The
information in this Prospectus is not complete and may be changed. The Trust may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion
Preliminary
Prospectus dated February 14, 2022
VANECK®
Natural
Resources ETF HAP®
Oil
Services ETF OIH®
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Principal
U.S. Listing Exchange for each Fund: NYSE Arca, 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. |
800.826.2333 vaneck.com
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TABLE
OF CONTENTS |
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| Summary
Information |
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VANECK®
NATURAL RESOURCES ETF |
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck®
Natural Resources ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the VanEck®
Natural Resources Index (the “Natural Resources 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 |
0.49 |
% |
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Other
Expenses |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.49 |
% |
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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 May 1, 2023.
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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$50 |
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3 |
$157 |
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5 |
$274 |
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10 |
$616 |
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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 [ 26% ]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 Fund’s benchmark index. The Natural Resources Index is comprised of
publicly traded companies engaged (derive greater than 50% of revenues from
applicable sources) in the production and distribution of commodities and
commodity-related products and services in the following sectors: 1)
Agriculture; 2) Alternatives (Water & Alternative Energy); 3) Base and
Industrial Metals; 4) Energy; 5) Forest Products; and 6) Precious Metals. Such
companies may include small- and medium-capitalization companies and foreign
issuers. As of December 31, 2021, the Natural Resources Index included 391
securities of companies with a market capitalization range of between
______________________
1
Prior to September 1, 2021, the Fund's name was VanEck Vectors®
Natural Resources ETF.
approximately
$391.7 million and $259.1 billion and a weighted average market capitalization
of $51.4 billion. These amounts are subject to change. The Fund’s 80% investment
policy is non-fundamental and may be changed without shareholder approval upon
60 days’ prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Natural Resources Index by investing in a
portfolio of securities that generally replicates the Natural Resources Index.
Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Natural Resources Index and
does not seek temporary defensive positions that are inconsistent with its
investment objective of seeking to replicate the Natural Resources
Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Natural Resources Index concentrates in an
industry or group of industries. [As of [December 31, 2020], each of the basic
materials, consumer staples, energy and industrials sectors represented a
significant portion of the Fund.]
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.
Risk
of Investing in Natural Resources Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of natural resources companies. Investments in
natural resources and natural resources companies, which include companies
engaged in agriculture, alternatives (e.g.,
water and alternative energy), base and industrial metals, energy, forest
products and precious metals, can be significantly affected by events relating
to these industries, including international political and economic
developments, embargoes, tariffs, inflation, weather and natural disasters,
livestock diseases, limits on exploration, rapid changes in the supply and
demand for natural resources and other factors. The Fund’s portfolio securities
may experience substantial price fluctuations as a result of these factors, and
may move independently of the trends of other operating companies. Companies
engaged in the industries listed above may be adversely affected by changes in
government policies and regulations, technological advances and/or obsolescence,
environmental damage claims, energy conservation efforts, the success of
exploration projects, limitations on the liquidity of certain natural resources
and commodities and competition from new market entrants. Changes in general
economic conditions, including commodity price volatility, changes in exchange
rates, imposition of import controls, rising interest rates, prices of raw
materials and other commodities, depletion of resources and labor relations,
could adversely affect the Fund’s portfolio companies.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Foreign
Currency Risk. Because
the Fund’s assets may be invested in securities denominated in foreign
currencies, the proceeds received by the Fund from its investments and/or the
revenues received by the issuer will generally be in foreign currencies. The
Fund’s exposure to foreign currencies and changes in the value of foreign
currencies versus the U.S. dollar may result in reduced returns for the Fund,
and the value of certain foreign currencies may be subject to a high degree of
fluctuation. Moreover, the Fund may incur costs in connection with conversions
between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Natural Resources Index, may
negatively affect the Fund’s ability to replicate the performance of the Natural
Resources Index.
[Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.]
[Risk
of Investing in the Consumer Staples Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the consumer staples sector. The consumer
staples sector comprises companies whose businesses are less sensitive to
economic cycles, such as manufacturers and distributors of food and beverages
and producers of
non-durable
household goods and personal products. Companies in the consumer staples sector
may be adversely affected by changes in the worldwide economy, consumer
spending, competition, demographics and consumer preferences, exploration and
production spending. Companies in this sector are also affected by changes in
government regulation, world events and economic conditions.]
[Risk
of Investing in the Energy Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the energy sector. Companies operating in
the energy sector are subject to risks including, but not limited to, economic
growth, worldwide demand, political instability in the regions that the
companies operate, government regulation stipulating rates charged by utilities,
interest rate sensitivity, oil price volatility, energy conservation,
environmental policies, depletion of resources, the cost of providing the
specific utility services and other factors that they cannot control. In
addition, these companies are at risk of civil liability from accidents
resulting in injury, loss of life or property, pollution or other environmental
damage claims and risk of loss from terrorism and natural disasters. A downturn
in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.]
[Risk
of Investing in the Industrials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the industrials sector. The industrials
sector comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
may be adversely affected by environmental damages, product liability claims and
exchange rates.]
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Cash Transactions.
Unlike other exchange-traded funds (“ETFs”), the Fund expects to effect its
creations and redemptions at least partially for cash, rather than wholly for
in-kind securities. Therefore, it may be required to sell portfolio securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
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.
Index
Tracking Risk.
The Fund’s return may not match the return of the Natural Resources Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Natural Resources 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 Natural
Resources 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, which are not factored into the return of the
Natural Resources Index. Transaction costs, including brokerage costs, will
decrease the Fund’s net asset value
(“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 Natural Resources Index. Errors in the Natural
Resources Index data, the Natural Resources Index computations and/or the
construction of the Natural Resources Index in accordance with its methodology
may occur from time to time and may not be identified and corrected by the
Natural Resources 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 Natural Resources Index provider's errors
will be kept by the Fund and its shareholders and any losses or costs resulting
from the Natural Resources Index provider's errors will be borne by the Fund and
its shareholders. When the Natural Resources Index is rebalanced and the Fund in
turn rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Natural Resources Index, any transaction costs and
market exposure arising from such portfolio rebalancing will be borne directly
by the Fund and its shareholders. The Fund may not be fully invested at times
either as a result of cash flows into the Fund or reserves of cash held by the
Fund to meet redemptions or pay expenses. Apart from scheduled rebalances, the
Natural Resources Index provider or its agents may carry out additional ad hoc
rebalances to the Natural Resources Index. Therefore, errors and additional ad
hoc rebalances carried out by the Natural Resources Index provider or its agents
to the Natural Resources Index may increase the costs to and the tracking error
risk of the Fund. In addition, the Fund may not invest in certain securities
included in the Natural Resources Index, or invest in them in the exact
proportions in which they are represented in the Natural Resources Index. The
Fund’s performance may also deviate from the return of the Natural Resources
Index due to legal restrictions or limitations imposed by the governments of
certain countries, certain listing standards of the Fund’s listing exchange (the
“Exchange”), a lack of liquidity on stock exchanges in which such securities
trade, potential adverse tax consequences or other regulatory reasons (such as
diversification requirements). The Fund may value certain of its investments
and/or other assets based on fair value prices. To the extent the Fund
calculates its NAV based on fair value prices and the value of the Natural
Resources Index is based on securities’ closing prices on local foreign markets
(i.e.,
the value of the Natural Resources Index is not based on fair value prices), the
Fund’s ability to track the Natural Resources Index may be adversely affected.
In addition, any issues the Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the index tracking risk. 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.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. 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 Natural Resources Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Natural Resources Index. Changes to the composition of the Natural Resources
Index in connection with a rebalancing or reconstitution of the Natural
Resources Index may cause the Fund to experience increased volatility, during
which time the Fund’s index tracking risk may be heightened.
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 equity securities traded on an exchange, 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 Natural Resources 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 Natural Resources Index provider to
postpone a scheduled rebalance or reconstitution, which could cause the Natural
Resources 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 Natural Resources 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. 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 [TO BE UPDATED]
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| Best
Quarter: |
21.95% |
4Q
2020 |
| Worst
Quarter: |
-32.16% |
1Q
2020 |
Average
Annual Total Returns for the Periods Ended December 31, 2020
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.
