ck0001137360-20211231
VANECK®
Agribusiness
ETF MOO®
Future
of Food ETF YUMY
Gold
Miners ETF GDX®
Green
Metals ETF GMET
Junior
Gold Miners ETF GDXJ®
Low
Carbon Energy ETF SMOG™
Natural
Resources ETF HAP®
Oil
Refiners ETF CRAK®
Oil
Services ETF OIH®
Rare
Earth/Strategic Metals ETF REMX®
Steel
ETF SLX®
Uranium+Nuclear
Energy ETF NLR®
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Principal
U.S. Listing Exchange for each Fund: NYSE Arca, Inc. |
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The
U.S. Securities and Exchange Commission (“SEC”) has not approved or
disapproved these securities or passed upon the accuracy or adequacy of
this Prospectus. Any representation to the contrary is a criminal
offense. |
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800.826.2333 vaneck.com
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TABLE
OF CONTENTS |
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Summary
Information |
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SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Agribusiness ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS®
Global Agribusiness Index (the “Agribusiness
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
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Other
Expenses |
0.02 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.52 |
% |
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Fee
Waivers and Expense Reimbursement(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.52 |
% |
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(a) 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, taxes and
extraordinary expenses) from exceeding 0.56% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
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YEAR |
EXPENSES |
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1 |
$53 |
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3 |
$167 |
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5 |
$291 |
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10 |
$653 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
17% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in securities that comprise the Fund’s benchmark
index. The Agribusiness Index includes equity securities of companies in the
agribusiness segment. To be initially eligible for the Agribusiness Index,
companies must generate at least 50% of their revenues from agri-chemicals,
animal health and fertilizers, seeds and traits, from farm/irrigation equipment
and farm machinery, aquaculture and fishing, livestock, cultivation and
plantations (including grain,
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Agribusiness ETF.
oil
palms, sugar cane, tobacco leafs, grapevines, etc.) and trading of agricultural
products. Such companies may include small- and medium-capitalization companies
and foreign market issuers. As of December 31, 2021, the Agribusiness Index
included 54 securities of companies with a market capitalization range of
between approximately $1.1 billion and $115.5 billion and a weighted average
market capitalization of $39.4 billion. These amounts are subject to change. The
Fund’s 80% investment policy is non-fundamental and may be changed without
shareholder approval upon 60 days’ prior written notice to
shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Agribusiness Index by investing in a portfolio
of securities that generally replicates the Agribusiness Index. Unlike many
investment companies that try to “beat” the performance of a benchmark index,
the Fund does not try to “beat” the Agribusiness Index and does not seek
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Agribusiness Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Agribusiness Index concentrates in an industry or group of industries. As of
December 31, 2021, each of the consumer staples, health care, industrials and
basic materials sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Agriculture Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of agriculture companies. Economic forces
affecting agricultural companies and related industries, including forces
affecting agricultural commodity prices, labor costs, and energy and financial
markets, as well as government policies and regulations, such as taxes, tariffs,
duties, subsidies and import and export restrictions, could adversely affect the
Fund’s portfolio companies and thus, the Fund’s financial situation and
profitability. Agricultural production and trade flows are significantly
affected by government policies and regulations. In addition, agriculture
companies must comply with a broad range of environmental and food safety laws
and regulations which could adversely affect the Fund. Additional or more
stringent environmental and food safety laws and regulations may be enacted in
the future and such changes could have a material adverse effect on the business
of the Fund’s portfolio companies.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign
currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Agribusiness Index, may
negatively affect the Fund’s ability to replicate the performance of the
Agribusiness Index. The issuers of depositary receipts may discontinue issuing
new depositary receipts and withdraw existing depositary receipts at any time,
which may result in costs and delays in the distribution of the underlying
assets to the Fund and may negatively impact the Fund’s performance and the
Fund’s ability to replicate/track the performance of its Index.
Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in the Consumer Staples Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the consumer staples sector. The consumer
staples sector comprises companies whose businesses are less sensitive to
economic cycles, such as manufacturers and distributors of food and beverages
and producers of non-durable household goods and personal products. Companies in
the consumer staples sector may be adversely affected by changes in the
worldwide economy, consumer spending, competition, demographics and consumer
preferences, exploration and production spending. Companies in this sector are
also affected by changes in government regulation, world events and economic
conditions.
Risk
of Investing in the Health Care Sector.
The Fund will be sensitive to, 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 and are subject to extensive litigation
based on product liability and similar claims.
Risk
of Investing in the Industrials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the industrials sector. The industrials
sector comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
may be adversely affected by environmental damages, product liability claims and
exchange rates.
Special
Risk Considerations of Investing in Asian Issuers.
Investments in securities of Asian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Certain Asian economies have experienced over-extension of credit,
currency devaluations and restrictions, high unemployment, high inflation,
decreased exports and economic recessions. Economic events in any one Asian
country can have a significant effect on the entire Asian region as well as on
major trading partners outside Asia, and any adverse effect on some or all of
the Asian countries and regions in which the Fund invests. The securities
markets in some Asian economies are relatively underdeveloped and may subject
the Fund to higher action costs or greater uncertainty than investments in more
developed securities markets. Such risks may adversely affect the value of the
Fund’s investments.
Special
Risk Considerations of Investing in European Issuers.
Investments in securities of European issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Economic and Monetary Union (“EMU”) of the European Union (“EU”)
requires member countries to comply with restrictions on inflation rates,
deficits, interest rates, debt levels and fiscal and monetary controls, each of
which may significantly affect every country in Europe. Decreasing imports or
exports, changes in governmental or EU regulations on trade, changes in the
exchange rate of the euro, the default or threat of default by an EU member
country on its sovereign debt, and/or an economic recession in an EU member
country may have a significant adverse effect on the economies of other EU
countries and on major trading partners outside Europe. The European financial
markets have previously experienced, and may continue to experience, volatility
and have been adversely affected, and may in the future be affected, by concerns
about economic downturns, credit rating downgrades, rising government debt
levels and possible default on or restructuring of government debt in several
European countries. These events have adversely affected, and may in the future
affect, the value and exchange rate of the euro and may continue to
significantly affect the economies of every country in Europe, including EU
member countries that do not use the euro and non-EU member countries. In a
referendum held on June 23, 2016, voters in the United Kingdom (“UK”) voted to
leave the EU, creating economic and political uncertainty in its wake. On
January 31, 2020, the UK officially withdrew from the EU and the UK entered a
transition period which ended on December 31, 2020. On December 30, 2020, the EU
and UK signed the EU-UK Trade and Cooperation Agreement ("TCA"), an agreement on
the terms governing certain aspects of the EU's and the UK's relationship
following the end of the transition period. Notwithstanding the TCA, following
the transition period, there is likely to be considerable uncertainty as to the
UK's post-transition framework.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Cash Transactions.
Unlike other exchange-traded funds (“ETFs”), the Fund expects to effect its
creations and redemptions at least partially for cash, rather than wholly for
in-kind securities. Therefore, it may be required to sell portfolio securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk. The
Fund’s return may not match the return of the Agribusiness Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Agribusiness 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 Agribusiness Index, or (to
the extent the Fund effects creations and redemptions for cash) raising cash to
meet redemptions or deploying cash in connection with newly created Creation
Units, which are not factored into the return of the Agribusiness Index.
Transaction costs, including brokerage costs, will decrease the Fund’s net asset
value (“NAV”) to the extent not offset by the transaction fee payable by an
Authorized Participant (“AP”). Market disruptions and regulatory restrictions
could have an adverse effect on the Fund’s ability to adjust its exposure to the
required levels in order to track the Agribusiness Index. Errors in the
Agribusiness Index data, the Agribusiness Index computations and/or the
construction of the Agribusiness Index in accordance with its methodology may
occur from time to time and may not be identified and corrected by the
Agribusiness Index provider for a period of time or at all, which may have an
adverse impact on the Fund and its shareholders. Shareholders should understand
that any gains from the Agribusiness Index provider's errors will be kept by the
Fund and its shareholders and any losses or costs resulting from the
Agribusiness Index provider's errors will be borne by the Fund and its
shareholders. When the Agribusiness Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Agribusiness Index, any transaction costs and market
exposure arising from such portfolio rebalancing will be borne directly by the
Fund and its shareholders. The Fund may not be fully invested at times either as
a result of cash flows into the Fund (if the Fund effects creations and
redemptions for cash) or reserves of cash held by the Fund to meet redemptions
or pay expenses. Apart from scheduled rebalances, the Agribusiness Index
provider or its agents may carry out additional ad hoc rebalances to the
Agribusiness Index. Therefore, errors and additional ad hoc rebalances carried
out by the Agribusiness Index provider or its agents to the Agribusiness Index
may increase the costs to and the tracking error risk of the Fund. In addition,
the Fund may not be able to invest in certain securities included in the
Agribusiness Index, or invest in them in the exact proportions in which they are
represented in the Agribusiness Index. The Fund’s performance may also deviate
from the return of the Agribusiness Index due to legal restrictions or
limitations imposed by the governments of certain countries, certain listing
standards of the Fund’s listing exchange (the “Exchange”), a lack of liquidity
on stock exchanges in which such securities trade, potential adverse tax
consequences or other regulatory reasons or legal restrictions or limitations
(such as diversification requirements). The Fund may value certain of its
investments, underlying securities, underlying currencies and/or other assets
based on fair value prices. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Agribusiness Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Agribusiness Index is not based on fair value prices), the
Fund’s ability to track the Agribusiness Index may be adversely affected. In
addition, any issues the Fund encounters with regard to currency convertibility
(including the cost of borrowing funds, if any) and repatriation may also
increase
the
index tracking risk. When markets are volatile, the ability to sell securities
at fair value prices may be adversely impacted and may result in additional
trading costs and/or increase the index tracking risk. The Fund may also need to
rely on borrowings to meet redemptions, which may lead to increased expenses.
