ck0000768847-20211231
VanEck
Funds
VanEck Morningstar Wide Moat
Fund
Class
I: MWMIX / Class Z: MWMZX
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These
securities have not been approved or disapproved either by the U.S.
Securities and Exchange Commission (SEC), or by any State Securities
Commission. Neither the SEC nor any State Commission has passed upon the
accuracy or adequacy of this prospectus.
Any
claim to the contrary is a criminal offense. |
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800.826.2333 vaneck.com
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TABLE
OF CONTENTS |
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| I.
Summary Information |
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| VanEck
Morningstar Wide Moat Fund (Class I, Z) |
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| II.
Investment Objective, Strategies, Policies, Risks and Other
Information |
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| 1.
Investment Objective |
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| 2.
Additional Information About Principal Investment Strategies and
Risks |
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| 3.
Additional Non-Principal Investment Strategies and Risks |
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| 4.
Other Information and Policies |
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| III.
Shareholder Information |
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| 1.
How to Buy, Sell, Exchange or Transfer Shares |
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| 2.
How to Choose a Class of Shares |
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| 3.
Sales Charges for Class I and Class Z Shares |
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| 4.
Householding of Reports and Prospectuses |
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| 5.
Retirement Plans |
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| 6.
Federal Income Taxes |
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| 7.
Dividends and Capital Gains Distributions |
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| 8.
Management of the Fund and Service Providers |
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| IV.
Financial Highlights |
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Appendix
A: Description of the Morningstar®
Wide Moat Focus IndexSM |
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| Appendix
B: Licensing Agreement and Disclaimers |
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VANECK
MORNINGSTAR WIDE MOAT FUND (CLASS I,
Z) |
I.
SUMMARY INFORMATION
INVESTMENT OBJECTIVE
The
VanEck Morningstar Wide Moat Fund seeks to replicate as closely as possible,
before fees and expenses, the price and yield performance of the
Morningstar®
Wide Moat Focus IndexSM
(the “Index”).
FUND FEES AND EXPENSES
This table describes the fees
and expenses that you may pay if you buy and hold shares of the Fund. For Class
Z shares, investors in programs or plans offered by financial intermediaries may
be charged fees or commissions by those financial intermediaries which are not
reflected in the expense example.
Shareholder
Fees
(fees
paid directly from your investment)
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Class
I |
Class
Z |
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Maximum
Sales Charge (load) imposed on purchases (as a percentage of offering
price) |
0.00% |
0.00% |
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Maximum
Deferred Sales Charge (load) (as a percentage of the lesser of the net
asset value or purchase price) |
0.00% |
0.00% |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Class
I |
Class
Z |
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Management
Fees |
0.45% |
0.45% |
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Distribution
and/or Service (12b-1) Fees |
0.00% |
0.00% |
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Other
Expenses |
1.81% |
1.14% |
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Total
Annual Fund Operating Expenses |
2.26% |
1.59% |
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Fee
Waivers and/or Expense Reimbursements1 |
-1.67% |
-1.10% |
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Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense
Reimbursements |
0.59% |
0.49% |
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1 Van Eck Associates
Corporation (the “Adviser”) has agreed to waive fees and/or pay Fund expenses to
the extent necessary to prevent the operating expenses of the Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, dividends
and interest payments on securities sold short, taxes and extraordinary
expenses) from exceeding 0.59% for Class I and 0.49% for Class Z of the Fund’s
average daily net assets per year until May 1,
2023. During such time, the expense limitation is expected to
continue until the Board of Trustees acts to discontinue all or a portion of
such expense limitation.
EXPENSE EXAMPLE
The following example
is intended to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then either redeem all of your
shares at the end of these periods or continue to hold them. The example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same, and applies fee waivers and/or expense
reimbursements, if any, for the periods indicated above under “Annual Fund
Operating Expenses.” Although your actual expenses may be higher or lower, based
on these assumptions, your costs would be:
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Share
Status |
1
Year |
3
Years |
5
Years |
10
Years |
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Class
I |
Sold or
Held |
$60 |
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$545 |
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$1,057 |
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$2,465 |
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Class
Z |
Sold
or Held |
$50 |
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$394 |
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$761 |
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$1,796 |
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PORTFOLIO
TURNOVER
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate that the Fund pays
higher 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, affect the Fund’s performance. During the
most recent fiscal year, the Fund’s portfolio turnover rate was 59% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under
normal conditions, the Fund invests at least 80% of its net assets in securities
that comprise the Index. The Index is comprised of securities issued by
companies that Morningstar, Inc. (“Morningstar”) determines to have sustainable
competitive advantages based on a proprietary methodology that considers
quantitative and qualitative factors (“wide moat companies”). Wide moat
companies are selected from the universe of companies represented in the
Morningstar®
US Market IndexSM,
a broad market index representing 97% of U.S. market capitalization. The Index
targets a select group of wide moat companies: those that according to
Morningstar’s equity research team are attractively priced as of each Index
review. Out of the companies in the Morningstar®
US Market IndexSM
that Morningstar determines are wide moat companies, Morningstar selects
companies to be included in the Index as determined by the ratio of
Morningstar’s estimate of fair value of the issuer’s common stock to the price.
Morningstar’s equity research fair value estimates are calculated using a
standardized, proprietary valuation model. Wide moat companies may include
medium-capitalization companies. The Fund’s 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders. In seeking to achieve its investment
objective, the Fund may also invest in VanEck Morningstar Wide Moat ETF (the
“underlying fund”), an affiliated fund, which also seeks to replicate the price
and yield performance of the Index, and such investment will count towards the
Fund’s 80% investment policy. Additionally, the Fund may engage in active and
frequent trading of its portfolio securities. A replication strategy is an
indexing strategy that involves investing in the securities of the index in
approximately the same proportions as the index.
As
of December 31, 2021, the Index included 46 securities of companies with a
market capitalization range of between approximately $1.7 billion to $2,525
billion and a weighted average market capitalization of $235.3 billion. These
amounts are subject to change. The Fund, using a “passive” or indexing
investment approach, attempts to approximate the investment performance of the
Index by investing in a portfolio of securities that generally replicates the
Index. Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Index and does not seek
temporary defensive positions when markets decline or appear overvalued.
Indexing may eliminate the chance that the Fund will substantially outperform
the Index but also may reduce some of the risks of active management, such as
poor security selection. Indexing seeks to achieve lower costs and better
after-tax performance by keeping portfolio turnover low in comparison to
actively managed investment companies.The Fund may become “non-diversified” as
defined under the Investment Company Act of 1940, as amended (the “1940 Act”),
solely as a result of a change in relative market capitalization or index
weighting of one or more constituents of the Morningstar® Wide Moat Focus
IndexSM
(the “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 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 Index. The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Index concentrates in an industry or group of
industries. As of December 31, 2021, each of the health care, information
technology, industrials and consumer staples sectors represented a significant
portion of the Index. A more detailed description of the Index is contained in
Appendix A to the Prospectus.
PRINCIPAL RISKS
There
is no assurance that the Fund will achieve its investment objective.
The Fund’s share price and return will fluctuate with
changes in the market value of the Fund’s portfolio securities. Accordingly, an
investment in the Fund involves the risk of losing
money.
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 Index concentrates in a
particular sector or sectors or industry or group of industries. To the extent
that the Index continues to be concentrated in the health care sector, the Fund
will be subject to the risk that economic, political or other conditions that
have a negative effect on this sector will negatively impact the Fund to a
greater extent than if the Fund’s assets were invested in a wider variety of
sectors or industries.
Equity
Securities.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility. Morningstar may be incorrect in its
assessment of the competitive advantages of the companies selected for inclusion
in the Index, and the securities issued by such companies may underperform
Morningstar’s expectations and have an adverse effect on the Fund’s overall
performance. There can also be no assurance that wide moat companies will have
sustainable competitive advantages for any period of time. Competitive
advantages for wide moat companies may erode in a relatively short period of
time due to, among other reasons, changes in laws and regulations, intellectual
property rights, economic and political conditions and technological
developments.
Index
Tracking and Data Risk.
The Fund’s return may not match the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the 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 Index, which are not factored into the return of the
Index. Transaction costs, including brokerage costs, will decrease the Fund’s
net asset value (“NAV”). 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 Index. Errors in the Index data, the Index
computations and/or the construction of the Index in accordance with its
methodology or the transmission of such information to the Adviser may occur
from time to time and may not be identified and corrected by the Index provider
for a period of time or at all, which may have an adverse impact on the Fund and
its shareholders. In addition, the Fund may not be able to invest in certain
securities included in the Index, or invest in them in the exact proportions in
which they are represented in the Index, due to legal restrictions or
limitations imposed by the governments of certain countries, a lack of liquidity
on stock exchanges in which such securities trade, potential adverse tax
consequences or other regulatory reasons. To the extent the Fund calculates its
NAV based on fair value prices and the value of the Index is based on
securities’ closing prices (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. 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 Index. In light of the factors discussed
above, the Fund’s return may deviate significantly from the return of the
Index.
Investing
in the Consumer Staples Sector. To
the extent that the consumer staples sector continues to represent a significant
portion of the Index, the Fund may be sensitive to changes in, and its
performance may depend to a greater extent on, the overall condition of the
consumer staples sector. The consumer staples sector comprises companies whose
businesses are less sensitive to economic cycles, such as manufacturers and
distributors of food and beverages and producers of non-durable household goods
and personal products. Companies in the consumer staples sector may be adversely
affected by changes in the worldwide economy, consumer spending, competition,
demographics and consumer preferences, exploration and production spending.
Companies in this sector are also affected by changes in government regulation,
world events and economic conditions.
Investing
in the Health Care Sector.
To the extent that the health care sector continues to represent a significant
portion of the Index, the Fund may be sensitive to changes in, and its
performance will depend to a greater extent on, the overall condition of the
health care sector. Companies in the health care sector may be affected by
extensive government regulation, restrictions on government reimbursement for
medical expenses, rising costs of medical products and services, pricing
pressure, an increased emphasis on outpatient services, limited number of
products, industry innovation, changes in technologies and other market
developments. Many health care companies are heavily dependent on patent
protection. The expiration of patents may adversely affect the profitability of
these companies. Many health care companies are subject to extensive litigation
based on product liability and similar claims. Health care companies are subject
to competitive forces that may make it difficult to raise prices and, in fact,
may result in price discounting. Many new products in the health care sector may
be subject to regulatory approvals. The process of obtaining such approvals may
be long and costly. Companies in the health care sector may be thinly
capitalized and may be susceptible to product obsolescence.
Investing
in the Industrials Sector.
