ck0001137360-20210430
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PROSPECTUS |
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September
1, 2021 |
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VANECK®
CEF
Muni Income ETF XMPT®
High
Yield Muni ETF HYD®
Intermediate
Muni ETF ITM®
Long
Muni ETF MLN®
Short
High Yield Muni ETF SHYD®
Short
Muni ETF SMB®
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Principal
U.S. Listing Exchange for each Fund: Cboe BZX Exchange,
Inc. |
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The
U.S. Securities and Exchange Commission ("SEC") has not approved or
disapproved these securities or passed upon the accuracy or adequacy of
this Prospectus. Any representation to the contrary is a criminal
offense. |
800.826.2333
vaneck.com
INVESTMENT OBJECTIVE
VanEck®
CEF Muni Income ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the S-Network Municipal Bond
Closed-End Fund IndexSM
(the “CEFMX 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 |
0.40 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Acquired
Fund Fees and Expenses(b) |
1.92 |
% |
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Total
Annual Fund Operating Expenses(a) |
2.32 |
% |
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(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2022.
(b) “Acquired Fund Fees and
Expenses” reflect the Fund’s pro rata portion of the expenses charged by the
Underlying Funds (as defined herein). These expenses are based on the total
expense ratio disclosed in each Underlying Fund’s most recent shareholder
report. Because Acquired Fund Fees and Expenses are not borne directly by the
Fund, they will not be reflected in the expense information in the Fund’s
financial statements and the information presented in the table will differ from
that presented in the Fund’s financial highlights included in the Fund’s reports
to shareholders.
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 |
$235 |
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3 |
$724 |
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5 |
$1,240 |
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10 |
$2,656 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
11% of the average value of its
portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
CEF Municipal Allocation
ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in investments the income
from which is exempt from U.S. federal income tax (other than federal
alternative minimum tax (“AMT”)). The Fund is a “fund of funds,” meaning that it
invests all or a portion of its assets in other funds (the “Underlying Funds”).
The Fund normally invests at least 80% of its total assets in securities of
issuers that comprise the Fund’s benchmark index. The CEFMX Index is comprised
of shares of U.S.-listed closed-end funds. The Underlying Funds invest in
municipal bonds issued by states or local governments or agencies the income of
which is exempt from U.S. federal income tax, but a portion of this income may
be subject to the AMT and will generally be subject to state income taxes. The
Fund’s investment policy to invest at least 80% of its total assets in
investments the income from which is exempt from U.S. federal income tax (other
than AMT) requires shareholder approval before it can be changed. The Fund may
count investments that generate income subject to the AMT toward the 80%
investment requirement.
The
Investment Company Act of 1940, as amended (the “1940 Act”), places limits on
the percentage of the total outstanding stock of an Underlying Fund that may be
owned by the Fund; however, exemptive relief from the Securities and Exchange
Commission permits it to invest in Underlying Funds in excess of this limitation
if certain conditions are met (the “Exemptive Relief”).
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the CEFMX Index by investing in a portfolio of
securities that generally replicates the CEFMX Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the CEFMX Index and does not take temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the CEFMX Index.
The
Fund may become "non-diversified" as defined under the 1940 Act, solely as a
result of a change in relative market capitalization or index weighting of one
or more constituents of the CEFMX Index. This means that the Fund may invest a
greater percentage of its assets in a limited number of issuers than would be
the case if the Fund were always managed as a diversified management investment
company. The Fund intends to be diversified in approximately the same proportion
as the CEFMX Index. Shareholder approval will not be sought when the Fund
crosses from diversified to non-diversified status due solely to a change in the
relative market capitalization or index weighting of one or more constituents of
the CEFMX Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the CEFMX Index concentrates in an industry or
group of industries.
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.
Fund
of Funds Risk.
The performance of the Fund is dependent on the performance of the Underlying
Funds. The Fund is subject to the risks of the Underlying Funds’ investments. In
addition, the Fund’s shareholders will indirectly bear the expenses of the
Underlying Funds, absorbing duplicative levels of fees with respect to
investments in the Underlying Funds. In addition, at times certain segments of
the market represented by the Underlying Funds may be out of favor and
underperform other segments.
Risks
of Investing in Closed-End Funds. The
shares of a closed-end fund may trade at a discount or premium to their net
asset value (“NAV”). A closed-end fund may be leveraged as part of its
investment strategy. As a result, the Fund may be indirectly exposed to the
effects of leverage through its investment in the Underlying Funds. Investments
in Underlying Funds that use leverage may cause the value of the Fund’s Shares
to be more volatile than if the Fund invested in Underlying Funds that do not
utilize leverage and may expose the Fund to the possibility that the Fund’s
long-term returns on such securities (and, indirectly, the long-term returns on
the Shares) will be diminished.
To
comply with provisions of the 1940 Act and the Exemptive Relief, the Adviser may
be required to vote Underlying Fund shares in the same general proportion as
shares held by other shareholders of the Underlying Fund.
Underlying
Funds Risk.
The Fund may be subject to the following risks as a result of its investment in
the Underlying Funds:
Market
Risk.
The prices of the securities in the Underlying Funds are subject to the risks
associated with investing in the securities market, including general economic
conditions, sudden and unpredictable drops in value, exchange trading
suspensions and closures and public health risks. These risks may be magnified
if certain social, political, economic and other conditions and events (such as
natural disasters, epidemics and pandemics, terrorism, conflicts and social
unrest) adversely interrupt the global economy; in these and other
circumstances, such events or developments might affect companies world-wide.
An investment in an Underlying Fund may lose
money.
Municipal
Securities Risk.
The Underlying Funds may invest in municipal securities. Municipal securities
are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. The issuer of a revenue bond makes interest and principal payments from
revenues generated from a particular source or facility, such as a tax on
particular property or revenues generated from a municipal water or sewer
utility or an airport. Revenue bonds generally are not backed by the full faith
and credit and general taxing power of the issuer. The market for municipal
bonds may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of many
or all municipal obligations of issuers in a state, U.S. territory, or
possession. For example, the COVID-19 pandemic has significantly stressed the
financial resources of many municipal issuers, which may impair a municipal
issuer’s ability to meet its financial obligations when due and could adversely
impact the value of its bonds, which could negatively impact the performance of
the Fund.
High
Yield Securities Risk. The
Underlying Funds may invest in high yield securities. Securities rated below
investment
grade
are commonly referred to as high yield securities or “junk bonds.” High yield
securities are often issued by issuers that are restructuring, are smaller or
less creditworthy than other issuers, or are more highly indebted than other
issuers. High yield securities are subject to greater risk of loss of income and
principal than higher rated securities and are considered speculative. The
prices of high yield securities are likely to be more sensitive to adverse
economic changes or individual municipal developments than higher rated
securities. During an economic downturn or substantial period of rising interest
rates, high yield security issuers may experience financial stress that would
adversely affect their ability to service their principal and interest payment
obligations, to meet their projected business goals or to obtain additional
financing. In the event of a default, the Fund may incur additional expenses to
seek recovery. The secondary market for municipal securities that are high yield
securities may be less liquid than the markets for higher quality municipal
securities or high yield securities issued by corporate issuers and, as such,
may have an adverse effect on the market prices of and an Underlying Fund’s
ability to arrive at a fair value for certain securities. In addition, periods
of economic uncertainty and change may result in an increased volatility of
market prices of high yield securities and a corresponding volatility in the
Fund’s NAV.
Credit
Risk.
Bonds are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security
will be unable and/or unwilling
to make timely interest payments and/or repay the principal on its debt or to
otherwise honor its obligations and/or default completely. Bonds are subject to
varying degrees of credit risk, depending on the issuer’s financial condition
and on the terms of the securities, which may be reflected in credit ratings.
There is a possibility that the credit rating of a bond may be downgraded after
purchase or the perception of an issuer’s credit worthiness may decline, which
may adversely affect the value of the security. The Underlying Funds may hold
securities that are insured by a bond insurer. A downgrade of the credit rating
of such bond insurer may cause the value of the insured security to
decline.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond
resulting from changes in the general level of interest rates. When the general
level of interest rates goes up, the prices of most debt securities go down.
When the general level of interest rates goes down, the prices of most debt
securities go up. The prevailing historically low interest rate environment
increases the risks associated with rising interest rates, including the
potential for periods of volatility and increased redemptions. In addition, debt
securities, such as bonds, with longer durations tend to be more sensitive to
interest rate changes, usually making them more volatile than debt securities
with shorter durations. In addition, in response to the COVID-19 pandemic, as
with other serious economic disruptions, governmental authorities and regulators
are enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new monetary programs and
lowering interest rates. These actions present heightened risks to debt
instruments, and such risks could be even further heightened if these actions
are unexpectedly or suddenly reversed or are ineffective in achieving their
desired outcomes.
Call
Risk.
The Underlying Funds may invest in callable bonds. If interest rates fall, it is
possible that issuers of callable securities will “call” (or prepay) their bonds
before their maturity date. If a call were exercised by the issuer during or
following a period of declining interest rates, the Underlying Fund is likely to
have to replace such called security with a lower yielding security or
securities with greater risks or other less favorable features. If that were to
happen, it would decrease the Underlying Fund’s net investment income, resulting
in a decline in the Fund’s income.
Tax
Risk.
There is no guarantee that the Underlying Fund’s income will be exempt from U.S.
federal or state income taxes. Events occurring after
the date of issuance of a municipal bond or after the Underlying Fund’s
acquisition of a municipal bond may result in a determination that interest on
that bond is includible in gross income for U.S. federal income tax purposes
retroactively to its date of issuance. Such a determination may cause a portion
of prior distributions by the Underlying Fund to its shareholders to be taxable
to those shareholders in the year of receipt. Federal or state changes in income
or alternative minimum tax rates or in the tax treatment of municipal bonds may
make municipal bonds less attractive as investments and cause them to lose
value.
Liquidity
Risk.
Unlike the Fund, as closed-end funds the Underlying Funds are not limited in
their ability to invest in illiquid securities. Securities with reduced
liquidity involve greater risk than securities with more liquid markets. Prices
of securities not traded on an exchange may vary over time. Secondary trading of
a fixed-income security may decline for a period of time if its credit quality
unexpectedly declines. An Underlying Fund may not receive full value for assets
sold during periods of infrequent trading.
Leverage
Risk.
Ordinary borrowings by an Underlying Fund or an Underlying Fund’s investment in
derivatives may result in
leverage. If the prices of those investments decrease, or if the cost of
borrowing exceeds any increase in the prices of investments made with the
proceeds of the borrowing, the NAV of the Underlying Fund’s shares will decrease
more than if the Underlying Fund had not used leverage. An Underlying Fund may
have to sell investments at a time and at a price that is unfavorable to the
Underlying Fund to repay borrowings. Interest on borrowings is an expense the
Underlying Fund would not otherwise incur. Leverage magnifies the potential for
gain and the risk of loss. If an Underlying Fund uses leverage, there can be no
assurance that the Underlying Fund’s leverage strategy will be
successful.
Anti-Takeover
Measures Risk.
Certain Underlying Funds may have provisions in their organizational documents
intended to limit the ability of third parties to acquire control or change the
composition of the Underlying Fund’s board. This may discourage a third party
from seeking to obtain control of the Underlying Fund, which could limit the
ability of Underlying Fund shareholders to sell their shares at a premium over
prevailing market prices.
Non-Diversified
Risk. Some
of the Underlying Funds may invest a relatively high percentage of their assets
in a smaller number of issuers or may invest a larger proportion of their assets
in the obligations of a single issuer. Moreover, the gains and losses on an
investment in such an Underlying Fund may have a greater impact on the Fund’s
NAV and may make the value of the Fund’s investment in such an Underlying Fund
more volatile than an investment in more diversified Underlying
Funds.
Risk
of Investment Restrictions.
The Fund is subject to the conditions set forth in the Exemptive Relief and
certain additional provisions of the 1940 Act that limit the amount that the
Fund and its affiliates, in the aggregate, can invest in the outstanding voting
securities of any one Underlying Fund. The Fund and its affiliates may not
acquire “control” of an Underlying Fund, which is presumed once ownership of an
Underlying Fund’s outstanding voting securities exceeds 25%. This limitation
could inhibit the Fund’s ability to purchase one or more Underlying Funds in the
CEFMX Index in the proportions represented in the CEFMX Index. In these
circumstances, the Fund would be required to use sampling techniques, which
could increase the risk of tracking error.
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 CEFMX Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the CEFMX 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 CEFMX Index or (to the
extent the Fund effects creations and redemptions for cash) raising cash to meet
redemptions or deploying cash in connection with newly created Creation Units
(defined herein), which are not factored into the return of the CEFMX Index.
Transaction costs, including brokerage costs, will decrease the Fund’s NAV to
the extent not offset by the transaction fee payable by an Authorized
Participant (“AP”). Market disruptions and regulatory restrictions could have an
adverse effect on the Fund’s ability to adjust its exposure to the required
levels in order to track the CEFMX Index. Errors in CEFMX Index data, CEFMX
Index computations and/or the construction of the CEFMX Index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the CEFMX 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 CEFMX Index provider's errors will be kept by
the Fund and its shareholders and any losses or costs resulting from the CEFMX
Index provider's errors will be borne by the Fund and its shareholders. When the
CEFMX Index is rebalanced and the Fund in turn rebalances its
portfolio
to attempt to increase the correlation between the Fund’s portfolio and the
CEFMX 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 CEFMX Index provider or its agents may
carry out additional ad hoc rebalances to the CEFMX Index. Therefore, errors and
additional ad hoc rebalances carried out by the CEFMX Index provider or its
agents to the CEFMX Index may increase the costs to and the tracking error risk
of the Fund. The Fund’s performance may also deviate from the return of the
CEFMX Index due to certain listing standards of the Fund's listing exchange (the
"Exchange") or legal restrictions or limitations (such as diversification
requirements). The Fund may value certain of its investments, underlying
securities and/or currencies, and/or other assets based on fair value prices.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the CEFMX Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the CEFMX Index. Changes to the composition of the CEFMX Index in connection
with a rebalancing or reconstitution of the CEFMX 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 bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the CEFMX 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 CEFMX Index
provider to postpone a scheduled rebalance or reconstitution, which could cause
the CEFMX 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.
Non-Diversification
Risk. The Fund may become classified as
non-diversified under the 1940 Act, as amended, solely as a result of a change
in relative market capitalization or index weighting of one or more constituents
of the CEFMX Index. If the Fund becomes non-diversified, it may invest a greater
portion of assets in securities of a smaller number of individual issuers than a
diversified fund. As a result, changes in the market value of a single
investment could cause greater fluctuations in share price than would occur in a
more diversified 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 CEFMX 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
The
year-to-date total return as of
June 30, 2021 was
7.76%.
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| Best
Quarter: |
10.40% |
1Q 2019 |
| Worst
Quarter: |
-9.05% |
4Q
2016 |
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.
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Past
One Year |
Past
Five Years |
Since
Inception
(7/12/2011) |
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VanEck CEF Muni Income ETF
(return
before taxes) |
7.32% |
5.97% |
6.56% |
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VanEck CEF Muni Income ETF
(return
after taxes on distributions) |
7.30% |
5.95% |
6.55% |
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VanEck CEF Muni Income ETF
(return
after taxes on distributions and sale of Fund
Shares) |
5.91% |
5.64% |
6.27% |
|
|
S-Network
Municipal Bond Closed-End Fund Index
(reflects no deduction for
fees, expenses or taxes) |
7.88% |
6.30% |
6.99% |
|
|
Bloomberg US Aggregate Bond Index
(reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.66% |
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are jointly and primarily 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 |
July
2011 |
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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®
High Yield Muni ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg Municipal Custom High
Yield Composite Index (the “High Yield Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the tables and
examples below.
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| Shareholder Fees (fees paid directly from
your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.35 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.35 |
% |
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(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2022.
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
9% of the average value of its
portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
High
Yield Muni ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the benchmark index. The High Yield Index is comprised of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
long-term tax-exempt bond market. The High Yield Index tracks the high yield
municipal bond market with a 75% weight in non-investment grade municipal bonds
and a targeted 25% weight in triple-B rated investment grade municipal bonds (in
accordance with the High Yield Index provider’s methodology). This 80%
investment policy is non-fundamental and may be changed without shareholder
approval upon 60 days’ prior written notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in investments suggested by its name. For purposes of this policy, the
term “assets” means net assets plus the amount of any borrowings for investment
purposes. This percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the High Yield Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the High Yield Index and does not take temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the High Yield Index. Because of the practical difficulties and
expense of purchasing all of the securities in the High Yield Index, the Fund
does not purchase all of the securities in the High Yield Index. Instead, the
Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the High
Yield Index in an effort to hold a portfolio of bonds with generally the same
risk and return characteristics of the High Yield Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the High Yield Index concentrates in an industry
or group of industries. As of April 30, 2021, each of the health care,
industrial development, special tax (i.e.,
revenue bonds backed by a special tax) and tobacco 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.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
High
Yield Securities Risk.
Securities rated below investment grade are commonly referred to as high yield
securities or “junk bonds.” High yield securities are often issued by issuers
that are restructuring, are smaller or less creditworthy than other issuers, or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual municipal developments
than higher rated securities. During an economic downturn or substantial period
of rising interest rates, high yield security issuers may experience financial
stress that would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. In the event of a default, the Fund may incur
additional expenses to seek recovery. The secondary market for municipal
securities that are high yield securities may be less liquid than the markets
for higher quality municipal securities or high yield securities issued by
corporate issuers and, as such, may have an adverse effect on the market prices
of and the Fund’s ability to arrive at a fair value for certain securities. The
illiquidity of the market also could make it difficult for the Fund to sell
certain securities in
connection
with a rebalancing of the High Yield Index. In addition, periods of economic
uncertainty and change may result in an increased volatility of market prices of
high yield securities and a corresponding volatility in the Fund’s net asset
value (“NAV”).
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities, such as bonds, with longer durations
tend to be more sensitive to interest rate changes, usually making them more
volatile than debt securities with shorter durations. In addition, in response
to the COVID-19 pandemic, as with other serious economic disruptions,
governmental authorities and regulators are enacting significant fiscal and
monetary policy changes, including providing direct capital infusions into
companies, creating new monetary programs and lowering interest rates. These
actions present heightened risks to debt instruments, and such risks could be
even further heightened if these actions are unexpectedly or suddenly reversed
or are ineffective in achieving their desired outcomes.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Private
Activity Bonds Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of private activity bonds. The
issuers of private activity bonds in which the Fund may invest may be negatively
impacted by conditions affecting either the general credit of the user of the
private activity project or the project itself. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax. See the
section of the Prospectus entitled “Shareholder Information—Tax Information” for
more details.
Health
Care Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. The health care
industry is subject to regulatory action by a number of private and governmental
agencies, including federal, state and local governmental agencies. A major
source of revenues for the health care industry is payments from Medicare and
Medicaid programs. As a result, the industry is sensitive to legislative changes
and reductions in governmental spending for such programs. Numerous other
factors may also affect the industry and the value and credit quality of health
care bonds, such as general and local economic conditions, demand for services
and the ability of the facility to provide the services required, physicians’
confidence in the facility, management capabilities, expenses (including
malpractice insurance premiums) and competition among health care providers. The
following elements may adversely affect health care facility operations: the
implementation of national and/or state-specific health insurance exchanges;
other national, state or local health care reform measures; medical and
technological advances which dramatically alter the need for health services or
the way in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; efforts by employers,
insurers, and governmental agencies to reduce the costs of health insurance and
health care services; and increases and decreases in the cost and availability
of medical products. Hospitals and other health care facilities are additionally
subject to claims and legal actions by patients and others in the ordinary
course of business. There can be no assurance that a claim will not exceed the
insurance coverage of a health care facility or that insurance coverage will be
available to a facility.
Industrial
Development Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of industrial development bonds. These
revenue bonds are issued by or on behalf of public authorities to obtain funds
to finance various public and/or privately operated facilities, including those
for business and manufacturing, housing, sports, pollution control, airport,
mass transit, port and parking facilities. These bonds are normally secured only
by the revenues from the project and not by state or local government tax
payments. Consequently, the credit quality of these securities is dependent upon
the ability of the user of the facilities financed by the bonds and any
guarantor to meet its financial obligations. Payment of interest on and
repayment of principal on such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the
debt
service on the bonds may cause the value of the bonds to decline. Adverse
conditions and developments affecting a particular project may result in lower
revenues to the issuer of the municipal securities, which may adversely affect
the value of the Fund’s portfolio.