For tax efficiency purposes, the Fund may sell certain securities, and such sale
may cause the Fund to realize a loss and deviate from the performance of the
Agribusiness Index. In light of the factors discussed above, the Fund’s return
may deviate significantly from the return of the Agribusiness Index. Changes to
the composition of the Agribusiness Index in connection with a rebalancing or
reconstitution of the Agribusiness Index may cause the Fund to experience
increased volatility, during which time the Fund’s index tracking risk may be
heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Agribusiness Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Agribusiness Index provider to postpone
a scheduled rebalance or reconstitution, which could cause the Agribusiness
Index to vary from its normal or expected composition. Therefore, the Fund’s
performance could be lower than funds that may actively shift their portfolio
assets to take advantage of market opportunities or to lessen the impact of a
market decline or a decline in the value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
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 Agribusiness Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 18, 2013,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the DAXglobal®
Agribusiness
Index (the “Prior Index”). Therefore, performance prior to March 18, 2013
reflects the performance of the Fund while seeking to track the Prior Index. All
returns assume reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
17.35% |
2Q 2020 |
Worst
Quarter: |
-25.16% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
|
|
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|
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|
|
|
|
|
|
|
|
Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck Agribusiness ETF (return before
taxes) |
23.99% |
14.70% |
9.29% |
|
|
VanEck Agribusiness ETF (return after
taxes on distributions) |
23.65% |
14.33% |
8.77% |
|
|
VanEck Agribusiness ETF (return after
taxes on distributions and sale of Fund
Shares) |
14.45% |
11.76% |
7.43% |
|
|
MVIS Global Agribusiness Index
(reflects no deduction for fees, expenses or taxes, except withholding
taxes)* |
24.51% |
14.77% |
9.41% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
|
|
|
|
|
|
|
*Prior to March 18, 2013, the Fund
sought to replicate as closely as possible, before fees and expenses, the price
and yield performance of the Prior Index. Therefore, performance information
prior to March 18, 2013 reflects the performance of the Fund while seeking to
track the Prior Index. Prior to March 18, 2013, the index data reflects that of
the Prior Index. From March 18, 2013, the index data reflects that of the
Agribusiness Index.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
|
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|
|
|
|
|
|
|
|
|
Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Peter
H. Liao |
Portfolio
Manager |
August
2007 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
|
|
|
|
|
|
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
|
|
|
VANECK®
FUTURE OF FOOD ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Future of Food ETF (the
“Fund”) seeks long-term capital appreciation.
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
|
|
|
|
|
|
Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
Fee |
0.69 |
% |
|
|
Other
Expenses(a)
(b) |
0.00 |
% |
|
|
|
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses(b) |
0.69 |
% |
|
|
|
|
|
(a) “Other Expenses” are based
on estimated amounts for the current fiscal
year.
(b) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least May 1,
2023.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR
|
EXPENSES |
|
|
1 |
$70 |
|
|
|
3 |
$221 |
|
|
|
|
|
|
PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the period from November 30, 2021 (the Fund's commencement of operations)
through December 31, 2021, the Fund’s portfolio turnover rate was
0% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
Under
normal conditions, the Fund invests at least 80% of its total assets in domestic
and foreign equity securities of companies engaged in Agri-Food technology and
innovation. “Agri-Food technology and innovation” encompasses industries and
companies that are leading, enabling, supplying, disrupting, or benefiting from
new environmentally sustainable agriculture and food products and services. The
Adviser performs a qualitative and quantitative analysis of each company’s
financial statements, balance sheets and/or earnings reports to determine
whether a company is engaged in Agri-Food technology and innovation. The Fund is
an actively managed exchange-traded fund (“ETF”).
The
Adviser classifies Agri-Food technology and innovation-related companies into
three overarching categories: food technology companies, precision agriculture
companies and agricultural sustainability companies. Food technology companies
include companies that apply innovative science to the creation, production,
packaging, or distribution of new environmentally sustainable food products,
such as alternative proteins, novel ingredients and flavors, and aquaculture
(i.e., breeding, rearing and harvesting of
fish,
shellfish and other organisms). Precision agriculture companies are companies
that make, service, or operate solutions that optimize farm operations, such as
robotics and automation platforms, indoor and vertical (i.e., growth in
vertically stacked layers) farms, water and irrigation equipment, and data
collection and analysis software. Agricultural sustainability companies are
companies that research, develop, make, or distribute environmentally
sustainable products across the agricultural supply chain, such as new seed
genetics, environmentally sustainable fertilizers, biological and nature-based
crop chemicals, novel animal feed and nutrition solutions, and sustainable crop
preservation and storage alternatives.
The
Fund may invest without limitation in any of these three Agri-Food technology
and innovation categories and may have limited or no exposure to one or more
particular categories at any given time. The Adviser selects equity securities
of companies that it believes represent growth opportunities. The Adviser
engages in its own internal research and analysis and leverages insights from
diverse sources, including external research, to identify and take advantage of
Agri-Food technology and innovation trends that influence and impact individual
companies or industries. Further, the Adviser will analyze financially material
risks and opportunities related to ESG (i.e., Environmental, Social and
Governance) factors as a component of the overall investment process. ESG
considerations can affect the Adviser’s fundamental assessment of a company or
country.
The
Fund may invest in securities of companies located anywhere in the world,
including the United States. The Fund may invest in securities of companies of
any capitalization range. The Fund concentrates its investments in the food
technology, precision agriculture, and agricultural sustainability group of
industries. An Agri-Food technology and innovation-related company may not
currently derive any revenue, and there is no assurance that such company will
derive any revenue from environmentally sustainable agriculture and food
products and services in the future. The Fund’s 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund may also invest up to 20% of its net assets in special purpose vehicles
such as special purpose acquisition companies (“SPACs”), initial public
offerings (“IPOs”), and securities issued by other investment companies,
including exchange traded funds (“ETFs”) and foreign investment companies. The
Fund may also invest in money market funds, but these investments are not
subject to this limitation. The Fund may invest in SPACs, IPOs, and ETFs to
participate in, or gain exposure to, certain market industries, or when direct
investments in certain countries are not permitted or available.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”) and, therefore, may invest a greater
percentage of its assets in a particular issuer. As of December 31, 2021, each of the
basic materials, consumer staples, and industrials sectors represented a
significant portion of the Fund.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Agri-Food Technology and Innovation Food Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of companies operating in the food technology,
precision agriculture, and agricultural sustainability markets. These companies
may have limited product lines, markets, financial resources or personnel. These
companies may face intense competition and potentially rapid product
obsolescence. These companies are also heavily dependent on intellectual
property rights and may be adversely affected by loss or impairment of those
rights. These companies are also subject to significant environmental and food
safety regulations that could adversely affect their business. Additional or
more stringent environmental and food safety regulations may be enacted in the
future and such changes could have a material adverse effect on the business of
the Fund’s portfolio companies. Companies operating in the food technology
markets are subject to other risks affecting the food industry. The food
industry is highly competitive and can be significantly affected by demographic
and product trends, competitive pricing, marketing campaigns, environmental
factors, government regulation, adverse changes in general economic conditions,
evolving consumer preferences, nutritional and health-related concerns, federal,
state and local food inspection and processing controls, consumer product
liability claims, consumer boycotts, risks of product tampering, and the
availability and expense of liability insurance. Food product recalls require
companies in the food industry to withdraw contaminated or mislabeled products
from the market. Companies operating in the precision agriculture and
agricultural sustainability markets are subject to other risks affecting the
agricultural industry, including the impact of global climate change on
agricultural production. These companies, especially smaller companies, tend to
be more volatile than companies that do not rely heavily on technology. These
companies may be adversely affected by commodity price volatility, changes in
exchange rates, government policies and regulations such as taxes, tariffs,
duties, subsidies and import and export restrictions, availability of certain
inputs and materials required for production, depletion of resources,
technological developments and labor relations. The customers and/or suppliers
of the companies in which the Fund invests may be concentrated in a particular
country, region or industry. Any adverse event affecting one of these countries,
regions or industries could have a negative impact on such
companies.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific
issuers in which the Fund invests. Equity securities are subordinated to
preferred securities and debt in a company’s capital structure with respect to
priority in right to a share of corporate income, and therefore will be subject
to greater dividend risk than preferred securities or debt instruments. In
addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in the Industrials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the industrials sector. The industrials
sector comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
may be adversely affected by environmental damages, product liability claims and
exchange rates.
Risk
of Investing in the Consumer Staples Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the consumer staples sector. The consumer
staples sector comprises companies whose businesses are less sensitive to
economic cycles, such as manufacturers and distributors of food and beverages
and producers of non-durable household goods and personal products. Companies in
the consumer staples sector may be adversely affected by changes in the
worldwide economy, consumer spending, competition, demographics and consumer
preferences, exploration and production spending. Companies in this sector are
also affected by changes in government regulation, world events and economic
conditions.
Special
Risk Considerations of Investing in European Issuers.
Investments in securities of European issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Economic and Monetary Union (“EMU”) of the European Union (“EU”)
requires member countries to comply with restrictions on inflation rates,
deficits, interest rates, debt levels and fiscal and monetary controls, each of
which may significantly affect every country in Europe. Decreasing imports or
exports, changes in governmental or EU regulations on trade, changes in the
exchange rate of the euro, the default or threat of default by an EU member
country on its sovereign debt, and/or an economic recession in an EU member
country may have a significant adverse effect on the economies of other EU
countries and on major trading partners outside Europe. The European financial
markets have previously experienced, and may continue to experience, volatility
and have been adversely affected, and may in the future be affected, by concerns
about economic downturns, credit rating downgrades, rising government debt
levels and possible default on or restructuring of government debt in several
European countries. These events have adversely affected, and may in the future
affect, the value and exchange rate of the euro and may continue to
significantly affect the economies of every country in Europe, including EU
member countries that do not use the euro and non-EU member countries. In a
referendum held on June 23, 2016, voters in the United Kingdom (“UK”) voted to
leave the EU, creating economic and political uncertainty in its wake. On
January 31, 2020, the UK officially withdrew from the EU and the UK entered a
transition period which ended on December 31, 2020. On December 30, 2020, the EU
and UK signed the EU-UK Trade and Cooperation Agreement (“TCA”), an agreement on
the terms governing certain aspects of the EU's and the UK's relationship
following the end of the transition period. Notwithstanding the TCA, following
the transition period, there is likely to be considerable uncertainty as to the
UK's post-transition framework.
Risk
of Investing in Foreign Securities.