To
the extent that the industrials sector continues to represent a significant
portion of the Index, the Fund may be sensitive to changes in, and its
performance may depend to a greater extent on, the overall condition of the
industrials sector. Companies in the industrials sector may be adversely
affected by changes in government regulation, world events and economic
conditions. In addition, companies in the industrials sector may be adversely
affected by environmental damages, product liability claims and exchange rates.
The stock prices of companies in the industrials sector are affected by supply
and demand both for their specific product or service and for industrial sector
products in general. The products of manufacturing companies may face product
obsolescence due to rapid technological developments and frequent new product
introduction. In addition, the industrials sector may also be adversely affected
by changes or trends in commodity prices, which may be influenced or
characterized by unpredictable factors.
Investing
in the Information Technology Sector.
To the extent that the information technology sector continues to represent a
significant portion of the Index, the Fund may be sensitive to changes in, and
its performance may depend to a greater extent on, the overall condition of the
information technology sector. Information technology companies face intense
competition, both domestically and internationally, which may have an adverse
effect on profit margins. Information technology companies may have limited
product lines, markets, financial resources or personnel. The products of
information technology companies may face product obsolescence due to rapid
technological developments and frequent new product introduction, unpredictable
changes in growth rates and competition for the services of qualified personnel.
Companies in the information technology sector are heavily dependent on patent
protection and the expiration of patents may adversely affect the profitability
of these companies.
Investing
in the Underlying Fund.
Through its investment in the underlying fund, the Fund is subject to the risks
associated with the underlying fund’s investments, including the possibility
that the value of the securities or other assets held by the underlying fund
could decrease. These risks include any combination of the risks described in
this Prospectus, although the Fund’s exposure to a particular risk will be
proportionate to the Fund’s overall allocation and the underlying fund’s asset
allocation. Additionally, the Fund will bear additional expenses based on its
pro rata share of the underlying fund’s operating
expenses.
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.
Medium-Capitalization
Companies.
Medium-capitalization companies may be more volatile and more likely than large-
capitalization companies to have narrower product lines, fewer financial
resources, less management depth and experience and less competitive strength.
In addition, these companies often have greater price volatility, lower trading
volume and less liquidity than larger more established companies. Returns on
investments in securities of medium-capitalization companies could trail the
returns on investments in securities of large-capitalization
companies.
Non-Diversification.
The Fund may become classified as
non-diversified 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
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.
Operational.
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. The Fund seeks
to reduce these operational risks through controls and procedures. However,
these measures do not address every possible risk and may be inadequate for
those risks that they are intended to address.
Portfolio
Turnover.
The Fund may engage in active and frequent trading of portfolio securities and
thus may experience a high portfolio turnover rate. This may result in
significant taxable capital gains as a result of the frequent trading of the
Fund’s portfolio securities and the Fund will incur transaction costs in
connection with buying and selling the securities, which may lower the fund’s
return.
Replication
Management.
An investment in the Fund involves risks similar to those of investing in any
fund of equity securities traded on an exchange, such as market fluctuations
caused by such factors as economic and political developments, changes in
interest rates and perceived trends in security prices. However, because the
Fund is not “actively” managed, unless a specific security is removed from the
Index, the Fund generally would not sell a security if the portfolio managers
believed the security’s issuer was in financial trouble. 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.
PERFORMANCE
The following
chart and table provide some indication of the risks of investing in the Fund by
showing changes in the Fund’s performance from year to year and by showing how
the Fund’s average annual total returns compare with those of a broad measure of
market performance and one or more other performance measures.
For instance, Morningstar®
Wide Moat Focus IndexSM
is a rules-based, equal-weighted index intended to offer exposure to companies
that Morningstar, Inc. determines have sustainable competitive advantages based
on a proprietary methodology that considers quantitative and qualitative factors
(“wide moat companies”).The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. The annual returns in the bar chart are
for the Fund’s Class Z shares.
Additionally,
large purchases and/or redemptions of shares of a class, relative to the amount
of assets represented by the class, may cause the annual returns for each class
to differ. Updated performance information for the Fund is available on the
VanEck website at vaneck.com.
Class Z: Annual Total Returns (%) as of
12/31
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| Best
Quarter: |
+19.28% |
2Q 2020 |
| Worst
Quarter: |
-20.31% |
1Q
2020 |
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Average Annual Total Returns as of
12/31/2021 |
1
Year |
Life
of
Class |
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Class
I Shares
(11/6/17) |
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Before Taxes |
24.04% |
18.18% |
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After Taxes on
Distributions1 |
19.33% |
14.66% |
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After Taxes on Distributions and Sale
of Fund Shares |
15.54% |
13.20% |
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Class
Z Shares
(11/6/17) |
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Before Taxes |
24.15% |
18.31% |
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Morningstar®
Wide Moat Focus Index
(reflects
no deduction for fees, taxes, or expenses) |
24.81% |
18.96% |
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S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
28.71% |
17.94% |
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1 After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
These returns are shown for
one class of shares only; after-tax returns for the other classes may
vary. Actual after-tax returns depend on your individual tax
situation and may differ from those shown in the preceding table. The after-tax return
information shown above does not apply to Fund shares held through a
tax-advantaged account, such as a 401(k) plan or Investment Retirement
Account.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation
Portfolio
Managers.
Peter Liao has been Portfolio Manager of the Fund since inception and has been
employed by the Adviser since 2004. Gregory F. Krenzer has been Deputy Portfolio
Manager of the Fund since inception and has been employed by the Adviser since
1994. Mr. Krenzer has also been an investment team member on various funds
managed by the Adviser since 1994.
PURCHASE
AND SALE OF FUND SHARES
In
general, shares of the Fund may be purchased or redeemed on any business day,
primarily through financial representatives such as brokers or advisers, or
directly by eligible investors through the Fund’s transfer agent. Purchase
minimums for Class I shares are $1 million for an initial purchase and no
minimum for a subsequent purchase; the initial minimum may be reduced or waived
at the Adviser’s discretion. Class Z shares have no initial and subsequent
purchase minimums, although financial intermediaries may have their own
minimums.
TAX
INFORMATION
The
Fund normally distributes net investment income and net realized capital gains,
if any, to shareholders annually. These distributions are generally taxable to
you as ordinary income or capital gains, unless you are investing through a tax
advantaged retirement account, such as a 401(k) plan or an individual retirement
account (IRA), in which case your distributions may be taxed as ordinary income
when withdrawn from such account.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its affiliates may pay the intermediary for
the sale of Fund shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your financial professional to recommend the Fund over another investment. Ask
your financial professional or visit your financial intermediary’s website for
more information.
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II.
INVESTMENT OBJECTIVE, STRATEGIES, POLICIES, RISKS AND OTHER
INFORMATION |
This
section states the Fund’s investment objective and describes certain strategies
and policies that the Fund may utilize in pursuit of its investment objective.
This section also provides additional information about the principal risks
associated with investing in the Fund.
1.
INVESTMENT OBJECTIVE
The
VanEck Morningstar Wide Moat Fund seeks to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Morningstar
Wide Moat Focus Index (the “Index”).
The
Fund’s investment objective is non-fundamental and may be changed by the Board
of Trustees (the “Board”) without shareholder approval. To the extent
practicable, the Fund will provide shareholders with 60 days’ prior written
notice before changing its investment objective.
2.
ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND
RISKS
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent that its 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, the 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 will negatively impact the Fund to a greater extent than if
the Fund’s assets were invested in a wider variety of sectors or
industries.
Consumer
Staples Sector Risk.
As of December 31, 2021, the consumer staples sector represented a significant
portion of the Index. To the extent that the consumer discretionary sector
continues to represent at least a significant portion of the Index, the Fund may
be sensitive to changes in, and its performance may depend to a greater extent
on, the overall condition of the consumer staples sector. The consumer staples
sector comprises companies whose businesses are less sensitive to economic
cycles, such as manufacturers and distributors of food and beverages and
producers of non-durable household goods and personal products. Companies in the
consumer staples sector may be adversely affected by changes in the worldwide
economy, consumer spending, competition, demographics and consumer preferences,
exploration and production spending. Companies in this sector are also affected
by changes in government regulation, world events and economic
conditions.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. For example, an adverse event, such
as an unfavorable earnings report, may result in a decline in the value of
equity securities of an issuer held by the Fund; the price of the equity
securities of an issuer may be particularly sensitive to general movements in
the securities markets; or a drop in the securities markets may depress the
price of most or all of the equities securities held by the Fund. In addition,
the equity securities of an issuer in the Fund’s portfolio may decline in price
if the issuer fails to make anticipated dividend payments. Equity securities are
subordinated to preferred securities and debt in a company’s capital structure
with respect to priority in right to a share of corporate income, and therefore
will be subject to greater dividend risk than preferred securities or debt
instruments. In addition, while broad market measures of equity securities have
historically generated higher average returns than fixed income securities,
equity securities have generally also experienced significantly more volatility
in those returns, although under certain market conditions fixed income
securities may have comparable or greater price volatility. A change in the
financial condition, market perception or the credit rating of an issuer of
securities included in the Fund’s index may cause the value of its securities to
decline.
Morningstar
may be incorrect in its assessment of the competitive advantages of the
companies selected for inclusion in the Index, and the securities issued by such
companies may underperform Morningstar’s expectations and have an adverse effect
on the Fund’s overall performance. There can also be no assurance that wide moat
companies will have sustainable competitive advantages for any period of time.
Competitive advantages for wide moat companies may erode in a relatively short
period of time due to, among other reasons, changes in laws and regulations,
intellectual property rights, economic and political conditions and
technological developments.
Health
Care Sector Risk.
As of December 31, 2021, the health care sector represented a significant
portion of the Index. To the extent that the health care sector continues to
represent at least a significant portion of the Index, the Fund may be sensitive
to changes in, and its performance may depend to a greater extent on, the
overall condition of the health care sector. Companies in the health care sector
may be affected by extensive government regulation, restrictions on government
reimbursement for medical expenses, rising costs of medical products and
services, pricing pressure, an increased emphasis on outpatient services,
limited number of products, industry innovation, changes in technologies and
other market developments. Many health care companies are heavily dependent on
patent protection. The expiration of patents may adversely affect the
profitability of these companies. Many health care companies are subject to
extensive litigation based on product liability and similar claims. Health care
companies are subject to competitive forces that may make it difficult to raise
prices and, in fact, may result in price discounting. Many new products in the
health care sector may be subject to regulatory approvals. The process of
obtaining such approvals may be long and costly. Companies in the health care
sector may be thinly capitalized and may be susceptible to product
obsolescence.
Industrials
Sector Risk.
