributor to transmit to NSCC on behalf of the
Participating Party such trade instructions as are necessary to effect the
Participating Partys creation order. Pursuant to such trade instructions from
the Distributor to NSCC, the Participating Party agrees to transfer the
requisite Deposit Securities (or contracts to purchase such Deposit Securities
that are expected to be delivered in a regular way manner by the third (3rd)
NSCC Business Day) and the Cash Component to the Trust, together with such
additional information as may be required by the Distributor. An order to
create Creation Units of the Funds through the Clearing Process is deemed
received by the Distributor on the Transmittal Date if (i) such order is
received by the Distributor not later than the Closing Time on such Transmittal
Date and (ii) all other procedures set forth in the Participant Agreement
are properly followed. Placement
of Creation Orders Outside Clearing Process All questions as to the number of shares of each
security in the Deposit Securities and the validity, form, eligibility and
acceptance for deposit of any securities to be delivered shall be determined by
the Trust, and the Trusts determination shall be final and binding. - 34 - The Administrator, through NSCC, makes available
immediately prior to the opening of business on the Amex (currently
9:30 a.m., Eastern time) on each day that the Amex is open for business,
the Fund Securities that will be applicable (subject to possible amendment or
correction) to redemption requests received in proper form (as defined below)
on that day. Unless cash redemptions are available or specified for the Funds,
the redemption proceeds for a Creation Unit generally consist of Fund
Securities as announced by the Administrator on the Business Day of the request
for redemption, plus cash in an amount equal to the difference between the NAV
of the Shares being redeemed, as next determined after a receipt of a request
in proper form, and the value of the Fund Securities, less the redemption
transaction fee described below. The redemption transaction fee of $1,000 is
deducted from such redemption proceeds. Should the Fund Securities have a value
greater than the NAV of the Shares being redeemed, a compensating cash payment
to the Trust equal to the differential plus the applicable redemption fee will
be required to be arranged for by or on behalf of the redeeming shareholder. The basic redemption transaction fees are the same no
matter how many Creation Units are being redeemed pursuant to any one
redemption request. The Funds may adjust these fees from time to time based
upon actual experience. An additional charge up to four times the redemption
transaction fee may be charged with respect to redemptions outside of the
Clearing Process. An additional variable charge for cash redemptions or partial
cash redemptions (when cash redemptions are available) may also be imposed.
Investors who use the services of a broker or other such intermediary may be
charged a fee for such services. Placement
of Redemption Orders Using Clearing Process - 35 - Placement
of Redemption Orders Outside Clearing Process After the Administrator has deemed an order for
redemption outside the Clearing Process received, the Administrator will
initiate procedures to transfer the requisite Fund Securities (or contracts to
purchase such Fund Securities) which are expected to be delivered within three
Business Days and the cash redemption payment to the redeeming Beneficial Owner
by the third Business Day following the Transmittal Date on which such
redemption order is deemed received by the Administrator. An additional
variable redemption transaction fee of up to four times the basic transaction
fee is applicable to redemptions outside the Clearing Process. Redemptions of Shares for Fund Securities will be
subject to compliance with applicable U.S. federal and state securities laws
and the Funds (whether or not it otherwise permits cash redemptions) reserve
the right to redeem Creation Units for cash to the extent that the Funds could
not lawfully deliver specific Fund Securities upon redemptions or could not do
so without first registering the Deposit Securities under such laws. The right of redemption may be suspended or the date
of payment postponed (1) for any period during which the NYSE is closed
(other than customary weekend and holiday closings); (2) for any period
during which trading on the NYSE is suspended or restricted; (3) for any
period during which an emergency exists as a result of which disposal of the
Shares of a Fund or determination of its NAV is not reasonably practicable; or
(4) in such other circumstance as is permitted by the SEC. - 36 - DETERMINATION OF NET ASSET VALUE The following information supplements and should be
read in conjunction with the section in the Prospectus entitled Shareholder
InformationDetermination of Net Asset Value. In computing each Funds NAV, the Funds securities
holdings are valued based on market quotations. When market quotations are not
readily available for a portfolio security a Fund must use the securitys fair
value as determined in good faith in accordance with the Funds Fair Value
Pricing Procedures which are approved by the Board of Trustees. - 37 - Dividends and other distributions on Shares are
distributed, as described below, on a pro rata basis to Beneficial Owners of
such Shares. Dividend payments are made through DTC Participants and Indirect
Participants to Beneficial Owners then of record with proceeds received from
the Trust. The Trust makes additional distributions to the minimum extent
necessary (i) to distribute the entire annual taxable income of the Trust,
plus any net capital gains and (ii) to avoid imposition of the excise tax
imposed by Section 4982 of the Internal Revenue Code. Management of the
Trust reserves the right to declare special dividends if, in its reasonable
discretion, such action is necessary or advisable to preserve the status of
each Fund as a regulated investment company (RIC) or to avoid
imposition of income or excise taxes on undistributed income. No reinvestment service is provided by the Trust.
Broker-dealers may make available the DTC book-entry Dividend Reinvestment
Service for use by Beneficial Owners of the Funds through DTC Participants for
reinvestment of their dividend distributions. If this service is used, dividend
distributions of both income and realized gains will be automatically
reinvested in additional whole Shares of the Funds. Beneficial Owners should
contact their broker to determine the availability and costs of the service and
the details of participation therein. Brokers may require Beneficial Owners to
adhere to specific procedures and timetables. - 38 - - 39 - Market
VectorsEnvironmental Services ETF Name And Address Percentage Owned Goldman Sachs 82.08 % 85 Broad Street New York, NY 10004 Timber Hill LLC 9.75 % 2 Pickwick Plaza, Ste. 210 Greenwich, CT 06830 Market
VectorsGold Miners ETF Name And Address Percentage Owned National Financial Services 13.46 % 200 Liberty Street New York, NY 10281 Charles Schwab 8.86 % 211 Main Street San Francisco, CA 94105 Brown Brothers Harriman 7.83 % 525 Washington Avenue Jersey City, NJ 07302 Pershing 7.81 % Pershing Plaza Jersey City, NJ 07399 Citigroup 7.79 % 333 W. 34th Street New York, NY 10001 Market
VectorsSteel ETF Name And Address Percentage Owned Goldman Sachs 86.92 % 85 Broad Street New York, NY 10004 Timber Hill LLC 7.80 % 2 Pickwick Plaza, Ste. 210 Greenwich, CT 06830 - 40 - Each Fund intends to qualify for and to elect
treatment as a RIC under Subchapter M of the Internal Revenue Code. To
qualify for treatment as an RIC, a company must annually distribute at least
90% of its net investment company taxable income (which includes dividends,
interest and net short-term capital gains) and meet several other requirements
relating to the nature of its income and the diversification of its assets, among
others. Each Fund will be subject to a 4% excise tax on
certain undistributed income if it does not distribute to its shareholders in
each calendar year at least 98% of its ordinary income for the calendar year
plus 98% of its capital gain net income for the twelve months ended
October 31 of such year. Each Fund intends to declare and distribute
dividends and distributions in the amounts and at the times necessary to avoid
the application of this 4% excise tax. As a result of U.S. federal income tax requirements,
the Trust on behalf of the Funds, has the right to reject an order for a
creation of Shares if the creator (or group of creators) would, upon obtaining
the Shares so ordered, own 80% or more of the outstanding Shares of a Fund and
if, pursuant to Section 351 of the Internal Revenue Code, the Funds would
have a basis in the Deposit Securities different from the market value of such
securities on the date of deposit. The Trust also has the right to require
information necessary to determine beneficial share ownership for purposes of
the 80% determination. See Creation and Redemption of Creation
UnitsProcedures for Creation of Creation Units. Dividends and interest received by a Fund from a
non-U.S. investment may give rise to withholding and other taxes imposed by
foreign countries. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes. Each Fund will report to shareholders annually the
amounts of dividends received from ordinary income, the amount of distributions
received from capital gains and the portion of dividends which may qualify for
the dividends received deduction. Certain ordinary dividends paid to
non-corporate shareholders may qualify for taxation at a lower tax rate
applicable to long-term capital gains. Special tax rules may change the normal treatment of
gains and losses recognized by the Fund if and when the Fund invests in forward
foreign currency exchange contracts, options, futures transactions, and
non-U.S. corporations classified as passive foreign investment companies (each a PFIC).
Those special tax rules can, among other things, affect the treatment of
capital gain or loss as long-term or short-term and may result in ordinary
income or loss rather than capital gain or loss and may accelerate when the Fund has to take
these items into account. The application of these
special rules would therefore also affect the timing and character of distributions made
by the Fund. For example, if a Fund invests in a PFIC, the Fund may make a mark-to-market
election to avoid being subject to materially adverse consequences with respect to the investment
that would otherwise apply. By making this election, the Fund will recognize as ordinary income
any increase in the value of such shares as of the close of the taxable year over their adjusted basis.
Also, any Gain realized with respect to a PFIC that the Fund has elected to mark-to-market will be
ordinary income. By making the mark-to-market election, a Fund may be required to recognize income
(which generally must be distributed to shareholders) in excess of the distributions that it receives
from the investment. Accordingly, the Fund may need to borrow money or dispose of investments in
order to make the required distributions.
Investment Company Act File No. 811-10325
Securities and Exchange Commission
Washington, D.C. 20549
(Exact Name of Registrant as Specified in its Charter)
New York, New York 10016
(Address of Principal Executive Offices)
(212)
687-5200
Registrants Telephone Number
Senior Vice President and General Counsel
Van Eck Associates Corporation
99 Park Avenue, 8th Floor
New York, New York 10016
(Name and Address of Agent for Service)
Stuart M.
Strauss, Esq.
Clifford Chance Us LLP
31 West 52nd Street
New York, New York 10019
under the Investment Company Act
of 1940:
The SEC has not approved or disapproved these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is
a criminal offense.
Market Vectors ETF Trust (the Trust) is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the 1940 Act), currently consisting of five investment
portfolios: Market VectorsEnvironmental Services ETF, Market VectorsGlobal
Alternative Energy ETF, Market VectorsGold Miners ETF, Market VectorsRussia
ETF and Market VectorsSteel ETF. This Prospectus relates to the three
portfolios listed on the cover of this Prospectus (each a Fund and,
together, the Funds). Van Eck Associates Corporation (the Adviser)
is the investment adviser to the Funds.
Principal Investment
Policy. The Fund normally invests at least 80% of its
total assets in common stocks and American Depositary Receipts (ADRs)
of companies involved in the environmental services industry. This 80%
investment policy is non-fundamental and requires 60 days prior written
notice to shareholders before it can be changed.
The Fund
normally invests at least 95% of its total assets in stocks and ADRs that
comprise the Environmental Services Index. A lesser percentage may be so
invested to the extent that the Adviser needs additional flexibility to comply
with the requirements of the Internal Revenue Code of 1986, as amended (the Internal
Revenue Code), and other regulatory requirements.
Fundamental and
Non-Fundamental Policies. The Funds investment
objective and each of the other investment policies are non-fundamental
policies that may be changed by the Board of Trustees without shareholder
approval, except as noted in the SAI under the heading Investment Policies and
RestrictionsInvestment Restrictions. However, shareholders would be notified
prior to any material change in these policies.
Index Tracking Risk.
The Funds return may not match the return of the Environmental Services Index
for a number of reasons. For example, the Fund incurs a number of operating
expenses not applicable to the Environmental Services Index and incurs costs in
buying and selling securities, especially when rebalancing the Funds
securities holdings to reflect changes in the composition of the Environmental
Services Index. The Fund may not be fully invested at times either as a result
of cash flows into the Fund or reserves of cash held by the Fund to meet
redemptions and pay expenses. The need to comply with the diversification and
other requirements of the Internal Revenue Code may also impact the Funds
ability to track the Environmental Services Index.
Replication
Management Risk. Unlike many investment companies, the
Fund is not actively managed. Therefore, unless a specific security is
removed from the Environmental Services Index, the Fund generally would not
sell a security because the securitys issuer was in financial trouble. An
investment in the Fund involves risks similar to those of investing in any fund
of equity securities traded on exchanges, such as market fluctuations caused by
such factors as economic and political developments, changes in interest rates
and perceived trends in stock prices. You should anticipate that the value of
the Funds Shares will decline, more or less, in correspondence with any
decline in value of the Environmental Services Index.
Short History of an
Active Market. The Fund is a recently organized series
of an investment company with little operating history. While its Shares are
listed on the Amex, there can be no assurance that active trading markets for
the Shares will be maintained. Van Eck Securities Corporation, the distributor
of the Shares (the Distributor), does not maintain a secondary market
in the Shares.
