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Market Vectors changes underlying indexes of coal and gaming ETFs


From 21 September the Market Vectors Coal ETF (KOL) will begin tracking a new benchmark, the Market Vectors Global Coal Index (MVKOL).

At the same time, the Market Vectors Gaming ETF (BJK) will also begin tracking a new benchmark, the Market Vectors Global Gaming Index (MVBJK).

Both indexes employ the Market Vectors index methodology that focuses on investability. This methodology is shared by the benchmark indexes of several other Market Vector ETFs, including Brazil Small-Cap, Indonesia, Junior Gold Miners, Oil Services, Russia, Semiconductor, and Vietnam.

“We expect that KOL and BJK will become more diversified as a result of these changes,” says Ed Lopez, marketing director at Van Eck Global. “They will continue, however, to offer pure play global exposure. Consistent with the Market Vectors index methodology, these indexes have limits on individual holdings which help to avoid overconcentration in a few large holdings.”

Both MVKOL and MVBJK are rules-based, modified-capitalization-weighted, float-adjusted indexes. These indexes seek to track the performance of the largest and most liquid global companies in their respective industries. Each provides 90 per cent market coverage of their investable universe based on strict size and liquidity requirements.

The pure-play nature of the two indexes requires that constituent companies must generate at least 50 per cent of their revenues from the industry they seek to track. Also, constituents are capped at an eight per cent weighting, a key change from the indexes that had previously served as the funds’ benchmarks.

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