As
of December 31, 2021, the industrials sector represented a significant portion
of the Index. To the extent that the industrials sector continues to represent
at least a significant portion of the Index, the Fund may be sensitive to
changes in, and its performance may depend to a greater extent on, the overall
condition of the industrials sector. Companies in the industrials sector may be
adversely affected by changes in government regulation, world events and
economic conditions. In addition, companies in the industrials sector may be
adversely affected by environmental damages, product liability claims and
exchange rates. The stock prices of companies in the industrials sector are
affected by supply and demand both for their specific product or service and for
industrial sector products in general. The products of manufacturing companies
may face product obsolescence due to rapid technological developments and
frequent new product introduction. In addition, the industrials sector may also
be adversely affected by changes or trends in commodity prices, which may be
influenced or characterized by unpredictable factors.
Information
Technology Sector Risk.
As of December 31, 2021, the information technology sector represented a
significant portion of the Index. To the extent that the information technology
sector continues to represent at least a significant portion of the Index, the
Fund may be sensitive to changes in, and its performance may depend to a greater
extent on, the overall condition of the information technology sector.
Information technology companies face intense competition, both domestically and
internationally, which may have an adverse effect on profit margins. Information
technology companies may have limited product lines, markets, financial
resources or personnel. The products of information technology companies may
face product obsolescence due to rapid technological developments and frequent
new product introduction, unpredictable changes in growth rates and competition
for the services of qualified personnel. Companies in the information technology
sector are heavily dependent on patent protection and the expiration of patents
may adversely affect the profitability of these companies.
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. Overall
securities values could decline generally or could underperform other
investments. An investment in the Fund may lose money.
The
“COVID-19” strain of coronavirus has resulted in instances of market closures
and dislocations, extreme volatility, liquidity constraints and increased
trading costs. Efforts to contain its spread have resulted in travel
restrictions, disruptions of healthcare systems, business operations and supply
chains, layoffs, lower consumer demand, and defaults, among other significant
economic impacts that have disrupted global economic activity across many
industries. Such economic impacts may exacerbate other pre-existing political,
social and economic risks locally or globally. The ongoing effects of COVID-19
are unpredictable and may result in significant and prolonged effects on the
Fund’s performance.
Medium-Capitalization
Companies Risk.
Securities of medium-capitalization companies are often subject to less analyst
coverage and may be in early and less predictable periods of their corporate
existences, with little or no record of profitability. In addition, these
companies often have greater price volatility, lower trading volume and less
liquidity than larger more established companies. These companies tend to have
smaller revenues, narrower product lines, less management depth and experience,
smaller shares of their product or service markets, fewer financial resources
and less competitive strength than large-capitalization companies. Returns on
investments in securities of medium-capitalization companies could trail the
returns on investments in securities of large-capitalization
companies.
Non-Diversification
Risk.
The Fund may become classified as non-diversified 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 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.
Operational
Risk.
An investment in the Fund involves “operational risk”—the risk arising from the
Fund’s operations. 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.
Portfolio
Turnover Risk.
The
Fund may engage in active and frequent trading of portfolio securities and thus
may experience a high portfolio turnover rate. A high portfolio turnover rate
may result in significant taxable capital gains as a result of the frequent
trading of the Fund’s portfolio securities and the Fund will incur transaction
costs in connection with buying and selling the securities, which may lower the
Fund’s return.
Replication
Management Risk.
Unlike many investment companies, the Fund is not “actively” managed. Unless a
specific security is removed from its Index, the Fund generally would not sell a
security because the security’s issuer is in financial trouble. If a specific
security is removed from the Fund’s Index, the Fund may be forced to sell such
security at an inopportune time or for prices other than at current market
values. An investment in the Fund involves risks similar to those of investing
in any fund of equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political
developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the 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. This means that based on
market and economic conditions, 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.
Tracking
and Data Error Risk.
The Fund’s investment objective is to seek to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Index. The
Fund’s return may not match the return of its Index for a number of reasons. For
example, the Fund incurs a number of operating expenses 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, which are not factored into the return of its Index.
Transaction costs, including brokerage costs, will decrease the Fund’s NAV.
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 its Index. There is no assurance that the Index provider (“Morningstar”)
or any agents that may act on their behalf will compile the Index accurately or
transmit or communicate such information to the Adviser accurately, or that the
Index will be determined, composed or calculated accurately. Errors in respect
of the quality, accuracy and completeness of the data used to compile the Index
may occur from time to time and may not be identified and corrected by
Morningstar for a period of time or at all, particularly if the index is less
commonly used as a benchmark by funds or managers. Therefore, gains, losses or
costs associated with errors of Morningstar or its agents’ will generally be
borne by the Fund and its shareholders. For example, during a period where the
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 the Fund and its
shareholders. Any gains due to Morningstar’s or its agents’ errors will be kept
by the Fund and its shareholders and any losses resulting from Morningstar’s or
its agents’ errors will be borne by the Fund and its shareholders. In addition,
the 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, a lack of liquidity in stock exchanges on which such
securities trade, potential adverse tax consequences or other regulatory
reasons. Moreover, the Fund may be delayed in purchasing or selling securities
included in its Index. In addition, any issues the Fund encounters with regard
to currency convertibility (including the cost of borrowing funds, if any) and
repatriation may also increase the Index tracking risk. Changes to the
composition of the 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.
The
need to comply with the tax diversification and other requirements of the
Internal Revenue Code of 1986, as amended (the “Code”), may also impact the
Fund’s ability to replicate the performance of its Index. In addition, if the
Fund utilizes depositary receipts and other derivative instruments that are not
included in its Index, its return may not correlate as well with the returns of
its Index as would be the case if the Fund purchased all the securities in its
Index directly. Actions taken in response to proposed corporate actions could
result in increased tracking error. In light of the factors discussed above, the
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. Errors in the construction or calculation of
the Fund’s Index may occur from time to time. Any such errors may not be
identified or corrected by Morningstar for some period of time, which may have
an adverse effect on the Fund and its shareholders.
Underlying
Fund Investments Risk.
In seeking to achieve its investment objective, the Fund may invest in the
VanEck Morningstar Wide Moat ETF (the “underlying fund”). Through its investment
in the underlying fund, the Fund is subject to the risks associated with the
underlying fund’s investments, including the possibility that the value of the
securities or other assets held by the underlying fund could decrease. These
risks include any combination of the risks set forth in this Prospectus,
although the Fund’s exposure to a particular risk will be proportionate to the
Fund’s overall allocation and the underlying fund’s asset allocation. Shares of
the underlying fund may trade at prices that reflect a premium above or a
discount below the investment company’s net asset value. If investment company
securities are purchased at a premium to net asset value, the premium may not
exist when those securities are sold and the Fund could incur a loss.
Additionally, the Fund will bear additional expenses based on its pro rata share
of the underlying fund’s operating expenses.
3.
ADDITIONAL NON-PRINCIPAL INVESTMENT STRATEGIES AND RISKS
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGIES
The
Fund may invest in securities not included in its Index, including, 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 certain derivatives. Depositary
receipts not included in the Fund’s Index may be used by the Fund in seeking
performance that corresponds to its Index and in managing cash flows, and may
count towards compliance with the Fund’s 80% policy. The Fund may also invest,
to the extent permitted by the 1940 Act, in other affiliated and unaffiliated
funds, such as open-end or closed-end management investment companies, including
other exchange-traded funds (“ETFs”). The Fund does not employ a temporary
defensive strategy, and does not invest as part of a temporary defensive
strategy to protect against potential stock market declines.
BORROWING
MONEY
The
Fund may borrow money from a bank up to a limit of one-third of the market value
of its assets. The 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 the Fund borrows money, it will 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 the Fund might realize, and may increase volatility in
the value of the Fund’s investments.
SECURITIES
LENDING
The
Fund may lend its securities as permitted under the 1940 Act, including by
participating in securities lending programs managed by broker-dealers or other
institutions. Securities lending allows the Fund to retain ownership of the
securities loaned and, at the same time, earn additional income. The borrowings
must be collateralized in full with cash, U.S. government securities or
high-quality letters of credit.
The
Fund could experience delays and costs in recovering the securities loaned or in
gaining access to the securities lending collateral. If the Fund is not able to
recover the securities loaned, the Fund may sell the collateral and purchase a
replacement investment in the market. The value of the collateral could decrease
below the value of the replacement investment by the time the replacement
investment is purchased. Cash received as collateral and which is invested is
subject to market appreciation and depreciation.
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
Fund’s use of derivatives involves risks different from, and possibly greater
than, the risks associated with investing directly in securities and other more
traditional investments. The use of derivatives can lead to losses because of
adverse movements in the price or value of the underlying security, currency,
interest rate or index, which may be magnified by certain features of the
derivatives. 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 the 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. The values of
derivatives
may move in unexpected ways, especially in unusual market conditions, and may
result in increased volatility, among other consequences. There may be imperfect
correlation between changes in the market value of a derivatives and the value
of its underlying reference asset, or in the case of hedging, in the value of
the portfolio investment being hedged, and this may be exaggerated in times of
market stress or volatility. Many derivatives require the Fund to post margin or
collateral or otherwise maintain liquid assets in a manner that satisfies
contractual undertakings and regulatory requirements. In order to satisfy margin
or other requirements, the Fund may need to sell securities from its portfolio
or exit positions at a time when it may be disadvantageous to do so. All of this
could, in turn, affect the Fund's ability to fully execute its investment
strategies and/or achieve its investment objective.
Derivative
transactions can create investment leverage, may be highly volatile, and the
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 the 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 the Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, the 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 the Fund’s
derivative positions at any time. Derivatives may be subject to changing
government regulation that could impact the Fund's ability to use certain
derivatives and their cost.
On
October 28, 2020, the SEC adopted new regulations governing the use of
derivatives by registered investment companies. The Fund will be required to
implement and comply with Rule 18f-4 by the third quarter of 2022. Rule 18f-4
will impose limits on the amount of derivatives a fund can enter into, eliminate
the asset segregation framework currently used by funds to comply with Section
18 of the Investment Company Act of 1940, as amended, treat derivatives as
senior securities so that a failure to comply with the limits would result in a
statutory violation and require funds whose use of derivatives is more than a
limited specified exposure amount to establish and maintain a comprehensive
derivatives risk management program and appoint a derivatives risk manager. As
the Fund comes into compliance, the Fund's approach to asset segregation and
coverage requirements described in this Prospectus may be impacted.