[TO
BE UPDATED]
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Past
One
Year |
Past
Five
Years |
Past
Ten
Years |
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VanEck®
Natural Resources ETF (return before taxes) |
6.73% |
10.55% |
2.36% |
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VanEck®
Natural Resources ETF (return after taxes on
distributions) |
6.21% |
10.01% |
1.83% |
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VanEck®
Natural Resources ETF (return after taxes on distributions and sale of
Fund Shares) |
4.50% |
8.41% |
1.79% |
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VanEck®
Natural Resources Index (reflects no deduction for fees, expenses or
taxes, except withholding taxes)* |
6.35% |
10.64% |
2.50% |
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S&P
500®
Index (reflects no deduction for fees, expenses or taxes) |
18.40% |
15.22% |
13.88% |
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*
Prior to April 11, 2017, the Natural Resources Index was named the
RogersTM
– Van Eck Natural Resources Index. Prior to May 1, 2014, the Natural Resources
Index was named the RogersTM
– Van Eck Hard Assets Producers Index.
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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Peter
H. Liao |
Portfolio
Manager |
August
2008 |
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Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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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®
Oil Services ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS®
US Listed Oil Services 25 Index (the “Oil Services 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 |
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 May 1, 2023.
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 [ 33%] 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 Fund’s benchmark index. The Oil Services Index includes common
stocks and depositary receipts of U.S. exchange-listed companies in the oil
services segment. Such companies may include small- and medium-capitalization
companies and foreign companies that are listed on a U.S. exchange. To be
initially eligible for inclusion in the Oil Services Index, companies must
generate at least 50% of their revenues from oil services to the upstream oil
sector, which includes companies engaged primarily in oil equipment, oil
services or oil drilling. Of the largest 50 stocks in the oil services sector by
full market capitalization, the top 25 by free-float market capitalization
(e.g.,
includes only shares that are readily available for trading in the market) and
three month average daily trading volume are included in the Oil
______________________
1
Prior to September 1, 2021, the Fund's name was VanEck Vectors®
Oil Services ETF.
Services
Index. As of December 31, 2021, the Oil Services Index included 25 securities of
companies with a market capitalization range of between approximately $305
million and $42 billion and a weighted average market capitalization of $14.4
billion. These amounts are subject to change. The Fund’s 80% investment policy
is non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Oil Services Index by investing in a portfolio
of securities that generally replicates the Oil Services Index. Unlike many
investment companies that try to “beat” the performance of a benchmark index,
the Fund does not try to “beat” the Oil Services Index and does not seek
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Oil Services Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Oil Services Index concentrates in an industry or group of industries. [As
of [December 31, 2020], each of the energy sector, oil and gas drilling
sub-industry, and oil and gas equipment and services sub-industry represented a
significant portion of the Fund.]
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.
Risk
of Investing in Oil Services Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of oil services companies. The profitability of
oil services companies is related to worldwide energy prices, including all
sources of energy, and exploration and production spending. The price of energy,
the earnings of oil services companies, and the value of such companies’
securities are subject to significant volatility. Oil services companies are
also subject to risks of changes in exchange rates and the price of oil and gas,
changes in prices for competitive energy services, changes in the global supply
of and demand for oil and gas, government regulation, the imposition of import
controls, world events, negative perception, depletion of resources and general
economic conditions, development of alternative energy sources, energy
conservation efforts, technological developments and labor relations, as well as
market, economic, social and political risks of the countries where oil services
companies are located or do business. Oil services companies operate in a highly
competitive and cyclical industry, with intense price competition.
Oil
services companies are exposed to significant and numerous operating hazards.
Oil services companies can be significantly affected by natural disasters and
adverse weather conditions in the regions in which they operate. The revenues of
oil services companies may be negatively affected by contract termination and
renegotiation. Oil services companies are subject to, and may be adversely
affected by, extensive federal, state, local and foreign laws, rules and
regulations. Oil services companies may also be adversely affected by
environmental damage claims and other types of litigation. Changes to
environmental protection laws, including the implementation of policies with
less stringent environmental protection standards and those geared away from
sustainable energy development, could lead to fluctuations in supply, demand and
prices of oil and gas. The international operations of oil services companies
expose them to risks associated with instability and changes in economic and
political conditions, social unrest and acts of war, foreign currency
fluctuations, changes in foreign regulations and other risks inherent to
international business. Additionally, changes to U.S. trading policies could
cause friction with certain oil producing countries and between the governments
of the United States and other major exporters of oil to the United States. Some
oil services companies are engaged in other lines of business unrelated to oil
services, and they may experience problems with these lines of business which
could adversely affect their operating results. The operating results of these
companies may fluctuate as a result of these additional risks and events in the
other lines of business. In addition, a company’s ability to engage in new
activities may expose it to business risks with which it has less experience
than it has with the business risks associated with its traditional businesses.
Despite a company’s possible success in traditional oil services activities,
there can be no assurance that the other lines of business in which these
companies are engaged will not have an adverse effect on a company’s business or
financial condition.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Oil Services Index, may
negatively affect the Fund’s ability to replicate the performance of the Oil
Services Index.
[Risk
of Investing in the Energy Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the energy sector. Companies operating in
the energy sector are subject to risks including, but not limited to, economic
growth, worldwide demand, political instability in the regions that the
companies operate, government regulation stipulating rates charged by utilities,
interest rate sensitivity, oil price volatility, energy conservation,
environmental policies,
depletion
of resources, the cost of providing the specific utility services and other
factors that they cannot control. In addition, these companies are at risk of
civil liability from accidents resulting in injury, loss of life or property,
pollution or other environmental damage claims and risk of loss from terrorism
and natural disasters. A downturn in the energy sector of the economy, adverse
political, legislative or regulatory developments or other events could have a
larger impact on the Fund than on an investment company that does not invest a
substantial portion of its assets in the energy sector. At times, the
performance of securities of companies in the energy sector may lag the
performance of other sectors or the broader market as a whole. The price of oil,
natural gas and other fossil fuels may decline and/or experience significant
volatility, which could adversely impact companies operating in the energy
sector.]
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
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.
Index
Tracking Risk.
The Fund’s return may not match the return of the Oil Services Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Oil Services 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 Oil
Services 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, which are not factored into the return of the Oil
Services Index. Transaction costs, including brokerage costs, will decrease the
Fund’s net asset value (“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 Oil Services Index. Errors
in the Oil Services Index data, the Oil Services Index computations and/or the
construction of the Oil Services Index in accordance with its methodology may
occur from time to time and may not be identified and corrected by the Oil
Services 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 Oil Services Index provider's errors will be kept by the
Fund and its shareholders and any losses or costs resulting from the Oil
Services Index provider's errors will be borne by the Fund and its shareholders.
When the Oil Services Index is rebalanced and the Fund in turn rebalances its
portfolio to attempt to increase the correlation between the Fund’s portfolio
and the Oil Services Index, any transaction costs and market exposure arising
from such portfolio rebalancing will be borne directly by the Fund and its
shareholders. Apart from scheduled rebalances, the Oil Services Index provider
or its agents may carry out additional ad hoc rebalances to the Oil Services
Index. Therefore, errors and additional ad hoc rebalances carried out by the Oil
Services Index provider or its agents to the Oil Services Index may increase the
costs to and the tracking error risk of the Fund. In addition, the Fund may not
invest in certain securities included in the Oil Services Index, or invest in
them in the exact proportions in which they are represented in the Oil Services
Index. The Fund’s performance may also deviate from the return of the Oil
Services Index due to legal restrictions or limitations imposed by the
governments of certain countries, certain listing standards of the Fund’s
listing exchange (the “Exchange”), a lack of liquidity on stock exchanges in
which such securities trade, potential adverse tax consequences or other
regulatory reasons (such as diversification requirements). The Fund may value
certain of its investments and/or other assets based on fair value prices. To
the extent the Fund calculates its NAV based on fair value prices and the value
of the Oil Services Index is based on securities’ closing prices on local
foreign markets (i.e.,
the value of the Oil Services Index is not based on fair value prices), the
Fund’s ability to track the Oil Services Index may be adversely affected. In
addition, any issues the Fund encounters with regard to currency convertibility
(including the cost of borrowing funds, if any) and
repatriation
may also increase the index tracking risk. 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.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. 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 Oil Services Index. In light of the factors discussed
above, the Fund’s return may deviate significantly from the return of the Oil
Services Index. Changes to the composition of the Oil Services Index in
connection with a rebalancing or reconstitution of the Oil Services Index may
cause the Fund to experience increased volatility, during which time the Fund’s
index tracking risk may be heightened.
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 equity securities traded on an exchange, 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 Oil Services 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 Oil Services Index provider to postpone
a scheduled rebalance or reconstitution, which could cause the Oil Services
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.
