Van Eck Drafts Plans For Mortgage REIT ETF

May 09, 2011


Van Eck Global, the money management firm that built its reputation by marketing natural resources funds, filed paperwork with the Securities and Exchange Commission to offer a mortgage REIT that will owns shares of companies that offer financing to developers and owners of properties.

The Market Vectors Mortgage REIT ETF will be based on Van Eck’s proprietary Market Vectors Mortgage REIT Index, and the ETF must invest at least 80 percent of its assets in securities included in the benchmark. The fund can concentrate investments in a particular industry or group of industries, though as of May 6, the date of filing, the real estate sector represents a significant portion of the index.

REIT ETFs have been a popular investment and have generally performed well since the market crash of 2008-2009. The Vanguard REIT ETF (NYSEArca: VNQ), for example, has gathered more than $9 billion in assets since its launch in September 2004, and it has risen more than 80 percent in the past two years, according to data compiled by IndexUniverse.

More recently, interest in REITs with non-U.S. holdings has also taken off. Both the Vanguard Global ex-U.S. REIT ETF (NYSEArca: VNQI) and the Cohen & Steers Global Realty Majors ETF (NYSEArca: GRI) canvass property holders outside the U.S., including real estate operating companies in the emerging markets. VNQI has gathered $164 million since it was launched last fall, while GRI has attracted about $53 million since its rollout about four years ago.

Van Eck didn’t say what its new mortgage REIT’s ticker or its annual expense ratio would be.


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