Tobacco
Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of tobacco bonds. Tobacco
settlement revenue bonds are generally neither general nor legal obligations of
a state or any of its political subdivisions and neither the full faith and
credit nor the taxing power nor any other assets or revenues of a state or of
any political subdivision will be pledged to the payment of any such bonds. In
addition, tobacco companies’ profits from the sale of tobacco products are
inherently variable and difficult to estimate. There can be no guarantee that
tobacco companies will earn enough revenues to cover the payments due under
tobacco bonds. The revenues of tobacco companies may be adversely affected by
the adoption of new legislation and/or by litigation.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
Illinois
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of Illinois. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
Illinois and by the financial condition of Illinois’ political subdivisions,
agencies, instrumentalities and public authorities.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide.
An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the High Yield Index. As a result, an
adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in NAV than would be the case if the Fund held all
of the bonds in the High Yield Index. Conversely, a positive development
relating to an issuer of securities in the High Yield Index that is not held by
the Fund could cause the Fund to underperform the High Yield Index. To the
extent the assets in the Fund are smaller, these risks will be
greater.
Index
Tracking Risk.
The Fund’s return may not match the return of the High Yield Index for a number
of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the High Yield Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the High
Yield Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein),
which are not factored into the return of the High Yield Index. Transaction
costs, including brokerage costs, will decrease the Fund’s NAV to the extent not
offset by the transaction fee payable by an Authorized Participant (“AP”).
Market disruptions and regulatory restrictions could have an adverse effect on
the Fund’s ability to adjust its exposure to the required levels in order to
track the High Yield Index. Errors in the High Yield Index data, High Yield
Index computations and/or the construction of the High Yield Index in accordance
with its methodology may occur from time to time and may not be identified and
corrected by the High Yield Index provider for a period of time or at all, which
may have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the High Yield Index provider's errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
High Yield Index provider's errors will be borne by the Fund and its
shareholders. When the High Yield Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the High Yield Index, any transaction costs and market
exposure arising from such portfolio rebalancing will be borne directly by the
Fund and its shareholders. In addition, the Fund's use of a representative
sampling approach may cause the fund to not be as well correlated with the
return of the High Yield Index as would be the case if the Fund purchased all of
the securities in the High Yield Index in the proportions in which they are
represented in the High Yield Index. Apart from scheduled rebalances, the High
Yield Index provider or its agents may carry out additional ad hoc rebalances to
the High Yield Index. Therefore, errors and additional ad hoc rebalances carried
out by the High Yield Index provider or its agents to the High Yield Index may
increase the costs to and the tracking error risk of the Fund. The Fund’s
performance may also deviate from the return of the High Yield Index due to
certain listing standards of the Fund's listing exchange (the "Exchange") or
legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities and/or
currencies, and/or other assets based on fair value prices. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the High Yield Index. In light of the factors discussed
above, the Fund’s return may deviate significantly from the return of the High
Yield Index. Changes to the
composition
of the High Yield Index in connection with a rebalancing or reconstitution of
the High Yield Index may cause the Fund to experience increased volatility,
during which time the Fund’s index tracking risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the High Yield Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the High
Yield Index provider to postpone a scheduled rebalance or reconstitution, which
could cause the High Yield Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the High Yield Index concentrates
in a particular sector or sectors or industry or group of industries. To the
extent that the Fund is concentrated in a particular sector or sectors or
industry or group of industries, the Fund will be subject to the risk that
economic, political or other conditions that have a negative effect on those
sectors and/or industries may negatively impact the Fund to a greater extent
than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows shows
how the Fund performed for the calendar years shown. The table below the bar
chart shows the Fund’s average annual returns (before and after taxes).
The bar chart and table provide
an indication of the risks of investing in the Fund by comparing the Fund’s
performance from year to year and by showing how the Fund’s average annual
returns for the one year, five year, ten year and/or since inception periods, as
applicable, compared with the Fund’s benchmark index and a broad
measure of market
performance. All returns assume reinvestment of dividends and
distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
June 30, 2021 was
5.08%.
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| Best
Quarter: |
6.39% |
1Q 2012 |
| Worst
Quarter: |
-7.55% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 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.
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Past
One Year |
Past
Five Years |
Past
Ten Years |
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VanEck High Yield Muni ETF
(return
before taxes) |
-0.05% |
4.32% |
5.73% |
|
|
VanEck High Yield Muni ETF
(return
after taxes on distributions) |
-0.08% |
4.30% |
5.68% |
|
|
VanEck High Yield Muni ETF
(return
after taxes on distributions and sale of Fund
Shares) |
1.55% |
4.31% |
5.58% |
|
|
Bloomberg
Municipal Custom High Yield Composite Index
(reflects no deduction for
fees, expenses or taxes) |
4.49% |
6.23% |
7.13% |
|
|
Bloomberg US Aggregate Bond
Index
(reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Manager. The
following individual is primarily responsible for the day-to-day management of
the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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|
James
T. Colby III |
Portfolio
Manager |
February
2009 |
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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®
Intermediate Muni ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg AMT-Free Intermediate
Continuous Municipal Index (the “Intermediate
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the tables and
examples below.
|
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| Shareholder Fees (fees paid directly from
your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.24 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2022.
EXPENSE EXAMPLE
This example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other funds. This example does not take into account brokerage commissions that
you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest $10,000
in the Fund for the time periods indicated and then sell or hold all of your
Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher
or lower, based on these assumptions, your costs would be:
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YEAR |
EXPENSES |
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1 |
$25 |
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3 |
$77 |
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5 |
$135 |
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10 |
$306 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
6% of the average value of its
portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Intermediate
Muni ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Intermediate Index. The Intermediate Index is
comprised of publicly traded municipal bonds that cover the U.S. dollar
denominated intermediate term tax-exempt bond market. This 80% investment policy
is non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in investments suggested by its name. For purposes of this policy, the
term “assets” means net assets plus the amount of any borrowings for investment
purposes. This percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Intermediate Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the Intermediate Index and does not take temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the Intermediate Index. Because of the practical difficulties and
expense of purchasing all of the securities in the Intermediate Index, the Fund
does not purchase all of the securities in the Intermediate Index. Instead, the
Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the
Intermediate Index in an effort to hold a portfolio of bonds with generally the
same risk and return characteristics of the Intermediate Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Intermediate Index concentrates in an industry
or group of industries. As of April 30, 2021, each of the special tax
(i.e.,
revenue bonds backed by a specific tax) and transportation 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.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities, such as bonds, with
longer
durations tend to be more sensitive to interest rate changes, usually making
them more volatile than debt securities with shorter durations. In addition, in
response to the COVID-19 pandemic, as with other serious economic disruptions,
governmental authorities and regulators are enacting significant fiscal and
monetary policy changes, including providing direct capital infusions into
companies, creating new monetary programs and lowering interest rates. These
actions present heightened risks to debt instruments, and such risks could be
even further heightened if these actions are unexpectedly or suddenly reversed
or are ineffective in achieving their desired outcomes.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s portfolio.
Transportation
Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of transportation bonds.
Transportation bonds are obligations of issuers that own and operate public
transit systems, ports, highways, turnpikes, bridges and other transportation
systems. The ability of these issuers to make payments on these bonds depends on
variations in use, the degree of government subsidization, competition from
other forms of transportation and increased costs. Port authorities derive
revenues primarily from fees imposed on ships using the port facilities. These
fees can fluctuate depending on the local economy and competition from air, rail
and truck transportation. Transportation bonds may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline industry and
on the stability of a specific carrier who uses the airport as a hub. Air
traffic generally follows broader economic trends and is also affected by the
price and availability of fuel. Toll road bonds are also affected by the cost
and availability of fuel as well as toll levels, the presence of competing roads
and the general economic health of an area. Fuel costs and availability also
affect other transportation related securities, as do the presence of alternate
forms of transportation, such as public transportation. Municipal securities
that are issued to finance a particular transportation project often depend
solely on revenues from that project to make principal and interest payments.
Adverse conditions and developments affecting a particular project may result in
lower revenues to the issuer of the municipal securities.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Intermediate Index. As a result,
an adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in net asset value (“NAV”) than would be the case if
the Fund held all of the securities in the Intermediate Index. Conversely, a
positive development relating to an issuer of securities in the Intermediate
Index that is not held by the Fund could cause the Fund to underperform the
Intermediate Index. To the extent the assets in the Fund are smaller, these
risks will be greater.
Index
Tracking Risk. The
Fund’s return may not match the return of the Intermediate Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Intermediate Index and incurs costs associated with
buying and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Intermediate
Index
or (to the extent the Fund effects creations and redemptions for cash) raising
cash to meet redemptions or deploying cash in connection with newly created
Creation Units (defined herein),
which are not factored into
the
return of the Intermediate Index. Transaction costs, including brokerage costs,
will decrease the Fund’s NAV to the extent not offset by the transaction fee
payable by an Authorized Participant (“AP”). Market disruptions and regulatory
restrictions could have an adverse effect on the Fund’s ability to adjust its
exposure to the required levels in order to track the Intermediate Index. Errors
in the Intermediate Index data, Intermediate Index computations and/or the
construction of the Intermediate Index in accordance with its methodology may
occur from time to time and may not be identified and corrected by the
Intermediate Index provider for a period of time or at all, which may have an
adverse impact on the Fund and its shareholders. Shareholders should understand
that any gains from the Intermediate Index provider's errors will be kept by the
Fund and its shareholders and any losses or costs resulting from the
Intermediate Index provider's errors will be borne by the Fund and its
shareholders. When the Intermediate Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Intermediate Index, any transaction costs and market
exposure arising from such portfolio rebalancing will be borne directly by the
Fund and its shareholders. In addition, the Fund's use of a representative
sampling approach may cause the fund to not be as well correlated with the
return of the Intermediate Index as would be the case if the Fund purchased all
of the securities in the Intermediate Index in the proportions in which they are
represented in the Intermediate Index. Apart from scheduled rebalances, the
Intermediate Index provider or its agents may carry out additional ad hoc
rebalances to the Intermediate Index. Therefore, errors and additional ad hoc
rebalances carried out by the Intermediate Index provider or its agents to the
Intermediate Index may increase the costs to and the tracking error risk of the
Fund. The Fund’s performance may also deviate from the return of the
Intermediate Index due to certain listing standards of the Fund's listing
exchange (the "Exchange") or legal restrictions or limitations (such as
diversification requirements). The Fund may value certain of its investments,
underlying securities and/or currencies, and/or other assets based on fair value
prices. When markets are volatile, the ability to sell securities at fair value
prices may be adversely impacted and may result in additional trading costs
and/or increase the index tracking risk. For tax efficiency purposes, the Fund
may sell certain securities, and such sale may cause the Fund to realize a loss
and deviate from the performance of the Intermediate Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Intermediate Index. Changes to the composition of the Intermediate
Index in connection with a rebalancing or reconstitution of the Intermediate
Index may cause the Fund to experience increased volatility, during which time
the Fund’s index tracking risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Intermediate Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the
Intermediate Index provider to postpone a scheduled rebalance or reconstitution,
which could cause the Intermediate Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and
redemptions,
the existence of market volatility or potential lack of an active trading market
for Shares (including through a trading halt), as well as other factors, may
result in Shares trading at a significant premium or discount to NAV or to the
intraday value of the Fund’s holdings. If a shareholder purchases Shares at a
time when the market price is at a premium to the NAV or sells Shares at a time
when the market price is at a discount to the NAV, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares that were bought or sold or the shareholder may be unable to sell his
or her Shares. The securities held by the Fund may be traded in markets that
close at a different time than the Exchange. Liquidity in those securities may
be reduced after the applicable closing times. Accordingly, during the time when
the Exchange is open but after the applicable market closing, fixing or
settlement times, bid-ask spreads on the Exchange and the resulting premium or
discount to the Shares’ NAV may widen. Additionally, in stressed market
conditions, the market for the Fund’s Shares may become less liquid in response
to deteriorating liquidity in the markets for the Fund’s underlying portfolio
holdings. There are various methods by which investors can purchase and sell
Shares. Investors should consult their financial intermediaries before
purchasing or selling Shares of the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Intermediate Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
June 30, 2021 was
0.74%.
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| Best
Quarter: |
4.26% |
3Q 2011 |
| Worst
Quarter: |
-5.13% |
4Q
2016 |
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.
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Past
One
Year |
Past
Five
Years |
Past
Ten
Years |
|
|
VanEck Intermediate Muni ETF
(return
before taxes) |
5.66% |
3.97% |
4.72% |
|
|
VanEck Intermediate Muni ETF
(return
after taxes on distributions) |
5.63% |
3.97% |
4.71% |
|
|
VanEck Intermediate Muni ETF
(return
after taxes on distributions and sale of Fund
Shares) |
4.23% |
3.58% |
4.28% |
|
|
Bloomberg
AMT-Free Intermediate Continuous Municipal Index
(reflects no deduction for
fees, expenses or taxes) |
6.48% |
4.53% |
5.34% |
|
|
Bloomberg US Aggregate Bond
Index
(reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Manager.
The following individual is primarily 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 |
|
|
James
T. Colby III |
Portfolio
Manager |
December
2007 |
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|
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information, and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Long Muni ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg AMT-Free Long
Continuous Municipal Index (the “Long Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the tables and
examples below.
|
|
|
|
|
|
| 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
Fee |
0.24 |
% |
|
|
|
|
|
|
Other
Expenses(a) |
0.00 |
% |
|
|
|
|
|
|
Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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|
|
|
|
|
|
|
|
|
|
(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2022.
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 |
|
|
1 |
$25 |
|
|
|
3 |
$77 |
|
|
|
5 |
$135 |
|
|
|
10 |
$306 |
|
|
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|
PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
23% of the average value of its
portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Long
Muni ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Long Index. The Long Index is comprised of publicly
traded municipal bonds that cover the U.S. dollar denominated long-term
tax-exempt bond market. This 80% investment policy is non-fundamental and may be
changed without shareholder approval upon 60 days’ prior written notice to
shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in investments suggested by its name. For purposes of this policy, the
term “assets” means net assets plus the amount of any borrowings for investment
purposes. This percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Long Index. Unlike many investment companies
that try to “beat” the performance of a benchmark index, the Fund does not try
to “beat” the Long Index and does not take temporary defensive positions that
are inconsistent with its investment objective of seeking to replicate the Long
Index. Because of the practical difficulties and expense of purchasing all of
the securities in the Long Index, the Fund does not purchase all of the
securities in the Long Index. Instead, the Adviser utilizes a “sampling”
methodology in seeking to achieve the Fund’s objective. As such, the Fund may
purchase a subset of the bonds in the Long Index in an effort to hold a
portfolio of bonds with generally the same risk and return characteristics of
the Long Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Long Index concentrates in an industry or
group of industries. As of April 30, 2021, each of the health care, special tax
(i.e.
revenue bonds backed by a special tax), transportation and water and sewer
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.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities, such as bonds, with longer durations
tend to be more sensitive to interest rate changes, usually making them more
volatile than debt securities with
shorter
durations. In addition, in response to the COVID-19 pandemic, as with other
serious economic disruptions, governmental authorities and regulators are
enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new monetary programs and
lowering interest rates. These actions present heightened risks to debt
instruments, and such risks could be even further heightened if these actions
are unexpectedly or suddenly reversed or are ineffective in achieving their
desired outcomes.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Texas
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of Texas. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within Texas and by
the financial condition of Texas’ political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Health
Care Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. The health care
industry is subject to regulatory action by a number of private and governmental
agencies, including federal, state and local governmental agencies. A major
source of revenues for the health care industry is payments from Medicare and
Medicaid programs. As a result, the industry is sensitive to legislative changes
and reductions in governmental spending for such programs. Numerous other
factors may also affect the industry and the value and credit quality of health
care bonds, such as general and local economic conditions, demand for services
and the ability of the facility to provide the services required, physicians’
confidence in the facility, management capabilities, expenses (including
malpractice insurance premiums) and competition among health care providers. The
following elements may adversely affect health care facility operations: the
implementation of national and/or state-specific health insurance exchanges;
other national, state or local health care reform measures; medical and
technological advances which dramatically alter the need for health services or
the way in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; efforts by employers,
insurers, and governmental agencies to reduce the costs of health insurance and
health care services; and increases and decreases in the cost and availability
of medical products. Hospitals and other health care facilities are additionally
subject to claims and legal actions by patients and others in the ordinary
course of business. There can be no assurance that a claim will not exceed the
insurance coverage of a health care facility or that insurance coverage will be
available to a facility.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s portfolio.
Transportation
Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of transportation bonds.
Transportation bonds are obligations of issuers that own and operate public
transit systems, ports, highways, turnpikes, bridges and other transportation
systems. The ability of these issuers to make payments on these bonds depends on
variations in use, the degree of government subsidization, competition from
other forms of transportation and increased costs. Port authorities derive
revenues primarily from fees imposed on ships using the port facilities. These
fees can fluctuate depending on the local economy and competition from air, rail
and truck transportation. Transportation bonds may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline industry and
on the stability of a specific carrier who uses the airport as a hub. Air
traffic generally follows broader economic trends and is also affected by the
price and availability of fuel. Toll road bonds are also affected by the cost
and availability of fuel as well as toll levels, the presence of competing roads
and the general economic health of an area. Fuel costs and availability also
affect other transportation related securities, as do the presence of alternate
forms of transportation, such as public transportation. Municipal securities
that are issued to finance a particular transportation project often depend
solely on revenues from that project to make principal and interest payments.
Adverse conditions and developments affecting a particular project may result in
lower revenues to the issuer of the municipal securities.
Water
and Sewer Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of water and sewer bonds. Water
and sewer revenue bonds are often considered to have relatively secure credit as
a result of their issuer’s importance, monopoly status and generally unimpeded
ability to raise rates. Despite this, lack of water supply due to insufficient
rain, run off or snow pack is a concern that has led to past defaults. Further,
public resistance to rate increases, costly environmental litigation and federal
environmental mandates are challenges faced by issuers of water and sewer
bonds.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in the Long Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value (“NAV”) than would be the case if the Fund
held all of the securities in the Long Index. Conversely, a positive development
relating to an issuer of securities in the Long Index that is not held by the
Fund could cause the Fund to underperform the Long Index. To the extent the
assets in the Fund are smaller, these risks will be greater.
Index
Tracking Risk. The
Fund’s return may not match the return of the Long Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Long Index and incurs costs associated with buying
and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Long Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the Long Index. Transaction costs, including
brokerage costs, will decrease the Fund’s NAV to the extent not offset by the
transaction fee payable by an Authorized Participant (“AP”). Market disruptions
and regulatory restrictions could have an adverse effect on the Fund’s ability
to adjust its exposure to the required levels in order to track the Long Index.
Errors in the Long Index data, Long Index computations and/or the construction
of the Long Index in accordance with its methodology may occur from time to time
and may not be identified and corrected by the Long Index provider for a period
of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Long Index
provider's errors will be kept by the Fund and its shareholders and any losses
or costs resulting from the Long Index provider's errors will be borne by the
Fund and its shareholders. When the Long Index is rebalanced and the Fund in
turn rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Long Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders.
In addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Long Index as would be
the case if the Fund purchased all of the securities in the Long Index in the
proportions in which they are represented in the Long Index. Apart
from scheduled rebalances, the Long Index provider or its agents may carry out
additional ad hoc rebalances to the Long Index. Therefore, errors and additional
ad hoc rebalances carried out by the Long Index provider or its agents to the
Long Index may increase the costs to and the tracking error risk of the Fund.
The Fund’s performance may also deviate from the return of the Long Index due to
certain listing standards of the Fund's listing exchange (the "Exchange") or
legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities and/or
currencies, and/or other assets based on fair value prices. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Long Index. In light of the factors discussed above, the
Fund’s return may deviate significantly from the return of the Long Index.
Changes to the composition of the Long Index in connection with a rebalancing or
reconstitution of the Long Index may cause the Fund to experience increased
volatility, during which time the Fund’s index tracking risk may be
heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Long Index, the Fund generally
would not sell a security because the security’s issuer was in financial
trouble. Additionally, unusual market conditions may cause the Long Index
provider to postpone a scheduled rebalance or reconstitution, which could cause
the Long Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Long Index concentrates in a particular
sector or sectors or industry or group of industries. To the extent that the
Fund is concentrated in a particular sector or sectors or industry or group of
industries, the Fund will be subject to the risk that economic, political or
other conditions that have a negative effect on those sectors and/or industries
may negatively impact the Fund to a greater extent than if the Fund’s assets
were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
June 30, 2021 was
1.98%.
|
|
|
|
|
|
|
|
|
| Best
Quarter: |
6.69% |
1Q 2014 |
| Worst
Quarter: |
-6.22% |
4Q
2016 |
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.
