UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM N-CSR

              CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

                              INVESTMENT COMPANIES

Investment Company Act file number  811-10325

                            MARKET VECTORS ETF TRUST
               (Exact name of registrant as specified in charter)

                     335 Madison Avenue, New York, NY 10017
               (Address of principal executive offices) (Zip code)

                         Van Eck Associates Corporation
                     335 Madison Avenue, New York, NY 10017
                     (Name and address of agent for service)

Registrant's telephone number, including area code: (212) 293-2000

Date of fiscal year end:  APRIL 30

Date of reporting period: OCTOBER 31, 2014

ITEM 1. REPORT TO SHAREHOLDERS

SEMI-ANNUAL REPORT   O C T O B E R  3 1 ,  2 0 1 4   ( u n a u d i t e d )

 

 

 

MARKET VECTORS
MUNICIPAL INCOME ETFs
CEF Municipal Income ETF	XMPT®
High-Yield Municipal Index ETF	HYD®
Intermediate Municipal Index ETF	ITM®
Long Municipal Index ETF	MLN®
Pre-Refunded Municipal Index ETF	PRB®
Short High-Yield Municipal Index ETF	SHYD®
Short Municipal Index ETF	SMB®

 

888.MKT.VCTR
marketvectorsetfs.com

 

 

MARKET VECTORS MUNICIPAL INCOME ETFs
Management Discussion		3
Performance Comparison
CEF Municipal Income ETF (XMPT)		5
High-Yield Municipal Index ETF (HYD)		6
Intermediate Municipal Index ETF (ITM)		7
Long Municipal Index ETF (MLN)		8
Pre-Refunded Municipal Index ETF (PRB)		9
Short High-Yield Municipal Index ETF (SHYD)		10
Short Municipal Index ETF (SMB)		11
Explanation of Expenses		12
Schedule of Investments
CEF Municipal Income ETF (XMPT)		13
High-Yield Municipal Index ETF (HYD)		15
Intermediate Municipal Index ETF (ITM)		33
Long Municipal Index ETF (MLN)		52
Pre-Refunded Municipal Index ETF (PRB)		57
Short High-Yield Municipal Index ETF (SHYD)		60
Short Municipal Index ETF (SMB)		67
Statements of Assets and Liabilities		76
Statements of Operations		78
Statements of Changes in Net Assets		80
Financial Highlights
CEF Municipal Income ETF (XMPT)		83
High-Yield Municipal Index ETF (HYD)		83
Intermediate Municipal Index ETF (ITM)		84
Long Municipal Index ETF (MLN)		84
Pre-Refunded Municipal Index ETF (PRB)		85
Short High-Yield Municipal Index ETF (SHYD)		85
Short Municipal Index ETF (SMB)		86
Notes to Financial Statements		87
Approval of Investment Management Agreements		93

 

The information contained in the management discussion represents the opinions of Market Vectors ETFs and may differ from other persons. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings and the Funds’ performance, and the views of Market Vectors ETFs are as of October 31, 2014, and are subject to change.

MARKET VECTORS MUNICIPAL INCOME ETFS

(unaudited)

 

Dear Shareholder:

 

On October 31 of this year, assets under management in the Market Vectors Municipal Income ETFs reached a record level of US$2.6 billion, surpassing the previous high of US$2.3 billion recorded in February 2013.

 

Meeting the market’s demand for municipal bonds in which to invest has become a challenge. Even by October 2014, reinvestment demand, as measured by calls, maturities and coupons, had outpaced new issuance supply from the primary market by approximately 33%.

 

Through the end of October, there was only about $264 billion in new bonds to meet reinvestment demand of around $351 billion; that does not even take into consideration either new investors or non-traditional buyers such as investors shifting assets from high-yield corporate bonds because of the more attractive yields in high-yield munis.

 

This imbalance of supply versus demand has been a big theme this year, and has been the primary driver of continuing very strong performance which, in many instances, has exceeded the expectations analysts may have had at the start to the year.

 

$351 Billion in Demand from Bonds Being Called, Bonds Maturing,
and Coupon Payments through 10/31/2014

 

 

Source: Siebert, Brandford, Shank & Co. LLC. Data as of October 31, 2014. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

We encourage you stay in touch with us through the videos, emails, and subscriptions available on our website (http://www.vaneck.com).

 

You may, in particular, be interested in subscribing to Muni Nation^®, our weekly blog on the municipal bond market written by Jim Colby, senior municipal strategist and portfolio manager responsible for Market Vectors municipal bond investments. Should you have any questions, please contact us at 1.888.MKT.VCTR or visit www.marketvectorsetfs.com.

MARKET VECTORS MUNICIPAL INCOME ETFS

(unaudited)

 

Thank you for participating in the Market Vectors ETF Trust. On the following pages, you will find the performance record of each of the funds for the six month period ending October 31, 2014. You will also find their financial statements. We value your continuing confidence in us and look forward to helping you meet your investment goals in the future.

 

 

 

Jan F. van Eck
Trustee and President
Market Vectors ETF Trust

 

November 11, 2014

 

Represents the opinions of the investment adviser. Past performance is no guarantee of future results. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

1	Source: Van Eck Global and Morningstar Direct. Based on NAV total return performance of the 32 ETFs in the Municipal Bond Morningstar U.S. Category Group year to date ending October 31, 2014.

 

 

Management Discussion (unaudited)

 

Market Review

 

During the six month period ended October 31, 2014, the municipal bond market (munis) continued to demonstrate its resilience in the face of a number of challenges. For example, despite the extension of the Federal Reserve Bank’s (the “Fed”) “taper” program, which itself ended at the end of the period under review, and building on the momentum they developed during the first three months 2014, munis continued to experience inflows. In stark contrast to negative performance across the board for the year ended April 30, 2014, in the six months to October 31, 2014 all the Market Vectors Municipal Income ETFs performed positively.

 

 

Source: Van Eck Global. Returns based on NAV. The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment returns and ETF share values will fluctuate so that investors’ shares, when redeemed, may be worth more or less than their original cost. ETF returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV. Current performance may be lower or higher than performance data quoted.

 

Short Municipal Index ETF/Pre-Refunded Municipal Index ETF

 

Among short munis, the state general obligation and transportation sectors contributed most to the total return of the Short Municipal Index ETF. All other nine sectors contributed positive performance, but the industrial development revenue/pollution control revenue (IDR/PCR) and pre-refunded sectors contributed the least. In terms of state/U.S. territory, New York and California contributed the most to the total return of the Fund, while Puerto Rico was the single detractor from performance.

 

Munis from California contributed by far the most to the total return of the Pre-Refunded Municipal Index ETF. Grouped by state/U.S. territory, only munis from Maryland actually detracted from performance, and then only minimally.

 

Intermediate Municipal Index ETF

 

Munis from California and New York contributed the most to the total return of the Fund, while, when grouped by state/U.S. territory, those from Puerto Rico were the only detractors from performance. The sectors with the largest and second largest average weightings in the index, state general obligation and local general obligation, were the two largest contributors to the Fund’s performance. While no sectors detracted from performance, the pre-refunded and health care facilities sectors contributed the least over the period under review.

MARKET VECTORS MUNICIPAL INCOME ETFS

(unaudited)

 

Long Municipal Index ETF

 

All sectors contributed positively to the Fund’s total return, with the hospital sector being the greatest contributor. Municipal bonds issued by New York contributed by far the most to performance. Grouped by state/U.S. territory, municipal bonds issued by Puerto Rico were the only detractors from performance.

 

Short High-Yield Municipal Index ETF/High-Yield Municipal Index ETF

 

The Short High-Yield Municipal Index ETF traded for the full six month period to October 31, 2014. While the hospital and IDR/PCR sectors contributed most to performance, the electric sector was the one detractor from performance. Every single state/U.S. territory represented in the Fund, except for New Hampshire, Louisiana, and Puerto Rico, contributed positively to the Fund’s total return, with munis from Texas and New Jersey contributing the most to performance.

 

In the High-Yield Municipal Index ETF, every sector except one – electric – contributed to overall performance. While the hospital and IDR/PCR sectors contributed by far the most to total return, the pre-refunded and housing sectors contributed the least. Munis from Florida made the greatest contribution to performance and those from Oklahoma, Nevada, and Puerto Rico detracted most from performance.

 

CEF Municipal Income ETF

 

Over the six months under review, the average discount at which municipal closed-end funds (CEFs) traded at the beginning of the period continued to widen inexorably, if choppily. From a starting point of approximately -5.9% on May 1, the average discount had widened to approximately -8.3% by October 31. Since many municipal CEFs use leverage, and short-term rates remained low during the period under review, the cost of leverage, too, remained relatively low. This was, therefore, beneficial to the municipal closed-end fund market.

CEF MUNICIPAL INCOME ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				CEFMXTR2
Six Months			4.96	%			5.00	%			5.20	%
One Year			15.83	%			15.51	%			15.99	%
Life* (annualized)			7.08	%			7.05	%			7.47	%
Life* (cumulative)			25.37	%			25.25	%			26.88	%
*since 7/12/11

 

Commencement date for the Market Vectors CEF Municipal Income ETF (XMPT) was 7/12/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (7/12/11) to the first day of secondary market trading in shares of the Fund (7/13/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.60% / Net Expense Ratio 0.40%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding interest expense, offering costs, trading expenses, taxes, extraordinary expenses and Acquired Fund Fees and Expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

S-Network Municipal Bond Closed-End Fund Index^SM is calculated and maintained by S-Network Global Indexes, LLC. S-Network does not sponsor, endorse, or promote the Fund and bears no liability with respect to the Fund or any security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	S-Network Municipal Bond Closed-End Fund IndexSM (CEFMXTR) is composed of shares of municipal closed-end funds listed in the United States that are principally engaged in asset management processes designed to produce federally tax-exempt annual yield.

HIGH-YIELD MUNICIPAL INDEX ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				LMEHTR2
Six Months			5.43	%			5.68	%			5.53	%
One Year			12.26	%			11.43	%			12.54	%
Five Year			6.00	%			6.36	%			7.98	%
Life* (annualized)			9.61	%			9.63	%			10.88	%
Life* (cumulative)			69.30	%			69.44	%			80.87	%
*since 2/4/09

 

Commencement date for the Market Vectors High-Yield Municipal Index ETF (HYD) was 2/4/09.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (2/4/09) to the first day of secondary market trading in shares of the Fund (2/5/09), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Annual Fund Operating Expenses 0.35%

 

The Investment Management Agreement between Market Vectors ETF Trust and Van Eck Associates Corporation (the “Adviser”) provides that the Adviser will pay all expenses of the Fund, except for the fee payment under the Investment Management Agreement, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Barclays Inc. does not sponsor, endorse, or promote the Fund and bears no liability with respect to any such Funds or security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Barclays Municipal Custom High Yield Composite Index (LMEHTR) is made up of a 25%/75% blend of investment grade triple-B and non-investment grade munis, and draws 75% of its holdings from bonds issued as part of transaction sizes of $100 million or more. To be included in the Index, bonds must have an outstanding par value of at least $3 million for non-investment grade and $7 million for investment grade; 25% of index in investment-grade triple-B bonds issued as part of transaction sizes of at least $100 million in value; 50% of index in non-investment grade bonds issued as part of transaction of at least $100 million; 25% of index in non-investment grade bonds issued as part of transaction of $20-$100 million in size; fixed rate; nominal maturity of greater than one year; dated-date after 12/31/1990.

INTERMEDIATE MUNICIPAL INDEX ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				LMT2TR2
Six Months			3.26	%			3.40	%			4.00	%
One Year			7.55	%			6.98	%			8.53	%
Five Year			5.26	%			5.29	%			6.06	%
Life* (annualized)			5.04	%			5.04	%			5.90	%
Life* (cumulative)			40.49	%			40.45	%			48.62	%
*since 12/4/07

 

Commencement date for the Market Vectors Intermediate Municipal Index ETF (ITM) was 12/4/07.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (12/4/07) to the first day of secondary market trading in shares of the Fund (12/6/07), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Annual Fund Operating Expenses 0.24%

 

The Investment Management Agreement between Market Vectors ETF Trust and Van Eck Associates Corporation (the “Adviser”) provides that the Adviser will pay all expenses of the Fund, except for the fee payment under the Investment Management Agreement, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Barclays Inc. does not sponsor, endorse, or promote the Fund and bears no liability with respect to any such Fund or security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Barclays AMT-Free Intermediate Continuous Municipal Index (LMT2TR) is comprised of bonds that must be rated investment-grade (Baa3/BBB-or higher) by at least two of the following ratings agencies: Moody’s, S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date within the last five years, and must be at least six years but less than seventeen years from their maturity date. Remarketed issues, taxable municipal bonds, AMT municipal bonds, bonds with floating rates, and derivatives, are excluded from the benchmark.

LONG MUNICIPAL INDEX ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				LMT3TR2
Six Months			5.79	%			5.73	%			6.45	%
One Year			13.01	%			12.57	%			13.82	%
Five Year			5.93	%			6.03	%			7.03	%
Life* (annualized)			4.17	%			4.16	%			5.82	%
Life* (cumulative)			32.22	%			32.14	%			47.18	%
*since 1/2/08

 

Commencement date for the Market Vectors Long Municipal Index ETF (MLN) was 1/2/08.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (1/2/08) to the first day of secondary market trading in shares of the Fund (1/7/08), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Annual Fund Operating Expenses 0.24%

 

The Investment Management Agreement between Market Vectors ETF Trust and Van Eck Associates Corporation (the “Adviser”) provides that the Adviser will pay all expenses of the Fund, except for the fee payment under the Investment Management Agreement, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Barclays Inc. does not sponsor, endorse, or promote the Fund and bears no liability with respect to any such Fund or security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Barclays AMT-Free Long Continuous Municipal Index (LMT3TR) is comprised of bonds that must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Moody’s, S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date within the last five years, and must be at least seventeen years from their maturity date. Remarketed issues, taxable municipal bonds, AMT municipal bonds, bonds with floating rates, and derivatives, are excluded from the benchmark.

PRE-REFUNDED MUNICIPAL INDEX ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				LMPETR2
Six Months			(0.26	)%			0.47	%			0.67	%
One Year			0.05	%			1.03	%			1.35	%
Five Year			1.21	%			1.31	%			1.81	%
Life* (annualized)			1.15	%			1.29	%			1.83	%
Life* (cumulative)			6.77	%			7.63	%			10.96	%
*since 2/2/09

 

Commencement date for the Market Vectors Pre-Refunded Municipal Index ETF (PRB) was 2/2/09.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (2/2/09) to the first day of secondary market trading in shares of the Fund (2/3/09), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Annual Fund Operating Expenses 0.24%

 

The Investment Management Agreement between Market Vectors ETF Trust and Van Eck Associates Corporation (the “Adviser”) provides that the Adviser will pay all expenses of the Fund, except for the fee payment under the Investment Management Agreement, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Barclays Inc. does not sponsor, endorse, or promote the Fund and bears no liability with respect to any such Fund or security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Barclays Municipal Pre-Refunded-Treasury-Escrowed Index (LMPETR) is comprised of pre-refunded and escrowed-to-maturity municipal securities secured by an escrow or trust account containing obligations that are directly issued or unconditionally guaranteed by the U.S. government. The escrowed securities consist solely of U.S. Treasury obligations. To be included in the Index, bonds must have a nominal maturity of 1-30 years; outstanding par value of at least $7 million; issued as part of transaction of at least $75 million in value; fixed rate coupon and denominated in U.S. dollars.

SHORT HIGH-YIELD MUNICIPAL INDEX ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				BMHYTR2
Six Months			2.23	%			2.40	%			4.09	%
Life* (cumulative)			4.26	%			4.26	%			7.12	%
*since 1/13/14

 

Commencement date for the Market Vectors Short High-Yield Municipal Index ETF (SHYD) was 1/13/14.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (1/13/14) to the first day of secondary market trading in shares of the Fund (1/14/14), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Annual Fund Operating Expenses 0.35%

 

The Investment Management Agreement between Market Vectors ETF Trust and Van Eck Associates Corporation (the “Adviser”) provides that the Adviser will pay all expenses of the Fund, except for the fee payment under the Investment Management Agreement, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Barclays Inc. does not sponsor, endorse, or promote the Fund and bears no liability with respect to any such Fund or security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Barclays Municipal High Yield Short Duration Index (BMHYTR) is a market size weighted index composed of publicly traded municipal bonds that cover the U.S. dollar denominated high yield short-term tax-exempt bond market. The majority of the Index’s constituents are from the revenue sector, with some constituents being from the general obligation sector. The revenue sector is divided into industry sectors that consist of but may not be limited to electric, health care, transportation, education, water & sewer, resource recovery, leasing and special tax. As of December 31, 2013, the Index consisted of approximately 1,619 bonds and 497 issuers.

SHORT MUNICIPAL INDEX ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				LMT1TR2
Six Months			0.99	%			0.82	%			1.25	%
One Year			1.82	%			1.59	%			2.23	%
Five Year			2.30	%			2.44	%			3.03	%
Life* (annualized)			2.96	%			2.97	%			3.57	%
Life* (cumulative)			21.53	%			21.62	%			26.47	%
*since 2/22/08

 

Commencement date for the Market Vectors Short Municipal Index ETF (SMB) was 2/22/08.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (2/22/08) to the first day of secondary market trading in shares of the Fund (2/26/08), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Annual Fund Operating Expenses 0.20%

 

The Investment Management Agreement between Market Vectors ETF Trust and Van Eck Associates Corporation (the “Adviser”) provides that the Adviser will pay all expenses of the Fund, except for the fee payment under the Investment Management Agreement, interest expense, offering costs, trading expenses, taxes and extraordinary expenses.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Barclays Inc. does not sponsor, endorse, or promote the Fund and bears no liability with respect to any such Fund or security.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Barclays AMT-Free Short Continuous Municipal Index (LMT1TR) is comprised of bonds that must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Moody’s, S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date within the last five years, and must be at least one year but less than six years from their maturity date. Remarketed issues, taxable municipal bonds, AMT municipal bonds, bonds with floating rates, and derivatives, are excluded from the benchmark.

MARKET VECTORS ETF TRUST

EXPLANATION OF EXPENSES

(unaudited)

 

As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the period, May 1, 2014 to October 31, 2014.

 

Actual Expenses

 

The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period.”

 

Hypothetical Example for Comparison Purposes

 

The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as fees on purchase payments. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

			Beginning		Ending		Annualized		Expenses Paid
			Account		Account		Expense		During the Period*
			Value		Value		Ratio		May 1, 2014-
			May 1, 2014		October 31, 2014		During Period		October 31, 2014
CEF Municipal Income ETF
	Actual		$1,000.00		$1,050.00		0.40%		$2.07
	Hypothetical**		$1,000.00		$1,023.19		0.40%		$2.04
High-Yield Municipal Index ETF
	Actual		$1,000.00		$1,056.80		0.35%		$1.81
	Hypothetical**		$1,000.00		$1,023.44		0.35%		$1.79
Intermediate Municipal Index ETF
	Actual		$1,000.00		$1,034.00		0.24%		$1.23
	Hypothetical**		$1,000.00		$1,024.00		0.24%		$1.22
Long Municipal Index ETF
	Actual		$1,000.00		$1,057.30		0.24%		$1.24
	Hypothetical**		$1,000.00		$1,024.00		0.24%		$1.22
Pre-Refunded Municipal Index ETF
	Actual		$1,000.00		$1,004.70		0.24%		$1.21
	Hypothetical**		$1,000.00		$1,024.00		0.24%		$1.22
Short High-Yield Municipal Index ETF
	Actual		$1,000.00		$1,024.00		0.35%		$1.79
	Hypothetical**		$1,000.00		$1,023.44		0.35%		$1.79
Short Municipal Index ETF
	Actual		$1,000.00		$1,008.20		0.20%		$1.01
	Hypothetical**		$1,000.00		$1,024.20		0.20%		$1.02

 

*	Expenses are equal to the Fund’s annualized expense ratio (for the six months ended October 31, 2014) multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of days in the fiscal year (to reflect the one-half year period).
**	Assumes annual return of 5% before expenses

CEF MUNICIPAL INCOME ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

CEF MUNICIPAL INCOME ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

Summary of Investments
by Sector (unaudited)		% of Investments				Value
Financial			99.9	%		$	37,738,907
Money Market Fund			0.1				33,366
			100.0	%		$	37,772,273
The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs					Level 3 Significant Unobservable Inputs					Value
Closed-End Funds		$	37,738,907				$	—				$	—				$	37,738,907
Money Market Fund			33,366					—					—					33,366
Total		$	37,772,273				$	—				$	—				$	37,772,273

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

See Notes to Financial Statements

HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

ACA	Credit Agricole SA
AMBAC	American Municipal Bond Assurance Corp.
CIFG	CDC Ixis Financial Guaranty
COMWLTH GTD	Commonwealth Guaranteed
CP	Certificate of Participation
FGIC	Financial Guaranty Insurance Co.
GO	General Obligation
NATL	National Public Finance Guarantee Corp.
RB	Revenue Bond
SA	Special Assessment
ST	Special Tax
TA	Tax Allocation
XLCA	Syncora Guarantee, Inc.
(c)	Callable Security - the redemption date shown is when the security may be redeemed by the issuer
(d)	Security in default
(p)	Puttable Security - the redemption date shown is when the security may be redeemed by the investor
^	Zero Coupon Bond - the rate shown is the effective yield at purchase date
*	Non-income producing
§	Illiquid Security - the aggregate value of illiquid securities is $13,850,410 which represents 1.1% of net assets.

 

Summary of Investments
By Sector (unaudited)		% of Investments				Value
Airport			4.4	%		$	56,956,870
Development			11.7				151,722,728
Education			3.6				47,339,704
Facilities			2.9				37,204,578
General Obligation			9.3				121,281,405
Higher Education			4.5				58,744,433
Housing			0.4				4,680,079
Medical			18.0				232,849,295
Multifamily Housing			0.1				1,047,220
Nursing Homes			9.8				127,539,510
Pollution			4.7				60,539,663
Power			1.0				13,300,945
Single Family Housing			0.4				4,574,956
Student Loan			0.4				4,631,417
Tobacco Settlement			13.3				172,577,428
Transportation			9.0				117,314,213
Utilities			2.8				36,845,971
Water			3.2				41,268,537
Money Market Fund			0.5				6,327,849
			100.0	%		$	1,296,746,801

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Municipal Bonds*		$	—			$	1,290,418,952				$	—			$	1,290,418,952
Money Market Fund			6,327,849				—					—				6,327,849
Total		$	6,327,849			$	1,290,418,952				$	—			$	1,296,746,801

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

INTERMEDIATE MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

AGM	Assured Guaranty Municipal Corp.
AGO	Assured Guaranty Ltd.
CP	Certificate of Participation
GO	General Obligation
Q-SBLF	Qualified School Board Loan Fund
RB	Revenue Bond
SAW	State Aid Withholding
SBG	School Board Guaranteed
ST	Special Tax
TA	Tax Allocation
(c)	Callable Security - the redemption date shown is when the security may be redeemed by the issuer
(p)	Puttable Security - the redemption date shown is when the security may be redeemed by the investor
^	Zero Coupon Bond - the rate shown is the effective yield at purchase date

 

Summary of Investments By Sector (unaudited)		% of Investments						Value
Airport			0.8	%				$6,521,087
Bond Bank			0.4					2,852,741
Development			1.4					10,589,610
Education			3.9					30,058,918
Facilities			3.4					26,273,256
General Obligation			51.1					393,331,057
Higher Education			6.6					51,100,754
Medical			2.8					21,790,079
Pollution			0.5					4,202,145
Power			5.0					38,365,208
School District			3.5					26,880,213
Single Family Housing			0.3					2,323,875
Student Loan			0.0					338,582
Tobacco Settlement			0.4					2,966,779
Transportation			12.0					92,380,413
Utilities			3.0					22,755,403
Water			4.6					35,284,024
Money Market Fund			0.3					1,945,779
			100.0	%				$769,959,923

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Municipal Bonds*		$	—			$	768,014,144			$	—			$	768,014,144
Money Market Fund			1,945,779				—				—				1,945,779
Total		$	1,945,779			$	768,014,144			$	—			$	769,959,923

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

LONG MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

LONG MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

LONG MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

AGM	Assured Guaranty Municipal Corp.
GO	General Obligation
RB	Revenue Bond
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
^	Zero Coupon Bond – the rate shown is the effective yield at purchase date

 

Summary of Investments by Sector (unaudited)		% of Investments				Value
Airport			1.5	%		$	1,355,512
Development			5.7				5,006,413
Education			1.8				1,549,159
Facilities			1.9				1,721,033
General Obligation			18.4				16,219,819
Higher Education			9.4				8,335,737
Medical			26.4				23,288,048
Nursing Homes			0.3				269,338
Power			2.2				1,963,935
School District			2.2				1,923,866
Transportation			19.6				17,325,816
Utilities			3.5				3,077,988
Water			6.5				5,706,503
Money Market Fund			0.6				547,865
			100.0	%		$	88,291,032

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Municipal Bonds*		$	—			$	87,743,167			$	—			$	87,743,167
Money Market Fund			547,865				—				—				547,865
Total		$	547,865			$	87,743,167			$	—			$	88,291,032

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

PRE-REFUNDED MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

PRE-REFUNDED MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

AGM	Assured Guaranty Municipal Corp.
AMBAC	American Municipal Bond Assurance Corp.
CP	Certificate of Participation
FGIC	Financial Guaranty Insurance Co.
FHA	Federal Housing Association
GO	General Obligation
NATL	National Public Finance Guarantee Corp.
RB	Revenue Bond
SAW	State Aid Withholding
SBG	School Board Guaranteed
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
^	Zero Coupon Bond – the rate shown is the effective yield at purchase date