Issuer-Specific
Changes Risk. The
value of individual securities or particular types of securities in the Fund’s
portfolio can be more volatile than the market as a whole and can perform
differently from the value of the market as a whole, which may have a greater
impact if the Fund’s portfolio is concentrated in a country, group of countries,
region, market, industry, group of industries, sector or asset class. The value
of securities of smaller issuers can be more volatile than that of larger
issuers.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified” fund under the 1940 Act.
Therefore, the Fund may invest a relatively high percentage of its assets in a
smaller number of issuers or may invest a larger proportion of its assets in a
single issuer. Moreover, the gains and losses on a single investment may have a
greater impact on the Fund’s NAV and may make the Fund more volatile than more
diversified funds. The Fund may be particularly vulnerable to this risk because
the Oil Services Index is comprised of securities of a limited number of
companies.
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 Oil Services 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. 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 [TO BE UPDATED]
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| Best
Quarter: |
59.39% |
4Q
2020 |
| Worst
Quarter: |
-69.68% |
1Q
2020 |
Average
Annual Total Returns for the Periods Ended December 31, 2020
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.
[TO
BE UPDATED]
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Past
One
Year |
Past
Five
Years |
Since
Inception (12/20/2011) |
|
|
VanEck
Oil Services ETF (return before taxes) |
-41.31% |
-20.38% |
-14.70% |
|
|
VanEck
Oil Services ETF (return after taxes on distributions) |
-41.52% |
-20.86% |
-15.17% |
|
|
VanEck
Oil Services ETF (return after taxes on distributions
and sale of Fund
Shares) |
-24.38% |
-13.44% |
-8.93% |
|
|
MVIS
US Listed Oil Services 25 Index (reflects no deduction for fees, expenses
or taxes, except withholding taxes) |
-41.99% |
-20.62% |
-14.87% |
|
|
S&P
500®
Index (reflects no deduction for fees, expenses or taxes) |
18.40% |
15.22% |
15.39% |
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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 |
|
|
Peter
H. Liao |
Portfolio
Manager |
December
2011 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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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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SUMMARY
INFORMATION ABOUT PURCHASES AND SALES OF FUND SHARES, TAXES AND PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL
INTERMEDIARIES |
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
Each
Fund’s distributions are taxable and will generally be taxed as ordinary income
or capital gains.
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.
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ADDITIONAL
INFORMATION ABOUT THE FUNDS’ INVESTMENT STRATEGIES AND
RISKS |
PRINCIPAL
INVESTMENT STRATEGIES
The
Adviser anticipates that, generally, each Fund will hold or gain exposure to all
of the securities that comprise its benchmark index (the "Index") in proportion
to their weightings in such Index. However, under various circumstances, it may
not be possible or practicable to purchase all of those securities in those
weightings. In these circumstances, a Fund may purchase a sample of securities
in its Index. There also may be instances in which the Adviser may choose to
underweight or overweight a security in a Fund’s Index, purchase securities not
in the Fund’s Index that the Adviser believes are appropriate to substitute for
certain securities in such Index or utilize various combinations of other
available investment techniques in seeking to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Fund’s Index.
Each Fund may sell securities that are represented in its Index in anticipation
of their removal from its Index or purchase securities not represented in its
Index in anticipation of their addition to such Index. Each Fund may also, in
order to comply with the tax diversification requirements of the Internal
Revenue Code of 1986, as amended (the “Code”), temporarily invest in securities
not included in its Index that are expected to be highly correlated with the
securities included in its 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 for each Fund unless otherwise noted.
Investors
in the Funds should be willing to accept a high degree of volatility in the
price of the Funds’ Shares and the possibility of significant losses. An
investment in the Funds involves a substantial degree of risk. An investment in
the Funds 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 Funds,
each of which could significantly and adversely affect the value of an
investment in a Fund.
Risk
of Investing in Natural Resources Companies.
(VanEck Natural Resources ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of the
natural resources companies. Investments in natural resources and natural
resources companies, which include companies engaged in agriculture,
alternatives (e.g.,
water and alternative energy), base and industrial metals, energy, forest
products and precious metals, can be significantly affected by events relating
to these industries, including international political and economic
developments, embargoes, tariffs, inflation, weather and natural disasters,
livestock disease, limits on exploration, rapid changes in the supply of and
demand for natural resources and other factors. The Fund’s portfolio securities
may experience substantial price fluctuations as a result of these factors, and
may move independently of the trends of other operating companies. Companies
engaged in the industries listed above may be adversely affected by changes in
government policies and regulations, technological advances and/or obsolescence,
environmental damage claims, energy conservation efforts, the success of
exploration projects, limitations on the liquidity of certain natural resources
and commodities and competition from new market entrants. Political risks and
the other risks to which foreign securities are subject may also affect domestic
natural resource companies if they have significant operations or investments in
foreign countries. Changes in general economic conditions, including commodity
price volatility, changes in exchange rates, imposition of import controls,
rising interest rates, prices of raw materials and other commodities, depletion
of resources and labor relations, could adversely affect the Fund’s portfolio
companies. The highly cyclical nature of the natural resources sector may affect
the earnings or operating cash flows of natural resources
companies.
Natural
resources companies engaged in crude oil and natural gas exploration,
development, or production, natural gas gathering and processing, crude oil
refining and transportation and coal mining or sales may be directly affected by
their respective natural resources commodities prices. The volatility of, and
interrelationships between, commodity prices can also indirectly affect certain
natural resources companies due to the potential impact on the volume of
commodities transported, processed, stored or distributed. In addition, the
companies in which the Fund invests may also be subject to the risks associated
with the energy and basic materials sectors, including the risks generally
associated with the extraction of natural resources, such as the risks of mining
and drilling. Securities of companies within natural resources can perform
differently than the overall market. This may be due to changes in such things
as the regulatory or competitive environment or to changes in investor
perceptions regarding a particular type of natural resource. Because the Fund
may allocate relatively more assets to certain types of natural resources than
others, the Fund’s performance may be more sensitive to developments which
affect the types of natural resources focused on by the Fund.
Risk
of Investing in Oil Services Companies.
(VanEck Oil Services ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of oil
services companies. The profitability of oil services companies is related to
worldwide energy prices, including all sources of energy, and exploration and
production costs. The price of energy, the earnings of oil services companies,
and the value of such companies’ securities are subject to significant
volatility.
Oil
services companies may have significant capital investments in, or engage in
transactions involving, emerging market countries, which may heighten these
risks. Oil services companies are also subject to risks of changes in exchange
rates and the price of oil and gas, changes in prices for competitive energy
services, changes in the global supply of and demand for oil and gas, the
imposition of import controls, world events, actions of OPEC, negative
perception and publicity, depletion of resources and general economic
conditions, development of alternative energy sources, energy conservation
efforts, technological developments and labor relations, as well as market,
economic, social and political risks of the countries where oil services
companies are located or do business. The values of securities of oil services
companies are subject to swift price and supply fluctuations caused by events
relating to international politics, including political instability,
expropriation, social unrest and acts of war, energy conservation, the success
of exploration projects and tax and other governmental regulatory policies. Oil
services companies may also be subject to contractual fixed pricing, which may
increase the cost of business and limit these companies’ earnings. Additionally,
a significant portion of the revenues of these companies depend on a relatively
small number of customers, including governmental entities and utilities. As a
result, governmental budget restraints may have a material adverse effect on the
stock prices of companies in the industry. Oil services companies operate in a
highly competitive and cyclical industry, with intense price
competition.
Oil
services companies are exposed to significant and numerous operating hazards.
Oil services companies’ operations are subject to hazards inherent in the oil
and gas industry, such as fire, explosion, blowouts, loss of well control, oil
spills, pipeline and equipment leaks and ruptures and discharges or releases of
toxic or hazardous gases. Oil and gas exploration and production can be
significantly affected by natural disasters and adverse weather conditions in
the regions in which they operate. The revenues of oil services companies may be
negatively affected by contract termination and renegotiation. In the oil
services sector, it is customary for contracts to provide for either automatic
termination or termination at the option of the customer if the drilling unit is
destroyed or lost or if drilling operations are suspended for a specified period
of time as a result of events beyond the control of either party or because of
equipment breakdowns. In periods of depressed market conditions, the customers
of oil services companies may not honor the terms of existing contracts and may
terminate contracts or seek to renegotiate contract rates and terms to reduce
their obligations.