ADDITIONAL
REGULATORY CONSIDERATIONS
With
respect to the Fund, the Adviser has claimed an exclusion from the definition of
“commodity pool operator” (“CPO”) under the U.S. Commodity Exchange Act of 1936,
as amended (“CEA") and the rules of the U.S. Commodity Futures Trading
Commission (“CFTC”) and, therefore, is not subject to CFTC registration or
regulation as a CPO. In addition, with respect to the Fund, the Adviser is
relying upon a related exclusion from the definition of “commodity trading
advisor” (“CTA”) under the CEA and the rules of the CFTC. The terms of the CPO
exclusion require the Fund, among other things, to adhere to certain limits on
its investments in “commodity interests.” Commodity interests include commodity
futures, commodity options and swaps, which in turn include non-deliverable
currency forward contracts. Because the Adviser and the Fund intend to comply
with the terms of the CPO exclusion, the Fund may, in the future, need to adjust
its investment strategies, consistent with its investment objective to limit its
investments in these types of instruments. The Fund is not intended as a vehicle
for trading in the commodity futures, commodity options or swaps markets. The
CFTC has neither reviewed nor approved the Adviser's reliance on these
exclusions, or the Fund, its investment strategies or this
prospectus.
LEVERAGE
RISK
To
the extent that the 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, the Fund may segregate liquid assets, or
otherwise “cover” its derivatives position in a manner consistent with the 1940
Act and the rules and interpretations of the U.S. Securities and Exchange
Commission (“SEC”) thereunder. The Fund may modify its asset segregation
policies at any time to comply with any changes in the SEC’s positions regarding
asset segregation.
4.
OTHER INFORMATION AND POLICIES
BENEFICIARIES
OF CONTRACTUAL ARRANGEMENTS
VanEck
Funds (the “Trust”) enters into contractual arrangements with various parties,
including, among others, the Fund’s investment adviser, administrator and
distributor, who provide services to the Fund. Shareholders of the Fund are not
parties to, or intended (or “third-party”) beneficiaries of, any of those
contractual arrangements, and those contractual arrangements are not intended to
create in any individual shareholder or group of shareholders any right to
enforce such contractual arrangements against the service providers or to seek
any remedy under such contractual arrangements against the service providers,
either directly or on behalf of the Trust.
This
prospectus provides information concerning the Trust and the Fund that you
should consider in determining whether to purchase shares of the Fund. None of
this prospectus, the Statement of Additional Information (“SAI”) or any document
filed as an exhibit to the Trust’s registration statement, is intended to, nor
does it, give rise to an agreement or contract between the Trust or the Fund and
any investor, or give rise to any contract or other rights in any individual
shareholder, group of shareholders or other person. Nothing contained in the
preceding sentence constitutes a waiver of any rights under the federal or state
securities laws.
CHANGING
THE FUND’S 80% POLICY
The
Fund’s policy of investing “at least 80% of its net assets” in securities that
comprise the Index (which includes net assets plus any borrowings for investment
purposes) may be changed by the Board without a shareholder vote, as long as
shareholders are given 60 days’ notice of the change.
PORTFOLIO
HOLDINGS INFORMATION
Generally,
it is the Fund’s and the Adviser’s policy that no current or potential investor,
including any Fund shareholder, shall be provided information about the Fund’s
portfolio on a preferential basis in advance of the provision of that
information to other investors. A complete description of the Fund’s policies
and procedures with respect to the disclosure of the Fund’s portfolio securities
is available in the Fund’s SAI.
Portfolio
holdings information for the Fund is available to all investors on the VanEck
website at vaneck.com. Generally, this information is posted to the website on a
daily basis. This information generally remains available on the website until
new information is posted. The Fund reserves the right to exclude any portion of
these portfolio holdings from publication when
deemed
in the best interest of the Fund, and to discontinue the posting of portfolio
holdings information at any time, without prior notice.
CYBER
SECURITY
The
Fund and its service providers are susceptible to cyber security risks that
include, among other things, theft, unauthorized monitoring, release, misuse,
loss, destruction or corruption of confidential and highly restricted data;
denial of service attacks; unauthorized access to relevant systems; compromises
to networks or devices that the Fund and its service providers use to service
the Fund’s operations; and operational disruption or failures in the physical
infrastructure or operating systems that support the Fund and its service
providers. Cyber attacks against or security breakdowns of the Fund or its
service providers may adversely impact the Fund and its shareholders,
potentially resulting in, among other things, financial losses; the inability of
Fund shareholders to transact business and the Fund to process transactions; the
inability to calculate the Fund’s net asset value; violations of applicable
privacy and other laws; regulatory fines, penalties, reputational damage,
reimbursement or other compensation costs; and/or additional compliance costs.
The Fund may incur additional costs for cyber security risk management and
remediation purposes. In addition, cyber security risks may also impact issuers
of securities in which the Fund invests, which may cause the Fund’s investments
in such issuers to lose value. There can be no assurance that the Fund or its
service providers will not suffer losses relating to cyber attacks or other
information security breaches in the future.
PORTFOLIO
HOLDINGS INFORMATION
Generally,
it is the Fund’s and the Adviser’s policy that no current or potential investor,
including any Fund shareholder, shall be provided information about the Fund’s
portfolio on a preferential basis in advance of the provision of that
information to other investors. A complete description of the Fund’s policies
and procedures with respect to the disclosure of the Fund’s portfolio securities
is available in the Fund’s SAI.
Portfolio
holdings information for the Fund is available to all investors on the VanEck
website at vaneck.com. Information regarding the Fund’s top holdings and country
and sector weightings, updated as of each month-end, is also located on this
website. Generally, this information is posted to the website within 10 business
days of the end of the applicable month. This information generally remains
available on the website until new information is posted. The Fund reserves the
right to exclude any portion of these portfolio holdings from publication when
deemed in the best interest of the Fund, and to discontinue the posting of
portfolio holdings information at any time, without prior notice.
PORTFOLIO
INVESTMENTS
The
percentage limitations relating to the composition of the Fund’s portfolio apply
at the time the Fund acquires an investment. A subsequent increase or decrease
in percentage resulting from a change in the value of portfolio securities or
the total or net assets of the Fund will not be considered a violation of the
restriction.
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III.
SHAREHOLDER INFORMATION |
1.
HOW TO BUY, SELL, EXCHANGE OR TRANSFER SHARES
The
Fund offers Class I and Class Z shares. Information related to how to buy, sell,
exchange and transfer shares is discussed below. See the “Minimum Purchase”
section for information related to initial and subsequent minimum investment
amounts. The minimum investment amounts vary by share class.
Through
a Financial Intermediary
Primarily,
accounts are opened through a financial intermediary (broker, bank, adviser or
agent). Please contact your financial intermediary for details.
Through
the Transfer Agent, DST Systems, Inc., an SS&C Company (DST)
You
may buy (purchase), sell (redeem), exchange, or transfer ownership of Class I
shares directly through DST by mail or telephone, as stated below. For Class Z
shares, shareholders must open accounts and transact business through a
financial intermediary.
The
Fund’s mailing address at DST is:
VanEck
Funds
P.O.
Box 218407
Kansas
City, MO 64121-8407
For
overnight delivery:
VanEck
Funds
430
W. 7th Street, Suite 218407
Kansas
City, MO 64105-1407
Non-resident
aliens cannot make a direct investment to establish a new account in the Fund,
but may invest through their broker or agent.
To
telephone the Fund at DST, call VanEck Account Assistance at
800-544-4653.
Purchase
by Mail
To
make an initial purchase, complete the VanEck Account Application and mail it
with your check made payable to VanEck Funds. Subsequent purchases can be made
by check with the remittance stub of your account statement. You cannot make a
purchase by telephone. We cannot accept third party checks, starter checks,
money orders, travelers checks, cashier checks, checks drawn on a foreign bank,
or checks not in U.S. dollars. There are separate applications for VanEck
retirement accounts (see “Retirement Plans” for details). For further details,
see the application or call Account Assistance.
Telephone
Redemption-Proceeds by Check 800-544-4653
If
your account has the optional Telephone Redemption Privilege, you can redeem up
to $50,000 per day. The redemption check must be payable to the registered
owner(s) at the address of record (which cannot have been changed within the
past 30 days). You automatically get the Telephone Redemption Privilege (for
eligible accounts) unless you specifically refuse it on your Account
Application, on broker/agent settlement instructions, or by written notice to
DST. All accounts are eligible for the privilege except those registered in
street, nominee, or corporate name and custodial accounts held by a financial
institution, including VanEck sponsored retirement plans.
Expedited
Redemption—Proceeds by Wire 800-544-4653
If
your account has the optional Expedited Redemption Privilege, you can redeem a
minimum of $1,000 or more per day by telephone or written request with the
proceeds wired to your designated bank account. The Fund reserves the right to
waive the minimum amount. This privilege must be established in advance by
Application. For further details, see the Application or call Account
Assistance.
Written
Redemption
Your
written redemption (sale) request must include:
■ Fund
and account number.
■ Number
of shares or dollar amount to be redeemed, or a request to sell “all shares.”
■ Signatures
of all registered account holders, exactly as those names appear on the account
registration, including any additional documents concerning authority and
related matters in the case of estates, trusts, guardianships, custodianships,
partnerships and corporations, as requested by DST.
■ Special
instructions, including bank wire information or special payee or address.
A
signature guarantee for each account holder will be required if:
■ The
redemption is for $50,000 or more.
■ The
redemption amount is wired.
■ The
redemption amount is paid to someone other than the registered owner.
■ The
redemption amount is sent to an address other than the address of record.
■ The
address of record has been changed within the past 30 days.
Institutions
eligible to provide signature guarantees include banks, brokerages, trust
companies, and some credit unions.
Telephone
Exchange 800-544-4653
If
your account has the optional Telephone Exchange Privilege, you can exchange
between VanEck Funds of the same Class without any sales charge. All accounts
are eligible except for omnibus accounts or those registered in street name and
certain custodial retirement accounts held by a financial institution other than
VanEck. For further details regarding exchanges, please see the application,
“Limits and Restrictions” and “Unauthorized Telephone Requests” below, or call
Account Assistance.
Written
Exchange
Written
requests for exchange must include:
■ The
fund and account number to be exchanged out of.
■ The
fund to be exchanged into.
■ Directions
to exchange “all shares” or a specific number of shares or dollar amount.
■ Signatures
of all registered account holders, exactly as those names appear on the account
registration, including any additional documents concerning authority and
related matters in the case of estates, trusts, guardianships, custodianships,
partnerships and corporations, as requested by DST.
For
further details regarding exchanges, please see the applicable information in
“Telephone Exchange.”
Certificates
Certificates
are not issued for new or existing shares.
Transfer
of Ownership
Requests
must be in writing and provide the same information and legal documentation
necessary to redeem and establish an account, including the social security or
tax identification number of the new owner.
Redemption
Liquidity
The
Fund expects to make redemption payments to the shareholder, or shareholder’s
financial intermediary, within 1 to 2 business days following the Fund’s receipt
of the redemption transaction from the shareholder, or shareholder’s financial
intermediary. The financial intermediary acts on behalf of the shareholder and
is responsible for transmitting redemption proceeds to the shareholder. Payment
of redemption proceeds by the Fund may take longer than the time the Fund
typically expects and may take up to 7 days as permitted by the 1940
Act.