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|
Past
One
Year |
Past
Five
Years |
Past
Ten
Years |
|
|
VanEck Long Muni ETF
(return before
taxes) |
6.37% |
4.79% |
5.98% |
|
|
VanEck Long Muni ETF
(return after
taxes on distributions) |
6.34% |
4.79% |
5.97% |
|
|
VanEck Long Muni ETF
(return after
taxes on distributions and sale of Fund Shares) |
4.86% |
4.37% |
5.52% |
|
|
Bloomberg
AMT-Free Long Continuous Municipal Index
(reflects no deduction for
fees, expenses or taxes) |
6.78% |
5.42% |
6.67% |
|
|
Bloomberg US Aggregate Bond Index
(reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Manager. The
following individual is primarily 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 |
|
|
James
T. Colby III |
Portfolio
Manager |
January
2008 |
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|
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Short High Yield Muni ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg Municipal High Yield
Short Duration Index (the “Short High Yield
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the tables and
examples below.
|
|
|
|
|
|
| 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 |
% |
|
|
|
|
|
|
Other
Expenses(a) |
0.00 |
% |
|
|
|
|
|
|
Total
Annual Fund Operating Expenses(a) |
0.35 |
% |
|
|
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|
|
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|
(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2022.
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 |
|
|
1 |
$36 |
|
|
|
3 |
$113 |
|
|
|
5 |
$197 |
|
|
|
10 |
$443 |
|
|
|
|
|
|
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
14% of the average value of its
portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Short
High Yield Muni ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the benchmark index. The Short High Yield Index is composed of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
short-term tax-exempt bond market. The Short High Yield Index tracks the high
yield municipal bond market with a targeted 65% weight in non-investment grade
municipal bonds, a targeted 25% weight in triple-B rated investment grade
municipal bonds and a targeted 10% weight in single-A rated investment grade
municipal bonds (in accordance with the Short High Yield Index provider’s
methodology). All bonds must have a fixed rate, a dated-date (i.e.,
the date when interest begins to accrue) after December 31, 1990 and a nominal
maturity of 1 to 12 years. This 80% investment policy is non-fundamental and may
be changed without shareholder approval upon 60 days’ prior written notice to
shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in investments suggested by its name. For purposes of this policy, the
term “assets” means net assets plus the amount of any borrowings for investment
purposes. This percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Short High Yield Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the Short High Yield Index and does not take temporary
defensive positions that are inconsistent with its investment objective of
seeking to replicate the Short High Yield Index. Because of the practical
difficulties and expense of purchasing all of the securities in the Short High
Yield Index, the Fund does not purchase all of the securities in the Short High
Yield Index. Instead, the Adviser utilizes a “sampling” methodology in seeking
to achieve the Fund’s objective. As such, the Fund may purchase a subset of the
bonds in the Short High Yield Index in an effort to hold a portfolio of bonds
with generally the same risk and return characteristics of the Short High Yield
Index.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Short High Yield Index concentrates in an
industry or group of industries. As of April 30, 2021, each of the health care,
industrial development, transportation and special
tax (i.e.
revenue bonds backed by a special tax) 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.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities
go
up. Many factors can cause interest rates to rise, including central bank
monetary policy, rising inflation rates and general economic conditions. The
prevailing historically low interest rate environment increases the risks
associated with rising interest rates, including the potential for periods of
volatility and increased redemptions. In addition, debt securities, such as
bonds, with longer durations tend to be more sensitive to interest rate changes,
usually making them more volatile than debt securities with shorter durations.
In addition, in response to the COVID-19 pandemic, as with other serious
economic disruptions, governmental authorities and regulators are enacting
significant fiscal and monetary policy changes, including providing direct
capital infusions into companies, creating new monetary programs and lowering
interest rates. These actions present heightened risks to debt instruments, and
such risks could be even further heightened if these actions are unexpectedly or
suddenly reversed or are ineffective in achieving their desired
outcomes.
High
Yield Securities Risk.
Securities rated below investment grade are commonly referred to as high yield
securities or “junk bonds.” High yield securities are often issued by issuers
that are restructuring, are smaller or less creditworthy than other issuers, or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual municipal developments
than higher rated securities. During an economic downturn or substantial period
of rising interest rates, high yield security issuers may experience financial
stress that would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. In the event of a default, the Fund may incur
additional expenses to seek recovery. The secondary market for municipal
securities that are high yield securities may be less liquid than the markets
for higher quality municipal securities or high yield securities issued by
corporate issuers and, as such, may have an adverse effect on the market prices
of and the Fund’s ability to arrive at a fair value for certain securities. The
illiquidity of the market also could make it difficult for the Fund to sell
certain securities in connection with a rebalancing of the Short High Yield
Index. In addition, periods of economic uncertainty and change may result in an
increased volatility of market prices of high yield securities and a
corresponding volatility in the Fund’s net asset value (“NAV”).
Health
Care Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. The health care
industry is subject to regulatory action by a number of private and governmental
agencies, including federal, state and local governmental agencies. A major
source of revenues for the health care industry is payments from Medicare and
Medicaid programs. As a result, the industry is sensitive to legislative changes
and reductions in governmental spending for such programs. Numerous other
factors may also affect the industry and the value and credit quality of health
care bonds, such as general and local economic conditions, demand for services
and the ability of the facility to provide the services required, physicians’
confidence in the facility, management capabilities, expenses (including
malpractice insurance premiums) and competition among health care providers. The
following elements may adversely affect health care facility operations: the
implementation of national and/or state-specific health insurance exchanges;
other national, state or local health care reform measures; medical and
technological advances which dramatically alter the need for health services or
the way in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; efforts by employers,
insurers, and governmental agencies to reduce the costs of health insurance and
health care services; and increases and decreases in the cost and availability
of medical products. Hospitals and other health care facilities are additionally
subject to claims and legal actions by patients and others in the ordinary
course of business. There can be no assurance that a claim will not exceed the
insurance coverage of a health care facility or that insurance coverage will be
available to a facility.
Industrial
Development Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of industrial development bonds. These
revenue bonds are issued by or on behalf of public authorities to obtain funds
to finance various public and/or privately operated facilities, including those
for business and manufacturing, housing, sports, pollution control, airport,
mass transit, port and parking facilities. These bonds are normally secured only
by the revenues from the project and not by state or local government tax
payments. Consequently, the credit quality of these securities is dependent upon
the ability of the user of the facilities financed by the bonds and any
guarantor to meet its financial obligations. Payment of interest on and
repayment of principal on such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Transportation
Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of transportation bonds.
Transportation bonds are obligations of issuers that own and operate public
transit systems, ports, highways, turnpikes, bridges and other transportation
systems. The ability of these issuers to make payments on these bonds depends on
variations in use, the degree of government subsidization, competition from
other forms of transportation and increased costs. Port authorities derive
revenues primarily from fees imposed on ships using the port facilities. These
fees can fluctuate depending on the local economy and competition from air, rail
and truck transportation. Transportation bonds may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline industry and
on the stability of a specific carrier who uses the airport as a hub. Air
traffic generally follows broader economic trends and is also affected by the
price and availability of fuel. Toll road bonds are also affected by the cost
and availability of fuel as well as toll levels, the presence of competing roads
and the general economic health of an area. Fuel costs and availability also
affect other transportation related securities, as do the presence of alternate
forms of transportation, such as public transportation. Municipal securities
that are issued to finance a particular transportation project often
depend
solely on revenues from that project to make principal and interest payments.
Adverse conditions and developments affecting a particular project may result in
lower revenues to the issuer of the municipal securities.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
Illinois
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of Illinois. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
Illinois and by the financial condition of Illinois’ political subdivisions,
agencies, instrumentalities and public authorities.
New
Jersey Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of New Jersey. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within New
Jersey and by the financial condition of New Jersey’s political subdivisions,
agencies, instrumentalities and public authorities.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Private
Activity Bonds Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of private activity bonds. The
issuers of private activity bonds in which the Fund may invest may be negatively
impacted by conditions affecting either the general credit of the user of the
private activity project or the project itself. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax. See the
section of the Prospectus entitled “Shareholder Information—Tax Information” for
more details.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Short High Yield Index. As a
result, an adverse development respecting an issuer of securities held by the
Fund could result in a greater decline in NAV than would be the case if the Fund
held all of the securities in the Short High Yield Index. Conversely, a positive
development relating to an issuer of securities in the Short High Yield Index
that is not held by the Fund could cause the Fund to underperform the Short High
Yield Index. To the extent the assets in the Fund are smaller, these risks will
be greater.
Index
Tracking Risk. The
Fund’s return may not match the return of the Short High Yield Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Short High Yield Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the Short
High Yield Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the Short High Yield Index. Transaction
costs, including brokerage costs, will decrease the Fund’s NAV to the extent not
offset by the transaction fee payable by an Authorized Participant (“AP”).
Market disruptions and regulatory restrictions could have an adverse effect on
the Fund’s ability to adjust its exposure to the required levels in order to
track the Short High Yield Index. Errors in the Short High Yield Index data,
Short High Yield Index computations and/or the construction of the Short High
Yield Index in accordance with its methodology may occur from time to time and
may not be identified and corrected by the Short High Yield Index provider for a
period of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Short High
Yield Index provider's errors will be kept by the Fund and its shareholders and
any losses or costs resulting from the Short High Yield Index provider's errors
will be borne by the Fund and its shareholders. When the Short High Yield Index
is rebalanced and the Fund in turn rebalances its portfolio to attempt to
increase the correlation between the Fund’s portfolio and the Short High Yield
Index, any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the Fund and its shareholders.
In addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Short High Yield Index
as would be the case if the Fund purchased all of the securities in the Short
High Yield Index in the proportions in which they are
represented
in the Short High Yield Index.
Apart
from scheduled rebalances, the Short High Yield Index provider or its agents may
carry out additional ad hoc rebalances to the Short High Yield Index. Therefore,
errors and additional ad hoc rebalances carried out by the Short High Yield
Index provider or its agents to the Short High Yield Index may increase the
costs to and the tracking error risk of the Fund. The Fund’s performance may
also deviate from the return of the Short High Yield Index due to certain
listing standards of the Fund's listing exchange (the "Exchange") or legal
restrictions or limitations (such as diversification requirements). The Fund may
value certain of its investments, underlying securities and/or currencies,
and/or other assets based on fair value prices. When markets are volatile, the
ability to sell securities at fair value prices may be adversely impacted and
may result in additional trading costs and/or increase the index tracking risk.
For tax efficiency purposes, the Fund may sell certain securities, and such sale
may cause the Fund to realize a loss and deviate from the performance of the
Short High Yield Index. In light of the factors discussed above, the Fund’s
return may deviate significantly from the return of the Short High Yield Index.
Changes to the composition of the Short High Yield Index in connection with a
rebalancing or reconstitution of the Short High Yield Index may cause the Fund
to experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Short High Yield Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the Short
High Yield Index provider to postpone a scheduled rebalance or reconstitution,
which could cause the Short High Yield Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Short High Yield Index concentrates in
a particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
June 30, 2021 was
3.65%.
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| Best
Quarter: |
3.00% |
1Q 2019 |
| Worst
Quarter: |
-5.03% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 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.
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Past
One Year |
Past
Five Years |
Since
Inception
(1/13/2014) |
|
|
VanEck Short High Yield Muni ETF
(return before taxes) |
1.80% |
2.99% |
3.01% |
|
|
VanEck Short High Yield Muni ETF
(return after taxes on distributions) |
1.76% |
2.97% |
3.00% |
|
|
VanEck Short High Yield Muni ETF
(return after taxes on distributions and sale of Fund
Shares) |
2.28% |
2.99% |
3.01% |
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|
Bloomberg
Municipal High Yield Short Duration Index
(reflects no deduction for
fees, expenses or taxes) |
3.60% |
4.27% |
4.69% |
|
|
Bloomberg US Aggregate Bond Index
(reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.97% |
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Manager. The
following individual is primarily responsible for the day-to-day management of
the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
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James
T. Colby III |
Portfolio
Manager |
January
2014 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Short Muni ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg AMT-Free Short
Continuous Municipal Index (the “Short Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the tables and
examples below.
|
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| Shareholder Fees (fees paid directly from
your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fee |
0.20 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.20 |
% |
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(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2022.
EXPENSE EXAMPLE
This example is intended to help
you compare the cost of investing in the Fund with the cost of investing in
other funds. This example does not take into account brokerage commissions that
you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest $10,000
in the Fund for the time periods indicated and then sell or hold all of your
Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher
or lower, based on these assumptions, your costs would be:
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YEAR |
EXPENSES |
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1 |
$20 |
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3 |
$64 |
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5 |
$113 |
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10 |
$255 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
30% of the average value of its
portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Short
Muni ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Short Index. The Short Index is comprised of
publicly traded municipal bonds that cover the U.S. dollar denominated
short-term tax-exempt bond market. This 80% investment policy is non-fundamental
and may be changed without shareholder approval upon 60 days’ prior written
notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in investments suggested by its name. For purposes of this policy, the
term “assets” means net assets plus the amount of any borrowings for investment
purposes. This percentage limitation applies at the time of the
investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Short Index. Unlike many investment companies
that try to “beat” the performance of a benchmark index, the Fund does not try
to “beat” the Short Index and does not take temporary defensive positions that
are inconsistent with its investment objective of seeking to replicate the Short
Index. Because of the practical difficulties and expense of purchasing all of
the securities in the Short Index, the Fund does not purchase all of the
securities in the Short Index. Instead, the Adviser utilizes a “sampling”
methodology in seeking to achieve the Fund’s objective. As such, the Fund may
purchase a subset of the bonds in the Short Index in an effort to hold a
portfolio of bonds with generally the same risk and return characteristics of
the Short Index.
The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Short Index concentrates in an industry or group of industries. As of April
30, 2021, each of the transportation and industrial development 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.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be
significantly affected by political changes as well as uncertainties in the
municipal market related to government regulation, taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue
bond makes interest and principal payments from revenues generated from a
particular source or facility, such as a tax on particular property or revenues
generated from a municipal water or sewer utility or an airport. Revenue bonds
generally are not backed by the full faith and credit and general taxing power
of the issuer. The market for municipal bonds may be less liquid than for
taxable bonds. There may be less information available on the financial
condition of issuers of municipal securities than for public corporations.
Municipal
instruments may be susceptible to periods of economic stress, which could affect
the market values and marketability of many or all municipal obligations of
issuers in a state, U.S. territory, or possession. For example, the COVID-19
pandemic has significantly stressed the financial resources of many municipal
issuers, which may impair a municipal issuer’s ability to meet its financial
obligations when due and could adversely impact the value of its bonds, which
could negatively impact the performance of the Fund.
Credit
Risk. Bonds
are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s credit worthiness may decline, which may adversely
affect the value of the security.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities, such as bonds, with longer durations
tend to be more sensitive to interest rate changes, usually making them more
volatile than debt securities with
shorter
durations. In addition, in response to the COVID-19 pandemic, as with other
serious economic disruptions, governmental authorities and regulators are
enacting significant fiscal and monetary policy changes, including providing
direct capital infusions into companies, creating new monetary programs and
lowering interest rates. These actions present heightened risks to debt
instruments, and such risks could be even further heightened if these actions
are unexpectedly or suddenly reversed or are ineffective in achieving their
desired outcomes.
California
Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, the Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease the
Fund’s net investment income.
Industrial
Development Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of industrial development
bonds. These revenue bonds are issued by or on behalf of public authorities to
obtain funds to finance various public and/or privately operated facilities,
including those for business and manufacturing, housing, sports, pollution
control, airport, mass transit, port and parking facilities. These bonds are
normally secured only by the revenues from the project and not by state or local
government tax payments. Consequently, the credit quality of these securities is
dependent upon the ability of the user of the facilities financed by the bonds
and any guarantor to meet its financial obligations. Payment of interest on and
repayment of principal on such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Transportation
Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of transportation bonds.
Transportation bonds are obligations of issuers that own and operate public
transit systems, ports, highways, turnpikes, bridges and other transportation
systems. The ability of these issuers to make payments on these bonds depends on
variations in use, the degree of government subsidization, competition from
other forms of transportation and increased costs. Port authorities derive
revenues primarily from fees imposed on ships using the port facilities. These
fees can fluctuate depending on the local economy and competition from air, rail
and truck transportation. Transportation bonds may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline industry and
on the stability of a specific carrier who uses the airport as a hub. Air
traffic generally follows broader economic trends and is also affected by the
price and availability of fuel. Toll road bonds are also affected by the cost
and availability of fuel as well as toll levels, the presence of competing roads
and the general economic health of an area. Fuel costs and availability also
affect other transportation related securities, as do the presence of alternate
forms of transportation, such as public transportation. Municipal securities
that are issued to finance a particular transportation project often depend
solely on revenues from that project to make principal and interest payments.
Adverse conditions and developments affecting a particular project may result in
lower revenues to the issuer of the municipal securities.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Short Index. As a result, an
adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in net asset value (“NAV”) than would be the case if
the Fund held all of the securities in the Short Index. Conversely, a positive
development relating to an issuer of securities in the Short Index that is not
held by the Fund could cause the Fund to underperform the Short Index. To the
extent the assets in the Fund are smaller, these risks will be
greater.
Index
Tracking Risk.
The Fund’s return may not match the return of the Short Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Short Index and incurs costs associated with buying
and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Short Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or
deploying
cash in connection with newly created Creation Units (defined
herein),
which are not factored into the return of the Short Index. Transaction costs,
including brokerage costs, will decrease the Fund’s NAV to the extent not offset
by the transaction fee payable by an Authorized Participant (“AP”). Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Short Index. Errors in the Short Index data, Short Index computations and/or
the construction of the Short Index in accordance with its methodology may occur
from time to time and may not be identified and corrected by the Short Index
provider for a period of time or at all, which may have an adverse impact on the
Fund and its shareholders. Shareholders should understand that any gains from
the Short Index provider's errors will be kept by the Fund and its shareholders
and any losses or costs resulting from the Short Index provider's errors will be
borne by the Fund and its shareholders. When the Short Index is rebalanced and
the Fund in turn rebalances its portfolio to attempt to increase the correlation
between the Fund’s portfolio and the Short Index, any transaction costs and
market exposure arising from such portfolio rebalancing will be borne directly
by the Fund and its shareholders.
In addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Short Index as would be
the case if the Fund purchased all of the securities in the Short Index in the
proportions in which they are represented in the Short Index. Apart
from scheduled rebalances, the Short Index provider or its agents may carry out
additional ad hoc rebalances to the Short Index. Therefore, errors and
additional ad hoc rebalances carried out by the Short Index provider or its
agents to the Short Index may increase the costs to and the tracking error risk
of the Fund. The Fund’s performance may also deviate from the return of the
Short Index due to certain listing standards of the Fund's listing exchange (the
"Exchange") or legal restrictions or limitations (such as diversification
requirements). The Fund may value certain of its investments, underlying
securities and/or currencies, and/or other assets based on fair value prices.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the Short Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Short Index. Changes to the composition of the Short Index in connection
with a rebalancing or reconstitution of the Short Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after the Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Short Index, the Fund generally
would not sell a security because the security’s issuer was in financial
trouble. Additionally, unusual market conditions may cause the Short Index
provider to postpone a scheduled rebalance or reconstitution, which could cause
the Short Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of
the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Short Index concentrates in a
particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
The
year-to-date total return as of
June 30, 2021 was
0.37%.
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| Best
Quarter: |
2.62% |
2Q 2020 |
| Worst
Quarter: |
-1.78% |
4Q
2016 |
Average Annual Total Returns for the Periods
Ended December 31, 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.
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Past
One Year |
Past
Five Years |
Past
Ten Years |
|
|
VanEck Short Muni ETF
(return
before taxes) |
3.22% |
1.98% |
1.96% |
|
|
VanEck Short Muni ETF
(return after
taxes on distributions) |
3.22% |
1.98% |
1.95% |
|
|
VanEck Short Muni ETF
(return after
taxes on distributions and sale of Fund Shares) |
2.54% |
1.84% |
1.84% |
|
|
Bloomberg
AMT-Free Short Continuous Municipal Index
(reflects no deduction for
fees, expenses or taxes) |
3.71% |
2.38% |
2.44% |
|
|
Bloomberg US Aggregate Bond Index
(reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Manager. The
following individual is primarily responsible for the day-to-day management of
the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
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James
T. Colby III |
Portfolio
Manager |
February
2008 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
PURCHASE
AND SALE OF FUND SHARES
Individual
Shares of a Fund may only be purchased and sold in secondary market transactions
through a broker or dealer at a market price. Shares of the Funds are listed on
the Exchange, and because Shares trade at market prices rather than NAV, Shares
of the Funds may trade at a price greater than NAV (i.e.,
a "premium") or less than NAV (i.e.,
a "discount").
An
investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares of a Fund (bid) and the
lowest price a seller is willing to accept for Shares (ask) when buying or
selling Shares in the secondary market (the “bid/ask spread”).
Recent
information, including information about each Fund’s NAV, market price, premiums
and discounts, and bid/ask spreads, is included on the Fund’s website at
www.vaneck.com.