Investments in the securities of foreign issuers involve risks beyond those
associated with investments in U.S. securities. These additional risks include
greater market volatility, the availability of less reliable financial
information, higher transactional and custody costs, taxation by foreign
governments, decreased market liquidity and political instability. Because
certain foreign securities markets may be limited in size, the activity of large
traders may have an undue influence on the prices of securities that trade in
such markets. The Fund invests in securities of issuers located in countries
whose economies are heavily dependent upon trading with key partners. Any
reduction in this trading may have an adverse impact on the Fund’s
investments.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of
certain
foreign currencies may be subject to a high degree of fluctuation. Moreover, the
Fund may incur costs in connection with conversions between U.S. dollars and
foreign currencies.
Active
Management Risk.
The Fund is subject to management risk because it is an actively managed ETF. In
managing the Fund’s portfolio, the Adviser will apply investment techniques and
risk analyses in making investment decisions for the Fund, but there can be no
guarantee that these will produce the desired results.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as
Authorized Participants (“APs”), none of which are obligated to engage in
creation and/or redemption transactions. To the extent that those APs exit the
business, or are unable to or choose not to process creation and/or redemption
orders, and no other AP is able to step forward to create and redeem, there may
be a significantly diminished trading market for Shares or Shares may trade like
closed-end funds at a greater discount (or premium) to net asset value (“NAV”)
and possibly face trading halts and/or de-listing. The AP concentration risk may
be heightened in scenarios where APs have limited or diminished access to the
capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
Initial
Public Offerings Risk. The
Fund may invest in IPOs of common stock or other primary or secondary syndicated
offerings of equity or debt securities issued by a corporate issuer. A purchase
of IPO securities often involves higher transaction costs than those associated
with the purchase of securities already traded on exchanges or markets. IPO
securities are subject to market risk and liquidity risk. The market value of
recently issued IPO securities may fluctuate considerably due to factors such as
the absence of a prior public market, unseasoned trading and speculation, a
potentially small number of securities available for trading, limited
information about the issuer, and other factors. The Fund may hold IPO
securities for a period of time, or may sell them soon after the purchase.
Investments in IPOs could have a magnified impact – either positive or negative
– on the Fund’s performance while
the
Fund’s assets are relatively small. The impact of an IPO on the Fund’s
performance may tend to diminish as the Fund’s assets grow. In circumstances
when investments in IPOs make a significant contribution to the Fund’s
performance, there can be no assurance that similar contributions from IPOs will
continue in the future.
Special
Purpose Acquisition Companies. Equity
securities in which the Fund invests include stock, rights, warrants, and other
interests in SPACs or similar special purpose entities. A SPAC is typically a
publicly traded company that raises investment capital via an initial public
offering for the purpose of acquiring one or more existing companies (or
interests therein) via merger, combination, acquisition or other similar
transactions. Since SPACs have no operating history or ongoing business other
than seeking a transaction, the value of their securities may be particularly
dependent on the quality of its management and on the ability of the SPAC’s
management to identify and complete a profitable transaction. Additionally, the
securities issued by a SPAC may become illiquid and/or may be subject to
restrictions on resale, among other risks.
Concentration
Risk.
The Fund’s assets are concentrated in the food technology, precision
agriculture, and agricultural sustainability group of industries. As such, the
Fund will be subject to the risk that economic, political or other conditions
that have a negative effect on such groups of industries may negatively impact
the Fund to a greater extent than if the Fund’s assets were invested in a wider
variety of groups of industries.
PERFORMANCE
The Fund commenced operations on November 30,
2021 and therefore does not have a performance history for a full calendar
year. The Fund’s financial performance for the Fund’s first
fiscal period is included in the “Financial Highlights” section of the
Prospectus. Visit www.vaneck.com
for current performance figures.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
|
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|
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|
|
|
|
|
|
|
|
|
|
Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Shawn
Reynolds |
Portfolio
Manager |
November
2021 |
|
|
Ammar
James |
Deputy
Portfolio Manager |
November
2021 |
|
|
|
|
|
|
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Gold Miners ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the NYSE®
Arca®
Gold Miners Index®
(the “Gold Miners Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
|
|
|
|
|
|
Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
Fee |
0.50 |
% |
|
|
Other
Expenses |
0.01 |
% |
|
|
|
|
|
|
Total
Annual Fund Operating Expenses(a) |
0.51 |
% |
|
|
Fee
Waivers and Expense Reimbursement(a) |
0.00 |
% |
|
|
Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.51 |
% |
|
|
|
|
|
(a) 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, taxes and
extraordinary expenses) from exceeding 0.53% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR |
EXPENSES |
|
|
1 |
$52 |
|
|
|
3 |
$164 |
|
|
|
5 |
$285 |
|
|
|
10 |
$640 |
|
|
|
|
|
|
PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
15% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in common stocks and depositary receipts of
companies involved in the gold mining industry. Such companies may include
small- and medium-capitalization companies and foreign issuers. The Gold Miners
Index is a modified market-capitalization weighted index primarily comprised of
publicly traded companies involved in the
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Gold Miners ETF.
mining
for gold and silver. The weight of companies whose revenues are more
significantly exposed to silver mining will not exceed 20% of the Gold Miners
Index at rebalance. As of December 31, 2021, the Gold Miners Index included 57
securities of companies with a market capitalization range of between
approximately $591.3 million and $49.5 billion and a weighted average market
capitalization of $20.2 billion. These amounts are subject to change. The Fund’s
80% investment policy is non-fundamental and may be changed without shareholder
approval upon 60 days’ prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Gold Miners Index by investing in a portfolio
of securities that generally replicates the Gold Miners Index. Unlike many
investment companies that try to “beat” the performance of a benchmark index,
the Fund does not try to “beat” the Gold Miners Index and does not seek
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Gold Miners Index. The Fund normally
invests at least 80% of its total assets in securities that comprise the Gold
Miners Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Gold Miners Index concentrates in an industry or group of industries. As of
December 31, 2021, the gold mining industry and basic materials represented a
significant portion of the Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Gold and Silver Mining Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of gold and silver mining companies.
Investments related to gold and silver are considered speculative and are
affected by a variety of factors. Competitive pressures may have a significant
effect on the financial condition of gold and silver mining companies. Also,
gold and silver mining companies are highly dependent on the price of gold and
silver bullion, respectively, and may be adversely affected by a variety of
worldwide economic, financial and political factors. The price of gold and
silver may fluctuate substantially over short periods of time so the Fund’s
Share price may be more volatile than other types of investments. Fluctuation in
the prices of gold and silver may be due to a number of factors, including
changes in inflation, changes in currency exchange rates and changes in
industrial and commercial demand for metals (including fabricator demand).
Additionally, increased environmental or labor costs may depress the value of
metal investments.
Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Special
Risk Considerations of Investing in Canadian Issuers.
Investments in securities of Canadian issuers, including issuers located outside
of Canada that generate significant revenue from Canada, involve risks and
special considerations not typically associated with investments in the U.S.
securities markets. The Canadian economy is very dependent on the demand for,
and supply and price of, natural resources. The Canadian market is relatively
concentrated in issuers involved in the production and distribution of natural
resources. There is a risk that any changes in natural resources sectors could
have an adverse impact on the Canadian economy. Additionally, the Canadian
economy is heavily dependent on relationships with certain key trading partners
including the United States, countries in the European Union and China. Because
the United States is Canada’s largest trading partner and foreign investor, the
Canadian economy is dependent on and may be significantly affected by the U.S.
economy. Reduction in spending on Canadian products and services or changes in
the U.S. economy may adversely impact the Canadian economy. Trade agreements may
further increase Canada’s dependency on the U.S. economy, and uncertainty as to
future trade agreements may cause a decline in the value of the Fund’s Shares.
Past periodic demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency movements in the
Canadian market and such demands may have this effect in the future. In
addition, certain sectors of Canada’s economy may be subject to foreign
ownership limitations.
This may negatively impact the Fund’s ability to invest in Canadian issuers and
to track the Gold Miners Index.
Special
Risk Considerations of Investing in Australian Issuers.
Investments in securities of Australian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Australian economy is heavily dependent on exports from the
agriculture and mining industries. This makes the Australian economy susceptible
to fluctuations in the commodity markets. Australia is also dependent on trading
with key trading partners.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political
instability.
Because certain foreign securities markets may be limited in size, the activity
of large traders may have an undue influence on the prices of securities that
trade in such markets. The Fund invests in securities of issuers located in
countries whose economies are heavily dependent upon trading with key partners.
