Van Eck rolls out six ETFs that until yesterday were HOLDRs with the same tickers.
Van Eck today launched six ETFs that until yesterday had been exchange-traded HOLDRS, adding more than $2 billion to its assets under management and an oil services fund that plays to its strengths as a firm known for its natural resources investments.
The new ETFs, which are retaining their previous tickers, are:
- Market Vectors Biotech ETF (NYSEArca: BBH)
- Market Vectors Bank and Brokerage ETF (NYSEArca: RKH)
- Market Vectors Oil Services ETF (NYSEArca: OIH)
- Market Vectors Pharmaceutical ETF (NYSEArca: PPH)
- Market Vectors Retail ETF (NYSEArca: RTH)
- Market Vectors Semiconductor ETF (NYSEArca: SMH)
The transfer offering is one more sign that the ETF juggernaut is gathering steam. As of Dec. 20, investors had almost $1.045 trillion allocated to various U.S.-listed ETFs. Inflows into ETFs have outpaced those into any other investment vehicle as investors become more familiar with the benefits of the ETF structure.
HOLDRs, on the other hand, have had their day. The funds, which are holding company depositary receipts Merrill Lynch launched in the late 1990s and early 2000s, are narrowly focused portfolios that, once created, never changed. They are exchange traded like ETFs, but that set-and-forget aspect has made them increasingly irrelevant as markets have evolved and companies have come and gone.
A 'Successful' Exchange Offer
Van Eck said in a press release yesterday that 70 percent of the assets in the six HOLDRS, or $2.3 billion, became assets in the new ETFs, and characterized the exchange offers as “successful.”
“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,” Adam Phillips, managing directors of ETFs at Van Eck, said in the press release.
As of the beginning of this month, the six HOLDRs had more than $3.5 billion in assets, with OIH the biggest on them all. It had more than $2 billion in assets, and now, as an ETF, has about $1.16 billion, according to data compiled by IndexUniverse.
The six HOLDRS involved in the transaction made up around 90 percent of all the assets of the 17 HOLDRs originally rolled by Merrill Lynch. Merrill has said in a regulatory filing that it will shut the remaining 11 HOLDRS.
Trade in the six HOLDRs was halted yesterday morning, a crucial final step that marked the end of the exchange offers Van Eck first announced in August.
Van Eck said yesterday that the breakdown of the 70 percent aggregate figure of assets that were successfully exchanged was as follows:
- Oil Service HOLDRS (NYSEArca: OIH), 60.71 percent
- Semiconductor HOLDRS (NYSEArca: SMH), 71.02 percent
- Pharmaceutical HOLDRS (NYSEArca: PPH), 70.20 percent
- Biotech HOLDRS (NYSEArca: BBH), 63.69 percent
- Retail HOLDRS (NYSEArca: RTH), 57.34 percent
- Regional Bank HOLDRS (NYSEArca: RKH), 74.52 percent