TAX
INFORMATION
The
Funds expect to distribute net investment income, if any, at least monthly, and
any net realized long-term or short-term capital gains annually. The Funds may
also pay a special distribution at any time to comply with U.S. federal tax
requirements.
Dividends
paid by the Funds that are properly reported as exempt-interest dividends will
not be subject to regular U.S. federal income tax. The Funds intend to invest
its assets in a manner such that a significant portion of their dividend
distributions to shareholders will generally be exempt from U.S. federal income
taxes, including the federal alternative minimum tax for noncorporate
shareholders. Such distributions will generally be subject to state income
taxes.
Distributions
from a Fund’s net investment income (other than net tax-exempt income),
including any net short-term capital gains, if any, are taxable to you as
ordinary income.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of the Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer or other intermediary or its employees or associated persons to
recommend the Fund over another investment. Ask your financial adviser or visit
your financial intermediary’s website for more information.
PRINCIPAL
INVESTMENT STRATEGIES
Each
Fund (except VanEck CEF Muni Income ETF) uses a sampling approach in seeking to
achieve its investment objective. Sampling means that the Adviser uses
quantitative analysis to select a representative sample of securities that the
Adviser believes collectively have an investment profile similar to a Fund’s
Index. The Adviser seeks to select securities that will have, in the aggregate,
investment characteristics (based on factors such as market capitalization and
industry weightings), fundamental characteristics (such as return variability,
duration, maturity or credit ratings and yield) and liquidity measures similar
to those of a Fund’s Index. The quantity of holdings in a Fund will be based on
a number of factors, including asset size of such Fund. The Adviser generally
expects a Fund to hold less than the total number of securities in its Index,
but reserves the right to hold as many securities as it believes necessary to
achieve the Fund’s investment objective. In addition, from time to time,
securities are added to or removed from the applicable Index. Each Fund may sell
securities that are represented in its Index, or purchase securities that are
not yet represented in its Index, in anticipation of their removal from or
addition to such Index. Further, the Adviser may choose to underweight or
overweight securities, purchase or sell securities not in an Index, or utilize
various combinations of other available investment techniques, in seeking to
track a Fund’s Index.
The
Adviser anticipates that, generally, VanEck CEF Muni Income ETF will hold or
gain exposure to all of the securities that comprise the CEFMX Index in
proportion to their weightings in the CEFMX Index. However, because of
limitations imposed by the 1940 Act regarding investments in other investment
companies, VanEck CEF Muni Income ETF may purchase a sample of securities in the
CEFMX Index. There also may be instances in which the Adviser may choose to
underweight or overweight a security in the CEFMX Index, purchase securities not
in the CEFMX Index that the Adviser believes are appropriate to substitute for
certain securities in the CEFMX 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 CEFMX Index.
VanEck CEF Muni Income ETF may sell securities that are represented in the CEFMX
Index in anticipation of their removal from the CEFMX Index or purchase
securities not represented in the CEFMX Index in anticipation of their addition
to the CEFMX Index. VanEck CEF Muni Income ETF may also, in order to comply with
the tax diversification requirements of the Internal Revenue Code of 1986, as
amended ("Internal Revenue Code"), temporarily invest in securities not included
on the CEFMX Index that are expected to be highly correlated with the securities
included in the CEFMX 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 (the
"Board of Trustees") of VanEck ETF Trust (the "Trust") without shareholder
approval, except as noted in this Prospectus or the Statement of Additional
Information (“SAI”) under the section entitled “Investment Policies and
Restrictions—Investment Restrictions.”
RISKS
OF INVESTING IN THE FUNDS
The
following section provides additional information regarding the principal risks
identified under “Principal Risks of Investing in the Fund” in each Fund’s
“Summary Information” section followed by additional risk information. The risks
listed below are applicable to each Fund unless otherwise noted.
Investors
in a Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
a Fund involves a substantial degree of risk. An investment in a Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore, you should
consider carefully the following risks before investing in a Fund, each of which
could significantly and adversely affect the value of an investment in a
Fund.
Credit
Risk.
Debt securities, such as bonds are subject to credit risk. Credit risk refers to
the possibility that the issuer or guarantor of a security will be unable and/or
unwilling to make timely interest payments and/or repay the principal on its
debt or to otherwise honor its obligations and/or default completely. Debt
securities are subject to varying degrees of credit risk, depending on the
issuer’s financial condition and on the terms of the securities, which may be
reflected in credit ratings. There is a possibility that the credit rating of a
debt security may be downgraded after purchase or the perception of an issuer’s
credit worthiness may decline, which may adversely affect the value of the
security. Lower credit quality may also affect liquidity and make it difficult
for a Fund to sell the security.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. The prevailing historically low
interest rate environment increases the risks associated with rising interest
rates, including the potential for periods of volatility and increased
redemptions. In addition, debt securities, such as bonds, with longer durations
tend to be more sensitive to interest rate changes, usually making them more
volatile than debt securities with shorter durations. To the extent the Fund
invests a substantial portion of its assets in debt securities with longer term
maturities, rising interest rates may cause the value of the Fund’s investments
to decline significantly.
In
addition, in response to the COVID-19 pandemic, as with other serious economic
disruptions, governmental authorities and regulators are enacting significant
fiscal and monetary policy changes, including providing direct capital infusions
into companies,
creating
new monetary programs and lowering interest rates. These actions present
heightened risks to debt instruments, and such risks could be even further
heightened if these actions are unexpectedly or suddenly reversed or are
ineffective in achieving their desired outcomes.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades or the bankruptcy of an issuer could have a significant effect on the
issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. In addition, there is a risk that, as a
result of the recent economic crisis, the ability of any issuer to pay, when
due, the principal or interest on its municipal bonds may be materially
affected. Certain municipalities may have difficulty meeting their obligations
due to, among other reasons, changes in underlying demographics. These actions
present heightened risks to debt instruments, and such risks could be even
further heightened if these actions are unexpectedly or suddenly reversed or are
ineffective in achieving their desired outcomes. Municipal instruments may be
susceptible to periods of economic stress, which could affect the market values
and marketability of many or all municipal obligations of issuers in a state,
U.S. territory, or possession. For example, the COVID-19 pandemic has
significantly stressed the financial resources of many municipal issuers, which
may impair a municipal issuer’s ability to meet its financial obligations when
due and could adversely impact the value of its bonds, which could negatively
impact the performance of the Funds.
Municipal
securities can be significantly affected by political changes as well as
uncertainties in the municipal market related to taxation, legislative changes
or the rights of municipal security holders. Because many municipal securities
are issued to finance similar projects, especially those relating to education,
health care, transportation, utilities and water and sewer, conditions in those
sectors can affect the overall municipal market. Municipal securities include
general obligation bonds, which are backed by the “full faith and credit” of the
issuer, which has the power to tax residents to pay bondholders. Timely payments
depend on the issuer’s credit quality, ability to raise tax revenues and ability
to maintain an adequate tax base. General obligation bonds generally are not
backed by revenues from a specific project or source. Municipal securities also
include revenue bonds, which are generally backed by revenue from a specific
project or tax. The issuer of a revenue bond makes interest and principal
payments from revenues generated from a particular source or facility, such as a
tax on particular property or revenues generated from a municipal water or sewer
utility or an airport. Revenue bonds generally are not backed by the full faith
and credit and general taxing power of the issuer. Municipal securities backed
by current or anticipated revenues from a specific project or specific assets
can be negatively affected by the discontinuance of the taxation supporting the
project or assets or the inability to collect revenues for the project or from
the assets.
If
the Internal Revenue Service (“IRS”) determines that an issuer of a municipal
security has not complied with applicable tax requirements, interest from the
security could become taxable and the security could decline significantly in
value.
The
market for municipal bonds may be less liquid than for taxable bonds. There may
also be less information available on the financial condition of issuers of
municipal securities than for public corporations. The reorganization of a
municipality’s debts may include extending debt maturities, reducing the amount
of principal or interest, refinancing the debt or taking other measures, which
may significantly affect the rights of creditors and the value of the securities
issued by the municipality and the value of a Fund’s investments. The taxing
power of any governmental entity may be limited and an entity’s credit may
depend on factors which are beyond the entity’s control.
High
Yield Securities Risk.
(VanEck CEF Muni Income ETF, VanEck High Yield Muni ETF and VanEck Short High
Yield Muni ETF only.) Securities rated below investment grade are commonly
referred to as high yield securities or “junk bonds.” High yield securities are
often issued by issuers that are restructuring, are smaller or less creditworthy
than other issuers, or are more highly indebted than other issuers. High yield
securities are subject to greater risk of loss of income and principal than
higher rated securities and are considered speculative. The prices of high yield
securities are likely to be more sensitive to adverse economic changes or
individual issuer developments than higher rated securities. During an economic
downturn or substantial period of rising interest rates, high yield security
issuers may experience financial stress that would adversely affect their
ability to service their principal and interest payment obligations, to meet
their projected business goals or to obtain additional financing. In the event
of a default, a Fund may incur additional expenses to seek recovery. The
secondary market for municipal securities that are high yield securities may be
less liquid than the markets for higher quality municipal securities or high
yield securities issued by corporate issuers and, as such, may have an adverse
effect on the market prices of and an underlying Fund’s ability to arrive at a
fair value for certain securities. The illiquidity of the market also could make
it difficult for a Fund to sell certain securities in connection with a
rebalancing of its respective Index. In addition, periods of economic
uncertainty and change may result in an increased volatility of market prices of
high yield securities and corresponding volatility in a Fund's NAV.
Fund
of Funds Risk.
(VanEck CEF Muni Income ETF only.) The performance of the Fund is dependent on
the performance of the Underlying Funds. The Fund will be subject to the risks
of the Underlying Funds’ investments. The Fund will pay indirectly a
proportional share of the fees and expenses of the Underlying Funds in which it
invests, including their investment advisory and administration fees, while
continuing to pay its own management fee. As a result, the Fund’s shareholders
will indirectly bear the expenses of the Underlying Funds, absorbing duplicative
levels of fees with respect to investments in the Underlying Funds. In addition,
at times certain segments of the market represented by the Underlying Funds may
be out of favor and underperform other segments.
Risks
of Investing in Closed-End Funds.
(VanEck CEF Muni Income ETF only.) The shares of a closed-end fund may trade at
a discount or premium to its NAV. Certain closed-end funds traded on exchanges
may be thinly traded and experience large spreads between the “ask” price quoted
by a seller and the “bid” price offered by a buyer. A closed-end fund may be
leveraged as part of its investment strategy. As a result, the Fund may be
indirectly exposed to the effects of leverage through its investment in the
Underlying Funds. Investments in Underlying Funds that use leverage may cause
the value of the Fund’s Shares to be more volatile than if the Fund invested in
Underlying Funds that do not utilize leverage and may expose the Fund to the
possibility that the Fund’s long-term returns on such securities (and,
indirectly, the long-term returns on the Shares) will be diminished. To comply
with provisions of the 1940 Act, on any matter upon which the Underlying Fund
shareholders are solicited to vote, the Adviser will vote Underlying Fund shares
held by the Fund in the same general proportion as shares held by other
shareholders of the Underlying Fund. In addition, to the extent that a
closed-end fund persistently trades at a significant discount to NAV, it may
become the target of activist shareholders seeking to narrow the discount, which
may increase the expenses of such fund.
Risk
of Investment Restrictions.
(VanEck CEF Muni Income ETF only.) The Fund is subject to the conditions set
forth in the Exemptive Relief and certain additional provisions of the 1940 Act
that limit the amount that the Fund and its affiliates, in the aggregate, can
invest in the outstanding voting securities of any one Underlying Fund. The Fund
and its affiliates may not acquire “control” of an Underlying Fund, which is
presumed once ownership of an Underlying Fund’s outstanding voting securities
exceeds 25%. This limitation could inhibit the Fund’s ability to purchase one or
more Underlying Funds in the CEFMX Index in the proportions represented in the
CEFMX Index. In these circumstances, the Fund would be required to use sampling
techniques, which could increase the risk of tracking error.
Sampling
Risk.
(All Funds except VanEck CEF Muni Income ETF.) A Fund’s use of a representative
sampling approach will result in its holding a smaller number of securities than
are in its respective Index. As a result, an adverse development respecting an
issuer of securities held by a Fund could result in a greater decline in NAV
than would be the case if the Fund held all of the securities in its respective
Index. Conversely, a positive development relating to an issuer of securities in
an Index that is not held by the Fund could cause the Fund to underperform its
respective Index. To the extent the assets in a Fund are smaller, these risks
will be greater.
Private
Activity Bonds Risk.
(VanEck High Yield Muni ETF and VanEck Short High Yield Muni ETF only.) A Fund
will be sensitive to, and its performance will depend to a greater extent on,
the overall condition and performance of private activity bonds. The issuers of
private activity bonds in which the Fund may invest may be negatively impacted
by conditions affecting either the general credit of the user of the private
activity project or the project itself. Conditions such as regulatory and
environmental restrictions and economic downturns may lower the need for these
facilities and the ability of users of the project to pay for the facilities.
This could cause a decline in the Fund’s value. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax.
Call
Risk.
Each Fund may invest in callable bonds. If interest rates fall, it is possible
that issuers of callable securities will “call” (or prepay) their bonds before
their maturity date. If a call were exercised by the issuer during or following
a period of declining interest rates, a Fund is likely to have to replace such
called security with a lower yielding security or securities with greater risks
or other less favorable features. If that were to happen, it would decrease a
Fund’s net investment income. A Fund also may fail to recover additional amounts
(i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Operational
Risk.
Each Fund is exposed to operational risk arising from a number of factors,
including but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or system failures.
Market
Risk.
The prices of the securities in the Funds are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. Overall securities
values could decline generally or could underperform other investments. An
investment in the Funds may lose money.
VanEck
Intermediate Muni ETF, VanEck Long Muni ETF, VanEck Short Muni ETF, VanEck High
Yield Muni ETF, VanEck Short High Yield Muni ETF and the Underlying Funds in
which VanEck CEF Muni Income ETF may invest in bonds from the following
industries/sectors:
Education
Bond Risk.
In general, there are two types of education related bonds: those issued to
finance projects for public and private colleges and universities, and those
representing pooled interests in student loans. Bonds issued to supply
educational institutions with funds are subject to the risk of unanticipated
revenue decline, primarily the result of decreasing student enrollment or
decreasing state and federal funding. Among the factors that may lead to
declining or insufficient revenues are restrictions on students’ ability to pay
tuition, availability of state and federal funding and general economic
conditions. Student loan revenue bonds are generally offered by state (or
substate) authorities or
commissions
and are backed by pools of student loans. Underlying student loans may be
guaranteed by state guarantee agencies and may be subject to reimbursement by
the United States Department of Education through its guaranteed student loan
program. Others may be private, uninsured loans made to parents or students
which are supported by reserves or other forms of credit enhancement. Recoveries
of principal due to loan defaults may be applied to redemption of bonds or may
be used to re-lend, depending on program latitude and demand for loans. Cash
flows supporting student loan revenue bonds are impacted by numerous factors,
including the rate of student loan defaults, seasoning of the loan portfolio and
student repayment deferral periods of forbearance. Other risks associated with
student loan revenue bonds include potential changes in federal legislation
regarding student loan revenue bonds, state guarantee agency reimbursement and
continued federal interest and other program subsidies currently in
effect.
Electric
Utilities Bond Risk.
The electric utilities industry has been experiencing, and will continue to
experience, increased competitive pressures. Federal legislation may open
transmission access to any electricity supplier, although it is not presently
known to what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel; (b) the availability and cost of capital; (c) the
effects of conservation on energy demand; (d) the effects of rapidly changing
environmental, safety and licensing requirements, and other federal, state and
local regulations; (e) timely and sufficient rate increases and governmental
limitations on rates charged to customers; (f) the effects of opposition to
nuclear power; (h) increases in operating costs; and (i) obsolescence of
existing equipment, facilities and products.
General
Obligation Bond Risk.
General obligation bonds are not backed by revenues from a specific project or
source. Instead, general obligation bonds are backed by the “full faith and
credit” of the issuer, which has the power to tax residents to pay bondholders.
Timely payments depend on the issuer’s credit quality, ability to raise tax
revenues and ability to maintain an adequate tax base.
Health
Care Bond Risk.
The health care industry is subject to regulatory action by a number of private
and governmental agencies, including federal, state and local governmental
agencies. A major source of revenues for the health care industry is payments
from Medicare and Medicaid programs. As a result, the industry is sensitive to
legislative changes and reductions in governmental spending for such programs.
Numerous other factors may also affect the industry and the value and credit
quality of health care bonds, such as general and local economic conditions,
demand for services and the ability of the facility to provide the services
required, physicians’ confidence in the facility, management capabilities,
expenses (including malpractice insurance premiums) and competition among health
care providers. The following elements may adversely affect health care facility
operations: the implementation of national and/or state-specific health
insurance exchanges; other national, state or local health care reform measures;
medical and technological advances which dramatically alter the need for health
services or the way in which such services are delivered; changes in medical
coverage which alter the traditional fee-for-service revenue stream; efforts by
employers, insurers, and governmental agencies to reduce the costs of health
insurance and health care services; and increases and decreases in the cost and
availability of medical products. Hospitals and other health care facilities are
additionally subject to claims and legal actions by patients and others in the
ordinary course of business. There can be no assurance that a claim will not
exceed the insurance coverage of a health care facility or that insurance
coverage will be available to a facility.
Housing
Bond Risk.
Housing revenue bonds are generally issued by a state, county, city, local
housing authority or other public agency. They generally are secured by the
revenues derived from mortgages purchased with the proceeds of the bond issue.
It is extremely difficult to predict the supply of available mortgages to be
purchased with the proceeds of an issue or the future cash flow from the
underlying mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner repayments
will create an irregular cash flow. Many factors may affect the financing of
multi-family housing projects, including acceptable completion of construction,
proper management, occupancy and rent levels, economic conditions and changes to
current laws and regulations.
Industrial
Development Bond Risk.
These revenue bonds are issued by or on behalf of public authorities to obtain
funds to finance various public and/or privately operated facilities, including
those for business and manufacturing, housing, sports, pollution control,
airport, mass transit, port and parking facilities. These bonds are normally
secured only by the revenues from the project and not by state or local
government tax payments. Consequently, the credit quality of these securities is
dependent upon the ability of the user of the facilities financed by the bonds
and any guarantor to meet its financial obligations. Payment of interest on and
repayment of principal of such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Lease
Obligations Risk.
Lease obligations may have risks not normally associated with general obligation
or other revenue bonds. Leases and installment purchase or conditional sale
contracts (which may provide for title to the leased asset to pass eventually to
the issuer) have developed as a means for governmental issuers to acquire
property and
equipment
without the necessity of complying with the constitutional statutory
requirements generally applicable for the issuance of debt.
Certain
lease obligations contain “non appropriation” clauses that provide that the
governmental issuer has no obligation to make future payments under the lease or
contract unless money is appropriated for that purpose by the appropriate
legislative body on an annual or other periodic basis. Consequently, continued
lease payments on those lease obligations containing “non appropriation” clauses
are dependent on future legislative actions. If these legislative actions do not
occur, the holders of the lease obligation may experience difficulty in
exercising their rights, including disposition of the property. In such
circumstances, the Fund might not recover the full principal amount of the
obligation.
Resource
Recovery Bond Risk.
Resource recovery bonds are a type of revenue bond issued to build facilities
such as solid waste incinerators or waste-to-energy plants. Typically, a private
corporation is involved, at least during the construction phase, and the revenue
stream is secured by fees or rents paid by municipalities for use of the
facilities.
These
bonds are normally secured only by the revenues from the project and not by
state or local government tax receipts. Consequently, the credit quality of
these securities is dependent upon the ability of the user of the facilities
financed by the bonds and any guarantor to meet its financial obligations. The
viability of a resource recovery project, environmental protection regulations,
and project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
Special
Tax Bond Risk.
Special tax bonds are usually backed and payable through a single tax, or series
of special
taxes
such as incremental property taxes. The failure of the tax levy to generate
adequate revenue to pay the debt service on the bonds may cause the value of the
bonds to decline. Adverse conditions and developments affecting a particular
project may result in lower revenues to the issuer of the municipal securities,
which may adversely affect the value of the Fund’s portfolio.
Tobacco
Bond Risk.
Tobacco
settlement revenue bonds are generally neither general nor legal obligations of
a state or any of its political subdivisions and neither the full faith and
credit nor the taxing power nor any other assets or revenues of a state or of
any political subdivision will be pledged to the payment of any such bonds. In
addition, tobacco companies’ profits from the sale of tobacco products are
inherently variable and difficult to estimate. There can be no guarantee that
tobacco companies will earn enough revenues to cover the payments due under
tobacco bonds. The revenues of tobacco companies may be adversely affected by
the adoption of new legislation and/or by litigation.
Transportation
Bond Risk.
