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PROSPECTUS |
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September
1, 2022
As
revised on December 1,
2022 |
VANECK®
High
Yield Muni ETF HYD
Intermediate
Muni ETF ITM
Long
Muni ETF MLN
Short
High Yield Muni ETF SHYD
Short
Muni ETF SMB
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Principal
U.S. Listing Exchange for each Fund: Cboe BZX Exchange,
Inc. |
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The
U.S. Securities and Exchange Commission (“SEC”) has not approved or
disapproved these securities or passed upon the accuracy or adequacy of
this Prospectus. Any representation to the contrary is a criminal
offense. |
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800.826.2333 vaneck.com
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VANECK®
HIGH YIELD MUNI ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck® High Yield Muni ETF (the
“Fund”) seeks to replicate as closely as possible, before fees and expenses, the
price and yield performance of the ICE High Yield Crossover Municipal Bond Index
(the “High Yield Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.35 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.35 |
% |
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(a) Van
Eck Associates Corporation (the “Adviser”) will pay all expenses of the Fund,
except for the fee payment under the investment management agreement, acquired
fund fees and expenses, interest expense, offering costs, trading expenses,
taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has
agreed to pay the offering costs until at least September 1,
2024.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
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1 |
$36 |
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3 |
$113 |
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5 |
$197 |
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10 |
$443 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
11% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the benchmark index. The High Yield Index is comprised of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
long-term tax-exempt bond market with a weight of 70% in non-investment grade
municipal bonds, 25% in triple-B rated investment grade municipal bonds and 5%
in single-A rated investment grade municipal bonds (in accordance with the High
Yield Index provider’s methodology). This 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days'
prior written notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the High Yield Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the High Yield Index and does not take temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the High Yield Index. Because of the practical difficulties and
expense of purchasing all of the securities in the High Yield Index, the Fund
does not purchase all of the securities in the High Yield Index. Instead, the
Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the High
Yield Index in an effort to hold a portfolio of bonds with generally the same
risk and return characteristics of the High Yield Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the High Yield Index concentrates in an industry
or group of industries. As of September 30, 2022, the High Yield Index had
20,578 component securities and each of the healthcare, industrial development
and special tax (i.e.,
revenue bonds backed by a special tax) sectors represented a significant portion
of the High Yield Index. The High Yield Index is rebalanced on the last calendar
day of the month.
Prior
to the selection of the High Yield Index, the Fund tracked the Bloomberg
Municipal Custom High Yield Composite Index (the “Prior High Yield Index”) until
March 1, 2022. From March 1, 2022 to November 30, 2022, the Fund tracked the ICE
High Yield Crossover Municipal Bond Transition Index, which was an interim index
that gradually increased exposure to securities based on their weightings in the
High Yield Index while proportionally reducing exposure to certain component
securities of the Prior High Yield Index.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
High
Yield Securities Risk.
Securities rated below investment grade are commonly referred to as high yield
securities or “junk bonds.” High yield securities are often issued by issuers
that are restructuring, are smaller or less creditworthy than other issuers, or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual municipal developments
than higher rated securities. During an economic downturn or substantial period
of rising interest rates, high yield security issuers may experience financial
stress that would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. In the event of a default, the Fund may incur
additional expenses to seek recovery. The secondary market for municipal
securities that are high yield securities may be less liquid than the markets
for higher quality municipal securities or high yield securities issued by
corporate issuers and, as such, may have an adverse effect on the market prices
of and the Fund’s ability to arrive at a fair value for certain securities. The
illiquidity of the market also could make it difficult for the Fund to sell
certain securities in connection with a rebalancing of the High Yield Index. In
addition, periods of economic uncertainty and change may result in an increased
volatility of market prices of high yield securities and a corresponding
volatility in the Fund’s net asset value (“NAV”).
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its
obligations
and/or default completely. Bonds are subject to varying degrees of credit risk,
depending on the issuer’s financial condition and on the terms of the
securities, which may be reflected in credit ratings. There is a possibility
that the credit rating of a bond may be downgraded after purchase or the
perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are subject to interest rate risk. Interest rate
risk refers to fluctuations in the value of a bond resulting from changes in the
general level of interest rates. When the general level of interest rates goes
up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities with shorter durations. In response to the COVID-19 pandemic, as with
other serious economic disruptions, governmental authorities and regulators are
enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new monetary programs and
lowering interest rates. These actions present heightened risks to debt
instruments, and such risks could increase if these actions are unexpectedly or
suddenly reversed or are ineffective in achieving their desired
outcomes.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Private
Activity Bonds Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of private activity bonds. The
issuers of private activity bonds in which the Fund may invest may be negatively
impacted by conditions affecting either the general credit of the user of the
private activity project or the project itself. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax. See the
section of the Prospectus entitled “Shareholder Information—Tax Information” for
more details.
Industrial
Development Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of industrial development bonds. These
revenue bonds are issued by or on behalf of public authorities to obtain funds
to finance various public and/or privately operated facilities, including those
for business and manufacturing, housing, sports, pollution control, airport,
mass transit, port and parking facilities. These bonds are normally secured only
by the revenues from the project and not by state or local government tax
payments. Consequently, the credit quality of these securities is dependent upon
the ability of the user of the facilities financed by the bonds and any
guarantor to meet its financial obligations. Payment of interest on and
repayment of principal on such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Health
Care Bond Risk.
The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. The health care
industry is subject to regulatory action by a number of private and governmental
agencies, including federal, state and local governmental agencies. A major
source of revenues for the health care industry is payments from Medicare and
Medicaid programs. As a result, the industry is sensitive to legislative changes
and reductions in governmental spending for such programs. Numerous other
factors may also affect the industry and the value and credit quality of health
care bonds, such as general and local economic conditions, demand for services,
expenses (including malpractice insurance premiums) and competition among health
care providers. The following elements may adversely affect health care facility
operations: the implementation of national and/or state-specific health
insurance exchanges; other national, state or local health care reform measures;
medical and technological advances which dramatically alter the need for health
services or the way in which such services are delivered; changes in medical
coverage which alter the traditional fee-for-service revenue stream; efforts by
employers, insurers, and governmental agencies to reduce the costs of health
insurance and health care services; and increases and decreases in the cost and
availability of medical products.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s portfolio.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
Illinois
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of Illinois. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
Illinois and by the financial condition of Illinois’ political subdivisions,
agencies, instrumentalities and public authorities.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the High Yield Index. As a result, an
adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in NAV than would be the case if the Fund held all
of the bonds in the High Yield Index. Conversely, a positive development
relating to an issuer of securities in the High Yield Index that is not held by
the Fund could cause the Fund to underperform the High Yield Index. To the
extent the assets in the Fund are smaller, these risks will be
greater.
Index
Tracking Risk.
The Fund’s return may not match the return of the High Yield Index for a number
of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the High Yield Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the High
Yield Index or (to the extent the Fund effects creations and redemptions for
cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units (defined herein), which are not factored into the
return of the High Yield Index. Transaction costs, including brokerage costs,
will decrease the Fund’s NAV to the extent not offset by the transaction fee
payable by an Authorized Participant (“AP”). Market disruptions and regulatory
restrictions could have an adverse effect on the Fund’s ability to adjust its
exposure to the required levels in order to track the High Yield Index. Errors
in the High Yield Index data, High Yield Index computations and/or the
construction of the High Yield Index in accordance with its methodology may
occur from time to time and may not be identified and corrected by the High
Yield Index provider for a period of time or at all, which may have an adverse
impact on the Fund and its shareholders. Shareholders should understand that any
gains from the High Yield Index provider's errors will be kept by the Fund and
its shareholders and any losses or costs resulting from the High Yield Index
provider's errors will be borne by the Fund and its shareholders. When the High
Yield Index is rebalanced and the Fund in turn rebalances its portfolio to
attempt to increase the correlation between the Fund’s portfolio and the High
Yield Index, any transaction costs and market exposure arising from such
portfolio rebalancing will be borne directly by the Fund and its shareholders.
In addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the High Yield Index as
would be the case if the Fund purchased all of the securities in the High Yield
Index in the proportions in which they are represented in the High Yield Index.
Apart from scheduled rebalances, the High Yield Index provider or its agents may
carry out additional ad hoc rebalances to the High Yield Index. Therefore,
errors and additional ad hoc rebalances carried out by the High Yield Index
provider or its agents to the High Yield Index may increase the costs to and the
tracking error risk of the Fund. The Fund’s performance may also deviate from
the return of the High Yield Index due to certain listing standards of the
Fund's listing exchange (the “Exchange”) or legal restrictions or limitations
(such as diversification requirements). The Fund may value certain of its
investments, underlying securities and/or currencies, and/or other assets based
on fair value prices. When markets are volatile, the ability to sell securities
at fair value prices may be adversely impacted and may result in additional
trading costs and/or increase the index tracking risk. For tax efficiency
purposes, the Fund may sell certain securities, and such sale may cause the Fund
to realize a loss and deviate from the performance of the High Yield Index. In
addition, sale of securities may result in the recognition of accrued market
discount and/or net realized gains for tax purposes, which may result in taxable
distributions to shareholders. In light of the factors discussed above, the
Fund’s return may deviate significantly from the return of the High Yield Index.
Changes to the composition of the High Yield Index in connection with a
rebalancing or reconstitution of the High Yield Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the High Yield Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the High
Yield Index provider to postpone a scheduled rebalance or reconstitution, which
could cause the High Yield Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the High Yield Index concentrates
in a particular sector or sectors or industry or group of industries. To the
extent that the Fund is concentrated in a particular sector or sectors or
industry or group of industries, the Fund will be subject to the risk that
economic, political or other conditions that have a negative effect on those
sectors and/or industries may negatively impact the Fund to a greater extent
than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1, 2022, the Fund
sought to replicate as closely as possible, before fees and expenses, the price
and yield performance of the Prior High Yield Index. Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior High Yield Index. From March 1, 2022 to November 30, 2022, the Fund
tracked the ICE High Yield Crossover Municipal Bond Transition Index and
performance from March 1, 2022 to November 30, 2022 reflects the performance of
the Fund tracking the ICE High Yield Crossover Municipal Bond Transition
Index. The Fund began tracking the High Yield
Index on December 1, 2022. All returns assume reinvestment of
dividends and distributions. The
Fund’s past performance (before and after
taxes) is not necessarily indicative of how the Fund will perform in the
future. Updated performance information is available online at
www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
September 30, 2022 was
-17.56%.
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Best
Quarter: |
6.39% |
1Q 2012 |
Worst
Quarter: |
-7.55% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past
One Year |
Past
Five Years |
Past
Ten Years |
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VanEck
High Yield Muni ETF
(return
before taxes)* |
5.33% |
5.34% |
5.24% |
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VanEck High Yield Muni ETF (return
after taxes on distributions) |
5.33% |
5.33% |
5.22% |
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VanEck High Yield Muni ETF (return
after taxes on distributions and sale of Fund
Shares) |
4.77% |
5.11% |
5.13% |
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Bloomberg
Municipal Custom High Yield Composite Index
(reflects no deduction for
fees, expenses or taxes) |
7.02% |
7.30% |
6.88% |
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ICE High Yield Crossover Municipal Bond
Transition Index (reflects no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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ICE
Broad High Yield Crossover Municipal Index
(reflects
no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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Bloomberg US Aggregate Bond
Index (reflects no deduction for fees, expenses or
taxes) |
-1.54% |
3.57% |
2.90% |
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ICE
BofA Broad US Market Index1
(reflects
no deduction for fees, expenses or taxes) |
-1.58% |
3.63% |
2.97% |
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*
Prior to March 1, 2022, the Fund sought to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Prior High
Yield Index. Therefore, performance information prior to March 1, 2022 reflects
the performance of the Fund tracking the Prior High Yield Index. From March 1,
2022 to November 30, 2022, the Fund tracked the ICE High Yield Crossover
Municipal Bond Transition Index and
performance
from March 1, 2022 to November 30, 2022 reflects the performance of the Fund
tracking the ICE High Yield Crossover Municipal Bond Transition
Index.
**
The inception date of the High Yield Index and the ICE High Yield Crossover
Municipal Bond Transition Index
was December 11,
2021.
1
On September 1, 2022, the
ICE BofA Broad US Market Index replaced the Bloomberg US Aggregate Bond Index as
the Fund's broad-based benchmark index as the Adviser believes it is more
representative of broad bond market exposure.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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James
T. Colby III |
Portfolio
Manager |
February
2009 |
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Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
INTERMEDIATE
MUNI ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck® Intermediate Muni ETF
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the ICE Intermediate AMT-Free Broad
National Municipal Index (the “Intermediate
Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.24 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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(a) Van
Eck Associates Corporation (the “Adviser”) will pay all expenses of the Fund,
except for the fee payment under the investment management agreement, acquired
fund fees and expenses, interest expense, offering costs, trading expenses,
taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has
agreed to pay the offering costs until at least September 1,
2024.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
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1 |
$25 |
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3 |
$77 |
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5 |
$135 |
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10 |
$306 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
4% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Intermediate Index. The Intermediate Index is
comprised of publicly traded municipal bonds that cover the U.S. dollar
denominated intermediate term tax-exempt bond market. This 80% investment policy
is non-fundamental and may be changed without shareholder approval upon 60 days'
prior written notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Intermediate Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not
try to “beat” the Intermediate Index and does not take temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the Intermediate Index. Because of the practical difficulties and
expense of purchasing all of the securities in the Intermediate Index, the Fund
does not purchase all of the securities in the Intermediate Index. Instead, the
Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the
Intermediate Index in an effort to hold a portfolio of bonds with generally the
same risk and return characteristics of the Intermediate Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Intermediate Index concentrates in an industry
or group of industries. As of September 30, 2022, the Intermediate Index had
17,914 component securities and the special tax (i.e.,
revenue bonds backed by a specific tax) sector represented a significant portion
of the Intermediate Index. The Intermediate Index is rebalanced on the last
calendar day of the month.
Prior to the selection of the Intermediate
Index, the Fund tracked the Bloomberg AMT-Free Intermediate Continuous Municipal
Index (the “Prior Intermediate Index”) until March 1, 2022. From March 1, 2022
to November 30, 2022, the Fund tracked the ICE Intermediate AMT-Free Broad
National Municipal Transition Index, which was an interim index that gradually
increased exposure to securities based on their weightings in the Intermediate
Index while proportionally reducing exposure to certain component securities of
the Prior Intermediate Index.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are subject to interest rate risk. Interest rate
risk refers to fluctuations in the value of a bond resulting from changes in the
general level of interest rates. When the general level of interest rates goes
up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities with shorter durations. In response to the COVID-19 pandemic, as with
other serious economic disruptions, governmental authorities and regulators are
enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new
monetary
programs and lowering interest rates. These actions present heightened risks to
debt instruments, and such risks could increase if these actions are
unexpectedly or suddenly reversed or are ineffective in achieving their desired
outcomes.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s portfolio.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Intermediate Index. As a result,
an adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in net asset value (“NAV”) than would be the case if
the Fund held all of the securities in the Intermediate Index. Conversely, a
positive development relating to an issuer of securities in the Intermediate
Index that is not held by the Fund could cause the Fund to underperform the
Intermediate Index. To the extent the assets in the Fund are smaller, these
risks will be greater.
Index
Tracking Risk. The
Fund’s return may not match the return of the Intermediate Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Intermediate Index and incurs costs associated with
buying and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Intermediate Index or (to
the extent the Fund effects creations and redemptions for cash) raising cash to
meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which are not factored into the return of the
Intermediate Index. Transaction costs, including brokerage costs, will decrease
the Fund’s NAV to the extent not offset by the transaction fee payable by an
Authorized Participant (“AP”). Market disruptions and regulatory restrictions
could have an adverse effect on the Fund’s ability to adjust its exposure to the
required levels in order to track the Intermediate Index. Errors in the
Intermediate Index data, Intermediate Index computations and/or the construction
of the Intermediate Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Intermediate Index
provider for a period of time or at all, which may have an adverse impact on the
Fund and its shareholders. Shareholders should understand that any gains from
the Intermediate Index provider's errors will be kept by the Fund and its
shareholders and any losses or costs resulting from the Intermediate Index
provider's errors will be borne by the Fund and its shareholders. When the
Intermediate Index is rebalanced and the Fund in turn rebalances its portfolio
to attempt to increase the correlation between the Fund’s portfolio and the
Intermediate Index, any transaction costs and market exposure arising from such
portfolio rebalancing will be borne directly by the Fund and its shareholders.
In addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Intermediate Index as
would be the case if the Fund purchased all of the securities in the
Intermediate Index in the proportions in which they are represented in the
Intermediate Index. Apart from scheduled rebalances, the Intermediate Index
provider or its agents may carry out additional ad hoc rebalances to the
Intermediate Index. Therefore, errors and additional ad hoc rebalances carried
out by the Intermediate Index provider or its agents to the Intermediate Index
may increase the costs to and the tracking error risk of the Fund. The Fund’s
performance may also deviate from the return of the Intermediate Index due to
certain listing standards of the Fund's listing exchange (the “Exchange”) or
legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities and/or
currencies, and/
or
other assets based on fair value prices. When markets are volatile, the ability
to sell securities at fair value prices may be adversely impacted and may result
in additional trading costs and/or increase the index tracking risk. For tax
efficiency purposes, the Fund may sell certain securities, and such sale may
cause the Fund to realize a loss and deviate from the performance of the
Intermediate Index. In addition, sale of securities may result in the
recognition of accrued market discount and/or net realized gains for tax
purposes, which may result in taxable distributions to shareholders. In light of
the factors discussed above, the Fund’s return may deviate significantly from
the return of the Intermediate Index. Changes to the composition of the
Intermediate Index in connection with a rebalancing or reconstitution of the
Intermediate Index may cause the Fund to experience increased volatility, during
which time the Fund’s index tracking risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Intermediate Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the
Intermediate Index provider to postpone a scheduled rebalance or reconstitution,
which could cause the Intermediate Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Intermediate Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1, 2022, the Fund
sought to replicate as closely as possible, before fees and expenses, the price
and yield performance of the Prior Intermediate Index. Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Intermediate Index. From March 1, 2022 to November 30, 2022, the Fund
tracked the ICE Intermediate AMT-Free Broad National Municipal Transition Index
and performance from March 1, 2022 to November 30, 2022 reflects the performance
of the Fund tracking the ICE Intermediate AMT-Free Broad National Municipal
Transition Index. The Fund began tracking the Intermediate Index
on December 1, 2022. All returns assume reinvestment of dividends and
distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
September 30, 2022 was
-13.61%.
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Best
Quarter: |
3.56% |
1Q 2019 |
Worst
Quarter: |
-5.13% |
4Q
2016 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
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VanEck Intermediate Muni ETF (return
before taxes)* |
0.91% |
4.29% |
3.56% |
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VanEck Intermediate Muni ETF (return
after taxes on distributions) |
0.88% |
4.27% |
3.55% |
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VanEck Intermediate Muni ETF (return
after taxes on distributions and sale of Fund
Shares) |
1.32% |
3.82% |
3.30% |
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Bloomberg AMT-Free Intermediate
Continuous Municipal Index (reflects no deduction for
fees, expenses or taxes)
|
1.28% |
4.82% |
4.17% |
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ICE Intermediate AMT-Free Broad
National Municipal Transition Index (reflects no deduction for fees,
expenses or taxes)** |
— |
— |
— |
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ICE
Intermediate AMT-Free Broad National Municipal Index
(reflects
no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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Bloomberg US Aggregate Bond
Index (reflects no deduction for fees, expenses or
taxes) |
-1.54% |
3.57% |
2.90% |
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ICE
BofA Broad US Market Index1
(reflects
no deduction for fees, expenses or taxes) |
-1.58% |
3.63% |
2.97% |
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*
Prior to March 1, 2022, the Fund sought to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Prior
Intermediate Index. Therefore, performance information prior to March 1, 2022
reflects the performance of the Fund tracking the Prior Intermediate Index. From
March 1, 2022 to November 30, 2022, the Fund tracked the ICE Intermediate
AMT-Free Broad National Municipal Transition Index and performance from March 1,
2022 to November 30, 2022 reflects the performance of the Fund tracking the ICE
Intermediate AMT-Free Broad National Municipal Transition Index.
**
The inception date of the Intermediate Index and the ICE Intermediate AMT-Free
Broad National Municipal Transition Index was December 11,
2021.
1
On September 1, 2022, the
ICE BofA Broad US Market Index replaced the Bloomberg US Aggregate Bond Index as
the Fund's broad-based benchmark index as the Adviser believes it is more
representative of broad bond market exposure.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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James
T. Colby III |
Portfolio
Manager |
December
2007 |
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Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information, and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck® Long Muni ETF (the
“Fund”) seeks to replicate as closely as possible, before fees and expenses, the
price and yield performance of the ICE Long AMT-Free Broad National Municipal
Index (the “Long Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.24 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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(a) Van
Eck Associates Corporation (the “Adviser”) will pay all expenses of the Fund,
except for the fee payment under the investment management agreement, acquired
fund fees and expenses, interest expense, offering costs, trading expenses,
taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has
agreed to pay the offering costs until at least September 1,
2024.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR
|
EXPENSES |
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1 |
$25 |
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3 |
$77 |
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5 |
$135 |
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10 |
$306 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
7% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Long Index. The Long Index is comprised of publicly
traded municipal bonds that cover the U.S. dollar denominated long-term
tax-exempt bond market. This 80% investment policy is non-fundamental and may be
changed without shareholder approval upon 60 days' prior written notice to
shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Long Index. Unlike many investment companies
that try to “beat” the performance of a benchmark index, the Fund does not try
to
“beat”
the Long Index and does not take temporary defensive positions that are
inconsistent with its investment objective of seeking to replicate the Long
Index. Because of the practical difficulties and expense of purchasing all of
the securities in the Long Index, the Fund does not purchase all of the
securities in the Long Index. Instead, the Adviser utilizes a “sampling”
methodology in seeking to achieve the Fund’s objective. As such, the Fund may
purchase a subset of the bonds in the Long Index in an effort to hold a
portfolio of bonds with generally the same risk and return characteristics of
the Long Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Long Index concentrates in an industry or
group of industries. As of September 30, 2022, the Long Index had 8,766
component securities and health care and the special tax (i.e.
revenue bonds backed by a special tax) sectors represented a significant portion
of the Long Index. The Long Index is rebalanced on the last calendar day of the
month.
Prior to the selection of the Long Index,
the Fund tracked the Bloomberg AMT-Free Long Continuous Municipal Index (the
“Prior Long Index”) until March 1, 2022. From March 1, 2022 to November 30,
2022, the Fund tracked the ICE Long AMT-Free Broad National Municipal Transition
Index, which was an interim index that gradually increased exposure to
securities based on their weightings in the Long Index while proportionally
reducing exposure to certain component securities of the Prior Long
Index.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are subject to interest rate risk. Interest rate
risk refers to fluctuations in the value of a bond resulting from changes in the
general level of interest rates. When the general level of interest rates goes
up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities with shorter durations. In response to the COVID-19 pandemic, as with
other serious economic disruptions, governmental authorities and regulators are
enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new monetary programs and
lowering interest rates. These actions present heightened risks to debt
instruments, and such risks could increase if these actions are unexpectedly or
suddenly reversed or are ineffective in achieving their desired
outcomes.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Texas
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of Texas. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within Texas and by
the financial condition of Texas’ political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Health
Care Bond Risk.
The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. The health care
industry is subject to regulatory action by a number of private and governmental
agencies, including federal, state and local governmental agencies. A major
source of revenues for the health care industry is payments from Medicare and
Medicaid programs. As a result, the industry is sensitive to legislative changes
and reductions in governmental spending for such programs. Numerous other
factors may also affect the industry and the value and credit quality of health
care bonds, such as general and local economic conditions, demand for services,
expenses (including malpractice insurance premiums) and competition among health
care providers. The following elements may adversely affect health care facility
operations: the implementation of national and/or state-specific health
insurance exchanges; other national, state or local health care reform measures;
medical and technological advances which dramatically alter the need for health
services or the way in which such services are delivered; changes in medical
coverage which alter the traditional fee-for-service revenue stream; efforts by
employers, insurers, and governmental agencies to reduce the costs of health
insurance and health care services; and increases and decreases in the cost and
availability of medical products.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s portfolio.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in the Long Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value (“NAV”) than would be the case if the Fund
held all of the securities in the Long Index. Conversely, a positive development
relating to an issuer of securities in the Long Index that is not held by the
Fund could cause the Fund to underperform the Long Index. To the extent the
assets in the Fund are smaller, these risks will be greater.
Index
Tracking Risk. The
Fund’s return may not match the return of the Long Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Long Index and incurs costs associated with buying
and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Long Index or (to the
extent the Fund effects creations and redemptions for cash) raising cash to meet
redemptions or deploying cash in connection with newly created Creation Units
(defined herein), which are not factored into the return of the Long Index.
Transaction costs, including brokerage costs, will decrease the Fund’s NAV to
the extent not offset by the transaction fee payable by an Authorized
Participant (“AP”). Market disruptions and regulatory restrictions could have an
adverse effect on the Fund’s ability to adjust its exposure to the required
levels in order to track the Long Index. Errors in the Long Index data, Long
Index computations and/or the construction of the Long Index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the Long Index provider for a period of time or at all, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Long Index provider's errors will
be
kept by the Fund and its shareholders and any losses or costs resulting from the
Long Index provider's errors will be borne by the Fund and its shareholders.
When the Long Index is rebalanced and the Fund in turn rebalances its portfolio
to attempt to increase the correlation between the Fund’s portfolio and the Long
Index, any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the Fund and its shareholders. In
addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Long Index as would be
the case if the Fund purchased all of the securities in the Long Index in the
proportions in which they are represented in the Long Index. Apart from
scheduled rebalances, the Long Index provider or its agents may carry out
additional ad hoc rebalances to the Long Index. Therefore, errors and additional
ad hoc rebalances carried out by the Long Index provider or its agents to the
Long Index may increase the costs to and the tracking error risk of the Fund.
The Fund’s performance may also deviate from the return of the Long Index due to
certain listing standards of the Fund's listing exchange (the “Exchange”) or
legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities and/or
currencies, and/or other assets based on fair value prices. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Long Index. In addition, sale of securities may result in
the recognition of accrued market discount and/or net realized gains for tax
purposes, which may result in taxable distributions to shareholders. In light of
the factors discussed above, the Fund’s return may deviate significantly from
the return of the Long Index. Changes to the composition of the Long Index in
connection with a rebalancing or reconstitution of the Long Index may cause the
Fund to experience increased volatility, during which time the Fund’s index
tracking risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Long Index, the Fund generally
would not sell a security because the security’s issuer was in financial
trouble. Additionally, unusual market conditions may cause the Long Index
provider to postpone a scheduled rebalance or reconstitution, which could cause
the Long Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity
in
those securities may be reduced after the applicable closing times. Accordingly,
during the time when the Exchange is open but after the applicable market
closing, fixing or settlement times, bid-ask spreads on the Exchange and the
resulting premium or discount to the Shares’ NAV may widen. Additionally, in
stressed market conditions, the market for the Fund’s Shares may become less
liquid in response to deteriorating liquidity in the markets for the Fund’s
underlying portfolio holdings. There are various methods by which investors can
purchase and sell Shares. Investors should consult their financial
intermediaries before purchasing or selling Shares of the Fund.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Long Index concentrates in a particular
sector or sectors or industry or group of industries. To the extent that the
Fund is concentrated in a particular sector or sectors or industry or group of
industries, the Fund will be subject to the risk that economic, political or
other conditions that have a negative effect on those sectors and/or industries
may negatively impact the Fund to a greater extent than if the Fund’s assets
were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1, 2022, the Fund
sought to replicate as closely as possible, before fees and expenses, the price
and yield performance of the Prior Long Index. Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Long Index. From March 1, 2022 to November 30, 2022, the Fund tracked
the ICE Long AMT-Free Broad National Municipal Transition Index and performance
from March 1, 2022 to November 30, 2022 reflects the performance of the Fund
tracking the ICE Long AMT-Free Broad National Municipal Transition Index. The
Fund began tracking the Long Index on December 1, 2022. All
returns assume reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
September 30, 2022 was
-21.56%.
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Best
Quarter: |
6.69% |
1Q 2014 |
Worst
Quarter: |
-6.22% |
4Q
2016 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
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VanEck Long Muni ETF (return before
taxes)* |
2.61% |
5.30% |
4.75% |
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VanEck Long Muni ETF (return after
taxes on distributions) |
2.49% |
5.27% |
4.74% |
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VanEck Long Muni ETF (return after
taxes on distributions and sale of Fund Shares) |
2.62% |
4.77% |
4.45% |
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Bloomberg
AMT-Free Long Continuous Municipal Index
(reflects no deduction for
fees, expenses or taxes) |
3.01% |
5.87% |
5.49% |
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ICE
Long AMT-Free Broad National Municipal Transition Index
(reflects
no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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ICE Long AMT-Free Broad National
Municipal Index (reflects no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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Bloomberg
US Aggregate Bond Index
(reflects
no deduction for fees, expenses or taxes) |
-1.54% |
3.57% |
2.90% |
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ICE
BofA Broad US Market Index1
(reflects no deduction for fees, expenses or
taxes) |
-1.58% |
3.63% |
2.97% |
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*
Prior to March 1, 2022, the Fund sought to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Prior Long
Index. Therefore, performance information prior to March 1, 2022 reflects the
performance of the Fund tracking the Prior Long Index. From March 1, 2022 to
November 30, 2022, the Fund tracked the ICE Long AMT-Free Broad National
Municipal Transition Index and performance from March 1, 2022 to November 30,
2022 reflects the performance of the Fund tracking the ICE Long AMT-Free Broad
National Municipal Transition Index.
**
The inception date of the Long Index and the ICE Long AMT-Free Broad National
Municipal Transition Index was December 11,
2021.
1
On September 1, 2022, the
ICE BofA Broad US Market Index replaced the Bloomberg US Aggregate Bond Index as
the Fund's broad-based benchmark index as the Adviser believes it is more
representative of broad bond market exposure.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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James
T. Colby III |
Portfolio
Manager |
January
2008 |
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Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
SHORT HIGH YIELD MUNI ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck® Short High Yield Muni
ETF (the “Fund”) seeks to replicate as closely as possible,
before fees and expenses, the price and yield performance of the ICE 1-12 Year
High Yield Crossover Municipal Bond Index (the “Short High Yield
Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.35 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.35 |
% |
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(a) Van
Eck Associates Corporation (the “Adviser”) will pay all expenses of the Fund,
except for the fee payment under the investment management agreement, acquired
fund fees and expenses, interest expense, offering costs, trading expenses,
taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has
agreed to pay the offering costs until at least September 1,
2024.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
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1 |
$36 |
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3 |
$113 |
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5 |
$197 |
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10 |
$443 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
16% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the benchmark index. The Short High Yield Index is composed of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
short-term tax-exempt bond market with a weight of 70% in non-investment grade
municipal bonds, 20% in triple-B rated investment grade municipal bonds and a
targeted 10% in single-A rated investment grade municipal bonds (in accordance
with the Short High Yield Index provider's methodology). All bonds must have a
nominal maturity of 1 to 12 years. This 80% investment policy is non-fundamental
and may be changed without shareholder approval upon 60 days' prior written
notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Short High Yield Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the Short High Yield Index and does not take temporary
defensive positions that are inconsistent with its investment objective of
seeking to replicate the Short High Yield Index. Because of the practical
difficulties and expense of purchasing all of the securities in the Short High
Yield Index, the Fund does not purchase all of the securities in the Short High
Yield Index. Instead, the Adviser utilizes a “sampling” methodology in seeking
to achieve the Fund’s objective. As such, the Fund may purchase a subset of the
bonds in the Short High Yield Index in an effort to hold a portfolio of bonds
with generally the same risk and return characteristics of the Short High Yield
Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Short High Yield Index concentrates in an
industry or group of industries. As of September 30, 2022, the Short High Yield
Index had 10,130 component securities and each of the industrial development and
special tax (i.e.
revenue bonds backed by a special tax) sectors represented a significant portion
of the Short High Yield Index. The Short High Yield Index is rebalanced on the
last calendar day of the month.
Prior to the selection of the Short High
Yield Index, the Fund tracked the Bloomberg Municipal High Yield Short Duration
Index (the “Prior Short High Yield Index”) until March 1, 2022. From March 1,
2022 to November 30, 2022, the Fund tracked the ICE 1-12 Year High Yield
Crossover Municipal Bond Transition Index, which was an interim index that
gradually increased exposure to securities based on their weightings in the
Short High Yield Index while proportionally reducing exposure to certain
component securities of the Prior Short High Yield Index.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are subject to interest rate risk. Interest rate
risk refers to fluctuations in the value of a bond resulting from changes in the
general level of interest rates. When the general level of interest rates goes
up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities with shorter durations. In
response
to the COVID-19 pandemic, as with other serious economic disruptions,
governmental authorities and regulators are enacting significant fiscal and
monetary policy changes, including providing direct capital infusions into
companies, creating new monetary programs and lowering interest rates. These
actions present heightened risks to debt instruments, and such risks could
increase if these actions are unexpectedly or suddenly reversed or are
ineffective in achieving their desired outcomes.
High
Yield Securities Risk.
Securities rated below investment grade are commonly referred to as high yield
securities or “junk bonds.” High yield securities are often issued by issuers
that are restructuring, are smaller or less creditworthy than other issuers, or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual municipal developments
than higher rated securities. During an economic downturn or substantial period
of rising interest rates, high yield security issuers may experience financial
stress that would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. In the event of a default, the Fund may incur
additional expenses to seek recovery. The secondary market for municipal
securities that are high yield securities may be less liquid than the markets
for higher quality municipal securities or high yield securities issued by
corporate issuers and, as such, may have an adverse effect on the market prices
of and the Fund’s ability to arrive at a fair value for certain securities. The
illiquidity of the market also could make it difficult for the Fund to sell
certain securities in connection with a rebalancing of the Short High Yield
Index. In addition, periods of economic uncertainty and change may result in an
increased volatility of market prices of high yield securities and a
corresponding volatility in the Fund’s net asset value (“NAV”).