 

Summary of Investments by Sector (unaudited)		% of Investments				Value
Education			4.2	%		$	1,106,994
Facilities			2.2				590,572
General Obligation			27.3				7,298,068
Higher Education			1.1				288,349
Medical			17.1				4,571,201
Pollution			1.0				275,132
School District			4.0				1,074,575
Transportation			41.0				10,967,349
Water			1.2				312,097
Money Market Fund			0.9				252,067
			100.0	%		$	26,736,404

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Municipal Bonds*		$	—			$	26,484,337			$	—			$	26,484,337
Money Market Fund			252,067				—				—				252,067
Total		$	252,067			$	26,484,337			$	—			$	26,736,404

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

SHORT HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

SHORT HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

SHORT HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

ACA	Credit Agricole SA
AMBAC	American Municipal Bond Assurance Corp.
COMWLTH GTD	Commonwealth Guaranteed
CP	Certificate of Participation
FGIC	Financial Guaranty Insurance Co.
GO	General Obligation
RB	Revenue Bond
SA	Special Assessment
ST	Special Tax
TA	Tax Allocation
XLCA	Syncora Guarantee, Inc.
(a)	When-issued security
(b)	Security is segregated as collateral for when issued security
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(d)	Security in default
(p)	Puttable Security – the redemption date shown is when the security may be redeemed by the investor
^	Zero Coupon Bond - the rate shown is the effective yield at purchase date

 

See Notes to Financial Statements

SHORT HIGH-YIELD MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

Summary of Investments
by Sector (unaudited)		% of Investments				Value
Airport			4.3	%		$	3,053,061
Development			21.0				14,876,362
Education			2.5				1,797,023
Facilities			5.4				3,791,408
General Obligation			11.5				8,150,204
Higher Education			2.4				1,706,522
Medical			13.6				9,603,239
Nursing Homes			7.7				5,421,051
Pollution			2.5				1,744,370
Power			0.4				315,562
Single Family Housing			0.2				154,212
Tobacco Settlement			5.5				3,882,285
Transportation			11.2				7,901,114
Utilities			5.9				4,209,779
Water			5.7				4,056,886
Money Market Fund			0.2				143,090
			100.0	%		$	70,806,168

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Municipal Bonds*		$	—			$	70,663,078			$	—			$	70,663,078
Money Market Fund			143,090				—				—				143,090
Total		$	143,090			$	70,663,078			$	—			$	70,806,168

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

SHORT MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

SHORT MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

See Notes to Financial Statements

SHORT MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

SHORT MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

SHORT MUNICIPAL INDEX ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

AGM	Assured Guaranty Municipal Corp.
CP	Certificate of Participation
GO	General Obligation
RB	Revenue Bond
SAW	State Aid Withholding
SBG	School Board Guaranteed
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(p)	Puttable Security – the redemption date shown is when the security may be redeemed by the investor

 

Summary of Investments by Sector (unaudited)		% of Investments				Value
Airport			1.5	%		$	3,851,830
Bond Bank			0.1				323,898
Development			3.0				8,013,490
Education			4.0				10,479,994
Facilities			3.2				8,351,676
General Obligation			50.9				134,349,236
Higher Education			4.6				12,209,256
Medical			3.8				9,931,753
Pollution			1.3				3,422,761
Power			8.1				21,539,264
School District			2.7				7,136,363
Student Loan			0.3				915,956
Transportation			12.7				33,469,709
Water			3.5				9,243,605
Money Market Fund			0.3				768,066
			100.0	%		$	264,006,857

 

See Notes to Financial Statements

 

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

						Level 2			Level 3
		Level 1				Significant			Significant
		Quoted				Observable			Unobservable
		Prices				Inputs			Inputs					Value
Municipal Bonds*		$	—			$	263,238,791			$	—			$	263,238,791
Money Market Fund			768,066				—				—				768,066
Total		$	768,066			$	263,238,791			$	—			$	264,006,857

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

October 31, 2014 (unaudited)

 

		CEF					High-Yield					Intermediate
		Municipal Income					Municipal Index					Municipal Index
		ETF					ETF					ETF
Assets:
Investments, at value (1)			$	37,772,273				$	1,296,746,801				$	769,959,923
Cash				—					—					484,341
Receivables:
Investment securities sold				—					2,251,417					—
Shares sold				—					3,091,927					2,392,773
Dividends and interest				131,155					22,882,501					9,276,434
Prepaid expenses				409					—					—
Total assets				37,903,837					1,324,972,646					782,113,471
Liabilities:
Payables:
Investment securities purchased				—					11,426,393					4,579,839
Due to Adviser				5,951					379,925					155,254
Deferred Trustee fees				1,527					3,184					3,000
Accrued expenses				69,866					—					—
Total liabilities				77,344					11,809,502					4,738,093
NET ASSETS			$	37,826,493				$	1,313,163,144				$	777,375,378
Shares outstanding				1,450,000					42,600,000					33,000,000
Net asset value, redemption and offering price per share			$	26.09				$	30.83				$	23.56
Net assets consist of:
Aggregate paid in capital			$	40,127,602				$	1,299,556,967				$	752,243,375
Net unrealized appreciation (depreciation)				(1,439,859	)				29,474,577					22,401,180
Undistributed (accumulated) net investment income (loss)				178,059					8,429,314					1,581,130
Accumulated net realized gain (loss)				(1,039,309	)				(24,297,714	)				1,149,693
			$	37,826,493				$	1,313,163,144				$	777,375,378
(1)   Cost of investments			$	39,212,132				$	1,267,272,224				$	747,558,743

 

See Notes to Financial Statements

 

 

 

Long						Pre-Refunded						Short High-Yield						Short
Municipal Index						Municipal Index						Municipal Index						Municipal Index
ETF						ETF						ETF						ETF
	$	88,291,032					$	26,736,404					$	70,806,168					$	264,006,857
		—						—						—						—
		—						—						235,105						—
		—						—						—						—
		1,194,556						430,895						1,044,494						3,403,108
		—						—						—						—
		89,485,588						27,167,299						72,085,767						267,409,965
		—						—						794,362						—
		18,070						5,879						21,151						45,246
		1,517						865						—						1,600
		—						—						327						15
		19,587						6,744						815,840						46,861
	$	89,466,001					$	27,160,555					$	71,269,927					$	267,363,104
		4,550,000						1,100,000						2,800,000						15,150,000
	$	19.66					$	24.69					$	25.45					$	17.65
	$	87,980,461					$	27,273,403					$	70,732,825					$	265,333,442
		4,248,642						312,336						895,054						1,744,058
		292,888						(28,642	)					293,907						262,639
		(3,055,990	)					(396,542	)					(651,859	)					22,965
	$	89,466,001					$	27,160,555					$	71,269,927					$	267,363,104
	$	84,042,389					$	26,424,067					$	69,911,114					$	262,262,799

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended October 31, 2014 (unaudited)

 

		CEF Municipal Income ETF						High-Yield Municipal Index ETF						Intermediate Municipal Index ETF
Income:
Dividends			$	1,044,323					$	—					$	—
Interest				—						32,299,514						9,585,438
Total income				1,044,323						32,299,514						9,585,438
Expenses:
Management fees				70,133						1,988,820						837,471
Professional fees				17,050						—						—
Insurance				285						—						—
Trustees’ fees and expenses				1,856						—						—
Reports to shareholders				5,590						—						—
Indicative optimized portfolio value fee				3,049						—						—
Custodian fees				434						—						—
Registration fees				3,781						—						—
Transfer agent fees				1,239						—						—
Fund accounting fees				1,871						—						—
Interest				52						607						116
Other				555						—						—
Total expenses				105,895						1,989,427						837,587
Waiver of management fees				(35,709	)					—						—
Net expenses				70,186						1,989,427						837,587
Net investment income				974,137						30,310,087						8,747,851
Net realized gain (loss) on:
Investments				(146,632	)					(5,385,756	)					166,224
In-kind redemptions				13,171						1,227,550						2,774,407
Net realized gain (loss)				(133,461	)					(4,158,206	)					2,940,631
Net change in unrealized appreciation (depreciation) on:
Investments				853,150						34,355,218						11,342,893
Net change in unrealized appreciation (depreciation)				853,150						34,355,218						11,342,893
Net Increase in Net Assets Resulting from Operations			$	1,693,826					$	60,507,099					$	23,031,375

 

See Notes to Financial Statements

 

 

 

Long						Pre-Refunded						Short High-Yield						Short
Municipal Index						Municipal Index						Municipal Index						Municipal Index
ETF						ETF						ETF						ETF
	$	—					$	—					$	—					$	—
		1,687,503						177,625						1,145,554						1,719,931
		1,687,503						177,625						1,145,554						1,719,931
		99,386						39,111						100,518						251,847
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						—						—						—
		—						95						574						34
		—						—						—						—
		99,386						39,206						101,092						251,881
		—						—						—						—
		99,386						39,206						101,092						251,881
		1,588,117						138,419						1,044,462						1,468,050
		(489,006	)					59,063						(571,250	)					(70,127	)
		60,425						134,069						11,827						204,509
		(428,581	)					193,132						(559,423	)					134,382
		3,341,535						(170,065	)					767,357						394,518
		3,341,535						(170,065	)					767,357						394,518
	$	4,501,071					$	161,486					$	1,252,396					$	1,996,950

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		CEF Municipal Income ETF												High-Yield Municipal Index ETF
		For the												For the
		Six Months						For the Year						Six Months						For the Year
		Ended						Ended						Ended						Ended
		October 31,						April 30,						October 31,						April 30,
		2014						2014						2014						2014
		(unaudited)												(unaudited)
Operations:
Net investment income			$	974,137					$	1,533,787					$	30,310,087					$	48,971,641
Net realized gain (loss)				(133,461	)					(831,361	)					(4,158,206	)					(35,842,202	)
Net change in unrealized appreciation (depreciation)				853,150						(1,577,011	)					34,355,218						(66,371,174	)
Net increase (decrease) in net assets resulting from operations				1,693,826						(874,585	)					60,507,099						(53,241,735	)
Dividends and Distributions to shareholders:
Dividends from net investment income				(959,275	)					(1,492,015	)					(27,242,050	)					(49,806,400	)
Distributions from net realized capital gains				—						—						—						(2,773,260	)
Total Dividends and Distributions				(959,275	)					(1,492,015	)					(27,242,050	)					(52,579,660	)
Share transactions:**
Proceeds from sale of shares				7,725,642						18,440,829						341,346,712						241,356,929
Cost of shares redeemed				(2,575,709	)					(9,594,941	)					(39,261,698	)					(288,263,858	)
Increase (Decrease) in net assets resulting from share transactions				5,149,933						8,845,888						302,085,014						(46,906,929	)
Total increase (decrease) in net assets				5,884,484						6,479,288						335,350,063						(152,728,324	)
Net Assets, beginning of period				31,942,009						25,462,721						977,813,081						1,130,541,405
Net Assets, end of period†			$	37,826,493					$	31,942,009					$	1,313,163,144					$	977,813,081
† Including undistributed (accumulated) net investment income (loss)			$	178,059					$	163,197					$	8,429,314					$	5,361,277
** Shares of Common Stock Issued (no par value)
Shares sold				300,000						750,000						11,200,000						8,200,000
Shares redeemed				(100,000	)					(400,000	)					(1,300,000	)					(9,500,000	)
Net increase (decrease)				200,000						350,000						9,900,000						(1,300,000	)

 

See Notes to Financial Statements

 

 

 

Intermediate Municipal Index ETF								Long Municipal Index ETF								Pre-Refunded Municipal Index ETF
For the								For the								For the
Six Months				For the Year				Six Months				For the Year				Six Months				For the Year
Ended				Ended				Ended				Ended				Ended				Ended
October 31,				April 30,				October 31,				April 30,				October 31,				April 30,
2014				2014				2014				2014				2014				2014
(unaudited)								(unaudited)								(unaudited)
$	8,747,851			$	15,916,385			$	1,588,117			$	3,558,597			$	138,419			$	340,280
	2,940,631				(6,117,289	)			(428,581	)			(3,733,903	)			193,132				(460,182	)
	11,342,893				(21,643,793	)			3,341,535				(5,921,217	)			(170,065	)			(401,973	)
	23,031,375				(11,844,697	)			4,501,071				(6,096,523	)			161,486				(521,875	)
	(8,459,030	)			(16,144,350	)			(1,575,925	)			(3,686,580	)			(169,220	)			(382,660	)
	—				—				—				—				—				—
	(8,459,030	)			(16,144,350	)			(1,575,925	)			(3,686,580	)			(169,220	)			(382,660	)
	251,584,666				252,701,369				21,331,439				35,141,472				4,932,965				2,463,763
	(113,900,068	)			(346,169,158	)			(11,587,505	)			(69,466,413	)			(12,343,639	)			—
	137,684,598				(93,467,789	)			9,743,934				(34,324,941	)			(7,410,674	)			2,463,763
	152,256,943				(121,456,836	)			12,669,080				(44,108,044	)			(7,418,408	)			1,559,228
	625,118,435				746,575,271				76,796,921				120,904,965				34,578,963				33,019,735
$	777,375,378			$	625,118,435			$	89,466,001			$	76,796,921			$	27,160,555			$	34,578,963
$	1,581,130			$	1,292,309			$	292,888			$	280,696			$	(28,642	)		$	2,159
	10,800,000				11,200,000				1,100,000				1,900,000				200,000				100,000
	(4,900,000	)			(15,500,000	)			(600,000	)			(3,800,000	)			(500,000	)			—
	5,900,000				(4,300,000	)			500,000				(1,900,000	)			(300,000	)			100,000

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

(continued)

 

		Short High-Yield Municipal Index ETF								Short Municipal Index ETF
		For the				For the Period				For the
		Six Months				January 13,				Six Months				For the Year
		Ended				2014* through				Ended				Ended
		October 31,				April 30,				October 31,				April 30,
		2014				2014				2014				2014
		(unaudited)								(unaudited)
Operations:
Net investment income		$	1,044,462			$	167,458			$	1,468,050			$	3,092,421
Net realized gain (loss)			(559,423	)			(77,244	)			134,382				(535,016	)
Net change in unrealized appreciation (depreciation)			767,357				127,697				394,518				(1,654,584	)
Net increase in net assets resulting from operations			1,252,396				217,911				1,996,950				902,821
Dividends to shareholders:
Dividends from net investment income			(843,100	)			(75,000	)			(1,455,770	)			(3,085,320	)
Share transactions:**
Proceeds from sale of shares			48,137,254				30,156,740				63,490,793				121,412,008
Cost of shares redeemed			(5,044,346	)			(2,531,928	)			(38,800,142	)			(82,603,960	)
Increase in net assets resulting from share transactions			43,092,908				27,624,812				24,690,651				38,808,048
Total increase in net assets			43,502,204				27,767,723				25,231,831				36,625,549
Net Assets, beginning of period			27,767,723				—				242,131,273				205,505,724
Net Assets, end of period†		$	71,269,927			$	27,767,723			$	267,363,104			$	242,131,273
† Including undistributed net investment income		$	293,907			$	92,545			$	262,639			$	250,359
** Shares of Common Stock Issued (no par value)
Shares sold			1,900,000				1,200,000				3,600,000				6,900,000
Shares redeemed			(200,000	)			(100,000	)			(2,200,000	)			(4,700,000	)
Net increase			1,700,000				1,100,000				1,400,000				2,200,000

 

*	Commencement of operations

 

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		CEF MUNICIPAL INCOME ETF
		For the Six Months Ended October 31, 2014				For the Year Ended April 30, 2014				For the Year Ended April 30, 2013				For the Period July 12, 2011(a) through April 30, 2012
			(unaudited)
Net asset value, beginning of period			$ 25.55				$ 28.29				$ 27.76				$ 25.00
Income from investment operations:
Net investment income			0.71				1.46				1.49				1.24
Net realized and unrealized gain (loss) on investments			0.55				(2.73	)			0.53				2.66
Total from investment operations			1.26				(1.27	)			2.02				3.90
Less:
Dividends from net investment income			(0.72	)			(1.47	)			(1.48	)			(1.12	)
Distributions from net realized capital gains			—				—				(0.01	)			(0.02	)
Total dividends and distributions			(0.72	)			(1.47	)			(1.49	)			(1.14	)
Net asset value, end of period			$ 26.09				$ 25.55				$ 28.29				$ 27.76
Total return (b)			5.00	%(c)			(4.08	)%			7.28	%			15.84	%(c)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$ 37,826				$ 31,942				$ 25,463				$ 8,329
Ratio of gross expenses to average net assets			0.60	%(d)			0.79	%			1.03	%			2.36	%(d)
Ratio of net expenses to average net assets			0.40	%(d)			0.40	%			0.40	%			0.40	%(d)
Ratio of net expenses, excluding interest expense, to average net assets			0.40	%(d)			0.40	%			0.40	%			0.40	%(d)
Ratio of net investment income to average net assets			5.55	%(d)			6.07	%			5.33	%			6.04	%(d)
Portfolio turnover rate			3	%(c)			9	%			3	%			3	%(c)
		HIGH-YIELD MUNICIPAL INDEX ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,
		2014				2014				2013				2012				2011				2010
		(unaudited)
Net asset value, beginning of period			$ 29.90				$ 33.25				$ 31.62				$ 28.39				$ 30.62				$ 26.22
Income from investment operations:
Net investment income			0.78				1.68				1.61				1.60				1.75				2.08
Net realized and unrealized gain (loss)on investments			0.90				(3.23	)			1.66				3.32				(1.97	)			4.17
Total from investment operations			1.68				(1.55	)			3.27				4.92				(0.22	)			6.25
Less:
Dividends from net investment income			(0.75	)			(1.70	)			(1.64	)			(1.69	)			(1.79	)			(1.85	)
Distributions from net realized capital gains			—				(0.10	)			—				—				(0.22	)			—
Total dividends and distributions			(0.75	)			(1.80	)			(1.64	)			(1.69	)			(2.01	)			(1.85	)
Net asset value, end of period			$ 30.83				$ 29.90				$ 33.25				$ 31.62				$ 28.39				$ 30.62
Total return (b)			5.68	%(c)			(4.48	)%			10.55	%			17.90	%			(0.81	)%			24.47	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$1,313,163				$977,813				$1,130,541				$566,009				$210,051				$159,210
Ratio of gross expenses to average net assets			0.35	%(d)			0.35	%			0.35	%			0.35	%			0.44	%			0.65	%
Ratio of net expenses to average net assets			0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net expenses, excluding interest expense, to average net assets			0.35	%(d)			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Ratio of net investment income to average net assets			5.32	%(d)			5.57	%			5.22	%			6.04	%			6.27	%			7.45	%
Portfolio turnover rate			4	%(c)			21	%			12	%			18	%			42	%			19	%

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		INTERMEDIATE MUNICIPAL INDEX ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,
		2014				2014				2013				2012				2011				2010
		(unaudited)
Net asset value, beginning of period			$23.07				$23.78				$23.22				$21.40				$21.51				$20.77
Income from investment operations:
Net investment income			0.29				0.58				0.59				0.71				0.74				0.75
Net realized and unrealized gain (loss) on investments			0.49				(0.71	)			0.57				1.82				(0.08	)			0.75
Total from investment operations			0.78				(0.13	)			1.16				2.53				0.66				1.50
Less:
Dividends from net investment income			(0.29	)			(0.58	)			(0.60	)			(0.71	)			(0.74	)			(0.76	)
Distributions from net realized capital gains			—				—				—	(a)			—				(0.03	)			—	(a)
Total dividends and distributions			(0.29	)			(0.58	)			(0.60	)			(0.71	)			(0.77	)			(0.76	)
Net asset value, end of period			$23.56				$23.07				$23.78				$23.22				$21.40				$21.51
Total return (b)			3.40	%(c)			(0.45	)%			5.05	%			12.02	%			3.11	%			7.35	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$777,375				$625,118				$746,575				$459,751				$220,371				$159,179
Ratio of gross expenses to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.29	%			0.45	%
Ratio of net expenses to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.24	%			0.23	%
Ratio of net expenses, excluding interest expense, to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.24	%			0.23	%
Ratio of net investment income to average net assets			2.50	%(d)			2.55	%			2.54	%			3.19	%			3.50	%			3.73	%
Portfolio turnover rate			1	%(c)			1	%			1	%			7	%			19	%			22	%
		LONG MUNICIPAL INDEX ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,
		2014				2014				2013				2012				2011				2010
		(unaudited)
Net asset value, beginning of period			$18.96				$20.32				$19.65				$17.46				$18.49				$17.28
Income from investment operations:
Net investment income			0.37				0.79				0.77				0.83				0.83				0.83
Net realized and unrealized gain (loss) on investments			0.71				(1.36	)			0.67				2.19				(1.03	)			1.23
Total from investment operations			1.08				(0.57	)			1.44				3.02				(0.20	)			2.06
Less:
Dividends from net investment income			(0.38	)			(0.79	)			(0.77	)			(0.83	)			(0.83	)			(0.85	)
Net asset value, end of period			$19.66				$18.96				$20.32				$19.65				$17.46				$18.49
Total return (b)			5.73	%(c)			(2.62	)%			7.44	%			17.67	%			(1.10	)%			12.20	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$89,466				$76,797				$120,905				$81,539				$55,009				$52,711
Ratio of gross expenses to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.38	%			0.64	%
Ratio of net expenses to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.24	%			0.25	%
Ratio of net expenses, excluding interest expense, to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.24	%			0.24	%
Ratio of net investment income to average net assets			3.83	%(d)			4.17	%			3.86	%			4.46	%			4.60	%			4.78	%
Portfolio turnover rate			3	%(c)			5	%			3	%			22	%			27	%			20	%

(a)	Amount represents less than $0.005 per share.
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized

 

See Notes to Financial Statements

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		PRE-REFUNDED MUNICIPAL INDEX ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,
		2014				2014				2013				2012				2011				2010
		(unaudited)
Net asset value, beginning of period			$24.70				$25.40				$25.35				$25.01				$24.98				$24.73
Income from investment operations:
Net investment income			0.10				0.25				0.38				0.34				0.34				0.35
Net realized and unrealized gain (loss) on investments			0.02				(0.67	)			0.05				0.34				0.10				0.24
Total from investment operations			0.12				(0.42	)			0.43				0.68				0.44				0.59
Less:
Dividends from net investment income			(0.13	)			(0.28	)			(0.38	)			(0.34	)			(0.35	)			(0.34	)
Distributions from net realized capital gains			—				—				—				—				(0.06	)			—
Total dividends and distributions			(0.13	)			(0.28	)			(0.38	)			(0.34	)			(0.41	)			(0.34	)
Net asset value, end of period			$24.69				$24.70				$25.40				$25.35				$25.01				$24.98
Total return (b)			0.47	%(c)			(1.64	)%			1.71	%			2.74	%			1.74	%			2.38	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$27,161				$34,579				$33,020				$32,957				$35,019				$39,965
Ratio of gross expenses to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.38	%			0.67	%
Ratio of net expenses to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.24	%			0.24	%
Ratio of net expenses, excluding interest expense, to average net assets			0.24	%(d)			0.24	%			0.24	%			0.24	%			0.24	%			0.24	%
Ratio of net investment income to average net assets			0.85	%(d)			1.02	%			1.50	%			1.36	%			1.36	%			1.44	%
Portfolio turnover rate			20	%(c)			61	%			19	%			40	%			28	%			8	%
		SHORT HIGH-YIELD MUNICIPAL INDEX ETF
		For the Six Months Ended October 31, 2014				For the Period January 13, 2014(a) through April 30, 2014
		(unaudited)
Net asset value, beginning of period			$25.24				$24.94
Income from investment operations:
Net investment income			0.41				0.24
Net realized and unrealized gain on investments			0.19				0.22
Total from investment operations			0.60				0.46
Less:
Dividends from net investment income			(0.39	)			(0.16	)
Net asset value, end of period			$25.45				$25.24
Total return (b)			2.40	%(c)			1.82	%(c)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$71,270				$27,768
Ratio of gross expenses to average net assets			0.35	%(d)			0.35	%(d)
Ratio of net expenses to average net assets			0.35	%(d)			0.35	%(d)
Ratio of net expenses, excluding interest expense, to average net assets			0.35	%(d)			0.35	%(d)
Ratio of net investment income to average net assets			3.62	%(d)			4.10	%(d)
Portfolio turnover rate			17	%(c)			6	%(c)

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		SHORT MUNICIPAL INDEX ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,
		2014				2014				2013				2012				2011				2010
		(unaudited)
Net asset value, beginning of period			$17.61				$17.79				$17.74				$17.35				$17.32				$16.93
Income from investment operations:
Net investment income			0.10				0.24				0.26				0.32				0.36				0.39
Net realized and unrealized gain (loss) on investments			0.04				(0.18	)			0.06				0.40				0.09				0.39
Total from investment operations			0.14				0.06				0.32				0.72				0.45				0.78
Less:
Dividends from net investment income			(0.10	)			(0.24	)			(0.26	)			(0.33	)			(0.36	)			(0.39	)
Distributions from net realized capital gains			—				—				(0.01	)			—	(a)			(0.06	)			—
Total dividends and distributions			(0.10	)			(0.24	)			(0.27	)			(0.33	)			(0.42	)			(0.39	)
Net asset value, end of period			$17.65				$17.61				$17.79				$17.74				$17.35				$17.32
Total return (b)			0.82	%(c)			0.36	%			1.83	%			4.16	%			2.59	%			4.64	%
Ratios/Supplemental Data
Net assets, end of period (000’s)		$267,363				$242,131				$205,506				$135,742				$94,568				$89,222
Ratio of gross expenses to average net assets			0.20	%(d)			0.20	%			0.20	%			0.20	%			0.29	%			0.55	%
Ratio of net expenses to average net assets			0.20	%(d)			0.20	%			0.20	%			0.20	%			0.20	%			0.20	%
Ratio of net expenses, excluding interest expense, to average net assets			0.20	%(d)			0.20	%			0.20	%			0.20	%			0.20	%			0.19	%
Ratio of net investment income to average net assets			1.17	%(d)			1.37	%			1.46	%			1.85	%			2.04	%			2.31	%
Portfolio turnover rate			1	%(c)			3	%			10	%			23	%			35	%			43	%

(a)	Amount represents less than $0.005 per share.
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Not Annualized
(d)	Annualized

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

October 31, 2014 (unaudited)

 

Note 1–Fund Organization–Market Vectors ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and as of October 31, 2014, offers fifty nine investment portfolios, each of which represents a separate series of the Trust.