Oil
services companies are subject to, and may be adversely affected by, extensive
federal, state, local and foreign laws, rules and regulations. Oil services
companies may also be adversely affected by environmental damage claims and
other types of litigation. Laws and regulations protecting the environment may
expose oil services companies to liability for the conduct of or conditions
caused by others or for acts that were in compliance with all applicable laws at
the time they were performed. Changes to environmental protection laws,
including the implementation of policies with less stringent environmental
protection standards and those geared away from sustainable energy development,
could lead to fluctuations in supply, demand and prices of oil and gas. The
international operations of oil services companies expose them to risks
associated with instability and changes in economic and political conditions,
foreign currency fluctuations, changes in interest rates, changes in foreign
regulations and other risks inherent to international business. Additionally,
changes to U.S. trading policies could cause friction with certain oil producing
countries and between the governments of the United States and other major
exporters of oil to the United States. Some oil services companies are engaged
in other lines of business unrelated to oil services, and they may experience
problems with these lines of business which could adversely affect their
operating results. The operating results of these companies may fluctuate as a
result of these additional risks and events in the other lines of business. In
addition, a company’s ability to engage in new activities may expose it to
business risks with which it has less experience than it has with the business
risks associated with its traditional businesses. Despite a company’s possible
success in traditional oil services activities, there can be no assurance that
the other lines of business in which these companies are engaged will not have
an adverse effect on a company’s business or financial condition.
Risk
of Investing in the Mining Industry.
(VanEck Natural Resources ETF only.) Companies operating in the mining industry
invest in stocks and depositary receipts of U.S. and foreign companies that are
involved in mining and are subject to certain risks associated with such
companies. Investments in mining companies may be speculative. Competitive
pressures may have a significant effect on the financial condition of such
companies. Mining companies are highly dependent on the price of the underlying
metal or element. These prices may fluctuate substantially over short periods of
time so the Fund’s Share price may be more volatile than other types of
investments.
In
particular, a drop in the price of gold, silver bullion, steel or rare
earth/strategic metals would particularly adversely affect the profitability of
small- and medium-capitalization mining companies and their ability to secure
financing. Furthermore, companies that are only in the exploration stage are
typically unable to adopt specific strategies for controlling the impact of such
price changes.
Some
of the companies in the Fund’s Index may be early stage mining companies that
are in the exploration stage only or that hold properties that might not
ultimately produce these metals. Exploration and development involves
significant financial risks over a significant period of time which even a
combination of careful evaluation, experience and knowledge may not eliminate.
Few properties which are explored are ultimately developed into producing mines.
Major expenditures may be required to establish reserves by drilling and to
construct mining and processing facilities at a site. In addition, many early
stage miners operate at a loss and are dependent on securing equity and/or debt
financing, which might be more difficult to secure for an early stage mining
company than for a more established counterpart.
Risk
of Investing in Foreign Securities.
Investments in the securities of foreign issuers involve risks beyond those
associated with investments in U.S. securities. These additional risks include
greater market volatility, the availability of less reliable financial
information, higher transactional and custody costs, taxation by foreign
governments, decreased market liquidity and political instability. Because
certain foreign securities markets may be limited in size, the activity of large
traders may have an undue influence on the prices of securities that trade in
such markets. Certain foreign markets that have historically been considered
relatively stable may become volatile in response to changed conditions or new
developments. Increased interconnectivity of world economies and financial
markets increases the possibility that adverse developments and conditions in
one country or region will affect the stability of economies and financial
markets in other countries or regions. Each Fund invests in securities of
issuers located in countries whose economies are heavily dependent upon trading
with key partners. Any reduction in this trading may have an adverse impact on a
Fund’s investments. Because each Fund may invest in securities denominated in
foreign currencies and some of the income received by each Fund may be in
foreign currency, changes in currency exchange rates may negatively impact each
Fund’s return. The risks of investing in emerging market countries are greater
than risks associated with investments in foreign developed
countries.
Foreign
issuers are often subject to less stringent requirements regarding accounting,
auditing, financial reporting and record keeping than are U.S. issuers, and
therefore, not all material information may be available or reliable. Securities
exchanges or foreign governments may adopt rules or regulations that may
negatively impact a Fund’s ability to invest in foreign securities or may
prevent each Fund from repatriating its investments. Each Fund may also invest
in depositary receipts, which involve similar risks to those associated with
investments in foreign securities. In addition, each Fund may not receive
shareholder communications or be permitted to vote the securities that it holds,
as the issuers may be under no legal obligation to distribute shareholder
communications.
Certain
foreign markets may rely heavily on particular industries or foreign capital and
are more vulnerable to diplomatic developments, the imposition of economic
sanctions against a particular country or countries, organizations, entities
and/or individuals, changes in international trade patterns, trade barriers, and
other protectionist or retaliatory measures. The United States and other nations
or international organizations may impose economic sanctions or take other
actions that may adversely affect issuers of specific countries. Economic
sanctions could, among other things, effectively restrict or eliminate each
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make each Fund’s investments in such
securities harder to value. These sanctions, any future sanctions or other
actions, or even the threat of future sanctions or other actions, may negatively
affect the value and liquidity of a Fund.
Also,
certain issuers located in foreign countries in which each Fund invests may
operate in, or have dealings with, countries subject to sanctions and/or
embargoes imposed by the U.S. Government and the United Nations and/or countries
identified by the U.S. Government as state sponsors of terrorism. As a result,
an issuer may sustain damage to its reputation if it is identified as an issuer
which operates in, or has dealings with, such countries. A Fund, as an investor
in such issuers, may be indirectly subject to those risks.
Foreign
Currency Risk. Because
a Fund’s assets that are invested in equity securities of issuers in foreign
countries may be denominated in foreign currencies, the proceeds received by the
Fund from these investments will generally be in foreign currencies. A Fund’s
exposure to foreign currencies and changes in the value of foreign currencies
versus the U.S. dollar may result in reduced returns for the Fund, and the value
of certain foreign currencies may be subject to a high degree of fluctuation.
Moreover, a Fund may incur costs in connection with conversions between U.S.
dollars and foreign currencies. The value of certain emerging market countries’
currency may be subject to a high degree of fluctuation. This fluctuation may be
due to changes in interest rates, investors’ expectations concerning inflation
and interest rates, the emerging market country’s debt levels and trade deficit,
the effects of monetary policies issued by the United States, foreign
governments, central banks or supranational entities, the imposition of currency
controls or other national or global political or economic developments. For
example, certain emerging market countries have experienced economic challenges
and liquidity issues with respect to their currency. The economies of certain
emerging market countries can be significantly affected by currency
devaluations. Certain emerging market countries may also have managed currencies
which are maintained at artificial levels relative to the U.S. dollar rather
than at levels determined by the market. This type of system could lead to
sudden and large adjustments in the currency, which in turn, may have a negative
effect on a Fund and its investments.
Risk
of Investing in Depositary Receipts.
A Fund may invest in depositary receipts (including American Depositary Receipts
("ADRs"), which involve similar risks to those associated with investments in
foreign securities. Depositary receipts are receipts listed on U.S. or foreign
exchanges issued by banks or trust companies that entitle the holder to all
dividends and capital gains that are paid out on the underlying foreign shares.
The issuers of certain depositary receipts are under no obligation to distribute
shareholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in a Fund’s Index, may negatively
affect a Fund’s ability to replicate the performance of its Index. In addition,
investments in depositary receipts that are not included in a Fund’s Index may
increase tracking error.
[Risk
of Investing in the Basic Materials Sector.
(VanEck Natural Resources ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of the
basic materials sector. Companies engaged in the production and distribution of
basic materials may be adversely affected by changes in world events, political
and economic conditions, energy conservation, environmental policies, commodity
price volatility, changes in exchange rates, imposition of import controls,
increased competition, depletion of resources and labor relations.]
[Risk
of Investing in the Consumer Staples Sector.
(VanEck Natural Resources ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of the
consumer staples sector. The consumer staples sector comprises companies whose
businesses are less sensitive to economic cycles, such as manufacturers and
distributors of food and beverages and producers of non-durable household goods
and personal products. Companies in the consumer staples sector may be adversely
affected by changes in the worldwide economy, consumer spending, competition,
demographics and consumer preferences, exploration and production spending.
Companies in this sector are also affected by changes in government regulation,
world events and economic conditions.]
[Risk
of Investing in the Energy Sector.