Transportation bonds are obligations of issuers that own and operate public
transit systems, ports, highways, turnpikes, bridges and other transportation
systems. The ability of these issuers to make payments on these bonds depends on
variations in use, the degree of government subsidization, competition from
other forms of transportation and increased costs. Port authorities derive
revenues primarily from fees imposed on ships using the port facilities. These
fees can fluctuate depending on the local economy and competition from air, rail
and truck transportation. Transportation bonds may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline industry and
on the stability of a specific carrier who uses the airport as a hub. Air
traffic generally follows broader economic trends and is also affected by the
price and availability of fuel. Toll road bonds are also affected by the cost
and availability of fuel as well as toll levels, the presence of competing roads
and the general economic health of an area. Fuel costs and availability also
affect other transportation related securities, as do the presence of alternate
forms of transportation, such as public transportation. Municipal securities
that are issued to finance a particular transportation project often depend
solely on revenues from that project to make principal and interest payments.
Adverse conditions and developments affecting a particular project may result in
lower revenues to the issuer of the municipal securities.
Water
and Sewer Bond Risk.
Water and sewer revenue bonds are often considered to have relatively secure
credit as a result of their issuer’s importance, monopoly status and generally
unimpeded ability to raise rates. Despite this, lack of water supply due to
insufficient rain, run off or snow pack is a concern that has led to past
defaults. Further, public resistance to rate increases, costly environmental
litigation and federal environmental mandates are challenges faced by issuers of
water and sewer bonds.
California
Risk.
(VanEck Intermediate Muni ETF, VanEck Long Muni ETF, VanEck Short Muni ETF and
VanEck High Yield Muni ETF only.) Each Fund may invest a significant portion of
its assets in municipal obligations of issuers located in the State of
California. Consequently, the Funds may be affected by political, economic,
regulatory and other developments within California and by the financial
condition of California’s political subdivisions, agencies, instrumentalities
and public authorities. The following is a summary of certain factors affecting
the State’s current financial situation that could, in turn, adversely affect
the Funds’ investments in California municipal obligations.
Provisions
of the California Constitution and State statutes limit the taxing and spending
authority of California governmental entities. Payments of certain municipal
obligations may also be structurally subordinated to other obligations as a
matter of California law. These provisions may impair the ability of California
issuers to pay principal and/or interest on their obligations and
the
ability of the State and municipalities to address financial downturns,
including limitations on the ability of the State or municipalities to raise
taxes, fees or charges without voter approval. In addition, California has in
the past experienced financial and economic difficulties, which heightened the
risks associated with investing in bonds issued by the State of California and
its political subdivisions, agencies, instrumentalities and public authorities.
Risks that threaten the State’s fiscal condition include the significant
unfunded liabilities of the State’s two main retirement systems. California has
committed to significant increases in annual payments to these systems to reduce
the unfunded liabilities, and California also has significant unfunded liability
with respect to other post-employment benefits. Moreover, many local government
agencies may face budget constraints due to mandated expenditures for health,
welfare and public safety, as well as the adverse impact local economic
conditions have had on property taxes and sales taxes, two major sources of
revenue for local government. In particular, there is an increased risk that
payments to bondholders could be interrupted or that an issuer could default on
its obligations. A default or credit rating downgrade of a small number of
California municipal security issuers could negatively impact the market values
and marketability of all California municipal securities held by each Fund.
California’s
economy is broad, it does have major concentrations in high technology, trade,
entertainment, manufacturing, agriculture, government, tourism, construction and
services and may be sensitive to economic problems affecting those industries.
In addition, future California political and economic developments,
constitutional amendments, legislative measures, executive orders,
administrative regulations, litigation and voter initiatives could negatively
impact California’s economy. Such developments could adversely affect each
Fund’s income, NAV, liquidity and/or ability to preserve or realize appreciation
of capital. Furthermore, investments in California municipal securities may be
affected by natural disasters, such as earthquakes or wildfires, which could
impair an issuer's ability to pay principal and/or interest on its
obligations.
Other
risks affecting issuers of California municipal securities include, but are not
limited to, the ongoing and evolving economic and health-related impacts of the
COVID-19 pandemic on the national, State and local economies; the impact of
federal tax law changes; the impact of international events on consumer
confidence, oil supplies and oil prices; shifts in monetary policy affecting
interest rates and the financial markets; the magnitude of pension and
post-retirement health care commitments, and the impact on the funding of such
benefits of lower-than-expected returns; the impact of consumer spending on tax
collections; increased demand for entitlement-based and claims-based programs
such as Medicaid, public assistance and general public health; access to the
capital markets in light of disruptions in the market; litigation against the
State; and actions taken by the federal government, including audits,
disallowances, changes in aid levels, and changes to Medicaid
rules.
New
York Risk.
(VanEck Intermediate Muni ETF, VanEck Long Muni ETF and VanEck Short Muni ETF
only). Each Fund may invest a significant portion of its assets in New York
municipal bonds. Consequently, each Fund may be affected by political, economic,
regulatory or other developments within the State of New York, and by the
financial condition of its public authorities and political subdivisions.
Unfavorable developments in any economic sector may have a substantial impact on
the overall New York municipal market. As the nation’s financial capital, New
York’s and New York City’s economy is heavily dependent on the financial sector
and may be sensitive to economic problems affecting the sector. New York and New
York City also face a particularly large degree of uncertainty from interest
rate risk and equity market volatility. The New York and New York City economy
tends to be more sensitive to monetary policy actions and to movements in the
national and world economies than the economies of other states. The economies
of New York State and New York City are diversified across the finance,
insurance, real estate, entertainment and services sectors. Any downturn in
these sectors or related industries may adversely affect the economy of the
state. Certain issuers of New York municipal bonds have experienced serious
financial difficulties in the past and reoccurrence of these difficulties may
impair the ability of certain New York issuers to pay principal or interest on
their obligations. The economic, financial and social impact from the COVID-19
pandemic has been unprecedented—and New York State was the epicenter of the
initial wave; however, the state's general obligation ratings have remained
strong.
Climate
change remains a long term threat to New York State. These threats include
rising sea levels, more severe coastal flooding, more intense storms, and
greenhouse gas emissions.
New
Jersey Risk. (VanEck
Short High Yield Muni ETF only.) Each Fund may invest a significant portion of
its assets in municipal obligations of issuers located in the State of New
Jersey. Consequently, the Funds may be impacted by political, economic or
regulatory developments that affect issuers in New Jersey and their ability to
pay principal and interest on their obligations. New Jersey faces significant
future pension and other post-employment benefit liabilities, which could lessen
the state’s financial strength and increase its overall credit risk.
New
Jersey’s debt burden has increased substantially in the past decade and is high
by a number of measurements. New Jersey’s ability to issue additional bonds is
somewhat limited, as voters must authorize both general obligation and
appropriation-backed bonds. However, this excludes debt backed by
constitutionally dedicated revenues. New Jersey’s general obligation credit
ratings have been downgraded by rating agencies several times in recent years.
New Jersey was also severely impacted by the COVID-19 pandemic beginning in
2020, which may also affect the state’s general obligation credit
ratings.
New
Jersey and its various subdivisions may also face increasing financial pressure
from costs relating to pensions and other post-employment benefits. New Jersey’s
debt burden has increased substantially in the past decade and is high by any
number of measurements. This may reduce financial flexibility in the
future.
Illinois
Risk.
(VanEck Short High Yield Muni ETF and VanEck High Yield Muni ETF only.) Each
Fund may invest a significant portion of its assets in Illinois municipal bonds.
Consequently, the Funds may be affected by negative political, economic,
regulatory or other developments within the State of Illinois including the
financial condition of its public authorities and political subdivisions.
Unfavorable
developments in any economic sector may have a substantial impact on the overall
Illinois municipal market. Illinois has experienced significant budgetary
challenges in recent years. Certain issuers of Illinois municipal bonds have
experienced serious financial difficulties in the past and reoccurrence of these
difficulties may impair the ability of certain Illinois issuers to pay principal
or interest on their obligations. In 2017, Illinois narrowly avoided becoming
the first state to be issued a “junk” credit rating after it passed its first
budget in more than two years. However, the state’s recent budget stalemate
could still trigger a credit downgrade from one of the other major ratings
companies. Any future failures to pass a budget could have an adverse impact on
the state’s ability to pay outstanding debt obligations, including with respect
to debt owned by a Fund.
In
addition, Illinois has been materially adversely impacted by the health-related
and economic impacts of the COVID-19 pandemic. Illinois has also faced
increasing levels of debt in recent years. There is no assurance that Illinois
can maintain its credit ratings for any given period of time. A downward
revision or withdrawal of any such rating may have an adverse effect on the
market prices of the securities issued by Illinois, which would in turn
negatively impact the performance of a Fund.
Texas
Risk. (VanEck
Long Muni ETF only.) Each Fund may invest a significant portion of its assets in
Texas municipal bonds. Consequently, the Funds may be affected by negative
political, economic, regulatory or other developments within the State of Texas
including the financial condition of its public authorities and political
subdivisions.
Index
Tracking Risk.
Each Fund’s return may not match the return of its Index for a number of
reasons. For example, a Fund incurs a number of operating expenses, including
taxes, not applicable to its Index and incurs costs associated with buying and
selling securities, especially when rebalancing the Fund’s securities holdings
to reflect changes in the composition of its Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of its Index. Transaction costs, including
brokerage costs, will decrease the Fund’s NAV to the extent not offset by the
transaction fee payable by an AP. Market disruptions and regulatory restrictions
could have an adverse effect on a Fund’s ability to adjust its exposure to the
required levels in order to track its respective Index. There is no assurance
that a Fund’s Index Provider (defined herein) or any agents that may act on its
behalf will compile the Fund’s Index accurately, or that an Index will be
determined, composed or calculated accurately. Errors in respect of the quality,
accuracy and completeness of the data used to compile an Index may occur from
time to time and may not be identified and corrected by the applicable Index
Provider for a period of time or at all, particularly where the indices are less
commonly used as benchmarks by funds or managers. Therefore, gains, losses or
costs associated with errors of an Index Provider or its agents will generally
be borne by the applicable Fund and its shareholders. Apart from scheduled
rebalances, the Index Providers or their agents may carry out additional ad hoc
rebalances to a Fund's Index. Therefore, errors and additional ad hoc rebalances
carried out by the Index Providers or their agents to a respective Index may
increase the costs to and the tracking error risk of the Funds. When a Fund’s
Index is rebalanced and the Fund in turn rebalances its portfolio to attempt to
increase the correlation between the Fund’s portfolio and its respective Index,
any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the applicable Fund and its shareholders.
For example, during a period where a Fund’s Index contains incorrect
constituents, the Fund would have market exposure to such constituents and would
be underexposed to the Index’s other constituents. Such errors may negatively or
positively impact a Fund and its shareholders. Any gains due to an Index
Provider’s or others’ errors will be kept by a Fund and its shareholders and any
losses resulting from an Index Provider’s or others’ errors will be borne by a
Fund and its shareholders. In addition, a Fund’s use of a representative
sampling approach may cause the Fund’s returns to not be as well correlated with
the return of its Index as would be the case if the Fund purchased all of the
securities in its Index in the proportions represented in such Index and can be
expected to result in greater tracking error than if the Fund used a replication
indexing strategy.
Each
Fund may not be fully invested at times as a result of reserves of cash held by
the Fund to pay expenses. In addition, a Fund may not be able to invest in
certain securities included in its Index, or invest in them in the exact
proportions in which they are represented in its Index, due to legal
restrictions or limitations imposed by the governments of certain countries, the
Exchange listing requirements, a lack of liquidity on stock exchanges in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). Moreover, a Fund may be delayed
in purchasing or selling securities included in its Index. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. Any issues a Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the Index tracking risk. For tax efficiency purposes, a Fund
may sell certain securities, and such sale may cause the Fund to realize a loss
and deviate from the performance of its Index.
Certain
Funds are expected to fair value certain of the securities they hold. To the
extent a Fund calculates its NAV based on fair value prices or on the prices
that differ from those used in calculating a Fund’s respective Index, the Fund’s
ability to track its Index may be adversely affected. The need to comply with
the tax diversification and other requirements of the Internal Revenue
Code
may also impact the Fund’s ability to replicate the performance of its Index.
VanEck CEF Muni Income ETF may not be able to invest in certain securities in
the exact proportions in which they are represented in the CEFMX Index due to
limitations imposed by the 1940 Act on the Fund’s investments in other
investment companies. In addition, if a Fund utilizes depositary receipts and
other derivative instruments, its return may not correlate as well with the
return of its Index as would be the case if the Fund purchased all the
securities in its Index directly. Actions taken in response to proposed
corporate actions could result in increased tracking error. In light of the
factors discussed above, each Fund’s return may deviate significantly from the
return of its index. Index tracking risk may be heightened during times of
increased market volatility or other unusual market conditions. Changes to the
composition of a Fund’s Index in connection with a rebalancing or reconstitution
of the Index may cause the Fund to experience increased volatility, during which
time the Fund’s index tracking risk may be heightened.
Passive
Management Risk.
Unlike many investment companies, the Funds are not “actively” managed.
Therefore, unless a specific security is removed from a Fund’s respective Index,
a Fund generally would not sell a security because the security’s issuer is in
financial trouble. If a specific security is removed from a Fund’s respective
Index, a Fund may be forced to sell such security at an inopportune time or for
prices other than at current market values. An investment in the Funds involves
risks similar to those of investing in any Fund that invests in bonds, such as
market fluctuations caused by such factors as economic and political
developments, changes in interest rates and perceived trends in security prices.
A Fund’s respective Index may not contain the appropriate or a diversified mix
of securities for any particular economic cycle. The timing of changes in the
securities of a Fund’s portfolio in seeking to replicate its Index could have a
negative effect on the Fund. Unlike with an actively managed fund, the Adviser
does not use techniques or defensive strategies designed to lessen the effects
of market volatility or to reduce the impact of periods of market decline.
Additionally, unusual market conditions may cause a Fund’s Index Provider to
postpone a scheduled rebalance or reconstitution, which could cause a Fund’s
Index to vary from its normal or expected composition. This means that, based on
market and economic conditions, a Fund’s performance could be lower than funds
that may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Tax
Risk.
There is no guarantee that a Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after a Fund’s acquisition of a municipal bond may result in a
determination that interest on that bond is includible in gross income for U.S.
federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by a Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state changes in income or alternative minimum tax rates or in the tax
treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Liquidity
Risk.
(VanEck CEF Muni Income ETF only.) Unlike the Fund, as closed-end funds the
Underlying Funds are not limited in their ability to invest in illiquid
securities. Securities with reduced liquidity involve greater risk than
securities with more liquid markets. Prices of securities not traded on an
exchange may vary over time. Secondary trading of a fixed-income security may
decline for a period of time if its credit quality unexpectedly declines. An
Underlying Fund may not receive full value for assets sold during periods of
infrequent trading.
Anti-Takeover
Measures Risk.
(VanEck CEF Muni Income ETF only.) Certain Underlying Funds may have provisions
in their organizational documents intended to limit the ability of third parties
to acquire control or change the composition of the Underlying Fund’s board.
This may discourage a third party from seeking to obtain control of the
Underlying Fund, which could limit the ability of Underlying Fund shareholders
to sell their shares at a premium over prevailing market prices.
Leverage
Risk.
(VanEck CEF Muni Income ETF only.) Ordinary borrowings by an Underlying Fund or
an Underlying Fund’s investment in derivatives may result in leverage. If the
prices of those investments decrease, or if the cost of borrowing exceeds any
increase in the prices of investments made with the proceeds of the borrowing,
the NAV of the Underlying Fund’s shares will decrease more than if the
Underlying Fund had not used leverage. An Underlying Fund may have to sell
investments at a time and at a price that is unfavorable to the Underlying Fund
to repay borrowings. Interest on borrowings is an expense the Underlying Fund
would not otherwise incur. Leverage magnifies the potential for gain and the
risk of loss. If an Underlying Fund uses leverage, there can be no assurance
that the Underlying Fund’s leverage strategy will be successful. Furthermore,
the Underlying Funds may pay a management fee to their advisers based on a
percentage of “managed assets.” Managed assets for this purpose can include the
proceeds realized and managed from the Underlying Fund’s use of leverage.
Accordingly, the fact that a decision to increase an Underlying Fund’s leverage
will have the effect, all other things being equal, of increasing managed assets
and therefore the management fee means that an Underlying Fund’s adviser may
have a conflict of interest in determining whether to use or increase leverage
with respect to its management of the Underlying Fund’s portfolio.
Authorized
Participant (“AP”) Concentration Risk.
A Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market. While
Shares are listed on the Exchange there can be no assurance that an active
trading market for the Shares will be maintained. Further, secondary markets may
be subject to irregular trading activity, wide bid/ask spreads and extended
trade settlement periods in times of market stress because market makers and APs
may step away from making a market in the Shares and in executing creation and
redemption orders, which could cause a material deviation in a Fund’s market
price from its NAV. Van Eck Securities Corporation, the distributor of the
Shares (the “Distributor”), does not maintain a secondary market in the Shares.
Investors purchasing and selling Shares in the secondary market may not
experience investment results consistent with those experienced by those APs
creating and redeeming directly with a Fund.
Decisions
by market makers or APs to reduce their role or “step away” from these
activities in times of market stress could inhibit the effectiveness of the
arbitrage process in maintaining the relationship between the underlying value
of a Fund’s portfolio securities and the Fund’s market price. This reduced
effectiveness could result in Fund Shares trading at a discount to its NAV and
also in greater than normal intraday bid/ask spreads for Fund
Shares.
Trading
Issues. Trading
in Shares on the Exchange may be halted due to market conditions or for reasons
that, in the view of the Exchange, make trading in Shares inadvisable. In
addition, trading in Shares on the Exchange is subject to trading halts caused
by extraordinary market volatility pursuant to the Exchange’s “circuit breaker”
rules. If a trading halt or unanticipated early close of the Exchange occurs, a
shareholder may be unable to purchase or sell Shares of a Fund. There can be no
assurance that the requirements of the Exchange necessary to maintain the
listing of a Fund will continue to be met or will remain unchanged.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
Disruptions to creations and redemptions, the existence of market volatility or
potential lack of an active trading market for Shares (including through a
trading halt), as well as other factors, may result in Shares trading at a
significant premium or discount to NAV or to the intraday value of a Fund’s
holdings. The NAV of the Shares will fluctuate with changes in the market value
of a Fund’s securities holdings. The market price of Shares may fluctuate, in
some cases materially, in accordance with changes in NAV and the intraday value
of a Fund’s holdings, as well as supply and demand on the Exchange. The Adviser
cannot predict whether Shares will trade below, at or above their NAV. Given the
fact that Shares can be created and redeemed by APs in Creation Units (defined
herein), the Adviser believes that large discounts or premiums to the NAV of
Shares should not be sustained in the long-term. While the creation/redemption
feature is designed to make it likely that Shares normally will trade close to
the value of a Fund’s holdings, market prices are not expected to correlate
exactly to the Fund’s NAV due to timing reasons, supply and demand imbalances
and other factors. The price differences may be due, in large part, to the fact
that supply and demand forces at work in the secondary trading market for Shares
may be closely related to, but not necessarily identical to, the same forces
influencing the prices of the securities of a Fund’s portfolio of investments
trading individually or in the aggregate at any point in time. If a shareholder
purchases Shares at a time when the market price is at a premium to the NAV or
sells Shares at a time when the market price is at a discount to the NAV, the
shareholder may pay significantly more or receive significantly less than the
underlying value of the Shares that were bought or sold or the shareholder may
be unable to sell his or her Shares. Any of these factors, discussed above and
further below, may lead to the Shares trading at a premium or discount to a
Fund’s NAV. In addition, because certain of a Fund’s underlying securities trade
on exchanges that are closed when the Exchange (i.e.,
the exchange that Shares of the Fund trade on) is open, there are likely to be
deviations between the expected value of an underlying security and the closing
security’s price (i.e.,
the last quote from its closed foreign market) resulting in premiums or
discounts to NAV that may be greater than those experienced by other ETFs. In
addition, the securities held by a Fund may be traded in markets that close at a
different time than the Exchange. Liquidity in those securities may be reduced
after the applicable closing times. Accordingly, during the time when the
Exchange is open but after the applicable market closing, fixing or settlement
times, bid/ask spreads and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
When
you buy or sell Shares of a Fund through a broker, you will likely incur a
brokerage commission or other charges imposed by brokers. In addition, the
market price of Shares, like the price of any exchange-traded security, includes
a bid/ask spread charged by the market makers or other participants that trade
the particular security. The spread of a Fund’s Shares varies over time based on
the Fund’s trading volume and market liquidity and may increase if the Fund’s
trading volume, the spread of the Fund’s underlying securities, or market
liquidity decrease. In times of severe market disruption, including when trading
of a Fund’s holdings may be halted, the bid/ask spread may increase
significantly. This means that Shares may trade at a discount to the Fund’s NAV,
and the discount is likely to be greatest during significant market
volatility.