 

These financial statements relate only to the following investment portfolios: CEF Municipal Income ETF (“CEF Municipal”), High-Yield Municipal Index ETF (“High-Yield”), Intermediate Municipal Index ETF (“Intermediate”), Long Municipal Index ETF (“Long”), Pre-Refunded Municipal Index ETF (“Pre-Refunded”), Short High-Yield Municipal Index ETF (“Short High-Yield”) and Short Municipal Index ETF (“Short”), each a “Fund” and collectively the “Funds”. Each Fund’s investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of its Index. The Funds (except CEF Municipal) expect to use a sampling approach in seeking to achieve their objectives. Sampling means that Van Eck Associates Corporation (the “Adviser”) uses quantitative analysis to select bonds and other securities that represent a sample of securities in the Index in terms of key risk factors, performance attributes and other characteristics. The number of securities in each Fund will be based upon several factors, including asset size of the Fund. The Adviser generally expects each Fund to hold less than the total number of securities in the Index, but reserves the right to hold as many securities as it believes necessary to achieve the Fund’s investment objective. CEF Municipal seeks to achieve its objectives through a portfolio of securities in substantially the same weighting as its index.

 

The Funds’ commencement of operations dates and their respective Indices are presented below:

 

Fund		Commencement of Operations		Index
CEF Municipal		July 12, 2011		S-Network Municipal Bond Closed-End Fund IndexSM
High-Yield		February 4, 2009		Barclays Municipal Custom High Yield Composite Index
Intermediate		December 4, 2007		Barclays AMT-Free Intermediate Continuous Municipal Index
Long		January 2, 2008		Barclays AMT-Free Long Continuous Municipal Index
Pre-Refunded		February 2, 2009		Barclays Municipal Pre-Refunded-Treasury-Escrowed Index
Short High-Yield		January 13, 2014		Barclays Municipal High Yield Short Duration Index
Short		February 22, 2008		Barclays AMT-Free Short Continuous Municipal Index

 

Note 2–Significant Accounting Policies–The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

The Funds are investment companies and are following accounting and reporting requirements of Accounting Standard Codification (“ASC”) 946 Financial Services - Investment Companies.

 

The following is a summary of significant accounting policies followed by the Funds.

 

A.

Security Valuation–The Funds value their investments in securities and other assets and liabilities carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges or traded on the NASDAQ National Market System are valued at the last sales price as reported at the close of each business day. Securities traded on the NASDAQ Stock Market are valued at the NASDAQ official closing price. Over-the-counter securities not included in the NASDAQ National Market System and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Debt securities for which market quotations are readily available are valued on the basis of quotations furnished by an independent pricing service approved by the Board of Trustees or provided by securities dealers. The pricing services may use valuation models or matrix pricing, which consider: (i) yield or price with respect to bonds that are considered comparable in characteristics such as rating, interest rate and maturity date and/or (ii) quotations from bond dealers to determine current value and are categorized as Level 2 in the fair value hierarchy. Money market fund investments are valued at net asset value and are categorized as Level 1 in the fair value hierarchy. Short-term obligations with more than sixty days remaining to maturity are valued at market value. Short-term obligations with sixty days or less to maturity

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

	are valued at amortized cost, which with accrued interest approximates fair value. Securities for which quotations are not available are stated at fair value as determined by the Pricing Committee of the Adviser appointed by the Board of Trustees. The Pricing Committee provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments for which market prices are not readily available. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, including a regular review of key inputs and assumptions, transactional back-testing and disposition analysis.
	Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be classified either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments.
	The Funds utilize various methods to measure the fair value of its investments on a recurring basis which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The transfers between levels of the fair value hierarchy assume the financial instruments were transferred at the beginning of the reporting period. The three levels of the fair value hierarchy are described below:
	Level 1 – Quoted prices in active markets for identical securities.
	Level 2 – Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
	Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
A summary of the inputs, the levels used to value the Funds’ investments, and transfers between levels are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments.
B.	Federal Income Taxes–It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.
C.	Dividends and Distributions to Shareholders–Dividends to shareholders from net investment income, if any, are declared and paid at least monthly by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid annually. Income dividends and capital gain distributions are determined in accordance with income tax regulations, which may differ from such amounts determined in accordance with GAAP.
D.	Restricted Securities–The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments.
E.	Use of Derivative Instruments–The Funds may make investments in derivative instruments, including, but not limited to, options, futures, swaps and other derivatives relating to foreign currency transactions. A derivative is an instrument whose value is derived from underlying assets, indices, reference rates or a combination of these factors. Derivative instruments may be privately negotiated contracts (often referred to as over-the-counter (“OTC”) derivatives) or they may be listed and traded on an exchange. Derivative contracts may involve future commitments

 

 

 

	to purchase or sell financial instruments at specified terms on a specified date, or to exchange interest payment streams or currencies based on a notional or contractual amount. Derivative instruments may involve a high degree of financial risk. The use of derivative instruments also involves the risk of loss if the investment adviser is incorrect in its expectation of the timing or level of fluctuations in securities prices, interest rates or currency prices. Investments in derivative instruments also include the risk of default by the counterparty, the risk that the investment may not be liquid and the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instruments. The Funds held no derivative instruments during the period ended October 31, 2014.
F.	Other–Security transactions are accounted for on trade date. Transactions in certain securities may take longer than the customary settlement cycle to be completed. The counterparty is required to collateralize such trades with cash in excess of the market value of the transaction, which is held at the custodian and marked to market daily. Realized gains and losses are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. The Funds record distributions received in excess of income from underlying investments as a reduction of cost of investments and/or an increase in realized gain. Such amounts are based upon estimates if actual amounts are not available, and actual amounts of income, realized gain and return of capital may differ from estimated amounts. Interest income, including amortization of premiums and discounts, is accrued as earned. Interest income is generally not earned on debt securities in default or upon determination that the income is not realizable.
	In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote.

 

Note 3–Investment Management and Other Agreements–The Adviser is the investment adviser to the Funds. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The High Yield, Intermediate, Long, Pre-Refunded, Short High-Yield and Short Funds utilize a unitary management fee where the Adviser is responsible for all expenses of the Funds, except the fee payment under the Investment Advisory Agreement, interest expenses, offering costs, trading expenses, taxes and extraordinary expenses. For CEF Municipal, the Adviser voluntarily waived its fees and assumed certain fund expenses during this period to limit total annual operating expenses to the expense limitation listed below.

 

The current management fee rate, expense limitation and the amounts waived/assumed by the Adviser for the period ended October 31, 2014 are as follows:

 

Fund		Expense Limitation		Management Fee Rate		Waiver of Management Fees
CEF Municipal*		0.40%		0.40%		$35,709

 

*

The Adviser has agreed, at least until September 1, 2015, to voluntarily waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the Fund’s total annual operating expenses do not exceed the expense limitation, excluding acquired fund fees and expenses, interest expense, offering cost, trading expenses, taxes and extraordinary expenses.

 

Fund		Unitary Management Fee Rate
High-Yield			0.35	%
Intermediate			0.24
Long			0.24
Pre-Refunded			0.24
Short High-Yield			0.35
Short			0.20

 

In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ Distributor. Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Note 4–Investments–For the period ended October 31, 2014, the cost of purchases and proceeds from sales of investments other than U.S. government obligations and short-term obligations (excluding in-kind transactions described in Note 6) were as follows:

 

Fund		Cost of Investments Purchased				Proceeds from Investments Sold
CEF Municipal		$	1,017,840			$	1,026,443
High-Yield			379,495,134				47,838,919
Intermediate			147,108,089				6,877,150
Long			11,925,109				2,329,912
Pre-Refunded			6,361,732				6,295,229
Short High-Yield			54,343,100				9,574,607
Short			30,477,005				2,770,200

 

Note 5–Income Taxes–As of October 31, 2014, for Federal income tax purposes, the identified cost of investments owned, net unrealized appreciation (depreciation), gross unrealized appreciation, and gross unrealized depreciation of investments were as follows:

 

Fund		Cost of Investments				Gross Unrealized Appreciation				Gross Unrealized Depreciation				Net Unrealized Appreciation (Depreciation)
CEF Municipal		$	39,207,563			$	108,073			$	(1,543,363	)		$	(1,435,290	)
High-Yield			1,265,302,791				60,480,040				(29,036,030	)			31,444,010
Intermediate			747,519,426				23,456,555				(1,016,058	)			22,440,497
Long			84,035,697				4,477,465				(222,130	)			4,255,335
Pre-Refunded			26,424,024				355,698				(43,318	)			312,380
Short High-Yield			69,905,500				1,283,556				(382,888	)			900,668
Short			262,262,172				2,122,523				(377,838	)			1,744,685

 

The tax character of dividends paid to shareholders during the year ended April 30, 2014 was as follows:

 

Fund		Tax-Exempt Dividends April 30, 2014				Ordinary Income April 30, 2014				Long-Term Capital Gains April 30, 2014
CEF Municipal		$	1,478,186			$	13,829			$	—
High-Yield			48,957,547				850,630				2,771,483
Intermediate			16,046,500				97,850				—
Long			3,656,495				30,085				—
Pre-Refunded			382,660				—				—
Short High-Yield			74,410				590				—
Short			3,032,010				53,310				—

 

The tax character of current year distributions will be determined at the end of the current fiscal year.

 

At April 30, 2014, the Funds had capital loss carryforwards available to offset future capital gains, as follows:

 

		No Expiration Short-Term				No Expiration Long-Term				Amount Expiring in the Year Ended December 31
Fund		Capital Losses				Capital Losses				April 2019				April 2018				April 2017
CEF Municipal		$	637,819			$	6,218			$	—			$	—			$	—
High-Yield			1,213,722				—				—				—				—
Intermediate			209				—				—				—				—
Long			310,787				—				78,825				1,554,202				603,978
Pre-Refunded			244,986				344,688				—				—				—
Short High-Yield			92,436				—				—				—				—
Short			32,634				20,219				—				—				—

 

During the year ended April 30, 2014 Short utilized $1,523 of prior year capital loss carryforwards.

 

The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken

 

 

 

 

on return filings for open tax years (tax years ended April 30, 2011 - 2014), or expected to be taken in the Funds’ current tax year. Therefore, no provision for income tax is required in the Funds’ financial statements.

 

The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended October 31, 2014, the Funds did not incur any interest or penalties.

 

Note 6–Capital Share Transactions–As of October 31, 2014, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Shares are issued and redeemed by the Funds only in Creation Units, consisting of 100,000 shares, except for CEF Municipal, which has Creation Units consisting of 50,000 shares, or multiples thereof. The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index plus a small amount of cash. For the period ended October 31, 2014, the Funds had in-kind contributions and redemptions as follows:

 

Fund		In-Kind Contributions				In-Kind Redemptions
CEF Municipal		$	5,423,936			$	258,107
High-Yield			17,990,216				38,842,745
Intermediate			114,050,283				113,503,890
Long			10,076,505				9,935,636
Pre-Refunded			4,903,113				12,147,463
Short High-Yield			4,783,730				4,945,293
Short			38,656,997				38,635,091

 

The in-kind contributions and in-kind redemptions in this table represent the accumulation of each Fund’s daily net shareholder transactions including rebalancing activity, while the Statements of Changes in Net Assets reflect gross shareholder transactions including any cash component of the transactions.

 

Note 7–Concentration and Other Risks–The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each Fund. The Adviser uses a “passive” or index approach to achieve each Fund’s investment objective. The Funds (except CEF Municipal) use a sampling approach in which the Adviser uses quantitative analysis to select bonds that represent a sample of securities in the index in terms of key risk factors, performance attributes and other characteristics. Each Fund is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. Investments in municipal securities involve risks similar to those of investing in any fund of fixed income securities traded on exchanges, such as market fluctuations caused by factors such as economic and political developments, changes in interest rates and perceived trends in security prices.

 

High-Yield and Short High-Yield invest in non-investment grade securities, often referred to as “junk bonds.” Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. These high yield securities may involve greater risks and considerations not typically associated with investing in U.S. government bonds and other high quality fixed-income securities. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. High-Yield and Short High-Yield may not be able to sell bonds at desired prices and that large purchases or sales of certain high-yield bond issues may cause substantial fluctuations in share price, yield and total return.

 

CEF Municipal invests in closed-end funds that may trade at a discount or premium to their net asset value. A closed-end fund may be leveraged as part of its investment strategy. As a result, the Fund may be indirectly exposed to the effects of leverage through its investment in the underlying funds. Investments in underlying funds that use leverage may cause the value of the Fund’s shares to be more volatile than if the Fund invested in underlying funds that do not utilize leverage.

 

Note 8–Trustee Deferred Compensation Plan–The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Effective September 1, 2010, High Yield, Intermediate, Long, Pre-Refunded and Short Funds adopted a unitary management fee where the Adviser is responsible for all expenses of the Funds. Therefore, the expense for the Plan for these Funds and for Short High-Yield are included in “Management fees”. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities for amounts accrued through September 1, 2010 and in “Due to Adviser” for amounts accrued after September 1, 2010.

 

For CEF Municipal, the expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.

 

Note 9–Bank Line of Credit–The Funds may participate in a $200 million committed credit facility (“Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the period ended October 31, 2014, the following Funds borrowed under this facility:

 

Fund		Days Outstanding				Average Daily Loan Balance				Average Interest Rate
High-Yield			7				2,094,106				1.49
Intermediate			5				858,192				1.48
Pre-Refunded			32				72,383				1.49
Short High-Yield			33				374,288				1.49
Short			5				151,965				1.49

 

As of October 31, 2014, the Funds had no outstanding loan balances.

 

Note 10–Custodian Fees–The Funds have entered into an expense offset agreement with the custodian wherein they receive a credit toward the reduction of custodian fees whenever there are uninvested cash balances. The Funds could have invested their cash balances elsewhere if they had not agreed to a reduction in fees under the expense offset agreement with the custodian. For the period ended October 31, 2014, there were no offsets to the custodian fees.

 

Note 11–Subsequent Events–The Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

 

The following dividends from net investment income were declared and paid subsequent to October 31, 2014:

 

Fund		Ex-Date		Record Date		Payable Date		Per Share
CEF Municipal		11/3/14		11/5/14		11/7/14		$0.1150
High-Yield		11/3/14		11/5/14		11/7/14		$0.1200
Intermediate		11/3/14		11/5/14		11/7/14		$0.0475
Long		11/3/14		11/5/14		11/7/14		$0.0608
Pre-Refunded		11/3/14		11/5/14		11/7/14		$0.0164
Short High-Yield		11/3/14		11/5/14		11/7/14		$0.0686
Short		11/3/14		11/5/14		11/7/14		$0.0171
CEF Municipal		12/1/14		12/3/14		12/5/14		$0.1200
High-Yield		12/1/14		12/3/14		12/5/14		$0.1109
Intermediate		12/1/14		12/3/14		12/5/14		$0.0467
Long		12/1/14		12/3/14		12/5/14		$0.0556
Pre-Refunded		12/1/14		12/3/14		12/5/14		$0.0136
Short High-Yield		12/1/14		12/3/14		12/5/14		$0.0622
Short		12/1/14		12/3/14		12/5/14		$0.0160

 

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS

(unaudited)

 

At a meeting held on June 6, 2014 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of Market Vectors ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved (i) the continuation of the investment management agreements (the “Municipal Investment Management Agreements”) between the Trust and Van Eck Associates Corporation (the “Adviser”) with respect to the Market Vectors California Long Municipal Index ETF, High-Yield Municipal Index ETF, Intermediate Municipal Index ETF, Long Municipal Index ETF, Massachusetts Municipal Index ETF, New Jersey Municipal Index ETF, New York Long Municipal Index ETF, Ohio Municipal Index ETF, Pennsylvania Municipal Index ETF, Pre-Refunded Municipal Index ETF, Puerto Rico Municipal Index ETF, Short High-Yield Municipal Index ETF and Short Municipal Index ETF (the “Municipal Funds”) and (ii) the continuation of the investment management agreement between the Trust and the Adviser (the “CEF Investment Management Agreement”) with respect to Market Vectors CEF Municipal Income ETF (the “CEF Muni Fund” and together with the Municipal Funds, the “Funds”). The Municipal Investment Management Agreements and the CEF Investment Management Agreement are collectively referred to as the “Investment Management Agreements.”

 

The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.

 

In preparation for the Renewal Meeting, the Trustees held a meeting on May 9, 2014. At that meeting, the Trustees discussed the information the Adviser and Lipper Inc. (“Lipper”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance (for those Funds which had begun operations) and expenses of the Funds and (where applicable) the Funds’ peer funds (other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance and expense information for certain of the Funds against their peer groups, the Trustees considered that some of the Funds generally invest in a different group of issuers than some or all of the other funds in a Fund’s designated peer group. They also considered the fact that Market Vectors Short High-Yield Municipal Index ETF had only recently commenced operations and therefore had no meaningful operational history that could be used for comparative purposes, since the expense information prepared by Lipper was based on estimated amounts and the performance comparisons provided by Lipper covered approximately a one-month period (January 13, 2014 (the date operations commenced for the Fund) through February 28, 2014). For these and other reasons, the Trustees noted that the peer group information did not necessarily provide meaningful direct comparisons to the Funds.

 

The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and the May 9, 2014 meeting and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, with respect to the CEF Muni Fund, the Adviser’s commitment to waive certain fees and/or pay expenses of the CEF Muni Fund to the extent necessary to prevent the operating expenses of the CEF Muni Fund from exceeding agreed upon limits for a period of time and, with respect to the Municipal Funds, the Adviser’s agreement to pay all of the direct expenses of the Municipal Funds (excluding interest expense, offering costs, trading expenses, taxes and extraordinary expenses).

 

The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance over relevant periods of each of the Funds that had commenced operations prior to the date of the Renewal Meeting (the “Operating Funds”), the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Operating Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any fair value adjustments to the underlying securities. Based on the foregoing, the Trustees concluded that the investment performance of the Operating Funds was satisfactory.

 

The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.

MARKET VECTORS ETF TRUST

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS

(unaudited) (continued)

 

As noted above, the Trustees were also provided various data from Lipper comparing the Operating Funds’ expenses and performance to that of other ETFs. The Trustees noted that the information provided showed that each Operating Fund, except the CEF Muni Fund, had a total expense ratio (after the effect of any applicable expense limitation) below the average and the median of its respective peer group of funds. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Operating Funds were reasonable in light of the performance of the Operating Funds and the quality of services received. The Trustees noted that this comparative data, while generally helpful, was limited in its usefulness in many cases due to the lack of a large number of directly comparable ETFs and, as noted above, the very limited operating history of Market Vectors Short High-Yield Municipal Index ETF.

 

The Trustees also considered any other benefits received by the Adviser from serving as adviser to the Funds and from providing certain administrative services to the Funds, and from an affiliate of the Adviser serving as distributor for the Funds.

 

The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Operating Fund. The Trustees reviewed each Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees noted that certain Funds were still relatively new products, which therefore made it difficult to quantify the potential variability in net assets and thus determine the sustainability of any potential economies of scale which may exist. The Trustees also considered, with respect to the Municipal Funds, the risks being assumed by the Adviser under the unitary fee structure arrangement and the potential expense stability that may inure to the benefit of shareholders of the Municipal Funds. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Fund is reasonable and appropriate in relation to the current asset size of each Fund and the other factors discussed above and currently reflects an appropriate sharing of any economies of scale which may exist with shareholders. The Trustees also determined that the profits earned by the Adviser in respect of the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.

 

The Trustees did not consider historical information about the profitability to the Adviser of Market Vectors California Long Municipal Index ETF, Massachusetts Municipal Index ETF, New Jersey Municipal Index ETF, New York Long Municipal Index ETF, Ohio Municipal Index ETF, Pennsylvania Municipal Index ETF and Puerto Rico Municipal Index ETF because the Funds had not yet commenced operations at the time of the Renewal Meeting. The Trustees could not consider the historical performance or the quality of services previously provided to each of these Funds although they concluded that the nature, quality, and extent of the services to be provided by the Adviser were appropriate based on the Trustees’ knowledge of the Adviser and its personnel and the operations of the other series of the Trust.

 

The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 9, 2014 meeting, as part of their consideration of the Investment Management Agreements.

 

In voting to approve the continuation of the Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that each Investment Management Agreement is in the best interest of each Fund and such Fund’s shareholders.

 

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a Market Vectors ETF Trust (the “Trust”) Prospectus, which includes more complete information. An investor should consider the investment objective, risks, and charges and expenses of the Funds carefully before investing. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing.   Additional information about the Trust’s Board of Trustees/Officers and a description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities are provided in the Statement of Additional Information. The Statement of Additional Information and information regarding how the Trust voted proxies relating to portfolio securities during the most recent twelve month period ending June 30 is available, without charge, by calling 1.888.MKT.VCTR, or by visiting vaneck.com, or on the Securities and Exchange Commission’s website at http://www.sec.gov.   The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust’s Form N-Qs are available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1.202.942.8090. The Funds’ complete schedules of portfolio holdings are also available by calling 1.888.MKT.VCTR or by visiting vaneck.com.   Investment Adviser: Van Eck Associates Corporation   Distributor: Van Eck Securities Corporation 335 Madison Avenue New York, NY 10017 vaneck.com   Account Assistance: 1.888.MKT.VCTR

 

MUNISAR

	SEMI-ANNUAL REPORT O C T O B E R  3 1 ,  2 0 1 4 ( u n a u d i t e d )

 

MARKET VECTORS
CORPORATE BOND ETFs
Fallen Angel High Yield Bond ETF	ANGL®
Investment Grade Floating Rate ETF	FLTR®
Treasury-Hedged High Yield Bond ETF	THHY®
MARKET VECTORS
EQUITY INCOME ETFs
BDC Income ETF	BIZD®
Mortgage REIT Income ETF	MORT®
Preferred Securities ex Financials ETF	PFXF®
MARKET VECTORS
INTERNATIONAL BOND ETFs
Emerging Markets Aggregate Bond ETF	EMAG®
Emerging Markets High Yield Bond ETF	HYEM®
Emerging Markets Local Currency Bond ETF	EMLC®
International High Yield Bond ETF	IHY®
Renminbi Bond ETF	CHLC®

 

888.MKT.VCTR
marketvectorsetfs.com

MARKET VECTORS INCOME ETFs
President’s Letter	1
Management Discussion	3
Performance Comparison
BDC Income ETF (BIZD)	7
Emerging Markets Aggregate Bond ETF (EMAG)	8
Emerging Markets High Yield Bond ETF (HYEM)	9
Emerging Markets Local Currency Bond ETF (EMLC)	10
Fallen Angel High Yield Bond ETF (ANGL)	11
International High Yield Bond ETF (IHY)	12
Investment Grade Floating Rate ETF (FLTR)	13
Mortgage REIT Income ETF (MORT)	14
Preferred Securities ex Financials ETF (PFXF)	15
Renminbi Bond ETF (CHLC)	16
Treasury-Hedged High Yield Bond ETF (THHY)	17
Explanation of Expenses	18
Schedule of Investments
BDC Income ETF (BIZD)	20
Emerging Markets Aggregate Bond ETF (EMAG)	21
Emerging Markets High Yield Bond ETF (HYEM)	26
Emerging Markets Local Currency Bond ETF (EMLC)	34
Fallen Angel High Yield Bond ETF (ANGL)	39
International High Yield Bond ETF (IHY)	42
Investment Grade Floating Rate ETF (FLTR)	53
Mortgage REIT Income ETF (MORT)	57
Preferred Securities ex Financials ETF (PFXF)	58
Renminbi Bond ETF (CHLC)	61
Treasury-Hedged High Yield Bond ETF (THHY)	63
Statements of Assets and Liabilities	66
Statements of Operations	68
Statements of Changes in Net Assets	70
Financial Highlights
BDC Income ETF (BIZD)	75
Emerging Markets Aggregate Bond ETF (EMAG)	75
Emerging Markets High Yield Bond ETF (HYEM)	76
Emerging Markets Local Currency Bond ETF (EMLC)	76
Fallen Angel High Yield Bond ETF (ANGL)	77
International High Yield Bond ETF (IHY)	77
Investment Grade Floating Rate ETF (FLTR)	78
Mortgage REIT Income ETF (MORT)	78
Preferred Securities ex Financials ETF (PFXF)	79
Renminbi Bond ETF (CHLC)	79
Treasury-Hedged High Yield Bond ETF (THHY)	80
Notes to Financial Statements	81
Approval of Investor Management Agreements	91

 

 

The information contained in the management discussion represents the opinions of Market Vectors ETFs and may differ from other persons. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings and the Funds’ performance, and the views of Market Vectors ETFs are as of October 31, 2014, and are subject to change.