Foreign Investments.
The Fund may invest in ADRs. These investments may involve additional risks and
considerations. These risks include, for example, those related to adverse
political and economic developments unique to a country or region, currency
fluctuations or controls and the possibility of expropriation, nationalization
or confiscatory taxation. As of December 31, 2006, of the 26 securities
that comprise the Environmental Services Index, two were ADRs, which had a
combined market capitalization of approximately $40 billion, representing
approximately 21% of the entire market value of the Environmental Services
Index.
The Fund
commenced operations on October 10, 2006 and therefore does not have a
performance history for a full calendar year. Visit www.vaneck.com/etf for
current performance figures.
(fees paid
directly from your investment, but see Shareholder InformationCreation and
Redemption of Creation Units for a discussion of Creation and Redemption
Transaction Fees)
The Fund
issues and redeems Shares at NAV only in blocks of 50,000 Shares or multiples
thereof. As
a practical matter, only authorized participants may purchase or redeem these
Creation Units. A standard creation transaction fee of $1,000 is charged
to each purchaser of Creation Units. The fee is the same regardless of the
number of Creation Units purchased by an authorized participant on the same day. An
authorized participant who holds Creation Units and wishes to redeem at NAV
would also pay a standard redemption transaction fee of $1,000 on the date of
such redemption(s), regardless of the number of Creation Units redeemed that
day. Authorized
participants who hold Creation Units will also pay the annual fund operating
expenses described in the table above. Assuming an investment in a Creation
Unit of $2,000,000 and a 5% return each year, and assuming that the Funds
operating expenses remain the same, the total costs would be $11,200 if the
Creation Unit is redeemed after one year and $71,800 if the Creation Unit is
redeemed after three years. Investors should note that this presentation is for
illustration purposes only and actual costs may be higher. See Shareholder
InformationCreation and Redemption of Creation Units.
Principal Investment
Policy. The Fund normally invests at least 80% of its
total assets in common stocks and ADRs of companies involved in the gold mining
industry.
This 80% investment policy is non-fundamental and requires
60 days prior written notice to shareholders before it can be changed.
The Fund
normally invests at least 95% of its total assets in securities that comprise
the Gold Miners Index. A lesser percentage may be so invested
to the extent that the Adviser needs additional flexibility to comply with the
requirements of the Internal Revenue Code and other regulatory requirements.
Fundamental and
Non-Fundamental Policies. The Funds investment
objective and each of the other investment policies is a non-fundamental policy
that may be changed by the Board of Trustees without shareholder approval,
except as
noted in the SAI under the heading Investment Policies and
RestrictionsInvestment Restrictions. . However, shareholders would be
notified prior to any material change in these policies.
Index Tracking Risk.
The Funds return may not match the return of the Gold Miners Index for a
number of reasons. For example, the Fund incurs a number of operating expenses
not applicable to the Gold Miners Index and incurs costs in buying and selling
securities, especially when rebalancing the Funds securities holdings to
reflect changes in the composition of the Gold Miners Index. The Fund may not
be fully invested at times either as a result of cash flows into the Fund or
reserves of cash held by the Fund to meet redemptions and pay expenses. The
need to comply with the diversification and other requirements of the Internal
Revenue Code may also impact the Funds ability to track the Gold Miners Index.
Replication
Management Risk. Unlike many investment companies, the
Fund is not actively managed. Therefore, unless a specific security is removed
from the Gold Miners Index, the Fund generally would not sell a security
because the securitys issuer was in financial trouble. An investment in the
Fund involves risks similar to those of investing in any fund of equity
securities traded on exchanges, such as market fluctuations caused by such
factors as economic and political developments, changes in interest rates and
perceived trends in stock prices. You should anticipate that the value of the
Funds Shares will decline, more or less, in correspondence with any decline in
value of the Gold Miners Index.
Short History of an
Active Market. The Fund is a recently organized series
of an investment company with little operating history. While its Shares are
listed on the Amex, there can be no assurance that active trading markets for
the Shares will be maintained. The Distributor does not maintain a secondary
market in the Shares.
Fluctuation of Net
Asset Value. The NAV of the Shares will fluctuate with
changes in the market value of the Funds securities holdings. The market
prices of Shares will fluctuate in accordance with changes in NAV and supply
and demand on the Amex. The Adviser cannot predict whether Shares will trade
below, at or above their NAV. Price differences may be due, in large part, to
the fact that supply and demand forces at work in the secondary trading market
for Shares will be closely related to, but not identical to, the same forces
influencing the prices of the securities of the Gold Miners Index trading
individually or in the aggregate at any point in time. However, given that
Shares can be created and redeemed daily in Creation Units (unlike shares of
closed-end funds, which frequently trade at appreciable discounts from, and
sometimes at premiums to, their NAV), the Adviser believes that large discounts
or premiums to the NAV of the Shares should not be sustained.
Shareholder Expenses
The Fund
issues and redeems Shares at NAV only in blocks of 50,000 Shares or multiples
thereof. As
a practical matter, only authorized participants may purchase or redeem these
Creation Units. A standard creation transaction fee of $1,000 is charged
to each purchaser of Creation Units. The fee is the same regardless of the
number of Creation Units purchased by an authorized participant on the same day. An
authorized participant who holds Creation Units and wishes to redeem at NAV
would also pay a standard redemption transaction fee of $1,000 on the date of
such redemption(s), regardless of the number of Creation Units redeemed that
day. Authorized
participants who hold Creation Units will also pay the annual fund operating
expenses described in the table above. Assuming an investment in a Creation
Unit of $2,000,000 and a 5% return each year, and assuming that the Funds
operating expenses remain the same, the total costs would be $11,200 if the
Creation Unit is redeemed after one year and $40,800 if the Creation Unit is
redeemed after three years. Investors should note that this presentation is for
illustration purposes only and actual costs may be higher. See Shareholder
InformationCreation and Redemption of Creation Units.
Principal Investment
Policy. The Fund normally invests at least 80% of its
total assets in common stocks and ADRs of companies involved in the steel industry. This
80% investment policy is non-fundamental and requires 60 days prior
written notice to shareholders before it can be changed.
The Fund
normally invests at least 95% of its total assets in securities that comprise
the Steel Index. A lesser percentage may be so invested to the extent that
the Adviser needs additional flexibility to comply with the requirements of the
Internal Revenue Code and other regulatory requirements.
Fundamental and
Non-Fundamental Policies. The Funds investment
objective and each of the other investment policies are non-fundamental
policies that may be changed by the Board of Trustees without shareholder
approval,
except as
noted in the SAI under the heading Investment Policies and
RestrictionsInvestment Restrictions. However, shareholders would be notified
prior to any material change in these policies.
Index Tracking Risk.
The Funds return may not match the return of the Steel Index for a number of
reasons. For example, the Fund incurs a number of operating expenses not
applicable to the Steel Index and incurs costs in buying and selling
securities, especially when rebalancing the Funds securities holdings to
reflect changes in the composition of the Steel Index. The Fund may not be
fully invested at times either as a result of cash flows into the Fund or
reserves of cash held by the Fund to meet redemptions and pay expenses. The
need to comply with the diversification and other requirements of the Internal
Revenue Code may also impact the Funds ability to track the Steel Index.
Replication
Management Risk. Unlike many investment companies, the
Fund is not actively managed. Therefore, unless a specific security is
removed from the Steel Index, the Fund generally would not sell a security
because the securitys issuer was in financial trouble. An investment in the
Fund involves risks similar to those of investing in any fund of equity
securities traded on exchanges, such as market fluctuations caused by such
factors as economic and political developments, changes in interest rates and
perceived trends in stock prices. You should anticipate that the value of the
Funds Shares will decline, more or less, in correspondence with any decline in
value of the Steel Index.
Short History of an
Active Market. The Fund is a recently organized series
of an investment company with little operating history. While its Shares are
listed on the Amex, there can be no assurance that active trading markets for
the Shares will be maintained. The Distributor does not maintain a secondary
market in the Shares.
Fluctuation of Net
Asset Value. The NAV of the Shares will fluctuate with
changes in the market value of the Funds securities holdings. The market
prices of Shares will fluctuate in accordance with changes in NAV and supply
and demand on the Amex. The Adviser cannot predict whether Shares will trade
below, at or above their NAV. Price differences may be due, in large part, to
the fact that supply and demand forces at work in the secondary trading market
for Shares will be closely related to, but not identical to, the same forces
influencing the prices of the securities of the Steel Index trading
individually or in the aggregate at any point in time. However, given that
Shares can be created and redeemed daily in Creation Units (unlike shares of
closed-end funds, which frequently trade at appreciable discounts from, and
sometimes at premiums to, their NAV), the Adviser believes that large discounts
or premiums to the NAV of the Shares should not be sustained.
The Fund
commenced operations on October 10, 2006 and therefore does not have a
performance history for a full calendar year. Visit www.vaneck.com/etf for
current performance figures.
YEAR
The Fund
issues and redeems Shares at NAV only in blocks of 50,000 Shares or multiples
thereof. As a practical matter, only authorized participants may purchase or
redeem these Creation Units. A standard creation transaction fee of $1,000 is
charged to each purchaser of Creation Units. The fee is the same regardless of
the number of Creation Units purchased by an authorized participant on the same
day. The value of a Creation Unit as of the first creation is expected to be
approximately $2,000,000. An authorized participant who holds Creation Units
and wishes to redeem at NAV would also pay a standard redemption transaction
fee of $1,000 on the date of such redemption(s), regardless of the number of
Creation Units redeemed that day. Authorized participants who hold Creation
Units will also pay the annual fund operating expenses described in the table
above. Assuming an investment in a Creation Unit of $2,000,000 and a 5% return
each year, and assuming that the Funds operating expenses remain the same, the
total costs would be $11,200 if the Creation Unit is redeemed after one year
and $69,200 if the Creation Unit is redeemed after three years. Investors
should note that this presentation is for illustration purposes only and actual
costs may be higher. See Shareholder InformationCreation and Redemption of
Creation Units.
The Amex
Environmental Services Index is a modified equal dollar weighted index
comprised of publicly traded companies that engage in business activities that
may benefit from the global increase in demand for consumer waste disposal,
removal and storage of industrial by-products, and the management of associated
resources. The Environmental Services Index includes common stocks and ADRs of
selected companies that are involved in management, removal and storage of
consumer waste and industrial by-products and related environmental services,
including waste collection, transfer and disposal services, recycling services,
soil remediation, wastewater management and environmental consulting services,
and that are listed for trading on the New York Stock Exchange (NYSE),
Amex or quoted on the NASDAQ Global Market (NASDAQ). Only companies
with a market capitalization greater than $100 million and a three-month
trading price greater than $3.00 that have a daily average traded volume of at
least $1 million over the past three months are eligible for inclusion in
the Environmental Services Index.
A description
of each Funds policies and procedures with respect to the disclosure of the
Funds portfolio securities is available in the SAI.
Each Fund
normally invests at least 95% of its total assets in component securities that
comprise its respective benchmark index. Each Fund may invest its remaining
assets in money market instruments, including repurchase agreements or other
funds which invest exclusively in money market instruments (subject to
applicable limitations under the 1940 Act, or exemptions therefrom),
convertible securities, structured notes (notes on which the amount of
principal repayment and interest payments are based on the movement of one or
more specified factors, such as the movement of a particular stock or stock
index) and in swaps, options, futures contracts and currency forwards. Swaps,
options, futures contracts and currency forwards (and convertible securities
and structured notes) may be used by each Fund in seeking performance that
corresponds to its respective benchmark index, and in managing cash flows. The
Funds will not invest in money market instruments as part of a temporary
defensive strategy to protect against potential stock market declines.
Board of Trustees.
The Board of Trustees of the Trust has responsibility for the general oversight
of the management of the Funds, including general supervision of the Adviser
and other service providers, but is not involved in the day-to-day management
of the Trust. A list of the Trustees and the Trust officers, and their present positions
and principal occupations is provided in the SAI.
Administrator,
Custodian and Transfer Agent. Van Eck Associates
Corporation is the administrator for the Funds (the Administrator),
and The Bank of New York is the custodian of each Funds assets and provides
transfer agency services to the Funds. The Administrator is responsible for
certain clerical, fund accounting, recordkeeping and/or bookkeeping services
which are provided pursuant to the relevant Investment Management Agreement.
Neither Mr.