Non-Diversified
Risk.
(VanEck CEF Muni Income Index ETF only.) Some of the Underlying Funds in which
VanEck CEF Muni Income ETF invests may invest a relatively high percentage of
their assets in a smaller number of issuers or may invest a larger proportion of
their assets in a single company or obligations of a single issuer. As a result,
the gains and losses on an investment in such an Underlying Fund may have a
greater impact on the Fund’s NAV and may make the value of the Fund’s investment
in such an Underlying Fund more volatile than an investment in more diversified
funds.
Non-Diversification
Risk. (VanEck
CEF Muni Income Index ETF only.) The Fund may become classified as
“non-diversified” under the Investment Company Act of 1940, as amended, solely
as a result of a change in relative market capitalization or index weighting of
one or more constituents of the its Index. If the Fund becomes non-diversified,
it may invest a greater portion of its assets in securities of a smaller number
of individual issuers than a diversified fund. As a result, changes in the
market value of a single investment could cause greater fluctuations in share
price than would occur in a more diversified fund.
Concentration
Risk.
A Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent that its respective Index
concentrates in a particular sector or sectors or industry or group of
industries. The securities of many or all of the companies in the same sector or
industry may decline in value due to developments adversely affecting such
sector or industry. By concentrating its assets in a particular sector or
sectors or industry or group of industries, a Fund is subject to the risk that
economic, political or other conditions that have a negative effect on that
sector or sectors or industry or group of industries may negatively impact the
Fund to a greater extent than if the Fund’s assets were invested in a wider
variety of sectors or industries.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGIES
Each
Fund may invest in securities not included in its respective Index, money market
instruments, including repurchase agreements or other funds which invest
exclusively in money market instruments, convertible securities, structured
notes (notes on which the amount of principal repayment and interest payments
are based on the movement of one or more specified factors, such as the movement
of a particular stock or stock index), and/or certain derivatives, which the
Adviser believes will help a Fund track its Index. Depositary receipts not
included in a Fund’s Index may be used by certain Funds in seeking performance
that corresponds to its respective Index, and in managing cash flows, and may
count towards compliance with a Fund’s 80% policy. Each Fund may also invest, to
the extent permitted by the 1940 Act or, in the case of VanEck CEF Muni Income
ETF, the Exemptive Relief, in other affiliated and unaffiliated funds, such as
open-end or closed-end management investment companies, including other ETFs.
BORROWING
MONEY
Each
Fund may borrow money from a bank up to a limit of one-third of the market value
of its assets. Each Fund has entered into a credit facility to borrow money for
temporary, emergency or other purposes, including the funding of shareholder
redemption requests, trade settlements and as necessary to distribute to
shareholders any income required to maintain the Fund’s status as a regulated
investment company. To the extent that a Fund borrows money, it may be
leveraged; at such times, the Fund will appreciate or depreciate in value more
rapidly than its Index. Leverage generally has the effect of increasing the
amount of loss or gain a Fund might realize, and may increase volatility in the
value of a Fund’s investments.
LENDING
PORTFOLIO SECURITIES
Each
Fund may lend its portfolio securities to brokers, dealers and other financial
institutions desiring to borrow securities to complete transactions and for
other purposes. In connection with such loans, a Fund receives cash, U.S.
government securities and stand-by letters of credit not issued by the Fund’s
bank lending agent equal to at least 102% of the value of the portfolio
securities being loaned. This collateral is marked-to-market on a daily basis.
Although a Fund will receive collateral in connection with all loans of its
securities holdings, the Fund would be exposed to a risk of loss should a
borrower fail to return the borrowed securities (e.g.,
the Fund would have to buy replacement securities and the loaned securities may
have appreciated beyond the value of the collateral held by the Fund) or become
insolvent. A Fund may pay fees to the party arranging the loan of securities. In
addition, a Fund will bear the risk that it may lose money because the borrower
of the loaned securities fails to return the securities in a timely manner or at
all. Each Fund could also lose money in the event of a decline in the value of
any cash collateral or in the value of investments made with the cash
collateral. These events could trigger adverse tax consequences for the Funds.
Substitute payments for dividends received by a Fund for securities loaned out
by a Fund will not be considered qualified dividend income.
ADDITIONAL
NON-PRINCIPAL RISKS
Risk
of Investing in Derivatives.
Derivatives 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 the 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 newrule 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. Following the
compliance date, these requirements may limit the ability of a fund to use
derivatives and reverse repurchase agreements and similar financing transactions
as part of its investment strategies. These requirements may increase the cost
of a fund’s investments and cost of doing business, which could adversely affect
investors.
Shareholder
Risk.
Certain shareholders, including other funds advised by the Adviser, may from
time to time own a substantial amount of a Fund’s Shares. In addition, a third
party investor, the Adviser or an affiliate of the Adviser, an AP, a market
maker, or another entity may invest in a Fund and hold its investment for a
limited period of time. There can be no assurance that any large shareholder
would not redeem its investment. Redemptions by shareholders could have a
negative impact on a Fund. In addition, transactions by large shareholders may
account for a large percentage of the trading volume on the Exchange and may,
therefore, have a material effect on the market price of the
Shares.
Leverage
Risk.
(Each Fund except VanEck CEF Muni Income ETF, for which Leverage Risk is a
principal 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 the Fund’s portfolio
securities. To manage the risk associated with leveraging, a 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. A
Fund may modify its asset segregation policies at any time to comply with any
changes in the SEC’s positions regarding asset segregation.
Puerto
Rico Risk.
(VanEck Intermediate Muni ETF, VanEck Long Muni ETF, VanEck High Yield Muni ETF
and VanEck Short High Yield Muni ETF only.) Each Fund may invest a portion of
its assets in municipal obligations of issuers located in Puerto Rico.
Consequently, the Fund may be affected by political, economic, regulatory and
other developments within Puerto Rico and by the financial condition of Puerto
Rico’s political subdivisions, agencies, instrumentalities and public
authorities. Events, including economic and political policy changes, tax base
erosion, territory constitutional limits on tax increases, budget deficits and
other financial difficulties and changes in the credit ratings assigned to
Puerto Rico’s municipal issuers, are likely to affect the Fund’s performance.
The Puerto Rican economy is reliant on manufacturing, services and tourism, and
its economic and financial operations parallel the economic cycles of the United
States. As a result, a decline in tourism, which is an important component of
the Puerto Rico economy, and U.S. recessions have had a negative effect on the
overall economy of Puerto Rico. Puerto Rico continues to face significant fiscal
challenges, including persistent government deficits, underfunded public pension
benefit obligations, underfunded government retirement systems, sizable debt
service obligations and a high unemployment rate.
The
Puerto Rican government defaulted on nearly $2 billion in debt payments due on
July 1, 2016. In May 2017, the newly-created oversight board that oversees
Puerto Rico's finance and court-supervised debt restructuring (the "Oversight
Board") initiated a bankruptcy-like process for the general government, general
obligation debt, and certain Puerto Rico instrumentalities, including the Puerto
Rico Sales Tax Financing Corporation, the Highways and Transportation Authority,
and the Employee Retirement System. These municipal obligations are subject to
heightened risks that may adversely affect the value of a Fund’s portfolio and
the repayment of such bonds may be subject to significant uncertainties if
Puerto Rico’s economic downturn continues. The negotiations between Puerto Rico
and its instrumentalities and their respective creditors to restructure
outstanding debt obligations remain ongoing, and it is not possible to predict
whether Puerto Rico and its instrumentalities will be able to come to agreements
with their creditors.
In
addition, due to the ongoing budget impact from the COVID-19 pandemic on Puerto
Rico's finances, the Oversight Board or Puerto Rico could seek to revise or even
terminate earlier agreements reached with certain creditors.
Unlike
many conventional mutual funds which are only bought and sold at closing NAVs,
the Shares of each Fund have been designed to be tradable in a secondary market
on an intra-day basis and to be created and redeemed principally in-kind in
Creation Units at each day’s market close. These in-kind arrangements are
designed to mitigate the adverse effects on a Fund’s portfolio that could arise
from frequent cash purchase and redemption transactions that affect the NAV of
the Fund. Moreover, in contrast to conventional mutual funds, where frequent
redemptions can have an adverse tax impact on taxable shareholders because of
the need to sell portfolio securities which, in turn, may generate taxable gain,
the in-kind redemption mechanism of each Fund, to the extent used, generally is
not expected to lead to a tax event for shareholders whose Shares are not being
redeemed.
A
description of each Fund’s policies and procedures with respect to the
disclosure of the Fund’s portfolio securities is available in the Funds’
SAI.
Board
of Trustees.
The Board of Trustees of the Trust has responsibility for the general oversight
of the management of the Funds, including general supervision of the Adviser and
other service providers, but is not involved in the day-to-day management of the
Trust. A list of the Trustees and the Trust officers, and their present
positions and principal occupations, is provided in the Funds’ SAI.
Investment
Adviser.
Under the terms of an investment management agreement between the Trust and Van
Eck Associates Corporation with respect to VanEck CEF Muni Income ETF, VanEck
High Yield Muni ETF, VanEck Intermediate Muni ETF, VanEck Long Muni ETF, VanEck
Short High Yield Muni ETF, and VanEck Short Muni ETF (the “Municipal Investment
Management Agreement”), Van Eck Associates Corporation serves as the adviser to
each Fund and, subject to the supervision of the Board of Trustees, is
responsible for the day-today investment management of each Fund. As of June 30,
2021, the Adviser managed approximately $80.26 billion in assets. The Adviser
has been an investment adviser since 1955 and also acts as adviser or
sub-adviser to mutual funds, other ETFs, other pooled investment vehicles and
separate accounts. The Adviser’s principal business address is 666 Third Avenue,
9th
Floor, New York, New York 10017. A discussion regarding the Board of Trustees’
approval of the Investment Management Agreement for each Fund will be available
in the Trust’s semi-annual report for the period ended October 31, 2021.
Pursuant
to the Municipal Investment Management Agreement, the Adviser is responsible for
all expenses of the Funds, including the costs of transfer agency, custody, fund
administration, legal, audit and other services, except for the fee payment
under the Municipal Investment Management Agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. For its services to each Fund, each Fund has agreed to
pay the Adviser an annual unitary management fee equal to 0.40% (with respect to
VanEck CEF Muni Income ETF), 0.35% (with respect to VanEck High Yield Muni ETF
and VanEck Short High Yield Muni ETF), 0.24% (with respect to VanEck
Intermediate Muni ETF and VanEck Long Muni ETF) and 0.20% (with respect to
VanEck Short Muni ETF) of its average daily net assets. Offering costs excluded
from the annual unitary management fee are: (a) legal fees pertaining to a
Fund’s Shares offered for sale; (b) SEC and state registration fees; and (c)
initial fees paid for Shares of a Fund to be listed on an exchange.
Notwithstanding the foregoing, the Adviser has agreed to pay all such offering
costs until at least September 1, 2022.
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
each Fund’s assets and provides transfer agency and fund accounting services to
the Funds. The Administrator is responsible for certain clerical, recordkeeping
and/or bookkeeping services which are required to be provided pursuant to the
Investment Management Agreement.
Distributor.
Van
Eck Securities Corporation is the distributor of the Shares (the "Distributor").
The Distributor will not distribute Shares in less than a specified number of
Shares, each called a "Creation Unit," and does not maintain a secondary market
in the Shares. The Shares are traded in the secondary market.
The
portfolio managers who currently share joint responsibility for the day-to-day
management of the VanEck CEF Muni Income ETF’s portfolio are Peter H. Liao and
Guo Hua (Jason) Jin. The portfolio manager who is currently responsible for the
day-to-day management of VanEck Intermediate Muni ETF’s, VanEck Long Muni ETF’s,
VanEck Short Muni ETF’s, VanEck High Yield Muni ETF’s and VanEck Short High
Yield Muni ETF’s portfolios is James T. Colby III.
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.
Mr.
Colby has been employed by the Adviser as a portfolio manager since September
2007. Mr. Colby graduated from Brown University in 1972 with a Bachelor of Arts
in Economics and International Relations; and from Hofstra University in 1979
with a Masters of Business Administration in Finance.
Each
of Messrs. Jin and Liao serve as a portfolio manager of other funds of the
Trust. Mr. Liao also serves as portfolio manager 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 of each Fund.
DETERMINATION
OF NAV
The
NAV per Share for each Fund is computed by dividing the value of the net assets
of the Fund (i.e., the value of its total assets less total liabilities) by the
total number of Shares outstanding. Expenses and fees, including the management
fee, are accrued daily and taken into account for purposes of determining NAV.
The NAV of each Fund is determined each business day as of the close of trading
(ordinarily 4:00 p.m., Eastern time) on the New York Stock
Exchange.
The
values of each Fund’s portfolio securities are based on the securities’ closing
prices on the markets on which the securities trade, when available. Due to the
time differences between the United States and certain countries in which
certain Funds invest, securities on these exchanges may not trade at times when
Shares of the Fund will trade. In the absence of a last reported sales price, or
if no sales were reported, and for other assets for which market quotes are not
readily available, values may be based on quotes obtained from a quotation
reporting system, established market makers or by an outside independent pricing
service. Debt instruments with remaining maturities of more than 60 days are
valued at the evaluated mean price provided by an outside independent pricing
service. If an outside independent pricing service is unable to provide a
valuation, the instrument is valued at the mean of the highest bid and the
lowest asked quotes obtained from one or more brokers or dealers selected by the
Adviser. Prices obtained by an outside independent pricing service may use
information provided by market makers or estimates of market values obtained
from yield data related to investments or securities with similar
characteristics and may use a computerized grid matrix of securities and its
evaluations in determining what it believes is the fair value of the portfolio
securities. Short-term debt instruments having a maturity of 60 days or less are
valued at amortized cost. Any assets or liabilities denominated in currencies
other than the U.S. dollar are converted into U.S. dollars at the current market
rates on the date of valuation as quoted by one or more sources. If a market
quotation for a security or other asset is not readily available or the Adviser
believes it does not otherwise accurately reflect the market value of the
security or asset at the time a Fund calculates its NAV, the security or asset
will be fair valued by the Adviser in accordance with the Trust’s valuation
policies and procedures approved by the Board of Trustees. Each Fund may also
use fair value pricing in a variety of circumstances, including but not limited
to, situations when the value of a security in the Fund’s portfolio has been
materially affected by events occurring after the close of the market on which
the security is principally traded (such as a corporate action or other news
that may materially affect the price of a security) or trading in a security has
been suspended or halted. In addition, each Fund that holds foreign equity
securities currently expects that it will fair value certain of the foreign
equity securities held by the Fund each day the Fund calculates its NAV, except
those securities principally traded on exchanges that close at the same time the
Fund calculates its NAV.
Accordingly,
a Fund’s NAV may reflect certain portfolio securities’ fair values rather than
their market prices at the time the exchanges on which they principally trade
close. Fair value pricing involves subjective judgments and it is possible that
a fair value determination for a security or other asset is materially different
than the value that could be realized upon the sale of such
security
or asset. In addition, fair value pricing could result in a difference between
the prices used to calculate a Fund’s NAV and the prices used by such Fund’s
respective Index. This may adversely affect a Fund’s ability to track its Index.
With respect to securities that are principally traded on foreign exchanges, the
value of a Fund’s portfolio securities may change on days when you will not be
able to purchase or sell your Shares.
INTRADAY
VALUE
The
trading prices of the Funds’ Shares in the secondary market generally differ
from the Funds’ daily NAV and are affected by market forces such as the supply
of and demand for Fund Shares and underlying securities held by each Fund,
economic conditions and other factors. Information regarding the intraday value
of the Funds’ Shares (“IIV”) may be disseminated throughout each trading day by
an Exchange or by market data vendors or other information providers. The IIV is
based on the current market value of the securities and/or cash required to be
deposited in exchange for a Creation Unit. The IIV does not necessarily reflect
the precise composition of the current portfolio of securities held by each Fund
at a particular point in time or the best possible valuation of the current
portfolio. Therefore, the IIV should not be viewed as a “real-time” update of
the Funds’ NAV, which is computed only once a day. The IIV is generally
determined by using current market quotations and/or price quotations obtained
from broker-dealers and other market intermediaries that may trade in the
portfolio securities held by each Fund and valuations based on current market
rates. The quotations and/or valuations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the United
States. Each Fund is not involved in, or responsible for, the calculation or
dissemination of the IIV and makes no warranty as to its accuracy.
RULE
144A AND OTHER UNREGISTERED SECURITIES
An
AP (i.e., a person eligible to place orders with the Distributor to create or
redeem Creation Units of a Fund) that is not a “qualified institutional buyer,”
as such term is defined under Rule 144A of the Securities Act of 1933, as
amended (the “Securities Act”), will not be able to receive, as part of a
redemption, restricted securities eligible for resale under Rule 144A or other
unregistered securities.
BUYING
AND SELLING EXCHANGE-TRADED SHARES
The
Shares of the Funds are listed on the Exchange. If you buy or sell Shares in the
secondary market, you will incur customary brokerage commissions and charges and
may pay some or all of the “spread,” which is any difference between the bid
price and the ask price. The spread varies over time for a Fund’s Shares based
on a 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, 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 may be suspended or the date of payment postponed (1) for
any period during which the Exchange is closed (other than customary weekend and
holiday closings); (2) for any period during which trading on the Exchange is
suspended or restricted; (3) for any period during which an emergency exists as
a result of which disposal of the Shares of a Fund or determination of its NAV
is not reasonably practicable; or (4) in such other circumstance as is permitted
by the SEC.
Market
Timing and Related Matters.
The
Funds impose no restrictions on the frequency of purchases and redemptions.
Frequent purchases and redemptions of Fund Shares may attempt to take advantage
of a potential arbitrage opportunity presented by a lag between a change in the
value of a Fund’s portfolio securities after the close of the primary markets
for a Fund’s portfolio securities and the reflection of that change in a Fund’s
NAV (“market timing”). The Board of Trustees considered the nature of each Fund
(i.e.,
a fund whose Shares are expected to trade intraday), that the Adviser monitors
the trading activity of APs for patterns of abusive trading, that the Funds
reserve the right to reject orders that may be disruptive to the management of
or otherwise not in the Funds’ best interests, and that each Fund may fair value
certain of its securities. Given this structure, the Board of Trustees
determined that it is not necessary to impose restrictions on the frequency of
purchases and redemptions for the Funds at the present time.
DISTRIBUTIONS
Net
Investment Income and Capital Gains.
As a shareholder of a Fund, you are entitled to your share of such Fund’s
distributions of net investment income and net realized capital gains on its
investments. Each Fund pays out substantially all of its net earnings to its
shareholders as “distributions.”
Each
Fund typically earns income dividends from stocks and/or interest on municipal
securities. These amounts, net of expenses, are typically passed along to Fund
shareholders as dividends from net investment income. Each Fund generally
realizes capital gains or losses whenever it sells securities. Net capital gains
are distributed to shareholders as “capital gain distributions.” Dividends paid
by the Funds that are properly reported as exempt-interest dividends will not be
subject to regular federal income tax. Distributions from a Fund’s net
investment income (other than net tax exempt income), including any net short
term capital gains, if any, are taxable to you as ordinary income. Any long-term
capital gains distributions you receive from a Fund are taxable as long-term
capital gains.
Net
investment income, if any, is typically distributed to shareholders at least
monthly and net realized capital gains, if any, are typically distributed to
shareholders at least annually. Dividends may be declared and paid more
frequently to improve index tracking or to comply with the distribution
requirements of the Internal Revenue Code. In addition, in situations where the
Fund acquires investment securities after the beginning of a dividend period,
the Fund may elect to distribute at least annually amounts representing the full
dividend yield net of expenses on the underlying investment securities, as if
the Funds owned the underlying investment securities for the entire dividend
period. If the Fund so elects, some portion of each distribution may result in a
return of capital, which, for tax purposes, is treated as a return of your
investment in Shares. You will be notified regarding the portion of the
distribution which represents a return of capital.
Distributions
in cash may be reinvested automatically in additional Shares of your Fund only
if the broker through which you purchased Shares makes such option
available.
TAX
INFORMATION
As
with any investment, you should consider how your Fund investment will be taxed.
The tax information in this Prospectus is provided as general information. You
should consult your own tax professional about the tax consequences of an
investment in the Funds, including the possible application of foreign, state
and local taxes. Unless your investment in a Fund is through a tax-exempt entity
or tax-deferred retirement account, such as a 401(k) plan, you need to be aware
of the possible tax consequences when: (i) a Fund makes distributions; (ii) you
sell Shares in the secondary market or (iii) you create or redeem Creation
Units.