MARKET VECTORS INCOME ETFs

(unaudited)

 

Dear Shareholder:

 

Emerging markets bonds, as an asset class, have evolved significantly over the past 20 years, growing in size, diversity, and liquidity. We believe that while these bonds deserve a permanent place in investor portfolios, many investors are just not aware of the full breadth of choices they have.

 

Improved economic policies, financial positions (especially growing reserves), and credit profiles have helped usher in “new worlds” within the asset class. This has created a diverse mix of hard and local currency bonds issued by both sovereigns and corporations.

 

The market is approximately six times as large as it was in 2004, and roughly twice the size of the U.S. high yield market. It offers investors more income, capital appreciation, and diversification potential through a variety of country, credit and maturity exposures: 60 countries, 20 currencies, and over 600 corporate issuers.

 

U.S. dollar-denominated sovereign debt tends to be how many investors get exposure to emerging markets bonds, but these bonds actually account for less than 20% of the total emerging markets bond universe.

 

Emerging Markets Bond Markets Continue to Grow

 

 

 

Source: EM Local Sov — J.P. Morgan GBI-EM Global Diversified Index, EM USD Sov — J.P. Morgan EMBI Global Diversified Index; EM USD Corp — J.P. Morgan CEMBI Broad Index. Data as of September 30, 2014. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

Market Vectors Emerging Markets Aggregate Bond ETF (NYSE Arca: EMAG), together with the other emerging markets debt-focused offerings in our ETF family, Market Vectors Emerging Markets High Yield Bond ETF (NYSE Arca: HYEM) and Market Vectors Emerging Markets Local Currency Bond ETF (NYSE Arca: EMLC), are all there to help give investors flexibility in tailoring their approach to emerging markets debt exposure.

 

EMAG in particular provides an efficient means for investors to gain access to a broad exposure of emerging markets bonds in a single ETF, while offering two key benefits: currency and credit quality diversification. In these uncertain times, the former may help reduce volatility, the latter may help reduce risk.

 

Going forward, we will, as always, continue to seek out and evaluate the most attractive opportunities for you as a shareholder, and we encourage you stay in touch with us through the videos and email subscriptions available on our website (http://www.vaneck.com). Should you have any questions, please contact us at 1.888.MKT.VCTR or visit www.marketvectorsetfs.com.

MARKET VECTORS INCOME ETFs

(unaudited)

 

Thank you for participating in the Market Vectors ETF Trust. You will find the performance comparison of each of the funds for the six months ended October 31, 2014 on the following pages. You will also find their respective financial statements. We value your continuing confidence in us and look forward to helping you meet your investment goals in the future.

 

 

Jan F. van Eck
Trustee and President
Market Vectors ETF Trust

 

November 13, 2014

 

Represents the opinions of the investment adviser. Past performance is no guarantee of future results. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue.

 

All indices are unmanaged and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. An index’s performance is not illustrative of the Fund’s performance. Indices are not securities in which investments can be made. Bonds and bond funds will decrease in value as interest rates rise.

 

EM Local Sov: J.P. Morgan GBI-EM Global Diversified Index is composed of local currency-denominated debt issued by emerging markets governments.

 

EM USD Sov: J.P. Morgan EMBI Global Diversified Index is composed of U.S. dollar-denominated debt issued by emerging markets governments.

 

EM USD Corp: J.P. Morgan CEMBI Broad Index is composed of U.S. dollar-denominated debt issued by emerging markets corporations.

 

 

 

Management Discussion (unaudited)

 

The suite of Market Vectors Income ETFs can most accurately be divided into three groups: equity income, international bonds, and corporate bonds. Over the six months ended October 31, 2014, the performances of individual funds were mostly positive, with only three funds posting negative returns. All three equity income ETFs posted positive total returns, two out of the three ETFs in the corporate bond group posted positive returns, and three out of the five ETFs in the international bond group posted positive total returns, as shown below.

 

 

 

Source: Van Eck Global. Returns based on NAV. The performance data quoted represents past performance. Past performance is not a guarantee of future results. Bonds and bond funds will decrease in value as interest rates rise. Performance information for the Funds reflects temporary waivers of expenses and/or fees. Had the Funds incurred all expenses, investment returns would have been reduced. Investment return and value of the shares of the Funds will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted.

 

EQUITY INCOME

 

Business Development Companies (BDCs)

BDCs typically lend to, and invest in, small privately held companies. An improving economy and increased lending benefit the industry, as do active buy-out and IPO markets.¹ Having been hit particularly hard in September, BDCs continued to fall through the middle of October, but recovered somewhat to end the month higher than they began. While giving back nearly all gains made in the first four months of the six-month period, they ended the half year on October 31, 2014 posting a positive performance of 1.49%. They underperformed relative to the broader market as measured by the S&P 500^® Index, which posted a return of 8.22%.^‡ (A continuing driver of this underperformance was the decision, at the end of February 2014, by S&P to exclude BDCs from its U.S. indices,² a decision Russell Indices also took, at the beginning of March, negatively impacting the industry thereafter.³) The industry ended the period offering a dividend yield of 8.76% as measured by the Market Vectors US Business Development Index⁴.

MARKET VECTORS INCOME ETFs

(unaudited)

 

Mortgage REITs

Since December 2013, when the Federal Reserve Bank (the “Fed”) announced the start of its “taper” program with a reduction of $10 billion in its monthly bond purchases, there have been six further such reductions of $10 billion. In mid-September the Fed announced that it planned to end, in October, its bond-buying program, after a final purchase of $15 billion.⁵ The end of its bond buying was confirmed at the Fed’s meeting on October 29, 2014.⁶ In the meantime, however, the Fed continues to signal its commitment to low interest rates.⁷ The six months ended October 31, 2014 continued to be an unsettled time for mortgage REITS. September, in particular, was challenging, as, during the month, they gave back gains made in the previous four months. October, however, saw mortgage REITS clawing their way back and posting a positive performance for the six-month period under review. Mortgage REITs ended the period offering a dividend yield of 10.45% as measured by the Market Vectors Global Mortgage REITs Index.⁸

 

Preferred Securities ex Financials

Preferred securities are considered hybrid securities because they have features of both debt and equity securities. Historically, a company’s preferred securities have offered higher yields than its common stock and senior debt. The Wells Fargo^® Hybrid and Preferred Securities ex Financials Index excludes traditional financial companies which have been more volatile than other sectors historically.⁹ For the six-month period ended October 31, 2014 the Fund posted a positive performance. All economic sectors except two – industrials and materials – contributed positive returns, with performance driven primarily by REITs. The industry ended the period offering a dividend yield of 6.27% as measured by the Wells Fargo Hybrid and Preferred Securities ex Financials Index.

 

INTERNATIONAL BOND

 

Emerging Markets Local Currency Bonds

Despite the Fed continuing to taper its bond buying program throughout the six months under review, from the beginning of May to just before the last week of July, local currency bonds recorded modest gains. However, on the back of concerns about prospects of lower emerging markets economic growth and a strengthening U.S. dollar, the period from the last week in July through the months of August and September saw these bonds shed all those gains, and more. While October was a choppy month (and marked the end of the U.S. governments bond buying program), and local currency bonds ended the month slightly higher than they started it, the Fund posted a negative return for the entire six-month period ended October 31, 2014.

 

In terms of local currency, bonds denominated in Brazilian Real and Thai Baht contributed most to the Fund’s total return, while the bonds denominated in Russian Ruble and Polish Zloty were the greatest detractors from performance.

 

Emerging Markets Aggregate Bonds

Both sovereign and corporate bonds denominated in hard currency contributed positively to performance, with corporates performing better than sovereigns, local currency corporates and sovereigns both detracted from performance, with local currency sovereigns detracting the most from returns. The Fund’s U.S. dollar allocation contributed most to returns, and Russian bonds were the largest detractor from performance.

 

Emerging Markets High Yield Bonds

Overall, emerging markets corporate bonds continue to be a fast growing asset class. Emerging markets corporate debt is now nearly as large as the U.S. high yield corporate debt market.

 

While Chinese and Russian bonds were the greatest contributors to the Fund’s total return, Venezuelan bonds were by far the greatest detractors. On a sector level, financial bonds were the greatest contributors to total return and, among all the other sectors, only energy sector bonds detracted from performance.

 

International High Yield Bonds

Non-U.S. high-yield bonds have continued to provide an opportunity to diversify not only geographically, but also in terms of currency, with bonds denominated, for example, in Euros, Sterling and Canadian dollars. Europe accounts for around 60% of global ex-U.S. high-yield corporate bond market value, and emerging markets represent about 30%.

 

Technology was the single sector to contribute positively to overall Fund performance, with the financial sector detracting most from performance. Only U.S. dollar-denominated bonds contributed positively to Fund total return. And while both Sterling- and Canadian dollar-denominated bonds detracted from Fund performance, Euro-denominated bonds performed far worse than bonds in either of these two currencies.

 

 

Renminbi Bonds

Chinese Renminbi-denominated bonds, both issued and traded outside China, constitute what is known as the “dim sum bond market”. Dim sum bonds provide an alternative way of gaining exposure to China’s currency and market, rather than non-deliverable forward contacts and/or QFII (Qualified Foreign Institutional Investor), which may not be practical. Investors in this market not only receive bond interest payments, but also gain exposure to China’s currency.

 

All sectors contributed positively to performance. While financial and utilities bonds were the best performers during the six-month period ended October 31, 2014, energy and communications bonds contributed the least to returns.

 

CORPORATE BOND

 

Fallen Angel Bonds

“Fallen angels” are high-yield corporate bonds that were once investment grade, but have been downgraded to noninvestment grade. They warrant distinction for an embedded value proposition that is not common to all of high yield: fallen angels tend to have a higher rate of ascension to investment grade than original issue high yield bonds. The default rate in this segment has averaged 3.71% historically, below the 4.60% average for all U.S. high yield.¹⁰

 

Communications and energy were the two best performing sectors during the period under review. While all sectors performed positively, the industrial and technology sectors contributed least to the Fund’s total return. Over the six-month period, fallen angel bonds outperformed broad market high-yield bonds by more than double.

 

El Paso Energy 7.75% 01/15/32 bond (2.3% of Fund net assets^†) and Embarq 8.00% 06/01/36 bond (2.5% of Fund net assets^†) were the top two performing bonds, while Avon Products 4.60% 03/15/23 bond (1.4% of Fund net assets^†) and Cliffs Natural Resources 4.88% 10/01/20 bond (1.0% of Fund net assets^†) were the bottom two performing bonds.

 

Investment Grade Floating Rate Notes

Floating rate notes (FRNs) are investment grade-rated corporate debt issues with variable coupons that reset to current interest rates, based on a particular benchmark. The coupons on these securities fluctuate with that benchmark. The combination of low average years to maturity, typically in the 1-5 year range, and floating interest rates creates the potential for relatively low price fluctuations. In addition, as short-term interest rates rise, portfolio securities reset to higher yields.

 

The top two performing notes were AA- rated General Electric Capital Corp. FRN 0.62% 05/05/26 (1.0% of Fund net assets^†) and BBB+ rated Citigroup, Inc. FRN 1.93% 05/15/18 (1.9% of Fund net assets^†). The bottom two performing notes were both A rated and from American Express Credit Corp.: FRN 0.50% 06/05/17 (1.3% of Fund net assets^†) and FRN 0.78% 03/18/19 (1.2% of Fund net assets^†).¹¹

 

Treasury-Hedged High Yield Bonds

The Treasury-Hedged High Yield Bond ETF tracks an index that combines the more liquid portion of the high-yield universe with short positions in 5-year U.S. Treasury notes. The Fund uses futures on such notes to help hedge against the risk of rising interest rates. Together, the long high-yield bond and short comparable U.S. Treasury portfolios offer a combination of income generation and protection against rising interest rates.

 

The main drivers of returns in this strategy are interest rates and credit spreads. Rising interest rates and narrowing credit spreads positively contribute to performance, while declining interest rates and widening credit spreads detract from the Fund’s returns.

 

The Fund underperformed unhedged high yield bond strategies as interest rates declined, negatively contributing to the short portfolio of futures contracts on 5-year U.S. Treasuries. The top performing bonds were El Paso Energy Corp. 7.75% 01/15/32 bond (1.3% of Fund net assets^†) and Ally Financial Inc. 8.00% 11/01/31 bond (2.5% of Fund net assets^†). The bottom performing bonds were both Caesars Entertainment Operating Co., Inc.: 11.25% 12/05/14 bond (0.8% of Fund net assets^†) and 10.0% 12/05/14 bond (0.1% of Fund net assets^†).

 

†	All Fund assets referenced are Total Net Assets as of October 31, 2014.
	All indices listed are unmanaged indices and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. An index’s performance is not illustrative of the Fund’s performance. Indices are not securities in which investments can be made.
‡	Standard & Poor’s (S&P) 500® Index, calculated with dividends reinvested, consists of 500 widely held common stocks covering the industrial, utility, financial, and transportation sectors.

MARKET VECTORS INCOME ETFs

(unaudited)

 

1	Investopedia: Little Known Stocks And ETFs To Buy As Interest Rates Rise, http://www.investopedia.com/stock-analysis/040314/little-known-stocks-and-etfs-buy-interest-rates-rise-bizd-acas-htgc-hrzn.aspx
2	Barron’s: BDCs Fall After S&P Gives the Boot - Now Watch Russell, http://blogs.barrons.com/focusonfunds/2014/02/26/bdcs-fall-after-sp-gives-the-boot-now-watch-russell/
3	Russell Indexes: Reconstitution - 2014 Schedule, http://www.russell.com/documents/indexes/reconstitution-schedule.pdf
4	Market Vectors® US Business Development Companies Index (MVBIZDTG) includes companies which are treated as Business Development Companies. To be eligible for the Index and qualify as a BDC, a company must be organized under the laws of, and have its principal place of business in the U.S., be registered with the Securities Exchange Commission and have elected to be regulated as a BDC under the Investment Company Act of 1940. As of October 31, 2014, the 30-day SEC yield for Market Vectors BDC Income ETF was 8.66%. 30-Day SEC Yield is calculated as of the most recent month end, and is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons primarily among bond funds. It is based on the most recent 30-day period. This yield figure reflects the interest and dividends earned during the period after deducting the Fund’s expenses for the period. It does not reflect the yield an investor would have received if they had held the Fund over the last twelve months assuming the most recent NAV. In the absence of temporary expense waivers or reimbursements, the 30-Day SEC Yield for Market Vectors BDC Income ETF would have been 8.31% on October 31, 2014.
5	Bloomberg QuickTake: The Fed Eases Off, http://www.bloombergview.com/quicktake/federal-reserve-quantitative-easing-tape
6	The Wall Street Journal: Fed Closes Chapter on Easy Money, http://online.wsj.com/articles/fed-ends-bond-buys-sticks-to-0-rate-for-considerable-time-1414605953
7	Washington Examiner: Federal Reserve keeps commitment to low rates, http://washingtonexaminer.com/federal-reserve-keeps-commitment-to-low-rates/article/2553551#null and Ibid.
8	Market Vectors® Global Mortgage REITs Index (MVMORTTR) is a rules-based index intended to give investors a means of tracking the overall performance of publicly traded U.S. and non-U.S. mortgage REITs that derive at least 50% of their revenues from mortgage-related activity. As of October 31, 2014, the 30-day SEC yield for Market Vectors Mortgage REIT Income ETF was 10.50%. 30-Day SEC Yield is calculated as of the most recent month end, and is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons primarily among bond funds. It is based on the most recent 30-day period. This yield figure reflects the interest and dividends earned during the period after deducting the Fund’s expenses for the period. It does not reflect the yield an investor would have received if they had held the Fund over the last twelve months assuming the most recent NAV. In the absence of temporary expense waivers or reimbursements, the 30-Day SEC Yield for Market Vectors Mortgage REIT Income ETF would have been 10.25% on October 31, 2014.
9	Wells Fargo® Hybrid and Preferred Securities ex Financials Index (WHPSL) is a rules-based index designed to track the performance of convertible or exchangeable and non-convertible preferred securities, issued by U.S. or foreign issuers that are not financial services companies or banks and that are listed on U.S. national securities exchanges. As of October 31, 2014, the 30-day SEC yield for Market Vectors Preferred Securities ex Financials ETF was 5.97%. 30 Day SEC Yield is calculated as of the most recent month end, and is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons primarily among bond funds. It is based on the most recent 30-day period. This yield figure reflects the interest and dividends earned during the period after deducting the Fund’s expenses for the period. It does not reflect the yield an investor would have received if they had held the Fund over the last six months assuming the most recent NAV. In the absence of temporary expense waivers or reimbursements, the 30-Day SEC Yield for Market Vectors Preferred Securities ex Financials ETF would have been 5.78% on October 31, 2014.
10	Altman, Edward I. and Brenda J. Kuehne. “Defaults and Returns in the High-Yield Bond and Distressed Debt Market: The Year 2013 in Review and Outlook”. Feb 2014. NYU Salomon Center.
11	Bloomberg Composite Rating: An evenly weighted blend of a security’s Moody’s, S&P, Fitch and DBRS ratings. This composite is not intended to be a credit opinion.

BDC INCOME ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				MVBIZDTG2
Six Months			1.37	%			1.41	%			1.49	%
One Year			1.46	%			1.66	%			1.91	%
Life* (annualized)			4.85	%			4.77	%			5.09	%
Life* (cumulative)			8.48	%			8.33	%			8.90	%
*since 2/11/13

 

Commencement date for the Market Vectors BDC Income ETF (BIZD) was 2/11/13.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (2/11/13) to the first day of secondary market trading in shares of the Fund (2/12/13), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.59% / Net Expense Ratio 0.41%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors US Business Development Companies Index (MVBIZDTG) (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Market Vectors Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. Market Vectors BDC Income ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by Market Vectors Index Solutions GmbH and Market Vectors Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Market Vectors® US Business Development Companies Index (MVBIZDTG) (the “Index”) includes companies which are treated as Business Development Companies. To be eligible for the Index and qualify as a BDC, a company must be organized under the laws of, and have its principal place of business in the U.S., be registered with the Securities Exchange Commission and have elected to be regulated as a BDC under the Investment Company Act of 1940.

EMERGING MARKETS AGGREGATE BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				MVEMAG2
Six Months			0.91	%			0.43	%			1.03	%
One Year			1.91	%			1.66	%			2.51	%
Life* (annualized)			2.98	%			2.98	%			4.73	%
Life* (cumulative)			10.75	%			10.73	%			17.43	%
*since 5/11/11

 

Effective December 10, 2013, Market Vectors^® LatAm Aggregate Bond ETF (BONO) changed its name to Market Vectors Emerging Markets Aggregate Bond ETF (EMAG). The Fund’s investment objective changed to seeking to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors^® EM Aggregate Bond Index (MVEMAG), from seeking to replicate as closely as possible, before fees and expenses, the price and yield performance of the BofA Merrill Lynch Broad Latin America Bond Index (LATS). Performance data prior to December 9, 2013, reflects that of BONO and LATS. Performance data from December 10, 2013, and on, reflects that of EMAG and MVEMAG. All Index history reflects a blend of the performance of the aforementioned Indexes (MVEMAG and LATS) AND IS NOT INTENDED FOR ANY THIRD PARTY USE. LATS is a trademark of Merrill Lynch, Pierce, Fenner & Smith Incorporation, which neither sponsors nor endorses EMAG and makes no warranty or representation as to the accuracy and/or completeness of this Index.

 

Commencement date for the Market Vectors Emerging Markets Aggregate Bond ETF (EMAG) was 5/11/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (5/11/11) to the first day of secondary market trading in shares of the Fund (5/12/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 1.06% / Net Expense Ratio 0.50%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.49% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors EM Aggregate Bond Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Market Vectors Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. Market Vectors Emerging Markets Aggregate Bond ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by Market Vectors Index Solutions GmbH and Market Vectors Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	The Market Vectors EM Aggregate Bond Index (MVEMAG) is comprised of sovereign bonds and corporate bonds denominated in U.S. dollars, Euros, or local emerging market currencies and includes both investment grade and below investment grade rated securities.

EMERGING MARKETS HIGH YIELD BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				EMHY2
Six Months			1.46	%			2.13	%			2.59	%
One Year			4.82	%			4.82	%			5.52	%
Life* (annualized)			6.62	%			6.69	%			7.38	%
Life* (cumulative)			17.25	%			17.44	%			19.34	%
*since 5/8/12

 

Commencement date for the Market Vectors Emerging Markets High Yield Bond ETF (HYEM) was 5/8/12.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (5/8/12) to the first day of secondary market trading in shares of the Fund (5/9/12), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.48% / Net Expense Ratio 0.40%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates (“BofA Merrill Lynch”) indices and related information, the name “BofA Merrill Lynch”, and related trademarks, are intellectual property licensed from BofA Merrill Lynch, and may not be copied, used, or distributed without BofA Merrill Lynch’s prior written approval. The licensee’s products have not been passed on as to their legality or suitability, and are not regulated, issued, endorsed, sold, guaranteed, or promoted by BofA Merrill Lynch. BOFA MERRILL LYNCH MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO THE INDICES, ANY RELATED INFORMATION, ITS TRADEMARKS, OR THE PRODUCT(S) (INCLUDING WITHOUT LIMITATION, THEIR QUALITY, ACCURACY, SUITABILITY AND/OR COMPLETENESS).

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

The BofA Merrill Lynch High Yield US Emerging Markets Liquid Corporate Plus Index (EMHY) is comprised of U.S. dollar denominated bonds issued by non-sovereign emerging market issuers that are rated BB1 or lower (based on an average of Moody’s, S&P and Fitch) and that are issued in the major domestic and Eurobond markets.

EMERGING MARKETS LOCAL CURRENCY BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				GBIEMCOR2
Six Months			(0.92	)%			(1.13	)%			(0.80	)%
One Year			(2.24	)%			(2.88	)%			(2.20	)%
Life* (annualized)			2.64	%			2.63	%			3.51	%
Life* (cumulative)			11.79	%			11.76	%			15.90	%
*since 7/22/10

 

Commencement date for the Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) was 7/22/10.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (7/22/10) to the first day of secondary market trading in shares of the Fund (7/23/10), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.48% / Net Expense Ratio 0.47%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.47% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) is not sponsored, endorsed, sold or promoted by J.P. Morgan and J.P. Morgan makes no representation regarding the advisability of investing in EMLC. J.P. Morgan does not warrant the completeness or accuracy of the J.P. Morgan GBI-EMG Core Index. “J.P. Morgan” is a registered service mark of JPMorgan Chase & Co.© 2014. JPMorgan Chase & Co. All rights reserved.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	J.P. Morgan Government Bond Index–Emerging Markets Global Core (GBIEMCOR) is designed to track the performance of bonds issued by emerging market governments and denominated in the local currency of the issuer.

FALLEN ANGEL HIGH YIELD BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				HOFA2
Six Months			2.33	%			2.52	%			2.97	%
One Year			8.35	%			8.90	%			9.86	%
Life* (annualized)			10.25	%			10.49	%			12.44	%
Life* (cumulative)			28.36	%			29.08	%			34.98	%
*since 4/10/12

 

Commencement date for the Market Vectors Fallen Angel High Yield Bond ETF (ANGL) was 4/10/12.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (4/10/12) to the first day of secondary market trading in shares of the Fund (4/11/12), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.97% / Net Expense Ratio 0.40%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates (“BofA Merrill Lynch”) indices and related information, the name “BofA Merrill Lynch”, and related trademarks, are intellectual property licensed from BofA Merrill Lynch, and may not be copied, used, or distributed without BofA Merrill Lynch’s prior written approval. The licensee’s products have not been passed on as to their legality or suitability, and are not regulated, issued, endorsed, sold, guaranteed, or promoted by BofA Merrill Lynch. BOFA MERRILL LYNCH MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO THE INDICES, ANY RELATED INFORMATION, ITS TRADEMARKS, OR THE PRODUCT(S) (INCLUDING WITHOUT LIMITATION, THEIR QUALITY, ACCURACY, SUITABILITY AND/OR COMPLETENESS).

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	The BofA Merrill Lynch US Fallen Angel High Yield Index (H0FA) is comprised of below investment grade corporate bonds denominated in U.S. dollars that were rated investment grade at the time of issuance.

INTERNATIONAL HIGH YIELD BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				HXUS2
Six Months			(2.67	)%			(2.75	)%			(2.92	)%
One Year			3.14	%			2.46	%			2.87	%
Life* (annualized)			8.06	%			7.93	%			8.77	%
Life* (cumulative)			22.14	%			21.76	%			24.23	%
*since 4/2/12

 

Commencement date for the Market Vectors International High Yield Bond ETF (IHY) was 4/2/12.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (4/2/12) to the first day of secondary market trading in shares of the Fund (4/3/12), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.54%/ Net Expense Ratio 0.40%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates (“BofA Merrill Lynch”) indices and related information, the name “Bank of America Merrill Lynch”, and related trademarks, are intellectual property licensed from BofA Merrill Lynch, and may not be copied, used, or distributed without BofA Merrill Lynch’s prior written approval. The licensee’s products have not been passed on as to their legality or suitability, and are not regulated, issued, endorsed, sold, guaranteed, or promoted by BofA Merrill Lynch. BOFA MERRILL LYNCH MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO THE INDICES, ANY RELATED INFORMATION, ITS TRADEMARKS, OR THE PRODUCT(S) (INCLUDING WITHOUT LIMITATION, THEIR QUALITY, ACCURACY, SUITABILITY AND/OR COMPLETENESS).