Typically,
redemption payments of Fund shares will be made in U.S. dollars. The Fund
generally expects to satisfy redemption requests from available cash holdings
and sale of portfolio securities. On a less regular basis, the Fund also may
draw on a bank line of credit to meet redemption requests. In stressed market
conditions or for a particularly large redemption, the Fund also reserves the
right to meet redemption requests through a “redemption in kind” as described
below.
Redemption
in Kind
The
Fund reserves the right to satisfy redemption requests by making payment in
securities (known as a redemption in kind). Redemptions in kind are not
routinely used by the Fund. The Fund may, however, use redemptions in kind
during particularly stressed market conditions or to manage the impact of a
large redemption on the Fund. In such case, the Fund may pay all or part of the
redemption in securities of equal value as permitted under the 1940 Act, and the
rules thereunder. The redeeming shareholder should expect to incur transaction
costs upon the disposition of the securities received and will bear any market
risks associated with such securities until they are converted into cash. A
redemption in kind is treated as a taxable transaction and a sale of the
redeemed shares, generally resulting in capital gain or loss to the redeeming
shareholder subject to certain loss limitation rules.
Redemptions
Initiated by the Fund
The
Fund reserves the right to redeem your shares in the Fund if the Fund’s Board
determines that the failure to so redeem may have materially adverse
consequences to the shareholders of the Fund. For additional information, please
see “Additional Purchase and Redemption Information—Redemptions Initiated by the
Fund” in the SAI.
LIMITS
AND RESTRICTIONS
Frequent
Trading Policy
The
Board has adopted policies and procedures reasonably designed to deter frequent
trading in shares of the Fund, commonly referred to as “market timing,” because
such activities may be disruptive to the management of the Fund’s portfolio and
may increase the Fund’s expenses and negatively impact the Fund’s performance.
As such, the Fund may reject a purchase or
exchange
transaction or restrict an account from investing in the Fund for any reason if
the Adviser, in its sole discretion, believes that a shareholder is engaging in
market timing activities that may be harmful to the Fund. The Fund discourages
and does not accommodate frequent trading of shares by its
shareholders.
The
Fund may invest in securities of foreign issuers, and consequently may be
subject to an increased risk of frequent trading activities because frequent
traders may attempt to take advantage of time zone differences between the
foreign markets in which the Fund’s portfolio securities trade and the time as
of which the Fund’s net asset value is calculated (“time-zone arbitrage”). The
Fund’s investments in other types of securities may also be susceptible to
frequent trading strategies. These investments include securities that are,
among other things, thinly traded, traded infrequently, or relatively illiquid,
which have the risk that the current market price for the securities may not
accurately reflect current market values. The Fund has adopted fair valuation
policies and procedures intended to reduce the Fund’s exposure to potential
price arbitrage. However, there is no guarantee that the Fund’s net asset value
will immediately reflect changes in market conditions.
The
Fund uses a variety of techniques to monitor and detect abusive trading
practices, such as monitoring purchases, redemptions and exchanges that meet
certain criteria established by the Fund, and making inquiries with respect to
such trades. If a transaction is rejected or an account restricted due to
suspected market timing, the investor or his or her financial adviser will be
notified.
With
respect to trades that occur through omnibus accounts at intermediaries, such as
broker-dealers and third party administrators, the Fund requires all such
intermediaries to agree to cooperate in identifying and restricting market
timers in accordance with the Fund’s policies and will periodically request
customer trading activity in the omnibus accounts based on certain criteria
established by the Fund. There is no assurance that the Fund will request such
information with sufficient frequency to detect or deter excessive trading or
that review of such information will be sufficient to detect or deter excessive
trading in omnibus accounts effectively.
Although
the Fund will use reasonable efforts to prevent market timing activities in the
Fund’s shares, there can be no assurances that these efforts will be successful.
As some investors may use various strategies to disguise their trading
practices, the Fund’s ability to detect frequent trading activities by investors
that hold shares through financial intermediaries may be limited by the ability
and/or willingness of such intermediaries to monitor for these
activities.
For
further details, contact Account Assistance.
Unauthorized
Telephone Requests
Like
most financial organizations, VanEck, the Fund and DST may only be liable for
losses resulting from unauthorized transactions if reasonable procedures
designed to verify the caller’s identity and authority to act on the account are
not followed.
If
you do not want to authorize the Telephone Exchange or Redemption privilege on
your eligible account, you must refuse it on the Account Application,
broker/agent settlement instructions, or by written notice to DST. VanEck, the
Fund, and DST reserve the right to reject a telephone redemption, exchange, or
other request without prior notice either during or after the call. For further
details, contact Account Assistance.
AUTOMATIC
SERVICES
Automatic
Investment Plan
You
may authorize DST to periodically withdraw a specified dollar amount from your
bank account and buy shares in your Fund account. For further details and to
request an Application, contact Account Assistance.
Automatic
Exchange Plan
You
may authorize DST to periodically exchange a specified dollar amount for your
account from one Fund to another Fund. For further details and to request an
Application, contact Account Assistance.
Automatic
Withdrawal Plan
You
may authorize DST to periodically withdraw (redeem) a specified dollar amount
from your Fund account and mail a check to you for the proceeds. Your Fund
account must be valued at $10,000 or more at the current offering price to
establish the Plan. For further details and to request an Application, contact
Account Assistance.
MINIMUM
PURCHASE
Each
class can set its own transaction minimums and may vary with respect to expenses
for distribution, administration and shareholder services.
For
Class I shares, an initial purchase by an eligible investor of $1 million is
required. The minimum initial investment requirement may be waived or aggregated
among investors, in the Adviser’s discretion, for investors in certain
fee-based, wrap or other no-load investment programs, and for an eligible
Employer-Sponsored Retirement Plan with plan assets of $3 million or more,
sponsored by financial intermediaries that have entered into a Class I agreement
with VanEck, as well as for other categories of investors. An
“Employer-Sponsored Retirement Plan” includes (a) an employer sponsored pension
or profit sharing plan that qualifies (a “Qualified Plan”) under section 401(a)
of the Internal Revenue Code of 1986, as amended (the “Code”), including Code
section
401(k), money purchase pension, profit sharing and defined benefit plans; (b) an
ERISA-covered 403(b) plan; and (c) certain non-qualified deferred compensation
arrangements that operate in a similar manner to a Qualified Plan, such as 457
plans and executive deferred compensation arrangements, but not including
employer-sponsored IRAs. In addition, members of the Boards of Trustees of
VanEck Funds and VanEck VIP Trust and each officer, director and employee of
VanEck may purchase Class I shares without being subject to the $1 million
minimum initial investment requirement. There are no minimum investment
requirements for subsequent purchases to existing accounts. To be eligible to
purchase Class I shares, you must also qualify as specified in “How to Choose a
Class of Shares.”
Class
Z shares have no initial and subsequent purchase minimums, although financial
intermediaries may impose their own minimums. To be eligible to purchase Class Z
shares, you must also qualify as specified in “How to Choose a Class of Shares”
below.
ACCOUNT
VALUE AND REDEMPTION
If
the value of your account falls below $500,000 for Class I shares and $1,000 for
Class Z shares after the initial purchase, the Fund reserves the right to redeem
your shares after 30 days notice to you. This does not apply to Class I accounts
exempt from purchase minimums as described above.
HOW
THE FUND SHARES ARE PRICED
The
Fund buys or sells its shares at its NAV per share next determined after receipt
of a purchase or redemption plus any applicable sales charge. The Fund
calculates its NAV per share class every day the New York Stock Exchange (NYSE)
is open, as of the close of regular trading on the NYSE, which is normally 4:00
p.m. Eastern Time.
You
may enter a buy or sell order when the NYSE is closed for weekends or holidays.
If that happens, your price will be the NAV calculated as of the close of the
next regular trading session of the NYSE. The Fund may invest in certain
securities which are listed on foreign exchanges that trade on weekends or other
days when the Fund does not price its shares. As a result, the NAV of the Fund’s
shares may change on days when shareholders will not be able to purchase or
redeem shares.
The
Fund’s investments are generally valued based on market quotations which may be
based on quotes obtained from a quotation reporting system, established market
makers, broker dealers or by an independent pricing service. Short-term debt
investments having a maturity of 60 days or less are valued at amortized cost,
which approximates the fair value of the security. 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. When market quotations are not readily available for a portfolio
security or other asset, or, in the opinion of the Adviser, are deemed
unreliable, the Fund will use the security’s or asset’s “fair value” as
determined in good faith in accordance with the Fund’s Fair Value Pricing
Policies and Procedures, which have been approved by the Board. As a general
principle, the current fair value of a security or other asset is the amount
which the Fund might reasonably expect to receive for the security or asset upon
its current sale. The Fund’s Pricing Committee, whose members are selected by
the senior management of the Adviser and reported to the Board, is responsible
for recommending fair value procedures to the Board and for administering the
process used to arrive at fair value prices.
Factors
that may cause the Fund’s Pricing Committee to fair value a security include,
but are not limited to: (1) market quotations are not readily available because
a portfolio security is not traded in a public market, trading in the security
has been suspended, or the principal market in which the security trades is
closed, (2) trading in a portfolio security is limited or suspended and not
resumed prior to the time at which the Fund calculates its NAV, (3) the market
for the relevant security is thin, or the price for the security is “stale”
because its price has not changed for five consecutive business days, (4) the
Adviser determines that a market quotation is not reliable, for example, because
price movements are highly volatile and cannot be verified by a reliable
alternative pricing source, or (5) a significant event affecting the value of a
portfolio security is determined to have occurred between the time of the market
quotation provided for a portfolio security and the time at which the Fund
calculates its NAV.
In
determining the fair value of securities, the Pricing Committee will consider,
among other factors, the fundamental analytical data relating to the security,
the nature and duration of any restrictions on the disposition of the security,
and the forces influencing the market in which the security is
traded.
Foreign
equity securities in which the Fund may invest may be traded in markets that
close before the time that the Fund calculates its NAV. Foreign equity
securities are normally priced based upon the market quotation of such
securities as of the close of their respective principal markets, as adjusted to
reflect the Adviser’s determination of the impact of events, such as a
significant movement in the U.S. markets occurring subsequent to the close of
such markets but prior to the time at which the Fund calculates its NAV. In such
cases, the Pricing Committee may apply a fair valuation formula to those foreign
equity securities based on the Committee’s determination of the effect of the
U.S. significant event with respect to each local market.
Certain
of the Fund’s portfolio securities are valued by an independent pricing service
approved by the Board. The independent pricing service may utilize an automated
system incorporating a model based on multiple parameters, including a
security’s local closing price (in the case of foreign securities), relevant
general and sector indices, currency fluctuations, and trading in depositary
receipts and futures, if applicable, and/or research evaluations by its staff,
in determining what it believes is the fair valuation of the portfolio
securities valued by such independent pricing service.