Any reduction in this trading may have an adverse impact on the Fund’s
investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Gold Miners Index, may
negatively affect the Fund’s ability to replicate the performance of the Gold
Miners Index. The issuers of depositary receipts may discontinue issuing new
depositary receipts and withdraw existing depositary receipts at any time, which
may result in costs and delays in the distribution of the underlying assets to
the Fund and may negatively impact the Fund’s performance and the Fund’s ability
to replicate/track the performance of its Index.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Gold Miners Index for a number
of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Gold Miners 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 Gold
Miners Index, or (to the extent the Fund effects creations and redemptions for
cash) raising cash to
meet
redemptions or deploying cash in connection with newly created Creation Units,
which are not factored into the return of the Gold Miners Index. Transaction
costs, including brokerage costs, will decrease the Fund’s net asset value
(“NAV”) to the extent not offset by the transaction fee payable by an Authorized
Participant (“AP”). Market disruptions and regulatory restrictions could have an
adverse effect on the Fund’s ability to adjust its exposure to the required
levels in order to track the Gold Miners Index. Errors in the Gold Miners Index
data, the Gold Miners Index computations and/or the construction of the Gold
Miners Index in accordance with its methodology may occur from time to time and
may not be identified and corrected by the Gold Miners Index provider for a
period of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Gold Miners
Index provider's errors will be kept by the Fund and its shareholders and any
losses or costs resulting from the Gold Miners Index provider's errors will be
borne by the Fund and its shareholders. When the Gold Miners Index is rebalanced
and the Fund in turn rebalances its portfolio to attempt to increase the
correlation between the Fund’s portfolio and the Gold Miners Index, any
transaction costs and market exposure arising from such portfolio rebalancing
will be borne directly by the Fund and its shareholders. The Fund may not be
fully invested at times as a result of cash flows into the Fund (if the Fund
effects creations and redemptions for cash) or reserves of cash held by the Fund
to meet redemptions or pay expenses. Apart from scheduled rebalances, the Gold
Miners Index provider or its agents may carry out additional ad hoc rebalances
to the Gold Miners Index. Therefore, errors and additional ad hoc rebalances
carried out by the Gold Miners Index provider or its agents to the Gold Miners
Index may increase the costs to and the tracking error risk of the Fund. In
addition, the Fund may not be able to invest in certain securities included in
the Gold Miners Index, or invest in them in the exact proportions in which they
are represented in the Gold Miners Index. The Fund’s performance may also
deviate from the return of the Gold Miners Index due to legal restrictions or
limitations imposed by the governments of certain countries, certain listing
standards of the Fund’s listing exchange (the “Exchange”), a lack of liquidity
on stock exchanges in which such securities trade, potential adverse tax
consequences or other regulatory reasons or legal limitations or restrictions
(such as diversification requirements). The Fund may value certain of its
investments, underlying securities, underlying currencies and/or other assets
based on fair value prices. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Gold Miners Index is based on securities’
closing prices on local foreign markets (i.e.,
the value of the Gold Miners Index is not based on fair value prices), the
Fund’s ability to track the Gold Miners Index may be adversely affected. In
addition, any issues the Fund encounters with regard to currency convertibility
(including the cost of borrowing funds, if any) and repatriation may also
increase the index tracking risk. When markets are volatile, the ability to sell
securities at fair value prices may be adversely impacted and may result in
additional trading costs and/or increase the index tracking risk. The Fund may
also need to rely on borrowings to meet redemptions, which may lead to increased
expenses. For tax efficiency purposes, the Fund may sell certain securities, and
such sale may cause the Fund to realize a loss and deviate from the performance
of the Gold Miners Index. In light of the factors discussed above, the Fund’s
return may deviate significantly from the return of the Gold Miners Index.
Changes to the composition of the Gold Miners Index in connection with a
rebalancing or reconstitution of the Gold Miners Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Gold Miners Index, the Fund generally would not sell a security
because the security’s issuer was in financial trouble. Additionally, unusual
market conditions may cause the Gold Miners Index provider to postpone a
scheduled rebalance or reconstitution, which could cause the Gold Miners Index
to vary from its normal or expected composition. Therefore, the Fund’s
performance could be lower than funds that may actively shift their portfolio
assets to take advantage of market opportunities or to lessen the impact of a
market decline or a decline in the value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot
predict
whether Shares will trade above, below, or at their most recent NAV. Disruptions
to creations and redemptions, the existence of market volatility or potential
lack of an active trading market for Shares (including through a trading halt),
as well as other factors, may result in Shares trading at a significant premium
or discount to NAV or to the intraday value of the Fund’s holdings. If a
shareholder purchases Shares at a time when the market price is at a premium to
the NAV or sells Shares at a time when the market price is at a discount to the
NAV, the shareholder may pay significantly more or receive significantly less
than the underlying value of the Shares that were bought or sold or the
shareholder may be unable to sell his or her Shares. The securities held by the
Fund may be traded in markets that close at a different time than the Exchange.
Liquidity in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the Exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the Exchange and
the resulting premium or discount to the Shares’ NAV may widen. Additionally, in
stressed market conditions, the market for the Fund’s Shares may become less
liquid in response to deteriorating liquidity in the markets for the Fund’s
underlying portfolio holdings. There are various methods by which investors can
purchase and sell Shares. Investors should consult their financial
intermediaries before purchasing or selling Shares of the Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
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 Gold Miners Index concentrates
in a particular sector or sectors or industry or group of industries. To the
extent that the Fund is concentrated in a particular sector or sectors or
industry or group of industries, the Fund will be subject to the risk that
economic, political or other conditions that have a negative effect on those
sectors and/or industries may negatively impact the Fund to a greater extent
than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
|
|
|
|
|
|
|
|
|
Best
Quarter: |
56.29% |
2Q 2020 |
Worst
Quarter: |
-35.32% |
2Q
2013 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck Gold Miners ETF (return before
taxes) |
-9.56% |
9.77% |
-3.90% |
|
|
VanEck Gold Miners ETF (return after
taxes on distributions) |
-9.81% |
9.63% |
-4.06% |
|
|
VanEck Gold Miners ETF (return after
taxes on distributions and sale of Fund
Shares) |
-5.30% |
7.81% |
-2.84% |
|
|
NYSE Arca Gold Miners Index (reflects
no deduction for fees, expenses or taxes, except withholding
taxes) |
-9.37% |
10.10% |
-3.50% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
|
|
|
|
|
|
|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly
responsible
for the day-to-day management of the Fund’s portfolio:
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|
Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Peter
H. Liao |
Portfolio
Manager |
May
2006 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
|
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|
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
INVESTMENT OBJECTIVE
VanEck®
Green Metals ETF (the
“Fund”) seeks to track as closely as possible, before fees and expenses, the
price and yield performance of the MVIS®
Global
Clean-Tech Metals Index (the “Clean-Tech Metals
Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”).
You may pay other fees, such as brokerage commissions and other fees to
financial intermediaries, which are not reflected in the tables and examples
below.
|
|
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|
|
Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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|
Management
Fee |
0.59 |
% |
|
|
Other
Expenses(a)(b) |
0.00 |
% |
|
|
|
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses(a)(b) |
0.59 |
% |
|
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|
(a) “Other Expenses” are based
on estimated amounts for the current fiscal
year.
(b) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least May 1,
2023.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR
|
EXPENSES |
|
|
1 |
$60 |
|
|
3 |
$189 |
|
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|
|
PORTFOLIO
TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the period from November 9, 2021 (the Fund's commencement of operations) through
December 31, 2021, the Fund’s portfolio turnover rate was 10% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities of Green
Metals Companies. The Clean-Tech Metals Index is a global index that tracks the
performance of Green Metals Companies. “Green Metals Companies” are companies
involved in the production, refining, processing and recycling of green metals.
“Green metals” are metals, including certain rare earth and strategic metals,
used in the applications, products and processes that enable the energy
transition from fossil fuels to cleaner energy sources and technologies. To be
initially eligible for the Clean-Tech Metals Index, companies must generate at
least 50% of their revenues from green metals or have mining projects with the
potential to generate at least 50% of their revenues from green metals when
developed.
The
Clean-Tech Metals Index may include small- and medium-capitalization companies,
foreign and emerging market issuers and A-shares issued by companies trading via
the Shanghai-Hong Kong Stock Connect program and the Shenzhen-Hong Kong Stock
Connect program (together, “Stock Connect”). As of December 31, 2021, the
Clean-Tech Metals Index included 48 securities of companies with a market
capitalization range of between approximately $1.9 billion and $67.1 billion and
a weighted average
market
capitalization of $25.1 billion. These amounts are subject to change. The
Clean-Tech Metals Index is published by MV Index Solutions GmbH (the “Index
Provider” or “MVIS”), which is a wholly owned subsidiary of the Adviser. The
Clean-Tech Metals Index is reconstituted and rebalanced quarterly. The Fund’s
80% investment policy is non-fundamental and may be changed without shareholder
approval upon 60 days’ prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Clean-Tech Metals Index by investing in a
portfolio of securities that generally replicates the Clean-Tech Metals Index.
Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Clean-Tech Metals Index and
does not seek temporary defensive positions that are inconsistent with its
investment objective of seeking to track the Clean-Tech Metals Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Clean-Tech Metals Index concentrates in an industry or group of industries.
As of December 31, 2021, each of the basic materials and the mining industry
sectors represented a significant portion of the Clean-Tech Metals
Index.
PRINCIPAL RISKS OF INVESTING IN THE
FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in “Green” Metals. Investments
in companies involved in the production, refining, processing and recycling of
green metals used to facilitate the energy transition from fossil fuels to
cleaner energy sources and technologies are subject to a variety of risks. Under
certain market conditions, the Fund may underperform as compared to funds that
invest in a broader range of investments. There may be significant differences
in interpretations of what is considered a “green” metal and the definition used
by the Index Provider may differ with those used by other investors, investment
advisers or index providers. In addition, some companies that rely on green
metals may be dependent on government tax incentives and subsidies and on
political support for certain environmental technologies and companies. The
“green” sector may also have challenges such as a limited number of issuers and
limited liquidity in the market. Additionally, there may also be a limited
supply of companies involved in green metals, which may adversely affect the
Fund.
Clean
Energy Companies Risk. Companies
involved with green metals may be dependent upon renewable and alternative
energy companies. Renewable and alternative energy companies can be
significantly affected by the following factors: obsolescence of existing
technology, short product cycles, legislation resulting in more strict
government regulations and enforcement policies, fluctuations in energy prices
and supply and demand of alternative energy fuels, energy conservation, the
success of exploration projects, the supply of and demand for oil and gas, world
events and economic conditions. In addition, shares of clean energy companies
have been significantly more volatile than shares of companies operating in
other more established industries and the securities included in the Fund may be
subject to sharp price declines. This industry is relatively nascent and
under-researched in comparison to more established and mature sectors, and
should therefore be regarded as having greater investment risk.
Risks
of Regulatory Action and Changes in Governments.
The producing, refining and recycling of rare earth/strategic metals may be
significantly affected by regulatory action and changes in governments. For
example, China, which produces more than 90% of the world’s rare earth supplies,
has implemented a reduction in its export quota of rare earth/strategic metals
and has considered a complete ban on the export of such metals. Such moves could
have a significant impact on industries around the globe and on the values of
the businesses in which the Fund expects to invest. Moreover, while it is
expected that China will consume most, if not all, of the rare earth/strategic
metals produced within the country to support its growing economy, China has
shown a willingness to flood the market for rare earth/strategic metals as it
did in the late 1990s, thereby causing many operations in other countries to
shut down.