Industrial
Development Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of industrial development bonds. These
revenue bonds are issued by or on behalf of public authorities to obtain funds
to finance various public and/or privately operated facilities, including those
for business and manufacturing, housing, sports, pollution control, airport,
mass transit, port and parking facilities. These bonds are normally secured only
by the revenues from the project and not by state or local government tax
payments. Consequently, the credit quality of these securities is dependent upon
the ability of the user of the facilities financed by the bonds and any
guarantor to meet its financial obligations. Payment of interest on and
repayment of principal on such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
Illinois
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of Illinois. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
Illinois and by the financial condition of Illinois’ political subdivisions,
agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Private
Activity Bonds Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of private activity bonds. The
issuers of private activity bonds in which the Fund may invest may be negatively
impacted by conditions affecting either the general credit of the user of the
private activity project or the project itself. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax. See the
section of the Prospectus entitled “Shareholder Information—Tax Information” for
more details.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Short High Yield Index. As a
result, an adverse development respecting an issuer of securities held by the
Fund could result in a greater decline in NAV than would be the case if the Fund
held all of the securities in the Short High Yield Index. Conversely, a positive
development relating to an issuer of securities in the Short High Yield Index
that is not held by the Fund could cause the Fund to underperform the Short High
Yield Index. To the extent the assets in the Fund are smaller, these risks will
be greater.
Index
Tracking Risk. The
Fund’s return may not match the return of the Short High Yield Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Short High Yield Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the Short
High Yield Index or (to the extent the Fund effects creations and redemptions
for cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units (defined herein), which are not factored into the
return of the Short High Yield Index. Transaction costs, including brokerage
costs, will decrease the Fund’s NAV to the extent not offset by the transaction
fee payable by an Authorized Participant (“AP”). Market disruptions and
regulatory restrictions could have an adverse effect on the Fund’s ability to
adjust its exposure to the required levels in order to track the Short High
Yield Index. Errors in the Short High Yield Index data, Short High Yield Index
computations and/or the construction of the Short High Yield Index in accordance
with its methodology may occur from time to time and may not be identified and
corrected by the Short High Yield Index provider for a period of time or at all,
which may have an adverse impact on the Fund and its shareholders. Shareholders
should understand that any gains from the Short High Yield Index provider's
errors will be kept by the Fund and its shareholders and any losses or costs
resulting from the Short High Yield Index provider's errors will be borne by the
Fund and its shareholders. When the Short High Yield Index is rebalanced and the
Fund in turn rebalances its portfolio to attempt to increase the correlation
between the Fund’s portfolio and the Short High Yield Index, any transaction
costs and market exposure arising from such portfolio rebalancing will be borne
directly by the Fund and its shareholders. In addition, the Fund's use of a
representative sampling approach may cause the fund to not be as well correlated
with the return of the Short High Yield Index as would be the case if the Fund
purchased all of the securities in the Short High Yield Index in the proportions
in which they are represented in the Short High Yield Index. Apart from
scheduled rebalances, the Short High Yield Index provider or its agents may
carry out additional ad hoc rebalances to the Short High Yield Index. Therefore,
errors and additional ad hoc rebalances carried out by the Short High Yield
Index provider or its agents to the Short High Yield Index may increase the
costs to and the tracking error risk of the Fund. The Fund’s performance may
also deviate from the return of the Short High Yield Index due to certain
listing standards of the Fund's listing exchange (the “Exchange”) or legal
restrictions or limitations (such as diversification requirements). The Fund may
value certain of its investments, underlying securities and/or currencies,
and/or other assets based on fair value prices. When markets are volatile, the
ability to sell securities at fair value prices may be adversely impacted and
may result in additional trading costs and/or increase the index tracking risk.
For tax efficiency purposes, the Fund may sell certain securities, and such sale
may cause the Fund to realize a loss and deviate from the performance of the
Short High Yield Index. In addition, sale of securities may result in the
recognition of accrued market discount and/or net realized gains for tax
purposes, which may result in taxable distributions to shareholders. In light of
the factors discussed above, the Fund’s return may deviate significantly from
the return of the Short High Yield Index. Changes to the composition of the
Short High Yield Index in connection with a rebalancing or reconstitution of the
Short High Yield Index may cause the Fund to experience increased volatility,
during which time the Fund’s index tracking risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step
away
from making a market in the Shares and in executing creation and redemption
orders, which could cause a material deviation in the Fund’s market price from
its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Short High Yield Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the Short
High Yield Index provider to postpone a scheduled rebalance or reconstitution,
which could cause the Short High Yield Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Short High Yield Index concentrates in
a particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1, 2022, the Fund
sought to replicate as closely as possible, before fees and expenses, the price
and yield performance of the Prior Short High Yield Index. Therefore,
performance information prior to March 1, 2022 reflects the performance of the
Fund tracking the Prior Short High Yield Index. From March 1, 2022 to November
30, 2022, the Fund tracked the ICE 1-12 Year High Yield Crossover Municipal Bond
Transition Index and performance from March 1, 2022 to November 30, 2022
reflects the performance of the Fund tracking the ICE 1-12 Year High Yield
Crossover Municipal Bond Transition Index. The Fund began tracking the Short
High Yield Index on December 1, 2022. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
September 30, 2022 was
-11.12%.
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Best
Quarter: |
3.00% |
1Q 2019 |
Worst
Quarter: |
-5.03% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past
One Year |
Past
Five Years |
Since
Inception
(1/13/2014) |
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VanEck Short High Yield Muni ETF
(return before taxes)* |
3.92% |
4.17% |
3.12% |
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VanEck Short High Yield Muni ETF
(return after taxes on distributions) |
3.92% |
4.15% |
3.11% |
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VanEck Short High Yield Muni ETF
(return after taxes on distributions and sale of Fund
Shares) |
3.50% |
3.93% |
3.09% |
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Bloomberg
Municipal High Yield Short Duration Index
(reflects no deduction for
fees, expenses or taxes) |
4.98% |
5.43% |
4.72% |
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ICE 1-12 Year High Yield Crossover
Municipal Bond Transition Index (reflects no deduction for fees,
expenses or taxes)** |
— |
— |
— |
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ICE 1-12 Year Broad High Yield
Crossover Municipal Index (reflects no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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Bloomberg US Aggregate Bond
Index (reflects no deduction for fees, expenses or
taxes) |
-1.54% |
3.57% |
3.26% |
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ICE
BofA Broad US Market Index1
(reflects no deduction for fees, expenses or
taxes) |
-1.58% |
3.63% |
3.33% |
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*
Prior to March 1, 2022, the Fund sought to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Prior Short
High Yield Index. Therefore, performance information prior to March 1, 2022
reflects the performance of the Fund tracking the Prior Short High Yield Index.
From March 1, 2022 to November 30, 2022, the Fund tracked the ICE 1-12 Year High
Yield Crossover Municipal Bond Transition Index and performance from March 1,
2022 to November 30, 2022 reflects the performance of the Fund tracking the ICE
1-12 Year High Yield Crossover Municipal Bond Transition Index.
**
The inception date of the Short High Yield Index and the ICE 1-12 Year High
Yield Crossover Municipal Bond Transition Index was December 11,
2021.
1
On September 1, 2022, the ICE BofA Broad US Market Index replaced the Bloomberg
US Aggregate Bond Index as the Fund's broad-based benchmark index as the Adviser
believes it is more representative of broad bond market exposure.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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James
T. Colby III |
Portfolio
Manager |
January
2014 |
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Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck® Short Muni ETF (the
“Fund”) seeks to replicate as closely as possible, before fees and expenses, the
price and yield performance of the ICE Short AMT-Free Broad National Municipal
Index (the “Short Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.20 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.20 |
% |
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(a) Van
Eck Associates Corporation (the “Adviser”) will pay all expenses of the Fund,
except for the fee payment under the investment management agreement, acquired
fund fees and expenses, interest expense, offering costs, trading expenses,
taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has
agreed to pay the offering costs until at least September 1,
2024.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
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1 |
$20 |
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3 |
$64 |
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5 |
$113 |
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10 |
$255 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
18% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Short Index. The Short Index is comprised of
publicly traded municipal bonds that cover the U.S. dollar denominated
short-term tax-exempt bond market. This 80% investment policy is non-fundamental
and may be changed without shareholder approval upon 60 days’ prior written
notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Short Index. Unlike many investment companies
that try to “beat” the performance of a benchmark index, the Fund does not try
to
“beat” the Short Index and does not take temporary defensive positions that are
inconsistent with its investment objective of seeking to replicate the Short
Index. Because of the practical difficulties and expense of purchasing all of
the securities in the Short Index, the Fund does not purchase all of the
securities in the Short Index. Instead, the Adviser utilizes a “sampling”
methodology in seeking to achieve the Fund’s objective. As such, the Fund may
purchase a subset of the bonds in the Short Index in an effort to hold a
portfolio of bonds with generally the same risk and return characteristics of
the Short Index.
The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Short Index concentrates in an industry or group of industries. As of
September 30, 2022, the Short Index had 13,822 component securities. The Short
Index is rebalanced on the last calendar day of the
month.
Prior to the selection of the Short Index,
the Fund tracked the Bloomberg AMT-Free Short Continuous Municipal Index (the
“Prior Short Index”) until March 1, 2022. From March 1, 2022 to November 30,
2022, the Fund tracked the ICE Short AMT-Free Broad National Municipal
Transition Index, which was an interim index that gradually increased exposure
to securities based on their weightings in the Short Index while proportionally
reducing exposure to certain component securities of the Prior Short
Index.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are subject to interest rate risk. Interest rate
risk refers to fluctuations in the value of a bond resulting from changes in the
general level of interest rates. When the general level of interest rates goes
up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities with shorter durations. In response to the COVID-19 pandemic, as with
other serious economic disruptions, governmental authorities and regulators are
enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new monetary programs and
lowering interest rates. These actions present heightened risks to debt
instruments, and such risks could increase if these actions are unexpectedly or
suddenly reversed or are ineffective in achieving their desired
outcomes.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Short Index. As a result, an
adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in net asset value (“NAV”) than would be the case if
the Fund held all of the securities in the Short Index. Conversely, a positive
development relating to an issuer of securities in the Short Index that is not
held by the Fund could cause the Fund to underperform the Short Index. To the
extent the assets in the Fund are smaller, these risks will be
greater.
Index
Tracking Risk.
The Fund’s return may not match the return of the Short Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Short Index and incurs costs associated with buying
and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Short Index or (to the
extent the Fund effects creations and redemptions for cash) raising cash to meet
redemptions or deploying cash in connection with newly created Creation Units
(defined herein), which are not factored into the return of the Short Index.
Transaction costs, including brokerage costs, will decrease the Fund’s NAV to
the extent not offset by the transaction fee payable by an Authorized
Participant (“AP”). Market disruptions and regulatory restrictions could have an
adverse effect on the Fund’s ability to adjust its exposure to the required
levels in order to track the Short Index. Errors in the Short Index data, Short
Index computations and/or the construction of the Short Index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the Short Index provider for a period of time or at all, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Short Index provider's errors will be kept by
the Fund and its shareholders and any losses or costs resulting from the Short
Index provider's errors will be borne by the Fund and its shareholders. When the
Short Index is rebalanced and the Fund in turn rebalances its portfolio to
attempt to increase the correlation between the Fund’s portfolio and the Short
Index, any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the Fund and its shareholders. In
addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Short Index as would be
the case if the Fund purchased all of the securities in the Short Index in the
proportions in which they are represented in the Short Index. Apart from
scheduled rebalances, the Short Index provider or its agents may carry out
additional ad hoc rebalances to the Short Index. Therefore, errors and
additional ad hoc rebalances carried out by the Short Index provider or its
agents to the Short Index may increase the costs to and the tracking error risk
of the Fund. The Fund’s performance may also deviate from the return of the
Short Index due to certain listing standards of the Fund's listing exchange (the
“Exchange”) or legal restrictions or limitations (such as diversification
requirements). The Fund may value certain of its investments, underlying
securities and/or currencies, and/or other assets based on fair value prices.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the Short Index. In addition, sale of securities
may result in the recognition of accrued market discount and/or net realized
gains for tax purposes, which may result in taxable distributions to
shareholders. In light of the factors discussed above, the Fund’s return may
deviate significantly from the return of the Short Index. Changes to the
composition of the Short Index in connection with a rebalancing or
reconstitution of the Short Index may cause the Fund to experience increased
volatility, during which time the Fund’s index tracking risk may be
heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination
may cause a portion of prior distributions by the Fund to its shareholders to be
taxable to those shareholders in the year of receipt. Federal or state changes
in income or alternative minimum tax rates or in the tax treatment of municipal
bonds may make municipal bonds less attractive as investments and cause them to
lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Short Index, the Fund generally
would not sell a security because the security’s issuer was in financial
trouble. Additionally, unusual market conditions may cause the Short Index
provider to postpone a scheduled rebalance or reconstitution, which could cause
the Short Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Short Index concentrates in a
particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows shows
how the Fund performed for the calendar years shown. The table below the bar
chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1, 2022, the Fund
sought to replicate as closely as possible, before fees and expenses, the price
and yield performance of the Prior Short Index. Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Short Index. From March 1, 2022 to November 30, 2022,
the Fund tracked the ICE Short AMT-Free Broad National Municipal Transition
Index and performance from March 1, 2022 to November 30, 2022 reflects the
performance of the Fund tracking the ICE Short AMT-Free Broad National Municipal
Transition Index. The Fund began tracking the Short Index on December 1, 2022.
All returns assume reinvestment of dividends and distributions. The Fund’s past
performance (before and after taxes) is not
necessarily indicative of how the Fund will perform in the
future. Updated performance information is available online at
www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
September 30, 2022 was
-6.14%.
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Best
Quarter: |
2.62% |
2Q 2020 |
Worst
Quarter: |
-1.78% |
4Q
2016 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past
One Year |
Past
Five Years |
Past
Ten Years |
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VanEck Short Muni ETF (return
before taxes)* |
0.25% |
2.12% |
1.50% |
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VanEck Short Muni ETF (return after
taxes on distributions) |
0.21% |
2.11% |
1.49% |
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VanEck Short Muni ETF (return after
taxes on distributions and sale of Fund Shares) |
0.67% |
1.96% |
1.46% |
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Bloomberg
AMT-Free Short Continuous Index
(reflects no deduction for
fees, expenses or taxes) |
0.35% |
2.51% |
1.95% |
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ICE
Short AMT-Free Broad National Municipal Transition Index
(reflects
no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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ICE
Short AMT-Free Broad National Municipal Index
(reflects
no deduction for fees, expenses or
taxes)** |
— |
— |
— |
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Bloomberg US Aggregate Bond
Index (reflects no deduction for fees, expenses or
taxes) |
-1.54% |
3.57% |
2.90% |
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ICE
BofA Broad US Market Index1
(reflects
no deduction for fees, expenses or taxes) |
-1.58% |
3.63% |
2.97% |
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*
Prior to March 1, 2022, the Fund sought to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Prior Short
Index. Therefore, performance information prior to March 1, 2022 reflects the
performance of the Fund tracking the Prior Short Index. From
March 1, 2022 to November 30, 2022, the Fund tracked the ICE Short AMT-Free
Broad National Municipal Transition Index and
performance
from March 1, 2022 to November 30, 2022 reflects the performance of the Fund
tracking the ICE Short AMT-Free Broad National Municipal Transition
Index.
**
The inception date of the Short Index and the ICE Short AMT-Free Broad National
Municipal Transition Index was December 11,
2021.
1
On September 1, 2022, the
ICE BofA Broad US Market Index replaced the Bloomberg US Aggregate Bond Index as
the Fund's broad-based benchmark index as the Adviser believes it is more
representative of broad bond market exposure.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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James
T. Colby III |
Portfolio
Manager |
February
2008 |
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Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
PURCHASE
AND SALE OF FUND SHARES
Individual
Shares of a Fund may only be purchased and sold in secondary market transactions
through a broker or dealer at a market price. Shares of the Funds are listed on
the Exchange, and because Shares trade at market prices rather than NAV, Shares
of the Funds may trade at a price greater than NAV (i.e.,
a “premium”) or less than NAV (i.e.,
a “discount”).
An
investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares of a Fund (bid) and the
lowest price a seller is willing to accept for Shares (ask) when buying or
selling Shares in the secondary market (the “bid/ask spread”).
Recent
information, including information about each Fund’s NAV, market price, premiums
and discounts, and bid/ask spreads, is included on the Fund’s website at
www.vaneck.com.
TAX
INFORMATION
The
Funds expect to distribute net investment income, if any, at least monthly, and
any net realized long-term or short-term capital gains annually. The Funds may
also pay a special distribution at any time to comply with U.S. federal tax
requirements.
Dividends
paid by the Funds that are properly reported as exempt-interest dividends will
not be subject to regular U.S. federal income tax. The Funds intend to invest
its assets in a manner such that a significant portion of their dividend
distributions to shareholders will generally be exempt from U.S. federal income
taxes, including the federal alternative minimum tax for noncorporate
shareholders. Such distributions will generally be subject to state income
taxes.
Distributions
from a Fund’s net investment income (other than net tax-exempt income),
including any net short-term capital gains, if any, are taxable to you as
ordinary income.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of the Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer or other intermediary or its employees or associated persons to
recommend the Fund over another investment. Ask your financial adviser or visit
your financial intermediary’s website for more information.
PRINCIPAL
INVESTMENT STRATEGIES
Each
Fund uses a sampling approach in seeking to achieve its investment objective.
Sampling means that the Adviser uses quantitative analysis to select a
representative sample of securities that the Adviser believes collectively have
an investment profile similar to a Fund’s Index. The Adviser seeks to select
securities that will have, in the aggregate, investment characteristics (based
on factors such as market capitalization and industry weightings), fundamental
characteristics (such as return variability, duration, maturity or credit
ratings and yield) and liquidity measures similar to those of a Fund’s Index.
