ConvergEx Group has been named exclusive transition manager in Van Eck Global’s exchange of certain Merrill Lynch-sponsored Holding Company Depositary Receipts (HOLDRS) into Market Vectors exchange traded funds (ETFs). These include: Oil Services (OIH), Semiconductor (SMH), Pharmaceutical (PPH), Biotech (BBH), Retail (RTH) and Regional Bank (RKH).
Market Vectors ETF Trust plans to offer investors in the six HOLDRS the opportunity to exchange their shares in these funds for shares of newly created ETFs. As transition manager, ConvergEx will be responsible for rebalancing the portfolio by selling the underlying securities in the HOLDRS and purchasing certain other securities in the open market in order to conform to an ETF structure. The ETFs are expected to retain the corresponding HOLDRS’ ticker symbols and will be part of the family of Market Vectors ETFs.
Thomas Smykowski (pictured), head of Global Portfolio and ETF Execution at ConvergEx Group, says: “This unique transaction brings together the dual strengths of ConvergEx’s leading Transition Management and ETF teams and represents yet another way we are developing creative solutions for the expanding ETF industry.”
The rebalance is expected to be completed on or about 20 December, 2011, unless the offers are extended.