Risk
of Investing in Rare Earth and Strategic Metals Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of rare earth/strategic metals companies, as
certain rare earth/strategic metals may be considered green metals. Rare
earth/strategic metals are industrial metals that are typically mined as
by-products or secondary metals in operations focused on precious metals and
base metals. Compared to base metals, they have more specialized uses and are
often more difficult to extract. Rare earth metals (or rare earth elements), a
subset of strategic metals, are a collection of chemical elements that are
crucial to many of the world’s most advanced technologies. Consequently, the
demand for strategic metals has strained supply, which has the potential to
result in a shortage of such materials which could adversely affect the
companies in the Fund’s portfolio. Companies involved in the various activities
that are related to the producing, refining and recycling of rare
earth/strategic metals tend to be small-, medium- and micro-capitalization
companies with volatile share prices, and are highly dependent on the price of
rare earth/strategic metals, which may fluctuate substantially over short
periods of time. The value of such companies may be significantly affected by
events relating to international, national and local political and
economic
developments, energy conservation efforts, the success of exploration projects,
commodity prices, tax and other government regulations, depletion of resources,
and mandated expenditures for safety and pollution control devices. The
producing, refining and recycling of rare earth/strategic metals can be capital
intensive and, if companies involved in such activities are not managed well,
the share prices of such companies could decline even as prices for the
underlying rare earth/strategic metals are rising. In addition, companies
involved in the various activities that are related to the producing, refining
and recycling of rare earth/strategic metals may be at risk for environmental
damage claims.
Special
Risk Considerations of Investing in Asian Issuers.
Investments in securities of Asian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Certain Asian economies have experienced over-extension of credit,
currency devaluations and restrictions, high unemployment, high inflation,
decreased exports and economic recessions. Economic events in any one Asian
country can have a significant effect on the entire Asian region as well as on
major trading partners outside Asia, and any adverse effect on some or all of
the Asian countries and regions in which the Fund invests. The securities
markets in some Asian economies are relatively underdeveloped and may subject
the Fund to higher action costs or greater uncertainty than investments in more
developed securities markets. Such risks may adversely affect the value of the
Fund’s investments.
Special
Risk Considerations of Investing in Australian Issuers.
Investments in securities of Australian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Australian economy is heavily dependent on exports from the
agriculture and mining industries. This makes the Australian economy susceptible
to fluctuations in the commodity markets. Australia is also dependent on trading
with key trading partners.
Special
Risk Considerations of Investing in European Issuers.
Investments in securities of European issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Economic and Monetary Union (“EMU”) of the European Union (“EU”)
requires member countries to comply with restrictions on inflation rates,
deficits, interest rates, debt levels and fiscal and monetary controls, each of
which may significantly affect every country in Europe. Decreasing imports or
exports, changes in governmental or EU regulations on trade, changes in the
exchange rate of the euro, the default or threat of default by an EU member
country on its sovereign debt, and/or an economic recession in an EU member
country may have a significant adverse effect on the economies of other EU
countries and on major trading partners outside Europe. The European financial
markets have previously experienced, and may continue to experience, volatility
and have been adversely affected, and may in the future be affected, by concerns
about economic downturns, credit rating downgrades, rising government debt
levels and possible default on or restructuring of government debt in several
European countries. These events have adversely affected, and may in the future
affect, the value and exchange rate of the euro and may continue to
significantly affect the economies of every country in Europe, including EU
member countries that do not use the euro and non-EU member countries. In a
referendum held on June 23, 2016, voters in the United Kingdom (“UK”) voted to
leave the EU, creating economic and political uncertainty in its wake. On
January 31, 2020, the UK officially withdrew from the EU and the UK entered a
transition period which ended on December 31, 2020. On December 30, 2020, the EU
and UK signed the EU-UK Trade and Cooperation Agreement (“TCA”), an agreement on
the terms governing certain aspects of the EU's and the UK's relationship
following the end of the transition period. Notwithstanding the TCA, following
the transition period, there is likely to be considerable uncertainty as to the
UK's post-transition framework.
Special
Risk Considerations of Investing in Chinese Issuers.
Investments in securities of Chinese issuers, including issuers located outside
of China that generate significant revenues from China, involve risks and
special considerations not typically associated with investments in the U.S.
securities markets. These risks include, among others, (i) more frequent (and
potentially widespread) trading suspensions and government interventions with
respect to Chinese issuers resulting in lack of liquidity and in price
volatility, (ii) currency revaluations and other currency exchange rate
fluctuations or blockage, (iii) the nature and extent of intervention by the
Chinese government in the Chinese securities markets, whether such intervention
will continue and the impact of such intervention or its discontinuation, (iv)
the risk of nationalization or expropriation of assets, (v) the risk that the
Chinese government may decide not to continue to support economic reform
programs, (vi) limitations on the use of brokers, (vii) higher rates of
inflation, (viii) greater political, economic and social uncertainty, (ix)
market volatility caused by any potential regional or territorial conflicts or
natural disasters and (x) the risk of increased trade tariffs, embargoes,
sanctions, investment restrictions and other trade limitations. Certain
securities are, or may in future become restricted, and the Fund may be forced
to sell such restricted securities and incur a loss as a result. In addition,
the economy of China differs, often unfavorably, from the U.S. economy in such
respects as structure, general development, government involvement, wealth
distribution, rate of inflation, growth rate, interest rates, allocation of
resources and capital reinvestment, among others. The Chinese central government
has historically exercised substantial control over virtually every sector of
the Chinese economy through administrative regulation and/or state ownership and
actions of the Chinese central and local government authorities continue to have
a substantial effect on economic conditions in China. In addition, previously
the Chinese government has from time to time taken actions that influence the
prices at which certain goods may be sold, encourage companies to invest or
concentrate in particular industries, induce mergers between companies in
certain industries and induce private companies to publicly offer their
securities to increase or continue the rate of economic growth, control the rate
of inflation or otherwise regulate economic expansion. The Chinese government
may do so in the future as well, potentially having a significant adverse effect
on economic conditions in China.
Risks
of Investing through Stock Connect. The
Fund may invest in A-shares listed and traded on the Shanghai Stock Exchange and
the Shenzhen Stock Exchange through Stock Connect, or on such other stock
exchanges in China which participate in Stock Connect from time to time or in
the future. Trading through Stock Connect is subject to a number of restrictions
that may affect the Fund’s investments and returns. For example, trading through
Stock Connect is subject to daily quotas that limit the maximum daily net
purchases on any particular day, which may restrict or preclude the Fund’s
ability to invest in Stock Connect A-shares. In addition, investments made
through Stock Connect are subject to trading, clearance and settlement
procedures that are relatively untested in the People’s Republic of China
(“PRC”), which could pose risks to the Fund. Furthermore, securities purchased
via Stock Connect will be held via a book entry omnibus account in the name of
Hong Kong Securities Clearing Company Limited (“HKSCC”), Hong Kong’s clearing
entity, at the China Securities Depository and Clearing Corporation (“CSDCC”).
The Fund’s ownership interest in Stock Connect securities will not be reflected
directly in book entry with CSDCC and will instead only be reflected on the
books of its Hong Kong sub-custodian. The Fund may therefore depend on HKSCC’s
ability or willingness as record-holder of Stock Connect securities to enforce
the Fund’s shareholder rights. PRC law did not historically recognize the
concept of beneficial ownership; while PRC regulations and the Hong Kong Stock
Exchange have issued clarifications and guidance supporting the concept of
beneficial ownership via Stock Connect, the interpretation of beneficial
ownership in the PRC by regulators and courts may continue to evolve. Moreover,
Stock Connect A-shares generally may not be sold, purchased or otherwise
transferred other than through Stock Connect in accordance with applicable
rules.
A
primary feature of Stock Connect is the application of the home market’s laws
and rules applicable to investors in A-shares. Therefore, the Fund’s investments
in Stock Connect A-shares are generally subject to PRC securities regulations
and listing rules, among other restrictions. The Fund will not benefit from
access to Hong Kong investor compensation funds, which are set up to protect
against defaults of trades, when investing through Stock Connect. Stock Connect
is only available on days when markets in both the PRC and Hong Kong are open,
which may limit the Fund’s ability to trade when it would be otherwise
attractive to do so. Since the inception of Stock Connect, foreign investors
(including the Fund) investing in A-shares through Stock Connect have been
temporarily exempt from the PRC corporate income tax and value-added tax on the
gains on disposal of such A-shares. Dividends are subject to PRC corporate
income tax on a withholding basis at 10%, unless reduced under a double tax
treaty with China upon application to and obtaining approval from the competent
tax authority. Additionally, uncertainties in permanent PRC tax rules governing
taxation of income and gains from investments in Stock Connect A-shares could
result in unexpected tax liabilities for the Fund.
The
Stock Connect program is a relatively new program and may be subject to further
interpretation and guidance. There can be no assurance as to the program’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns. In addition, the
application and interpretation of the laws and regulations of Hong Kong and the
PRC, and the rules, policies or guidelines published or applied by relevant
regulators and exchanges in respect of the Stock Connect program are uncertain,
and they may have a detrimental effect on the Fund’s investments and
returns.
Risk
of Investing in Foreign Securities.
Investments in the securities of foreign issuers involve risks beyond those
associated with investments in U.S. securities. These additional risks include
greater market volatility, the availability of less reliable financial
information, higher transactional and custody costs, taxation by foreign
governments, decreased market liquidity and political instability. Because
certain foreign securities markets may be limited in size, the activity of large
traders may have an undue influence on the prices of securities that trade in
such markets. The Fund invests in securities of issuers located in countries
whose economies are heavily dependent upon trading with key partners. Any
reduction in this trading may have an adverse impact on the Fund’s
investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign
currencies.
Risk
of Investing in the Basic Materials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the basic materials sector. Companies
engaged in the production and distribution of basic materials may be adversely
affected by changes in world events, political and economic conditions, energy
conservation, environmental policies, commodity price volatility, changes in
exchange rates, imposition of import controls, increased competition, depletion
of resources and labor relations.