There
can be no assurance that the Fund could purchase or sell a portfolio security or
other asset at the price used to calculate the Fund’s NAV. Because of the
inherent uncertainty in fair valuations, and the various factors considered in
determining value pursuant to the Fund’s fair value procedures, there can be
material differences between a fair value price at which a portfolio security or
other asset is being carried and the price at which it is purchased or
sold.
Furthermore,
changes in the fair valuation of portfolio securities or other assets may be
less frequent, and of greater magnitude, than changes in the price of portfolio
securities or other assets valued by an independent pricing service, or based on
market quotations.
In
December 2020, the SEC adopted Rule 2a-5 under the Investment Company Act of
1940, as amended (“Rule 2a-5"), which is intended to address valuation practices
and the role of a fund's board with respect to the fair value of the investments
of a registered investment company or business development company. Rule 2a-5,
among other things, establishes an updated regulatory framework for the
valuation practices of registered investment companies. The Funds will be
required to comply with Rule 2a-5 by September 2022.
2.
HOW TO CHOOSE A CLASS OF SHARES
The
Fund offers two classes of shares designed to provide you with different
purchase options according to your investment needs. Different share classes may
have different fees and expenses. Class I shares have no sales charge, no
contingent deferred redemption charge (“CDRC”) and no 12b-1 fee and are offered
to eligible investors primarily through financial intermediaries that have
entered into a Class I Agreement with VanEck. The Fund reserves the right to
accept direct investments by eligible investors. Class Z shares have no sales
charge, no CDRC and no 12b-1 fee, with no fees paid to financial intermediaries.
Class Z shares are only offered through financial intermediaries that have
entered into a Class Z Agreement with VanEck and that make Class Z shares
available to their and/or their clients’ programs or plans (e.g.,
retirement plans). For Class Z shares, investors in programs or plans offered by
financial intermediaries may be charged fees or commissions by those financial
intermediaries. For additional information, please contact your financial
intermediary.
Financial
intermediaries making Fund shares available to their clients determine which
share class(es) to make available. Your financial intermediary may receive
different compensation for selling one class of shares than for selling another
class, which may depend on, among other things, the type of investor account and
the policies, procedures and practices adopted by your financial intermediary.
You should review these arrangements with your financial
intermediary.
■ CLASS
I Shares
are offered with no sales charge, no CDRC, and no 12b-1 fee. To be eligible to
purchase Class I (Institutional) shares, you must be an eligible investor that
is making or has made a minimum initial investment of at least $1 million (which
may be reduced or waived under certain circumstances) in Class I shares of the
Fund. Eligible investors in Class I shares include corporations, foundations,
family offices and other institutional organizations; high net worth
individuals; persons purchasing through certain financial intermediaries or a
bank, trust company or similar institution investing for its own account or for
the account of a client when such institution has entered into a Class I
Agreement with VanEck and makes Class I shares available to the client’s program
or plan.
■ CLASS
Z Shares
are only offered through financial intermediaries that have entered into a Class
Z Agreement with VanEck and that make Class Z shares available to their and/ or
their clients’ programs or plans. Such financial intermediaries may trade and
hold Class Z shares on behalf of other financial intermediaries (including
third-party retirement plan recordkeepers). Financial intermediaries determine
which of their and/or their clients’ programs or plans may use Class Z shares,
and may establish certain minimum investment amounts and/or other criteria.
Investors in plans or programs offered by financial intermediaries may be
charged fees or commissions by those financial intermediaries. For additional
information, please contact your financial intermediary.
Financial
intermediaries may offer their clients more than one class of shares of the
Fund. Shareholders who own shares of one class of the Fund and who are eligible
to invest in another class of the same Fund may be eligible to convert their
shares from one class to the other. Shareholders no longer participating in a
fee-based program may be subject to conversion of their current class of shares
by their financial intermediary to another class of shares of the Fund having
expenses that may be higher than the expenses of their current class of shares.
The timing and implementation of such conversions are at the discretion of the
shareholder’s financial intermediary. For additional information, please contact
your financial intermediary or see “Class Conversions” in the SAI. Investors
should consider carefully a Fund’s share class expenses and applicable sales
charges and fees plus any separate transaction and other fees charged by such
intermediaries in connection with investing in each available share class before
selecting a share class. It is the responsibility of the financial intermediary
and the investor to choose the proper share class and notify DST or VanEck of
that share class at the time of each purchase. More information regarding share
class eligibility is available in the “How to Buy, Sell, Exchange, or Transfer
Shares” section of the prospectus and in “Purchase of Shares” in the
SAI.
3.
SALES CHARGES FOR CLASS I AND CLASS Z SHARES
No
initial sales charge or CDRC for Class I or Class Z shares is imposed by the
Fund. For Class Z shares, investors in programs or plans offered by financial
intermediaries may be charged fees or commissions by those financial
intermediaries. For additional information, please contact your financial
intermediary.
4.
HOUSEHOLDING OF REPORTS AND PROSPECTUSES
If
more than one member of your household is a shareholder of any of the funds in
the VanEck Funds, regulations allow us, subject to certain requirements, to
deliver single copies of your shareholder reports, prospectuses and prospectus
supplements to a shared address for multiple shareholders. For example, a
husband and wife with separate accounts in the same fund who have the same
shared address generally receive two separate envelopes containing the same
report or prospectus. Under the system, known as “householding,” only one
envelope containing one copy of the same report or prospectus will be mailed to
the shared address for the household. You may benefit from this system in two
ways, a reduction in mail you receive and a reduction in fund expenses due to
lower fund printing and mailing costs. However, if you prefer to continue to
receive separate shareholder reports and prospectuses for each shareholder
living in your household now or at any time in the future, please call Account
Assistance at 800-544-4653.
5.
RETIREMENT PLANS
Fund
shares may be invested in tax-advantaged retirement plans sponsored by VanEck or
other financial organizations. Retirement plans sponsored by VanEck use UMB Bank
n.a. as custodian and must receive investments directly by check or wire using
the appropriate VanEck retirement plan application. Confirmed trades through a
broker or agent cannot be accepted. To obtain applications and helpful
information on VanEck retirement plans, contact your broker or agent or Account
Assistance.
Retirement
Plans Sponsored by VanEck:
Traditional
IRA
Roth
IRA
SEP
IRA
6.
FEDERAL INCOME TAXES
TAXATION
OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS YOU RECEIVE
The
Fund intends to qualify each year as a regulated investment company under the
Code. As a regulated investment company, the Fund generally pays no federal
income tax on the income and gains it distributes to you.
For
tax-reportable accounts, dividends and capital gains distributions are normally
taxable even if they are reinvested. Fund distributions of short-term capital
gains are taxed as ordinary income. Fund distributions of long-term capital
gains are taxed at long-term capital gain rates no matter how long you have
owned your fund shares. Certain income dividends are treated as qualified
dividend income, taxable at long-term capital gain rates provided certain
holding period requirements are met. Tax laws and regulations are subject to
change.
At
the time you purchase your Fund shares, the Fund’s NAV may reflect undistributed
income, undistributed capital gains, or net unrealized appreciation in the value
of portfolio securities held by the Fund. For taxable investors, a subsequent
distribution to you of such amounts, although constituting a return of your
investment, would be taxable. Buying shares in the Fund just before it declares
an income dividend or capital gains distribution is sometimes known as “buying a
dividend.”
TAXATION
OF SHARES YOU SELL
For
tax-reportable accounts, when you redeem your shares you may incur a capital
gain or loss on the proceeds. The amount of gain or loss, if any, is the
difference between the amount you paid for your shares (including reinvested
dividends and capital gains distributions) and the amount you receive from your
redemption. Be sure to keep your regular statements; they contain the
information necessary to calculate the capital gain or loss. An exchange of
shares from one Fund to another will be treated as a sale and purchase of Fund
shares. It is therefore a taxable event.
COST
BASIS REPORTING
As
required by law, for shares purchased on and after January 1, 2012 in accounts
eligible for IRS Tax Form 1099-B tax reporting by VanEck Funds for which tax
basis information is available (“covered shares”), the VanEck Funds will provide
cost basis information to you and the IRS for shares using the IRS Tax Form
1099-B. Generally, cost basis is the dollar amount paid to purchase shares,
including purchases of shares made by reinvestment of dividends and capital
gains distributions, adjusted for various items, such as sales charges and
transaction fees, wash sales, and returns of capital.
The
cost basis of your shares will be calculated using the Fund’s default cost basis
method of Average Cost, and the Fund will deplete your oldest shares first,
unless you instruct the Fund to use a different cost basis method. You may elect
the cost basis method that best fits your specific tax situation using VanEck’s
Cost Basis Election Form. It is important that any such election be received in
writing from you by the VanEck Funds before you redeem any covered shares since
the cost basis in effect at the time of redemption, as required by law, will be
reported to you and the IRS. Particularly, any election or revocation of the
Average Cost method must be received in writing by the VanEck Funds before you
redeem covered shares. The VanEck Funds will process any of your future
redemptions by depleting your oldest shares first (FIFO). If you elect a cost
basis method other than Average Cost, the method you chose will not be utilized
until shares held prior to January 1, 2012 are liquidated. Cost basis reporting
for non-covered shares will be calculated and reported separately from covered
shares. You should carefully review the cost basis information provided by the
Fund and make any additional cost basis, holding period, or other adjustments
that are required when
reporting
these amounts on your federal, state, and local income tax returns. For tax
advice specific to your situation, please contact your tax advisor and visit the
IRS website at IRS.gov. The VanEck Funds cannot and do not provide any advice,
including tax advice.
To
obtain VanEck’s Cost Basis Election Form and to learn more about the cost basis
elections offered by the VanEck Funds, please go to our website at vaneck.com or
call VanEck Account Services at 800-544-4653.
BACKUP
WITHHOLDING
By
law, if you do not provide the Fund with your proper taxpayer identification
number and certain required certifications, you may be subject to backup
withholding on any distributions of income, capital gains, or proceeds from the
sale of your shares. The Fund also must withhold if the IRS instructs it to do
so. When withholding is required, the amount will be 24% of any distributions or
proceeds paid.
STATE
AND LOCAL TAXES
Fund
distributions and gains from the sale or exchange of your Fund shares generally
are subject to state and local taxes.
NON-RESIDENT
ALIENS
Dividends
and short-term capital gains, if any, paid to non-resident aliens generally are
subject to the maximum withholding tax (or lower tax treaty rates for certain
countries). The IRS considers these dividends U.S. source income. Exemptions
from U.S. withholding tax are provided for certain capital gain dividends paid
by the Fund from net long-term capital gains, interest-related dividends paid by
the Fund from its qualified net interest income from U.S. sources and short-
term capital gain dividends, if such amounts are reported by the Fund. However,
notwithstanding such exemptions from U.S. withholding at the source, any such
dividends and distributions of income and capital gains will be subject to
backup withholding at a rate of 24% if you fail to properly certify that you are
not a U.S. person.