Kuczma nor Mr. Liao manages any other accounts of any type for the Adviser. See
the SAI for additional information about the portfolio managers compensation,
other accounts managed by the portfolio managers and their respective ownership
of Shares.
The NAV per
Share for each Fund is computed by dividing the value of the net assets of the
Fund (i.e.,
the value of its total assets less total liabilities) by the total number of
Shares outstanding. Expenses and fees, including the management, administration
and distribution fees, are accrued daily and taken into account for purposes of
determining NAV. The NAV of each Fund is determined each business day after the
close of trading (ordinarily 4:00 p.m., Eastern time) of the NYSE.
The Shares of
the Funds are listed on the Amex. If you buy or sell Shares in the secondary
market, you will incur customary brokerage commissions and charges and may pay
some or all of the spread between the bid and the offered price in the
secondary market on each leg of a round trip (purchase and sale) transaction.
The Shares of the Funds trade in the secondary market at prices that may differ
to varying degrees from the closing NAVs of the Shares. Given, however, that
Shares can be created and redeemed daily in Creation Units, the Adviser
believes that large discounts and premiums to NAV should not be sustained for
very long.
The Trust
issues and redeems Shares at their NAV only in a large specified number of
Shares each called a Creation Unit. A Creation Unit consists of 50,000
Shares. The Trust generally issues and redeems Creation Units only in-kind in
exchange for a designated portfolio of equity securities included in each
respective benchmark index and a relatively small cash payment. Except when
aggregated in Creation Units, the Shares are not redeemable securities of the
Funds. See Shareholder InformationBuying and Selling Exchange-Traded Shares,
Procedures for Creation of Creation Units and
Redemption of Creation
Units.
Orders for
creation that are effected outside the Clearing Process are likely to require
transmittal by the DTC Participant earlier on the Transmittal Date than orders
effected using the Clearing Process. Those persons placing orders outside the
Clearing Process should ascertain the deadlines applicable to DTC and the
Federal Reserve Bank wire system by contacting the operations department of the
broker or depository institution effectuating such transfer of Deposit
Securities and Cash Component. Investors should refer to Creation and
Redemption of Creation Units in the SAI for details regarding the logistics of
placement of orders using and outside the Clearing Process.
Acceptance of
Creation Order. The Trust reserves the absolute right
to reject a creation order transmitted to it by the Distributor if, for any
reason: (a) the order is not in proper form; (b) the creator or creators, upon
obtaining the Shares ordered, would own 80% or more of the currently
outstanding Shares of a Fund; (c) the Deposit Securities delivered are not as
specified by the Administrator, as described above; (d) acceptance of the
Deposit Securities would have certain adverse tax consequences to a Fund; (e)
the acceptance of the Fund Deposit would, in the opinion of counsel, be
unlawful; (f) the acceptance of the Fund Deposit would otherwise, in the
discretion of the Trust or the Adviser, have an adverse effect on the Trust or
the rights of beneficial owners; or (g) in the event that circumstances outside
the control of the Trust, the Distributor and the Adviser make it for all
practical purposes impossible to process creation orders. Examples of such
circumstances include acts of God or public service or utility problems such as
fires, floods, extreme weather conditions and power outages resulting in
telephone, telecopy and computer failures; market conditions or activities
causing trading halts; systems failures involving computer or other information
systems affecting the Trust, the Adviser, the Distributor, DTC, NSCC or any
other participant in the creation process, and similar extraordinary events.
The Trust shall notify a prospective creator of its rejection of the order of
such person. The Trust and the Distributor are under no duty, however, to give
notification of any defects or irregularities in the delivery of Fund Deposits
nor shall either of them incur any liability for the failure to give any such
notification. The Trust shall notify a prospective creator of its rejection of
the order of such person.
additional
charge up to four times the redemption transaction fee may be charged with
respect to redemptions outside the Clearing Process. An additional variable
charge for cash redemptions or partial cash redemptions (when cash redemptions
are available) may also be imposed. Investors who use the services of a
broker or other such intermediary may be charged a fee for such services. Investors
should refer to Creation and Redemption of Creation UnitsRedemption of
Creation Units in the SAI for details regarding the logistics of redemption
orders using and outside the Clearing Process.
The right of
redemption may be suspended or the date of payment postponed (1) for any period
during which the NYSE is closed (other than customary weekend and holiday
closings); (2) for any period during which trading on the NYSE is suspended or
restricted; (3) for any period during which an emergency exists as a result of
which disposal of the Shares of the Funds or determination of its NAV is not
reasonably practicable; or (4) in such other circumstance as is permitted by
the SEC.
Taxes on
Distributions. The Funds expect to distribute net
investment income at least annually, and any net realized long-term or
short-term capital gains annually. Each Fund may also pay a special dividend at
the end of the calendar year to comply with U.S. federal tax requirements. In
general, your dividends and/or distributions are
subject to
U.S. federal income tax when they are paid, whether you take them in cash or
reinvest them in the Fund. Dividends paid out of a Funds net investment income
and net short-term capital gains, if any, are taxable as ordinary income. The
Funds may receive dividend income, the payment of which the Funds may designate
as a qualified dividend. In the event that the Fund receives such dividend
income and designates the payment of such dividend as a qualified dividend, the
qualified dividend may be taxed at the maximum capital gains rate.
Distributions of net long-term capital gains, if any, in excess of net short
term capital losses are taxable as long-term capital gains, regardless of how
long you have held the Shares.
Under current
U.S. federal income tax laws, any capital gain or loss realized upon a
redemption of Creation Units is generally treated as long-term capital gain or
loss if the Shares have been held for more than one year and as a short-term
capital gain or loss if the Shares have been held for one year or less.
The foregoing
discussion summarizes some of the consequences under current U.S. federal
income tax law of an investment in the Funds. It is not a substitute for
personal tax advice. Consult your own tax advisor about the potential tax
consequences of an investment in the Funds under all applicable tax laws.
The financial
highlights table is intended to help you understand the Funds financial
performance since each Funds inception. Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by Ernst & Young LLP, whose report, along with the Funds
financial statements, are included in the Funds Annual Report, which is
available upon request.
Services ETF
ETF
October 10,
2006* through
December 31,
2006
May 16, 2006*
through
December 31,
2006
October 10,
2006* through
December 31,
2006
The table set
forth below presents information about the differences between the closing
price of Shares of each Fund and each Funds NAV. NAV is the price per share at
which each Fund issues and redeems its Shares. It is calculated in the same way
that mutual fund shares are valued. The market price of each Fund is
determined using the closing price of a Share of each Fund. Each Funds market
price may be at, above or below its NAV.
The NAV of
each Fund will fluctuate with changes in the market value of its portfolio
holdings. The market price of each Fund will fluctuate in accordance with
changes in its NAV, as well as market supply and demand. Premiums or discounts
are the differences (generally expressed as a percentage) between the NAV and
market price of each Fund on a given day, generally at the time NAV is
calculated. A premium is the amount that each Fund is trading above the
reported NAV, expressed as a percentage of the NAV. A discount is the amount
that each Fund is trading below the reported NAV, expressed as a percentage of
the NAV.
December 31, 2006
June 30, 2006
September 30, 2006
December 31, 2006
December 31, 2006
The Trust was
organized as a Delaware statutory trust on March 15, 2001. Its Declaration of
Trust currently permits the Trust to issue an unlimited number of shares of
beneficial interest. If shareholders are required to vote on any matters, each
Share outstanding would be entitled to one vote. Annual meetings of
shareholders will not be held except as required by the 1940 Act and other
applicable law. See the SAI for more information concerning the Trusts form of
organization. Section 12(d)(1) of the 1940 Act restricts investments by
investment companies in the securities of other investment companies, including
shares of the Funds. Registered investment companies are permitted to invest in
the Funds beyond the limits set forth in Section 12(d)(1) subject to certain
terms and conditions set forth in an SEC exemptive order issued to the Trust,
including that such investment companies enter into an agreement with a Fund.
This
Prospectus does not contain all the information included in the Registration
Statement filed with the SEC with respect to the Funds Shares. Information
about the Funds can be reviewed and copied at the SECs Public Reference Room
and information on the operation of the Public Reference Room may be obtained
by calling the SEC at 1.202.551.8090. The Registration Statement, including
this Prospectus, the SAI and the exhibits may be examined at the offices of the
SEC (100 F Street, NE, Washington, DC 20549) or on the Edgar database at the
SECs website (http://www.sec.gov), and copies may be obtained, after paying a
duplicating fee, by electronic request at the following email address:
publicinfo@sec.gov, or by writing the SECs Public Reference Section, Washington,
DC 20549-0102. These documents and other information concerning the Trust also
may be inspected at the offices of the Amex (86 Trinity Place, New York, New
York 10006).
The Funds SAI
is available at www.vaneck.com/etf.
(CONTINUED)
The Trust is an open-end management investment
company. The Trust currently consists of five investment series, Market
VectorsEnvironmental Services ETF, Market VectorsGlobal Alternative Energy
ETF, Market VectorsGold Miners ETF, Market VectorsRussia ETF and Market
VectorsSteel ETF. This SAI relates only to the Funds listed on the cover page
of this SAI. The Funds invest in common stocks and American Depositary Receipts
(ADRs) consisting of some or all of the component securities of each
Funds respective benchmark index, each compiled by the Amex (the Index
Compilation Agent), selected to reflect the performance thereof. The Trust
was organized as a Delaware statutory trust on March 15, 2001. The shares
of each Fund are referred to herein as Shares.
The Environmental Services Index includes common
stocks or ADRs of selected companies that are involved in management, removal
and storage of consumer waste and industrial by-products, and related
environmental services, including waste collection, transfer and disposal
services, recycling services, soil remediation, wastewater management, and
environmental consulting services. Only companies listed for trading on the New
York Stock Exchange (the NYSE), Amex or quoted on the NASDAQ Global
Market (NASDAQ) with market capitalization greater than
$100 million, three-month trading price greater than $3.00 and three-month
daily average traded value greater than $1 million are eligible for
inclusion in the Environmental Services Index.
The Environmental Services Index is reviewed quarterly
so that the Environmental Services Index components continue to represent the
universe of companies involved environmental services relating to consumer and
industrial waste management. The Amex may at any time and from time to time
change the number of securities comprising the group by adding or deleting one
or more securities, or replace one or more securities contained in the group
with one or more substitute securities of its choice, if in the AMEXs
discretion such addition, deletion or substitution is necessary or appropriate
to maintain the quality and/or character of the Environmental Services Index to
which the group relates. Changes to the Environmental Services Index
compositions and/or the component share weights in the Environmental Services
Index typically take effect after the close of trading one day prior to the
last business day of each calendar quarter month in connection with the
quarterly Environmental Services Index rebalance. At the time of the
Environmental Services Index quarterly rebalance, the weights for the component
securities (taking into account expected component changes and share
adjustments) are modified in accordance with the following procedures.
Maintenance
of the Environmental Services Index
The Gold Miners Index is reviewed quarterly to ensure
that at least 90% of the Gold Miners Index weight is accounted for by Gold
Miners Index component securities that continue to meet the initial eligibility
requirements. Component securities will be removed from the Gold Miners Index
during the quarterly review, if the market capitalization falls below
$50 million or the traded average daily shares for the previous six months
is lower than 25,000 shares. In conjunction with the quarterly review, the
share weights used in the calculation of the Gold Miners Index are determined
based upon current shares outstanding modified, if necessary, to provide
greater Gold Miners Index diversification, as described in the Eligibility
Criteria for Index Components section above. The Gold Miners Index component
securities and their share weights are determined and announced prior to taking
effect. The share weight of each component security in the Gold Miners Index
portfolio remains fixed between quarterly reviews except in the event of
certain types of corporate actions such as stock splits, reverse stock splits,
stock dividends or similar events. The share weights used in the Gold Miners
Index calculation are not typically adjusted for shares issued or repurchased
between quarterly reviews. However, in the event of a merger between two
components, the share weight of the surviving entity may be adjusted to account
for any stock issued in the acquisition. The Amex may substitute securities or
change the number of securities included in the Gold Miners Index, based on
changing conditions in the industry or in the event of certain types of
corporate actions, including mergers, acquisitions, spin-offs and
reorganizations. In the event of component or share weight changes to the Gold
Miners Index portfolio, the payment of dividends other than ordinary cash
dividends, spin-offs, rights offerings, re-capitalization or other corporate
actions affecting a component security of the Gold Miners Index; the Gold
Miners Index divisor may be adjusted to ensure that there are no changes to the
Gold Miners Index level as a result of non-market forces.