Risk
of Investing in the Mining Industry.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the mining industry. Investments in mining
companies may be speculative. Competitive pressures may have a significant
effect on the financial condition of such companies. Mining companies are highly
dependent on the price of the underlying metal or element. These prices may
fluctuate substantially over short periods of time so the Fund’s Share price may
be more volatile than other types of investments. In particular, a drop in the
price of rare earth/strategic metals would particularly adversely affect the
profitability of small- and medium-capitalization mining companies and their
ability to secure financing. Furthermore, companies that are only in the
exploration stage are typically unable to adopt specific strategies for
controlling the impact of such price changes. In addition, many early stage
miners operate at a loss and are dependent on securing equity and/or debt
financing, which might be more difficult to secure for an early stage mining
company than for a more established counterpart.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Cash Transactions. Unlike
other exchange-traded funds (“ETFs”), the Fund expects to effect its creations
and redemptions at least partially for cash, rather than wholly for in-kind
securities. Therefore, it may be required to sell portfolio securities and
subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Clean-Tech Metals Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Clean-Tech Metals 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
Clean-Tech Metals Index, or (to the extent the Fund effects creations and
redemptions for cash) raising cash to meet redemptions or deploying cash in
connection with newly created Creation Units, which are not factored into the
return of the Clean-Tech Metals Index. Transaction costs, including brokerage
costs, will decrease the Fund’s net asset value (“NAV”) to the extent not offset
by the transaction fee payable by an Authorized Participant (“AP”). Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Clean-Tech Metals Index. Errors in the Clean-Tech Metals Index data, the
Clean-Tech Metals Index computations and/or the construction of the Clean-Tech
Metals Index in accordance with its methodology 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.
Shareholders should understand that any gains from the Index provider’s errors
will be kept by the Fund and its shareholders and any losses or costs resulting
from the Index provider’s errors will be borne by the Fund and its shareholders.
When the Clean-Tech Metals Index is rebalanced and the Fund in turn rebalances
its portfolio to attempt to increase the correlation between the Fund’s
portfolio and the Clean-Tech Metals Index, any transaction costs and market
exposure arising from such portfolio rebalancing will be borne directly by the
Fund and its shareholders. The Fund may not be fully invested at times as a
result
of cash flows into the Fund (if the Fund effects creations and redemptions for
cash) or reserves of cash held by the Fund to meet redemptions or pay expenses.
Apart from scheduled rebalances, the Index provider or its agents may carry out
additional ad hoc rebalances to the Clean-Tech Metals Index. Therefore, errors
and additional ad hoc rebalances carried out by the Index provider or its agents
to the Clean-Tech Metals Index may increase the costs to and the tracking error
risk of the Fund. The Fund may not be fully invested at times, either as a
result of cash flows into the Fund (if the Fund effects creations and
redemptions for cash) or reserves of cash held by the Fund to pay expenses or
meet redemptions. In addition, the Fund may not be able to invest in certain
securities included in the Clean-Tech Metals Index, or invest in them in the
exact proportions in which they are represented in the Clean-Tech Metals Index.
The Fund’s performance may also deviate from the return of the Clean-Tech Metals
Index due to legal restrictions or limitations imposed by the governments of
certain countries, certain listing standards of the Fund’s listing exchange (the
“Exchange”), a lack of liquidity on stock exchanges in which such securities
trade, potential adverse tax consequences or other regulatory reasons or legal
restrictions or limitations (such as diversification requirements). The Fund may
value certain of its investments, underlying securities, underlying currencies
and/or other assets based on fair value prices. To the extent the Fund
calculates its NAV based on fair value prices and the value of the Index is
based on securities’ closing prices on foreign markets (i.e.,
the value of the Clean-Tech Metals Index is not based on fair value prices), the
Fund’s ability to track the Clean-Tech Metals Index may be adversely affected.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. In addition, any issues the Fund encounters with regard
to currency convertibility (including the cost of borrowing funds, if any) and
repatriation may also increase the index tracking risk. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Clean-Tech Metals Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Index. Changes to the composition of the Clean-Tech Metals Index in
connection with a rebalancing or reconstitution of the Clean-Tech Metals Index
may cause the Fund to experience increased volatility, during which time the
Fund’s index tracking risk may be heightened.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Clean-Tech Metals Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Clean-Tech Metals Index provider to
postpone a scheduled rebalance or reconstitution, which could cause the
Clean-Tech Metals Index to vary from its normal or expected composition.
Therefore, the Fund’s performance could be lower than funds that may actively
shift their portfolio assets to take advantage of market opportunities or to
lessen the impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but
after the applicable market closing, fixing or settlement times, bid-ask spreads
on the Exchange and the resulting premium or discount to the Shares’ NAV may
widen. Additionally, in stressed market conditions, the market for the Fund’s
Shares may become less liquid in response to deteriorating liquidity in the
markets for the Fund’s underlying portfolio holdings. There are various methods
by which investors can purchase and sell Shares. Investors should consult their
financial intermediaries before purchasing or selling Shares of the
Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
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 Clean-Tech Metals Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The Fund commenced operations on November 9,
2021 and therefore does not have a performance history for a full calendar
year. The Fund’s financial performance for the Fund’s first
fiscal period is included in the “Financial Highlights” section of the
Prospectus. Visit www.vaneck.com
for current performance figures.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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Peter
H. Liao |
Portfolio
Manager |
November
2021 |
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Guo
Hua (Jason) Jin |
Portfolio
Manager |
November
2021 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
JUNIOR GOLD MINERS ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Junior Gold Miners ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS®
Global Junior Gold Miners Index (the “Junior Gold Miners
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
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Other
Expenses |
0.02 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.52 |
% |
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Fee
Waivers and Expense Reimbursement(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.52 |
% |
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(a) 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, taxes and
extraordinary expenses) from exceeding 0.56% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
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YEAR |
EXPENSES |
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1 |
$53 |
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3 |
$167 |
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5 |
$291 |
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10 |
$653 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
24% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in securities that comprise the Fund’s benchmark
index. The Fund will normally invest at least 80% of its total assets in
companies that are involved in the gold mining industry (the “80% policy”). To
be initially eligible for the Junior Gold Miners Index, companies must generate
at least 50% of their revenues from gold and/or silver
mining/royalties/streaming or have mining projects with the potential to
generate at least 50% of their revenues from gold and/or
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Junior Gold Miners ETF.
silver
when developed. Such companies may include small- and medium-capitalization
companies and foreign issuers. As of December 31, 2021, the Junior Gold Miners
Index included 99 securities of companies with a market capitalization range of
between approximately $97.6 million and $6.3 billion and a weighted average
market capitalization of 2.5 billion. These amounts are subject to change. The
Fund’s 80% policy is non-fundamental and may be changed without shareholder
approval upon 60 days’ prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Junior Gold Miners Index by investing in a
portfolio of securities that generally replicates the Junior Gold Miners Index.
Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Junior Gold Miners Index
and does not seek temporary defensive positions that are inconsistent with its
investment objective of seeking to replicate the Junior Gold Miners Index. As of
December 31, 2021, approximately 86.87% of the Junior Gold Miners Index was
comprised of securities of gold mining companies.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Junior Gold Miners Index concentrates in an industry or group of industries.
As of December 31, 2021, each of the gold mining, silver mining industries and
basic materials sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Gold and Silver Mining Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of gold and silver mining companies.
Investments related to gold and silver are considered speculative and are
affected by a variety of factors. Competitive pressures may have a significant
effect on the financial condition of gold and silver mining companies. Also,
gold and silver mining companies are highly dependent on the price of gold
bullion and silver, respectively, and may be adversely affected by a variety of
worldwide economic, financial and political factors. The price of gold and
silver may fluctuate substantially over short periods of time so the Fund’s
Share price may be more volatile than other types of investments. Fluctuation in
the prices of gold and silver may be due to a number of factors, including
changes in inflation, changes in currency exchange rates and changes in
industrial and commercial demand for metals (including fabricator demand).
Additionally, increased environmental or labor costs may depress the value of
metal investments.
In
particular, a drop in the price of gold and/or silver bullion would particularly
adversely affect the profitability of small- and medium-capitalization mining
companies and their ability to secure financing. Furthermore, companies that are
only in the exploration stage are typically unable to adopt specific strategies
for controlling the impact of the price of gold or silver. A significant number
of the companies in the Junior Gold Miners Index may be early stage mining
companies that are in the exploration stage only or that hold properties that
might not ultimately produce gold or silver. The exploration and development of
mineral deposits involve significant financial risks over a significant period
of time which even a combination of careful evaluation, experience and knowledge
may not eliminate. Few properties which are explored are ultimately developed
into producing mines. Major expenditures may be required to establish reserves
by drilling and to construct mining and processing facilities at a site. In
addition, many early stage miners operate at a loss and are dependent on
securing equity and/or debt financing, which might be more difficult to secure
for an early stage mining company than for a more established
counterpart.
Risk
of Investing in the Basic Materials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the basic materials sector. Companies
engaged in the production and distribution of basic materials may be adversely
affected by changes in world events, political and economic conditions, energy
conservation, environmental policies, commodity price volatility, changes in
exchange rates, imposition of import controls, increased competition, depletion
of resources and labor relations.
Special
Risk Considerations of Investing in Australian Issuers. Investments
in securities of Australian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Australian economy is heavily dependent on exports from the
agriculture and mining industries. This makes the Australian economy susceptible
to fluctuations in the commodity markets. Australia is also dependent on trading
with key trading partners.
Special
Risk Considerations of Investing in Canadian Issuers.
Investments in securities of Canadian issuers, including issuers located outside
of Canada that generate significant revenue from Canada, involve risks and
special considerations not typically associated with investments in the U.S.
securities markets. The Canadian economy is very dependent on the demand for,
and supply and price of, natural resources. The Canadian market is relatively
concentrated in issuers involved in the production and distribution of natural
resources. There is a risk that any changes in natural resources sectors could
have an adverse impact on the Canadian economy. Additionally, the Canadian
economy is heavily dependent on relationships with
certain
key trading partners including the United States, countries in the European
Union and China. Because the United States is Canada’s largest trading partner
and foreign investor, the Canadian economy is dependent on and may be
significantly affected by the U.S. economy. Reduction in spending on Canadian
products and services or changes in the U.S. economy may adversely impact the
Canadian economy. Trade agreements may further increase Canada’s dependency on
the U.S. economy, and uncertainty as to future trade agreements may cause a
decline in the value of the Fund’s Shares. Past periodic demands by the Province
of Quebec for sovereignty have significantly affected equity valuations and
foreign currency movements in the Canadian market and such demands may have this
effect in the future. In addition, certain sectors of Canada’s economy may be
subject to foreign ownership limitations.This
may negatively impact the Fund’s ability to invest in Canadian issuers and to
track the Junior Gold Miners Index.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Junior Gold Miners Index, may
negatively affect the Fund’s ability to replicate the performance of the Junior
Gold Miners Index. The issuers of depositary receipts may discontinue issuing
new depositary receipts and withdraw existing depositary receipts at any time,
which may result in costs and delays in the distribution of the underlying
assets to the Fund and may negatively impact the Fund’s performance and the
Fund’s ability to replicate/track the performance of its Index.