A Fund will be sensitive to changes in, and its performance will depend to a
greater extent on, the overall condition of the energy sector. Companies
operating in the energy sector are subject to risks including, but not limited
to, economic growth, worldwide demand, political instability in the regions that
the companies operate, government regulation stipulating rates charged by
utilities, interest rate sensitivity, oil price volatility, energy conservation,
environmental policies, depletion of resources and the cost of providing the
specific utility services and other factors that they cannot
control.
The
energy sector is cyclical and is highly dependent on commodity prices; prices
and supplies of energy may fluctuate significantly over short and long periods
of time due to, among other things, national and international political
changes, Organization of Petroleum Exporting Countries (“OPEC”) policies,
changes in relationships among OPEC members and between OPEC and oil-importing
nations, the regulatory environment, taxation policies, and the economy of the
key energy-consuming countries. Commodity prices have recently been subject to
increased volatility and declines, which may negatively affect companies in
which the Fund invests.
Companies
in the energy sector may be adversely affected by terrorism, natural disasters
or other catastrophes. Companies in the energy sector are at risk of civil
liability from accidents resulting in injury, loss of life or property,
pollution or other environmental damage claims. Disruptions in the oil industry
or shifts in fuel consumption may significantly impact companies in this sector.
Significant oil and gas deposits are located in emerging markets countries where
corruption and security may raise significant risks, in addition to the other
risks of investing in emerging markets.
Companies
in the energy sector may also be adversely affected by changes in exchange
rates, tax treatment, government regulation and intervention, negative
perception, efforts at energy conservation and world events in the regions in
which the companies operate (e.g.,
expropriation, nationalization, confiscation of assets and property or the
imposition of restrictions on foreign investments and repatriation of capital,
military coups, social unrest, violence or labor unrest). Because a significant
portion of revenues of companies in this sector is derived from a relatively
small number of customers that are largely comprised of governmental entities
and utilities, governmental budget constraints may have a significant impact on
the stock prices of companies in this sector. The energy sector is highly
regulated. Entities operating in the energy sector are subject to significant
regulation of nearly every aspect of their operations by federal, state and
local governmental agencies. Such regulation can change rapidly or over time in
both scope and intensity. Stricter laws, regulations or enforcement policies
could be enacted in the future which would likely increase compliance costs and
may materially adversely affect the financial performance of companies in the
energy sector.
A
downturn in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.]
[Risk
of Investing in the Industrials Sector.
(VanEck Natural Resources ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of the
industrials sector. The industrials sector comprises companies who produce
capital goods used in construction and manufacturing, such as companies that
make and sell machinery, equipment and supplies that are used to produce other
goods. Companies in the industrials sector may be adversely affected by changes
in government regulation, world events and economic conditions. In addition,
companies in the industrials sector may be adversely affected by environmental
damages, product liability claims and exchange rates. The stock prices of
companies in the industrials sector are affected by supply and demand both for
their specific product or service and for industrial sector products in general.
The products of manufacturing companies may face product obsolescence due to
rapid technological developments and frequent new product introduction. In
addition, the industrials sector may also be adversely affected by changes or
trends in commodity prices, which may be influenced or characterized by
unpredictable factors.]
Risk
of Investing in Small- and/or Medium-Capitalization Companies.
A Fund may invest in small- and/or medium-capitalization companies and,
therefore, may be subject to certain risks associated with small- and/or
medium-capitalization companies. These companies are often subject to less
analyst coverage and may be in early and less predictable periods of their
corporate existences, with little or no record of profitability. In addition,
these companies often have greater price volatility, lower trading volume and
less liquidity than larger more established companies. These companies tend to
have smaller revenues, narrower product lines, less management depth and
experience, smaller shares of their product or service markets, fewer financial
resources and less competitive strength than large-capitalization companies.
Returns on investments in securities of small- and/or medium-capitalization
companies could trail the returns on investments in securities of larger
companies.
Risk
of Cash Transactions.
Unlike other ETFs, VanEck Natural Resources ETF effects its creations and
redemptions at least partially for cash, rather than wholly for in-kind
securities. Because this Fund currently intends to effect a portion of
redemptions for cash, rather than in-kind distributions, it may be required to
sell portfolio securities in order to obtain the cash needed to distribute
redemption proceeds, which involves transaction costs that the Fund may not have
incurred had it effected redemptions entirely in kind. These costs may include
brokerage costs and/or taxable gains or losses, which may be imposed on the Fund
and decrease the Fund's NAV to the extent such costs are not offset by a
transaction fee payable by an AP. If the Fund recognizes gain on these sales,
this generally will cause the Fund to recognize gain it might not otherwise have
recognized if it were to distribute portfolio securities in-kind, or to
recognize such gain sooner than would otherwise be required. As a result, an
investment in the Fund may be less tax-efficient than an investment in a more
conventional ETF. Other ETFs generally are able to make in-kind redemptions and
avoid realizing gains in connection with transactions designed to raise cash to
meet redemption requests. The Fund generally intends to distribute these gains
to shareholders to avoid being taxed on this gain at the Fund level and
otherwise comply with the special tax rules that apply to it. This strategy may
cause shareholders to be subject to tax on gains they would not otherwise be
subject to, or at an earlier date than, if they had made an investment in a
different ETF. Additionally, transactions may have to be carried out over
several days if the securities market is relatively illiquid and may involve
considerable transaction fees and taxes.
Equity
Securities Risk.
The value of the equity securities held by a Fund may fall due to general market
and economic conditions, perceptions regarding the markets in which the issuers
of securities held by a Fund participate, or factors relating to specific
issuers in which a Fund invests. For example, an adverse event, such as an
unfavorable earnings report, may result in a decline in the value of equity
securities of an issuer held by a Fund; the price of the equity securities of an
issuer may be particularly sensitive to general movements in the securities
markets; or a drop in the securities markets may depress the price of most or
all of the equities securities held by a Fund. In addition, the equity
securities of an issuer in a Fund’s portfolio may decline in price if the issuer
fails to make anticipated dividend payments. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility. A change in the financial condition,
market perception or the credit rating of an issuer of securities included in a
Fund’s Index may cause the value of its securities to decline.
Market
Risk.
The prices of the securities in a 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. Overall securities
values could decline generally or could underperform other investments. An
investment in a Fund may lose money.
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.
Index
Tracking Risk.
A 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 a Fund effects
creations and redemptions for cash) raising cash to meet redemptions or
deploying cash in connection with newly created Creation Units, which are not
factored into the return of each Fund's Index. Transaction costs, including
brokerage costs, will decrease a 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 Index. Unusual market conditions may cause
a Fund's Index's provider to postpone a scheduled rebalance, which could cause
such Index to vary from its normal or expected composition. There is no
assurance that the Index Providers (defined herein) or any agents that may act
on their behalf will compile each Fund’s Index accurately, or that each 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 Index
Providers 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 the Index Providers or their agents will generally be borne 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 an Index’s other constituents. Such
errors may negatively or positively impact a Fund and its shareholders. Any
gains due to the Index Provider’s or others’ errors will be kept by the
applicable Funds and its shareholders and any losses resulting from an Index
Providers’ or others’ errors will be borne by the applicable Fund and its
shareholders. 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 may be borne directly by the applicable
Fund and its shareholders. A Fund may not be fully invested at times, either as
a result of cash flows into the Fund (if the Fund effects creations and
redemptions for cash) or reserves of cash held by the Fund to pay expenses or
meet redemptions. Apart
from scheduled rebalances, a Fund's Index Provider or their agents may carry out
additional ad hoc rebalances to the Fund's Index. Therefore, errors and
additional ad hoc rebalances carried out by a Fund's Index Provider or their
agents to the Fund’s Index may increase the costs to and the tracking error risk
of the Fund. In
addition, a Fund may not invest in certain securities and/or other
assets
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, certain Exchange listing standards, a lack
of liquidity in markets in which securities trade, potential adverse tax
consequences or other regulatory reasons (such as diversification requirements).
A lack of liquidity may be due to various events, including market events,
economic conditions or investor perceptions. Illiquid securities may be
difficult to value and their value may be lower than the market price of
comparable liquid securities, which would negatively affect a Fund's
performance. 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. Certain Funds may also need to rely on borrowings to meet redemptions,
which may lead to increased expenses. 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 may accept cash in
connection with a purchase of Creation Units or effect their redemptions in cash
rather than in-kind and, as a result, a Fund’s ability to match the return of
its respective Index will be affected.
