Van Eck Global, the money managing firm behind the Market Vectors exchange traded funds, announced it will launch the Market Vectors Index Solutions unit after acquiring 15 indices from Germany-based 4asset-management, which develops, markets and licenses the benchmark indices the Van Eck’s ETFs are based on.
According to a press release, MVIS’s indexing methodology emphasizes investability, liquidity and diversification. Altogether, the 15 indices that are currently being used by the U.S.-listed Market Vector ETFs account for $4 billion in assets.
“The launch of MVIS is an important step for Van Eck Global,” Jan van Eck, Principal and CEO of Van Eck Global, said in the press release. “Generally speaking, there has been a shift form theoretical benchmarks to investable benchmarks within the ETF space. The ability to develop our own line of proprietary benchmarks will allow for more flexibility to create indices that are well suited to underlie investment products such as ETFs.”
Van Eck previously sold its indices to 4asset management due to regulatory constraints that required a separation between index providers and ETF providers, reports Alex Ulam for IndexUniverse. The company, though, was given self-indexing relief from the Securities and Exchange Commission after outlining a plan to safely separate the ETF business from the new subsidiary MVIS.
“You need to separate portfolio management and the index business,” Lars Hamich, chief executive officer of the Market Vectors Index Solutions unit, said in the IndexUniverse article. “This is why we moved the index business to Frankfurt, so basically everything we do is completely separated from Van Eck, and the portfolio team will get the news at the same time as everyone else. You want to make sure that everyone is treated alike.”
Market Vector ETF investors will likely see no real changes in their investments.