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	The BofA Merrill Lynch Global Ex-US Issuers High Yield Constrained Index (HXUS) tracks the performance of below investment grade debt issued by non-U.S. corporations denominated in Euros, U.S. dollars, Canadian dollars or pound sterling issued in the major domestic or eurobond markets.

INVESTMENT GRADE FLOATING RATE ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				MVFLTR2
Six Months			0.35	%			0.35	%			0.51	%
One Year			0.72	%			0.92	%			1.29	%
Life* (annualized)			1.02	%			1.02	%			1.50	%
Life* (cumulative)			3.64	%			3.63	%			5.39	%
*since 4/25/11

 

Commencement date for the Market Vectors Investment Grade Floating Rate ETF (FLTR) was 4/25/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (4/25/11) to the first day of secondary market trading in shares of the Fund (4/26/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.49% / Net Expense Ratio 0.19%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.19% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors Investment Grade Floating Rate ETF (the “Fund”) is not sponsored, issued or advised by Wells Fargo & Company, Wells Fargo Securities, LLC or any of their affiliates (together, “Wells Fargo”). The Market Vectors US Investment Grade Floating Rate Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (the “Index Provider”), which has contracted with Wells Fargo to create and maintain and with Interactive Data Pricing and Reference Data, Inc. (the “Index Calculator”) to calculate the Index. Neither Wells Fargo nor the Index Calculator guarantees the accuracy and/or completeness of the Index or of any data supplied by it or its agents or makes any warranty as to the results to be obtained from investing in the Fund or tracking the Index. The Index is calculated by Interactive Data Pricing and Reference Data, Inc., which is not an adviser for or fiduciary to the Fund, and, like Wells Fargo, is not responsible for any direct, indirect or consequential damages associated with indicative optimized portfolio values and/or indicative intraday values. The Fund is not sponsored, endorsed, sold or promoted by Market Vectors Index Solutions GmbH.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Market Vectors® US Investment Grade Floating Rate Index (MVFLTR) is comprised of U.S. dollar-denominated floating rate notes issued by corporate issuers or similar commercial entities that are public reporting companies in the U.S. and rated investment grade by at least one of three rating services: Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s Rating Services (“S&P”) or Fitch International Rating Agency (“Fitch”). Investment grade securities are those rated Baa3 or higher by Moody’s or rated BBB- or higher by S&P or Fitch.

MORTGAGE REIT INCOME ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				MVMORTTR2
Six Months			4.40	%			4.40	%			2.97	%
One Year			17.90	%			18.06	%			14.87	%
Life* (annualized)			11.48	%			11.49	%			8.01	%
Life* (cumulative)			41.71	%			41.77	%			28.06	%
*since 8/16/11

 

Commencement date for the Market Vectors Mortgage REIT Income ETF (MORT) was 8/16/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (8/16/11) to the first day of secondary market trading in shares of the Fund (8/17/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.53% / Net Expense Ratio 0.41%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors Global Mortgage REITs Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Market Vectors Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. Market Vectors Mortgage REIT Income ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by Market Vectors Index Solutions GmbH and Market Vectors Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	Market Vectors® Global Mortgage REITs Index (MVMORTTR) is a rules-based index intended to give investors a means of tracking the overall performance of publicly traded U.S. and non-U.S. mortgage REITs that derive at least 50% of their revenues from mortgage-related activity.

PREFERRED SECURITIES EX FINANCIALS ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				WHPSL2
Six Months			2.25	%			2.35	%			2.23	%
One Year			12.35	%			12.64	%			12.29	%
Life* (annualized)			7.19	%			7.15	%			7.15	%
Life* (cumulative)			17.27	%			17.15	%			17.15	%
*since 7/16/12

 

Commencement date for the Market Vectors Preferred Securities ex Financials ETF (PFXF) was 7/16/12.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (7/16/12) to the first day of secondary market trading in shares of the Fund (7/17/12), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 0.49% / Net Expense Ratio 0.40%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.40% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

The Fund is not issued, sponsored, endorsed or advised by Wells Fargo & Company, Wells Fargo Securities, LLC or their subsidiaries and affiliates (collectively, “Wells Fargo”). Wells Fargo makes no representation or warranty, express or implied, to the Fund’s investors or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of any data supplied by Wells Fargo or the Index to track financial instruments comprising the Index or any trading market. Wells Fargo’s only relationship to the Adviser is the licensing of certain trademarks and trade names of Wells Fargo and of the data supplied by Wells Fargo that is determined, composed and calculated by Wells Fargo or a third party index calculator, without regard to the Fund or its shareholders. Wells Fargo has no obligation to take the needs of the Fund or the Fund’s shareholders into consideration when determining, composing or calculating the data. Wells Fargo has no obligation or liability in connection with the administration, marketing or trading of the Fund.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	Wells Fargo® Hybrid and Preferred Securities ex Financials Index (WHPSL) is designed to track the performance of convertible or exchangeable and non-convertible preferred securities listed on U.S. exchanges.

RENMINBI BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				MVCHLC2
Six Months			5.70	%			3.33	%			3.49	%
One Year			5.07	%			1.92	%			2.52	%
Life* (annualized)			4.78	%			4.13	%			4.39	%
Life* (cumulative)			15.31	%			13.16	%			14.05	%
*since 10/11/11

 

Commencement date for the Market Vectors Renminbi Bond ETF (CHLC) was 10/11/11.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (10/11/11) to the first day of secondary market trading in shares of the Fund (10/12/11), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 2.16% / Net Expense Ratio 0.39%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.39% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors Renminbi Bond Index is the exclusive property of Market Vectors Index Solutions GmbH (a wholly owned subsidiary of the Adviser), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Market Vectors Index Solutions GmbH, Solactive AG has no obligation to point out errors in the Index to third parties. Market Vectors Renminbi Bond ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by Market Vectors Index Solutions GmbH and Market Vectors Index Solutions GmbH makes no representation regarding the advisability of investing in the Fund.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2

Market Vectors® Renminbi Bond Index (MVCHLC) is designed to track the performance of fixed-rate, Chinese Renminbi (“RMB”)-denominated bonds with an investment grade rating from at least one rating agency that are available to market participants outside of mainland China issued by Chinese or non-Chinese corporate, governmental, quasi-governmental or supranational issuers (“RMB Bonds”).

TREASURY-HEDGED HIGH YIELD BOND ETF

PERFORMANCE COMPARISON

October 31, 2014 (unaudited)

 

Total Return		Share Price1				NAV				MVTHHY2
Six Months			(0.85	)%			(0.22	)%			(0.12	)%
One Year			5.79	%			3.79	%			4.37	%
Life* (annualized)			4.00	%			4.13	%			4.90	%
Life* (cumulative)			6.53	%			6.75	%			8.03	%
*since 3/21/13

 

Commencement date for the Market Vectors Treasury-Hedged High Yield Bond ETF (THHY) was 3/21/13.

 

1

The price used to calculate market return (Share Price) is determined by using the closing price listed on NYSE Arca. Since the shares of the Fund did not trade in the secondary market until several days after the Fund’s commencement, for the period from commencement (3/21/13) to the first day of secondary market trading in shares of the Fund (3/22/13), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns.

 

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for the Fund reflects temporary waivers of expenses and/or fees. Had the Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.

 

Investment return and value of the shares of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Performance current to the most recent month-end is available by calling 1.888.MKT.VCTR or by visiting marketvectorsetfs.com.

 

Gross Expense Ratio 1.57% / Net Expense Ratio 0.50%

 

Van Eck Associates Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of the Fund (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) from exceeding 0.50% of the Fund’s average daily net assets per year until at least September 1, 2015. During such time, the expense limitation is expected to continue until the Fund’s Board of Trustees acts to discontinue all or a portion of such expense limitation.

 

Fund shares are not individually redeemable and will be issued and redeemed at their 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.

 

The “Net Asset Value” (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.

 

Market Vectors US Treasury-Hedged High Yield Bond Index (the “Index”) is the exclusive property of Market Vectors Index Solutions GmbH (the “Index Provider”), which has contracted with Interactive Data Pricing and Reference Data, LLC. (the “Calculation Agent “) to calculate the Index. The Calculation Agent is not an adviser for or a fiduciary to any account, fund or ETF managed by Van Eck Associates Corporation. The Calculation Agent is not responsible for any direct, indirect, or consequential damages associated with indicative optimized portfolio values and/or indicative intraday values. Market Vectors Treasury-Hedged High Yield Bond ETF (the “Fund”) is not sponsored, endorsed, sold or promoted by the Index Provider, which makes no representation regarding the advisability of investing in the Fund.

 

Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.

 

2	Market Vectors® US Treasury-Hedged High Yield Bond Index (MVTHHY) is comprised of long positions in below-investment grade corporate bonds, denominated in U.S. dollars, and an equivalent amount of short positions in Treasury notes and bonds.

MARKET VECTORS ETF TRUST

EXPLANATION OF EXPENSES

(unaudited)

 

As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the period, May 1, 2014 to October 31, 2014.

 

Actual Expenses

The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period.”

 

Hypothetical Example for Comparison Purposes

The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as fees on purchase payments. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

		Beginning Account Value May 1, 2014			Ending Account Value October 31, 2014		Annualized Expense Ratio During Period				Expenses Paid During the Period* May 1, 2014- October 31, 2014
BDC Income ETF
Actual		$1,000.00			$1,014.10			0.41	%		$2.08
Hypothetical**		$1,000.00			$1,023.14			0.41	%		$2.09
Emerging Markets Aggregate Bond ETF
Actual		$1,000.00			$1,004.30			0.50	%		$2.53
Hypothetical**		$1,000.00			$1,022.68			0.50	%		$2.55
Emerging Markets High Yield Bond ETF
Actual		$1,000.00			$1,021.30			0.40	%		$2.04
Hypothetical**		$1,000.00			$1,023.19			0.40	%		$2.04
Emerging Markets Local Currency Bond ETF
Actual		$1,000.00			$   988.70			0.47	%		$2.36
Hypothetical**		$1,000.00			$1,022.84			0.47	%		$2.40
Fallen Angel High Yield Bond ETF
Actual		$1,000.00			$1,025.20			0.40	%		$2.04
Hypothetical**		$1,000.00			$1,023.19			0.40	%		$2.04
International High Yield Bond ETF
Actual		$1,000.00			$   972.50			0.40	%		$1.99
Hypothetical**		$1,000.00			$1,023.19			0.40	%		$2.04
Investment Grade Floating Rate ETF
Actual		$1,000.00			$1,003.50			0.19	%		$0.96
Hypothetical**		$1,000.00			$1,024.25			0.19	%		$0.97
Mortgage REIT Income ETF
Actual		$1,000.00			$1,044.00			0.41	%		$2.11
Hypothetical**		$1,000.00			$1,023.14			0.41	%		$2.09

		Beginning Account Value May 1, 2014			Ending Account Value October 31, 2014		Annualized Expense Ratio During Period				Expenses Paid During the Period* May 1, 2014- October 31, 2014
Preferred Securities ex Financials ETF
Actual		$1,000.00			$1,023.50			0.40	%		$2.04
Hypothetical**		$1,000.00			$1,023.19			0.40	%		$2.04
Renminbi Bond ETF
Actual		$1,000.00			$1,033.30			0.39	%		$2.00
Hypothetical**		$1,000.00			$1,023.24			0.39	%		$1.99
Treasury-Hedged High Yield Bond ETF
Actual		$1,000.00			$   997.80			0.50	%		$2.52
Hypothetical**		$1,000.00			$1,022.68			0.50	%		$2.55

*	Expenses are equal to the Fund’s annualized expense ratio (for the six months ended October 31, 2014) multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of days in the fiscal year (to reflect the one-half year period).
**	Assumes annual return of 5% before expenses

BDC INCOME ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $8,181,588.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Financial			99.9	%		$	45,608,955
Money Market Fund			0.1				37,257
			100.0	%		$	45,646,212

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

						Level 2					Level 3
		Level 1				Significant					Significant
		Quoted				Observable					Unobservable
		Prices				Inputs					Inputs					Value
Common Stocks*		$	45,608,955				$	—				$	—			$	45,608,955
Money Market Funds			8,456,678					—					—				8,456,678
Total		$	54,065,633				$	—				$	—			$	54,065,633

 

*	See Schedule of Investments for security type and industry sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

EMERGING MARKETS AGGREGATE BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

EMERGING MARKETS AGGREGATE BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

EMERGING MARKETS AGGREGATE BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

BRL	Brazilian Real
CLP	Chilean Peso
CNY	Chinese Yuan
COP	Colombian Peso
CZK	Czech Koruna
EUR	Euro
HUF	Hungarian Forint
IDR	Indonesian Rupiah
ILS	Israeli Sheqel
MXN	Mexican Peso
MYR	Malaysian Ringgit
NGN	Nigerian Naira
PEN	Peruvian Nuevo Sol
PLN	Polish Zloty
RON	Romanian Leu
RUB	Russian Ruble
THB	Thai Baht
TRY	Turkish Lira
USD	United States Dollar
ZAR	South African Rand
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(p)	Puttable Security – the redemption date shown is when the security may be redeemed by the investor
(s)	Step Bond – coupon increases periodically based upon a predetermined schedule. The rate shown reflects the rate in effect at the end of the reporting period
^	Zero Coupon Bond – the rate shown is the effective yield at purchase date
†	Security fully or partially on loan. Total market value of securities on loan is $203,771.
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
144A	Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $1,291,294, or 7.3% of net assets.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Basic Materials			4.0	%		$	706,171
Communications			3.3				586,698
Consumer, Non-cyclical			1.6				277,991
Diversified			2.0				346,530
Energy			11.1				1,933,444
Financial			11.5				2,000,441
Government			61.8				10,772,711
Industrial			0.6				105,969
Utilities			3.6				624,383
Money Market Fund			0.5				84,337
			100.0	%		$	17,438,675

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

						Level 2				Level 3
		Level 1				Significant				Significant
		Quoted				Observable				Unobservable
		Prices				Inputs				Inputs					Value
Corporate Bonds*		$	—			$	6,479,191				$	—			$	6,479,191
Government Obligations*			—				10,875,147					—				10,875,147
Money Market Funds			297,733				—					—				297,733
Total		$	297,733			$	17,354,338				$	—			$	17,652,071

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

EMERGING MARKETS HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

EMERGING MARKETS HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

EMERGING MARKETS HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

EMERGING MARKETS HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(d)	Security in default
(p)	Puttable Security – the redemption date shown is when the security may be redeemed by the investor
(s)	Step Bond – coupon increases periodically based upon a predetermined schedule. The rate shown reflects the rate in effect at the end of the reporting period
*	Non-income producing
†	Security fully or partially on loan. Total market value of securities on loan is $58,062,007.
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
144A	Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $277,418,589, or 63.4% of net assets.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Basic Materials			11.2	%		$	48,420,963
Communications			12.1				52,355,835
Consumer, Cyclical			4.0				17,413,820
Consumer, Non-cyclical			5.0				21,773,046
Diversified			0.5				2,247,927
Energy			15.1				65,451,742
Financial			31.7				137,086,692
Government			4.2				18,326,661
Industrial			8.2				35,631,553
Technology			0.6				2,338,095
Utilities			6.0				25,843,320
Money Market Fund			1.4				6,153,801
			100.0	%		$	433,043,455

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Corporate Bonds*		$	—			$	403,646,565			$	—			$	403,646,565
Government Obligations*			—				23,243,089				—				23,243,089
Money Market Fund			6,153,801				—				—				6,153,801
Repurchase Agreements			—				60,188,426				—				60,188,426
Total		$	6,153,801			$	487,078,080			$	—			$	493,231,881

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

EMERGING MARKETS LOCAL CURRENCY BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

EMERGING MARKETS LOCAL CURRENCY BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

EMERGING MARKETS LOCAL CURRENCY BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

BRL	Brazilian Real
CLP	Chilean Peso
COP	Colombian Peso
HUF	Hungarian Forint
IDR	Indonesian Rupiah
MXN	Mexican Peso
MYR	Malaysian Ringgit
NGN	Nigerian Naira
PEN	Peruvian Nuevo Sol
PHP	Philippine Peso
PLN	Polish Zloty
RON	Romanian Leu
RUB	Russian Ruble
THB	Thai Baht
TRY	Turkish Lira
ZAR	South African Rand
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(p)	Puttable Security – the redemption date shown is when the security may be redeemed by the investor
^	Zero Coupon Bond – the rate shown is the effective yield at purchase date
†	Security fully or partially on loan. Total market value of securities on loan is $12,089,204.
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
TIPS	Treasury Inflation Protected Securities

 

Summary of Investments by Sector Excluding		% of
Collateral for Securities Loaned (unaudited)		Investments				Value
Consumer, Non-cyclical			0.8	%		$	7,376,873
Financial			2.9				26,289,884
Government			87.7				794,951,184
Industrial			1.5				13,310,433
Utilities			6.7				60,858,048
Money Market Fund			0.4				3,900,978
			100.0	%		$	906,687,400

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

						Level 2				Level 3
		Level 1				Significant				Significant
		Quoted				Observable				Unobservable
		Prices				Inputs				Inputs					Value
Corporate Bonds*		$	—			$	107,868,892				$	—			$	107,868,892
Government Obligations*			—				794,917,530					—				794,917,530
Money Market Fund			3,900,978				—					—				3,900,978
Repurchase Agreements			—				13,368,999					—				13,368,999
Total		$	3,900,978			$	916,155,421				$	—			$	920,056,399

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

FALLEN ANGEL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

FALLEN ANGEL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(p)	Puttable Security – the redemption date shown is when the security may be redeemed by the investor
†	Security fully or partially on loan. Total market value of securities on loan is $854,553.
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
144A	Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $1,914,110, or 11.5% of net assets.

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Basic Materials			16.3	%		$	2,680,806
Communications			20.6				3,374,993
Consumer, Cyclical			7.7				1,255,843
Consumer, Non-cyclical			7.4				1,222,529
Energy			7.3				1,197,237
Financial			25.5				4,184,727
Industrial			6.2				1,015,625
Technology			2.1				346,250
Utilities			6.4				1,048,408
Money Market Fund			0.5				83,968
			100.0	%		$	16,410,386

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Corporate Bonds*		$	—			$	16,326,418			$	—			$	16,326,418
Money Market Funds			954,528				—				—				954,528
Total		$	954,528			$	16,326,418			$	—			$	17,280,946

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

INTERNATIONAL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

INTERNATIONAL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

INTERNATIONAL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

INTERNATIONAL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

INTERNATIONAL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

INTERNATIONAL HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

CAD		Canadian Dollar
EUR		Euro
GBP		British Pound
USD		United States Dollar
(c)		Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(d)		Security in default
(p)		Puttable Security – the redemption date shown is when the security may be redeemed by the investor
(s)		Step Bond – coupon increases periodically based upon a predetermined schedule. The rate shown reflects the rate in effect at the end of the reporting period
*		Non-income producing
†		Security fully or partially on loan. Total market value of securities on loan is $19,614,511.
Reg S		Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
144A		Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $70,591,546, or 34.4% of net assets.

 

Summary of Investments by Sector Excluding		% of
Collateral for Securities Loaned (unaudited)		Investments					Value
Basic Materials				10.6	%		$	21,335,846
Communications				18.7				37,802,181
Consumer, Cyclical				10.0				20,142,365
Consumer, Non-cyclical				6.7				13,507,249
Diversified				1.0				2,005,506
Energy				7.2				14,478,654
Financial				27.5				55,476,864
Government				0.7				1,344,392
Industrial				11.0				22,132,489
Technology				0.6				1,204,187
Utilities				5.1				10,219,112
Money Market Fund				0.9				1,775,567
				100.0	%		$	201,424,412

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Corporate Bonds*		$	—			$	198,304,453				$	—			$	198,304,453
Government Obligations*			—				1,344,392					—				1,344,392
Money Market Fund			1,775,567				—					—				1,775,567
Repurchase Agreements			—				20,667,623					—				20,667,623
Total		$	1,775,567			$	220,316,468				$	—			$	222,092,035

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

INVESTMENT GRADE FLOATING RATE ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

INVESTMENT GRADE FLOATING RATE ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

INVESTMENT GRADE FLOATING RATE ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

(c)		Callable Security – the redemption date shown is when the security may be redeemed by the issuer
†		Security fully or partially on loan. Total market value of securities on loan is $301,301.
Reg S		Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
144A		Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $15,294,754, or 16.5% of net assets.

 

Summary of Investments by Sector Excluding			% of
Collateral for Securities Loaned (unaudited)			Investments					Value
Basic Materials				0.5	%			$	483,153
Communications				6.5					5,993,906
Consumer, Cyclical				2.7					2,549,520
Consumer, Non-cyclical				3.3					3,032,817
Energy				9.6					8,844,000
Financial				68.8					63,724,380
Government				0.1					100,639
Industrial				0.8					700,814
Technology				6.8					6,301,336
Utilities				0.3					301,211
Money Market Fund				0.6					525,390
				100.0	%			$	92,557,166

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs						Value
Floating Rate Notes*		$	—			$	92,031,776			$	—				$	92,031,776
Money Market Funds			834,390				—				—					834,390
Total		$	834,390			$	92,031,776			$	—				$	92,866,166

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014

 

See Notes to Financial Statements

MORTGAGE REIT INCOME ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

Summary of Investments
by Sector (unaudited)		% of Investments				Value
Financial			99.2	%		$	121,715,378
Money Market Fund			0.8				986,407
			100.0	%		$	122,701,785

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

						Level 2					Level 3
		Level 1				Significant					Significant
		Quoted				Observable					Unobservable
		Prices				Inputs					Inputs					Value
Real Estate Investment Trusts*		$	121,715,378				$	—				$	—			$	121,715,378
Money Market Fund			986,407					—					—				986,407
Total		$	122,701,785				$	—				$	—			$	122,701,785

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

PREFERRED SECURITIES EX FINANCIALS ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

 

 

 

 

 

See Notes to Financial Statements

PREFERRED SECURITIES EX FINANCIALS ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

^		Securities is convertible into common stock through date shown.
(c)		Callable Security – the redemption date shown is when the security may be redeemed by the issuer
(p)		Puttable Security – the redemption date shown is when the security may be redeemed by the investor
†		Security fully or partially on loan. Total market value of securities on loan is $7,635,874.

 

Summary of Investments by Sector Excluding		% of
Collateral for Securities Loaned (unaudited)		Investments					Value
Basic Materials				6.2	%		$	11,049,236
Communications				11.2				19,778,199
Consumer, Non-cyclical				8.0				14,195,803
Energy				1.0				1,824,787
Financial				6.1				10,760,285
Government				1.4				2,473,888
Industrial				6.6				11,765,612
Real Estate Investment Trusts				33.5				59,385,614
Technology				1.1				1,923,175
Utilities				24.8				43,845,373
Money Market Fund				0.1				117,209
				100.0	%		$	177,119,181

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

						Level 2					Level 3
		Level 1				Significant					Significant
		Quoted				Observable					Unobservable
		Prices				Inputs					Inputs					Value
Preferred Securities*		$	177,001,972				$	—				$	—			$	177,001,972
Money Market Fund			117,209					—					—				117,209
Repurchase Agreements			—					7,804,978					—				7,804,978
Total		$	177,119,181				$	7,804,978				$	—			$	184,924,159

 

*	See Schedule of Investments for security type and industry sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

RENMINBI BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

RENMINBI BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

CNY	Chinese Yuan
(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
Reg S	Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.

 

Summary of Investments by Sector (unaudited)		% of Investments				Value
Basic Materials			6.4	%		$	326,067
Consumer, Cyclical			9.6				487,636
Energy			3.3				166,759
Financial			41.8				2,123,059
Government			15.7				797,789
Industrial			3.2				163,427
Utilities			19.8				1,005,374
Money Market Fund			0.2				8,630
			100.0	%		$	5,078,741

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs				Level 3 Significant Unobservable Inputs					Value
Corporate Bonds*			$	—			$	4,272,322			$	—				$	4,272,322
Government Obligations*				—				797,789				—					797,789
Money Market Fund				8,630				—				—					8,630
Total			$	8,630			$	5,070,111			$	—				$	5,078,741

 

*	See Schedule of Investments for security type and geographic sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

TREASURY-HEDGED HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

October 31, 2014 (unaudited)

 

 

See Notes to Financial Statements

TREASURY-HEDGED HIGH YIELD BOND ETF

SCHEDULE OF INVESTMENTS

(unaudited) (continued)

 

 

See Notes to Financial Statements

 

 

 

 

(c)	Callable Security – the redemption date shown is when the security may be redeemed by the issuer
†	Security fully or partially on loan. Total market value of securities on loan is $355,183.
144A	Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $1,405,569, or 14.1% of net assets.

 

At October 31, 2014, the Fund held the following open futures contracts:

 

Number of Contracts

Expiration Date

Cost

Market Value

Unrealized Depreciation

Contracts to Sell:

U.S. Treasury 5 Year Note

81

December 2014

$(9,621,008)

$(9,673,804)

$(52,796)

 

Summary of Investments by Sector Excluding Collateral for Securities Loaned (unaudited)		% of Investments				Value
Basic Materials			1.9	%		$	182,002
Communications			22.8				2,235,679
Consumer, Cyclical			11.6				1,141,678
Consumer, Non-cyclical			16.6				1,628,898
Energy			17.0				1,667,838
Financial			15.2				1,494,606
Industrial			7.7				757,500
Technology			3.0				291,073
Utilities			2.8				272,597
Money Market Fund			1.4				132,618
			100.0	%		$	9,804,489

 

The summary of inputs used to value the Fund’s investments as of October 31, 2014 is as follows:

 

		Level 1 Quoted Prices				Level 2 Significant Observable Inputs			Level 3 Significant Unobservable Inputs					Value
Corporate Bonds*		$	—			$	9,671,871			$	—			$	9,671,871
Money Market Funds			499,549				—				—				499,549
Total		$	499,549			$	9,671,871			$	—			$	10,171,420
Other Financial Instruments:
Futures Contracts		$	(52,796	)		$	—			$	—			$	(52,796	)

 

*	See Schedule of Investments for security type and industry sector breakouts.