The quantity of holdings in a Fund will be based on a number of factors,
including asset size of such Fund. The Adviser generally expects a Fund to hold
less than the total number of securities in its Index, but reserves the right to
hold as many securities as it believes necessary to achieve the Fund’s
investment objective. In addition, from time to time, securities are added to or
removed from the applicable Index. Each Fund may sell securities that are
represented in its Index, or purchase securities that are not yet represented in
its Index, in anticipation of their removal from or addition to such Index.
Further, the Adviser may choose to underweight or overweight securities,
purchase or sell securities not in an Index, or utilize various combinations of
other available investment techniques, in seeking to track a Fund’s
Index.
FUNDAMENTAL
AND NON-FUNDAMENTAL POLICIES
Each
Fund’s investment objective and each of its other investment policies are
non-fundamental policies that may be changed by the Board of Trustees of the
Trust (the "Board of Trustees") without shareholder approval, except as noted in
this Prospectus or the Statement of Additional Information (“SAI”) under the
section entitled “Investment Policies and Restrictions—Investment
Restrictions.”
RISKS
OF INVESTING IN THE FUNDS
The
following section provides additional information regarding the principal risks
identified under “Principal Risks of Investing in the Fund” in each Fund’s
“Summary Information” section followed by additional risk information. The risks
listed below are applicable to each Fund unless otherwise noted.
Investors
in a Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
a Fund involves a substantial degree of risk. An investment in a Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore, you should
consider carefully the following risks before investing in a Fund, each of which
could significantly and adversely affect the value of an investment in a
Fund.
Credit
Risk.
Debt securities, such as bonds are subject to credit risk. Credit risk refers to
the possibility that the issuer or guarantor of a security will be unable and/or
unwilling to make timely interest payments and/or repay the principal on its
debt or to otherwise honor its obligations and/or default completely. Debt
securities are subject to varying degrees of credit risk, depending on the
issuer’s financial condition and on the terms of the securities, which may be
reflected in credit ratings. There is a possibility that the credit rating of a
debt security may be downgraded after purchase or the perception of an issuer’s
credit worthiness may decline, which may adversely affect the value of the
security. Lower credit quality may also affect liquidity and make it difficult
for a Fund to sell the security.
Interest
Rate Risk.
Debt securities, such as bonds, are subject to interest rate risk. Interest rate
risk refers to fluctuations in the value of a bond resulting from changes in the
general level of interest rates. When the general level of interest rates goes
up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities, such as bonds with longer durations
tend to be more sensitive to interest rate changes, usually making them more
volatile than debt securities with shorter durations. To the extent the Fund
invests a substantial portion of its assets in debt securities with longer term
maturities, rising interest rates may cause the value of the Fund’s investments
to decline significantly.
In
addition, in response to the COVID-19 pandemic, as with other serious economic
disruptions, governmental authorities and regulators are enacting significant
fiscal and monetary policy changes, including providing direct capital infusions
into companies, creating new monetary programs and lowering interest rates.
These actions present heightened risks to debt instruments, and such risks could
be even further heightened if these actions are unexpectedly or suddenly
reversed or are ineffective in achieving their desired outcomes.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades or the bankruptcy of an issuer could have a significant effect on the
issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. In addition, there is a risk that, as a
result of the recent economic crisis, the ability of any issuer to pay, when
due, the principal or interest on its municipal bonds may be materially
affected. Certain municipalities may have difficulty meeting their obligations
due to, among other reasons, changes in underlying demographics. These actions
present heightened risks to debt instruments, and such risks could be even
further heightened if these actions are unexpectedly or suddenly reversed or are
ineffective in achieving their desired outcomes. Municipal instruments may be
susceptible to periods of economic stress, which could affect the market values
and marketability of many or all municipal obligations of issuers in a state,
U.S. territory, or possession. For example, the COVID-19
pandemic
has significantly stressed the financial resources of many municipal issuers,
which may impair a municipal issuer’s ability to meet its financial obligations
when due and could adversely impact the value of its bonds, which could
negatively impact the performance of the Funds.
Municipal
securities can be significantly affected by political changes as well as
uncertainties in the municipal market related to taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue bond makes interest and principal
payments from revenues generated from a particular source or facility, such as a
tax on particular property or revenues generated from a municipal water or sewer
utility or an airport. Revenue bonds generally are not backed by the full faith
and credit and general taxing power of the issuer. Municipal securities backed
by current or anticipated revenues from a specific project or specific assets
can be negatively affected by the discontinuance of the taxation supporting the
project or assets or the inability to collect revenues for the project or from
the assets.
If
the Internal Revenue Service (“IRS”) determines that an issuer of a municipal
security has not complied with applicable tax requirements, interest from the
security could become taxable and the security could decline significantly in
value.
The
market for municipal bonds may be less liquid than for taxable bonds. There may
also be less information available on the financial condition of issuers of
municipal securities than for public corporations. The reorganization of a
municipality’s debts may include extending debt maturities, reducing the amount
of principal or interest, refinancing the debt or taking other measures, which
may significantly affect the rights of creditors and the value of the securities
issued by the municipality and the value of a Fund’s investments. The taxing
power of any governmental entity may be limited and an entity’s credit may
depend on factors which are beyond the entity’s control.
High
Yield Securities Risk.
(VanEck High Yield Muni ETF and VanEck Short High Yield Muni ETF only.)
Securities rated below investment grade are commonly referred to as high yield
securities or “junk bonds.” High yield securities are often issued by issuers
that are restructuring, are smaller or less creditworthy than other issuers, or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual issuer developments
than higher rated securities. During an economic downturn or substantial period
of rising interest rates, high yield security issuers may experience financial
stress that would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. In the event of a default, a Fund may incur
additional expenses to seek recovery. The secondary market for municipal
securities that are high yield securities may be less liquid than the markets
for higher quality municipal securities or high yield securities issued by
corporate issuers and, as such, may have an adverse effect on the market prices
of and an underlying Fund’s ability to arrive at a fair value for certain
securities. The illiquidity of the market also could make it difficult for a
Fund to sell certain securities in connection with a rebalancing of its
respective Index. In addition, periods of economic uncertainty and change may
result in an increased volatility of market prices of high yield securities and
corresponding volatility in a Fund's NAV.
Sampling
Risk.
A Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its respective Index. As a result, an
adverse development respecting an issuer of securities held by a Fund could
result in a greater decline in NAV than would be the case if the Fund held all
of the securities in its respective Index. Conversely, a positive development
relating to an issuer of securities in an Index that is not held by the Fund
could cause the Fund to underperform its respective Index. To the extent the
assets in a Fund are smaller, these risks will be greater.
Private
Activity Bonds Risk.
(VanEck High Yield Muni ETF and VanEck Short High Yield Muni ETF only.) A Fund
will be sensitive to, and its performance will depend to a greater extent on,
the overall condition and performance of private activity bonds. The issuers of
private activity bonds in which the Fund may invest may be negatively impacted
by conditions affecting either the general credit of the user of the private
activity project or the project itself. Conditions such as regulatory and
environmental restrictions and economic downturns may lower the need for these
facilities and the ability of users of the project to pay for the facilities.
This could cause a decline in the Fund’s value. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax.
Call
Risk.
Each Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, a Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease a
Fund’s net investment income. A Fund also may fail to recover additional amounts
(i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Operational
Risk.
Each Fund is exposed to operational risk arising from a number of factors,
including but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or system failures.
Market
Risk.
The prices of the securities in the Funds are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. Overall securities
values could decline generally or could underperform other investments. An
investment in the Funds may lose money.
VanEck
High Yield Muni ETF, VanEck Intermediate Muni ETF, VanEck Long Muni ETF, VanEck
Short High Yield Muni ETF and VanEck Short Muni ETF, may invest in bonds from
the following industries/sectors:
Education
Bond Risk.
In general, there are two types of education related bonds: those issued to
finance projects for public and private colleges and universities, and those
representing pooled interests in student loans. Bonds issued to supply
educational institutions with funds are subject to the risk of unanticipated
revenue decline, primarily the result of decreasing student enrollment or
decreasing state and federal funding. Among the factors that may lead to
declining or insufficient revenues are restrictions on students’ ability to pay
tuition, availability of state and federal funding and general economic
conditions. Student loan revenue bonds are generally offered by state (or
substate) authorities or commissions and are backed by pools of student loans.
Underlying student loans may be guaranteed by state guarantee agencies and may
be subject to reimbursement by the United States Department of Education through
its guaranteed student loan program. Others may be private, uninsured loans made
to parents or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be applied to
redemption of bonds or may be used to re-lend, depending on program latitude and
demand for loans. Cash flows supporting student loan revenue bonds are impacted
by numerous factors, including the rate of student loan defaults, seasoning of
the loan portfolio and student repayment deferral periods of forbearance. Other
risks associated with student loan revenue bonds include potential changes in
federal legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
Electric
Utilities Bond Risk.
The electric utilities industry has been experiencing, and will continue to
experience, increased competitive pressures. Federal legislation may open
transmission access to any electricity supplier, although it is not presently
known to what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel; (b) the availability and cost of capital; (c) the
effects of conservation on energy demand; (d) the effects of rapidly changing
environmental, safety and licensing requirements, and other federal, state and
local regulations; (e) timely and sufficient rate increases and governmental
limitations on rates charged to customers; (f) the effects of opposition to
nuclear power; (h) increases in operating costs; and (i) obsolescence of
existing equipment, facilities and products.
General
Obligation Bond Risk.
General obligation bonds are not backed by revenues from a specific project or
source. Instead, general obligation bonds are backed by the “full faith and
credit” of the issuer, which has the power to tax residents to pay bondholders.
Timely payments depend on the issuer’s credit quality, ability to raise tax
revenues and ability to maintain an adequate tax base.
Health
Care Bond Risk.
The health care industry is subject to regulatory action by a number of private
and governmental agencies, including federal, state and local governmental
agencies. A major source of revenues for the health care industry is payments
from Medicare and Medicaid programs. As a result, the industry is sensitive to
legislative changes and reductions in governmental spending for such programs.
Numerous other factors may also affect the industry and the value and credit
quality of health care bonds, such as general and local economic conditions,
demand for services and the ability of the facility to provide the services
required, physicians’ confidence in the facility, management capabilities,
expenses (including malpractice insurance premiums) and competition among health
care providers. The following elements may adversely affect health care facility
operations: the implementation of national and/or state-specific health
insurance exchanges; other national, state or local health care reform measures;
medical and technological advances which dramatically alter the need for health
services or the way in which such services are delivered; changes in medical
coverage which alter the traditional fee-for-service revenue stream; efforts by
employers, insurers, and governmental agencies to reduce the costs of health
insurance and health care services; and increases and decreases in the cost and
availability of medical products. Hospitals and other health care facilities are
additionally subject to claims and legal actions by patients and others in the
ordinary course of business. There can be no assurance that a claim will not
exceed the insurance coverage of a health care facility or that insurance
coverage will be available to a facility.
Housing
Bond Risk.
Housing revenue bonds are generally issued by a state, county, city, local
housing authority or other public agency. They generally are secured by the
revenues derived from mortgages purchased with the proceeds of the bond issue.
It is extremely difficult to predict the supply of available mortgages to be
purchased with
the
proceeds of an issue or the future cash flow from the underlying mortgages.
Consequently, there are risks that proceeds will exceed supply, resulting in
early retirement of bonds, or that homeowner repayments will create an irregular
cash flow. Many factors may affect the financing of multi-family housing
projects, including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions and changes to current laws and
regulations.
Industrial
Development Bond Risk.
These revenue bonds are issued by or on behalf of public authorities to obtain
funds to finance various public and/or privately operated facilities, including
those for business and manufacturing, housing, sports, pollution control,
airport, mass transit, port and parking facilities. These bonds are normally
secured only by the revenues from the project and not by state or local
government tax payments. Consequently, the credit quality of these securities is
dependent upon the ability of the user of the facilities financed by the bonds
and any guarantor to meet its financial obligations. Payment of interest on and
repayment of principal of such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Lease
Obligations Risk.
Lease obligations may have risks not normally associated with general obligation
or other revenue bonds. Leases and installment purchase or conditional sale
contracts (which may provide for title to the leased asset to pass eventually to
the issuer) have developed as a means for governmental issuers to acquire
property and equipment without the necessity of complying with the
constitutional statutory requirements generally applicable for the issuance of
debt.
Certain
lease obligations contain “non appropriation” clauses that provide that the
governmental issuer has no obligation to make future payments under the lease or
contract unless money is appropriated for that purpose by the appropriate
legislative body on an annual or other periodic basis. Consequently, continued
lease payments on those lease obligations containing “non appropriation” clauses
are dependent on future legislative actions. If these legislative actions do not
occur, the holders of the lease obligation may experience difficulty in
exercising their rights, including disposition of the property. In such
circumstances, the Fund might not recover the full principal amount of the
obligation.
Resource
Recovery Bond Risk.
Resource recovery bonds are a type of revenue bond issued to build facilities
such as solid waste incinerators or waste-to-energy plants. Typically, a private
corporation is involved, at least during the construction phase, and the revenue
stream is secured by fees or rents paid by municipalities for use of the
facilities.
These
bonds are normally secured only by the revenues from the project and not by
state or local government tax receipts. Consequently, the credit quality of
these securities is dependent upon the ability of the user of the facilities
financed by the bonds and any guarantor to meet its financial obligations. The
viability of a resource recovery project, environmental protection regulations,
and project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
Special
Tax Bond Risk.
Special tax bonds are usually backed and payable through a single tax, or series
of special taxes such as incremental property taxes. The failure of the tax levy
to generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
Tobacco
Bond Risk.
Tobacco settlement revenue bonds are generally neither general nor legal
obligations of a state or any of its political subdivisions and neither the full
faith and credit nor the taxing power nor any other assets or revenues of a
state or of any political subdivision will be pledged to the payment of any such
bonds. In addition, tobacco companies’ profits from the sale of tobacco products
are inherently variable and difficult to estimate. There can be no guarantee
that tobacco companies will earn enough revenues to cover the payments due under
tobacco bonds. The revenues of tobacco companies may be adversely affected by
the adoption of new legislation and/or by litigation.
Transportation
Bond Risk.
Transportation bonds are obligations of issuers that own and operate public
transit systems, ports, highways, turnpikes, bridges and other transportation
systems. The ability of these issuers to make payments on these bonds depends on
variations in use, the degree of government subsidization, competition from
other forms of transportation and increased costs. Port authorities derive
revenues primarily from fees imposed on ships using the port facilities. These
fees can fluctuate depending on the local economy and competition from air, rail
and truck transportation. Transportation bonds may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline industry and
on the stability of a specific carrier who uses the airport as a hub. Air
traffic generally follows broader economic trends and is also affected by the
price and availability of fuel. Toll road bonds are also affected by the cost
and availability of fuel as well as toll levels, the presence of competing roads
and the general economic health of an area. Fuel costs and availability also
affect other transportation related securities, as do the presence of alternate
forms of transportation, such as public transportation. Municipal securities
that are issued to finance a particular transportation project often depend
solely on revenues from
that
project to make principal and interest payments. Adverse conditions and
developments affecting a particular project may result in lower revenues to the
issuer of the municipal securities.
Water
and Sewer Bond Risk.
Water and sewer revenue bonds are often considered to have relatively secure
credit as a result of their issuer’s importance, monopoly status and generally
unimpeded ability to raise rates. Despite this, lack of water supply due to
insufficient rain, run off or snow pack is a concern that has led to past
defaults. Further, public resistance to rate increases, costly environmental
litigation and federal environmental mandates are challenges faced by issuers of
water and sewer bonds.
California
Risk.
(VanEck High Yield Muni ETF, VanEck Intermediate Muni ETF, VanEck Long Muni ETF
and VanEck Short Muni ETF only.) Each Fund may invest a significant portion of
its assets in municipal obligations of issuers located in the State of
California. Consequently, the Funds may be affected by political, economic,
regulatory and other developments within California and by the financial
condition of California’s political subdivisions, agencies, instrumentalities
and public authorities. The following is a summary of certain factors affecting
the State’s current financial situation that could, in turn, adversely affect
the Funds’ investments in California municipal obligations.
Provisions
of the California Constitution and State statutes limit the taxing and spending
authority of California governmental entities. Payments of certain municipal
obligations may also be structurally subordinated to other obligations as a
matter of California law. These provisions may impair the ability of California
issuers to pay principal and/or interest on their obligations and the ability of
the State and municipalities to address financial downturns, including
limitations on the ability of the State or municipalities to raise taxes, fees
or charges without voter approval. In addition, California has in the past
experienced financial and economic difficulties, which heightened the risks
associated with investing in bonds issued by the State of California and its
political subdivisions, agencies, instrumentalities and public authorities.
Risks that threaten the State’s fiscal condition include the significant
unfunded liabilities of the State’s two main retirement systems. California has
committed to significant increases in annual payments to these systems to reduce
the unfunded liabilities, and California also has significant unfunded liability
with respect to other post-employment benefits. Moreover, many local government
agencies may face budget constraints due to mandated expenditures for health,
welfare and public safety, as well as the adverse impact local economic
conditions have had on property taxes and sales taxes, two major sources of
revenue for local government. In particular, there is an increased risk that
payments to bondholders could be interrupted or that an issuer could default on
its obligations. A default or credit rating downgrade of a small number of
California municipal security issuers could negatively impact the market values
and marketability of all California municipal securities held by each Fund.
California’s
economy is broad, it does have major concentrations in high technology, trade,
entertainment, manufacturing, agriculture, government, tourism, construction and
services and may be sensitive to economic problems affecting those industries.