Taxes
on Distributions.
As noted above, each Fund expects to distribute net investment income, if any,
monthly, and any net realized long-term or short-term capital gains, if any,
annually. Each Fund may also pay a special distribution at any time to comply
with U.S. federal tax requirements.
Dividends
paid by the Funds that are properly reported as exempt-interest dividends will
not be subject to regular U.S. federal income tax. The Funds intend to invest
their assets in a manner such that a significant portion of their dividend
distributions to shareholders will generally be exempt from U.S. federal income
taxes, including the federal alternative minimum tax for noncorporate
shareholders. The VanEck High Yield Muni ETF, VanEck Short High Yield Muni ETF
and Underlying Funds in which VanEck CEF Muni Income ETF invests may invest a
portion of their assets in certain “private activity bonds,” and as a result, a
portion of the exempt-interest dividends paid by them will be an item of tax
preference to shareholders subject to the alternative minimum tax. Depending on
a shareholder’s state of residence, exempt-interest dividends from interest
earned on municipal securities of a state or its political subdivisions may be
exempt in the hands of such shareholder from income tax in that state. However,
income from municipal securities of states other than the shareholder’s state of
residence generally will not qualify for tax-free treatment for such
shareholder.
Distributions
from a Fund’s net investment income other than net tax exempt income, including
any net short-term gains, if any, are taxable to you as ordinary
income.
In
general, your distributions are subject to U.S. federal income tax when they are
paid, whether you take them in cash or reinvest them in the Fund. Whether
distributions of capital gains represent long-term or short-term capital gains
is determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your Shares. Distributions of net short-term
capital gains in excess of net long–term capital losses, if any, are generally
taxable as ordinary
income.
Distributions of net long-term capital gains in excess of net short-term capital
losses, if any, that are properly reported as capital gain dividends are
generally taxable as long-term capital gains. Long-term capital gains of a
non-corporate shareholder are generally taxable at a maximum rate of 15% or 20%,
depending on whether the shareholder’s income exceeds certain threshold amounts.
The Funds do not expect that any of their distributions will be qualified
dividends eligible for lower tax rates or for the corporate dividends received
deduction.
Exempt-interest
dividends from a Fund are taken into account in determining the taxable portion
of any Social Security or railroad retirement benefits that you
receive.
Distributions
in excess of a Fund’s current and accumulated earnings and profits are treated
as a tax-free return of your investment to the extent of your basis in the
Shares, and generally as capital gain thereafter. A return of capital, which for
tax purposes is treated as a return of your investment, reduces your basis in
Shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition of Shares. A distribution will reduce a Fund’s NAV per Share and may
be taxable to you as ordinary income or capital gain even though, from an
economic standpoint, the distribution may constitute a return of
capital.
The
VanEck CEF Muni Income ETF will not be able to offset gains realized by one
Underlying Fund in which the VanEck CEF Muni Income ETF invests against losses
realized by another Underlying Fund in which the VanEck CEF Muni Income ETF
invests. Short-term capital gains earned by an Underlying Fund when distributed
will be ordinary income to the VanEck CEF Muni Income ETF and will not be offset
by its capital losses, if any. Redemptions of Shares in an Underlying Fund could
also result in a gain and/or income to the VanEck CEF Muni Income ETF and
realized losses from such redemptions may be deferred indefinitely as wash
sales. The VanEck CEF Muni Income ETF’s use of the fund-of-funds structure could
therefore affect the amount, timing and character of distributions to
shareholders. Redemptions of Shares in an Underlying Fund could also cause
additional distributable gains to shareholders.
Backup
Withholding.
A Fund may be required to withhold a percentage of your distributions and
proceeds if you have not provided a taxpayer identification number or social
security number or otherwise established a basis for exemption from backup
withholding. The backup withholding rate for individuals is currently 24%. This
is not an additional tax and may be refunded, or credited against your U.S.
federal income tax liability, provided certain required information is furnished
to the IRS.
Taxes
on the Sale or Cash Redemption of Exchange Listed Shares.
Currently, any capital gain or loss realized upon a sale of Shares is generally
treated as long term capital gain or loss if the Shares have been held for more
than one year and as a short-term capital gain or loss if held for one year or
less. However, any capital loss on a sale of Shares held for six months or less
is treated as long-term capital loss to the extent that capital gain dividends
were paid with respect to such Shares. The ability to deduct capital losses may
be limited. To the extent that a Fund’s shareholder’s Shares are redeemed for
cash, this is normally treated as a sale for tax purposes.
Taxes
on Creations and Redemptions of Creation Units.
A person who exchanges securities for Creation Units generally will recognize a
gain or loss. The gain or loss will be equal to the difference between the
market value of the Creation Units at the time of exchange and the sum of the
exchanger’s aggregate basis in the securities surrendered and the amount of any
cash paid for such Creation Units. A person who exchanges Creation Units for
securities will generally recognize a gain or loss equal to the difference
between the exchanger’s basis in the Creation Units and the sum of the aggregate
market value of the securities received. The IRS, however, may assert that a
loss realized upon an exchange of primarily securities for Creation Units cannot
be deducted currently under the rules governing “wash sales,” or on the basis
that there has been no significant change in economic position. Persons
exchanging securities for Creation Units or redeeming Creation Units should
consult their own tax adviser with respect to whether wash sale rules apply and
when a loss might be deductible and the tax treatment of any creation or
redemption transaction.
Under
current U.S. federal income tax laws, any capital gain or loss realized upon a
redemption (or creation) of Creation Units held as capital assets is generally
treated as long-term capital gain or loss if the Shares (or securities
surrendered) have been held for more than one year and as a short-term capital
gain or loss if the Shares (or securities surrendered) have been held for one
year or less.
If
you create or redeem Creation Units, you will be sent a confirmation statement
showing how many Shares you created or sold and at what price.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Fund
Shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
Non-U.S.
Shareholders.
Dividends paid by a Fund to non-U.S. shareholders are generally subject to
withholding tax at a 30% rate or a reduced rate specified by an applicable
income tax treaty to the extent derived from investment income and short-term
capital gains. Dividends paid by a Fund from net tax-exempt income or long-term
capital gains are generally not subject to such withholding tax.
Properly-reported dividends are generally exempt from U.S. federal withholding
tax where they (i) are paid in respect of a Fund’s “qualified net interest
income” (generally, a Fund’s U.S. source interest income, other than certain
contingent
interest
and interest from obligations of a corporation or partnership in which a Fund is
at least a 10% shareholder, reduced by expenses that are allocable to such
income); or (ii) are paid in respect of a Fund’s “qualified short-term capital
gains” (generally, the excess of a Fund’s net short-term capital gain over a
Fund’s long-term capital loss for such taxable year). However, depending on its
circumstances, a Fund may report all, some or none of its potentially eligible
dividends as such qualified net interest income or as qualified short-term
capital gains and/or treat such dividends, in whole or in part, as ineligible
for this exemption from withholding.
Any
capital gain realized by a non-U.S. shareholder upon a sale of Shares of a Fund
will generally not be subject to U.S. federal income or withholding tax unless
(i) the gain is effectively connected with the shareholder’s trade or business
in the United States, or in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the United States for 183 days or more
during the taxable year and certain other conditions are met or (ii) the Fund is
or has been a U.S. real property holding corporation, as defined below, at any
time within the five-year period preceding the date of disposition of the Fund’s
Shares or, if shorter, within the period during which the non-U.S. shareholder
has held the Shares. Generally, a corporation is a U.S. real property holding
corporation if the fair market value of its U.S. real property interests, as
defined in the 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
CEFMX Index is published by S-Network Global Indexes, LLC (“S-Network”). The
High Yield Index, Intermediate Index, Long Index, Short High Yield Index and
Short Index are published by Bloomberg Finance L.P. and its affiliates
(“Bloomberg”). Bloomberg and S-Network are referred to herein as 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.
The
CEFMX Index is a rules based index intended to serve as a benchmark for
closed-end funds listed in the U.S. that are principally engaged in asset
management processes designed to produce federally tax-exempt annual yield. The
CEFMX Index employs a modified total net assets weighting methodology designed
to provide investment exposure across the various business segments that
together comprise the federally tax-exempt annual yield sector of the closed-end
fund market. The CEFMX Index is divided into four main closed-end fund segments
including: leveraged municipal fixed income closed-end funds; unleveraged
municipal fixed income closed-end funds; leveraged high yield municipal fixed
income closed-end funds; and unleveraged high yield municipal fixed income
closed-end funds.
The
CEFMX Index will reconstitute at the conclusion of trading on the last business
day of the last month of each calendar half (March/September) and rebalance at
the conclusion of trading on the last business day of the last month of each
calendar quarter. The CEFMX Index is calculated and maintained by ICE Data
Indices on behalf of S-Network. The CEFMX Index is reviewed on an ongoing basis.
S-Network may delay or change a scheduled rebalancing or reconstitution of the
CEFMX Index or the implementation of certain rules at its sole
discretion.
The
High Yield Index is a market size weighted index composed of publicly traded
municipal bonds that cover the U.S. dollar denominated high yield long-term
tax-exempt bond market. The majority of the High Yield Index’s constituents are
from the revenue sector, with some constituents being from the general
obligation sector.
The
High Yield Index is calculated using a market value weighting methodology. The
High Yield Index tracks the high yield municipal bond market with a 75% weight
in non-investment grade municipal bonds and a targeted 25% weight in triple-B
rated investment grade municipal bonds (in accordance with Bloomberg’s
methodology).
All
bonds must have a fixed rate, a dated-date (i.e.,
the date when interest begins to accrue) after December 31, 1990 and a nominal
maturity of 1 to 30 years. Taxable municipal bonds, bonds with floating rates
and derivatives are excluded from the High Yield Index.
The
composition of the High Yield Index is rebalanced monthly. Bloomberg may delay
or change a scheduled rebalancing or reconstitution of the High Yield Index or
the implementation of certain rules at its sole discretion. Interest and
principal payments earned by the component securities are held in the High Yield
Index without a reinvestment return until month end when they are removed from
the High Yield Index. Qualifying securities issued, but not necessarily settled,
on or before the month end rebalancing date qualify for inclusion in the High
Yield Index in the following month.
Total
returns are calculated based on the sum of price changes, gain/loss on
repayments of principal, and coupons received and accrued, expressed as a
percentage of beginning market value. The High Yield Index is calculated and is
available once a day by Bloomberg.
The
Intermediate Index is a market size weighted index comprised of publicly traded
municipal bonds that cover the U.S. dollar denominated intermediate term
tax-exempt bond market. It is a total return benchmark designed for high quality
and tax efficient investments. The Intermediate Index has four main sectors:
state and local general obligation bonds, revenue bonds, insured bonds and
pre-refunded bonds. The Intermediate Index is calculated using a market value
weighting methodology.
To
be included in the Intermediate Index, a bond must be rated investment grade (in
accordance with Bloomberg’s methodology).
The
composition of the Intermediate Index is rebalanced monthly. Bloomberg may delay
or change a scheduled rebalancing or reconstitution of the Intermediate Index or
the implementation of certain rules at its sole discretion. Interest and
principal payments earned by the component securities are held in the
Intermediate Index without a reinvestment return until month end when they are
removed from the Intermediate Index. Qualifying securities issued, but not
necessarily settled, on or before the month end rebalancing date qualify for
inclusion in the Intermediate Index in the following month.
Total
returns are calculated based on the sum of price changes, gain/loss on
repayments of principal, and coupons received or accrued, expressed as a
percentage of beginning market value. The Intermediate Index is calculated once
a day by Bloomberg.
The
Long Index is a market size weighted index comprised of publicly traded
municipal bonds that cover the U.S. dollar denominated long-term tax-exempt bond
market. It is a total return benchmark designed for high quality and tax
efficient investments. The Long Index has four main sectors: state and local
general obligation bonds, revenue bonds, insured bonds and pre-refunded bonds.
The Long Index is calculated using a market value weighting
methodology.
To
be included in the Long Index, bonds must be rated investment grade (in
accordance with Bloomberg’s methodology).
The
composition of the Long Index is rebalanced monthly. Bloomberg may delay or
change a scheduled rebalancing or reconstitution of the Long Index or the
implementation of certain rules at its sole discretion. Interest and principal
payments earned by the component securities are held in the Long Index without a
reinvestment return until month end when they are removed from the Long Index.
Qualifying securities issued, but not necessarily settled, on or before the
month end rebalancing date qualify for inclusion in the Long Index in the
following month.
Total
returns are calculated based on the sum of price changes, gain/loss on
repayments of principal, and coupons received or accrued, expressed as a
percentage of beginning market value. The Long Index is calculated once a day by
Bloomberg.
The
Short High Yield Index is a market size weighted index composed of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
short-term tax-exempt bond market. The majority of the Short High Yield Index’s
constituents are from the revenue sector, with some constituents being from the
general obligation sector.
The
Short High Yield Index is calculated using a market value weighting methodology.
The Short High Yield Index tracks the high yield municipal bond market with a
targeted 65% weight in non-investment grade municipal bonds, a targeted 25%
weight in triple-B rated investment grade municipal bonds and a targeted 10%
weight in single-A rated investment grade municipal bonds (in accordance with
Bloomberg’s methodology).
All
bonds must have a fixed rate, a dated-date (i.e.,
the date when interest begins to accrue) after December 31, 1990 and a nominal
maturity of 1 to 12 years. Taxable municipal bonds, bonds with floating rates
and derivatives are excluded from the Short High Yield Index.
The
composition of the Short High Yield Index is rebalanced monthly. Bloomberg may
delay or change a scheduled rebalancing or reconstitution of the Short High
Yield Index or the implementation of certain rules at its sole discretion.
Interest and principal payments earned by the component securities are held in
the Short High Yield Index without a reinvestment return until month end when
they are removed from the Short High Yield Index. Qualifying securities issued,
but not necessarily settled, on or before the month end rebalancing date qualify
for inclusion in the Short High Yield Index in the following month.
Total
returns are calculated based on the sum of price changes, gain/loss on
repayments of principal, and coupons received and accrued, expressed as a
percentage of beginning market value. The Short High Yield Index is calculated
and is available once a day by Bloomberg.
The
Short Index is a market size weighted index comprised of publicly traded
municipal bonds that cover the U.S. dollar denominated short-term tax-exempt
bond market. It is a total return benchmark designed for high quality and tax
efficient investments. The Short Index has four main sectors: state and local
general obligation bonds, revenue bonds, insured bonds and pre-refunded bonds.
The Short Index is calculated using a market value weighting
methodology.
To
be included in the Short Index, bonds must be rated investment grade (in
accordance with Bloomberg’s methodology).
The
composition of the Short Index is rebalanced monthly. Bloomberg may delay or
change a scheduled rebalancing or reconstitution of the Short Index or the
implementation of certain rules at its sole discretion. Interest and principal
payments earned by the component securities are held in the Short Index without
a reinvestment return until month end when they are removed from the Short
Index. Qualifying securities issued, but not necessarily settled, on or before
the month end rebalancing date qualify for inclusion in the Short Index in the
following month.
Total
returns are calculated based on the sum of price changes, gain/loss on
repayments of principal, and coupons received or accrued, expressed as a
percentage of beginning market value. The Short Index is calculated once a day
by Bloomberg.
The
Adviser has entered into a licensing agreement with each Index Provider to use
each Fund’s respective Index. Each Fund is entitled to use its respective Index
pursuant to a sublicensing arrangement with the Adviser.
VanEck
CEF Muni Income ETF is not sponsored, endorsed, sold or promoted by S-Network.
S-Network makes no representation or warranty, express or implied, to the owners
of VanEck CEF Muni Income ETF, or any member of the public regarding the
advisability of investing in securities generally or in VanEck CEF Muni Income
ETF particularly or the ability of the CEFMX Index to track the performance of
the federally tax-exempt annual yield sector of the closed-end fund market.
S-Network’s only relationship to the Adviser is the licensing of certain service
marks and trade names of S-Network and of the CEFMX Index that is determined,
composed and calculated by the S-Network without regard to the Adviser or VanEck
CEF Muni Income ETF. S-Network has no obligation to take the needs of the
Adviser or the owners of VanEck CEF Muni Income ETF, into consideration in
determining, composing or calculating the CEFMX Index. S-Network is not
responsible for and has not participated in the determination of the timing of,
prices at, or quantities of VanEck CEF Muni Income ETF to be issued or in the
determination or calculation of the equation by which VanEck CEF Muni Income ETF
is to be converted into cash. S-Network has no obligation or liability in
connection with the administration, marketing or trading of VanEck CEF Muni
Income ETF.
S-NETWORK
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE CEFMX INDEX OR
ANY DATA INCLUDED THEREIN AND THE INDEX PROVIDER 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 THE ADVISER, OWNERS OF
VANECK CEF MUNI INCOME ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
CEFMX 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 CEFMX INDEX OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE
CEFMX INDEX PROVIDER HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
“Bloomberg®”
and Bloomberg
AMT-Free Intermediate Continuous Municipal Index, Bloomberg AMT-Free Long
Continuous Municipal Index, Bloomberg AMT-Free Short Continuous Municipal Index,
Bloomberg Municipal Custom High Yield Composite Index and Bloomberg Municipal
High Yield Short Duration Index (collectively, the “BLOOMBERG
INDICES”)
are service marks of Bloomberg Finance L.P. and its affiliates, including
Bloomberg Index Services Limited (“BISL”), the administrator of the index
(collectively, “Bloomberg”), and have been licensed for use for certain purposes
by the Adviser.
The
VanEck
High Yield Muni ETF, VanEck Intermediate Muni ETF, VanEck Long Muni ETF, VanEck
Short High Yield Muni ETF and VanEck Short Muni ETF on the Exchange (the “VanEck
ETFs”) are
not sponsored, endorsed, sold or promoted by Bloomberg. Bloomberg does not make
any representation or warranty, express or implied, to the owners of or
counterparties to the VanEck
ETFs or
any member of the public regarding the advisability of investing in securities
generally or in the
VanEck ETFs particularly.
The only relationship of Bloomberg to the Adviser is the licensing of certain
trademarks, trade names and service marks and of the BLOOMBERG
INDICES,
which is determined, composed and calculated by BISL without regard to the
Adviser or the
VanEck ETFs.
Bloomberg has no obligation to take the needs of the Adviser or the owners of
the
VanEck ETFs
into consideration in determining, composing or calculating the BLOOMBERG
INDICES.
Bloomberg is not responsible for and has not participated in the determination
of the timing of, prices at, or quantities of the
VanEck ETFs to
be issued. Bloomberg shall not have any obligation or liability, including,
without limitation, to
VanEck ETFs customers,
in connection with the administration, marketing or trading of the
VanEck ETFs.