As
part of the Foreign Account Tax Compliance Act, (“FATCA”), the Fund is required
to withhold a 30% federal tax on income dividends paid by the Fund 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. After December 31, 2018, FATCA withholding also
would have applied to certain capital gain distributions, return of capital
distributions and the proceeds arising from the sale of Fund shares; however,
based on proposed regulations issued by the IRS, which can be relied on
currently, such withholding is no longer required unless final regulations
provide otherwise (which is not expected). To avoid possible withholding, FFIs,
other than FFIs subject to special treatment under certain intergovernmental
agreements, 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.
The
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 the Fund to comply with the FATCA rules. If the Fund is
required to withhold amounts from payments pursuant to FATCA, investors will
receive distributions that are reduced by such withholding amounts.
Because
everyone’s tax situation is unique, you should consult your tax professional
about federal, state, local, or foreign tax consequences before making an
investment in the Fund.
7.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The
Fund makes distributions of all of its net investment income to shareholders as
dividends annually. The Fund makes distributions of any net capital gains, at
least annually, in December. See your tax adviser for details. Occasionally, a
dividend and/or capital gain distribution may be made outside of the normal
schedule.
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Dividends
and Capital Gains Distributions Reinvestment Plan
Dividends
and/or distributions are automatically reinvested into your account without a
sales charge, unless you elect a cash payment. You may elect cash payment either
on your original Account Application, or by calling Account Assistance at
800-544-4653.
8.
MANAGEMENT OF THE FUND AND SERVICE PROVIDERS
INFORMATION
ABOUT FUND MANAGEMENT
INVESTMENT
ADVISER
Van
Eck Associates Corporation (the “Adviser”), 666 Third Avenue, New York, New York
10017, is the Adviser to the Fund. The Adviser has been an investment adviser
since 1955 and also acts as adviser or sub-adviser to other mutual funds,
exchange-traded funds, other pooled investment vehicles and separate
accounts.
Jan
F. van Eck and members of his family own 100% of the voting stock of the
Adviser. As of December 31, 2021, the Adviser’s assets under management were
approximately $81.73 billion.
Fees
paid to the Adviser:
Pursuant to the advisory agreement between the Adviser and the Trust (the
“Advisory Agreement”), the Fund pays the Adviser a monthly fee at the annual
rate equal to 0.45% of average daily net assets of the Fund. This includes the
fee paid to the Adviser for accounting and administrative services.
The
Adviser has agreed to waive fees and/or pay expenses for the Fund to the extent
necessary to prevent the operating expenses of the Fund (excluding acquired fund
fees and expenses, interest expense, trading expenses, dividends and interest
payments on securities sold short, taxes and extraordinary expenses) from
exceeding 0.59% for Class I and 0.49% for Class Z of the Fund’s average daily
net assets per year until May 1, 2023. During such time, the expense
limitation is expected to continue until the Board acts to discontinue all or a
portion of such expense limitation. To minimize the duplication of fees, the
Adviser has agreed to waive the management fee it charges to the Fund by any
amount it collects as a management fee from an underlying investment company in
which the Fund invests that is managed by the Adviser, as a result of the
investment of the Fund’s assets in such investment company.
The
Adviser may hire and terminate sub-advisers in accordance with the terms of an
exemptive order obtained by the Fund and the Adviser from the SEC under which
the Adviser is permitted, subject to supervision and approval of the Board, to
enter into and materially amend sub-advisory agreements without seeking
shareholder approval. The Adviser will furnish shareholders of the Fund with
information regarding a new sub-adviser within 90 days of the hiring of the new
sub- adviser. Currently, the Adviser has not hired a sub-adviser to assist with
the portfolio management of the Fund.
For
the Fund’s most recent fiscal year end, the advisory fee paid to the Adviser was
as follows:
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VanEck
Funds |
As
a % of average daily net assets |
|
|
Morningstar
Wide Moat Fund |
0.45% |
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A
discussion regarding the basis for the Board’s approval of the Advisory
Agreement is available in the Fund’s semi- annual report to shareholders for the
period ended June 30, 2021.
PORTFOLIO
MANAGERS
Portfolio
Managers.
Peter
Liao, Portfolio Manager of the Fund, is primarily responsible for the day-to-day
portfolio management of the Fund.
Peter
Liao.
Mr. Liao is Portfolio Manager of the Fund. Mr. Liao has been employed by the
Adviser since the summer of 2004. Mr. Liao also serves as a portfolio manager
for certain other investment companies advised by the Adviser.
Gregory
F. Krenzer, CFA.
Mr. Krenzer is Deputy Portfolio Manager of the Fund. He has been employed by the
Adviser since 1994 and has over 20 years of experience in the international and
financial markets.
The
SAI provides additional information about the above Portfolio Managers, their
compensation, other accounts they manage, and their securities ownership in the
Fund.
THE
TRUST
For
more information on the VanEck Funds (the “Trust”), the Trustees and the
Officers of the Trust, see “General Information,” “Description of the Trust” and
“Trustees and Officers” in the SAI.
THE
DISTRIBUTOR
Van
Eck Securities Corporation, 666 Third Avenue, New York, NY 10017 (the
“Distributor”), a wholly owned subsidiary of the Adviser, has entered into a
Distribution Agreement with the Trust for distributing shares of the
Fund.
The
Distributor generally sells and markets shares of the Fund through
intermediaries, such as broker-dealers. The intermediaries may be compensated by
the Fund for providing various services.
In
addition, the Distributor or the Adviser may pay certain intermediaries, out of
its own resources and not as an expense of the Fund, additional cash or non-cash
compensation as an incentive to intermediaries to promote and sell shares of the
Fund and other mutual funds distributed by the Distributor. These payments are
commonly known as “revenue sharing”. The benefits that the Distributor or the
Adviser may receive when each of them makes these payments include, among other
things, placing the Fund on the intermediary’s sales system and/or preferred or
recommended fund list, offering the Fund through the intermediary’s advisory or
other specialized programs, and/or access (in some cases on a preferential basis
over other competitors) to individual members of the intermediary’s sales force.
Such payments may also be used to compensate intermediaries for a variety of
administrative and shareholders services relating to investments by their
customers in the Fund.
The
fees paid by the Distributor or the Adviser to intermediaries may be calculated
based on the gross sales price of shares sold by an intermediary, the NAV of
shares held by the customers of the intermediary, or otherwise. These fees may,
but are not normally expected to, exceed in the aggregate 0.50% of the average
net assets of the Fund attributable to a particular intermediary on an annual
basis.
The
Distributor or the Adviser may also provide intermediaries with additional cash
and non-cash compensation, which may include financial assistance to
intermediaries in connection with conferences, sales or training programs for
their employees, seminars for the public and advertising campaigns, technical
and systems support, attendance at sales meetings and reimbursement of ticket
charges. In some instances, these incentives may be made available only to
intermediaries whose representatives have sold or may sell a significant number
of shares.
Intermediaries
may receive different payments, based on a number of factors including, but not
limited to, reputation in the industry, sales and asset retention rates, target
markets, and customer relationships and quality of service. No one factor is
determinative of the type or amount of additional compensation to be provided.
Financial intermediaries that sell the Fund’s shares may also act as a broker or
dealer in connection with execution of transactions for the Fund’s portfolio.
The Fund and the Adviser have adopted procedures to ensure that the sales of the
Fund’s shares by an intermediary will not affect the selection of brokers for
execution of portfolio transactions.
Not
all intermediaries are paid the same to sell mutual funds. Differences in
compensation to intermediaries may create a financial interest for an
intermediary to sell shares of a particular mutual fund, or the mutual funds of
a particular family of mutual funds. Before purchasing shares of the Fund, you
should ask your intermediary or its representative about the compensation in
connection with the purchase of such shares, including any revenue sharing
payments it receives from the Distributor.
THE
CUSTODIAN
State
Street Bank & Trust Company
One
Lincoln Street
Boston,
MA 02111
THE
TRANSFER AGENT
DST
Systems, Inc., an SS&C Company
210
West 10th Street, 8th Floor
Kansas
City, MO 64105
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers
LLP
300
Madison Avenue
New
York, NY 10017
COUNSEL
Stradley
Ronon Stevens and Young, LLP
2005
Market Street, Suite 2600
Philadelphia,
PA 19103
The
financial highlights tables that follow are intended to help you understand the
Fund’s financial performance since the commencement of the Fund’s operations.
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 the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by another independent
registered public accounting firm, whose report, along with the Fund’s financial
statements are included in the Fund’s annual report, which is available upon
request.