 

There were no transfers between levels during the period ended October 31, 2014.

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

October 31, 2014 (unaudited)

 

		BDC Income ETF					Emerging Markets Aggregate Bond ETF					Emerging Markets High Yield Bond ETF					Emerging Markets Local Currency Bond ETF
Assets:
Investments, at value (1) (2)			$	45,646,212				$	17,438,675				$	433,043,455				$	906,687,400
Short-term investments held as collateral for securities loaned (3)				8,419,421					213,396					60,188,426					13,368,999
Cash				—					8,997					102,854					319
Cash denominated in foreign currency, at value (4)				—					45,067					—					3,167,581
Receivables:
Investment securities sold				—					—					2,056,966					16,521,161
Shares sold				—					—					780,038					—
Due from Adviser				—					4,654					—					—
Dividends and interest				109,433					291,940					7,532,374					16,510,175
Prepaid expenses				459					229					4,701					10,096
Total assets				54,175,525					18,002,958					503,708,814					956,265,731
Liabilities:
Payables:
Investment securities purchased				—					—					5,988,583					7,948,982
Collateral for securities loaned				8,419,421					213,396					60,188,426					13,368,999
Line of credit				151,662					—					—					—
Due to Adviser				6,191					—					110,790					230,217
Due to custodian				37,257					—					—					—
Variation margin on futures contracts				—					—					—					—
Deferred Trustee fees				1,154					936					13,849					73,518
Accrued expenses				37,764					91,806					84,047					303,499
Total liabilities				8,653,449					306,138					66,385,695					21,925,215
NET ASSETS			$	45,522,076				$	17,696,820				$	437,323,119				$	934,340,516
Shares outstanding				2,350,000					750,000					17,200,000					40,800,000
Net asset value, redemption and offering price per share			$	19.37				$	23.60				$	25.43				$	22.90
Net assets consist of:
Aggregate paid in capital			$	48,134,162				$	19,895,883				$	448,886,659				$	1,078,923,977
Net unrealized appreciation (depreciation)				(2,478,157	)				(490,288	)				(10,695,277	)				(124,781,434	)
Undistributed net investment income				174,582					67,087					2,339,221					3,579,235
Accumulated net realized gain (loss)				(308,511	)				(1,775,862	)				(3,207,484	)				(23,381,262	)
			$	45,522,076				$	17,696,820				$	437,323,119				$	934,340,516
(1)   Value of securities on loan			$	8,181,588				$	203,771				$	58,062,007				$	12,089,204
(2)   Cost of investments			$	48,124,369				$	17,918,554				$	443,738,733				$	1,030,860,029
(3)   Cost of short-term investments held as collateral for securities loaned			$	8,419,421				$	213,396				$	60,188,426				$	13,368,999
(4)   Cost of cash denominated in foreign currency			$	—				$	46,444				$	—				$	3,190,789

 

 (a) Represents cash collateral held at broker for futures contracts

 

See Notes to Financial Statements

 

 

Fallen Angel High Yield Bond ETF					International High Yield Bond ETF					Investment Grade Floating Rate ETF					Mortgage REIT Income ETF					Preferred Securities ex Financials ETF					Renminbi Bond ETF					Treasury-Hedged High Yield Bond ETF
	$	16,410,386				$	201,424,412				$	92,557,166				$	122,701,785				$	177,119,181				$	5,078,741				$	9,804,488
		870,560					20,667,623					309,000					—					7,804,978					—					366,931
		—					3,027					—					—					—					—					152,470	(a)
		—					533,576					—					—					—					153,115					—
		420,718					4,811,829					2,216,500					—					2,066,365					—					—
		2,518					99,284					2,115					—					5,327,710					—					—
		2,964					—					—					—					—					6,709					5,953
		277,964					4,045,455					82,480					148,466					306,781					46,224					157,843
		197					2,223					1,045					1,383					1,964					59					122
		17,985,307					231,587,429					95,168,306					122,851,634					192,626,979					5,284,848					10,487,807
		396,488					5,817,344					2,153,942					—					2,694,362					—					—
		870,560					20,667,623					309,000					—					7,804,978					—					366,931
		—					—					—					346,472					—					—					—
		—					37,704					2,919					25,014					42,974					—					—
		—					—					—					986,407					—					—					—
		—					—					—					—					—					—					52,796
		934					15,675					3,636					6,114					8,448					358					553
		63,136					91,921					83,185					71,501					40,478					85,369					64,764
		1,331,118					26,630,267					2,552,682					1,435,508					10,591,240					85,727					485,044
	$	16,654,189				$	204,957,162				$	92,615,624				$	121,416,126				$	182,035,739				$	5,199,121				$	10,002,763
		600,000					7,800,000					3,700,000					4,950,000					8,850,000					200,000					400,000
	$	27.76				$	26.28				$	25.03				$	24.53				$	20.57				$	26.00				$	25.01
	$	15,296,592				$	210,059,051				$	92,116,276				$	136,324,993				$	188,127,587				$	5,062,679				$	10,003,834
		1,062,184					(5,279,941	)				348,787					(10,271,480	)				(2,237,888	)				73,698					3,194
		83,574					1,055,993					48,747					2,380,473					476,607					43,211					42,003
		211,839					(877,941	)				101,814					(7,017,860	)				(4,330,567	)				19,533					(46,268	)
	$	16,654,189				$	204,957,162				$	92,615,624				$	121,416,126				$	182,035,739				$	5,199,121				$	10,002,763
	$	854,553				$	19,614,511				$	301,301				$	—				$	7,635,874				$	—				$	355,183
	$	15,348,202				$	206,583,814				$	92,208,378				$	132,973,266				$	179,357,069				$	5,007,035				$	9,748,498
	$	870,560				$	20,667,623				$	309,000				$	—				$	7,804,978				$	—				$	366,931
	$	—				$	535,640				$	—				$	—				$	—				$	151,432				$	—

 

See Notes to Financial Statements 

MARKET VECTORS ETF TRUST

STATEMENTS OF OPERATIONS

For the Six Months Ended October 31, 2014 (unaudited)

 

		BDC Income ETF					Emerging Markets Aggregate Bond ETF					Emerging Markets High Yield Bond ETF					Emerging Markets Local Currency Bond ETF
Income:
Dividends			$	1,824,015				$	—				$	—				$	—
Interest				—					483,903					13,633,721					26,806,329
Securities lending income				56,837					236					119,555					25,982
Foreign taxes withheld				—					(4,235	)				(1,815	)				(490,373	)
Total income				1,880,852					479,904					13,751,461					26,341,938
Expenses:
Management fees				87,709					34,259					827,875					1,541,560
Professional fees				20,067					25,445					26,276					72,179
Insurance				286					260					3,165					9,606
Trustees’ fees and expenses				1,768					992					11,056					43,229
Reports to shareholders				5,903					6,106					27,546					85,366
Indicative optimized portfolio value fee				3,094					12,176					11,596					13,548
Custodian fees				1,131					13,189					55,510					250,067
Registration fees				3,314					5,269					19,340					55,590
Transfer agent fees				741					1,239					1,240					1,240
Fund accounting fees				3,930					1,917					7,249					26,539
Interest				1,508					452					105					6,737
Other				183					2,107					9,451					13,032
Total expenses				129,634					103,411					1,000,409					2,118,693
Waiver of management fees				(40,417	)				(34,259	)				(172,428	)				(41,931	)
Expenses assumed by the Adviser				—					(20,738	)				—					—
Net expenses				89,217					48,414					827,981					2,076,762
Net investment income				1,791,635					431,490					12,923,480					24,265,176
Net realized gain (loss) on:
Investments				(402,002	)				19,272					(201,879	)				(13,362,586	)
Futures contracts				—					—					—					—
In-kind redemptions				317,992					—					11,827					(281,606	)
Foreign currency transactions and foreign denominated assets and liabilities				—					(8,896	)				—					(704,745	)
Net realized gain (loss)				(84,010	)				10,376					(190,052	)				(14,348,937	)
Net change in unrealized appreciation (depreciation) on:
Investments				(1,190,533	)				(294,371	)				(6,331,393	)				(21,317,448	)
Futures contracts				—					—					—					—
Foreign currency transactions and foreign denominated assets and liabilities				—					(14,242	)				—					(682,665	)
Net change in unrealized appreciation (depreciation)				(1,190,533	)				(308,613	)				(6,331,393	)				(22,000,113	)
Net Increase (Decrease) in Net Assets Resulting from Operations			$	517,092				$	133,253				$	6,402,035				$	(12,083,874	)

 

See Notes to Financial Statements

 

 

 

 

Fallen Angel High Yield Bond ETF					International High Yield Bond ETF					Investment Grade Floating Rate ETF					Mortgage REIT Income ETF					Preferred Securities ex Financials ETF					Renminbi Bond ETF					Treasury-Hedged High Yield Bond ETF
	$	—				$	—				$	—				$	4,994,422				$	5,496,920				$	—				$	—
		479,670					5,351,664					366,712					—					—					79,452					251,736
		6,910					41,863					196					1,791					102,800					—					713
		—					(5,862	)				—					—					—					(152	)				—
		486,580					5,387,665					366,908					4,996,213					5,599,720					79,300					252,449
		33,748					398,778					160,053					237,581					344,752					9,097					22,956
		19,850					23,373					18,748					24,522					21,382					22,027					25,359
		137					2,028					615					1,064					1,548					48					94
		1,460					11,349					3,490					3,816					7,264					1,053					1,222
		3,560					19,308					6,095					11,688					13,200					2,795					11,693
		11,607					11,599					12,176					9,134					3,049					12,176					8,267
		4,812					41,753					11,910					2,709					4,801					2,825					4,030
		3,125					19,380					3,227					8,452					13,752					2,856					3,271
		1,240					1,239					1,239					1,240					1,170					1,240					1,216
		1,901					4,910					3,599					3,873					4,311					1,642					1,487
		149					37					33					8,130					2,612					—					41
		520					9,529					655					961					1,642					504					245
		82,109					543,283					221,840					313,170					419,483					56,263					79,881
		(33,748	)				(144,469	)				(134,923	)				(67,459	)				(72,118	)				(9,097	)				(22,956	)
		(14,463	)				—					—					—					—					(37,029	)				(31,379	)
		33,898					398,814					86,917					245,711					347,365					10,137					25,546
		452,682					4,988,851					279,991					4,750,502					5,252,355					69,163					226,903
		119,543					187,260					36,357					(2,839,918	)				(1,719,422	)				17,758					4,729
		—					—					—					—					—					—					(51,251	)
		—					—					66,637					2,019,226					690,352					—					—
		—					(81,979	)				—					—					—					1,815					—
		119,543					105,281					102,994					(820,692	)				(1,029,070	)				19,573					(46,522	)
		(159,552	)				(11,338,530	)				(74,429	)				863,510					(175,477	)				77,452					(120,283	)
		—					—					—					—					—					—					(81,976	)
		—					(81,729	)				—					—					—					2,687					—
		(159,552	)				(11,420,259	)				(74,429	)				863,510					(175,477	)				80,139					(202,259	)
	$	412,673				$	(6,326,127	)			$	308,556				$	4,793,320				$	4,047,808				$	168,875				$	(21,878	)

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

		BDC Income ETF										Emerging Markets Aggregate Bond ETF
		For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Six Months Ended April 30, 2014					For the Year Ended April 30, 2014
			(unaudited)										(unaudited)
Operations:
Net investment income			$	1,791,635				$	1,727,541				$	431,490				$	938,588
Net realized gain (loss)				(84,010	)				214,137					10,376					(3,690,202	)
Net change in unrealized appreciation (depreciation)				(1,190,533	)				(1,597,176	)				(308,613	)				(809,513	)
Net increase (decrease) in net assets resulting from operations				517,092					344,502					133,253					(3,561,127	)
Dividends and Distributions to shareholders:
Dividends from net investment income				(1,757,250	)				(1,559,010	)				(363,500	)				(510,630	)
Distributions from net realized capital gains				—					—					—					—
Return of capital				—					—					—					(472,970	)
Total Dividends and Distributions				(1,757,250	)				(1,559,010	)				(363,500	)				(983,600	)
Share transactions:**
Proceeds from sale of shares				19,139,158					32,709,913					—					14,184,621
Cost of shares redeemed				(6,104,601	)				(9,165,938	)				(3,628,462	)				(35,655,670	)
Increase (Decrease) in net assets resulting from share transactions				13,034,557					23,543,975					(3,628,462	)				(21,471,049	)
Total increase (decrease) in net assets				11,794,399					22,329,467					(3,858,709	)				(26,015,776	)
Net Assets, beginning of period				33,727,677					11,398,210					21,555,529					47,571,305
Net Assets, end of period†			$	45,522,076				$	33,727,677				$	17,696,820				$	21,555,529
† Including undistributed (accumulated) net investment income (loss)			$	174,582				$	140,197				$	67,087				$	(903	)
** Shares of Common Stock Issued (no par value)
Shares sold				950,000					1,600,000					—					600,000
Shares redeemed				(300,000	)				(450,000	)				(150,000	)				(1,500,000	)
Net increase (decrease)				650,000					1,150,000					(150,000	)				(900,000	)

 

See Notes to Financial Statements 

 

 

 

Emerging Markets High Yield Bond ETF										Emerging Markets Local Currency Bond ETF										Fallen Angel High Yield Bond ETF
For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014
(unaudited)										(unaudited)										(unaudited)
	$	12,923,480				$	14,564,215				$	24,265,176				$	57,695,550				$	452,682				$	844,617
		(190,052	)				(4,997,534	)				(14,348,937	)				(60,619,507	)				119,543					138,100
		(6,331,393	)				(5,092,059	)				(22,000,113	)				(145,686,574	)				(159,552	)				272,361
		6,402,035					4,474,622					(12,083,874	)				(148,610,531	)				412,673					1,255,078
		(12,348,800	)				(13,759,920	)				(19,699,300	)				(38,448,228	)				(453,000	)				(823,240	)
		—					—					—					—					—					(45,240	)
		—					—					—					(15,121,732	)				—					—
		(12,348,800	)				(13,759,920	)				(19,699,300	)				(53,569,960	)				(453,000	)				(868,480	)
		109,486,153					162,275,358					189,654,137					34,626,333					—					5,290,667
		(5,237,676	)				(61,048,427	)				(33,899,085	)				(527,074,783	)				—					—
		104,248,477					101,226,931					155,755,052					(492,448,450	)				—					5,290,667
		98,301,712					91,941,633					123,971,878					(694,628,941	)				(40,327	)				5,677,265
		339,021,407					247,079,774					810,368,638					1,504,997,579					16,694,516					11,017,251
	$	437,323,119				$	339,021,407				$	934,340,516				$	810,368,638				$	16,654,189				$	16,694,516
	$	2,339,221				$	1,764,541				$	3,579,235				$	(986,641	)			$	83,574				$	83,892
		4,200,000					6,400,000					8,000,000					1,400,000					—					200,000
		(200,000	)				(2,400,000	)				(1,400,000	)				(21,800,000	)				—					—
		4,000,000					4,000,000					6,600,000					(20,400,000	)				—					200,000

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

(continued)

 

		International										Investment
		High Yield Bond ETF										Grade Floating Rate ETF
		For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014
		(unaudited)										(unaudited)
Operations:
Net investment income			$	4,988,851				$	11,258,798				$	279,991				$	437,700
Net realized gain (loss)				105,281					6,954,449					102,994					9,373
Net change in unrealized appreciation (depreciation)				(11,420,259	)				(3,333,654	)				(74,429	)				333,329
Net increase (decrease) in net assets resulting from operations				(6,326,127	)				14,879,593					308,556					780,402
Dividends and Distributions to shareholders:
Dividends from net investment income				(5,000,400	)				(11,928,640	)				(280,250	)				(398,830	)
Distributions from net realized capital gains				—					(218,400	)				—					—
Return of capital				—					—					—					—
Total Dividends and Distributions				(5,000,400	)				(12,147,040	)				(280,250	)				(398,830	)
Share transactions:**
Proceeds from sale of shares				55,430,652					65,018,264					10,023,426					82,240,442
Cost of shares redeemed				—					(180,633,439	)				(15,020,384	)				(2,499,468	)
Increase (Decrease) in net assets resulting from share transactions				55,430,652					(115,615,175	)				(4,996,958	)				79,740,974
Total increase (decrease) in net assets				44,104,125					(112,882,622	)				(4,968,652	)				80,122,546
Net Assets, beginning of period				160,853,037					273,735,659					97,584,276					17,461,730
Net Assets, end of period†			$	204,957,162				$	160,853,037				$	92,615,624				$	97,584,276
† Including undistributed net investment income			$	1,055,993				$	1,067,542				$	48,747				$	49,006
** Shares of Common Stock Issued (no par value)
Shares sold				2,000,000					2,400,000					400,000					3,300,000
Shares redeemed				—					(6,600,000	)				(600,000	)				(100,000	)
Net increase (decrease)				2,000,000					(4,200,000	)				(200,000	)				3,200,000

 

See Notes to Financial Statements

 

 

 

 

										Preferred Securities
Mortgage REIT Income ETF										ex Financials ETF										Renminbi Bond ETF
For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Six Months Ended October 31, 2014					For the Year Ended April 30,2014					For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014
(unaudited)										(unaudited)										(unaudited)
	$	4,750,502				$	12,441,753				$	5,252,355				$	9,270,496				$	69,163				$	132,021
		(820,692	)				(4,112,151	)				(1,029,070	)				1,173,817					19,573					63,218
		863,510					(18,809,590	)				(175,477	)				(3,355,067	)				80,139					(188,631	)
		4,793,320					(10,479,988	)				4,047,808					7,089,246					168,875					6,608
		(4,509,000	)				(10,623,350	)				(5,019,130	)				(9,173,790	)				(77,000	)				(192,600	)
		—					—					—					—					—					—
		—					(2,500,000	)				—					—					—					—
		(4,509,000	)				(13,123,350	)				(5,019,130	)				(9,173,790	)				(77,000	)				(192,600	)
		21,176,637					64,250,712					25,627,467					48,465,833					—					—
		(6,184,335	)				(65,391,766	)				(5,139,033	)				(47,333,828	)				—					—
		14,992,302					(1,141,054	)				20,488,434					1,132,005					—					—
		15,276,622					(24,744,392	)				19,517,112					(952,539	)				91,875					(185,992	)
		106,139,504					130,883,896					162,518,627					163,471,166					5,107,246					5,293,238
	$	121,416,126				$	106,139,504				$	182,035,739				$	162,518,627				$	5,199,121				$	5,107,246
	$	2,380,473				$	2,138,971				$	476,607				$	243,382				$	43,211				$	51,048
		850,000					2,700,000					1,250,000					2,400,000					—					—
		(250,000	)				(2,800,000	)				(250,000	)				(2,450,000	)				—					—
		600,000					(100,000	)				1,000,000					(50,000	)				—					—

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

(continued)

 

		Treasury-Hedged High Yield Bond ETF
		For the
		Six Months					For the
		Ended					Year Ended
		October 31, 2014					April 30, 2014
		(unaudited)
Operations:
Net investment income			$	226,903				$	356,526
Net realized gain (loss)				(46,522	)				102,514
Net change in unrealized appreciation (depreciation)				(202,259	)				87,928
Net increase (decrease) in net assets resulting from operations				(21,878	)				546,968
Dividends and Distributions to shareholders:
Dividends from net investment income				(226,000	)				(340,240	)
Distributions from net realized capital gains				—					(92,160	)
Total Dividends and Distributions				(226,000	)				(432,400	)
Share transactions:**
Proceeds from sale of shares				5,117,095					5,085,275
Cost of shares redeemed				(5,117,095	)				(5,085,275	)
Increase (Decrease) in net assets resulting from share transactions				—					—
Total increase (decrease) in net assets				(247,878	)				114,568
Net Assets, beginning of period				10,250,641					10,136,073
Net Assets, end of period†			$	10,002,763				$	10,250,641
† Including undistributed net investment income			$	42,003				$	41,100
** Shares of Common Stock Issued (no par value)
Shares sold				200,000					200,000
Shares redeemed				(200,000	)				(200,000	)
Net increase (decrease)				—					—

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		BDC INCOME ETF
		For the					For the					For the Period
		Six Months					Year					February 11,
		Ended					Ended					2013(a) through
		October 31,					April 30,					April 30,
		2014					2014					2013
		(unaudited)
Net asset value, beginning of period				$19.84					$20.72					$19.98
Income from investment operations:
Net investment income				0.75					1.37					0.21
Net realized and unrealized gain (loss) on investments				(0.46	)				(0.97	)				0.74
Total from investment operations				0.29					0.40					0.95
Less:
Dividends from net investment income				(0.76	)				(1.28	)				(0.21	)
Net asset value, end of period				$19.37					$19.84					$20.72
Total return (b)				1.41	%(d)				1.94	%				4.79	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)			$	45,522				$	33,728				$	11,398
Ratio of gross expenses to average net assets				0.59	%(c)				0.81	%				4.82	%(c)
Ratio of net expenses to average net assets				0.41	%(c)				0.40	%				0.40	%(c)
Ratio of net expenses, excluding interest expense, to average net assets				0.40	%(c)				0.40	%				0.40	%(c)
Ratio of net investment income to average net assets				8.16	%(c)				7.38	%				6.67	%(c)
Portfolio turnover rate				10	%(d)				14	%				0	%(d)

 

		EMERGING MARKETS AGGREGATE BOND ETF
		For the															For the Period
		Six Months															May 11,
		Ended															2011(a) through
		October 31,					For the Year Ended April 30,										April 30,
		2014					2014					2013					2012
		(unaudited)
Net asset value, beginning of period				$23.95					$26.43					$25.28					$25.00
Income from investment operations:
Net investment income				0.55					1.19					1.16					1.30
Net realized and unrealized gain (loss) on investments				(0.44	)				(2.49	)				1.10					0.18
Total from investment operations				0.11					(1.30	)				2.26					1.48
Less:
Dividends from net investment income				(0.46	)				(0.61	)				(1.10	)				(1.19	)
Distributions from net realized capital gains				—					—					(0.01	)				(0.01	)
Return of capital				—					(0.57	)				—					—
Total dividends and distributions				(0.46	)				(1.18	)				(1.11	)				(1.20	)
Net asset value, end of period				$23.60					$23.95					$26.43					$25.28
Total return (b)				0.43	%(d)				(4.78	)%				9.25	%				6.05	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)			$	17,697				$	21,556				$	47,571					$7,583
Ratio of gross expenses to average net assets				1.06	%(c)				1.34	%				1.26	%				1.92	%(c)
Ratio of net expenses to average net assets				0.50	%(c)				0.50	%				0.49	%				0.49	%(c)
Ratio of net expenses, excluding interest expense, to average net assets				0.49	%(c)				0.49	%				0.49	%				0.49	%(c)
Ratio of net investment income to average net assets				4.42	%(c)				4.57	%				4.92	%				5.44	%(c)
Portfolio turnover rate				12	%(d)				58	%				11	%				11	%(d)

 

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Annualized
(d)	Not Annualized

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		EMERGING MARKETS HIGH YIELD BOND ETF
		For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Period May 8, 2012(a) through April 30, 2013
		(unaudited)
Net asset value, beginning of period				$25.68					$26.86					$25.03
Income from investment operations:
Net investment income				0.80					1.51					1.54
Net realized and unrealized gain (loss) on investments				(0.25	)				(1.21	)				1.75
Total from investment operations				0.55					0.30					3.29
Less:
Dividends from net investment income				(0.80	)				(1.48	)				(1.45	)
Distributions from net realized capital gains				—					—					(0.01	)
Total dividends and distributions				(0.80	)				(1.48	)				(1.46	)
Net asset value, end of period				$25.43					$25.68					$26.86
Total return (b)				2.13	%(d)				1.34	%				13.47	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$437,323					$339,021					$247,080
Ratio of gross expenses to average net assets				0.48	%(c)				0.53	%				0.69	%(c)
Ratio of net expenses to average net assets				0.40	%(c)				0.40	%				0.40	%(c)
Ratio of net expenses, excluding interest expense, to average net assets				0.40	%(c)				0.40	%				0.40	%(c)
Ratio of net investment income to average net assets				6.24	%(c)				6.05	%				6.09	%(c)
Portfolio turnover rate				13	%(d)				16	%				20	%(d)

		EMERGING MARKETS LOCAL CURRENCY BOND ETF
		For the Six Months Ended October 31,						For the Year Ended April 30,														For the Period July 22, 2010(a) through April 30,
		2014						2014					2013					2012				2011
		(unaudited)
Net asset value, beginning of period				$23.69					$27.56					$26.28					$27.74					$25.11
Income from investment operations:
Net investment income				0.65					1.38					1.36					1.41					0.96
Net realized and unrealized gain (loss) on investments				(0.90	)				(3.98	)				1.13					(1.54	)				2.51
Total from investment operations				(0.25	)				(2.60	)				2.49					(0.13	)				3.47
Less:
Dividends from net investment income				(0.54	)				(0.87	)				(1.14	)				(1.33	)				(0.84	)
Return of capital				—					(0.40	)				(0.07	)				—					—
Total dividends				(0.54	)				(1.27	)				(1.21	)				(1.33	)				(0.84	)
Net asset value, end of period				$22.90					$23.69					$27.56					$26.28					$27.74
Total return (b)				(1.13	)%(d)				(9.35	)%				9.75	%				(0.34	)%				14.02	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$934,341						$810,369					$1,504,998					$741,109				$349,530
Ratio of gross expenses to average net assets				0.48	%(c)				0.52	%				0.48	%				0.47	%				0.49	%(c)
Ratio of net expenses to average net assets				0.47	%(c)				0.47	%				0.47	%				0.47	%				0.49	%(c)
Ratio of net expenses, excluding interest expense, to average net assets				0.47	%(c)				0.47	%				0.47	%				0.47	%				0.48	%(c)
Ratio of net investment income to average net assets				5.50	%(c)				5.47	%				5.28	%				5.71	%				5.60	%(c)
Portfolio turnover rate				13	%(d)				16	%				16	%				21	%				3	%(d)

