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Agrimarketing : March 2008
32 AgriMarketing March 2008 COVER STORY When it comes to suc- cessfully launching a new product, tim- ing is a critical factor. Throw in a solid sales and marketing strategy with great execution, and companies have a hit on their hands. That is exactly what has happened to the New York- based investment manage- ment firm Van Eck Global (www.vaneck.com) and its Market Vectors --- Agri- business ETF (Exchange- Traded Fund) that is traded on the American Exchange under the sym- bol: MOO. Since its introduction last September, MOO has attracted over $1 billion in assets and is ranked among the most successful ETF launches in Van Eck and market history. The fact that its holdings are composed of companies that are a major part of this magazine's audience makes it a particularly interesting case history to present. As anyone who has been following the agricultural industry knows, ag was one of Wall Street's darlings last year with the index MOO seeks to replicate finishing 2007 with a gain of approximately 90%. Through Febru- ary 22, with the S&P 500 down approximately 7.85% year-to-date, the ag market as measured by the index underlying MOO is up slightly. ABOUT THE PRODUCT Generally speaking, an ETF is a fund that seeks to track the performance of a specified index such as the Dow Jones Industrial Average or the S&P 500 Index. In this case, MOO seeks to track the performance of the DAX- global Agribusiness Index (Bloomberg and Reuters ticker: DXAG) that was developed by Deutsche Bourse, the Frankfurt, Germany, stock exchange, and went live in July 2007. "Our Market Vectors --- Agribusi- ness ETF is currently comprised of the 37 securities that make up the DXAG, which includes companies from around the world that are engaged in various sectors of the agribusiness industry," says Van Eck's Adam Phillips, Director of ETF Sales. (See "MOO's Holdings") Van Eck has been involved in fol- lowing the ag industry since it first developed its Global Hard Assets mutual fund in 1994. That fund can invest in ag-related companies and, as a result, Van Eck has been researching, analyzing and investing in ag stocks ever since. So, it was a natural for the firm to develop its Market Vectors --- Agribusiness ETF. "Because of our Global Hard Asset fund, we saw what was happening in the ag mar- ket and developed a solid view of its future. As a result, we developed and launched MOO," says Derek van Eck, Chief Investment Officer of Van Eck Global. "MOO allows investors to get exposure to the ag market through a diversified portfolio," explains VAN ECK'S MOO: THE RIGHT PLACE AT THE RIGHT TIME by Lynn Henderson, Editorial Director Pictured (l to r) is the Van Eck Hard Assets Investment Team: Joe Foster, Shawn Reynolds, Sam Halpert, Derek van Eck, Charl Malan, Greg Krenzer, Geoff King, and Charles Cameron, in the investment firm's board room. WHAT'S IN A NAME? To agri-marketers, the name MOO seems a bit unflattering to the sophisti- cated ag industry. In fact, it conjures up a misperception many in the indus- try are trying to update. However, the name was a hit among Van Eck's target markets. "MOO is whimsical, memorable and relates closely to our product," Van Eck's Sr. VP/Mktg Harvey Hirsch says. "It caught on almost immediately. The media almost invariably gave the symbol special mention in its coverage. "When our sales people visited the offices of financial intermediaries, they were often greeted with a 'mooing' sound. Interestingly, there was some reluctance at the firm to use MOO as the symbol, but MOO's advo- cates would not be denied and they carried the day. AM
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