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VANECK
MORNINGSTAR WIDE MOAT FUND |
FINANCIAL
HIGHLIGHTS
For
a share outstanding throughout each period:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Class
I |
|
|
Year
Ended December 31, |
|
Period
Ended
December
31, 2017(a) |
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
| Net
asset value, beginning of period |
$ |
30.70 |
|
|
$ |
29.13 |
|
|
$ |
23.94 |
|
|
$ |
26.63 |
|
|
$ |
25.15 |
|
|
| Net
investment income (b) |
0.40 |
|
0.47 |
|
0.49 |
|
0.49 |
|
0.07 |
|
| Net
realized and unrealized gain (loss) on investments |
6.92 |
|
|
3.63 |
|
|
7.86 |
|
|
(0.91) |
|
|
1.48 |
|
|
| Total
from investment operations |
7.32 |
|
4.10 |
|
8.35 |
|
(0.42) |
|
1.55 |
|
| Distributions
from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(0.38) |
|
(0.48) |
|
(0.46) |
|
(0.48) |
|
(0.07) |
|
| Net
realized capital gains |
(4.13) |
|
(2.05) |
|
(2.70) |
|
(1.79) |
|
— |
|
|
| Total
distributions |
(4.51) |
|
(2.53) |
|
(3.16) |
|
(2.27) |
|
(0.07) |
|
| Net
asset value, end of period |
$ |
33.51 |
|
|
$ |
30.70 |
|
|
$ |
29.13 |
|
|
$ |
23.94 |
|
|
$ |
26.63 |
|
|
| Total
return (c) |
24.04 |
|
% |
14.18 |
|
% |
34.80 |
|
% |
(1.30) |
|
% |
6.15 |
|
%(d) |
| Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
| Gross
expenses |
2.26 |
|
% |
4.28 |
|
% |
5.21 |
|
% |
3.42 |
|
% |
16.25 |
|
%(e) |
| Net
expenses |
0.59 |
|
% |
0.59 |
|
% |
0.59 |
|
% |
0.59 |
|
% |
0.59 |
|
%(e) |
| Net
investment income |
1.13 |
|
% |
1.65 |
|
% |
1.72 |
|
% |
1.79 |
|
% |
1.89 |
|
%(e) |
| Supplemental
data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of period (in millions) |
$4 |
|
|
$3 |
|
|
$1 |
|
|
$1 |
|
|
$1 |
|
|
| Portfolio
turnover rate |
59 |
|
% |
64 |
|
% |
108 |
|
% |
76 |
|
% |
10 |
|
%(d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
Z |
|
|
Year
Ended December 31, |
|
Period
Ended
December
31, 2017(a) |
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
|
| Net
asset value, beginning of period |
$ |
30.32 |
|
|
$ |
28.76 |
|
|
$ |
23.95 |
|
|
$ |
26.63 |
|
|
$ |
25.15 |
|
|
| Net
investment income (b) |
0.44 |
|
0.49 |
|
0.52 |
|
0.50 |
|
0.08 |
|
| Net
realized and unrealized gain (loss) on investments |
6.82 |
|
3.59 |
|
7.89 |
|
(0.90) |
|
1.47 |
|
|
| Total
from investment operations |
7.26 |
|
4.08 |
|
8.41 |
|
(0.40) |
|
1.55 |
|
| Distributions
from: |
|
|
|
|
|
|
|
|
|
|
| Net
investment income |
(0.41) |
|
(0.47) |
|
(0.90) |
|
(0.49) |
|
(0.07) |
|
| Net
realized capital gains |
(4.13) |
|
(2.05) |
|
(2.70) |
|
(1.79) |
|
— |
|
|
| Total
distributions |
(4.54) |
|
(2.52) |
|
(3.60) |
|
(2.28) |
|
(0.07) |
|
| Net
asset value, end of period |
$ |
33.04 |
|
|
$ |
30.32 |
|
|
$ |
28.76 |
|
|
$ |
23.95 |
|
|
$ |
26.63 |
|
|
| Total
return (c) |
24.15 |
|
% |
14.31 |
|
% |
35.02 |
|
% |
(1.22) |
|
% |
6.17 |
|
%(d) |
| Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
| Gross
expenses |
1.59 |
|
% |
2.48 |
|
% |
3.02 |
|
% |
2.16 |
|
% |
13.17 |
|
%(e) |
| Net
expenses |
0.49 |
|
% |
0.49 |
|
% |
0.49 |
|
% |
0.49 |
|
% |
0.49 |
|
%(e) |
| Net
investment income |
1.23 |
|
% |
1.74 |
|
% |
1.83 |
|
% |
1.90 |
|
% |
1.99 |
|
%(e) |
| Supplemental
data |
|
|
|
|
|
|
|
|
|
|
| Net
assets, end of period (in millions) |
$15 |
|
|
$10 |
|
|
$8 |
|
|
$5 |
|
|
$4 |
|
|
| Portfolio
turnover rate |
59 |
|
% |
64 |
|
% |
108 |
|
% |
76 |
|
% |
10 |
|
%(d) |
|
|
|
|
|
|
|
|
|
|
|
(a)For
the period November 7, 2017 (commencement of operations) through December 31,
2017.
(b)Calculated
based upon average shares outstanding
(c)Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d)Not
Annualized
(e)Annualized
APPENDIX
A: DESCRIPTION OF THE MORNINGSTAR®
WIDE MOAT FOCUS INDEXSM
The
Index is a rules-based index intended to offer exposure to companies that the
Index provider determines have sustainable competitive advantages based on a
proprietary methodology that considers quantitative and qualitative factors
(“wide moat companies”). Wide moat companies are selected from the universe of
companies represented in the Morningstar®
US Market IndexSM,
a broad market index representing 97% of U.S. market capitalization. The Index
targets a select group of wide moat companies: those that according to
Morningstar’s equity research team are attractively priced as of each Index
review. Out of the companies in the Morningstar US Market Index that the Index
provider determines are wide moat companies, the Index provider selects
companies to be included in the Index as determined by the ratio of the Index
provider’s estimate of fair value of the issuer’s common stock to the price. The
Index provider’s equity research team’s fair value estimates are calculated
using a standardized, proprietary valuation model.
A
selection committee, comprising members of Morningstar’s equity research team,
makes the final determination of whether a company is a wide moat company. Only
those companies with one or more of the identifiable competitive advantages, as
determined by the Index provider’s equity research team and agreed to by the
selection committee, are wide moat companies. The quantitative factors used to
identify competitive advantages include historical and projected returns on
invested capital relative to cost of capital. The qualitative factors used to
identify competitive advantages include customer switching cost (i.e.,
the costs of customers switching to competitors), internal cost advantages,
intangible assets (e.g.,
intellectual property and brands), network effects (i.e.,
whether products or services become more valuable as the number of customers
grows) and efficient scale (i.e.,
whether the company effectively serves a limited market that potential rivals
have little incentive to enter into).
The
Index provider’s equity research team uses a standardized, proprietary valuation
model to assign fair values to potential Index constituents’ common stock. The
Index Provider’s equity research team estimates the issuer’s future free cash
flows and then calculates an enterprise value using weighted average costs of
capital as the discount rate. The Index provider’s equity research team then
assigns each issuer’s common stock a fair value by adjusting the enterprise
value to account for net debt and other adjustments.
A
buffer rule is applied to the current Index constituents. Those that are ranked
in the top 150% of stocks representing the lowest current market price/fair
value price eligible for inclusion in the Index will remain in the Index at the
time of reconstitution and those that fall outside of the top 150% are excluded
from the Index. The maximum weight of an individual sector in the Index is
capped at 10% more than its corresponding weight in the Morningstar US Market
Index at the time of reconstitution, or 40%, whichever is higher.
As
of December 31, 2021, the Index included 46 securities of companies with a
market capitalization range of between approximately $1.7 billion and $2,525
billion and a weighted average market capitalization of $235.2 billion. These
amounts are subject to change. The Index employs a staggered rebalance
methodology. The Index is divided into two equally-weighted sub-portfolios, and
each is reconstituted and rebalanced semi-annually on alternating quarters. Each
sub-portfolio will contain 40 equally-weighted securities at its semi-annual
reconstitution and weights will vary with market prices until the next
reconstitution date. Due to the staggered rebalance methodology, constituents
and weightings may vary between sub-portfolios. Each sub-portfolio is reweighted
to 50% of the total Index every six months. Adjustments to one sub-portfolio are
performed after the close of business on the third Friday of March and September
and adjustments to the other sub-portfolio are performed after the close of
business on the third Friday of June and December, and all adjustments are
effective on the following Monday. If the Monday is a market holiday,
reconstitution and rebalancing occurs on the Tuesday immediately following.
Rebalancing data, including constituent weights and related information, is
posted on the Index provider’s website at the end of each quarter-end month. The
Index provider may delay or change a scheduled rebalancing or reconstitution of
the Index or the implementation of certain rules at its sole discretion.Target
weights of the constituents are not otherwise adjusted between quarters except
in the event of certain types of corporate actions.
APPENDIX
B: LICENSING AGREEMENT AND DISCLAIMERS
The
Adviser has entered into a licensing agreement with Morningstar to use the
Index. The Fund is entitled to use the Index pursuant to a sub-licensing
arrangement with the Adviser.
VanEck
Morningstar Wide Moat Fund is not sponsored, endorsed, sold or promoted by
Morningstar. Morningstar makes no representation or warranty, express or
implied, to the shareholders of VanEck Morningstar Wide Moat Fund or any member
of the public regarding the advisability of investing in securities generally or
in VanEck Morningstar Wide Moat Fund in particular or the ability of VanEck
Morningstar Wide Moat Fund to track general stock market performance.
Morningstar’s only relationship to the Adviser is the licensing of certain
service marks and service names of Morningstar and of the Wide Moat Index, which
are determined, composed and calculated by Morningstar without regard to the
Adviser or VanEck Morningstar Wide Moat Fund. Morningstar has no obligation to
take the needs of the Adviser or the shareholders of VanEck Morningstar Wide
Moat Fund into consideration in determining, composing or calculating the Wide
Moat Index. Morningstar is not responsible for and has not participated in the
determination of the prices and amount of VanEck Morningstar Wide Moat Fund or
the timing of the issuance or sale of VanEck Morningstar Wide Moat Fund or in
the determination or calculation of the equation by which VanEck Morningstar
Wide Moat Fund are converted into cash. Morningstar has no obligation or
liability in connection with the administration, marketing or trading of VanEck
Morningstar Wide Moat Fund.
MORNINGSTAR
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE WIDE MOAT INDEX
OR ANY DATA INCLUDED THEREIN AND MORNINGSTAR SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. MORNINGSTAR MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ADVISER, SHAREHOLDERS OF
VANECK MONRINGSTAR WIDE MOAT FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE WIDE MOAT INDEX OR ANY DATA INCLUDED THEREIN. MORNINGSTAR 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 WIDE MOAT INDEX
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL MORNINGSTAR HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
The
S&P 500 Index included in certain of the Fund’s performance tables is a
product of S&P Dow Jones Indices LLC and/or its affiliates and has been
licensed for use by the Adviser. Copyright © 2022 S&P Dow Jones Indices LLC,
a division of S&P Global, Inc., and/or its affiliates. All rights reserved.
Redistribution or reproduction in whole or in part are prohibited without
written permission of S&P Dow Jones Indices LLC. For more information on any
of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P
is a registered trademark of S&P Global and Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P
Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor
their third party licensors make any representation or warranty, express or
implied, as to the ability of any index to accurately represent the asset class
or market sector that it purports to represent and neither S&P Dow Jones
Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third
party licensors shall have any liability for any errors, omissions, or
interruptions of any index or the data included therein.
For
more detailed information, see the Statement of Additional Information (SAI),
which is legally a part of and is incorporated by reference into this
prospectus. The SAI includes information regarding, among other things: the Fund
and its investment policies and risks; management of the Fund, investment
advisory and other services, the Fund’s Board of Trustees, and tax matters
related to the Fund.
Additional
information about the investments is available in the Fund’s annual and
semi-annual reports to shareholders. In the 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 800.826.1115, or visit the VanEck website at vaneck.com to request,
free of charge, the annual or semi-annual reports, the SAI, information
regarding applicable sales loads, breakpoint discounts, reduced or waived sales
charges and eligibility minimums, or other information about the
Fund.
▪Reports
and other information about the Fund 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 e-mail address: publicinfo@sec.gov.
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Transfer
Agent:
DST
Systems Inc., an SS&C Company
P.O.
Box 218407
Kansas
City, Missouri 64121-8407
SEC
Registration Number: 811-04297
|
800.544.4653
vaneck.com |
|
MWMPRO |