 

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Annualized
(d)	Not Annualized

 

See Notes to Financial Statements

 

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		FALLEN ANGEL HIGH YIELD BOND ETF
		For the Six Months Ended															For the Period April 10, 2012(a) through
		October 31,					For the Year Ended April 30,										April 30,
		2014					2014					2013					2012
		(unaudited)
Net asset value, beginning of period				$27.82					$27.54					$25.20					$25.00
Income from investment operations:
Net investment income				0.75					1.54					1.62					0.07
Net realized and unrealized gain (loss) on investments				(0.05	)				0.37					2.39					0.13
Total from investment operations				0.70					1.91					4.01					0.20
Less:
Dividends from net investment income				(0.76	)				(1.55	)				(1.55	)				—
Distributions from net realized capital gains				—					(0.08	)				(0.12	)				—
Total dividends and distributions				(0.76	)				(1.63	)				(1.67	)				—
Net asset value, end of period				$27.76					$27.82					$27.54					$25.20
Total return (b)				2.52	%(d)				7.31	%				16.40	%				0.80	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$ 16,654					$ 16,695					$ 11,017					$ 10,080
Ratio of gross expenses to average net assets				0.97	%(c)				1.47	%				1.48	%				6.27	%(c)
Ratio of net expenses to average net assets				0.40	%(c)				0.40	%				0.40	%				0.40	%(c)
Ratio of net expenses, excluding interest expense, to average net assets				0.40	%(c)				0.40	%				0.40	%				0.40	%(c)
Ratio of net investment income to average net assets				5.37	%(c)				5.72	%				6.16	%				4.90	%(c)
Portfolio turnover rate				22	%(d)				35	%				34	%				0	%(d)

		INTERNATIONAL HIGH YIELD BOND ETF
		For the Six Months Ended															For the Period April 2, 2012(a) through
		October 31,					For the Year Ended April 30,										April 30,
		2014					2014					2013					2012
		(unaudited)
Net asset value, beginning of period				$27.73					$27.37					$24.93					$24.96
Income from investment operations:
Net investment income				0.66					1.66					1.43					0.10
Net realized and unrealized gain (loss) on investments				(1.40	)				0.44					2.43					(0.13	)
Total from investment operations				(0.74	)				2.10					3.86					(0.03	)
Less:
Dividends from net investment income				(0.71	)				(1.69	)				(1.42	)				—
Distributions from net realized capital gains				—					(0.05	)				—					—
Total dividends and distributions				(0.71	)				(1.74	)				(1.42	)				—
Net asset value, end of period				$26.28					$27.73					$27.37					$24.93
Total return (b)				(2.75	)%(d)				8.06	%				16.01	%				(0.12	)%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$204,957					$160,853					$273,736					$19,943
Ratio of gross expenses to average net assets				0.54	%(c)				0.58	%				0.52	%				2.85	%(c)
Ratio of net expenses to average net assets				0.40	%(c)				0.40	%				0.40	%				0.40	%(c)
Ratio of net expenses, excluding interest expense, to average net assets				0.40	%(c)				0.40	%				0.40	%				0.40	%(c)
Ratio of net investment income to average net assets				5.00	%(c)				5.59	%				5.81	%				5.65	%(c)
Portfolio turnover rate				18	%(d)				27	%				11	%				0	%(d)

 

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Annualized
(d)	Not Annualized

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		INVESTMENT GRADE FLOATING RATE ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,												For the Period April 25, 2011(a) through April 30,
		2014				2014				2013				2012				2011
		(unaudited)
Net asset value, beginning of period			$25.02				$24.95				$24.27				$24.82				$24.82
Income from investment operations:
Net investment income			0.08				0.15				0.23				0.23				—	(e)
Net realized and unrealized gain (loss) on investments			0.01				0.07				0.69				(0.58	)			—
Total from investment operations			0.09				0.22				0.92				(0.35	)			—
Less:
Dividends from net investment income			(0.08	)			(0.15	)			(0.24	)			(0.20	)			—
Net asset value, end of period			$25.03				$25.02				$24.95				$24.27				$24.82
Total return (b)			0.35	%(d)			0.88	%			3.82	%			(1.40	)%			0.00	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$92,616				$97,584				$17,462				$7,282				$4,965
Ratio of gross expenses to average net assets			0.49	%(c)			0.54	%			1.48	%			1.92	%			30.87	%(c)
Ratio of net expenses to average net assets			0.19	%(c)			0.19	%			0.19	%			0.19	%			0.19	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.19	%(c)			0.19	%			0.19	%			0.19	%			0.19	%(c)
Ratio of net investment income (loss) to average  net assets			0.61	%(c)			0.62	%			0.91	%			0.95	%			(0.15	)%(c)
Portfolio turnover rate			14	%(d)			13	%			5	%			14	%			0	%(d)

 

		MORTGAGE REIT INCOME ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,								For the Period August 16, 2011(a) through April 30,
		2014				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$24.40				$29.41				$25.35				$24.85
Income from investment operations:
Net investment income			0.91				3.06				2.84				2.07
Net realized and unrealized gain (loss) on investments			0.14				(4.85	)			4.08				0.36
Total from investment operations			1.05				(1.79	)			6.92				2.43
Less:
Dividends from net investment income			(0.92	)			(2.61	)			(2.72	)			(1.93	)
Distributions from net realized capital gains			—				—				(0.14	)			—
Return of capital			—				(0.61	)			—				—
Total dividends and distributions			(0.92	)			(3.22	)			(2.86	)			(1.93	)
Net asset value, end of period			$24.53				$24.40				$29.41				$25.35
Total return (b)			4.40	%(d)			(4.87	)%			28.75	%			10.87	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$121,416				$106,140				$130,884				$34,228
Ratio of gross expenses to average net assets			0.53	%(c)			0.60	%			0.58	%			1.19	%(c)
Ratio of net expenses to average net assets			0.41	%(c)			0.41	%			0.41	%			0.41	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.40	%(c)			0.40	%			0.40	%			0.40	%(c)
Ratio of net investment income to average net assets			7.99	%(c)			12.22	%			11.60	%			14.50	%(c)
Portfolio turnover rate			6	%(d)			26	%			6	%			8	%(d)

 

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Annualized
(d)	Not Annualized
(e)	Amount represents less than $0.005 per share

 

See Notes to Financial Statements 

 

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		PREFERRED SECURITIES EX FINANCIALS ETF
		For the Six Months Ended October 31, 2014				For the Year Ended April 30, 2014				For the Period July 16, 2012(a) through April 30, 2013
		(unaudited)
Net asset value, beginning of period			$20.70				$20.69				$20.06
Income from investment operations:
Net investment income			0.63				1.25				0.89
Net realized and unrealized gain (loss) on investments			(0.15	)			—	(e)			0.57
Total from investment operations			0.48				1.25				1.46
Less:
Dividends from net investment income			(0.61	)			(1.24	)			(0.83	)
Net asset value, end of period			$20.57				$20.70				$20.69
Total return (b)			2.35	%(d)			6.59	%			7.38	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$182,036				$162,519				$163,471
Ratio of gross expenses to average net assets			0.49	%(c)			0.53	%			0.51	%(c)
Ratio of net expenses to average net assets			0.40	%(c)			0.40	%			0.40	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.40	%(c)			0.40	%			0.40	%(c)
Ratio of net investment income to average  net assets			6.09	%(c)			6.40	%			6.25	%(c)
Portfolio turnover rate			11	%(d)			19	%			21	%(d)

 

		RENMINBI BOND ETF
		For the Six Months Ended October 31,				For the Year Ended April 30,								For the Period October 11, 2011(a) through April 30,
		2014				2014				2013				2012
		(unaudited)
Net asset value, beginning of period			$25.54				$26.47				$25.61				$24.93
Income from investment operations:
Net investment income			0.35				0.66				0.53				0.27
Net realized and unrealized gain (loss) on investments			0.50				(0.63	)			0.89				0.63
Total from investment operations			0.85				0.03				1.42				0.90
Less:
Dividends from net investment income			(0.39	)			(0.96	)			(0.56	)			(0.22	)
Net asset value, end of period			$26.00				$25.54				$26.47				$25.61
Total return (b)			3.33	%(d)			0.08	%			5.61	%			3.61	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$5,199				$5,107				$5,293				$5,121
Ratio of gross expenses to average net assets			2.16	%(c)			3.08	%			2.42	%			3.32	%(c)
Ratio of net expenses to average net assets			0.39	%(c)			0.39	%			0.39	%			0.39	%(c)
Ratio of net expenses, excluding interest expense, to average net assets			0.39	%(c)			0.39	%			0.39	%			0.39	%(c)
Ratio of net investment income to average  net assets			2.66	%(c)			2.51	%			2.05	%			2.01	%(c)
Portfolio turnover rate			8	%(d)			31	%			26	%			11	%(d)

 

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Annualized
(d)	Not Annualized
(e)	Amount represents less than $0.005 per share

 

See Notes to Financial Statements 

MARKET VECTORS ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout the period:

 

		TREASURY-HEDGED HIGH YIELD BOND ETF
		For the Six Months Ended October 31, 2014					For the Year Ended April 30, 2014					For the Period March 21, 2013(a) through April 30, 2013
		(unaudited)
Net asset value, beginning of period			$	25.63				$	25.34				$	25.00
Income from investment operations:
Net investment income				0.57					0.89					0.06
Net realized and unrealized gain (loss) on investments				(0.62	)				0.48					0.28
Total from investment operations				(0.05	)				1.37					0.34
Less:
Dividends from net investment income				(0.57	)				(0.85	)				—
Distributions from net realized capital gains				—					(0.23	)				—
Total dividends and distributions				(0.57	)				(1.08	)				—
Net asset value, end of period			$	25.01				$	25.63				$	25.34
Total return (b)				(0.22	)%(d)				5.55	%				1.36	%(d)
Ratios/Supplemental Data
Net assets, end of period (000’s)		$10,003					$10,251					$10,136
Ratio of gross expenses to average net assets				1.57	%(c)				2.50	%				4.53	%(c)
Ratio of net expenses to average net assets				0.50	%(c)				1.22	%				1.54	%(c)
Ratio of net expenses, excluding interest expense and interest on securities sold short, to average net assets				0.50	%(c)				0.50	%				0.50	%(c)
Ratio of net investment income to average net assets				4.45	%(c)				3.52	%				2.26	%(c)
Portfolio turnover rate				22	%(d)				41	%				124	%(d)

 

(a)	Commencement of operations
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
(c)	Annualized
(d)	Not Annualized

 

See Notes to Financial Statements

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

October 31, 2014 (unaudited)

 

Note 1–Fund Organization–Market Vectors ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and as of October 31, 2014, offers fifty-nine investment portfolios, each of which represents a separate series of the Trust.

 

These financial statements relate only to the following investment portfolios: BDC Income ETF (“BDC Income”), Emerging Markets Aggregate Bond ETF (“Emerging Markets Aggregate”), Emerging Markets High Yield Bond ETF (“Emerging Markets High Yield”), Emerging Markets Local Currency Bond ETF (“Emerging Markets Local Currency”), Fallen Angel High Yield Bond ETF (“Fallen Angel”), International High Yield Bond ETF (“International High Yield”), Investment Grade Floating Rate ETF (“Investment Grade”), Mortgage REIT Income ETF (“Mortgage REIT”), Preferred Securities ex Financials ETF (“Preferred Securities”), Renminbi Bond ETF (“Renminbi”) and Treasury-Hedged High Yield Bond ETF (“Treasury-Hedged”), each a “Fund” and collectively the “Funds”. Each Fund’s investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of its index. The Funds (except BDC Income, Mortgage REIT and Preferred Securities) expect to use a sampling approach in seeking to achieve their objectives. Sampling means that Van Eck Associates Corporation (the “Adviser”) uses quantitative analysis to select bonds and other securities that represent a sample of securities in the index in terms of key risk factors, performance attributes and other characteristics. The number of securities in each Fund will be based upon several factors, including asset size of the Fund. The Adviser generally expects each Fund to hold less than the total number of securities in the index, but reserves the right to hold as many securities as it believes necessary to achieve the Fund’s investment objective. BDC Income, Mortgage REIT and Preferred Securities seek to achieve their investment objective through a portfolio of securities in substantially the same weighting as their index.

 

The Funds’ commencement of operations dates and their respective indices are presented below:

 

Fund		Commencement of Operations		Index
BDC Income		February 11, 2013		Market Vectors® U.S. Business Development Companies Index*
Emerging Markets Aggregate		May 11, 2011		Market Vectors® EM Aggregate Bond Index*
Emerging Markets High Yield		May 8, 2012		The BofA Merrill Lynch High Yield US Emerging Markets Liquid Corporate Plus Index
Emerging Markets Local Currency		July 22, 2010		JP Morgan Government Bond Index-Emerging Markets Global Core
Fallen Angel		April 10, 2012		The BofA Merrill Lynch US Fallen Angel High Yield Index
International High Yield		April 2, 2012		The BofA Merrill Lynch Global Ex-US Issuers High Yield Constrained Index
Investment Grade		April 25, 2011		Market Vectors® US Investment Grade Floating Rate Index*
Mortgage REIT		August 16, 2011		Market Vectors® Global Mortgage REITs Index*
Preferred Securities		July 16, 2012		Wells Fargo® Hybrid & Preferred Securities ex Financials Index
Renminbi		October 11, 2011		Market Vectors® Renminbi Bond Index*
Treasury-Hedged		March 21, 2013		Market Vectors® US Treasury-Hedged High Yield Bond Index*

 

*	Owned by Market Vectors Index Solutions GmbH, an indirect, wholly owned subsidiary of the Adviser.

 

Note 2–Significant Accounting Policies–The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

The Funds are investment companies and are following accounting and reporting requirements of Accounting Standard Codification (“ASC”) 946 Financial Services – Investment Companies.

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

The following is a summary of significant accounting policies followed by the Funds.

 

A.

Security Valuation–The Funds value their investments in securities and other assets and liabilities carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges or traded on the NASDAQ National Market System are valued at the last sales price as reported at the close of each business day. Securities traded on the NASDAQ Stock Market are valued at the NASDAQ official closing price. Over-the-counter securities not included in the NASDAQ National Market System and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Debt securities for which market quotations are readily available are valued on the basis of quotations furnished by an independent pricing service approved by the Board of Trustees or provided by securities dealers. The pricing services may use valuation models or matrix pricing, which consider: (i) yield or price with respect to bonds that are considered comparable in characteristics such as rating, interest rate and maturity date and/or (ii) quotations from bond dealers to determine current value and are categorized as Level 2 in the fair value hierarchy. Money market fund investments are valued at net asset value and are categorized as Level 1 in the fair value hierarchy. Short-term obligations with more than sixty days remaining to maturity are valued at market value. Short-term obligations with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Securities for which quotations are not available are stated at fair value as determined by the Pricing Committee of the Adviser appointed by the Board of Trustees. The Pricing Committee provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments for which market prices are not readily available. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, including a regular review of key inputs and assumptions, transactional back-testing and disposition analysis.

 

Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be classified either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments.

 

The Funds utilize various methods to measure the fair value of its investments on a recurring basis which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The transfers between levels of the fair value hierarchy assume the financial instruments were transferred at the beginning of the reporting period. The three levels of the fair value hierarchy are described below:

 

Level 1 – Quoted prices in active markets for identical securities.

 

Level 2 – Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

 

Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

 

A summary of the inputs, the levels used to value the Funds’ investments, and transfers between levels are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments.

 

B.	Federal Income Taxes–It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

 

 

C.

Dividends and Distributions to Shareholders–Dividends to shareholders from net investment income, if any, are declared and paid at least monthly by each Fund (except BDC Income and Mortgage REIT which are declared and paid quarterly). Distributions of net realized capital gains, if any, generally are declared and paid annually. Income dividends and capital gain distributions are determined in accordance with income tax regulations, which may differ from such amounts determined in accordance with GAAP.

 

D.

Securities Sold Short–Treasury-Hedged may invest in securities sold short. A short sale occurs when a Fund sells a security, which it does not own, by borrowing it from a broker. Proceeds from securities sold short are reported as liabilities in the Statements of Assets and Liabilities and are marked to market daily in accordance with the fair value methodology described in Note 2A. Gains and losses are classified as realized when short positions are closed. In the event that the value of the security which the Fund sold short declines, the Fund will gain as it repurchases the security in the market at the lower price. If the price of the security increases, the Fund will suffer a loss, as it will have to repurchase the security at the higher price. Short sales may incur higher transaction costs than regular securities transactions. Interest on securities sold short is recorded as an expense by the Fund on the interest payment date. Cash as collected is deposited in a segregated account with brokers, maintained by the Fund, for its open short sales. Until the Fund replaces the borrowed security, the Fund maintains securities or permissible liquid assets in a segregated account with a broker or custodian sufficient to cover its short positions. At October 31, 2014, Treasury-Hedged held no securities sold short.

 

E.

Currency Translation–Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed in the financial statements. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations.

 

F.

Restricted Securities–The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments.

 

G.

Repurchase Agreements–The Funds may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, to generate income from their excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires securities from a seller, subject to resale to the seller at an agreed upon price and date. A Fund, through its custodian/securities lending agent, takes possession of securities collateralizing the repurchase agreement. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the Funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the Funds maintain their right to sell the underlying securities at market value and may claim any resulting loss against the seller. Repurchase agreements held as of October 31, 2014 are reflected in the Schedules of Investments.

 

H.

Use of Derivative Instruments–The Funds may make investments in derivative instruments, including, but not limited to, options, futures, swaps and other derivatives relating to foreign currency transactions. A derivative is an instrument whose value is derived from underlying assets, indices, reference rates or a combination of these factors. Derivative instruments may be privately negotiated contracts (often referred to as over-the-counter (“OTC”) derivatives) or they may be listed and traded on an exchange. Derivative contracts may involve future commitments to purchase or sell financial instruments at specified terms on a specified date, or to exchange interest payment streams or currencies based on a notional or contractual amount. Derivative instruments may involve a high degree

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

	of financial risk. The use of derivative instruments also involves the risk of loss if the investment adviser is incorrect in its expectation of the timing or level of fluctuations in securities prices, interest rates or currency prices. Investments in derivative instruments also include the risk of default by the counterparty, the risk that the investment may not be liquid and the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instruments.
		Futures Contracts–The Funds may purchase or sell futures contracts to gain exposure or to hedge against interest rate movement. Using futures contracts involves various market risks, including interest rate and equity risk as well as the risks that there may be an illiquid market or that a change in the value of the contract may not correlate with changes in the value of the underlying securities.
		Upon entering into a futures contract, a Fund is required to deliver to a broker an amount of cash and/or government securities equal to a certain percentage of the contract amount. This amount is known as the “initial margin”. Subsequent payments, known as “variation margin”, generally are made or received by the Portfolio each day depending on the fluctuations in the value of the underlying futures contracts, except that in the case of certain futures contracts payments may be made or received at settlement. Such variation margin is recorded for financial statement purposes on a daily basis as an unrealized gain or loss on futures until the futures contract is closed or expires, at which time the net gain or loss is reclassified to realized gain or loss on futures. Treasury-Hedged held futures contracts for six months during the period ended October 31, 2014 of which the average market value of the futures contracts for that six month period was $9,696,883. Futures contracts held by Treasury-Hedged at October 31, 2014 are reflected in the Schedule of Investments.
		At October 31, 2014, Treasury-Hedged held the following derivatives instruments:

 

		Liability Derivatives Interest Rate Risk
Futures contracts1		$52,796

 

 

		Interest Rate Risk
Net change in unrealized appreciation (depreciation):
Futures contracts2		$(81,976)
Realized gain (loss):
Futures contracts3		$(51,251)

 

 

I.	Offsetting Assets and Liabilities–In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of setoff in those agreements allows the Funds to set off any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may pledge or receive cash and/or securities as collateral for derivative instruments, securities lending and repurchase agreements. For financial reporting purposes, the Funds do not offset securities lending or repurchase agreement assets and liabilities subject to enforceable master netting agreements or other similar agreements in the Statements of Assets and Liabilities.
	The table below presents both gross and net information about the derivative instruments eligible for offset in the Statements of Assets and Liabilities, subject to master netting or similar agreements, as well as financial collateral received or pledged (including cash collateral and margin) as of October 31, 2014. Collateral is disclosed up to 100% of the net amount of unrealized gain/loss or market value of the respective financial instruments. In general, collateral received or pledged exceeds the net amount of the unrealized gain/loss or market value of financial instruments. Refer to the Schedules of Investments and Statements of Assets and Liabilities for collateral received or pledged as of October 31, 2014.

 

 

Fund			Description		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments and Cash Collateral Pledged*		Net Amount
Treasury-Hedged			Futures Contracts		$52,796		$               —		$52,796		$(52,796)		$	—

 

*Gross amounts not offset in the Statements of Assets and Liabilities

 

J.	Other–Security transactions are accounted for on trade date. Transactions in certain securities may take longer than the customary settlement cycle to be completed. The counterparty is required to collateralize such trades with cash in excess of the market value of the transaction, which is held at the custodian and marked to market daily. Realized gains and losses are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. The Funds record distributions received in excess of income from underlying investments as a reduction of cost of investments and/or an increase in realized gain. Such amounts are based upon estimates if actual amounts are not available, and actual amounts of income, realized gain and return of capital may differ from estimated amounts. Interest income, including amortization of premiums and discounts, is accrued as earned. Interest income is generally not earned on debt securities in default or upon determination that the income is not realizable.
	In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote.

 

Note 3–Investment Management and Other Agreements–The Adviser is the investment adviser to the Funds. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The Adviser has agreed, at least until September 1, 2015, for the Funds to voluntarily waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Funds so that each Fund’s total annual operating expenses does not exceed the expense limitation (excluding acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses) listed in the table below.

 

The current management fee rate/expense limitation and the amounts waived/assumed by the Adviser for the period ended October 31, 2014 are as follows:

 

Fund		Expense Limitation				Management Fee Rate				Waiver of Management Fees				Expenses Assumed by the Adviser
BDC Income			0.40	%			0.40	%		$	40,417			$	—
Emerging Markets Aggregate			0.49				0.35				34,259				20,738
Emerging Markets High Yield			0.40				0.40				172,428				—
Emerging Markets Local Currency			0.47				0.35				41,931				—
Fallen Angel			0.40				0.40				33,748				14,463
International High Yield			0.40				0.40				144,469				—
Investment Grade			0.19				0.35				134,923				—
Mortgage REIT			0.40				0.40				67,459				—
Preferred Securities			0.40				0.40				72,118				—
Renminbi			0.39				0.35				9,097				37,029
Treasury-Hedged			0.50				0.45				22,956				31,379

 

In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ Distributor. Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Note 4–Investments–For the period ended October 31, 2014, the cost of purchases and proceeds from sales of investments other than U.S. government obligations and short-term obligations (excluding in-kind transactions described in Note 6) were as follows:

 

Fund		Cost of Investments Purchased				Proceeds from Investments Sold
BDC Income		$	6,575,311			$	4,250,972
Emerging Markets Aggregate			2,272,363				5,372,252
Emerging Markets High Yield			73,448,990				50,902,694
Emerging Markets Local Currency			183,250,360				109,018,098
Fallen Angel			3,586,285				3,545,044
International High Yield			51,614,105				34,095,016
Investment Grade			18,057,457				13,085,454
Mortgage REIT			32,941,953				7,469,607
Preferred Securities			19,206,090				21,049,416
Renminbi			386,223				808,932
Treasury-Hedged			2,119,451				2,270,953

 

Note 5–Income Taxes–As of October 31, 2014, for Federal income tax purposes, the identified cost of investments owned, net unrealized appreciation (depreciation), gross unrealized appreciation, and gross unrealized depreciation of investments were as follows:

 

Fund		Cost of Investments				Gross Unrealized Appreciation				Gross Unrealized Depreciation				Net Unrealized Appreciation (Depreciation)
BDC Income		$	56,560,337			$	317,005			$	(2,811,709	)		$	(2,494,704	)
Emerging Markets Aggregate			18,136,066				363,235				(847,230	)			(483,995	)
Emerging Markets High Yield			504,022,276				5,282,892				(16,073,287	)			(10,790,395	)
Emerging Markets Local Currency			1,046,097,106				3,908,544				(129,949,251	)			(126,040,707	)
Fallen Angel			16,218,762				1,146,250				(84,066	)			1,062,184
International High Yield			227,282,352				2,784,277				(7,974,594	)			(5,190,317	)
Investment Grade			92,517,378				389,971				(41,183	)			348,788
Mortgage REIT			132,107,918				4,974,725				(14,380,858	)			(9,406,133	)
Preferred Securities			187,042,255				2,458,132				(4,576,228	)			(2,118,096	)
Renminbi			5,007,035				84,110				(12,404	)			71,706
Treasury-Hedged			10,115,429				214,381				(158,390	)			55,991

 

The tax character of dividends paid to shareholders during the year ended April 30, 2014 was as follows:

 

		Ordinary Income				Long-Term Capital Gains				Return of Capital
Fund		April 30, 2014				April 30, 2014				April 30, 2014
BDC Income		$	1,559,010			$	—			$	—
Emerging Markets Aggregate			507,063				3,567				472,970
Emerging Markets High Yield			13,759,920				—				—
Emerging Markets Local Currency			38,448,228				—				15,121,732
Fallen Angel			823,240				45,240				—
International High Yield			12,147,040				—				—
Investment Grade			398,830				—				—
Mortgage REIT			10,623,350				—				2,500,000
Preferred Securities			9,173,790				—				—
Renminbi			192,600				—				—
Treasury-Hedged			432,400				—				—

 

The tax character of current year distributions will be determined at the end of the fiscal year.