In addition, future California political and economic developments,
constitutional amendments, legislative measures, executive orders,
administrative regulations, litigation and voter initiatives could negatively
impact California’s economy. Such developments could adversely affect each
Fund’s income, NAV, liquidity and/or ability to preserve or realize appreciation
of capital. Furthermore, investments in California municipal securities may be
affected by natural disasters, such as earthquakes or wildfires, which could
impair an issuer's ability to pay principal and/or interest on its
obligations.
Other
risks affecting issuers of California municipal securities include, but are not
limited to, the ongoing and evolving economic and health-related impacts of the
COVID-19 pandemic on the national, State and local economies; the impact of
federal tax law changes; the impact of international events on consumer
confidence, oil supplies and oil prices; shifts in monetary policy affecting
interest rates and the financial markets; the magnitude of pension and
post-retirement health care commitments, and the impact on the funding of such
benefits of lower-than-expected returns; the impact of consumer spending on tax
collections; increased demand for entitlement-based and claims-based programs
such as Medicaid, public assistance and general public health; access to the
capital markets in light of disruptions in the market; litigation against the
State; and actions taken by the federal government, including audits,
disallowances, changes in aid levels, and changes to Medicaid
rules.
New
York Risk.
(VanEck Intermediate Muni ETF, VanEck Long Muni ETF, VanEck Short High Yield
Muni ETF and VanEck Short Muni ETF only). Each Fund may invest a significant
portion of its assets in New York municipal bonds. Consequently, each Fund may
be affected by political, economic, regulatory or other developments within the
State of New York, and by the financial condition of its public authorities and
political subdivisions. Unfavorable developments in any economic sector may have
a substantial impact on the overall New York municipal market. As the nation’s
financial capital, New York’s and New York City’s economy is heavily dependent
on the financial sector and may be sensitive to economic problems affecting the
sector. New York and New York City also face a particularly large degree of
uncertainty from interest rate risk and equity market volatility. The New York
and New York City economy tends to be more sensitive to monetary policy actions
and to movements in the national and world economies than the economies of other
states. The economies of New York State and New York City are diversified across
the finance, insurance, real estate, entertainment and services sectors. Any
downturn in these sectors or related industries may adversely affect the economy
of the state. Certain issuers of New York municipal bonds have experienced
serious financial difficulties in the past and reoccurrence of these
difficulties may impair the ability of certain New York issuers to pay principal
or interest on their obligations. The economic, financial and social impact from
the COVID-19 pandemic has been unprecedented—and New York State was the
epicenter of the initial wave; however, the state's general
obligation
ratings have remained strong. Climate change remains a long term threat to New
York State. These threats include rising sea levels, more severe coastal
flooding, more intense storms, and greenhouse gas emissions.
Illinois
Risk.
(VanEck High Yield Muni ETF and VanEck Short High Yield Muni ETF only.) Each
Fund may invest a significant portion of its assets in Illinois municipal bonds.
Consequently, the Funds may be affected by negative political, economic,
regulatory or other developments within the State of Illinois including the
financial condition of its public authorities and political subdivisions.
Unfavorable
developments in any economic sector may have a substantial impact on the overall
Illinois municipal market. Illinois has experienced significant budgetary
challenges in recent years. Certain issuers of Illinois municipal bonds have
experienced serious financial difficulties in the past and reoccurrence of these
difficulties may impair the ability of certain Illinois issuers to pay principal
or interest on their obligations. In 2017, Illinois narrowly avoided becoming
the first state to be issued a “junk” credit rating after it passed its first
budget in more than two years. However, the state’s recent budget stalemate
could still trigger a credit downgrade from one of the other major ratings
companies. Any future failures to pass a budget could have an adverse impact on
the state’s ability to pay outstanding debt obligations, including with respect
to debt owned by a Fund.
In
addition, Illinois has been materially adversely impacted by the health-related
and economic impacts of the COVID-19 pandemic. Illinois has also faced
increasing levels of debt in recent years. There is no assurance that Illinois
can maintain its credit ratings for any given period of time. A downward
revision or withdrawal of any such rating may have an adverse effect on the
market prices of the securities issued by Illinois, which would in turn
negatively impact the performance of a Fund.
Texas
Risk. (VanEck
Long Muni ETF only.) Each Fund may invest a significant portion of its assets in
Texas municipal bonds. Consequently, the Funds may be affected by negative
political, economic, regulatory or other developments within the State of Texas
including the financial condition of its public authorities and political
subdivisions.
Index
Tracking Risk.
Each Fund’s return may not match the return of its Index for a number of
reasons. For example, a Fund incurs a number of operating expenses, including
taxes, not applicable to its Index and incurs costs associated with buying and
selling securities, especially when rebalancing the Fund’s securities holdings
to reflect changes in the composition of its Index or (to the extent the Fund
effects creations and redemptions for cash) raising cash to meet redemptions or
deploying cash in connection with newly created Creation Units (defined herein),
which are not factored into the return of its Index. Transaction costs,
including brokerage costs, will decrease the Fund’s NAV to the extent not offset
by the transaction fee payable by an AP. Market disruptions and regulatory
restrictions could have an adverse effect on a Fund’s ability to adjust its
exposure to the required levels in order to track its respective Index. There is
no assurance that a Fund’s Index Provider (defined herein) or any agents that
may act on its behalf will compile the Fund’s Index accurately, or that an Index
will be determined, composed or calculated accurately. Errors in respect of the
quality, accuracy and completeness of the data used to compile an Index may
occur from time to time and may not be identified and corrected by the
applicable Index Provider for a period of time or at all, particularly where the
indices are less commonly used as benchmarks by funds or managers. Therefore,
gains, losses or costs associated with errors of an Index Provider or its agents
will generally be borne by the applicable Fund and its shareholders. Apart from
scheduled rebalances, the Index Providers or their agents may carry out
additional ad hoc rebalances to a Fund's Index. Therefore, errors and additional
ad hoc rebalances carried out by the Index Providers or their agents to a
respective Index may increase the costs to and the tracking error risk of the
Funds. When a Fund’s Index is rebalanced and the Fund in turn rebalances its
portfolio to attempt to increase the correlation between the Fund’s portfolio
and its respective Index, any transaction costs and market exposure arising from
such portfolio rebalancing will be borne directly by the applicable Fund and its
shareholders. For example, during a period where a Fund’s Index contains
incorrect constituents, the Fund would have market exposure to such constituents
and would be underexposed to the Index’s other constituents. Such errors may
negatively or positively impact a Fund and its shareholders. Any gains due to an
Index Provider’s or others’ errors will be kept by a Fund and its shareholders
and any losses resulting from an Index Provider’s or others’ errors will be
borne by a Fund and its shareholders. In addition, a Fund’s use of a
representative sampling approach may cause the Fund’s returns to not be as well
correlated with the return of its Index as would be the case if the Fund
purchased all of the securities in its Index in the proportions represented in
such Index and can be expected to result in greater tracking error than if the
Fund used a replication indexing strategy.
Each
Fund may not be fully invested at times as a result of reserves of cash held by
the Fund to pay expenses. In addition, a Fund may not be able to invest in
certain securities included in its Index, or invest in them in the exact
proportions in which they are represented in its Index, due to legal
restrictions or limitations imposed by the governments of certain countries, the
Exchange listing requirements, a lack of liquidity on stock exchanges in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). Moreover, a Fund may be delayed
in purchasing or selling securities included in its Index. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. Any issues a Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the Index tracking risk. For tax efficiency purposes, a Fund
may sell certain securities, and such sale may cause the Fund to realize a loss
and deviate from the performance of its Index.
Certain
Funds are expected to fair value certain of the securities they hold. To the
extent a Fund calculates its NAV based on fair value prices or on the prices
that differ from those used in calculating a Fund’s respective Index, the Fund’s
ability to track its Index may be adversely affected. The need to comply with
the tax diversification and other requirements of the Internal Revenue Code may
also impact the Fund’s ability to replicate the performance of its Index. In
addition, if a Fund utilizes depositary receipts and other derivative
instruments, its return may not correlate as well with the return of its Index
as would be the case if the Fund purchased all the securities in its Index
directly. Actions taken in response to proposed corporate actions could result
in increased tracking error. In light of the factors discussed above, each
Fund’s return may deviate significantly from the return of its index. Index
tracking risk may be heightened during times of increased market volatility or
other unusual market conditions. Changes to the composition of a Fund’s Index in
connection with a rebalancing or reconstitution of the Index may cause the Fund
to experience increased volatility, during which time the Fund’s index tracking
risk may be heightened. In addition, sale of securities may result in the
recognition of accrued market discount and/or net realized gains for tax
purposes, which may result in taxable distributions to
shareholders.
Passive
Management Risk.
Unlike many investment companies, the Funds are not “actively” managed.
Therefore, unless a specific security is removed from a Fund’s respective Index,
a Fund generally would not sell a security because the security’s issuer is in
financial trouble. If a specific security is removed from a Fund’s respective
Index, a Fund may be forced to sell such security at an inopportune time or for
prices other than at current market values. An investment in the Funds involves
risks similar to those of investing in any Fund that invests in bonds, such as
market fluctuations caused by such factors as economic and political
developments, changes in interest rates and perceived trends in security prices.
A Fund’s respective Index may not contain the appropriate or a diversified mix
of securities for any particular economic cycle. The timing of changes in the
securities of a Fund’s portfolio in seeking to replicate its Index could have a
negative effect on the Fund. Unlike with an actively managed fund, the Adviser
does not use techniques or defensive strategies designed to lessen the effects
of market volatility or to reduce the impact of periods of market decline.
Additionally, unusual market conditions may cause a Fund’s Index Provider to
postpone a scheduled rebalance or reconstitution, which could cause a Fund’s
Index to vary from its normal or expected composition. This means that, based on
market and economic conditions, a Fund’s performance could be lower than funds
that may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Tax
Risk.
There is no guarantee that a Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after a Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by a Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant (“AP”) Concentration Risk.
A Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market. While
Shares are listed on the Exchange there can be no assurance that an active
trading market for the Shares will be maintained. Further, secondary markets may
be subject to irregular trading activity, wide bid/ask spreads and extended
trade settlement periods in times of market stress because market makers and APs
may step away from making a market in the Shares and in executing creation and
redemption orders, which could cause a material deviation in a Fund’s market
price from its NAV. Van Eck Securities Corporation, the distributor of the
Shares (the “Distributor”), does not maintain a secondary market in the Shares.
Investors purchasing and selling Shares in the secondary market may not
experience investment results consistent with those experienced by those APs
creating and redeeming directly with a Fund.
Decisions
by market makers or APs to reduce their role or “step away” from these
activities in times of market stress could inhibit the effectiveness of the
arbitrage process in maintaining the relationship between the underlying value
of a Fund’s portfolio securities and the Fund’s market price. This reduced
effectiveness could result in Fund Shares trading price which differs materially
from NAV and also in greater than normal intraday bid/ask spreads for Fund
Shares.
Trading
Issues. Trading
in Shares on the Exchange may be halted due to market conditions or for reasons
that, in the view of the Exchange, make trading in Shares inadvisable. In
addition, trading in Shares on the Exchange is subject to trading halts caused
by extraordinary market volatility pursuant to the Exchange’s “circuit breaker”
rules. If a trading halt or unanticipated early close of the Exchange occurs, a
shareholder may be unable to purchase or sell Shares of a Fund. There can be no
assurance that the requirements of the Exchange necessary to maintain the
listing of a Fund will continue to be met or will remain unchanged.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
Disruptions to creations and redemptions, the existence of market volatility or
potential lack of an active trading market for Shares (including through a
trading halt), as well
as
other factors, may result in Shares trading at a significant premium or discount
to NAV or to the intraday value of a Fund’s holdings. The NAV of the Shares will
fluctuate with changes in the market value of a Fund’s securities holdings. The
market price of Shares may fluctuate, in some cases materially, in accordance
with changes in NAV and the intraday value of a Fund’s holdings, as well as
supply and demand on the Exchange. The Adviser cannot predict whether Shares
will trade below, at or above their NAV. Given the fact that Shares can be
created and redeemed by APs in Creation Units (defined herein), the Adviser
believes that large discounts or premiums to the NAV of Shares should not be
sustained in the long-term. While the creation/redemption feature is designed to
make it likely that Shares normally will trade close to the value of a Fund’s
holdings, market prices are not expected to correlate exactly to the Fund’s NAV
due to timing reasons, supply and demand imbalances and other factors. The price
differences may be due, in large part, to the fact that supply and demand forces
at work in the secondary trading market for Shares may be closely related to,
but not necessarily identical to, the same forces influencing the prices of the
securities of a Fund’s portfolio of investments trading individually or in the
aggregate at any point in time. If a shareholder purchases Shares at a time when
the market price is at a premium to the NAV or sells Shares at a time when the
market price is at a discount to the NAV, the shareholder may pay significantly
more or receive significantly less than the underlying value of the Shares that
were bought or sold or the shareholder may be unable to sell his or her Shares.
Any of these factors, discussed above and further below, may lead to the Shares
trading at a premium or discount to a Fund’s NAV. In addition, because certain
of a Fund’s underlying securities trade on exchanges that are closed when the
Exchange (i.e.,
the exchange that Shares of the Fund trade on) is open, there are likely to be
deviations between the expected value of an underlying security and the closing
security’s price (i.e.,
the last quote from its closed foreign market) resulting in premiums or
discounts to NAV that may be greater than those experienced by other ETFs. In
addition, the securities held by a Fund may be traded in markets that close at a
different time than the Exchange. Liquidity in those securities may be reduced
after the applicable closing times. Accordingly, during the time when the
Exchange is open but after the applicable market closing, fixing or settlement
times, bid/ask spreads and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
When
you buy or sell Shares of a Fund through a broker, you will likely incur a
brokerage commission or other charges imposed by brokers. In addition, the
market price of Shares, like the price of any exchange-traded security, includes
a bid/ask spread charged by the market makers or other participants that trade
the particular security. The spread of a Fund’s Shares varies over time based on
the Fund’s trading volume and market liquidity and may increase if the Fund’s
trading volume, the spread of the Fund’s underlying securities, or market
liquidity decrease. In times of severe market disruption, including when trading
of a Fund’s holdings may be halted, the bid/ask spread may increase
significantly. This means that Shares may trade at a discount to the Fund’s NAV,
and the discount is likely to be greatest during significant market
volatility.
Concentration
Risk.
A Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent that its respective Index
concentrates in a particular sector or sectors or industry or group of
industries. The securities of many or all of the companies in the same sector or
industry may decline in value due to developments adversely affecting such
sector or industry. By concentrating its assets in a particular sector or
sectors or industry or group of industries, a Fund is subject to the risk that
economic, political or other conditions that have a negative effect on that
sector or sectors or industry or group of industries may negatively impact the
Fund to a greater extent than if the Fund’s assets were invested in a wider
variety of sectors or industries.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGIES
Each
Fund may invest in securities not included in its respective Index, money market
instruments, including repurchase agreements or other funds which invest
exclusively in money market instruments, convertible securities, structured
notes (notes on which the amount of principal repayment and interest payments
are based on the movement of one or more specified factors, such as the movement
of a particular stock or stock index), and/or certain derivatives, which the
Adviser believes will help a Fund track its Index. Depositary receipts not
included in a Fund’s Index may be used by certain Funds in seeking performance
that corresponds to its respective Index, and in managing cash flows, and may
count towards compliance with a Fund’s 80% policy. Each Fund may also invest, to
the extent permitted by the 1940 Act and SEC regulations thereunder in other
affiliated and unaffiliated funds, such as open-end or closed-end management
investment companies, including other ETFs.
BORROWING
MONEY
Each
Fund may borrow money from a bank up to a limit of one-third of the market value
of its assets. Each Fund has entered into a credit facility to borrow money for
temporary, emergency or other purposes, including the funding of shareholder
redemption requests, trade settlements and as necessary to distribute to
shareholders any income required to maintain the Fund’s status as a regulated
investment company. To the extent that a Fund borrows money, it may be
leveraged; at such times, the Fund will appreciate or depreciate in value more
rapidly than its Index. Leverage generally has the effect of increasing the
amount of loss or gain a Fund might realize, and may increase volatility in the
value of a Fund’s investments.
LENDING
PORTFOLIO SECURITIES
Each
Fund may lend its portfolio securities to brokers, dealers and other financial
institutions desiring to borrow securities to complete transactions and for
other purposes. In connection with such loans, a Fund receives cash, U.S.
government securities
and
stand-by letters of credit not issued by the Fund’s bank lending agent equal to
at least 102% of the value of the portfolio securities being loaned. This
collateral is marked-to-market on a daily basis. Although a Fund will receive
collateral in connection with all loans of its securities holdings, the Fund
would be exposed to a risk of loss should a borrower fail to return the borrowed
securities (e.g.,
the Fund would have to buy replacement securities and the loaned securities may
have appreciated beyond the value of the collateral held by the Fund) or become
insolvent. A Fund may pay fees to the party arranging the loan of securities. In
addition, a Fund will bear the risk that it may lose money because the borrower
of the loaned securities fails to return the securities in a timely manner or at
all. Each Fund could also lose money in the event of a decline in the value of
any cash collateral or in the value of investments made with the cash
collateral. These events could trigger adverse tax consequences for the Funds.
Substitute payments for dividends received by a Fund for securities loaned out
by a Fund will not be considered qualified dividend income.
ADDITIONAL
NON-PRINCIPAL RISKS
Risk
of Investing in Derivatives.