Except as otherwise specified in the Prospectus or
this SAI, there are no limitations on the extent to which the Funds may engage
in transactions involving futures and options thereon. The Funds will take
steps to prevent their futures positions from leveraging its securities
holdings. When it has a long futures position, it will maintain with its
custodian bank, cash or liquid securities having a value equal to the notional
value of the contract (less any margin deposited in connection with the
position). When it has a short futures position, as part of a complex stock
replication strategy the Funds will maintain with their custodian bank assets
substantially identical to those underlying the contract or cash and liquid
securities (or a combination of the foregoing) having a value equal to the net
obligation of each Fund under the contract (less the value of any margin
deposits in connection with the position).
A discussion of the risks associated with an investment in each Fund is
contained in the Prospectus under the heading Principal Risks of Investing in
the Fund for each Fund. The discussion below supplements, and should be read
in conjunction with, such section of the Prospectus.
An investment in each Fund should also be made with an understanding that the
Fund will not be able to replicate exactly the performance of its respective
Index because the total return generated by the securities will be reduced by
transaction costs incurred in adjusting the actual balance of the securities
and other Fund expenses, whereas such transaction costs and expenses are not
included in the calculation of its respective Index. It is also possible that
for short periods of time, a Fund may not fully replicate the performance of
its respective Index due to the temporary unavailability of certain Index
securities in the secondary market or due to other extraordinary circumstances.
Such events are unlikely to continue for an extended period of time because a
Fund is required to correct such imbalances by means of adjusting the
composition of the securities. It is also possible that the composition of the
Fund may not exactly replicate the composition of its respective Index if the
Fund has to adjust is portfolio holdings in order to continue to qualify as a
regulated investment company under the Internal Revenue Code of 1986, as
amended (the Internal Revenue Code).
The risk of loss in trading futures contracts or uncovered call options in some
strategies (e.g.,
selling uncovered stock index futures contracts) is potentially unlimited. The
Funds do not plan to use futures and options contracts in this way. The risk of
a futures position may still be large as traditionally measured due to the low
margin deposits required. In many cases, a relatively small price movement in a
futures contract may result in immediate and substantial loss or gain to the
investor relative to the size of a required margin deposit. The Funds, however,
intend to utilize futures and options contracts in a manner designed to limit
its risk exposure to that which is comparable to what it would have incurred
through direct investment in stocks.
In order for the Funds to continue to qualify for U.S. federal income tax
treatment as a regulated investment company, at least 90% of their gross income
for a taxable year must be derived from qualifying income, i.e., dividends, interest,
income derived from loans of securities, gains from the sale of securities or
of foreign currencies or other income derived with respect to the Funds
business of investing in securities. It is anticipated that any net
A discussion of exchange listing and trading matters associated with an
investment in the Funds is contained under the headings Principal Risks of
Investing in the Fund for each Fund, Shareholder InformationDetermination of
Net Asset Value and Shareholder InformationBuying and Selling
Exchange-Traded Shares. The discussion below supplements, and should be read
in conjunction with, such sections of the Funds Prospectus.
In order to provide investors with a basis to gauge whether the market price of
the Shares on the Amex are approximately consistent with the current value of
the assets of the Fund on a per Share basis, the Amex disseminates through the
facilities of the Consolidated Tape Associations Network B and updated
Indicative Per Share Portfolio Value, and underlying trading reference value
for each Funds respective underlying Index published by the Amex to be used in
conjunctions with other exchange traded fund information, which is designed to
give investors a sense of the relationship between the Fund and its respective
Index on an intraday basis. Indicative Per Share Portfolio Values are
disseminated every 15 seconds during regular Amex trading hours based on the
most recently reported prices of Fund Securities. The Funds are not involved in
or responsible for the calculation or dissemination of the Indicative Per Share
Portfolio Value and make no warranty as to the accuracy of the Indicative Per
Share Portfolio Value.
and Age
Held with
Funds
Office2 and
Length of
Time
Served
Past Five Years
Portfolios
in Fund
Complex3
Overseen
Directorships
Held By
Trustee
Age
Held with
Funds
Office2 and
Length of
Time
Served
Past Five Years
Portfolios
in Fund
Complex3
Overseen by
Trustee
Directorships
Held Outside
the Fund
Complex:
and Age
Held with
Funds
Office2 and
Length of
Time Served
and Age
Held with
Funds
Office2 and
Length of
Time Served
and Age
Held with
Funds
Office2 and
Length of
Time Served
The Board has an Audit Committee, consisting of four Trustees who are not
interested persons (as defined in the 1940 Act) of the Trust (an Independent
Trustee). Messrs. Chow, DeFeo, Short and Stamberger currently serve as
members of the Audit Committee. Mr. Short is the Chairman of the Audit
Committee. The Audit Committee has the responsibility, among other things, to:
(i) oversee the accounting and financial reporting processes of the Trust
and its internal control over financial reporting and, as the Audit Committee
deems appropriate, to inquire into the internal control over financial
reporting of certain third-party service providers, (ii) oversee the
quality and integrity of the Trusts financial statements and the independent
audit thereof, (iii) oversee or, as appropriate, assist the Boards oversight
of the Trusts compliance with legal and regulatory requirements that relate to
the Trusts accounting and financial reporting, internal control over financial
reporting and independent audit; (iv) approve prior to appointment the
engagement of the Trusts independent registered public accounting firm and, in
connection therewith, to review and evaluate the qualifications, independence
and performance of the Trusts independent registered public accounting firm;
and (v) act as a liaison between the Trusts independent registered public
accounting firm and the full Board. The Audit Committee met three times during
the fiscal year ended December 31, 2006.
For each Trustee, the dollar range of equity securities beneficially owned by
the Trustee in each Fund and in all registered investment companies overseen by
the Trustee is shown below.
Securities in Market
Vectors ETF Trust (As of
December 31, 2006)
Securities in all Registered
Investment Companies Overseen By
Trustee In Family of Investment
Companies (As of December 31,
2006)
The Trust pays
each Independent Trustee an annual retainer of $10,000, a per meeting fee of
$5,000 for scheduled quarterly meetings of the Board and each special meeting
of the Board and a per meeting fee of $2,500 for telephonic meetings. The Trust
pays the Chairman of the Board an annual retainer of $10,000 and each Trustee
who acts as chairman of a committee an annual retainer of $5,000. The Trust
also reimburses each Trustee for travel and other out-of-pocket expenses
incurred in attending such meetings. No pension or retirement benefits are
accrued as part of Trustee compensation.
The table below shows the estimated compensation that is contemplated to be
paid to the Trustees by the Trust for the fiscal year ended December 31, 2007.
Annual Trustee fees may be reviewed periodically and changed by the Trusts
Board.
Compensation
From the
Trust
Compensation
From the
Trust
Retirement
Benefits Accrued
as Part of the
Trusts Expenses
Annual
Benefits
Upon
Retirement
Compensation
From the Trust
and the Fund
Complex (1)
Paid to
Trustee
Each Funds portfolio holdings are publicly
disseminated each day the Fund is open for business through financial reporting
and news services, including publicly accessible Internet web sites. In
addition, a basket composition file, which includes the security names and
share quantities to deliver in exchange for Shares, together with estimates and
actual cash components is publicly disseminated daily prior to the opening of
the Amex via the National Securities Clearing Corporation (the NSCC),
a clearing agency that is registered with the SEC. The basket represents one
Creation Unit of each Fund. The Trust, Adviser, Custodian and Distributor will
not disseminate non-public information concerning the Trust.
The Trust is required to disclose, after its first and
third fiscal quarters, the complete schedule of the Funds portfolio holdings
with the SEC on Form N-Q. Form N-Q for the Funds is available on the
SECs website at http://www.sec.gov. The Funds Form N-Q may also be
reviewed and copied at the SECs Public Reference Room in Washington, D.C. and
information on the operation of the Public Reference Room may be obtained by
calling 202.551.8090. The Funds Form N-Q is available through the Funds
website at www.vaneck.com or by writing to 99 Park Avenue, 8th Floor, New York,
New York 10016.
Generally, all Personnel must obtain approval prior to
conducting any transaction in securities. Independent Trustees, however, are
not required to obtain prior approval of personal securities transactions.
Personnel may purchase securities in an initial public offering or private
placement, provided
that he or she obtains preclearance of the purchase and makes certain
representations.
The Funds proxy voting record is available upon
request and on the SECs website at http://www.sec.gov. Proxies for each Funds
portfolio securities are voted in accordance with the Advisers proxy voting
policies and procedures, which are set forth in Appendix A to this SAI.
Van Eck Associates Corporation (the Adviser)
acts as investment manager to the Trust and, subject to the supervision of the
Board, is responsible for the day-to-day investment management of the Funds.
The Adviser is a private company with headquarters in New York and manages
other mutual funds and separate accounts.
Compensation.
As compensation for its services under each Investment Management Agreement,
the Adviser is paid a monthly fee based on a percentage of each Funds average
daily net assets at the annual rate of 0.50%. From time to time, the Adviser
may waive all or a portion of its fees. Until at least April 30, 2008, the
Adviser has contractually agreed to waive fees and/or pay Fund expenses to the
extent necessary to prevent the operating expenses of each Fund (excluding
interest expense, brokerage commissions, offering costs and other trading
expenses, fees, taxes and extraordinary expenses) from exceeding 0.55% of
average daily net assets per year. The offering costs excluded from the 0.55%
expense cap are: (a) legal fees pertaining to a Funds Shares offered for
sale; (b) SEC and state registration fees; and (c) initial fees paid
to be listed on an exchange.
that the SEC bring a civil or administrative action
alleging violations of U.S. securities laws against the Adviser and two of its
senior officers. Under SEC procedures, the Adviser has an opportunity to
respond to the SEC staff before the staff makes a formal recommendation. The
time period for the Advisers response has been extended until further notice
from the SEC. There cannot be any assurance that, if the SEC and/or the NYAG
were to assess sanctions against the Adviser, such sanctions would not
materially and adversely affect the Adviser.
The Bank of New York serves as custodian for the Funds
pursuant to a Custodian Agreement. As Custodian, The Bank of New York holds the
Funds assets. The Bank of New York serves as Funds transfer agent pursuant to
a Transfer Agency Agreement. The Bank of New York may be reimbursed by each
Fund for its out-of-pocket expenses. In addition, The Bank of New York provides
various accounting services to each of Market VectorsEnvironmental Services
ETF and Market VectorsSteel ETF pursuant to a fund accounting agreement. The
Adviser pays a portion of the fee that it receives from Market VectorsGold
Miners ETF to The Bank of New York for providing fund accounting services to
Market VectorsGold Miners ETF.
Van Eck Securities Corporation (the Distributor)
is the principal underwriter and distributor of Shares. Its principal address
is 99 Park Avenue, New York, New York 10016 and investor information can be
obtained by calling 1-888-MKT-VCTR. The Distributor has entered into an
agreement with the Trust which will continue from its effective date unless
terminated by either party upon 60 days prior written notice to the other
party by the Trust and the Adviser, or by the Distributor, or until termination
of the Trust or the Funds offering their Shares, and which is renewable annually
thereafter (the Distribution Agreement), pursuant to which it
distributes Shares. Shares will be continuously offered for sale by the Trust
through the Distributor only in Creation Units, as described below under
Creation and Redemption of Creation UnitsProcedures for Creation of Creation
Units. Shares in less than Creation Units are not distributed by the
Distributor. The Distributor will deliver a prospectus to persons purchasing
Shares in Creation Units and will maintain records of both orders placed with
it and confirmations of acceptance furnished by it. The Distributor is a
broker-dealer registered under the Securities Exchange Act of 1934, as amended
(the Exchange Act), and a member of NASD, Inc. (NASD). The
Distributor has no role in determining the investment policies of the Trust or
which securities are to be purchased or sold by the Trust.
The portfolio managers are paid a fixed base salary
and a bonus. The bonus is based upon the quality of investment analysis and the
management of the Funds. The quality of management of the Funds includes issues
of replication, rebalancing, portfolio monitoring, efficient operation, among
other factors. Portfolio managers who oversee accounts with significantly
different fee structures are generally compensated by discretionary bonus
rather than a set formula to help reduce potential conflicts of interest. At
times, the Adviser and affiliates manage accounts with incentive fees.
As of December 31, 2006, the dollar range of Shares of
the Funds beneficially owned by each of Mr. Kuczma and Mr. Liao was $0$10,000.