Certain
Funds may fair value certain of the foreign securities and/or underlying
currencies or other assets it holds, except those securities primarily traded on
exchanges that close at the same time the Fund calculates its NAV. To the extent
a Fund calculates its NAV based on fair value prices and the value of its Index
is based on securities’ closing prices on local foreign markets (i.e.,
the value of its Index is not based on fair value prices) or if a Fund otherwise
calculates its NAV based on prices that differ from those used in calculating
its 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 a Fund’s ability to replicate the
performance of its Index. In addition, if a Fund utilizes depositary receipts
and other derivative instruments that are not included in its Index, its return
may not correlate as well with the returns 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 may 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.
Authorized
Participant 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. The Distributor (defined herein), 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 at a 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 an 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 an Exchange is subject to trading halts caused
by extraordinary market volatility pursuant to the relevant Exchange’s “circuit
breaker” rules. If a trading halt or unanticipated early close of an Exchange
occurs, a shareholder may be unable to purchase or sell Shares of a Fund. There
can be no assurance that the requirements of an Exchange necessary to maintain
the listing of a Fund will continue to be met or will remain
unchanged.
Passive
Management Risk.
Unlike many investment companies, the Funds are not “actively” managed.
Therefore, unless a specific security is removed from its 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 Index, the
Fund may be forced to sell such security at an inopportune time or for prices
other than at current market values. An investment in a Fund involves risks
similar to those of investing in any Fund that invests in equity securities
traded on an exchange, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. Each Fund’s 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.
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 will 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 an 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, 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 a
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 an 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 an Exchange. Liquidity in those securities may be reduced
after the applicable closing times. Accordingly, during the time when an
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 a 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
Funds.
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
a Fund’s trading volume and market liquidity and may increase if a Fund’s
trading volume, the spread of a 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 a Fund’s NAV,
and the discount is likely to be greatest during significant market
volatility.
Issuer-Specific
Changes Risk.
(VanEck Oil Services ETF only.) The value of individual securities or particular
types of securities in the Fund’s portfolio can be more volatile than the market
as a whole and can perform differently from the value of the market as a whole,
which may have a greater impact if the Fund’s portfolio is concentrated in a
country, group of countries, region, market, industry, group of industries,
sector or asset class. The value of securities of smaller issuers can be more
volatile than that of larger
issuers.
A change in the financial condition, market perception or credit rating of an
issuer of securities included in the Fund’s Index may cause the value of its
securities to decline.
Non-Diversified
Risk.
VanEck Oil Services ETF is a separate investment portfolio of VanEck ETF Trust
(the “Trust”), which is an open-end investment company registered under the 1940
Act. VanEck Oil Services ETF is classified as a “non-diversified” fund under the
1940 Act. As a result, the Fund is subject to the risk that it will be more
volatile than a diversified fund because the Fund may invest its assets in a
smaller number of issuers or may invest a larger proportion of its assets in a
single issuer. Moreover, the gains and losses on a single investment may have a
greater impact on the Fund’s NAV and may make the Fund more volatile than more
diversified funds.
Concentration
Risk.
Each 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 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.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGIES
Each
Fund may invest in securities not included in its 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 the Fund in seeking performance that
corresponds to the 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, 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 or intends to enter 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 such 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 such 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 Funds’
bank lending agent liquid collateral 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 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). 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.
In
October 2020, the Securities and Exchange Commission (the "SEC") adopted a final
rule related to the use of derivatives, short sales, reverse repurchase
agreements and certain other transactions by registered investment companies
that will rescind and withdraw the guidance of the SEC and its staff regarding
asset segregation and cover transactions. The final rule requires funds to trade
derivatives and other transactions that create future payment or delivery
obligations (except reverse repurchase agreements and similar financing
transactions) subject to a value-at-risk (“VaR”) leverage limit, certain
derivatives risk management program and reporting requirements. Generally, these
requirements apply unless a fund qualifies as a “limited derivatives user,” as
defined in the final rule. Under the final rule, when a fund trades reverse
repurchase agreements or similar financing transactions, including certain
tender option bonds, it needs to aggregate the amount of indebtedness associated
with the reverse repurchase agreements or similar financing transactions with
the aggregate amount of any other senior securities representing indebtedness
when calculating the fund’s asset coverage ratio or treat all such transactions
as derivatives transactions. Reverse repurchase agreements or similar financing
transactions aggregated with other indebtedness do not need to be included in
the calculation of whether a fund is a limited derivatives user, but for funds
subject to the VaR testing, reverse repurchase agreements and similar financing
transactions must be included for purposes of such testing whether treated as
derivatives transactions or not. The SEC also provided guidance in connection
with the new rule regarding use of securities lending collateral that may limit
a fund's securities lending activities. Compliance with these new requirements
will be required after an eighteen-month transition period.
Shareholder
Risk.
Certain shareholders, including other funds advised by the Adviser, may from
time to time own a substantial amount of the Funds’ 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. To manage the
risk associated with leveraging, each Fund may segregate liquid assets, or
otherwise “cover” its derivatives position in a manner consistent with the 1940
Act and the rules and SEC interpretations thereunder. Each Fund may modify its
asset segregation policies at any time to comply with any changes in the SEC’s
positions regarding asset segregation.
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TAX
ADVANTAGED PRODUCT STRUCTURE |
Unlike
many conventional mutual funds which are only bought and sold at closing NAVs,
the Shares of VanEck Oil Services ETF have been designed to be tradable in a
secondary market on an intra-day basis and to be created and redeemed primarily
in-kind, while the Shares of VanEck Natural Resources ETF are created and
redeemed partially for cash, 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
certain Funds, 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 each of the Funds (the “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-to-day investment management of the Funds. As of
[February 28, 2021], the Adviser managed approximately $[68.36] 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 will be available in the Trust’s annual report for the
period ended December 31, 2021.
Pursuant
to the Investment Management Agreement, the Adviser is responsible for all
expenses of VanEck Natural Resources ETF and VanEck Oil Services ETF including
the costs of transfer agency, custody, fund administration, legal, audit and
other services, 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. For its services to VanEck
Natural Resources ETF, the Fund has agreed to pay the Adviser an annual unitary
management fee equal to 0.49% of its average daily net assets and for its
services to VanEck Oil Services ETF, the Fund has agreed to pay the Adviser an
annual unitary management fee equal to 0.35% 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 May 1, 2023 with respect to each
Fund.
Prior
to January 1, 2022, for the services provided to VanEck Natural Resources ETF
under the Investment Management Agreement, the Fund paid the Adviser monthly
fees based on a percentage of the Fund’s average daily net assets at the annual
rate of 0.50%, and for services provided to VanEck Oil Services ETF under the
Investment Management Agreement, the Fund paid the Adviser monthly fees based on
a percentage of the Fund’s average daily net assets at the annual rate of 0.35%.
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 each Fund’s portfolio are Peter H. Liao, CFA, and Guo Hua (Jason)
Jin. Mr. Liao has been employed by the Adviser as an analyst since the summer of
2004 and has been a portfolio manager since 2006. Mr. Liao graduated from New
York University in 2004 with a Bachelor of Arts in Economics and Mathematics.
Mr. Jin has been employed by the Adviser as an analyst since January 2007 and
has been a portfolio manager since 2018. Mr. Jin graduated from the State
University of New York at Buffalo in 2004 with a Bachelor of Science degree in
Business Administration with a concentration in Financial Analysis. Messrs. Liao
and Jin also serve as portfolio managers for certain other investment companies
and pooled investment vehicles advised by the Adviser. 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.
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 an 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 interest from debt
securities. These amounts, net of expenses, are typically passed along to Fund
shareholders as dividends from net investment income. Each Fund realizes capital
gains or losses whenever it sells securities. Net capital gains are distributed
to shareholders as “capital gain distributions.”
Net
investment income, if any, and net 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 Code. In addition, in situations where a
Fund acquires investment securities after the beginning of a dividend period, a
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 Fund owned the underlying investment securities for the entire dividend
period. If a 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 a 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 a Fund, 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) the 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, at
least annually, 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.
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 a Fund. Distributions of
net investment income, including net short-term gains, if any, are generally
taxable as ordinary income. Whether distributions of capital gains represent
long-term or short-term capital gains is determined by how long a 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 may receive dividends, the distribution of which a Fund may report as
qualified dividends. In the event that a Fund receives such a dividend and
reports the distribution of such dividend as a qualified dividend, the dividend
may be taxed at the maximum capital gains rates of 15% or 20%, provided holding
period and other requirements are met at both the shareholder and the Fund
level. There can be no assurance that any significant portion of a Fund’s
distributions will be eligible for qualified dividend treatment.