BLOOMBERG
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE BLOOMBERG
INDICES OR
ANY DATA RELATED THERETO AND SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS
OR INTERRUPTIONS THEREIN. BLOOMBERG DOES NOT MAKE ANY WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY the Adviser, OWNERS OF THE VanEck ETFs
OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BLOOMBERG
INDICES
OR ANY DATA RELATED THERETO. BLOOMBERG DOES NOT MAKE ANY EXPRESS OR IMPLIED
WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE BLOOMBERG
INDICES
OR ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, TO THE
MAXIMUM EXTENT ALLOWED BY LAW, BLOOMBERG, ITS LICENSORS, AND ITS AND THEIR
RESPECTIVE EMPLOYEES, CONTRACTORS, AGENTS, SUPPLIERS, AND VENDORS SHALL HAVE NO
LIABILITY OR RESPONSIBILITY WHATSOEVER FOR ANY INJURY OR DAMAGES—WHETHER DIRECT,
INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR OTHERWISE—ARISING IN CONNECTION
WITH THE VanEck ETFs OR BLOOMBERG
INDICES OR
ANY DATA OR VALUES RELATING THERETO—WHETHER ARISING FROM THEIR NEGLIGENCE OR
OTHERWISE, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
The
financial highlights tables which follow are intended to help you understand the
Funds’ financial performance for the past five years or as indicated. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned (or
lost) on an investment in a Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Ernst & Young LLP, 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.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEF
Muni Income ETF |
|
For
the Year Ended April 30, |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
| Net
asset value, beginning of year |
$ |
24.34 |
|
|
$ |
26.18 |
|
|
$ |
24.97 |
|
|
$ |
26.58 |
|
|
$ |
28.50 |
|
|
| Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
1.14 |
|
(a) |
1.09 |
|
(a) |
1.16 |
|
(a) |
1.27 |
|
(a) |
1.37 |
|
| Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
| investments |
4.71 |
|
|
(1.83) |
|
|
1.21 |
|
|
(1.61) |
|
|
(1.90) |
|
|
| Total
from investment operations |
5.85 |
|
|
(0.74) |
|
|
2.37 |
|
|
(0.34) |
|
|
(0.53) |
|
|
| Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(1.12) |
|
|
(1.10) |
|
|
(1.16) |
|
|
(1.27) |
|
|
(1.39) |
|
|
| Net
asset value, end of year |
$ |
29.07 |
|
|
$ |
24.34 |
|
|
$ |
26.18 |
|
|
$ |
24.97 |
|
|
$ |
26.58 |
|
|
| Total
return (b) |
24.38 |
|
% |
(3.17) |
|
% |
9.83 |
|
% |
(1.45) |
|
% |
(1.93) |
|
% |
| Ratios/Supplemental
Data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of year (000’s) |
$176,578 |
|
|
$142,386 |
|
|
$143,970 |
|
|
$94,876 |
|
|
$83,719 |
|
|
| Ratio
of gross expenses to average net assets (d)(e) |
0.40 |
|
% |
0.45 |
|
% |
0.48 |
|
% |
0.50 |
|
% |
0.51 |
|
% |
| Ratio
of net expenses to average net assets (d)(e) |
0.40 |
|
% |
0.40 |
|
% |
0.40 |
|
% |
0.40 |
|
% |
0.40 |
|
% |
| Ratio
of net expenses to average net assets |
|
|
|
|
|
|
|
|
|
|
| excluding
interest expense (d)(e) |
0.40 |
|
% |
0.40 |
|
% |
0.40 |
|
% |
0.40 |
|
% |
0.40 |
|
% |
| Ratio
of net investment income to average net |
|
|
|
|
|
|
|
|
|
|
| assets |
4.17 |
|
% |
4.02 |
|
% |
4.67 |
|
% |
4.78 |
|
% |
4.98 |
|
% |
| Portfolio
turnover rate (c) |
11 |
|
% |
10 |
|
% |
13 |
|
% |
9 |
|
% |
12 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
Yield Muni ETF # |
|
For
the Year Ended April 30, |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
| Net
asset value, beginning of year |
$ |
56.13 |
|
|
$ |
62.79 |
|
|
$ |
62.16 |
|
|
$ |
61.52 |
|
|
$ |
63.18 |
|
|
| Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
2.36 |
|
(a) |
2.69 |
|
(a) |
2.67 |
|
(a) |
2.72 |
|
(a) |
2.68 |
|
|
| Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
| investments
|
6.38 |
|
|
(6.73) |
|
|
0.64 |
|
|
0.60 |
|
|
(1.64) |
|
|
| Total
from investment operations |
8.74 |
|
|
(4.04) |
|
|
3.31 |
|
|
3.32 |
|
|
1.04 |
|
|
| Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(2.39) |
|
|
(2.62) |
|
|
(2.68) |
|
|
(2.68) |
|
|
(2.70) |
|
|
| Net
asset value, end of year |
$ |
62.48 |
|
|
$ |
56.13 |
|
|
$ |
62.79 |
|
|
$ |
62.16 |
|
|
$ |
61.52 |
|
|
| Total
return (b) |
15.84 |
|
% |
(6.86) |
|
% |
5.46 |
|
% |
5.48 |
|
% |
1.69 |
|
% |
| Ratios/Supplemental
Data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of year (000’s) |
$ |
3,461,322 |
|
|
$ |
2,570,367 |
|
|
$ |
2,655,936 |
|
|
$ |
2,436,743 |
|
|
$ |
2,106,741 |
|
|
| Ratio
of expenses to average net assets |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
| Ratio
of expenses to average net assets excluding |
|
|
|
|
|
|
|
|
|
|
| interest
expense |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
| Ratio
of net investment income to average net |
|
|
|
|
|
|
|
|
|
|
| assets |
3.91 |
|
% |
4.26 |
|
% |
4.31 |
|
% |
4.37 |
|
% |
4.36 |
|
% |
| Portfolio
turnover rate (c) |
9 |
|
% |
12 |
|
% |
10 |
|
% |
14 |
|
% |
10 |
|
% |
(a)Calculated
based upon average shares outstanding.
(b)Total
return is calculated assuming an initial investment made at the net asset value
at the beginning of year, reinvestment of any dividends and distributions at net
asset value on the dividend/distributions payment date and a redemption at the
net asset value on the last day of the year. The return includes adjustments in
accordance with U.S. Generally Accepted Accounting Principles and as such, the
net asset values for financial reporting purposes and the returns based upon
those net asset values may differ from the net asset values and returns for
shareholder transactions. The return does not reflect the deduction of taxes
that a shareholder would pay on Fund dividends/distributions or the redemption
of Fund shares.
(c)Portfolio
turnover rates exclude securities received or delivered as a result of
processing in-kind capital share transactions.
(d)The
ratios represented do not reflect the Fund’s proportionate share of income and
expenses from the Fund’s investment in underlying funds.
# On
October 26, 2018, The Fund effected a 1 for 2 reverse share split. Per share
data has been adjusted to reflect the reverse share split.
(e)Periods
after November 1, 2019 reflect a unitary management fee structure.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intermediate
Muni ETF # |
|
For
the Year Ended April 30, |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
| Net
asset value, beginning of year |
$ |
48.97 |
|
|
$ |
48.94 |
|
|
$ |
46.83 |
|
|
$ |
47.40 |
|
|
$ |
48.84 |
|
|
| Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
0.98 |
(a) |
1.09 |
(a) |
1.12 |
(a) |
1.08 |
(a) |
1.06 |
|
| Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
| investments |
2.72 |
|
0.10 |
|
2.11 |
|
(0.59) |
|
(1.44) |
|
| Total
from investment operations |
3.70 |
|
1.19 |
|
3.23 |
|
0.49 |
|
(0.38) |
|
| Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(0.98) |
|
(1.10) |
|
(1.12) |
|
(1.06) |
|
(1.06) |
|
| Net
realized capital gains |
(0.07) |
|
(0.06) |
|
— |
|
— |
|
— |
|
| Total
dividends and distributions |
(1.05) |
|
(1.16) |
|
(1.12) |
|
(1.06) |
|
(1.06) |
|
| Net
asset value, end of year |
$ |
51.62 |
|
|
$ |
48.97 |
|
|
$ |
48.94 |
|
|
$ |
46.83 |
|
|
$ |
47.40 |
|
|
| Total
return (b) |
7.59 |
|
% |
2.40 |
|
% |
6.98 |
|
% |
1.04 |
|
% |
(0.80) |
|
% |
| Ratios/Supplemental
Data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of year (000’s) |
$1,801,347 |
|
|
$1,581,679 |
|
|
$1,720,181 |
|
|
$1,697,602 |
|
|
$1,592,512 |
|
|
| Ratio
of expenses to average net assets |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
| Ratio
of expenses to average net assets excluding |
|
|
|
|
|
|
|
|
|
|
| interest
expense |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
| Ratio
of net investment income to average net |
|
|
|
|
|
|
|
|
|
|
| assets |
1.90 |
|
% |
2.17 |
|
% |
2.37 |
|
% |
2.24 |
|
% |
2.22 |
|
% |
| Portfolio
turnover rate (c) |
6 |
|
% |
7 |
|
% |
7 |
|
% |
9 |
|
% |
7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Muni ETF |
|
For
the Year Ended April 30, |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
| Net
asset value, beginning of year |
$ |
20.18 |
|
|
$ |
20.40 |
|
|
$ |
19.63 |
|
|
$ |
19.63 |
|
|
$ |
20.43 |
|
|
| Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
0.52 |
|
(a) |
0.57 |
(a) |
0.60 |
(a) |
0.59 |
(a) |
0.60 |
|
| Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
| investments |
1.54 |
|
(0.20) |
|
0.77 |
|
0.01 |
|
(0.79) |
|
| Total
from investment operations |
2.06 |
|
0.37 |
|
1.37 |
|
0.60 |
|
(0.19) |
|
| Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(0.52) |
|
(0.57) |
|
(0.60) |
|
(0.60) |
|
(0.61) |
|
| Net
realized capital gains |
(0.04) |
|
(0.02) |
|
— |
|
— |
|
— |
|
| Total
dividends and distributions |
(0.56) |
|
(0.59) |
|
(0.60) |
|
(0.60) |
|
(0.61) |
|
| Net
asset value, end of year |
$ |
21.68 |
|
|
$ |
20.18 |
|
|
$ |
20.40 |
|
|
$ |
19.63 |
|
|
$ |
19.63 |
|
|
| Total
return (b) |
10.31 |
|
% |
1.75 |
|
% |
7.15 |
|
% |
3.02 |
|
% |
(0.99) |
|
% |
| Ratios/Supplemental
Data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of year (000’s) |
$227,654 |
|
|
$199,798 |
|
|
$153,002 |
|
|
$154,107 |
|
|
$161,965 |
|
|
| Ratio
of expenses to average net assets |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
| Ratio
of expenses to average net assets excluding |
|
|
|
|
|
|
|
|
|
|
| interest
expense |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
0.24 |
|
% |
| Ratio
of net investment income to average net |
|
|
|
|
|
|
|
|
|
|
| assets |
2.45 |
|
% |
2.72 |
|
% |
3.06 |
|
% |
2.96 |
|
% |
2.99 |
|
% |
| Portfolio
turnover rate (c) |
23 |
|
% |
22 |
|
% |
22 |
|
% |
33 |
|
% |
17 |
|
% |
(a)Calculated
based upon average shares outstanding.
(b)Total
return is calculated assuming an initial investment made at the net asset value
at the beginning of year, reinvestment of any dividends and distributions at net
asset value on the dividend/distributions payment date and a redemption at the
net asset value on the last day of the year. The return includes adjustments in
accordance with U.S. Generally Accepted Accounting Principles and as such, the
net asset values for financial reporting purposes and the returns based upon
those net asset values may differ from the net asset values and returns for
shareholder transactions. The return does not reflect the deduction of taxes
that a shareholder would pay on Fund dividends/distributions or the redemption
of Fund shares.
(c)Portfolio
turnover rates exclude securities received or delivered as a result of
processing in-kind capital share transactions.
# On
October 26, 2018, The Fund effected a 1 for 2 reverse share split. Per share
data has been adjusted to reflect the reverse share split.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
High Yield Muni ETF |
|
For
the Year Ended April 30, |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
| Net
asset value, beginning of year |
$ |
23.09 |
|
|
$ |
24.70 |
|
|
$ |
24.24 |
|
|
$ |
24.26 |
|
|
$ |
25.15 |
|
|
| Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
0.73 |
|
(b) |
0.84 |
|
(b) |
0.80 |
|
(b) |
0.76 |
|
(b) |
0.72 |
|
|
| Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
| investments |
1.99 |
|
|
(1.64) |
|
|
0.43 |
|
|
(0.02) |
|
|
(0.92) |
|
|
| Total
from investment operations |
2.72 |
|
|
(0.80) |
|
|
1.23 |
|
|
0.74 |
|
|
(0.20) |
|
|
| Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(0.75) |
|
|
(0.81) |
|
|
(0.77) |
|
|
(0.76) |
|
|
(0.69) |
|
|
| Net
asset value, end of year |
$ |
25.06 |
|
|
$ |
23.09 |
|
|
$ |
24.70 |
|
|
$ |
24.24 |
|
|
$ |
24.26 |
|
|
| Total
return (c) |
11.89 |
|
% |
(3.44) |
|
% |
5.16 |
|
% |
3.07 |
|
% |
(0.81) |
|
% |
| Ratios/Supplemental
Data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of year (000’s) |
$ |
305,712 |
|
|
$ |
263,266 |
|
|
$ |
202,545 |
|
|
$ |
134,537 |
|
|
$ |
114,033 |
|
|
| Ratio
of expenses to average net assets |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
| Ratio
of expenses to average net assets excluding |
|
|
|
|
|
|
|
|
|
|
| interest
expense |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
| Ratio
of net investment income to average net |
|
|
|
|
|
|
|
|
|
|
| assets |
2.98 |
|
% |
3.37 |
|
% |
3.28 |
|
% |
3.11 |
|
% |
2.93 |
|
% |
| Portfolio
turnover rate (d) |
14 |
|
% |
17 |
|
% |
22 |
|
% |
27 |
|
% |
20 |
|
% |
(a)Commencement
of operations.
(b)Calculated
based upon average shares outstanding.
(c)Total
return is calculated assuming an initial investment made at the net asset value
at the beginning of period, reinvestment of any dividends and distributions at
net asset value on the dividend/distributions payment date and a redemption at
the net asset value on the last day of the period. The return includes
adjustments in accordance with U.S. Generally Accepted Accounting Principles and
as such, the net asset values for financial reporting purposes and the returns
based upon those net asset values may differ from the net asset values and
returns for shareholder transactions. The return does not reflect the deduction
of taxes that a shareholder would pay on Fund dividends/distributions or the
redemption of Fund shares.
(d)Portfolio
turnover rates exclude securities received or delivered as a result of
processing in-kind capital share transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
Muni ETF |
|
For
the Year Ended April 30, |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
| Net
asset value, beginning of year |
$ |
17.55 |
|
|
$ |
17.54 |
|
|
$ |
17.18 |
|
|
$ |
17.52 |
|
|
$ |
17.68 |
|
|
| Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
0.23 |
(a) |
0.27 |
(a) |
0.27 |
(a) |
0.22 |
(a) |
0.20 |
|
| Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
| investments |
0.51 |
|
|
0.02 |
|
|
0.36 |
|
|
(0.34) |
|
|
(0.17) |
|
|
| Total
from investment operations |
0.74 |
|
|
0.29 |
|
|
0.63 |
|
|
(0.12) |
|
|
0.03 |
|
|
| Less
distributions from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(0.25) |
|
|
(0.28) |
|
|
(0.27) |
|
|
(0.22) |
|
|
(0.19) |
|
|
| Net
asset value, end of year |
$ |
18.04 |
|
|
$ |
17.55 |
|
|
$ |
17.54 |
|
|
$ |
17.18 |
|
|
$ |
17.52 |
|
|
| Total
return (b) |
4.27 |
|
% |
1.66 |
|
% |
3.70 |
|
% |
(0.70) |
|
% |
0.20 |
|
% |
| Ratios/Supplemental
Data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of year (000’s) |
$296,815 |
|
|
$203,598 |
|
|
$200,875 |
|
|
$219,867 |
|
|
$267,138 |
|
|
| Ratio
of expenses to average net assets |
0.20 |
|
% |
0.20 |
|
% |
0.20 |
|
% |
0.20 |
|
% |
0.20 |
|
% |
| Ratio
of expenses to average net assets excluding |
|
|
|
|
|
|
|
|
|
|
| interest
expense |
0.20 |
|
% |
0.20 |
|
% |
0.20 |
|
% |
0.20 |
|
% |
0.20 |
|
% |
| Ratio
of net investment income to average net |
|
|
|
|
|
|
|
|
|
|
| assets |
1.26 |
|
% |
1.54 |
|
% |
1.57 |
|
% |
1.26 |
|
% |
1.11 |
|
% |
| Portfolio
turnover rate (c) |
30 |
|
% |
34 |
|
% |
33 |
|
% |
41 |
|
% |
12 |
|
% |
(a)Calculated
based upon average shares outstanding.
(b)Total
return is calculated assuming an initial investment made at the net asset value
at the beginning of year, reinvestment of any dividends and distributions at net
asset value on the dividend/distributions payment date and a redemption at the
net asset value on the last day of the year. The return includes adjustments in
accordance with U.S. Generally Accepted Accounting Principles and as such, the
net asset values for financial reporting purposes and the returns based upon
those net asset values may differ from the net asset values and returns for
shareholder transactions. The return does not reflect the deduction of taxes
that a shareholder would pay on Fund dividends/distributions or the redemption
of Fund shares.
(c)Portfolio
turnover rates exclude securities received or delivered as a result of
processing in-kind capital share transactions.
Information
regarding how often the closing trading price of the Shares of each Fund was
above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund
for the most recently completed calendar year and the most recently completed
calendar quarter(s) since that year (or the life of the Fund, if shorter) can be
found at www.vaneck.com.
CONTINUOUS
OFFERING
The
method by which Creation Units are created and traded may raise certain issues
under applicable securities laws. Because new Creation Units are issued and sold
by the Trust on an ongoing basis, a “distribution,” as such term is used in the
Securities Act, may occur at any point. Broker dealers and other persons are
cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner which could render them statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act.
For
example, a broker dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares, and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a categorization
as an underwriter.
Broker
dealers who are not “underwriters” but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus dealing with
Shares that are part of an “unsold allotment” within the meaning of Section
4(a)(3)(C) of the Securities Act, would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
This is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, broker dealer firms should note that
dealers who are not underwriters but are participating in a distribution (as
contrasted with ordinary secondary market transactions) and thus dealing with
the Shares that are part of an overallotment within the meaning of Section
4(a)(3)(A) of the Securities Act would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
Firms that incur a prospectus delivery obligation with respect to Shares are
reminded that, under Rule 153 of the Securities Act, a prospectus delivery
obligation under Section 5(b)(2) of the Securities Act owed to an exchange
member in connection with a sale on the Exchange is satisfied by the fact that
the prospectus is available at the Exchange upon request. The prospectus
delivery mechanism provided in Rule 153 is only available with respect to
transactions on an exchange.
In
addition, certain affiliates of the Funds and the Adviser may purchase and
resell Fund shares pursuant to this Prospectus.
OTHER
INFORMATION
The
Trust was organized as a Delaware statutory trust on March 15, 2001. Its
Declaration of Trust currently permits the Trust to issue an unlimited number of
Shares of beneficial interest. If shareholders are required to vote on any
matters, each Share outstanding would be entitled to one vote. Annual meetings
of shareholders will not be held except as required by the 1940 Act and other
applicable law. See the Funds’ SAI for more information concerning the Trust’s
form of organization. Section 12(d)(1) of the 1940 Act restricts investments by
investment companies in the securities of other investment companies, including
Shares of a Fund. Registered investment companies are permitted to invest in the
Funds (except VanEck CEF Muni Income ETF) beyond the limits set forth in Section
12(d)(1) subject to certain terms and conditions set forth in an SEC exemptive
order or SEC regulations, including that such investment companies enter into an
agreement with such Fund.
The
Prospectus, SAI and any other Fund communication do not create any contractual
obligations between the Fund’s shareholders and the Trust, the Fund, the Adviser
and/or the Trustees. Further, shareholders are not intended third-party
beneficiaries of any contracts entered into by (or on behalf of) any Fund,
including contracts with the Adviser or other parties who provide services to
the Fund.
Dechert
LLP serves as counsel to the Trust, including the Funds. Ernst & Young LLP
serves as the Trust’s independent registered public accounting firm and will
audit the Fund’s financial statements annually.
ADDITIONAL
INFORMATION
This
Prospectus does not contain all the information included in the Registration
Statement filed with the SEC with respect to the Funds’ Shares. The Funds’
Registration Statement, including this Prospectus, the Funds’ SAI and the
exhibits are available on the EDGAR database at the SEC’s website
(http://www.sec.gov), and copies may be obtained, after paying a duplicating
fee, by electronic request at the following email address: [email protected].
The
SAI for the Funds, which has been filed with the SEC, provides more information
about the Funds. The SAI for the Funds is incorporated herein by reference and
is legally part of this Prospectus. Additional information about the Funds’
investments is available in each Fund’s annual and semi-annual reports to
shareholders. In each Fund’s annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund’s performance during its last fiscal year. The SAI and the Funds’ annual
and semi-annual reports may be obtained without charge by writing to the Funds
at Van Eck Securities Corporation, the Funds’ Distributor, at 666 Third Avenue,
9th Floor, New York, New York 10017 or by calling the distributor at the
following number: Investor Information: 800.826.2333.
Shareholder
inquiries may be directed to the Funds in writing to 666 Third Avenue, 9th
Floor, New York, New York 10017 or by calling 800.826.2333.
The
Funds’ SAI is available at www.vaneck.com.
(Investment
Company Act file no. 811-10325)
For
more detailed information about the Funds, see the SAI dated September 1, 2021,
as may be supplemented from time to time. Additional information about the
Funds’ investments is or will be available in each Fund’s annual and semi-annual
reports to shareholders. In each Fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund’s performance during its last fiscal year.
Call
VanEck at 800.826.2333 to request, free of charge, the annual or semi-annual
reports, the SAI, or other information about the Funds or to make shareholder
inquiries. You may also obtain the SAI or a Fund’s annual or semi-annual
reports, by visiting the VanEck website at www.vaneck.com.
Reports
and other information about the Funds are available on the EDGAR Database on the
SEC’s internet site at http://www.sec.gov. In addition, copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following email address: [email protected].
|
|
|
|
|
|
|
|
|
Transfer
Agent: State Street Bank and Trust Company
SEC Registration Number:
333-123257
1940 Act Registration Number: 811-10325 |
800.826.2333
vaneck.com |
| MUNIPRO |