Portfolio turnover may vary from year to year, as well
as within a year. High turnover rates are likely to result in comparatively
greater brokerage expenses. The portfolio turnover rate for each Fund is
expected to be under 30%. See Principal Investment Objective and Strategies
for each Fund in the Prospectus. The overall reasonableness of brokerage
commissions is evaluated by the Adviser based upon its knowledge of available
information as to the general level of commissions paid by other institutional
investors for comparable services.
The following information supplements and should be
read in conjunction with the section in the Prospectus entitled Shareholder
InformationBuying and Selling Exchange-Traded Shares.
DTC may determine to discontinue providing its service
with respect to the Shares at any time by giving reasonable notice to the Trust
and discharging its responsibilities with respect thereto under applicable law.
Under such circumstances, the Trust shall take action either to find a
replacement for DTC to perform its functions at a comparable cost or, if such a
replacement is unavailable, to issue and deliver printed certificates
representing ownership of Shares, unless the Trust makes other arrangements
with respect thereto satisfactory to the Amex.
The Trust issues and sells Shares only in Creation
Units on a continuous basis through the Distributor, without an initial sales
load, at their NAV next determined after receipt, on any Business Day (as
defined herein), of an order in proper form.
The consideration for a purchase of Creation Units of
the Funds generally consists of the in-kind deposit of a designated portfolio
of equity securities (the Deposit Securities) constituting a
replication of each Funds respective benchmark index and an amount of cash
computed as described below (the Cash Component). Together, the
Deposit Securities and the Cash Component constitute the Fund Deposit,
which represents the minimum initial and subsequent investment amount for
Shares of the Funds. The Cash Component represents the difference between the
NAV of a Creation Unit and the market value of Deposit Securities and may
include a Dividend Equivalent Payment. The Dividend Equivalent Payment
enables each Fund to make a complete distribution of dividends on the next
dividend payment date, and is an amount equal, on a per Creation Unit basis, to
the dividends on all the securities held by the Fund (Fund Securities)
with ex-dividend dates within the accumulation period for such distribution
(the Accumulation Period), net of expenses and liabilities for such
period, as if all of the Fund Securities had been held by the Trust for the
entire Accumulation Period. The Accumulation Period begins on the ex-dividend
date for each Fund and ends on the next ex-dividend date.
To be eligible to place orders with the Distributor to
create Creation Units of the Funds, an entity or person either must be
(1) a Participating Party, i.e., a broker-dealer or other participant
in the Clearing Process through the Continuous Net Settlement System of the
NSCC, a clearing agency that is registered with the SEC; or (2) a DTC
Participant (see Book Entry Only System); and, in either case, must have
executed an agreement with the Trust and with the Distributor with respect to
creations and redemptions of Creation Units outside the Clearing Process (Participant
Agreement) (discussed below). All Creation Units of the Funds, however
created, will be entered on the records of the Depository in the name of Cede
& Co. for the account of a DTC Participant.
Fund Deposits created outside the Clearing Process
must be delivered through a DTC Participant that has executed a Participant
Agreement with the Distributor and with the Trust. A DTC Participant who wishes
to place an order creating Creation Units of the Funds to be effected outside
the Clearing Process need not be a Participating Party, but such orders must
state that the DTC Participant is not using the Clearing Process and that the
creation of Creation Units will instead be effected through a transfer of
securities and cash. The Fund Deposit transfer must be ordered by the DTC
Participant in a timely fashion so as to ensure the delivery of the requisite
number of Deposit Securities through DTC to the account of the Trust by no
later than 11:00 a.m. of the next Business Day immediately following the
Transmittal Date. All questions as to the number of Deposit Securities to be
delivered, and the validity, form and eligibility (including time of receipt)
for the deposit of any tendered securities, will be determined by the Trust,
whose determination shall be final and binding. The cash equal to the Cash
Component must be transferred directly to the Distributor through the Federal
Reserve wire system in a timely manner so as to be received by the Distributor
no later than 2:00 p.m. on the next Business Day immediately following the
Transmittal Date. An order to create Creation Units of the Fund outside the
Clearing Process is deemed received by the Distributor on the Transmittal Date
if (i) such order is received by the Distributor not later than the
Closing Time on such Transmittal Date; and (ii) all other procedures set
forth in the Participant Agreement are properly followed. However, if the
Distributor does not receive both the requisite Deposit Securities and the Cash
Component in a timely fashion on the next Business Day immediately following the
Transmittal Date, such order will be cancelled. Upon written notice to the
Distributor, such cancelled order may be resubmitted the following Business Day
using a Fund Deposit as newly constituted to reflect the current NAV of the
Funds. The delivery of Creation Units of the Funds so created will occur no
later than the third (3rd) Business Day following the day on which the creation
order is deemed received by the Distributor.
The Trust reserves the absolute right to reject a
creation order transmitted to it by the Distributor if, for any reason,
(a) the order is not in proper form; (b) the creator or creators,
upon obtaining the Shares ordered, would own 80% or more of the currently
outstanding Shares of the Funds; (c) the Deposit Securities delivered are
not as specified by the Administrator, as described above; (d) acceptance
of the Deposit Securities would have certain adverse tax consequences to the
Funds; (e) the acceptance of the Fund Deposit would, in the opinion of
counsel, be unlawful; (f) the acceptance of the Fund Deposit would
otherwise, in the discretion of the Trust or the Adviser, have an adverse
effect on the Trust or the rights of beneficial owners; or (g) in the
event that circumstances outside the control of the Trust, the Distributor and
the Adviser make it for all practical purposes impossible to process creation
orders. Examples of such circumstances include acts of God or public service or
utility problems such as fires, floods, extreme weather conditions and power
outages resulting in telephone, telecopy and computer failures; market
conditions or activities causing trading halts; systems failures involving
computer or other information systems affecting the Trust, the Adviser, the
Distributor, DTC, NSCC or any other participant in the creation process, and
similar extraordinary events. The Trust shall notify a prospective creator of
its rejection of the order of such person. The Trust and the Distributor are
under no duty, however, to give notification of any defects or irregularities
in the delivery of Fund Deposits nor shall either of them incur any liability
for the failure to give any such notification.
A fixed creation transaction fee of $1,000 payable to
the Custodian is imposed on each creation transaction. In addition, a variable
charge for cash creations or for creations outside the Clearing Process
currently of up to four times the basic creation fee will be imposed. Where the
Trust permits a creator to substitute cash in lieu of depositing a portion of
the Deposit Securities, the creator will be assessed the additional variable
charge for cash creations on the cash in lieu portion of its investment.
Creators of Creation Units are responsible for the costs of transferring the
securities constituting the Deposit Securities to the account of the Trust.
Shares may be redeemed only in Creation Units at their
NAV next determined after receipt of a redemption request in proper form by the
Distributor, only on a Business Day and only through a Participating Party or
DTC Participant who has executed a Participant Agreement. The Trust will not redeem Shares in
amounts less than Creation Units. Beneficial Owners also may sell
Shares in the secondary market, but must accumulate enough Shares to constitute
a Creation Unit in order to have such shares redeemed by the Trust. There can
be no assurance, however, that there will be sufficient liquidity in the public
trading market at any time to permit assembly of a Creation Unit. Investors
should expect to incur brokerage and other costs in connection with assembling
a sufficient number of Shares to constitute a redeemable Creation Unit. See
Principal Risks of Investing in the Fund for each Fund in the Prospectus.
Orders to redeem Creation Units of the Funds through
the Clearing Process must be delivered through a Participating Party that has
executed the Participant Agreement with the Distributor and with the Trust (as
the case may be from time to time amended in accordance with its terms). An
order to redeem Creation Units of the Funds using the Clearing Process is
deemed received on the Transmittal Date if (i) such order is received by
the Distributor not later than 4:00 p.m. (3:00 p.m. for Custom
Orders) on such Transmittal Date; and (ii) all other procedures set forth
in the Participant Agreement are properly followed; such order will be effected
based on the NAV of the Fund as next determined. An order to redeem Creation
Units of the Funds using the Clearing Process made in proper form but received
by the Fund after 4:00 p.m. will be deemed received on the next Business
Day immediately following the Transmittal Date. The requisite Fund Securities
(or contracts to purchase such Fund Securities which are expected to be
delivered in a regular way manner) will be transferred by the third (3rd)
NSCC Business Day following the date on which such request for redemption is
deemed received, and the applicable cash payment.
Orders to redeem Creation Units of the Funds outside
the Clearing Process must be delivered through a DTC Participant that has
executed the Participant Agreement with the Distributor and with the Trust. A
DTC Participant who wishes to place an order for redemption of Creation Units
of the Funds to be effected outside the Clearing Process need not be a
Participating Party, but such orders must state that the DTC Participant is not
using the Clearing Process and that redemption of Creation Units of the Funds
will instead be effected through transfer of Creation Units of the Funds
directly through DTC. An order to redeem Creation Units of the Funds outside
the Clearing Process is deemed received by the Administrator on the Transmittal
Date if (i) such order is received by the Administrator not later than
4:00 p.m. (3:00 p.m. for Custom Orders) on such Transmittal Date;
(ii) such order is preceded or accompanied by the requisite number of
Shares of Creation Units specified in such order, which delivery must be made
through DTC to the Administrator no later than 11:00 a.m. on such
Transmittal Date (the DTC Cut-Off-Time); and (iii) all other
procedures set forth in the Participant Agreement are properly followed.
If it is not possible to effect deliveries of the Fund
Securities, the Trust may in its discretion exercise its option to redeem such
shares in cash, and the redeeming Beneficial Owner will be required to receive
its redemption proceeds in cash. In addition, an investor may request a
redemption in cash which the Funds may, in their sole discretion, permit. In
either case, the investor will receive a cash payment equal to the NAV of its
Shares based on the NAV of Shares of the Funds next determined after the redemption
request is received in proper form (minus a redemption transaction fee and
additional variable charge for requested cash redemptions specified above, to
offset the Trusts brokerage and other transaction costs associated with the
disposition of portfolio securities). The Funds may also, in their sole
discretion, upon request of a shareholder, provide such redeemer a portfolio of
securities which differs from the exact composition of the Fund Deposit but
does not differ in NAV.
The NAV per share for each Fund is computed by
dividing the value of the net assets of the Fund (i.e., the value of its total
assets less total liabilities) by the total number of Shares outstanding,
rounded to the nearest cent. Expenses and fees, including management and
administration fees, are accrued daily and taken into account for purposes of
determining NAV. The NAV of each Fund is determined as of the close of the
regular trading session on the NYSE (ordinarily 4:00 p.m., Eastern time)
on each day that such exchange is open.
The following information supplements and should be
read in conjunction with the section in the Prospectus entitled Shareholder
InformationDividends and Distributions.
Dividends from net investment income are declared and
paid at least annually by each Fund. Distributions of net realized capital
gains, if any, generally are declared and paid once a year, but the Trust may
make distributions on a more frequent basis for each Fund to improve its Index
tracking or to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
1940 Act. In addition, the Trust may distribute at least annually amounts
representing the full dividend yield on the underlying portfolio securities of
the Funds, net of expenses of the Funds, as if each Fund owned such underlying
portfolio securities for the entire dividend period in which case some portion
of each distribution may result in a return of capital for tax purposes for
certain shareholders.
The audited financial statements, including the
financial highlights appearing in the Trusts annual report to shareholders for
the fiscal year ended December 31, 2006 and filed electronically with the
Securities and Exchange Commission, are incorporated by reference and made part
of this SAI. You may request a copy of the Trusts annual report at no charge
by calling 1.888.MKT.VCTR during normal business hours.
The following table sets forth the name, address and
percentage of ownership of each shareholder who is known by the Trust to own,
of record or beneficially, 5% or more of the outstanding equity securities of
each Fund as of December 31, 2006:
The following information also supplements and should
be read in conjunction with the section in the Prospectus entitled Shareholder
InformationTax Matters.
In general, a sale of Shares results in capital gain
or loss, and for individual shareholders, is taxable at a federal rate
dependent upon the length of time the Shares were held. A redemption of a
shareholders Fund Shares is normally treated as a sale for tax purposes. Fund
Shares held for a period of one year or less at the time of such sale or
redemption will, for tax purposes, generally result in short-term capital gains
or losses and those held for more than one year will generally result in
long-term capital gains or losses. Under current law, the maximum tax rate on
long-term capital gains available to non-corporate shareholders generally is
15%. Without future congressional action, the maximum tax rate on long-term
capital gains will return to 20% in 2011.
