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Market Vectors ETF Trust announces expiration of successful exchange offers for six Merrill Lynch-sponsored HOLDRS

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Van Eck Global has announced the expiration of the exchange offers by its Market Vectors ETF Trust for any and all outstanding receipts of six Merrill Lynch-sponsored HOLDRS: Oil Service (OIH), Semiconductor (SMH), Pharmaceutical (PPH), Biotech (BBH), Retail (RTH), and Regional Bank (RKH).

The offering period expired, as scheduled, at 11:00 am EST, on 20 December,, 2011. All terms and conditions have been satisfied for each of the six exchange offers. As such, Market Vectors ETF Trust has accepted all tendered HOLDRS associated with the offers. A total of 33,756,917 HOLDRS were validly tendered (and not withdrawn) and accepted by Market Vectors ETF Trust, representing nearly 70% of the value of the aggregate assets of the six Trusts and totalling USD2.3 billion (based off today’s 10:30 am market prices).

“We are extremely pleased with the outcome, and feel that the exchange offers have provided an important benefit to investors. As we’ve stated, we believe that ETFs offer a better investment vehicle when compared to the HOLDRS structure,” says Adam Phillips (pictured), Managing Director of ETFs at Van Eck Global. “These funds are a great addition to the Van Eck platform and, particularly in the case of OIH, a natural extension of the kinds of products with which we have historically been associated. We are eager to move forward with the launch of this new suite of industry focused ETFs.”

All owners of validly tendered HOLDRS will be entitled to shares of a new corresponding Market Vectors ETF. The newly created ETFs are expected to begin trading on 21 December, 2011 under the corresponding HOLDRS’ ticker symbols.

Market Vectors’ six new ETFs seek to replicate as closely as possible, before fees and expenses, the price and yield performance of Market Vectors Indices. By tracking their respective indices, the new ETFs will provide exposure to highly liquid companies. The index weighting methodology combines market capitalisation and trading volume rankings to compile 25 of the largest and most actively traded companies in their respective industries.

Additionally, the new ETFs may include both domestic and US- listed foreign companies. This feature allows for greater industry representation compared to many industry-focused indices which include US domiciled companies only. Many highly recognisable companies in these industries are based outside of the US, particularly in Oil Services, Semiconductor and Pharmaceutical.
The indices are capitalisation-weighted and require constituents to be listed on a US exchange and derive the majority of their revenues from their respective industry. Each index will have 25 constituents with weightings rebalanced quarterly.

The launch of these ETFs underscores Van Eck’s commitment to industry-focused investment themes and the ongoing evolution of the firm’s product offerings. Van Eck currently offers a broad lineup of specialised hard asset ETFs as well as industry ETFs focused on global gaming, environmental services and mortgage REITs. In addition, it offers international equity, fixed income and municipal bond ETFs.

Each of the new Market Vectors ETFs carry a gross expense ratio of 0.47% and a net expense ratio of 0.35%, with expenses capped at 0.35% at least until 1 May, 2013 (excludes certain expenses, such as interest).

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