Van Eck’s China A-Share ETF Surpasses $100 Million in Assets under Management

The Market Vectors® ChinaAMC A-Share ETF (NYSE Arca: PEK®) sponsored by Van Eck Global, a New York-based independent investment firm, surpassed $100M in AUM on March 23. The Fund was introduced in 2010 as the first ETF to offer investors access to the China A-shares market. On March 31, 2015, PEK received a 5-star Morningstar rating on a three-year and overall basis.

“With significant reforms under way and an economy that has decelerated but continues to outpace much of the world, we believe China deserves a fresh look from investors,” says Jan van Eck, Chief Executive Officer at Van Eck Global.

“We believe that there is an underlying assumption by U.S. investors that China currently represents some kind of systemic risk,” he said. “The causes are generally ascribed to slowing growth, a real estate bubble, overcapacity in one industry or another, or unsustainable levels of debt. While there are challenges, we observe that the country is further along in working through these issues than is commonly recognized.”

Mr. van Eck also addressed some of the issues currently troubling China watchers. “One of the major concerns about China has been local government debt and so-called ‘shadow loans’ – cities getting bank loans through companies that they owned and they borrowed money from, off budget. About a year ago, the central government moved to put a stop to this and replace it with a municipal bond market. Subsequently, there have been about ten major municipal issues all trading at the same or similar credit rating as the central government. All of that debt has to appear on the books of the local government now1. So there has been a move towards transparency, which may mitigate some of the concerns over debt.”

Van Eck noted that there are multiple reforms underway in the financial sector as well: reining in “gray market” loans; removing restrictions on commercial bank lending; developing a more formal, transparent corporate bond market; and reinvigorating the equity markets, including the market for initial public offerings (IPOs)2.

“By some measures, China is currently the largest economy in the world, so putting in place these kinds of economic and financial reforms takes time,” said van Eck. “However, we believe these reforms are beginning to be priced into the market. The recent rally in Chinese equities suggests to us that other investors are starting to come to a similar conclusion.”

Van Eck Global is a pioneer in providing investors exposure to China’s local markets. PEK was the first-of-its-kind ETF when it was launched in 2010. Last year, Van Eck launched the Market Vectors ChinaAMC SMC-ChiNext ETF (NYSE Arca: CNXT), based on an index intended to track the performance of the 100 largest and most liquid A-share stocks listed and trading on the Small and Medium Enterprise (SME) Board and the ChiNext Board of the Shenzhen Stock Exchange. According to Bloomberg, CNXT was the best performing non-leveraged ETF in the U.S. for the first quarter 2015.

The Market Vectors ChinaAMC China Bond ETF (NYSE Arca: CBON), the first U.S.-listed ETF to provide investors with direct access to China’s onshore bond market, was recently named “Best New ETF of 2014” by ETF.com.

1 Source: Van Eck Global

2 Source: Van Eck Global

About Van Eck Global

Founded in 1955, Van Eck Global was among the first U.S. independent investment firms helping investors achieve greater diversification through global investing. Today, the firm continues this tradition by offering innovative, actively managed investment choices in hard assets, emerging markets, precious metals including gold, and other alternative asset classes. Van Eck Global has offices around the world and managed approximately $30.6 billion in investor assets as of March 31, 2015.

Market Vectors exchange-traded products have been offered by Van Eck Global since 2006 and span many asset classes, including equities, fixed income (municipal and international bonds) and currency markets. Van Eck Global is one of the largest sponsors of ETFs in the U.S. and worldwide.

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Morningstar Ratings: © 2015 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Market Vectors ChinaAMC A-Share ETF (PEK) and Market Vectors ChinaAMC SME-ChiNext ETF (CNXT) are subject to elevated risks associated with investments in Chinese securities, including A-Shares, which include, among others, political and economic instability, inflation, confiscatory taxation, nationalization, and expropriation, market volatility, less reliable financial information, differences in accounting, auditing, and financial standards and requirements, and uncertainty of implementation of Chinese law. In addition, the Fund is also subject to liquidity and valuation risks, currency risk, non-diversification risk, and other risks associated with foreign and emerging markets investments. PEK may be subject to risks associated with the Stock Connect program. Small- and medium-capitalization companies may be subject to elevated risks. Investments may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.

An investment in the Market Vectors ChinaAMC China Bond ETF (CBON) may be subject to risk which include, among others, risk of investing in RMB bonds, credit risk, interest rate risk, sovereign and quasi-sovereign defaults, adviser and sub-adviser risk, non-diversification risk, risks associated with non-investment grade securities and risk of the RQFII regime, all of which may adversely affect the Fund. Investments in mainland China may be subject to local customs, duties and rights of ownership, which might change at any time should policy makers deem them in China's best interest. As the Fund invests in securities denominated in Chinese Renminbi, changes in currency exchange rates may negatively impact the Fund's return. Foreign and emerging markets investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, changes in currency exchange rates, unstable governments, and limited trading capacity which may make these investments volatile in price or difficult to trade. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.

Fund shares are not individually redeemable and will be issued and redeemed at their Net Asset Value (“NAV”) only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. Please refer to the prospectus for complete risk information. To obtain a prospectus and summary prospectus, which contains this and other information, call 888.MKT.VCTR or visit marketvectorsetfs.com. Please read the prospectus and summary prospectus carefully before investing.

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