Gain or loss on the sale or redemption of Fund Shares is measured by the difference between the amount received and the adjusted tax basis of the Shares. Shareholders should keep records of investments made (including Shares acquired through reinvestment of dividends and distributions) so they can compute the tax basis of their Shares.
A loss realized on a sale or exchange of Shares of a Fund may be disallowed if other Fund Shares are acquired (whether through the automatic reinvestment of dividends or otherwise) within a sixty-one (61) day period beginning thirty (30) days before and ending thirty (30) days after the date that the Shares are disposed of. In such a case, the basis of the Shares acquired will be adjusted to reflect the disallowed loss. Any loss upon the sale or
- 41 -
exchange of Shares held for six (6) months or less will be treated as long-term capital loss to the extent of any capital gain dividends received by the shareholders.
Distribution of ordinary income and capital gains may
also be subject to state and local taxes.
The Fund may make investments in which it recognizes
income or gain prior to receiving cash with respect to such investment. For
example, under certain tax rules, the Fund may be required to accrue a portion
of any discount at which certain securities are purchased as income each year
even though the Fund receives no payments in cash on the security during the
year. To the extent that the Fund makes such investments, it generally would be
required to pay out such income or gain as a distribution in each year to avoid
taxation at the Fund level.
Distributions reinvested in additional Fund Shares through the means of the service (see Dividend Reinvestment Service) will nevertheless be taxable dividends to Beneficial Owners acquiring such additional Shares to the same extent as if such dividends had been received in cash.
Distributions of ordinary income paid to shareholders
who are nonresident aliens or foreign entities will be subject to a 30% U.S.
withholding tax unless a reduced rate of withholding or a withholding exemption
is provided under applicable treaty law. Nonresident shareholders are urged to
consult their own tax advisors concerning the applicability of the U.S.
withholding tax. A RIC may, under certain circumstances, designate all or a
portion of a dividend as an interest-related dividend that if received by a
nonresident alien or foreign entity generally would be exempt from the 30% U.S.
withholding tax, provided that certain other requirements are met. A RIC may
also, under certain circumstances, designate all or a portion of a dividend as
a short-term capital gain dividend which if received by a nonresident alien
or foreign entity generally would be exempt from the 30% U.S. withholding tax,
unless the foreign person is a nonresident alien individual present in the
United States for a period or periods aggregating 183 days or more during
the taxable year. The provisions discussed above relating to dividends to
foreign persons apply to dividends with respect to taxable years before
January 1, 2008. Prospective investors are urged to consult their tax
advisors regarding the specific tax consequences relating to the rules
discussed above.
Some shareholders may be subject to a withholding tax on distributions of ordinary income, capital gains and any cash received on redemption of Creation Units (backup withholding). The backup withholding rate for individuals is currently 28%. Generally, shareholders subject to backup withholding will be those for whom no certified taxpayer identification number is on file with a Fund or who, to the Funds knowledge, have furnished an incorrect number. When establishing an account, an investor must certify under penalty of perjury that such number is correct and that such investor is not otherwise subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld will be allowed as a credit against shareholders U.S. federal income tax liabilities, and may entitle them to a refund, provided that the required information is timely furnished to the Internal Revenue Service.
The foregoing discussion is a summary only and is not
intended as a substitute for careful tax planning. Purchasers of Shares of the
Trust should consult their own tax advisers as to the tax consequences of
investing in such Shares, including under state, local and other tax laws.
Finally, the foregoing discussion is based on applicable provisions of the
Internal Revenue Code, regulations, judicial authority and administrative
interpretations in effect on the date hereof. Changes in applicable authority
could materially affect the conclusions discussed above, and such changes often
occur.
Under promulgated Treasury regulations, if a shareholder recognizes a loss on disposition of a Funds Shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC that engaged in a reportable transaction are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all RICs. In addition, pursuant to recently enacted legislation, significant penalties may be imposed for the failure to comply with the reporting requirements. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayers treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances.
- 42 -
CAPITAL STOCK AND SHAREHOLDER REPORTS
The Trust currently is comprised of five investment
funds. The Trust issues shares of beneficial interest, with no par value. The
Board may designate additional funds of the Trust.
Each Share issued by the Trust has a pro rata interest in the assets of the corresponding Fund. Shares have no pre-emptive, exchange, subscription or conversion rights and are freely transferable. Each Share is entitled to participate equally in dividends and distributions declared by the Board with respect to the relevant Fund, and in the net distributable assets of such Fund on liquidation.
Each Share has one vote with respect to matters upon which a shareholder vote is required consistent with the requirements of the 1940 Act and the rules promulgated thereunder. Shares of all Funds vote together as a single class except that if the matter being voted on affects only a particular Fund it will be voted on only by that Fund, and if a matter affects a particular Fund differently from other Funds, that Fund will vote separately on such matter. Under Delaware law, the Trust is not required to hold an annual meeting of shareholders unless required to do so under the 1940 Act. The policy of the Trust is not to hold an annual meeting of shareholders unless required to do so under the 1940 Act. All Shares of the Trust have noncumulative voting rights for the election of Trustees. Under Delaware law, Trustees of the Trust may be removed by vote of the shareholders.
Under Delaware law, shareholders of a statutory trust may have similar limitation liabilities as shareholders of a corporation.
The Trust will issue through DTC Participants to its shareholders semi-annual reports containing unaudited financial statements and annual reports containing financial statements audited by independent auditors approved by the Trusts Trustees and by the shareholders when meetings are held and such other information as may be required by applicable laws, rules and regulations. Beneficial Owners also receive annually notification as to the tax status of the Trusts distributions.
Shareholder inquiries may be made by writing to the Trust, c/o Van Eck Associates Corporation, 99 Park Avenue, 8th Floor, New York, NY 10016.
COUNSEL AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Clifford Chance US LLP is counsel to the Trust and have passed upon the validity of each Funds Shares.
Ernst & Young LLP serves as the Trusts independent registered public accounting firm.
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APPENDIX
A
VAN ECK GLOBAL
PROXY VOTING POLICIES
ADOPTED
JULY 30, 2003
AMENDED APRIL 20, 2004
AMENDED APRIL 14, 2005
INTRODUCTION
Effective March 10, 2003, the Securities and Exchange Commission (the Commission) adopted Rule 206(4)-6 under the Investment Advisers Act of 1940 (Advisers Act), requiring each investment adviser registered with the Commission to adopt and implement written policies and procedures for voting client proxies, to disclose information about the procedures to its clients, and to inform clients how to obtain information about how their proxies were voted. The Commission also amended Rule 204-2 under the Advisers Act to require advisers to maintain certain proxy voting records. Both rules apply to all investment advisers registered with the Commission that have proxy voting authority over their clients securities. An adviser that exercises voting authority without complying with Rule 206(4)-6 will be deemed to have engaged in a fraudulent, deceptive, or manipulative act, practice or course of business within the meaning of Section 206(4) of the Advisers Act.
When an adviser has been granted proxy voting authority by a client, the adviser owes its clients the duties of care and loyalty in performing this service on their behalf. The duty of care requires the adviser to monitor corporate actions and vote client proxies. The duty of loyalty requires the adviser to cast the proxy votes in a manner that is consistent with the best interests of the client.
PROXY VOTING POLICIES AND PROCEDURES
RESOLVING MATERIAL CONFLICTS OF INTEREST
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A MATERIAL CONFLICT means the existence of a business relationship between a portfolio company or an affiliate and Van Eck Associates Corporation, any affiliate or subsidiary (individually and together, as the context may require, Adviser), or an affiliated person of a Van Eck mutual fund in excess of $60,000. Examples of when a material conflict exists include the situation where the adviser provides significant investment advisory, brokerage or other services to a company whose management is soliciting proxies; an officer of the Adviser serves on the board of a charitable organization that receives charitable contributions from the portfolio company and the charitable organization is a client of the Adviser; a portfolio company that is a significant selling agent of Van Ecks products and services solicits proxies; a broker-dealer or insurance company that controls 5% or more of the Advisers assets solicits proxies; the Adviser serves as an investment adviser to the pension or other investment account of the portfolio company; the Adviser and the portfolio company have a lending relationship. In each of these situations voting against management may cause the Adviser a loss of revenue or other benefit. |
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Conflict Resolution. When a material conflict exists proxies will be voted in the following manner: |
Where the written guidelines set out a pre-determined voting policy, proxies will be voted in accordance with that policy, with no deviations (if a deviation is advisable, one of the other methods may be used);
Where the guidelines permit discretion and an independent third party has been retained to vote proxies, proxies will be voted in accordance with the predetermined policy based on the recommendations of that party; or
The potential conflict will be disclosed to the client (a) with a request that the client vote the proxy, (b) with a recommendation that the client engage another party to determine how the proxy should be voted or (c) if the foregoing are not acceptable to the client disclosure of how VEAC intends to vote and a written consent to that vote by the client.
A-1
Any deviations from the foregoing voting mechanisms must be approved by the Compliance Officer with a written explanation of the reason for the deviation.
REASONABLE RESEARCH EFFORTS
When determining whether a vote is in the best interest of the client, the Adviser will use reasonable research efforts. Investment personnel may rely on public documents about the company and other readily available information, which is easily accessible to the investment personnel at the time the vote is cast. Information on proxies by foreign companies may not be readily available.
VOTING CLIENT PROXIES
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The Adviser generally will vote proxies on behalf of clients, unless clients instruct otherwise. There may be times when refraining from voting a proxy is in a clients best interest, such as when the Adviser determines that the cost of voting the proxy exceeds the expected benefit to the client. (For example, casting a vote on a foreign security may involve additional costs such as hiring a translator or traveling to foreign country to vote the security in person). |
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The portfolio manager or analyst covering the security is responsible for making voting decisions. |
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Portfolio Administration, in conjunction with the portfolio manager and the custodian, is responsible for monitoring corporate actions and ensuring that corporate actions are timely voted. |
CLIENT INQUIRIES
All inquiries by clients as to how Van Eck has voted proxies must immediately be forwarded to Portfolio Administration.
DISCLOSURE TO CLIENTS
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Notification of Availability of Information Client Brochure. |
The Client Brochure or Part II of Form ADV will inform clients that they can obtain information from VEAC on how their proxies were voted. The Client Brochure or Part II of Form ADV will be mailed to each client annually. The Legal Department will be responsible for coordinating the mailing with Sales/Marketing Departments.
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Availability of Proxy Voting Information |
At the clients request or if the information is not available on VEACs website, a hard copy of the accounts proxy votes will be mailed to each client.
RECORDKEEPING REQUIREMENTS
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VEAC will retain the following documentation and information for each matter relating to a portfolio security with respect to which a client was entitled to vote: |
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proxy statements received; |
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identifying number for the portfolio security; |
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shareholder meeting date; |
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brief identification of the matter voted on; |
Exh A-2
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whether the vote was cast on the matter and how the vote was cast; |
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how the vote was cast (e.g., for or against proposal, or abstain; for or withhold regarding election of directors); |
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records of written client requests for information on how VEAC voted proxies on behalf of the client; |
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a copy of written responses from VEAC to any written or oral client request for information on how VEAC voted proxies on behalf of the client; and |
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any documents prepared by VEAC that were material to the decision on how to vote or that memorialized the basis for the decision, if such documents were prepared. |
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Copies of proxy statements filed on EDGAR, and proxy statements and records of proxy votes maintained with a third party (i.e., proxy voting service) need not be maintained. The third party must agree in writing to provide a copy of the documents promptly upon request. |
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If applicable, any document memorializing that the costs of voting a proxy exceed the benefit to the client or any other decision to refrain from voting, and that such abstention was in the clients best interest. |
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Proxy voting records will be maintained in an easily accessible place for five years, the first two at the office of VEAC. Proxy statements on file with EDGAR or maintained by a third party and proxy votes maintained by a third party are not subject to these particular retention requirements. |
PROXY VOTING GUIDELINES
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I. |
GENERAL INFORMATION |
Generally, the Adviser will vote in accordance with the following guidelines. Where the proxy vote decision maker determines, however, that voting in such a manner would not be in the best interest of the client, the investment personnel will vote differently.
If there is a conflict of interest on any management or shareholder proposals that are voted on a case by case basis, we will follow the recommendations of an independent proxy service provider.