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.
Dividends,
interest and gains from non-U.S. investments of a Fund may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may, in some cases, reduce or
eliminate such taxes.
Each
Fund may make investments in companies classified as passive foreign investment
companies ("PFICs") for U.S. federal income tax purposes. Investments in PFICs
are subject to special tax rules which may result in adverse tax consequences to
the Fund and its shareholders. Each Fund generally intends to elect to “mark to
market” these investments at the end of each taxable year. By making this
election, a Fund will recognize as ordinary income any increase in the value of
such shares as of the close of the taxable year over their adjusted basis and as
ordinary loss any decrease in such investment (but only to the extent of prior
income from such investment under the mark to market rules). Gains realized with
respect to a disposition of a PFIC that a Fund has elected to mark to market
will be ordinary income. By making the mark to market election, a Fund may
recognize income in excess of the distributions that it receives from its
investments. Accordingly, a Fund may need to borrow money or dispose of some of
its investments in order to meet its distribution requirements. If a Fund does
not make the mark to market election with respect to an investment in a PFIC,
the Fund could become subject to U.S. federal income tax with respect to certain
distributions from, and gain on the dispositions of, the PFIC which cannot be
avoided by distributing such amounts to the Fund’s shareholders.
If
more than 50% of a Fund’s total assets at the end of its taxable year consist of
foreign securities, the Fund may elect to “pass through” to its investors
certain foreign income taxes paid by the Fund, with the result that each
investor will (i) include in gross income, even though not actually received,
the investor’s pro rata share of the Fund’s foreign income taxes, and (ii)
either deduct (in calculating U.S. taxable income) or credit (in calculating
U.S. federal income), subject to certain holding period and other limitations,
the investor’s pro rata share of the Fund’s foreign income taxes. It is expected
that more than 50% of VanEck Natural Resources ETF's assets will consist of
foreign securities.
Backup
Withholding.
Each 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 Internal Revenue Service).
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. The ability to deduct capital losses may be limited. To the extent that a
Fund shareholder’s Shares are redeemed for cash, this is normally treated as a
sale for tax purposes.
Taxes
on In-Kind Creations and In-Kind Redemptions of Creation Units.
To the extent a person exchanges securities or securities and cash for Creation
Units, such person 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 or securities and cash 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 and the amount of any cash received for such
Creation Units. 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 primarily 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 the Funds 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 the Funds 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 the Funds’ “qualified net interest
income” (generally, the Funds’ U.S. source interest income, other than certain
contingent interest and interest from obligations of a corporation or
partnership in which the Fund is at least a 10% shareholder, reduced by expenses
that are allocable to such income); or (ii) are paid in respect of the Funds’
“qualified short-term capital gains” (generally, the excess of the Funds’ net
short-term capital gain over the Fund’s long-term capital loss for such taxable
year). However, depending on its circumstances, the Funds 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 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 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
Oil Services Index is published by MV Index Solutions GmbH ("MVIS"), which is a
wholly owned subsidiary of the Adviser. The Natural Resources Index is published
by S-Network Global Indexes, LLC (“S-Network”).
MVIS
and S-Network are each referred to herein as an “Index Provider” and
collectively the “Index Providers.” The Index Providers do not sponsor, endorse,
or promote the Funds and bear no liability with respect to the Funds or any
security.
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VANECK®
NATURAL RESOURCES INDEX |
The
Natural Resources Index is a rules based index intended to give investors a
means of tracking the overall performance of a global universe of listed
companies engaged in the production and distribution of commodities and
commodity-related products and services. The Natural Resources Index is a
modified capitalization weighted, float adjusted index comprising publicly
traded companies engaged in the production and distribution of commodities and
commodity-related products and services in the following sectors: 1)
Agriculture; 2) Alternatives (Water & Alternative Energy); 3) Base and
Industrial Metals; 4) Energy; 5) Forest Products; and 6) Precious Metals. Index
constituents include certain companies that produce products and services
directly related to the production of commodities, but not the commodities
themselves.
The
six sectors are weighted based on estimates of the global consumption of various
commodities included in each of the sectors. Sector weights are set annually on
the third Friday of the last month of the third calendar quarter and the Natural
Resources Index is rebalanced quarterly to the sector weights. The Natural
Resources Index includes companies worldwide that are principally engaged
(derive greater than 50% of revenues from applicable sources) in the production
and/or distribution of commodities and commodity-related products and
services.
The
Natural Resources Index strives to capture at least 90% of the global investable
market capitalization of its various sectors except for the agriculture and
alternatives sectors where the Natural Resources Index strives to capture 100%
and 95% respectively of the global investable market capitalization. Constituent
stocks must have a market capitalization of greater than $500 million on a
rebalancing date to be added to the Natural Resources Index. Stocks whose market
capitalizations fall below $400 million as of any rebalancing date will be
deleted from the Natural Resources Index. Stocks must have a three-month trading
volume equal to or greater than $1 million per day to be included in the Natural
Resources Index. Stocks whose three-month trading volume falls below $600
thousand per day as of any rebalancing date will be deleted from the Natural
Resources Index. Only shares that trade on a recognized domestic or
international stock exchange that provides a “last closing price” may qualify
(e.g., National Stock Market stocks must be “reported securities” under Rule
11Aa3-1 of the Exchange Act. Similar criteria and standards apply to stocks with
foreign listings).
S-Network
Global Indexes Inc. (“S-Network”), an independent third party (the “Calculation
Agent”), is responsible for the ongoing maintenance, compilation, calculation
and administration of The Ardour Global Index and AGI Composite Index. Real-time
index values are provided by Thomson Reuters. Index values are calculated daily,
except Saturdays and Sundays, and are distributed over the New York Stock
Exchange Global Index Feed (GIF) between the hours of approximately 9:30 a.m.
and 4:15 p.m. (New York time), under the symbol “RVEIT.” Index values are
disseminated every 15 seconds.
The
Natural Resources Index is calculated using a capitalization weighting
methodology, adjusted for float, which is modified so as to ensure compliance
with the diversification requirements of Subchapter M of the Internal Revenue
Code. The Natural Resources Index is reconstituted quarterly, at the close of
business on the third Friday of the last month of each calendar quarter, and
companies are added and/or deleted based upon the Natural Resources Index
eligibility criteria. Companies with recent stock exchange listings,
i.e.,
recent initial public offerings, may be added to the Natural Resources Index on
any rebalancing date, provided the companies meet all eligibility criteria and
have been trading for more than 22 trading days. The share weights of the
Natural Resources Index components are adjusted on each rebalancing
date.
Rebalancing
data, including constituent weights and related information, is posted on the
Natural Resources Index’s web site prior to the start of trading on the first
business day following the third Friday of the last month of each calendar
quarter. A press announcement identifying additions and deletions to the Natural
Resources Index is issued no later than the Wednesday prior to the second Friday
of the rebalancing month. Share weights of the constituents remain constant
between quarters except in the event of certain types of corporate actions,
including stock splits and reverse stock splits. Share weights of the Natural
Resources Index are not adjusted between rebalancing dates for shares issued or
shares repurchased. S-Network may delay or change the scheduled rebalancing or
reconstitution of the Natural Resources Index or the implementation of certain
rules at its sole discretion.
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MVIS®
US LISTED OIL SERVICES 25
INDEX |
The
Oil Services Index is a rules based, modified capitalization weighted, float
adjusted index intended to give investors a means of tracking the overall
performance of the largest and the most liquid common stocks and depositary
receipts of U.S. exchange-listed companies involved in: oil services to the
upstream oil sector, which includes companies engaged primarily in oil
equipment, oil services or oil drilling.
To
be initially eligible for the Oil Services Index, (i) companies must generate at
least 50% of their revenues from oil services (as defined above) and (ii) all
stocks must have a market capitalization of greater than $150 million as of the
end of the month prior to the month in which a rebalancing date
occurs.
The
Oil Services Index is the exclusive property of MVIS (a wholly owned subsidiary
of the Adviser), which has contracted with Solactive AG to maintain and
calculate the Oil Services Index. Solactive AG uses its best efforts to ensure
that the Oil Services Index is calculated correctly. Irrespective of its
obligations towards MVIS, Solactive AG has no obligation to point out errors in
the Oil Services Index to third parties. VanEck Oil Services ETF is not
sponsored, endorsed, sold or promoted by MVIS and MVIS makes no representation
regarding the advisability of investing in the VanEck Oil Services
ETF.