Derivatives and other similar instruments (referred to collectively as
"derivatives") are financial instruments whose values are based on the value of
one or more reference assets or indicators, such as a security, currency,
interest rate, or index. The Funds’ use of derivatives involves risks different
from, and possibly greater than, the risks associated with investing directly in
securities and other more traditional investments. Moreover, although the value
of a derivative is based on an underlying asset or indicator, a derivative
typically does not carry the same rights as would be the case if a Fund invested
directly in the underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and a Fund could lose more than the amount
it invests. The use of derivatives may increase the amount and affect the timing
and character of taxes payable by shareholders of a Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of a Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, a Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). Counterparty risk also refers to the related risks of
having concentrated exposure to such a counterpary. A liquid secondary market
may not always exist for a Fund’s derivative positions at any time, and a Fund
may not be able to initiate or liquidate a swap position at an advantageous time
or price, which may result in significant losses. The Fund may be required to
hold additional cash or sell other investments in order to obtain cash to close
out a position and changes in the value of a derivative may also create margin
delivery or settlement payment obligations for the Fund.
Derivatives
are also subject to operational and legal risks. Operational risk generally
refers to risk related to potential operational issues, including documentation
issues, settlement issues, system failures, inadequate controls, and human
errors. Legal risk generally refers to insufficient documentation, insufficient
capacity or authority of counterparty, or legality or enforceability of a
contract.
Shareholder
Risk.
Certain shareholders, including other funds advised by the Adviser, may from
time to time own a substantial amount of a Fund’s Shares. In addition, a third
party investor, the Adviser or an affiliate of the Adviser, an AP, a market
maker, or another entity may invest in a Fund and hold its investment for a
limited period of time. There can be no assurance that any large shareholder
would not redeem its investment. Redemptions by shareholders could have a
negative impact on a Fund. In addition, transactions by large shareholders may
account for a large percentage of the trading volume on an Exchange and may,
therefore, have a material effect on the market price of the
Shares.
Leverage
Risk.
To the extent that a Fund borrows money or utilizes certain derivatives, it may
be leveraged. Leveraging generally exaggerates the effect on NAV of any increase
or decrease in the market value of a Fund’s portfolio securities. The Funds are
required to comply with the derivatives rule when they engage in transactions
that create future Fund payment or delivery obligations.
Puerto
Rico Risk.
(VanEck High Yield Muni ETF and VanEck Short High Yield Muni ETF only.) Each
Fund may invest a portion of its assets in municipal obligations of issuers
located in Puerto Rico. Consequently, the Fund may be affected by political,
economic, regulatory and other developments within Puerto Rico and by the
financial condition of Puerto Rico’s political subdivisions, agencies,
instrumentalities and public authorities. Events, including economic and
political policy changes, tax base erosion, territory constitutional limits on
tax increases, budget deficits and other financial difficulties and changes in
the credit ratings assigned to Puerto Rico’s municipal issuers, are likely to
affect the Fund’s performance. The Puerto Rican economy is reliant on
manufacturing, services and tourism, and its economic and financial operations
parallel the economic cycles of the United States. As a result, a decline in
tourism, which is an important component of the Puerto Rico economy, and U.S.
recessions have had a negative effect on the overall economy of Puerto Rico.
Puerto Rico continues to face significant
fiscal
challenges, including persistent government deficits, underfunded public pension
benefit obligations, underfunded government retirement systems, sizable debt
service obligations and a high unemployment rate.
The
Puerto Rican government defaulted on nearly $2 billion in debt payments due on
July 1, 2016. In May 2017, the newly-created oversight board that oversees
Puerto Rico's finance and court-supervised debt restructuring (the “Oversight
Board”) initiated a bankruptcy-like process for the general government, general
obligation debt, and certain Puerto Rico instrumentalities, including the Puerto
Rico Sales Tax Financing Corporation, the Highways and Transportation Authority,
and the Employee Retirement System. These municipal obligations are subject to
heightened risks that may adversely affect the value of a Fund’s portfolio and
the repayment of such bonds may be subject to significant uncertainties if
Puerto Rico’s economic downturn continues. The negotiations between Puerto Rico
and its instrumentalities and their respective creditors to restructure
outstanding debt obligations remain ongoing, and it is not possible to predict
whether Puerto Rico and its instrumentalities will be able to come to agreements
with their creditors.
In
addition, due to the ongoing budget impact from the COVID-19 pandemic on Puerto
Rico's finances, the Oversight Board or Puerto Rico could seek to revise or even
terminate earlier agreements reached with certain creditors.
Unlike
many conventional mutual funds which are only bought and sold at closing NAVs,
the Shares of each Fund have been designed to be tradable in a secondary market
on an intra-day basis and to be created and redeemed principally in-kind in
Creation Units at each day’s market close. These in-kind arrangements are
designed to mitigate the adverse effects on a Fund’s portfolio that could arise
from frequent cash purchase and redemption transactions that affect the NAV of
the Fund. Moreover, in contrast to conventional mutual funds, where frequent
redemptions can have an adverse tax impact on taxable shareholders because of
the need to sell portfolio securities which, in turn, may generate taxable gain,
the in-kind redemption mechanism of each Fund, to the extent used, generally is
not expected to lead to a tax event for shareholders whose Shares are not being
redeemed.
A
description of each Fund’s policies and procedures with respect to the
disclosure of the Fund’s portfolio securities is available in the Funds’
SAI.
Board
of Trustees.
The Board of Trustees of the Trust has responsibility for the general oversight
of the management of the Funds, including general supervision of the Adviser and
other service providers, but is not involved in the day-to-day management of the
Trust. A list of the Trustees and the Trust officers, and their present
positions and principal occupations, is provided in the Funds’ SAI.
Investment
Adviser.
Under the terms of an investment management agreement between the Trust and Van
Eck Associates Corporation with respect to VanEck High Yield Muni ETF, VanEck
Intermediate Muni ETF, VanEck Long Muni ETF, VanEck Short High Yield Muni ETF,
and VanEck Short Muni ETF (the “Municipal Investment Management Agreement”), Van
Eck Associates Corporation serves as the adviser to each Fund and, subject to
the supervision of the Board of Trustees, is responsible for the day-today
investment management of each Fund. As of October 31, 2022, the Adviser managed
approximately $63.90 billion in assets. The Adviser has been an investment
adviser since 1955 and also acts as adviser or sub-adviser to mutual funds,
other ETFs, other pooled investment vehicles and separate accounts. The
Adviser’s principal business address is 666 Third Avenue, 9th
Floor, New York, New York 10017. A discussion regarding the Board of Trustees’
approval of the Investment Management Agreement for each Fund is available in
the Trust’s semi-annual report for the period ended October 31, 2022.
Pursuant
to the Municipal Investment Management Agreement, the Adviser is responsible for
all expenses of VanEck High Yield Muni ETF, VanEck Intermediate Muni ETF, VanEck
Long Muni ETF, VanEck Short High Yield Muni ETF and VanEck Short Muni ETF,
including the costs of transfer agency, custody, fund administration, legal,
audit and other services, except for the fee payment under the Municipal
Investment Management Agreement, acquired fund fees and expenses, interest
expense, offering costs, trading expenses, taxes and extraordinary expenses. For
its services to each Fund, each Fund has agreed to pay the Adviser an annual
unitary management fee equal to 0.35% (with respect to VanEck High Yield Muni
ETF and VanEck Short High Yield Muni ETF), 0.24% (with respect to VanEck
Intermediate Muni ETF and VanEck Long Muni ETF), and 0.20% (with respect to
VanEck Short Muni ETF) of its average daily net assets. Offering costs excluded
from the annual unitary management fee are: (a) legal fees pertaining to a
Fund’s Shares offered for sale; (b) SEC and state registration fees; and (c)
initial fees paid for Shares of a Fund to be listed on an exchange.
Notwithstanding the foregoing, the Adviser has agreed to pay all such offering
costs until at least September 1, 2024.
Administrator,
Custodian and Transfer Agent. Van
Eck Associates Corporation is the administrator for the Funds (the
“Administrator”), and State Street Bank and Trust Company is the custodian of
the Funds’ assets and provides transfer agency and fund accounting services to
the Funds. The Administrator is responsible for certain clerical, recordkeeping
and/or bookkeeping services which are required to be provided pursuant to the
Investment Management Agreement.
Distributor.
Van
Eck Securities Corporation is the distributor of the Shares (the “Distributor”).
The Distributor will not distribute Shares in less than a specified number of
Shares, each called a “Creation Unit,” and does not maintain a secondary market
in the Shares. The Shares are traded in the secondary market.
The
portfolio managers who currently share joint responsibility for the day-to-day
management of the Funds’ are James T. Colby III and Stephanie Wang.
Mr.
Colby has been employed by the Adviser as a portfolio manager since September
2007. Mr. Colby graduated from Brown University in 1972 with a Bachelor of Arts
in Economics and International Relations; and from Hofstra University in 1979
with a Masters of Business Administration in Finance.
Ms.
Wang is deputy portfolio manager of the Funds. She has been employed with the
Adviser since 2016. Ms. Wang graduated from Baruch College in 2013 with a
Bachelor of Business Administration in Finance and in 2016 with a Master's in
Financial Engineering. She is a CFA®
charter holder and a member of the CFA Institute.
See
the Funds’ SAI for additional information about the portfolio managers’
compensation, other accounts managed by the portfolio managers and their
respective ownership of Shares of each Fund.
DETERMINATION
OF NAV
The
NAV per Share for each Fund is computed by dividing the value of the net assets
of the Fund (i.e., the value of its total assets less total liabilities) by the
total number of Shares outstanding. Expenses and fees, including the management
fee, are accrued daily and taken into account for purposes of determining NAV.
The NAV of each Fund is determined each business day as of the close of trading
(ordinarily 4:00 p.m., Eastern time) on the New York Stock
Exchange.
The
values of each Fund’s portfolio securities are based on the securities’ closing
prices on the markets on which the securities trade, when available. Due to the
time differences between the United States and certain countries in which
certain Funds invest, securities on these exchanges may not trade at times when
Shares of the Fund will trade. In the absence of a last reported sales price, or
if no sales were reported, and for other assets for which market quotes are not
readily available, values may be based on quotes obtained from a quotation
reporting system, established market makers or by an outside independent pricing
service. Debt instruments with remaining maturities of more than 60 days are
valued at the evaluated mean price provided by an outside independent pricing
service. If an outside independent pricing service is unable to provide a
valuation, the instrument is valued at the mean of the highest bid and the
lowest asked quotes obtained from one or more brokers or dealers selected by the
Adviser. Prices obtained by an outside independent pricing service may use
information provided by market makers or estimates of market values obtained
from yield data related to investments or securities with similar
characteristics and may use a computerized grid matrix of securities and its
evaluations in determining what it believes is the fair value of the portfolio
securities. Short-term debt instruments having a maturity of 60 days or less are
valued at amortized cost. Any assets or liabilities denominated in currencies
other than the U.S. dollar are converted into U.S. dollars at the current market
rates on the date of valuation as quoted by one or more sources. If a market
quotation for a security or other asset is not readily available or the Adviser
believes it does not otherwise accurately reflect the market value of the
security or asset at the time a Fund calculates its NAV, the security or asset
will be fair valued by the Adviser in accordance with the Trust’s valuation
policies and procedures approved by the Board of Trustees. Each Fund may also
use fair value pricing in a variety of circumstances, including but not limited
to, situations when the value of a security in the Fund’s portfolio has been
materially affected by events occurring after the close of the market on which
the security is principally traded (such as a corporate action or other news
that may materially affect the price of a security) or trading in a security has
been suspended or halted. In addition, each Fund that holds foreign equity
securities currently expects that it will fair value certain of the foreign
equity securities held by the Fund, if any, each day the Fund calculates its
NAV, except those securities principally traded on exchanges that close at the
same time the Fund calculates its NAV.
Accordingly,
a Fund’s NAV may reflect certain portfolio securities’ fair values rather than
their market prices at the time the exchanges on which they principally trade
close. Fair value pricing involves subjective judgments and it is possible that
a fair value determination for a security or other asset is materially different
than the value that could be realized upon the sale of such security or asset.
In addition, fair value pricing could result in a difference between the prices
used to calculate a Fund’s NAV and the prices used by such Fund’s respective
Index. This may adversely affect a Fund’s ability to track its Index. With
respect to securities that are principally traded on foreign exchanges, the
value of a Fund’s portfolio securities may change on days when you will not be
able to purchase or sell your Shares.
INTRADAY
VALUE
The
trading prices of the Funds’ Shares in the secondary market generally differ
from the Funds’ daily NAV and are affected by market forces such as the supply
of and demand for Fund Shares and underlying securities held by each Fund,
economic conditions and other factors. Information regarding the intraday value
of the Funds’ Shares (“IIV”) may be disseminated throughout each trading day by
an Exchange or by market data vendors or other information providers. The IIV is
based on the current market value of the securities and/or cash required to be
deposited in exchange for a Creation Unit. The IIV does not
necessarily
reflect the precise composition of the current portfolio of securities held by
each Fund at a particular point in time or the best possible valuation of the
current portfolio. Therefore, the IIV should not be viewed as a “real-time”
update of the Funds’ NAV, which is computed only once a day. The IIV is
generally determined by using current market quotations and/or price quotations
obtained from broker-dealers and other market intermediaries that may trade in
the portfolio securities held by each Fund and valuations based on current
market rates. The quotations and/or valuations of certain Fund holdings may not
be updated during U.S. trading hours if such holdings do not trade in the United
States. Each Fund is not involved in, or responsible for, the calculation or
dissemination of the IIV and makes no warranty as to its accuracy.
RULE
144A AND OTHER UNREGISTERED SECURITIES
An
AP (i.e., a person eligible to place orders with the Distributor to create or
redeem Creation Units of a Fund) that is not a “qualified institutional buyer,”
as such term is defined under Rule 144A of the Securities Act of 1933, as
amended (the “Securities Act”), will not be able to receive, as part of a
redemption, restricted securities eligible for resale under Rule 144A or other
unregistered securities.
BUYING
AND SELLING EXCHANGE-TRADED SHARES
The
Shares of the Funds are listed on the Exchange. If you buy or sell Shares in the
secondary market, you will incur customary brokerage commissions and charges and
may pay some or all of the “spread,” which is any difference between the bid
price and the ask price. The spread varies over time for a Fund’s Shares based
on the Fund’s trading volume and market liquidity, and is generally lower if the
Funds have high trading volume and market liquidity, and generally higher if the
Funds have little trading volume and market liquidity (which is often the case
for funds that are newly launched or small in size). In times of severe market
disruption or low trading volume in a Fund’s Shares, this spread can increase
significantly. It is anticipated that the Shares will trade in the secondary
market at prices that may differ to varying degrees from the NAV of the Shares.
During periods of disruptions to creations and redemptions or the existence of
extreme market volatility, the market prices of Shares are more likely to differ
significantly from the Shares’ NAV.
The
Depository Trust Company (“DTC”) serves as securities depository for the Shares.
(The Shares may be held only in book- entry form; stock certificates will not be
issued.) DTC, or its nominee, is the record or registered owner of all
outstanding Shares. Beneficial ownership of Shares will be shown on the records
of DTC or its participants (described below). Beneficial owners of Shares are
not entitled to have Shares registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and are
not considered the registered holder thereof. Accordingly, to exercise any
rights of a holder of Shares, each beneficial owner must rely on the procedures
of: (i) DTC; (ii) “DTC Participants,” i.e.,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom (and/or their representatives) own
DTC; and (iii) “Indirect Participants,” i.e.,
brokers, dealers, banks and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly,
through which such beneficial owner holds its interests. The Trust understands
that under existing industry practice, in the event the Trust requests any
action of holders of Shares, or a beneficial owner desires to take any action
that DTC, as the record owner of all outstanding Shares, is entitled to take,
DTC would authorize the DTC Participants to take such action and that the DTC
Participants would authorize the Indirect Participants and beneficial owners
acting through such DTC Participants to take such action and would otherwise act
upon the instructions of beneficial owners owning through them. As described
above, the Trust recognizes DTC or its nominee as the owner of all Shares for
all purposes. For more information, see the section entitled “Book Entry Only
System” in the Funds’ SAI.
Each
Exchange is open for trading Monday through Friday and is closed on weekends and
the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’
Day, Good Friday, Memorial Day, Juneteenth National Independence Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Because
non-U.S. exchanges may be open on days when a Fund does not price its Shares,
the value of the securities in the Fund’s portfolio may change on days when
shareholders will not be able to purchase or sell a Fund’s Shares.
The
right of redemption by an AP may be suspended or the date of payment postponed
(1) for any period during which an Exchange is closed (other than customary
weekend and holiday closings); (2) for any period during which trading on an
Exchange is suspended or restricted; (3) for any period during which an
emergency exists as a result of which disposal of the Shares of a Fund or
determination of its NAV is not reasonably practicable; or (4) in such other
circumstance as is permitted by the SEC.
Market
Timing and Related Matters.
The
Funds impose no restrictions on the frequency of purchases and redemptions.
Frequent purchases and redemptions of Fund Shares may attempt to take advantage
of a potential arbitrage opportunity presented by a lag between a change in the
value of a Fund’s portfolio securities after the close of the primary markets
for a Fund’s portfolio securities and the reflection of that change in a Fund’s
NAV (“market timing”). The Board of Trustees considered the nature of each Fund
(i.e.,
a fund whose Shares are expected to trade intraday), that the Adviser monitors
the trading activity of APs for patterns of abusive trading, that the Funds
reserve the right to reject orders that may be disruptive to the management of
or otherwise not in the Funds’ best interests, and that each Fund may fair value
certain of its securities. Given this structure, the Board of Trustees
determined that it is not necessary to impose restrictions on the frequency of
purchases and redemptions for the Funds at the present time.