Risk
of Investing in Micro-Capitalization Companies. Micro-capitalization
companies are subject to substantially greater risks of loss and price
fluctuations because their earnings and revenues tend to be less predictable
(and some companies may be experiencing significant losses), and their share
prices tend to be more volatile and their markets less liquid than companies
with larger market capitalizations. The shares of micro-capitalization companies
tend to trade less frequently than those of larger, more established companies,
which can adversely affect the pricing of these securities and the future
ability to sell those securities.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated
higher average returns than fixed income securities, equity securities have
generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Junior Gold Miners Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Junior Gold Miners 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 Junior
Gold Miners Index, or (to the extent the Fund effects creations and redemptions
for cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units, which are not factored into the return of the
Junior Gold Miners Index. Transaction costs, including brokerage costs, will
decrease the Fund’s net asset value (“NAV”) to the extent not offset by the
transaction fee payable by an Authorized Participant (“AP”). Market disruptions
and regulatory restrictions could have an adverse effect on the Fund’s ability
to adjust its exposure to the required levels in order to track the Junior Gold
Miners Index. Errors in the Junior Gold Miners Index data, the Junior Gold
Miners Index computations and/or the construction of the Junior Gold Miners
Index in accordance with its methodology may occur from time to time and may not
be identified and corrected by the Junior Gold Miners Index provider for a
period of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Junior Gold
Miners Index provider's errors will be kept by the Fund and its shareholders and
any losses or costs resulting from the Junior Gold Miners Index provider's
errors will be borne by the Fund and its shareholders. When the Junior Gold
Miners Index is rebalanced and the Fund in turn rebalances its portfolio to
attempt to increase the correlation between the Fund’s portfolio and the Junior
Gold Miners Index, any transaction costs and market exposure arising from such
portfolio rebalancing will be borne directly by the Fund and its shareholders.
The Fund may not be fully invested at times as a result of cash flows into the
Fund (if the Fund effects creations and redemptions for cash) or reserves of
cash held by the Fund to meet redemptions or pay expenses. Apart from scheduled
rebalances, the Junior Gold Miners Index provider or its agents may carry out
additional ad hoc rebalances to the Junior Gold Miners Index. Therefore, errors
and additional ad hoc rebalances carried out by the Junior Gold Miners Index
provider or its agents to the Junior Gold Miners Index may increase the costs to
and the tracking error risk of the Fund. In addition, the Fund may not be able
to invest in certain securities included in the Junior Gold Miners Index, or
invest in them in the exact proportions in which they are represented in the
Junior Gold Miners Index. The Fund’s performance may also deviate from the
return of the Junior Gold Miners Index due to legal restrictions or limitations
imposed by the governments of certain countries,
certain
listing standards of the Fund’s listing exchange (the “Exchange”), a lack of
liquidity on stock exchanges in which such securities trade, potential adverse
tax consequences or other regulatory reasons or legal restrictions or
limitations (such as diversification requirements). The Fund may value certain
of its investments, underlying securities, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its NAV
based on fair value prices and the value of the Junior Gold Miners Index is
based on securities’ closing prices on local foreign markets (i.e.,
the value of the Junior Gold Miners Index is not based on fair value prices),
the Fund’s ability to track the Junior Gold Miners Index may be adversely
affected. In addition, any issues the Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the index tracking risk. When markets are volatile, the
ability to sell securities at fair value prices may be adversely impacted and
may result in additional trading costs and/or increase the index tracking risk.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Junior Gold Miners Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Junior Gold Miners Index. Changes to the composition of the Junior Gold
Miners Index in connection with a rebalancing or reconstitution of the Junior
Gold Miners Index may cause the Fund to experience increased volatility, during
which time the Fund’s index tracking risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide
bid/
ask
spreads and extended trade settlement periods in times of market stress because
market makers and APs may step away from making a market in the Shares and in
executing creation and redemption orders, which could cause a material deviation
in the Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Junior Gold Miners Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Junior Gold Miners Index provider to
postpone a scheduled rebalance or reconstitution, which could cause the Junior
Gold Miners Index to vary from its normal or expected composition. Therefore,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
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 Junior Gold Miners Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
Tax
Reform Legislation.
A provision in the 2017 tax reform legislation generally required U.S.
shareholders, such as the Fund, to recognize on a deemed basis their pro rata
shares of the accumulated undistributed earnings of any foreign corporations in
which they hold a 10 percent-or-greater interest. The Fund is monitoring the
effects of this provision and relevant regulatory guidance on its minimum
distribution and qualifying income requirements.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
72.29% |
2Q 2020 |
Worst
Quarter: |
-45.36% |
2Q
2013 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
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VanEck Junior Gold Miners ETF (return
before taxes) |
-21.44% |
6.61% |
-6.79% |
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VanEck Junior Gold Miners ETF (return
after taxes on distributions) |
-21.86% |
6.36% |
-7.25% |
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VanEck Junior Gold Miners ETF (return
after taxes on distributions and sale of Fund
Shares) |
-12.55% |
5.15% |
-4.85% |
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MVIS Global Junior Gold Miners Index
(reflects no deduction for fees, expenses or taxes, except withholding
taxes) |
-20.99% |
6.74% |
-6.46% |
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S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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Peter
H. Liao |
Portfolio
Manager |
November
2009 |
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Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
LOW CARBON ENERGY ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Low Carbon Energy ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS Global Low Carbon Energy
Index (the “Low Carbon Energy Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
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Other
Expenses |
0.05 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.55 |
% |
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Fee
Waivers and Expense Reimbursement(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.55 |
% |
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(a) 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, taxes and
extraordinary expenses) from exceeding 0.62% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
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YEAR |
EXPENSES |
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1 |
$56 |
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3 |
$176 |
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5 |
$307 |
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10 |
$689 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
77% of the average value of its
portfolio.
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Low
Carbon Energy ETF.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in stocks of low carbon
energy companies. Such companies may include small- and medium-capitalization
companies and foreign issuers. “Low carbon energy companies” refers to companies
primarily engaged in renewable energy, including renewable energy production,
alternative fuels, electric vehicles, and related technologies and building
materials (such as advanced batteries). Renewable energy refers to the
generation of power through environmentally friendly sources that can replace or
supplement traditional fossil-fuel sources and that may reduce the global carbon
footprint. It includes power derived principally from bio-fuels (such as
ethanol), wind, solar, hydro, hydrogen, and geothermal sources and also includes
lithium-ion batteries, fuel cells, and the various technologies that support the
production, use and storage of these sources. As of December 31, 2021, the Low
Carbon Energy Index included 70 securities of companies with a market
capitalization range of between approximately $1.6 billion and $1,061.3 billion
and a weighted average market capitalization of $131.6 billion. These amounts
are subject to change. The Fund’s 80% investment policy is non-fundamental and
may be changed without shareholder approval upon 60 days’ prior written notice
to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Low Carbon Energy Index by investing in a
portfolio of securities that generally replicates the Low Carbon Energy Index.
Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Low Carbon Energy Index and
does not seek temporary defensive positions that are inconsistent with its
investment objective of seeking to replicate the Low Carbon Energy Index. The
Fund normally invests at least 80% of its total assets in securities that
comprise the Low Carbon Energy Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Low Carbon Energy Index concentrates in an industry or group of industries.
As of December 31, 2021, each of the consumer discretionary, industrials,
information technology and utilities sectors represented a significant portion
of the Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Low Carbon Energy Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of low carbon (i.e.,
renewable) energy companies. Low carbon energy refers to the generation of power
through environmentally friendly sources that can replace or supplement
traditional fossil-fuel sources and that may reduce the global carbon footprint.
It includes power derived principally from bio fuels (such as ethanol), wind,
solar, hydro and geothermal sources and also includes the various technologies
that support the production, use and storage of these sources.
Renewable
energy companies may be significantly affected by the competition from new and
existing market entrants, obsolescence of technology, short product cycles,
production spending, varying prices and profits, commodity price volatility,
changes in exchange rates, imposition of import controls, depletion of
resources, seasonal weather conditions, technological developments and general
economic conditions, market sentiment, fluctuations in energy prices and supply
and demand of renewable energy fuels, fluctuations in the price of oil and gas,
energy conservation efforts, the success of exploration projects, tax and other
government regulations (such as incentives and subsidies) and international
political events. Additionally, adverse weather conditions may cause
fluctuations in renewable energy generation and adversely affect the cash flows
associated with these assets.
Further,
renewable energy companies may be subject to risks associated with hazardous
materials and can be significantly and adversely affected by legislation
resulting in more strict government regulations and enforcement policies and
specific expenditures for environmental cleanup efforts. There are also risks
associated with a failure to enforce environmental law. If the government
reduces environmental regulations or their enforcement, companies that produce
products designed to provide a clean environment are less likely to prosper.
Renewable energy companies may be more volatile than companies operating in more
established industries. Certain valuation methods used to value renewable energy
companies have not been in widespread use for a significant period of time. As a
result, the use of these valuation methods may serve to further increase the
volatility of certain renewable and transitional energy company share prices. If
government subsidies and incentives for renewable energy sources are reduced or
eliminated, the demand for renewable energy may decline and cause corresponding
declines in the revenues and profits of renewable energy companies. In addition,
changes in U.S., European and other governments’ policies towards renewable
energy technology also may have an adverse effect on the Fund’s performance.
Furthermore, the Fund may invest in the shares of companies with a limited
operating history, some of which may never have operated profitably. Investment
in young companies with a short operating history is generally riskier than
investing in companies with a longer operating history. The Fund
will
carry greater risk and may be more volatile than a portfolio composed of
securities issued by companies operating in a wide variety of different or more
established industries.
Special
Risk Considerations of Investing in Asian Issuers.