The
Oil Services Index is reconstituted semi-annually and rebalanced quarterly. MVIS
may delay or change a scheduled rebalancing or reconstitution of the Oil
Services Index or the implementation of certain rules at its sole
discretion.
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| LICENSE
AGREEMENTS AND DISCLAIMERS |
The
Adviser has entered into a licensing agreement with MVIS to use the Oil Services
Index (the "MVIS Index"). The Adviser has also granted MVIS a license to use the
name “VanEck” in connection with the MVIS Index. VanEck Oil Services ETF (the
"MVIS Index ETF"), is entitled to use the MVIS Index, respectively, pursuant to
a sub-licensing arrangement with the Adviser.
Shares
of the MVIS Index ETF are not sponsored, endorsed, sold or promoted by MVIS.
MVIS makes no representation or warranty, express or implied, to the owners of
the Shares of the MVIS Index ETF or any member of the public regarding the
advisability of investing in securities generally or in the Shares of the MVIS
Index ETF particularly or the ability of the MVIS Index to track the performance
of the securities markets. The MVIS Index is determined and composed by MVIS
without regard to the Adviser or the Shares of the MVIS Index ETF. MVIS has no
obligation to take the needs of the Adviser or the owners of the Shares of the
MVIS Index ETF into consideration in determining or composing the MVIS Index.
MVIS is not responsible for and has not participated in the determination of the
timing of, prices at, or quantities of the Shares of the MVIS Index ETF to be
issued or in the determination or calculation of the equation by which the
Shares of the MVIS Index ETF is to be converted into cash. MVIS has no
obligation or liability in connection with the administration, marketing or
trading of the Shares of the MVIS Index ETF.
The
MVIS Index is the exclusive property of MVIS, which has contracted with
Solactive AG to maintain and calculate the MVIS Index. Solactive AG uses its
best efforts to ensure that the MVIS Index is calculated correctly. Irrespective
of its obligations towards MVIS, Solactive AG has no obligation to point out
errors in the MVIS Index to third parties including but not limited to investors
and/or financial intermediaries of the financial instrument.
MVIS
Index ETF is not sponsored, promoted, sold or supported in any other manner by
Solactive AG nor does Solactive AG offer any express or implicit guarantee or
assurance either with regard to the results of using the MVIS Index and/or its
trademarks or its prices at any time or in any other respect. The MVIS Index is
calculated and maintained by Solactive AG. Solactive AG uses its best efforts to
ensure that the MVIS Index is calculated correctly. Irrespective of its
obligations towards MVIS, Solactive AG has no obligation to point out errors in
the MVIS Index to third parties including but not limited to investors and/or
financial intermediaries of the MVIS Index ETF. Neither the publication of the
MVIS Index or its trademarks for the purpose of use in connection with the MVIS
Index ETF constitutes a recommendation by Solactive AG to invest capital in the
MVIS Index ETF nor does it in any way represent an assurance or opinion of
Solactive AG with regard to any investment in the MVIS Index ETF. Solactive AG
is not responsible for fulfilling the legal requirements concerning the accuracy
and completeness of the Prospectus.
MVIS
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE MVIS INDEX OR ANY
DATA INCLUDED THEREIN AND MVIS SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS
OR INTERRUPTIONS THEREIN. MVIS MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY THE ADVISER, OWNERS OF THE SHARES OF THE MVIS INDEX
ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE MVIS INDEX OR ANY DATA
INCLUDED THEREIN. MVIS 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 MVIS INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MVIS HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
The
Adviser has entered into a licensing agreement with S-Network to use the Natural
Resources Index. The Adviser has also granted S-Network a license to use the
VanEck name in connection with the Natural Resources Index and S-Network will
pay the Adviser a share of the revenues received by S-Network from the licensing
of the Natural Resources Index. VanEck Natural Resources ETF is entitled to use
its Natural Resources Index pursuant to a sub-licensing arrangement with the
Adviser.
S-Network®
is a service mark of S-Network and has been licensed for use by the Adviser in
connection with VanEck Natural Resources ETF. VanEck Natural Resources ETF is
not sponsored, endorsed, sold or promoted by S-Network, which makes no
representation regarding the advisability of investing in VanEck Natural
Resources ETF.
“S-Network
Global Indexes, LLCSM,”
is a service mark of S-Network and have been licensed for use by the Adviser.
The
Shares of VanEck Natural Resources ETF are not sponsored, endorsed, sold or
promoted by S-Network. S-Network makes no representation or warranty, express or
implied, to the owners of Shares of VanEck Natural Resources ETF or any member
of the public regarding the advisability of investing in securities generally or
in the Shares of VanEck Natural Resources ETF particularly or the ability of the
Natural Resources Index to track the performance of the physical commodities
market. S-Network’s only relationship to the Adviser (“Licensee”) is the
licensing of certain service marks and trade names of S-Network and of the
Natural Resources Index that are determined, composed and calculated by
S-Network without regard to the Licensee or the Shares of VanEck Natural
Resources ETF. S-Network has no obligation to take the needs of the Licensee or
the owners of Shares of VanEck Natural Resources ETF into consideration in
determining, composing or calculating the Natural Resources Index. S-Network is
not responsible for and has not participated in the determination of the timing
of, prices at, or quantities of the Shares of VanEck Natural Resources ETF to be
issued or in the determination or calculation of the equation by which the
Shares of VanEck Natural Resources ETF are to be converted into cash. S-Network
has no obligation or liability in connection with the administration, marketing
or trading of the Shares of VanEck Natural Resources ETF.
S-NETWORK
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE NATURAL RESOURCES
INDEX OR ANY DATA INCLUDED THEREIN AND S-NETWORK SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS,
OR
INTERRUPTIONS THEREIN. S-NETWORK MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF SHARES OF VANECK NATURAL RESOURCES
ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NATURAL RESOURCES INDEX
OR ANY DATA INCLUDED THEREIN. S-NETWORK 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 NATURAL RESOURCES INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
S-NETWORK HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
VANECK
AND ITS AFFILIATES SHALL NOT HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS, OR
INTERRUPTIONS, AND MAKES NO WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE
OBTAINED BY OWNERS OF VANECK NATURAL RESOURCES ETF, OR ANY OTHER PERSON OR
ENTITY FROM THE USE OF THE NATURAL RESOURCES INDEX. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL VANECK OR ANY OF ITS AFFILIATES HAVE ANY LIABILITY
FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR
LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
The
S&P 500®
Index included in each Fund’s performance table is a product of S&P Dow
Jones Indices LLC and/or its affiliates and has been licensed for use by the
Adviser. Copyright © 2021 S&P Dow Jones Indices LLC, a division of S&P
Global, Inc., and/or its affiliates. All rights reserved. Redistribution or
reproduction in whole or in part are prohibited without written permission of
S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones
Indices LLC’s indices please visit www.spdji.com. S&P®
is a registered trademark of S&P Global and Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P
Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor
their third party licensors make any representation or warranty, express or
implied, as to the ability of any index to accurately represent the asset class
or market sector that it purports to represent and neither S&P Dow Jones
Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third
party licensors shall have any liability for any errors, omissions, or
interruptions of any index or the data included therein.
S&P
DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR
THE COMPLETENESS OF EACH INDEX OR ANY DATA RELATED THERETO, OR ANY COMMUNICATION
INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING
ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL
NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS
THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE ADVISER, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF EACH INDEX, OR WITH RESPECT TO ANY DATA
RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER
SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF
PROFITS, TRADING LOSSES, LOST TIME, OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY,
OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR
ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE ADVISER, OTHER THAN THE
LICENSORS OF S&P DOW JONES INDICES.
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).
The
information below has been audited by [ ], the Trust’s independent registered
public accounting firm, whose
report,
along with the Funds’ financial statements, are included in the Funds’ Annual
Report, which is available upon request.
[TO
BE UPDATED]
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 an Exchange is satisfied by the fact that
the prospectus is available at an 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 the Funds.
The
Prospectus, SAI and any other Fund communication do not create any contractual
obligations between the Funds’ shareholders and the Trust, the Funds, 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. [ ] 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 [ ] 2022, as may be
supplemented from time to time. Additional information about each of 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 each 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 |
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