DISTRIBUTIONS
Net
Investment Income and Capital Gains.
As a shareholder of a Fund, you are entitled to your share of such Fund’s
distributions of net investment income and net realized capital gains on its
investments. Each Fund pays out substantially all of its net earnings to its
shareholders as “distributions.”
Each
Fund typically earns income dividends from stocks and/or interest on municipal
securities. These amounts, net of expenses, are typically passed along to Fund
shareholders as dividends from net investment income. Each Fund generally
realizes capital gains or losses whenever it sells securities. Net capital gains
are distributed to shareholders as “capital gain distributions.” Dividends paid
by the Funds that are properly reported as exempt-interest dividends will not be
subject to regular federal income tax. Distributions from a Fund’s net
investment income (other than net tax-exempt income), including any net short
term capital gains, if any, are taxable to you as ordinary income. Any long-term
capital gains distributions you receive from a Fund are taxable as long-term
capital gains.
Net
investment income, if any, is typically distributed to shareholders at least
monthly and net realized capital gains, if any, are typically distributed to
shareholders at least annually. Dividends may be declared and paid more
frequently to improve index tracking or to comply with the distribution
requirements of the Internal Revenue Code. In addition, in situations where the
Fund acquires investment securities after the beginning of a dividend period,
the Fund may elect to distribute at least annually amounts representing the full
dividend yield net of expenses on the underlying investment securities, as if
the Funds owned the underlying investment securities for the entire dividend
period. If the Fund so elects, some portion of each distribution may result in a
return of capital, which, for tax purposes, is treated as a return of your
investment in Shares. You will be notified regarding the portion of the
distribution which represents a return of capital.
Distributions
in cash may be reinvested automatically in additional Shares of your Fund only
if the broker through which you purchased Shares makes such option
available.
TAX
INFORMATION
As
with any investment, you should consider how your Fund investment will be taxed.
The tax information in this Prospectus is provided as general information. You
should consult your own tax professional about the tax consequences of an
investment in the Funds, including the possible application of foreign, state
and local taxes. Unless your investment in a Fund is through a tax-exempt entity
or tax-deferred retirement account, such as a 401(k) plan, you need to be aware
of the possible tax consequences when: (i) a Fund makes distributions; (ii) you
sell Shares in the secondary market or (iii) you create or redeem Creation
Units.
Taxes
on Distributions.
As noted above, each Fund expects to distribute net investment income, if any,
monthly, and any net realized long-term or short-term capital gains, if any,
annually. Each Fund may also pay a special distribution at any time to comply
with U.S. federal tax requirements.
Dividends
paid by the Funds that are properly reported as exempt-interest dividends will
not be subject to regular U.S. federal income tax. The Funds intend to invest
their assets in a manner such that a significant portion of their dividend
distributions to shareholders will generally be exempt from U.S. federal income
taxes, including the federal alternative minimum tax for noncorporate
shareholders. The VanEck High Yield Muni ETF and VanEck Short High Yield Muni
ETF may invest a portion of their assets in certain “private activity bonds,”
and as a result, a portion of the exempt-interest dividends paid by them will be
an item of tax preference to shareholders subject to the alternative minimum
tax. Depending on a shareholder’s state of residence, exempt-interest dividends
from interest earned on municipal securities of a state or its political
subdivisions may be exempt in the hands of such shareholder from income tax in
that state. However, income from municipal securities of states other than the
shareholder’s state of residence generally will not qualify for tax-free
treatment for such shareholder.
Distributions
from a Fund’s net investment income other than net tax-exempt income, including
any net short-term gains, if any, are taxable to you as ordinary
income.
In
general, your distributions are subject to U.S. federal income tax when they are
paid, whether you take them in cash or reinvest them in the Fund. Whether
distributions of capital gains represent long-term or short-term capital gains
is determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your Shares. Distributions of net short-term
capital gains in excess of net long–term capital losses, if any, are generally
taxable as ordinary income. Distributions of net long-term capital gains in
excess of net short-term capital losses, if any, that are properly reported as
capital gain dividends are generally taxable as long-term capital gains.
Long-term capital gains of a non-corporate shareholder are generally taxable at
a maximum rate of 15% or 20%, depending on whether the shareholder’s income
exceeds certain threshold amounts. The Funds do not expect that any of their
distributions will be qualified dividends eligible for lower tax rates or for
the corporate dividends received deduction.
Exempt-interest
dividends from a Fund are taken into account in determining the taxable portion
of any Social Security or railroad retirement benefits that you
receive.
Distributions
in excess of a Fund’s current and accumulated earnings and profits are treated
as a tax-free return of your investment to the extent of your basis in the
Shares, and generally as capital gain thereafter. A return of capital, which for
tax
purposes
is treated as a return of your investment, reduces your basis in Shares, thus
reducing any loss or increasing any gain on a subsequent taxable disposition of
Shares. A distribution will reduce a Fund’s NAV per Share and may be taxable to
you as ordinary income or capital gain even though, from an economic standpoint,
the distribution may constitute a return of capital.
Backup
Withholding.
A Fund may be required to withhold a percentage of your distributions and
proceeds if you have not provided a taxpayer identification number or social
security number or otherwise established a basis for exemption from backup
withholding. The backup withholding rate for individuals is currently 24%. This
is not an additional tax and may be refunded, or credited against your U.S.
federal income tax liability, provided certain required information is furnished
to the IRS.
Taxes
on the Sale or Cash Redemption of Exchange Listed Shares.
Currently, any capital gain or loss realized upon a sale of Shares is generally
treated as long term-capital gain or loss if the Shares have been held for more
than one year and as a short-term capital gain or loss if held for one year or
less. However, any capital loss on a sale of Shares held for six months or less
is treated as long-term capital loss to the extent that capital gain dividends
were paid with respect to such Shares. The ability to deduct capital losses may
be limited. To the extent that a Fund’s shareholder’s Shares are redeemed for
cash, this is normally treated as a sale for tax purposes.
Taxes
on Creations and Redemptions of Creation Units.
A person who exchanges securities for Creation Units generally will recognize a
gain or loss. The gain or loss will be equal to the difference between the
market value of the Creation Units at the time of exchange and the sum of the
exchanger’s aggregate basis in the securities surrendered and the amount of any
cash paid for such Creation Units. A person who exchanges Creation Units for
securities will generally recognize a gain or loss equal to the difference
between the exchanger’s basis in the Creation Units and the sum of the aggregate
market value of the securities received. The IRS, however, may assert that a
loss realized upon an exchange of primarily securities for Creation Units cannot
be deducted currently under the rules governing “wash sales,” or on the basis
that there has been no significant change in economic position. Persons
exchanging securities for Creation Units or redeeming Creation Units should
consult their own tax adviser with respect to whether wash sale rules apply and
when a loss might be deductible and the tax treatment of any creation or
redemption transaction.
Under
current U.S. federal income tax laws, any capital gain or loss realized upon a
redemption (or creation) of Creation Units held as capital assets is generally
treated as long-term capital gain or loss if the Shares (or securities
surrendered) have been held for more than one year and as a short-term capital
gain or loss if the Shares (or securities surrendered) have been held for one
year or less.
If
you create or redeem Creation Units, you will be sent a confirmation statement
showing how many Shares you created or sold and at what price.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Fund
Shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
Non-U.S.
Shareholders.
Dividends paid by a Fund to non-U.S. shareholders are generally subject to
withholding tax at a 30% rate or a reduced rate specified by an applicable
income tax treaty to the extent derived from investment income and short-term
capital gains. Dividends paid by a Fund from net tax-exempt income or long-term
capital gains are generally not subject to such withholding tax.
Properly-reported dividends are generally exempt from U.S. federal withholding
tax where they (i) are paid in respect of a Fund’s “qualified net interest
income” (generally, a Fund’s U.S. source interest income, other than certain
contingent interest and interest from obligations of a corporation or
partnership in which a Fund is at least a 10% shareholder, reduced by expenses
that are allocable to such income); or (ii) are paid in respect of a Fund’s
“qualified short-term capital gains” (generally, the excess of a Fund’s net
short-term capital gain over a Fund’s long-term capital loss for such taxable
year). However, depending on its circumstances, a Fund may report all, some or
none of its potentially eligible dividends as such qualified net interest income
or as qualified short-term capital gains and/or treat such dividends, in whole
or in part, as ineligible for this exemption from withholding.
Any
capital gain realized by a non-U.S. shareholder upon a sale of Shares of a Fund
will generally not be subject to U.S. federal income or withholding tax unless
(i) the gain is effectively connected with the shareholder’s trade or business
in the United States, or in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the United States for 183 days or more
during the taxable year and certain other conditions are met or (ii) the Fund is
or has been a U.S. real property holding corporation, as defined below, at any
time within the five-year period preceding the date of disposition of the Fund’s
Shares or, if shorter, within the period during which the non-U.S. shareholder
has held the Shares. Generally, a corporation is a U.S. real property holding
corporation if the fair market value of its U.S. real property interests, as
defined in the Internal Revenue Code and applicable regulations, equals or
exceeds 50% of the aggregate fair market value of its worldwide real property
interests and its other assets used or held for use in a trade or business. A
Fund may be, or may prior to a non-U.S. shareholder’s disposition of Shares
become, a U.S. real property holding corporation. If a Fund is or becomes a U.S.
real property holding corporation, so long as the Fund’s Shares are regularly
traded on an established securities market, only a non-U.S. shareholder who
holds or held (at any time during the shorter of the five-year period preceding
the date of disposition or the
holder’s
holding period) more than 5% (directly or indirectly as determined under
applicable attribution rules of the Internal Revenue Code) of the Fund’s Shares
will be subject to United States federal income tax on the disposition of
Shares.
As
part of the Foreign Account Tax Compliance Act, (“FATCA”), a Fund may be
required to withhold 30% tax on certain types of U.S. sourced income
(e.g.,
dividends, interest, and other types of passive income) paid to (i) foreign
financial institutions (“FFIs”), including non-U.S. investment funds, unless
they agree to collect and disclose to the IRS information regarding their direct
and indirect U.S. account holders and (ii) certain nonfinancial foreign entities
(“NFFEs”), unless they certify certain information regarding their direct and
indirect U.S. owners. To avoid possible withholding, FFIs will need to enter
into agreements with the IRS which state that they will provide the IRS
information, including the names, account numbers and balances, addresses and
taxpayer identification numbers of U.S. account holders and comply with due
diligence procedures with respect to the identification of U.S. accounts as well
as agree to withhold tax on certain types of withholdable payments made to
non-compliant foreign financial institutions or to applicable foreign account
holders who fail to provide the required information to the IRS, or similar
account information and required documentation to a local revenue authority,
should an applicable intergovernmental agreement be implemented. NFFEs will need
to provide certain information regarding each substantial U.S. owner or
certifications of no substantial U.S. ownership, unless certain exceptions
apply, or agree to provide certain information to the IRS.
A
Fund may be subject to the FATCA withholding obligation, and also will be
required to perform due diligence reviews to classify foreign entity investors
for FATCA purposes. Investors are required to agree to provide information
necessary to allow a Fund to comply with the FATCA rules. If a Fund is required
to withhold amounts from payments pursuant to FATCA, investors will receive
distributions that are reduced by such withholding amounts.
Non-U.S.
shareholders are advised to consult their tax advisors with respect to the
particular tax consequences to them of an investment in the Funds, including the
possible applicability of the U.S. estate tax.
The
foregoing discussion summarizes some of the consequences under current U.S.
federal income tax law of an investment in a Fund. It is not a substitute for
personal tax advice. Consult your own tax advisor about the potential tax
consequences of an investment in a Fund under all applicable tax laws. Changes
in applicable tax authority could materially affect the conclusions discussed
above and could adversely affect the Funds, and such changes often
occur.
The
High Yield Index, Intermediate Index, Long Index, Short High Yield Index and
Short Index are published by ICE Data Indices, LLC (“ICE Data”) and its
affiliates. ICE Data is referred to herein as the “Index Provider.” The Index
Provider does not sponsor, endorse, or promote the Funds and bear no liability
with respect to the Funds or any security.
The
High Yield Index tracks the performance of lower-rated and unrated U.S. dollar
denominated tax-exempt debt publicly issued in the U.S. domestic market by U.S.
states and territories as well as their political subdivisions.
The
High Yield Index is a modified blend of the following indices, with additional
constraints placed on certain exposure concentrations:
70%
ICE Core High Yield & Unrated Municipal Index;
25%
ICE Core BBB Municipal Index;
5%
ICE Core Single-A Municipal Index.
The
High Yield Index is rebalanced on the last calendar day of the month, based on
the rebalanced constituencies of the three component indices. ICE Data may delay
or change a scheduled rebalancing or reconstitution of the High Yield Index or
the implementation of certain rules at its sole discretion.
The
Intermediate Index tracks the performance of intermediate maturity U.S. dollar
denominated investment grade tax-exempt debt publicly issued in the U.S.
domestic market by U.S. states and territories as well as their political
subdivisions. Qualifying securities must be exempt from Federal taxes and must
not be subject to alternative minimum tax. In addition, qualifying securities
must have at least six years but less than 17 years remaining term to final
maturity, a fixed coupon schedule (including zero coupon and step up or stepdown
bonds) and an investment grade rating (based on the middle rating of Moody’s,
S&P and Fitch).
The
Intermediate Index is rebalanced on the last calendar day of the month. ICE Data
may delay or change a scheduled rebalancing or reconstitution of the
Intermediate Index or the implementation of certain rules at its sole
discretion.
The
Long Index tracks the performance of long maturity U.S. dollar denominated
investment grade tax-exempt debt publicly issued in the U.S. domestic market by
U.S. states and territories as well as their political subdivisions. Qualifying
securities must be exempt from Federal taxes and must not be subject to
alternative minimum tax. In addition, qualifying securities must have at least
17 years remaining term to final maturity, a fixed coupon schedule (including
zero coupon and step up or stepdown bonds) and an investment grade rating (based
on the middle rating of Moody’s, S&P and Fitch).
The
Long Index is rebalanced on the last calendar day of the month. ICE Data may
delay or change a scheduled rebalancing or reconstitution of the Long Index or
the implementation of certain rules at its sole discretion.
The
Short High Yield Index tracks the performance of lower-rated and unrated U.S.
dollar denominated tax-exempt debt publicly issued in the U.S. domestic market
by U.S. states and territories as well as their political
subdivisions.
The
Short High Yield Index is a modified blend of the following indices, with
additional constraints placed on certain exposure concentrations:
70%
ICE 1-12 Year Core High Yield & Unrated Municipal Index;
20%
ICE 1-12 Year Core BBB Municipal Index;
10%
ICE 1-12 Year Core Single-A Municipal Index.
The
Short High Yield Index is rebalanced on the last calendar day of the month,
based on the rebalanced constituencies of the three component indices. ICE Data
may delay or change a scheduled rebalancing or reconstitution of the Short High
Yield Index or the implementation of certain rules at its sole
discretion.
The
Short Index tracks the performance of short maturity U.S. dollar denominated
investment grade tax-exempt debt publicly issued in the U.S. domestic market by
U.S. states and territories as well as their political subdivisions. Qualifying
securities must be exempt from Federal taxes and must not be subject to
alternative minimum tax. In addition, qualifying securities must have less than
six years remaining term to final maturity, a fixed coupon schedule (including
zero coupon and step up or stepdown bonds) and an investment grade rating (based
on the middle rating of Moody’s, S&P and Fitch).
Qualifying
securities included in the Short Index must have at least one year but less than
six years remaining term to final maturity.
The
Short Index is rebalanced on the last calendar day of the month. ICE Data may
delay or change a scheduled rebalancing or reconstitution of the Short Index or
the implementation of certain rules at its sole discretion.
The
Adviser has entered into a licensing agreement with each Index Provider to use
each Fund’s respective Index. Each Fund is entitled to use its respective Index
pursuant to a sublicensing arrangement with the Adviser.
The
information contained herein regarding the High Yield Index, the Intermediate
Index, the Long Index, the Short High Yield Index and the Short Index
(collectively, the “ICE Indices”) was provided by ICE Data and its
affiliates.
The
Adviser has entered into a licensing agreement with ICE Data to use the ICE
Indices. Each of VanEck High Yield Muni ETF, VanEck Intermediate Muni ETF,
VanEck Long Muni ETF, VanEck Short High Yield Muni ETF and VanEck Short Muni ETF
(collectively, the “Products”) is entitled to use its respective Index pursuant
to a sub-licensing arrangement with the Adviser.
Source
ICE Data is used with permission. ICE and NYSE are service/trademarks of ICE
Data or its affiliates. Such trademarks have been licensed, along with the ICE
Indices for use by the Adviser in connection with the Products. Neither Van Eck
Associates Corporation (the “Licensee”) nor the Products, as applicable, are
sponsored, endorsed, sold or promoted by ICE Data, its affiliates or its Third
Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make
no representations or warranties regarding the advisability of investing in
securities generally, in the Products particularly, the Licensee or the ability
of the ICE Indices to track general bond market performance.