 

 

 

At April 30, 2014, the Funds had capital loss carryforwards available to offset future capital gains, as follows:

 

Fund		No Expiration Short-Term Capital Losses					No Expiration Long-Term Capital Losses
BDC Income			$	101,590				$	—
Emerging Markets Aggregate				1,403,942					155,658
Emerging Markets High Yield				833,054					393,421
Emerging Markets Local Currency				3,391,602					—
International High Yield				240,924					5,140
Investment Grade				—					1,180
Mortgage REIT				941,991
Preferred Securities				2,091,234					417,398
Renminbi				39					—

 

During the year ended April 30, 2014, Investment Grade, Renminbi and Treasury-Hedged utilized $2,913, $843 and $10,100 of prior year capital carryforwards, respectively.

 

The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for open tax years (tax years ended April 30, 2011-2014), or expected to be taken in the Funds’ current tax year. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements.

 

The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended October 31, 2014, the Funds did not incur any interest or penalties.

 

Note 6–Capital Share Transactions–As of October 31, 2014, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Shares are issued and redeemed by the Funds only in Creation Units, or multiple thereof, as follows:

 

Fund		Creation Units
BDC Income				50,000
Emerging Markets Aggregate				200,000
Emerging Markets High Yield				200,000
Emerging Markets Local Currency				200,000
Fallen Angel				200,000
International High Yield				200,000
Investment Grade				100,000
Mortgage REIT				50,000
Preferred Securities				50,000
Renminbi				100,000
Treasury-Hedged				200,000

 

The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index plus a small amount of cash. For the period ended October 31, 2014, the Funds had in-kind contributions and redemptions as follows:

 

Fund		In-Kind Contributions					In-Kind Redemptions
BDC Income			$	15,097,780				$	4,145,492
Emerging Markets High Yield				85,502,902					4,280,510
Emerging Markets Local Currency				88,657,412					13,588,859
International High Yield				37,242,129					—
Investment Grade				4,249,806					14,365,526
Mortgage REIT				—					7,809,726
Preferred Securities				27,748,352					9,972,088

 

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

The in-kind contributions and in-kind redemptions in this table represent the accumulation of each Fund’s daily net shareholder transactions including rebalancing activity, while the Statements of Changes in Net Assets reflect gross shareholder transactions including any cash component of the transactions.

 

Note 7–Concentration and Other Risks–The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index, as indicated in the name of each Fund. The Adviser uses a “passive” or index approach to achieve each Fund’s investment objective. The Funds (except BDC Income, Mortgage REIT, and Preferred Securities) use a sampling approach in which the Adviser uses quantitative analysis to select bonds that represent a sample of securities in the index in terms of key risk factors, performance attributes and other characteristics. Each Fund is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. Investments in the Funds involve risks similar to those of investing in any bond fund, such as market fluctuations caused by factors such as economic and political developments, changes in interest rates and perceived trends in security prices.

 

The Funds (except Investment Grade, Mortgage REIT, Preferred Securities and Renminbi) may directly or indirectly invest in non-investment grade securities, often referred to as “junk bonds.” Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. These high yield securities may involve greater risks and considerations not typically associated with investing in U.S. government bonds and other high quality fixed-income securities. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. These Funds may not be able to sell bonds at desired prices and large purchases or sales of certain high-yield bond issues may cause substantial fluctuations in share price, yield and total return.

 

BDC Income invests in business development companies which generally invest in less mature private companies or thinly traded U.S. public companies which involve greater risk than well-established publicly-traded companies.

 

Emerging Markets Aggregate, Emerging Markets High Yield, Emerging Markets Local Currency, Fallen Angel, International High Yield, Investment Grade and Renminbi invest in foreign securities. Investments in foreign securities may involve a greater degree of risk than investments in domestic securities due to political, economic or social instability. Foreign investments may also be subject to foreign taxes and settlement delays. Since the Funds may have significant investments in foreign debt securities, they may be subject to greater credit and interest risks and greater currency fluctuations than portfolios with significant investments in domestic debt securities.

 

Mortgage REIT invests directly in mortgage REITs and is exposed to the risks specific to the real estate market as well as the risks that relate specifically to the way in which mortgage REITs are organized and operated. Mortgage REITs receive principal and interest payments from the owners of the mortgaged properties. Accordingly, mortgage REITs are subject to the credit risk of the borrowers to whom they extend credit. To the extent that a mortgage REIT invests in mortgage-backed securities, it may be subject to default risk or interest rate risk.

 

Mortgage REIT may invest in mortgage REITs that may trade at a discount or premium to their net asset value.

 

Preferred Securities invests in preferred securities which are essentially contractual obligations that declare distributions but permit the issuer to defer or suspend distributions. This may require the Fund to account for the distribution that has been deferred or suspended for tax purposes, even though it may not have received this income. Additionally, preferred securities are subject to credit risk. Credit risk refers to the possibility that the issuer of a security will be unable and/or unwilling to make timely distributions of dividends. In addition, preferred securities are subject to interest rate risk. Preferred securities interest rates may move in an inverse direction to that of general interest rates.

 

Treasury-Hedged invests directly in securities sold short and futures contracts which are designed to hedge against the price sensitivity of the below investment grade corporate bonds. A risk of hedging is the imperfect correlation between price movement of the securities sold short and the price movement of the Fund’s investments.

 

Certain Funds may invest directly in the Russian local market. As a result of recent events involving Ukraine and the Russian Federation, the United States and the European Union have imposed sanctions on certain Russian individuals

 

 

 

 

and companies. These sanctions do not currently impact any of the Funds. Additional economic sanctions may be imposed or other actions may be taken that may adversely affect the value and liquidity of the Russian-related issuers’ held, if any, by the Funds.

 

At October 31, 2014, the Adviser owned approximately 53% of Emerging Markets Aggregate as well as 50% of Renminbi.

 

Note 8–Trustee Deferred Compensation Plan–The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.

 

For each Fund, the expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.

 

Note 9–Securities Lending–To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with The Bank of New York Mellon, the securities lending agent and also the Funds’ custodian. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, U.S. government or U.S. government agency securities, shares of an investment trust or mutual fund, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value plus accrued interest on the securities loaned. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. The Funds may pay reasonable finders’, administrative and custodial fees in connection with a loan of its securities and shares the interest earned on the collateral and borrowing fees received with the securities lending agent. Securities lending income is disclosed as such in the Statements of Operations. The collateral for securities loaned is recognized in the Schedules of Investments and the Statements of Assets and Liabilities. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in the Bank of New York Overnight Government Fund, the Bank of New York Institutional Cash Reserve, or repurchase agreements collateralized by obligations of the U.S. Treasury and/or Government Agencies. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the lender securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related collateral outstanding at October 31, 2014 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.

 

Note 10–Bank Line of Credit–The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the period ended October 31, 2014, the following Funds borrowed under this Facility:

 

														Outstanding Loan
		Days				Average Daily				Average				Balance as of
Fund		Outstanding				Loan Balance				Interest Rate				October 31, 2014
BDC Income			145			$	244,726				1.49	%			$151,662
Emerging Markets Aggregate			18				155,219				1.49				—
Emerging Markets High Yield			5				504,947				1.49				—
Emerging Markets Local Currency			57				2,224,230				1.49				—
Fallen Angel			19				184,356				1.49				—
International High Yield			2				444,870				1.49				—
Investment Grade			2				403,711				1.49				—
Mortgage REIT			151				1,252,263				1.49				346,472
Preferred Securities			136				474,933				1.49				—
Treasury-Hedged			6				150,806				1.49				—

MARKET VECTORS ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(unaudited) (continued)

 

Note 11–Custodian Fees–The Funds have entered into an expense offset agreement with the custodian wherein they receive a credit toward the reduction of custodian fees whenever there are uninvested cash balances. The Funds could have invested their cash balances elsewhere if they had not agreed to a reduction in fees under the expense offset agreement with the custodian. For the period ended October 31, 2014, there were no offsets to the custodian fees.

 

Note 12–Subsequent Events–The Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

 

The following dividends from net investment income were declared and paid subsequent to October 31, 2014:

 

Fund		Ex-Date		Record Date		Payable Date		Per Share
Emerging Markets Aggregate		11/3/14		11/5/14		11/7/14		$0.0900
Emerging Markets High Yield		11/3/14		11/5/14		11/7/14		$0.1360
Emerging Markets Local Currency		11/3/14		11/5/14		11/7/14		$0.1000
Fallen Angel		11/3/14		11/5/14		11/7/14		$0.1300
International High Yield		11/3/14		11/5/14		11/7/14		$0.1160
Investment Grade		11/3/14		11/5/14		11/7/14		$0.0129
Preferred Securities		11/3/14		11/5/14		11/7/14		$0.0600
Renminbi		11/3/14		11/5/14		11/7/14		$0.1000
Treasury-Hedged		11/3/14		11/5/14		11/7/14		$0.1000
Emerging Markets Aggregate		12/1/14		12/3/14		12/5/14		$0.0850
Emerging Markets High Yield		12/1/14		12/3/14		12/5/14		$0.1280
Emerging Markets Local Currency		12/1/14		12/3/14		12/5/14		$0.1012
Fallen Angel		12/1/14		12/3/14		12/5/14		$0.1050
International High Yield		12/1/14		12/3/14		12/5/14		$0.1100
Investment Grade		12/1/14		12/3/14		12/5/14		$0.0134
Preferred Securities		12/1/14		12/3/14		12/5/14		$0.0700
Renminbi		12/1/14		12/3/14		12/5/14		$0.1000
Treasury-Hedged		12/1/14		12/3/14		12/5/14		$0.0930
Renminbi		12/9/14		12/11/14		12/15/14		$0.6043

 

The following distribution from long-term capital gains was declared and paid subsequent to October 31, 2014:

 

Fund		Ex-Date		Record Date		Payable Date		Per Share
Renminbi		12/9/14		12/11/14		12/15/14		$0.0120

 

Effective November 5, 2014, the expense limitation for Investment Grade was reduced from 0.19% to 0.14%. Additionally, effective December 12, 2014, shares are now issued and redeemed by Treasury-Hedged in Creation Units of 100,000 or multiples thereof.

 

The Board of Trustees of Market Vectors ETF Trust approved the liquidation and dissolution of Renminbi. A final distribution will be paid out to shareholders of record on December 22, 2014, payable on December 23, 2014.

MARKET VECTORS ETF TRUST

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS

(unaudited)

 

At a meeting held on June 6, 2014 (the “Meeting”), the Board of Trustees (the “Board”) of Market Vectors ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), considered and approved a sub-advisory agreement (the “Sub-Advisory Agreement”) between Van Eck Associates Corporation (the “Adviser”) and China Asset Management (Hong Kong) Limited (the “Sub-Adviser”) with respect to Market Vectors Renminbi Bond ETF (the “Fund”).

 

The Board’s approval of the Sub-Advisory Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.

 

In advance of the Meeting, the Trustees received materials from the Adviser and the Sub-Adviser, as discussed below. Information provided to the Trustees from the Adviser and the Sub-Adviser included various aspects of the proposed changes to the Fund’s investment strategies, the rationale for retaining a sub-adviser that has been granted a quota under the Renminbi Qualified Institutional Investors Scheme (“RQFII quota”) and the RQFII program generally. The Independent Trustees’ consideration of the Sub-Advisory Agreement was based, in part, on information obtained through discussions with the Adviser and the Sub-Adviser at the Meeting regarding the management of the Fund and/or based on their review of the materials provided by the Adviser and the Sub-Adviser, including the background and experience of the portfolio managers, the Sub-Adviser’s affiliate, China Asset Management Co., Ltd. and others involved or proposed to be involved on behalf of the Sub-Adviser in the management of the Fund. The Trustees noted that the Sub-Adviser is a wholly-owned subsidiary of China Asset Management Co., China’s largest asset management company measured by fund assets under management. The Trustees took into account the Sub-Adviser’s experience and investment management process with respect to RQFII funds, including Market Vectors ChinaAMC A-Share ETF, currently managed by the Sub-Adviser and the experience of its affiliate, China Asset Management Co., Ltd. The Trustees also considered the terms of, and scope of services that the Sub-Adviser would provide under, the Sub-Advisory Agreement and information with respect to the Sub-Adviser’s compliance program.

 

In addition, the Trustees were given information regarding the expected benefits to the Fund that could be achieved by investing directly in renminbi-denominated bonds issued in mainland China via the Sub-Adviser’s RQFII quota. The Trustees took into account the unique legal and operational aspects of the Fund and the RQFII program. The Trustees also considered materials relating to the sub-advisory fees to be paid to the Sub-Adviser by the Adviser, the advisory fees to be retained by the Adviser and information provided by the Sub-Adviser with respect to the tracking error of other RQFII funds that it manages and the fees it charges those funds. The Trustees concluded that the nature, quality and extent of the services to be provided by the Sub-Adviser were appropriate.

 

The Independent Trustees were advised by and met in executive session with their independent counsel at the Meeting as part of their consideration of the Sub-Advisory Agreement.

 

In voting to approve the Sub-Advisory Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Sub-Advisory Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees also concluded that the sub-advisory fees were reasonable in light of the services to be provided. The Trustees further concluded that Sub-Advisory Agreement is in the best interest of the Fund and the Fund’s shareholders.

 

* * *

 

At a meeting held on June 6, 2014 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of Market Vectors ETF Trust (the “Trust”), including all of Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the Market Vectors Asia ex-Japan Aggregate Bond ETF, BDC Income ETF, Business Development Company/Specialty Finance ETF, Defaulted & Distressed Bond ETF, Emerging Markets Aggregate Bond ETF, Emerging Markets High Yield Bond ETF, Emerging Markets Local Currency Bond ETF, Emerging Markets Short-Term Corporate Bond ETF, European High Yield Bond ETF, European Sovereign Bond ETF, Fallen Angel High Yield Bond ETF, Fixed Income I ETF, Fixed Income II ETF, Global Fallen Angel Bond ETF, Global High Yield Bond ETF, Global High Yield US$ Bond ETF, Greater China Corporate Bond ETF, Greater China High Yield Bond ETF, International High Yield Bond ETF, International US$ High Yield Bond ETF,

MARKET VECTORS ETF TRUST

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS

(unaudited) (continued)

 

Investment Grade Floating Rate ETF, Japanese Bond ETF, Mortgage REIT Income ETF, MV Emerging Markets Aggregate Bond ETF, Non-Agency RMBS ETF, Preferred Securities ex Financials ETF, Renminbi Bond ETF, Treasury-Hedged High Yield Bond ETF and USD Emerging Markets Aggregate Bond ETF (collectively, the “Funds”).

 

The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.

 

In preparation for the Renewal Meeting, the Trustees held a meeting on May 9, 2014. At that meeting, the Trustees discussed the information the Adviser and Lipper Inc. (“Lipper”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance (for those Funds which had begun operations) and expenses of the Funds and (where applicable) the Funds’ peer funds (other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance and expense information for certain of the Funds against their peer groups, the Trustees considered that some of the Funds generally invest in a different group of issuers than some or all of the other funds in a Fund’s designated peer group. For these and other reasons, the Trustees noted that the peer group information did not necessarily provide meaningful direct comparisons to the Funds.

 

The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and the May 9, 2014 meeting and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, where applicable, the Adviser’s commitment to waive certain fees and/or pay expenses of each of the Funds to the extent necessary to prevent the operating expenses of each of the Funds from exceeding agreed upon limits for a period of time.

 

The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance over relevant periods of each of the Funds that had commenced operations prior to the date of the Renewal Meeting (the “Operating Funds”), the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Operating Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any fair value adjustments to the underlying securities. Based on discussions with the Adviser, the Trustees concluded that the investment performance of the Funds was satisfactory.

 

The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.

 

As noted above, the Trustees were also provided various data from Lipper comparing the Operating Funds’ expenses and performance to that of other ETFs. The Trustees noted that the information provided showed that each Operating Fund had a total expense ratio (after the effect of any applicable expense limitation) below or equal to the average and/or median of its respective peer group of funds, except for each of Market Vectors BDC Income ETF, Mortgage REIT Income ETF and Treasury-Hedged High Yield Bond ETF which had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its peer group of funds. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Operating Funds were reasonable in light of the performance of the Operating Funds and the quality of services received. The Trustees noted that this comparative data, while generally helpful, was limited in its usefulness in many cases due to the lack of a large number of directly comparable ETFs.

 

The Trustees also considered any other benefits received by the Adviser from serving as adviser to the Funds and from providing certain administrative services to the Funds, and from an affiliate of the Adviser serving as distributor for the Funds.

 

 

The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Operating Fund. The Trustees reviewed each Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees noted that certain Funds were still relatively new products, which therefore made it difficult to quantify the potential variability in net assets and thus determine the sustainability of any potential economies of scale which may exist. The Trustees noted that the Adviser has capped expenses on each Operating Fund since its inception. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Fund is reasonable and appropriate in relation to the current asset size of each Fund and the other factors discussed above and currently reflects an appropriate sharing of any economies of scale which may exist with shareholders. The Trustees also determined that the profits earned by the Adviser in respect of the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.

 

The Trustees did not consider historical information about the profitability to the Adviser of Market Vectors Asia ex-Japan Aggregate Bond ETF, Defaulted & Distressed Bond ETF, Emerging Markets Aggregate Bond ETF, Emerging Markets Short-Term Corporate Bond ETF, European High Yield Bond ETF, European Sovereign Bond ETF, Fixed Income I ETF, Fixed Income II ETF, Global High Yield Bond ETF, Greater China Corporate Bond ETF, Greater China High Yield Bond ETF and Non-Agency RMBS ETF because the Funds had not yet commenced operations at the time of the Renewal Meeting. The Trustees could not consider the historical performance or the quality of services previously provided to each of these Funds although they concluded that the nature, quality, and extent of the services to be provided by the Adviser were appropriate based on the Trustees’ knowledge of the Adviser and its personnel and the operations of the other series of the Trust.

 

The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 9, 2014 meeting as part of their consideration of the Investment Management Agreements.

 

In voting to approve the continuation of the Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that each Investment Management Agreement is in the best interest of each Fund and such Fund’s shareholders.

 

* * *

 

At a meeting (the “Meeting”) held on September 4, 2014, the Board of Trustees (the “Board”) of Market Vectors ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), considered and approved an investment management agreement (the “Investment Management Agreement”) between the Trust and Van Eck Associates Corporation (the “Adviser”) and a sub-advisory agreement (the “Sub-Advisory Agreement”) between the Adviser and China Asset Management (Hong Kong) Limited (the “Sub-Adviser”) with respect to Market Vectors China Bond ETF (the “Fund”). The Investment Management Agreement and Sub-Advisory Agreement are together referred to as the “Agreements.”

 

The Board’s approval of each Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.

 

In advance of the Meeting, the Trustees received materials from the Adviser and the Sub-Adviser as discussed below. Information provided to the Trustees from the Adviser and the Sub-Adviser included various aspects of the Fund’s proposed investment program, fee arrangements and service provider arrangements as well as the rationale for retaining a sub-adviser that has been granted a quota under the Renminbi Qualified Institutional Investors Scheme (“RQFII quota”) and the RQFII program generally. The Independent Trustees’ consideration of each Agreement was based, in part, on information obtained through discussions with the Adviser at the Meeting regarding the management of the Fund, information obtained at other meetings of the Trustees respecting the Adviser and the Sub-Adviser and/or based on their review of the materials provided by the Adviser and the Sub-Adviser, including the background and experience of the portfolio managers, the Sub-Adviser’s affiliate, China Asset Management Co., Ltd. and others involved or proposed to

MARKET VECTORS ETF TRUST

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS

(unaudited) (continued)

 

be involved on behalf of the Adviser and the Sub-Adviser in the management of the Fund. The Trustees also considered the terms of, and scope of services that the Adviser and the Sub-Adviser would provide under each Agreement, including the Adviser’s commitment to waive certain fees and/or pay expenses of the Fund to the extent necessary to prevent the operating expenses of the Fund from exceeding agreed upon limits for a period of at least one year following the effective date of the Fund’s respective registration statement. The Trustees noted that the Sub-Adviser is a wholly-owned subsidiary of China Asset Management Co., China’s largest asset management company measured by fund assets under management. The Trustees took into account the Sub-Adviser’s experience and investment management process with respect to RQFII funds, including Market Vectors ChinaAMC A-Share ETF and Market Vectors ChinaAMC SME-ChiNext ETF, currently managed by the Sub-Adviser and the experience of its affiliate, China Asset Management Co., Ltd. The Trustees also considered information with respect to the overall business of the Adviser and the Sub-Adviser, and the Adviser’s views of the proposed service providers.

 

In addition, the Trustees were given data on the exchange-traded fund (“ETF”) market with the Adviser noting that, at the time of the Meeting, there were no U.S.-listed ETFs that provided exposure to bonds issued in mainland China. The Trustees took into account the unique legal and operational aspects of the Fund and the RQFII program. The Trustees considered the sub-advisory fees to be paid to the Sub-Adviser by the Adviser, and the advisory fees to be retained by the Adviser. The Trustees considered the benefits, other than the fees under the Investment Management Agreement, that the Adviser would receive from serving as adviser to the Fund, including any it may receive from providing administrative services to the Fund and from an affiliate of the Adviser serving as distributor to the Fund. The Trustees did not consider historical information about the cost of the services provided by the Adviser and the Sub-Adviser or the profitability of the Fund to the Adviser and the Sub-Adviser because the Fund had not yet commenced operations. However, the Adviser agreed to provide the Trustees with profitability information in connection with future proposed continuances of the Investment Management Agreement, which will permit the Trustees to consider in the future the extent to which economies of scale may exist and whether the fees paid to the Adviser reflect these economies of scale for the benefit of shareholders. In addition, because the Fund has not yet commenced operations, the Trustees could not consider the historical performance or the quality of services previously provided to the Fund by the Adviser and the Sub-Adviser, although they concluded that the nature, quality and extent of the services to be provided by the Adviser and the Sub-Adviser were appropriate based on the Trustees’ knowledge of the Adviser and the Sub-Adviser and their personnel and the operations of the other series of the Trust (in the case of the Sub-Adviser, Market Vectors ChinaAMC A-Share ETF and Market Vectors ChinaAMC SME-ChiNext ETF as having served in such capacity since January 2014 and July 2014, respectively).

 

The Independent Trustees were advised by and met in executive session with their independent counsel at the Meeting as part of their consideration of the Agreements.

 

In voting to approve the Agreements, the Trustees, including the Independent Trustees, concluded that the terms of the Agreements are reasonable and fair in light of the services to be performed, the fees paid by other funds, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees also concluded that the advisory and sub-advisory fees were reasonable in light of the services to be provided. The Trustees further concluded that each Agreement is in the best interest of the Fund and the Fund’s shareholders.

 

 

INCOMESAR

Item 2. CODE OF ETHICS.

  Not applicable.

Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.

  Not applicable.

Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

  Not applicable.


Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

     Not applicable.

Item 6. SCHEDULE OF INVESTMENTS.

     Information included in Item 1.

Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
        MANAGEMENT INVESTMENT COMPANIES.

     Not applicable.

Item 8. PORTFOLIO MANAGER OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

     Not applicable.

Item 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
        COMPANY AND AFFILIATED PURCHASERS.

     Not applicable.

Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.

Item 11. CONTROLS AND PROCEDURES.

(a)  The registrant's principal executive and principal financial officers, or
     persons performing similar functions, have concluded that the registrant's
     disclosure controls and procedures (as defined in Rule 30a-3(c) under the
     Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR
     270.30a-3(c)) are effective, as of a date within 90 days of the filing
     date of the report that includes the disclosure required by this paragraph,
     based on their evaluation of these controls and procedures required
     by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules
     13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934,
     as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)  There were no changes in the registrant's internal control over financial
     reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
     270.30a-3(d)) that occurred during the second fiscal quarter of the period
     covered by this report that has materially affected, or is reasonably
     likely to materially affect, the registrant's internal control over
     financial reporting.


Item 12. EXHIBITS.

(a)(1) Not applicable.

(a)(2) A separate certification for each principal executive officer and
       principal financial officer of the registrant as required by Rule 30a-2
       under the Act (17 CFR 270.30a-2(a)) is attached as Exhibit 99.CERT.

(b)  Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is
     furnished as Exhibit 99.906CERT.

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                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) MARKET VECTORS ETF TRUST

By (Signature and Title) /s/ John J. Crimmins, Treasurer & Chief Financial Officer
                         ---------------------------------------------------------
Date January 8, 2015
     ---------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title) /s/ Jan F. van Eck, Chief Executive Officer
                        --------------------------------------------
Date January 8, 2015
     ---------------

By (Signature and Title)  /s/ John J. Crimmins, Treasurer & Chief Financial Officer
                        -----------------------------------------------------------

Date January 8, 2015
     ---------------

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