Index Changes Coming for Coal, Gaming ETFs (BJK, KOL)
Van Eck's Market Vectors unit, the fifth-largest U.S. ETF issuer, announced the Market Vectors Coal ETF (NYSE: KOL) and the Market Vectors Gaming ETF (NYSE: BJK) will begin tracking new indexes on or about September 21, 2012.
The Market Vectors Coal ETF, which has almost $166 million in assets under management, currently tracks the Stowe Coal Index. KOL will make the switch to the Market Vectors Global Coal Index. The Market Vectors Gaming ETF, which has almost $59 million in AUM, is linked to the S-Network Global Gaming Index, but will make the change to the Market Vectors Global Gaming Index.
Both indexes employ the Market Vectors index methodology that focuses on investability, Market Vectors said in a statement.
"We expect that KOL and BJK will become more diversified as a result of these changes," said Ed Lopez, Marketing Director at Van Eck Global, in a statement. "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."
The same index methodology is currently used for other popular Market Vectors ETFs such as the Market Vectors Vietnam ETF (NYSE: VNM), the Market Vectors Brazil Small-Cap ETF (NYSE: BRF), the Market Vectors Indonesia ETF (NYSE: IDX), the Market Vectors Russia ETF (NYSE: RSX) and the Market Vectors Oil Services ETF (NYSE: OIH).
The new indexes for BJK and KOL are rules-based, modified-capitalization-weighted, float-adjusted indexes.
The pure-play nature of the two indexes requires that constituent companies must generate at least 50 percent of their revenues from the industry they seek to track and constituents are capped at an 8 percent weighting, according to the statement.
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