ICE
Data’s only relationship to the Adviser is the licensing of certain trademarks
and trade names and the ICE Indices or components thereof. The ICE Indices are
determined, composed and calculated by ICE Data without regard to the Adviser or
the Products or their holders. ICE Data has no obligation to take the needs of
the Adviser or the holders of the Products into consideration in determining,
composing or calculating the ICE Indices. ICE Data is not responsible for and
has not participated in the determination of the timing of, prices of, or
quantities of the Products to be issued or in the determination or calculation
of the equation by which the Products are to be priced, sold, purchased, or
redeemed. Except for certain custom index calculation services, all information
provided by ICE Data is general in nature and not tailored to the needs of the
Adviser or any other person, entity or group of persons. ICE Data has no
obligation or liability in connection with the administration, marketing, or
trading of the Products. ICE Data is not an investment advisor. Inclusion of a
security within an index is not a recommendation by ICE Data to buy, sell, or
hold such security, nor is it considered to be investment advice.
ICE
DATA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE ICE INDICES
OR ANY DATA INCLUDED THEREIN AND ICE DATA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, UNAVAILABILITY, OR INTERRUPTIONS THEREIN. ICE DATA MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ADVISER,
SHAREHOLDERS OF THE PRODUCTS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
ICE INDICES OR ANY DATA INCLUDED THEREIN. ICE DATA MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE ICE INDICES OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL ICE
DATA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL,
CONSEQUENTIAL DAMAGES, OR LOST PROFITS, EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES.
The
financial highlights tables which follow are intended to help you understand the
Funds’ financial performance for the past five years or as indicated. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in a Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by another independent
registered public accounting firm for the periods reflected in the financial
highlights below, whose report, along with the Funds’ financial statements, are
included in the Funds’ annual report, which is available upon
request.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
Yield Muni ETF (a) |
|
Year
Ended April 30, |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
Net
asset value, beginning of year |
$62.48 |
|
|
|
$56.13 |
|
|
|
$62.79 |
|
|
|
$62.16 |
|
|
|
$61.52 |
|
|
Net
investment income (b) |
2.09 |
|
|
|
2.36 |
|
|
|
2.69 |
|
|
|
2.67 |
|
|
|
2.72 |
|
|
Net
realized and unrealized gain (loss) on investments |
(7.27) |
|
|
|
6.38 |
|
|
|
(6.73) |
|
|
|
0.64 |
|
|
|
0.60 |
|
|
Total
from investment operations |
(5.18) |
|
|
|
8.74 |
|
|
|
(4.04) |
|
|
|
3.31 |
|
|
|
3.32 |
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(2.12) |
|
|
|
(2.39) |
|
|
|
(2.62) |
|
|
|
(2.68) |
|
|
|
(2.68) |
|
|
Net
asset value, end of year |
$55.18 |
|
|
|
$62.48 |
|
|
|
$56.13 |
|
|
|
$62.79 |
|
|
|
$62.16 |
|
|
Total
return (c) |
(8.62) |
|
% |
|
15.84 |
|
% |
|
(6.86) |
|
% |
|
5.46 |
|
% |
|
5.48 |
|
% |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
0.35 |
|
% |
|
0.35 |
|
% |
|
0.35 |
|
% |
|
0.35 |
|
% |
|
0.35 |
|
% |
Net
Investment Income |
3.38 |
|
% |
|
3.91 |
|
% |
|
4.26 |
|
% |
|
4.31 |
|
% |
|
4.37 |
|
% |
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$3,018 |
|
|
|
$3,461 |
|
|
|
$2,570 |
|
|
|
$2,656 |
|
|
|
$2,437 |
|
|
Portfolio
turnover rate (d) |
11 |
|
% |
|
9 |
|
% |
|
12 |
|
% |
|
10 |
|
% |
|
14 |
|
% |
(a) On
October 26, 2018, the Fund effected a 1 for 2 reverse share split. Per share
data has been adjusted to reflect the reverse share split.
(b) Calculated
based upon average shares outstanding
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intermediate
Muni ETF (a) |
|
Year
Ended April 30, |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
Net
asset value, beginning of year |
$51.62 |
|
|
|
$48.97 |
|
|
|
$48.94 |
|
|
|
$46.83 |
|
|
|
$47.40 |
|
|
Net
investment income (b) |
0.83 |
|
|
|
0.98 |
|
|
|
1.09 |
|
|
|
1.12 |
|
|
|
1.08 |
|
|
Net
realized and unrealized gain (loss) on investments |
(5.92) |
|
|
|
2.72 |
|
|
|
0.10 |
|
|
|
2.11 |
|
|
|
(0.59) |
|
|
Total
from investment operations |
(5.09) |
|
|
|
3.70 |
|
|
|
1.19 |
|
|
|
3.23 |
|
|
|
0.49 |
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.84) |
|
|
|
(0.98) |
|
|
|
(1.10) |
|
|
|
(1.12) |
|
|
|
(1.06) |
|
|
Net
realized capital gains |
— |
|
(c) |
|
(0.07) |
|
|
|
(0.06) |
|
|
|
— |
|
|
|
— |
|
|
Total
distributions |
(0.84) |
|
|
|
(1.05) |
|
|
|
(1.16) |
|
|
|
(1.12) |
|
|
|
(1.06) |
|
|
Net
asset value, end of year |
$45.69 |
|
|
|
$51.62 |
|
|
|
$48.97 |
|
|
|
$48.94 |
|
|
|
$46.83 |
|
|
Total
return (d) |
(9.99) |
|
% |
|
7.59 |
|
% |
|
2.40 |
|
% |
|
6.98 |
|
% |
|
1.04 |
|
% |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
0.24 |
|
% |
|
0.24 |
|
% |
|
0.24 |
|
% |
|
0.24 |
|
% |
|
0.24 |
|
% |
Net
investment income |
1.64 |
|
% |
|
1.90 |
|
% |
|
2.17 |
|
% |
|
2.37 |
|
% |
|
2.24 |
|
% |
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$1,695 |
|
|
|
$1,801 |
|
|
|
$1,582 |
|
|
|
$1,720 |
|
|
|
$1,698 |
|
|
Portfolio
turnover rate (e) |
4 |
|
% |
|
6 |
|
% |
|
7 |
|
% |
|
7 |
|
% |
|
9 |
|
% |
(a)On
October 26, 2018, the Fund effected a 1 for 2 reverse share split. Per share
data has been adjusted to reflect the reverse share split.
(b)Calculated
based upon average shares outstanding
(c)Amount
represents less than $0.005 per share.
(d)Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(e)Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Muni ETF |
|
Year
Ended April 30, |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
Net
asset value, beginning of year |
$21.68 |
|
|
|
$20.18 |
|
|
|
$20.40 |
|
|
|
$19.63 |
|
|
|
$19.63 |
|
|
Net
investment income (a) |
0.46 |
|
|
|
0.52 |
|
|
|
0.57 |
|
|
|
0.60 |
|
|
|
0.59 |
|
|
Net
realized and unrealized gain (loss) on investments |
(3.26) |
|
|
|
1.54 |
|
|
|
(0.20) |
|
|
|
0.77 |
|
|
|
0.01 |
|
|
Total
from investment operations |
(2.80) |
|
|
|
2.06 |
|
|
|
0.37 |
|
|
|
1.37 |
|
|
|
0.60 |
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.46) |
|
|
|
(0.52) |
|
|
|
(0.57) |
|
|
|
(0.60) |
|
|
|
(0.60) |
|
|
Net
realized capital gains |
(0.07) |
|
|
|
(0.04) |
|
|
|
(0.02) |
|
|
|
— |
|
|
|
— |
|
|
Total
distributions |
(0.53) |
|
|
|
(0.56) |
|
|
|
(0.59) |
|
|
|
(0.60) |
|
|
|
(0.60) |
|
|
Net
asset value, end of year |
$18.35 |
|
|
|
$21.68 |
|
|
|
$20.18 |
|
|
|
$20.40 |
|
|
|
$19.63 |
|
|
Total
return (b) |
(13.26) |
|
% |
|
10.31 |
|
% |
|
1.75 |
|
% |
|
7.15 |
|
% |
|
3.02 |
|
% |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
0.24 |
|
% |
|
0.24 |
|
% |
|
0.24 |
|
% |
|
0.24 |
|
% |
|
0.24 |
|
% |
Net
investment income |
2.15 |
|
% |
|
2.45 |
|
% |
|
2.72 |
|
% |
|
3.06 |
|
% |
|
2.96 |
|
% |
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$216 |
|
|
|
$228 |
|
|
|
$200 |
|
|
|
$153 |
|
|
|
$154 |
|
|
Portfolio
turnover rate (c) |
7 |
|
% |
|
23 |
|
% |
|
22 |
|
% |
|
22 |
|
% |
|
33 |
|
% |
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
High Yield Muni ETF |
|
Year
Ended April 30, |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
Net
asset value, beginning of year |
$25.06 |
|
|
|
$23.09 |
|
|
|
$24.70 |
|
|
|
$24.24 |
|
|
|
$24.26 |
|
|
Net
investment income (a) |
0.58 |
|
|
|
0.73 |
|
|
|
0.84 |
|
|
|
0.80 |
|
|
|
0.76 |
|
|
Net
realized and unrealized gain (loss) on investments |
(2.18) |
|
|
|
1.99 |
|
|
|
(1.64) |
|
|
|
0.43 |
|
|
|
(0.02) |
|
|
Total
from investment operations |
(1.60) |
|
|
|
2.72 |
|
|
|
(0.80) |
|
|
|
1.23 |
|
|
|
0.74 |
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.60) |
|
|
|
(0.75) |
|
|
|
(0.81) |
|
|
|
(0.77) |
|
|
|
(0.76) |
|
|
Net
asset value, end of year |
$22.86 |
|
|
|
$25.06 |
|
|
|
$23.09 |
|
|
|
$24.70 |
|
|
|
$24.24 |
|
|
Total
return (b) |
(6.58) |
|
% |
|
11.89 |
|
% |
|
(3.44) |
|
% |
|
5.16 |
|
% |
|
3.07 |
|
% |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
0.35 |
|
% |
|
0.35 |
|
% |
|
0.35 |
|
% |
|
0.35 |
|
% |
|
0.35 |
|
% |
Net
investment income |
2.34 |
|
% |
|
2.98 |
|
% |
|
3.37 |
|
% |
|
3.28 |
|
% |
|
3.11 |
|
% |
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$418 |
|
|
|
$306 |
|
|
|
$263 |
|
|
|
$203 |
|
|
|
$135 |
|
|
Portfolio
turnover rate (c) |
16 |
|
% |
|
14 |
|
% |
|
17 |
|
% |
|
22 |
|
% |
|
27 |
|
% |
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
Muni ETF |
|
Year
Ended April 30, |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
Net
asset value, beginning of year |
$18.04 |
|
|
|
$17.55 |
|
|
|
$17.54 |
|
|
|
$17.18 |
|
|
|
$17.52 |
|
|
Net
investment income (a) |
0.15 |
|
|
|
0.23 |
|
|
|
0.27 |
|
|
|
0.27 |
|
|
|
0.22 |
|
|
Net
realized and unrealized gain (loss) on investments |
(1.09) |
|
|
|
0.51 |
|
|
|
0.02 |
|
|
|
0.36 |
|
|
|
(0.34) |
|
|
Total
from investment operations |
(0.94) |
|
|
|
0.74 |
|
|
|
0.29 |
|
|
|
0.63 |
|
|
|
(0.12) |
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.19) |
|
|
|
(0.25) |
|
|
|
(0.28) |
|
|
|
(0.27) |
|
|
|
(0.22) |
|
|
Net
realized capital gains |
(0.02) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total
distributions |
(0.21) |
|
|
|
(0.25) |
|
|
|
(0.28) |
|
|
|
(0.27) |
|
|
|
(0.22) |
|
|
Net
asset value, end of year |
$16.89 |
|
|
|
$18.04 |
|
|
|
$17.55 |
|
|
|
$17.54 |
|
|
|
$17.18 |
|
|
Total
return (b) |
(5.27) |
|
% |
|
4.27 |
|
% |
|
1.66 |
|
% |
|
3.70 |
|
% |
|
(0.70) |
|
% |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
0.20 |
|
% |
|
0.20 |
|
% |
|
0.20 |
|
% |
|
0.20 |
|
% |
|
0.20 |
|
% |
Net
investment income |
0.86 |
|
% |
|
1.26 |
|
% |
|
1.54 |
|
% |
|
1.57 |
|
% |
|
1.26 |
|
% |
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$328 |
|
|
|
$297 |
|
|
|
$204 |
|
|
|
$201 |
|
|
|
$220 |
|
|
Portfolio
turnover rate (c) |
18 |
|
% |
|
30 |
|
% |
|
34 |
|
% |
|
33 |
|
% |
|
41 |
|
% |
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
Information
regarding how often the closing trading price of the Shares of each Fund was
above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund
for the most recently completed calendar year and the most recently completed
calendar quarter(s) since that year (or the life of the Fund, if shorter) can be
found at www.vaneck.com.
CONTINUOUS
OFFERING
The
method by which Creation Units are created and traded may raise certain issues
under applicable securities laws. Because new Creation Units are issued and sold
by the Trust on an ongoing basis, a “distribution,” as such term is used in the
Securities Act, may occur at any point. Broker dealers and other persons are
cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner which could render them statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act.
For
example, a broker dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares, and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a categorization
as an underwriter.
Broker
dealers who are not “underwriters” but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus dealing with
Shares that are part of an “unsold allotment” within the meaning of Section
4(a)(3)(C) of the Securities Act, would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
This is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, broker dealer firms should note that
dealers who are not underwriters but are participating in a distribution (as
contrasted with ordinary secondary market transactions) and thus dealing with
the Shares that are part of an overallotment within the meaning of Section
4(a)(3)(A) of the Securities Act would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
Firms that incur a prospectus delivery obligation with respect to Shares are
reminded that, under Rule 153 of the Securities Act, a prospectus delivery
obligation under Section 5(b)(2) of the Securities Act owed to an exchange
member in connection with a sale on the Exchange is satisfied by the fact that
the prospectus is available at the Exchange upon request. The prospectus
delivery mechanism provided in Rule 153 is only available with respect to
transactions on an exchange.
In
addition, certain affiliates of the Funds and the Adviser may purchase and
resell Fund shares pursuant to this Prospectus.
OTHER
INFORMATION
The
Trust was organized as a Delaware statutory trust on March 15, 2001. Its
Declaration of Trust currently permits the Trust to issue an unlimited number of
Shares of beneficial interest. If shareholders are required to vote on any
matters, each Share outstanding would be entitled to one vote. Annual meetings
of shareholders will not be held except as required by the 1940 Act and other
applicable law. See the Funds’ SAI for more information concerning the Trust’s
form of organization. Section 12(d)(1) of the 1940 Act restricts investments by
investment companies in the securities of other investment companies, including
Shares of a Fund. Registered investment companies are permitted to invest in the
Funds beyond the limits set forth in Section 12(d)(1) subject to certain terms
and conditions set forth in SEC regulations, including that such investment
companies enter into an agreement with such Fund.
The
Prospectus, SAI and any other Fund communication do not create any contractual
obligations between the Fund’s shareholders and the Trust, the Fund, the Adviser
and/or the Trustees. Further, shareholders are not intended third-party
beneficiaries of any contracts entered into by (or on behalf of) any Fund,
including contracts with the Adviser or other parties who provide services to
the Fund.
Dechert
LLP serves as counsel to the Trust, including the Funds. PricewaterhouseCoopers
LLP serves as the Trust’s independent registered public accounting firm and will
audit the Fund’s financial statements annually.
ADDITIONAL
INFORMATION
This
Prospectus does not contain all the information included in the Registration
Statement filed with the SEC with respect to the Funds’ Shares. The Funds’
Registration Statement, including this Prospectus, the Funds’ SAI and the
exhibits are available on the EDGAR database at the SEC’s website
(http://www.sec.gov), and copies may be obtained, after paying a duplicating
fee, by electronic request at the following email address: [email protected].
The
SAI for the Funds, which has been filed with the SEC, provides more information
about the Funds. The SAI for the Funds is incorporated herein by reference and
is legally part of this Prospectus. Additional information about the Funds’
investments is available in each Fund’s annual and semi-annual reports to
shareholders. In each Fund’s annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund’s performance during its last fiscal year. The SAI and the Funds’ annual
and semi-annual reports may be obtained without charge by writing to the Funds
at Van Eck Securities Corporation, the Funds’ Distributor, at 666 Third Avenue,
9th Floor, New York, New York 10017 or by calling the distributor at the
following number: Investor Information: 800.826.2333.
Shareholder
inquiries may be directed to the Funds in writing to 666 Third Avenue, 9th
Floor, New York, New York 10017 or by calling 800.826.2333.
The
Funds’ SAI is available at www.vaneck.com.
(Investment
Company Act file no. 811-10325)
For
more detailed information about the Funds, see the SAI dated December 1, 2022,
as may be supplemented from time to time. Additional information about the
Funds’ investments is or will be available in each Fund’s annual and semi-annual
reports to shareholders. In each Fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund’s performance during its last fiscal year.
Call
VanEck at 800.826.2333 to request, free of charge, the annual or semi-annual
reports, the SAI, or other information about the Funds or to make shareholder
inquiries. You may also obtain the SAI or a Fund’s annual or semi-annual
reports, by visiting the VanEck website at www.vaneck.com.
Reports
and other information about the Funds are available on the EDGAR Database on the
SEC’s internet site at http://www.sec.gov. In addition, copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following email address: [email protected].
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Transfer
Agent: State Street Bank and Trust Company SEC Registration Number:
333-123257 1940 Act Registration Number: 811-10325 |
800.826.2333 vaneck.com |
MUNIPRO12.2022 |