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II. |
OFFICERS AND DIRECTORS |
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A. |
THE BOARD OF DIRECTORS |
Director Nominees in Uncontested Elections
Vote on a case-by-case basis for director nominees, examining factors such as:
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long-term corporate performance record relative to a market index; |
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composition of board and key board committees; |
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nominees investment in the company; |
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whether a retired CEO sits on the board; and |
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whether the chairman is also serving as CEO. |
Exh A-3
In cases of significant votes and when information is readily available, we also review:
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corporate governance provisions and takeover activity; |
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board decisions regarding executive pay; |
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director compensation; |
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number of other board seats held by nominee; and |
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interlocking directorships. |
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B. |
CHAIRMAN AND CEO ARE THE SAME PERSON |
Vote on a case-by-case basis on shareholder proposals that would require the positions of chairman and CEO to be held by different persons.
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C. |
MAJORITY OF INDEPENDENT DIRECTORS |
Vote on a case-by-case basis shareholder proposals that request that the board be comprised of a majority of independent directors.
Vote for shareholder proposals that request that the board audit, compensation and/or nominating committees include independent directors exclusively.
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D. |
STOCK OWNERSHIP REQUIREMENTS |
Vote on a case-by-case basis shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director, or to remain on the board.
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E. |
TERM OF OFFICE |
Vote on a case-by-case basis shareholder proposals to limit the tenure of outside directors.
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F. |
DIRECTOR AND OFFICER INDEMNIFICATION AND LIABILITY PROTECTION |
Vote on a case-by-case basis proposals concerning director and officer indemnification and liability protection.
Generally, vote against proposals to eliminate entirely director and officer liability for monetary damages for violating the duty of care.
Vote for only those proposals that provide such expanded coverage in cases when a directors or officers legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, AND (2) only if the directors legal expenses would be covered.
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G. |
DIRECTOR NOMINEES IN CONTESTED ELECTIONS |
Vote on a case-by-case basis when the election of directors is contested, examining the following factors:
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long-term financial performance of the target company relative to its industry; |
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managements track record; |
Exh A-4
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background to the proxy contest; |
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qualifications of director nominees (both slates); |
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evaluation of what each side is offering shareholders, as well as the likelihood that the proposed objectives and goals can be met; and |
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stock ownership positions. |
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H. |
BOARD STRUCTURE: STAGGERED VS. ANNUAL ELECTIONS |
Generally, vote against proposals to stagger board elections.
Generally, vote for proposals to repeal classified boards and to elect all directors annually.
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I. |
SHAREHOLDER ABILITY TO REMOVE DIRECTORS |
Vote against proposals that provide that directors may be removed only for cause.
Vote for proposals to restore shareholder ability to remove directors with or without cause.
Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.
Vote for proposals that permit shareholders to elect directors to fill board vacancies.
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J. |
SHAREHOLDER ABILITY TO ALTER THE SIZE OF THE BOARD |
Vote for proposals that seek to fix the size of the board.
Vote against proposals that give management the ability to alter the size of the board without shareholder approval.
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III. |
PROXY CONTESTS |
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A. |
REIMBURSE PROXY SOLICITATION EXPENSES |
Vote on a case-by-case basis proposals to provide full reimbursement for dissidents waging a proxy contest.
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IV. |
AUDITORS |
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A. |
RATIFYING AUDITORS |
Vote for proposals to ratify auditors, unless information that is readily available to the vote decision-maker demonstrates that an auditor has a financial interest in or association with the company, and is therefore clearly not independent.; or such readily available information creates a reasonable basis to believe that the independent auditor has rendered an opinion which is neither accurate nor indicative of the companys financial position.
Vote for shareholder proposals asking for audit firm rotation unless the rotation period is so short (less than five years) that it would be unduly burdensome to the company.
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V. |
SHAREHOLDER VOTING AND CONTROL ISSUES |
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A. |
CUMULATIVE VOTING |
Generally, vote against proposals to eliminate cumulative voting.
Exh A-5
Generally, vote for proposals to permit cumulative voting.
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B. |
SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS |
Generally, vote against proposals to restrict or prohibit shareholder ability to call special meetings. Generally, vote for proposals that remove restrictions on the right of shareholders to act independently of management.
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C. |
SHAREHOLDER ABILITY TO ACT BY WRITTEN CONSENT |
Generally, vote against proposals to restrict or prohibit shareholder ability to take action by written consent.
Generally, vote for proposals to allow or make easier shareholder action by written consent.
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D. |
POISON PILLS |
Vote for shareholder proposals that ask a company to submit its poison pill for shareholder ratification.
Vote on a case-by-case basis shareholder proposals to redeem a companys poison pill.
Vote on a case-by-case basis management proposals to ratify a poison pill.
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E. |
FAIR PRICE PROVISION |
Vote on a case-by-case basis when examining fair price proposals, (where market quotations are not readily available) taking into consideration whether the shareholder vote requirement embedded in the provision is no more than a majority of disinterested shares.
Generally, vote for shareholder proposals to lower the shareholder vote requirement in existing fair price provisions.
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F. |
GREENMAIL |
Generally, vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise restrict a companys ability to make greenmail payments.
Generally, vote on a case-by-case basis anti-greenmail proposals when they are bundled with other charter or bylaw amendments.
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G. |
UNEQUAL VOTING RIGHTS |
Vote against dual class exchange offers.
Vote against dual class recapitalizations
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H. |
SUPERMAJORITY SHAREHOLDER VOTE REQUIREMENT TO AMEND THE CHARTER OR BYLAWS |
Vote against management proposals to require a supermajority shareholder vote to approve charter and bylaw amendments.
Vote for shareholder proposals to lower supermajority shareholder vote requirements for charter and bylaw amendments.
Exh A-6
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I. |
SUPERMAJORITY SHAREHOLDER VOTE REQUIREMENT TO APPROVE MERGERS |
Vote against management proposals to require a supermajority shareholder vote to approve mergers and other significant business combinations.
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J. |
WHITE KNIGHT PLACEMENTS |
Vote for shareholder proposals to require approval of blank check preferred stock issues for other than general corporate purposes or similar corporate actions.
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K. |
CONFIDENTIAL VOTING |
Generally, vote for shareholder proposals that request corporations to adopt confidential voting, use independent tabulators and use independent inspectors of election as long as the proposals include clauses for proxy contests as follows: In the case of a contested election, management is permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy remains in place. If the dissidents do not agree, the confidential voting policy is waived.
Generally, vote for management proposals to adopt confidential voting.
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L. |
EQUAL ACCESS |
Generally, vote for shareholders proposals that would allow significant company shareholders equal access to managements proxy material in order to evaluate and propose voting recommendations on proxy proposals and director nominees, and in order to nominate their own candidates to the board.
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M. |
BUNDLED PROPOSALS |
Generally, vote on a case-by-case basis bundled or conditioned proxy proposals. In the case of items that are conditioned upon each other, we examine the benefits and costs of the packaged items. In instances when the joint effect of the conditioned items is not in shareholders best interests, we vote against the proposals. If the combined effect is positive, we support such proposals.
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N. |
SHAREHOLDER ADVISORY COMMITTEES |
Vote on a case-by-case basis proposals to establish a shareholder advisory committee.
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VI. |
CAPITAL STRUCTURE |
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A. |
COMMON STOCK AUTHORIZATION |
Vote on a case-by-case basis proposals to increase the number of shares of common stock authorized for issue.
Generally, vote against proposed common stock authorizations that increase the existing authorization by more than 100% unless a clear need for the excess shares is presented by the company.
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B. |
STOCK DISTRIBUTIONS: SPLITS AND DIVIDENDS |
Generally, vote for management proposals to increase common share authorization
for a stock split, provided that the split does not result in
an increase of authorized but unissued shares of more than 100% after giving
effect to the shares needed for the split.
Exh A-7
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C. |
REVERSE STOCK SPLITS |
Generally, vote for management proposals to implement a reverse stock split, provided
that the reverse split does not result in an increase of authorized but
unissued shares of more than 100% after giving effect to the shares needed for
the reverse split.
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D. |
BLANK CHECK PREFERRED AUTHORIZATION |
Generally, vote for proposals to create blank check preferred stock in cases when the company expressly states that the stock will not be used as a takeover defense or carry superior voting rights.
Vote on a case-by-case basis proposals that would authorize the creation of new classes of preferred stock with unspecified voting, conversion, dividend and distribution, and other rights.
Vote on a case-by-case basis proposals to increase the number of authorized blank check preferred shares.
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E. |
SHAREHOLDER PROPOSALS REGARDING BLANK CHECK PREFERRED STOCK |
Generally, vote for shareholder proposals to have blank check preferred stock placements, other than those shares issued for the purpose of raising capital or making acquisitions in the normal course of business, submitted for shareholder ratification.
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F. |
ADJUST PAR VALUE OF COMMON STOCK |
Vote on a case-by-case basis management proposals to reduce the par value of common stock.
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G. |
PREEMPTIVE RIGHTS |
Vote on a case-by-case basis proposals to create or abolish preemptive rights. In evaluating proposals on preemptive rights, we look at the size of a company and the characteristics of its shareholder base.
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H. |
DEBT RESTRUCTURINGS |
Vote on a case-by-case basis proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan. We consider the following issues:
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DILUTION How much will ownership interest of existing shareholders be reduced, and how extreme will dilution to any future earnings be? |
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CHANGE IN CONTROL Will the transaction result in a change in control of the company? |
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BANKRUPTCY Is the threat of bankruptcy, which would result in severe losses in shareholder value, the main factor driving the debt restructuring? |
Generally, we approve proposals that facilitate debt restructurings unless there are clear signs of self-dealing or other abuses.
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I. |
SHARE REPURCHASE PROGRAMS |
Vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.
Exh A-8
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VII. |
EXECUTIVE COMPENSATION |
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In general, we vote on a case-by-case basis on executive compensation plans, with the view that viable compensation programs reward the creation of stockholder wealth by having a high payout sensitivity to increases in shareholder value. |
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VIII. |
COMPENSATION PROPOSALS |
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A. |
AMENDMENTS THAT PLACE A CAP ON ANNUAL GRANTS |
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Vote for plans that place a cap on the annual grants any one participant may receive. |
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B. |
AMEND ADMINISTRATIVE FEATURES |
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Vote for plans that simply amend shareholder-approved plans to include administrative features. |
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C. |
AMENDMENTS TO ADDED PERFORMANCE-BASED GOALS |
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Generally, vote for amendments to add performance goals to existing compensation plans. |
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D. |
AMENDMENTS TO INCREASE SHARES AND RETAIN TAX DEDUCTIONS |
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Vote on amendments to existing plans to increase shares reserved and to qualify the plan for favorable tax treatment should be evaluated on a case-by-case basis. |
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E. |
APPROVAL OF CASH OR CASH-AND-STOCK BONUS PLANS |
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Vote for cash or cash-and-stock bonus plans to exempt the compensation from taxes. |
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F. |
SHAREHOLDER PROPOSALS TO LIMIT EXECUTIVE PAY |
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Vote on a case-by-case basis all shareholder proposals that seek additional disclosure of executive pay information. |
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Vote on a case-by-case basis all other shareholder proposals that seek to limit executive pay. |
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Vote for shareholder proposals to expense options, unless the company has already publicly committed to expensing options by a specific date. |
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G. |
GOLDEN AND TIN PARACHUTES |
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Vote for shareholder proposals to have golden and tin parachutes submitted for shareholder ratification. |
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Vote on a case-by-case basis all proposals to ratify or cancel golden or tin parachutes. |
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H. |
EMPLOYEE STOCK OWNERSHIP PLANS (ESOPS) |
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Vote on a case-by-case basis proposals that request shareholder approval in order to implement an ESOP or to increase authorized shares for existing ESOPs, except in cases when the number of shares allocated to the ESOP is excessive (i.e., generally greater than 5% of outstanding shares). |
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I. |
401(K) EMPLOYEE BENEFIT PLANS |
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Generally, vote for proposals to implement a 401(k) savings plan for employees. |
Exh A-9
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IX. |
STATE OF INCORPORATION |
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A. |
VOTING ON STATE TAKEOVER STATUTES |
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Vote on a case-by-case basis proposals to opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freezeout provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti-greenmail provisions, and disgorgement provisions). |
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B. |
VOTING ON REINCORPORATION PROPOSALS |
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Vote on a case-by-case basis proposals to change a companys state of incorporation. |
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X. |
MERGERS AND CORPORATE RESTRUCTURINGS |
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A. |
MERGERS AND ACQUISITIONS |
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Vote on a case-by-case basis proposals related to mergers and acquisitions, taking into account at least the following: |
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anticipated financial and operating benefits; |
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offer price (cost vs. premium); |
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prospects of the combined companies; |
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how the deal was negotiated; and |
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changes in corporate governance and their impact on shareholder rights. |
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B. |
CORPORATE RESTRUCTURING |
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Vote on a case-by-case basis proposals related to a corporate restructuring, including minority squeezeouts, leveraged buyouts, spin-offs, liquidations and asset sales. |
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C. |
SPIN-OFFS |
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Vote on a case-by-case basis proposals related to spin-offs depending on the tax and regulatory advantages, planned use of sale proceeds, market focus, and managerial incentives. |
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D. |
ASSET SALES |
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Vote on a case-by-case basis proposals related to asset sales after considering the impact on the balance sheet/working capital, value received for the asset, and potential elimination of diseconomies. |
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A-10 |
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E. |
LIQUIDATIONS |
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Vote on a case-by-case basis proposals related to liquidations after reviewing managements efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation. |
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F. |
APPRAISAL RIGHTS |
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Vote for proposals to restore, or provide shareholders with, rights of appraisal. |
Exh A-10
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G. |
CHANGING CORPORATE NAME |
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Vote on a case-by-case basis proposal to change the corporate name. |
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XI. |
MUTUAL FUND PROXIES |
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A. |
ELECTION OF TRUSTEES |
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Vote on trustee nominees on a case-by-case basis. |
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B. |
INVESTMENT ADVISORY AGREEMENT |
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Vote on investment advisory agreements on a case-by-case basis. |
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C. |
FUNDAMENTAL INVESTMENT RESTRICTIONS |
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Vote on amendments to a funds fundamental investment restrictions on a case-by-case basis. |
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D. |
DISTRIBUTION AGREEMENTS |
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Vote on distribution agreements on a case-by-case basis. |
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XII. |
SOCIAL AND ENVIRONMENTAL ISSUES |
In general we vote on a case-by-case basis on shareholder social and environmental proposals, on the basis that their impact on share value can rarely be anticipated with any high degree of confidence.
In most cases, however, we vote for disclosure reports that seek additional information, particularly when it appears companies have not adequately addressed shareholders social and environmental concerns.
In determining our vote on shareholder social and environmental proposals, we analyze factors such as:
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whether adoption of the proposal would have either a positive or negative impact on the companys short-term or long-term share value; |
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the percentage of sales, assets and earnings affected; |
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the degree to which the companys stated position on the issues could affect its reputation or sales, or leave it vulnerable to boycott or selective purchasing; whether the issues presented should be dealt with through government or company specific action; |
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whether the company has already responded in some appropriate manner to the request embodied in a proposal; |
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whether the companys analysis and voting recommendation to shareholders is persuasive; |
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what other companies have done in response to the issue; |
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whether the proposal itself is well framed and reasonable; whether implementation of the proposal would achieve the objectives sought in the proposal; and |
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whether the subject of the proposal is best left to the discretion of the board. |
Exh A-11
PART C: OTHER INFORMATION
Item 23. Exhibits:
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(a) |
Amended and Restated Declaration of Trust.* |
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(b) |
Bylaws of the Trust.* |
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(c) |
Not applicable. |
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(d)(1) |
Form of Investment Management Agreement between the Trust and Van Eck Associates Corporation with respect to Market Vectors Gold Miners ETF).* |
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(d)(2) |
Form of Investment Management Agreement between the Trust and Van Eck Associates Corporation with respect to all portfolios (except for Market Vectors Gold Miners ETF).*** |
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(e)(1) |
Form of Distribution Agreement between the Trust and Van Eck Securities Corporation.** |
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(e)(2) |
Form of Participant Agreement.* |
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(f) |
Not applicable. |
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(g) |
Form of Custodian Agreement between the Trust and The Bank of New York.* |
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(h)(1) |
Form of Fund Accounting Agreement between the Trust and The Bank of New York.* |
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(h)(2) |
Form of Transfer Agency Services Agreement between the Trust and The Bank of New York.* |
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(h)(3) |
Form of Sub-License Agreement between the Trust and the Van Eck Associates Corp.* |
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(i)(1) |
Opinion and consent of Clifford Chance US LLP (with respect to Market Vectors Environmental Services ETF, Market Vectors Gold Miners ETF and Market Vectors Steel ETF).*** |
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(i)(2) |
Opinion of Clifford Chance US LLP (with respect to Market Vectors Global Alternative Energy ETF and Market Vectors Russia ETF).**** |
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(i)(3) |
Consent of Clifford Chance US LLP.***** |
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(j)(1) |
Consent of Ernst & Young LLP, independent registered public accounting firm (with respect to Market Vectors Environmental Services ETF, Market Vectors Gold Miners ETF and Market Vectors Steel ETF).***** |
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(j)(2) |
Consent of Ernst & Young LLP, independent registered public accounting firm (with respect to Market Vectors Global Alternative Energy ETF and Market Vectors Russia ETF).**** |
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(k) |
Not applicable. |
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(l) |
Not applicable. |
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(m) |
Not applicable. |
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(n) |
Not applicable. |
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(o) |
Not applicable. |
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(p)(1) |
Code of Ethics.*** |
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* |
Incorporated by the reference to the Registrants Registration Statement filed on April 28, 2006. |
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** |
Incorporated by reference to the Registrants Registration Statement filed on May 11, 2006. |
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*** |
Incorporated by reference to the Registrants Registration Statement filed on October 6, 2006. |
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**** |
Incorporated by reference to the Registrants Registration Statement filed on April 9, 2007. |
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***** |
Filed herewith. |
Item 24. Persons Controlled by or Under Common Control with Registrant
None.
Item 25. Indemnification
Pursuant to Section 10.2 of the Amended and Restated Declaration of Trust, all persons that are or have been a Trustee or officer of the Trust (collectively, the Covered Persons) shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably
C-1
incurred or paid by him in connection with any claim, action, suit, or proceeding in which he or she becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer and against amounts paid or incurred by him in the settlement thereof. No indemnification will be provided to a Covered Person who shall have been adjudicated by a court or body before which the proceeding was brought to be liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office or not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or in the event of a settlement, unless there has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office.
Article XII of the Trusts Bylaws, to the maximum extent permitted by Delaware law in effect from time to time, the Trust shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former trustee or officer of the Trust and who is made a party to the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director of the Trust and at the request of the Trust, serves or has served as a trustee, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made a party to the proceeding by reason of his or her service in that capacity. The Trust may, with the approval of its Board of Trustees, provide such indemnification and advance for expenses to a person who served a predecessor of the Trust in any of the capacities described in (a) or (b) above and to any employee or agent of the Trust or a predecessor of the Trust; provided that no provision of Article XII shall be effective to protect or purport to protect any trustee or officer of the Trust against liability to the Trust or its stockholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
The Trust has agreed to indemnify and hold harmless the Trustees against any and all expenses actually and reasonably incurred by the Trustee in any proceeding arising out of or in connection with the Trustees service to the Trust, to the fullest extent permitted by the Amended and Restated Agreement and Declaration of Trust and Bylaws of the Fund and Title 12, Part V, Chapter 38 of the Delaware Code, and applicable law.
Item 26. Business and Other Connections of Investment Manager
See Management in the Statement of Additional Information. Information as to the directors and officers of the Adviser is included in its Form ADV filed with the SEC and is incorporated herein by reference thereto.
Item 27. Principal Underwriters
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(a) |
Van Eck Securities Corporation is the Trusts principal underwriter. Van Eck Securities Corporation also acts as a principal underwriter, depositor, or investment manager for the following other investment companies: Van Eck Funds (which is comprised of three series: Emerging Markets Fund, Global Hard Assets Fund and International Investors Gold Fund); Worldwide Insurance Trust (which is comprised of five series: Worldwide Absolute Return Fund, Worldwide Bond Fund, Worldwide Emerging Markets Fund, Worldwide Hard Assets Fund and Worldwide Real Estate Fund); and Van Eck Funds, Inc. (which has one series, Mid Cap Value Fund). |
C-2
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(b) |
The following is a list of the executive officers, directors and partners of Van Eck Securities Corporation: |
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Name and Principal |
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Positions and |
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Keith J. Carlson |
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President |
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Susan Lashey |
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Vice President |
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Joseph McBrien |
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Senior Vice President, General Counsel and Secretary |
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Peter Moeller |
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Senior Vice President |
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Jonathan R. Simon |
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Vice President and Associate General Counsel |
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Bruce J. Smith |
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Senior Vice President, Chief Financial Officer, Treasurer and Controller |
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Jan F. van Eck |
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Director, Executive Vice President and Chief Compliance Officer |
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Derek S. van Eck |
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Director and Executive Vice President |
Item 28. Location of Accounts and Records
All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the Rules thereunder will be maintained at the offices of The Bank of New York, 101 Barclay Street, New York, New York 10286.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
C-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and State of New York on the 27th day of April, 2007.
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MARKET VECTORS ETF TRUST |
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By: |
/s/ Keith J. Carlson* |
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Keith J. Carlson |
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President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following person in the capacities and on the date indicated.
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/s/ Phillip D. DeFeo* |
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Chairman |
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April 27, 2007 |
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Phillip D. DeFeo |
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/s/ David H. Chow* |
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Trustee |
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April 27, 2007 |
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David H. Chow |
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/s/ R. Alastair Short* |
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Trustee |
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April 27, 2007 |
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R. Alastair Short |
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/s/ Richard D. Stamberger* |
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Trustee |
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April 27, 2007 |
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Richard D. Stamberger |
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/s/ Jan F. van Eck* |
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Trustee |
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April 27, 2007 |
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Jan F. van Eck |
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/s/ Keith J. Carlson* |
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President and Chief Executive Officer |
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April 27, 2007 |
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Keith J. Carlson |
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/s/ Bruce J. Smith* |
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Chief Financial Officer |
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April 27, 2007 |
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Bruce J. Smith |
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*By: |
/s/ Joseph J. McBrien |
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Joseph J. McBrien |
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Attorney-in-Fact |
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C-4
EXHIBIT INDEX
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(a) |
Amended and Restated Declaration of Trust.* |
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(b) |
Bylaws of the Trust.* |
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(c) |
Not applicable. |
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(d)(1) |
Form of Investment Management Agreement between the Trust and Van Eck Associates Corporation with respect to Market Vectors Gold Miners ETF).* |
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(d)(2) |
Form of Investment Management Agreement between the Trust and Van Eck Associates Corporation with respect to all portfolios (except for Market Vectors Gold Miners ETF).*** |
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(e)(1) |
Form of Distribution Agreement between the Trust and Van Eck Securities Corporation.** |
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(e)(2) |
Form of Participant Agreement.* |
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(f) |
Not applicable. |
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(g) |
Form of Custodian Agreement between the Trust and The Bank of New York.* |
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(h)(1) |
Form of Fund Accounting Agreement between the Trust and The Bank of New York.* |
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(h)(2) |
Form of Transfer Agency Services Agreement between the Trust and The Bank of New York.* |
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(h)(3) |
Form of Sub-License Agreement between the Trust and the Van Eck Associates Corp.* |
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(i)(1) |
Opinion and consent of Clifford Chance US LLP (with respect to Market Vectors Environmental Services ETF, Market Vectors Gold Miners ETF and Market Vectors Steel ETF).*** |
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(i)(2) |
Opinion of Clifford Chance US LLP (with respect to Market Vectors Global Alternative Energy ETF and Market Vectors Russia ETF).**** |
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(i)(3) |
Consent of Clifford Chance US LLP.***** |
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(j)(1) |
Consent of Ernst & Young LLP, independent registered public accounting firm (with respect to Market Vectors Environmental Services ETF, Market Vectors Gold Miners ETF and Market Vectors Steel ETF).***** |
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(j)(2) |
Consent of Ernst & Young LLP, independent registered public accounting firm (with respect to Market Vectors Global Alternative Energy ETF and Market Vectors Russia ETF).**** |
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(k) |
Not applicable. |
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(l) |
Not applicable. |
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(m) |
Not applicable. |
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(n) |
Not applicable. |
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(o) |
Not applicable. |
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(p)(1) |
Code of Ethics.*** |
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* |
Incorporated by the reference to the Registrants Registration Statement filed on April 28, 2006. |
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** |
Incorporated by reference to the Registrants Registration Statement filed on May 11, 2006. |
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*** |
Incorporated by reference to the Registrants Registration Statement filed on October 6, 2006. |
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**** |
Incorporated by reference to the Registrants Registration Statement filed on April 9, 2007. |
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***** |
Filed herewith. |
C-5