Investments in securities of Asian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Certain Asian economies have experienced over-extension of credit,
currency devaluations and restrictions, high unemployment, high inflation,
decreased exports and economic recessions. Economic events in any one Asian
country can have a significant effect on the entire Asian region as well as on
major trading partners outside Asia, and any adverse effect on some or all of
the Asian countries and regions in which the Fund invests. The securities
markets in some Asian economies are relatively underdeveloped and may subject
the Fund to higher action costs or greater uncertainty than investments in more
developed securities markets. Such risks may adversely affect the value of the
Fund’s investments.
Special
Risk Considerations of Investing in Chinese Issuers.
Investments in securities of Chinese issuers, including issuers located outside
of China that generate significant revenues from China, involve risks and
special considerations not typically associated with investments in the U.S.
securities markets. These risks include, among others, (i) more frequent (and
potentially widespread) trading suspensions and government interventions with
respect to Chinese issuers resulting in lack of liquidity and in price
volatility, (ii) currency revaluations and other currency exchange rate
fluctuations or blockage, (iii) the nature and extent of intervention by the
Chinese government in the Chinese securities markets, whether such intervention
will continue and the impact of such intervention or its discontinuation, (iv)
the risk of nationalization or expropriation of assets, (v) the risk that the
Chinese government may decide not to continue to support economic reform
programs, (vi) limitations on the use of brokers, (vii) higher rates of
inflation, (viii) greater political, economic and social uncertainty, (ix)
market volatility caused by any potential regional or territorial conflicts or
natural disasters and (x) the risk of increased trade tariffs, embargoes,
sanctions, investment restrictions and other trade limitations. Certain
securities are, or may in future become restricted, and the Fund may be forced
to sell such restricted securities and incur a loss as a result. In addition,
the economy of China differs, often unfavorably, from the U.S. economy in such
respects as structure, general development, government involvement, wealth
distribution, rate of inflation, growth rate, interest rates, allocation of
resources and capital reinvestment, among others. The Chinese central government
has historically exercised substantial control over virtually every sector of
the Chinese economy through administrative regulation and/or state ownership and
actions of the Chinese central and local government authorities continue to have
a substantial effect on economic conditions in China. In addition, previously
the Chinese government has from time to time taken actions that influence the
prices at which certain goods may be sold, encourage companies to invest or
concentrate in particular industries, induce mergers between companies in
certain industries and induce private companies to publicly offer their
securities to increase or continue the rate of economic growth, control the rate
of inflation or otherwise regulate economic expansion. The Chinese government
may do so in the future as well, potentially having a significant adverse effect
on economic conditions in China.
Special
Risk Considerations of Investing in European Issuers.
Investments
in securities of European issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. The
Economic and Monetary Union (“EMU”) of the European Union (“EU”) requires member
countries to comply with restrictions on inflation rates, deficits, interest
rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental or EU regulations on trade, changes in the exchange rate
of the euro, the default or threat of default by an EU member country on its
sovereign debt, and/or an economic recession in an EU member country may have a
significant adverse effect on the economies of EU member countries and on major
trading partners outside Europe. The European financial markets have previously
experienced, and may continue to experience, volatility and have been adversely
affected by concerns about economic downturns, credit rating downgrades, rising
government debt levels and possible default on or restructuring of government
debt in several European countries. These events have adversely affected, and
may in the future affect, the value and exchange rate of the euro and may
continue to significantly affect the economies of every country in Europe,
including EU member countries that do not use the euro and non-EU member
countries. In a referendum held on June 23, 2016, voters in the United Kingdom
(“UK”) voted to leave the EU, creating economic and political uncertainty in its
wake. On January 31, 2020, the UK officially withdrew from the EU and the UK
entered a transition period which ended on December 31, 2020. On December 30,
2020, the EU and UK signed the EU-UK Trade and Cooperation Agreement ("TCA"), an
agreement on the terms governing certain aspects of the EU's and the UK's
relationship following the end of the transition period. Notwithstanding the
TCA, following the transition period, there is likely to be considerable
uncertainty as to the UK's post-transition framework.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than
developed
markets to experience problems with the clearing and settling of trades, as well
as the holding of securities by local banks, agents and depositories. Political
risks may include unstable governments, nationalization, restrictions on foreign
ownership, laws that prevent investors from getting their money out of a country
and legal systems that do not protect property rights as well as the laws of the
United States. Market risks may also include economies that concentrate in only
a few industries, securities issues that are held by only a few investors,
liquidity issues and limited trading capacity in local exchanges and the
possibility that markets or issues may be manipulated by foreign nationals who
have inside information. The frequency, availability and quality of financial
information about investments in emerging markets varies. The Fund has limited
rights and few practical remedies in emerging markets and the ability of U.S.
authorities to bring enforcement actions in emerging markets may be limited, and
the Fund's passive investment approach does not take account of these risks. All
of these factors can make emerging market securities more volatile and
potentially less liquid than securities issued in more developed
markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Low Carbon Energy Index, may
negatively affect the Fund’s ability to replicate the performance of the Low
Carbon Energy Index. The issuers of depositary receipts may discontinue issuing
new depositary receipts and withdraw existing depositary receipts at any time,
which may result in costs and delays in the distribution of the underlying
assets to the Fund and may negatively impact the Fund’s performance and the
Fund’s ability to replicate/track the performance of its Index.
Risk
of Investing in the Utilities Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the utilities sector. Companies in the
utilities sector may be adversely affected by changes in exchange rates,
domestic and international competition, difficulty in raising adequate amounts
of capital and governmental limitation on rates charged to
customers.
Risk
of Investing in the Consumer Discretionary Sector.
The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the consumer discretionary sector. The consumer
discretionary sector comprises companies whose businesses are sensitive to
economic cycles, such as manufacturers of high-end apparel and automobile and
leisure companies. Companies engaged in the consumer discretionary sector are
subject to fluctuations in supply and demand. These companies may also be
adversely affected by changes in consumer spending as a result of world events,
political and economic conditions, commodity price volatility, changes in
exchange rates, imposition of import controls, increased competition, depletion
of resources and labor relations.
Risk
of Investing in the Industrials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the industrials sector. The industrials
sector comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
may be adversely affected by environmental damages, product liability claims and
exchange rates.
Risk
of Investing in the Information Technology Sector.
The Fund will be sensitive to, and its performance will 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.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Cash Transactions. Unlike
other exchange-traded funds (“ETFs”), the Fund expects to effect its creations
and redemptions at least partially for cash, rather than wholly for in-kind
securities. Therefore, it may be required to sell portfolio
securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Low Carbon Energy Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Low Carbon Energy 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 Low
Carbon Energy Index, or (to the extent the Fund effects creations and
redemptions for cash) raising cash to meet redemptions or deploying cash in
connection with newly created Creation Units, which are not factored into the
return of the Low Carbon Energy Index. Transaction costs, including brokerage
costs, will decrease the Fund’s net asset value (“NAV”) to the extent not offset
by the transaction fee payable by an Authorized Participant (“AP”). Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Low Carbon Energy Index. Errors in the Low Carbon Energy Index data, the Low
Carbon Energy Index computations and/or the construction of the Low Carbon
Energy Index in accordance with its methodology may occur from time to time and
may not be identified and corrected by the Low Carbon Energy Index provider for
a period of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Low Carbon
Energy Index provider's errors will be kept by the Fund and its shareholders and
any losses or costs resulting from the Low Carbon Energy Index provider's errors
will be borne by the Fund and its shareholders. When the Low Carbon Energy Index
is rebalanced and the Fund in turn rebalances its portfolio to attempt to
increase the correlation between the Fund’s portfolio and the Low Carbon Energy
Index, any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the Fund and its shareholders. The Fund
may not be fully invested at times as a result of cash flows into the Fund (if
the Fund effects creations and redemptions for cash) or reserves of cash held by
the Fund to meet redemptions or pay expenses. Apart from scheduled rebalances,
the Low Carbon Energy Index provider or its agents may carry out additional ad
hoc rebalances to the Low Carbon Energy Index. Therefore, errors and additional
ad hoc rebalances carried out by the Low Carbon Energy Index provider or its
agents to the Low Carbon Energy Index may increase the costs to and the tracking
error risk of the Fund. The Fund may not be able to be fully invested at times,
either as a result of cash flows into the Fund (if the Fund effects creations
and redemptions for cash) or reserves of cash held by the Fund to pay expenses
or meet redemptions. In addition, the Fund may not be able to invest in certain
securities included in the Low Carbon Energy Index, or invest in them in the
exact proportions in which they are represented in the Low Carbon Energy Index.
The Fund’s performance may also deviate from the return of the Low Carbon Energy
Index due to legal restrictions or limitations imposed by the governments of
certain countries, certain listing standards of the Fund’s listing exchange (the
“Exchange”), a lack of liquidity on stock exchanges in which such securities
trade, potential adverse tax consequences or other regulatory reasons or legal
restrictions or limitations (such as diversification requirements). The Fund may
value certain of its investments, underlying securities, underlying currencies
and/or other assets based on fair value prices. To the extent the Fund
calculates its NAV based on fair value prices and the value of the Low Carbon
Energy Index is based on securities’ closing prices on local foreign markets
(i.e.,
the value of the Low Carbon Energy Index is not based on fair value prices), the
Fund’s ability to track the Low Carbon Energy Index may be adversely affected.
In addition, any issues the Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the index tracking risk. When markets are volatile, the
ability to sell securities at fair value prices may be adversely impacted and
may result in additional trading costs and/or increase the index tracking risk.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Low Carbon Energy Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Low Carbon
Energy
Index. Changes to the composition of the Low Carbon Energy Index in connection
with a rebalancing or reconstitution of the Low Carbon Energy Index may cause
the Fund to experience increased volatility, during which time the Fund’s index
tracking risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Low Carbon Energy Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Low Carbon Energy Index provider to
postpone a scheduled rebalance or reconstitution, which could cause the Low
Carbon Energy Index to vary from its normal or expected composition. Therefore,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
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 Low Carbon Energy Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows shows
how the Fund performed for the calendar years shown. The table below the bar
chart shows the Fund’s average annual returns (before and after taxes).
The bar chart and table provide
an indication of the risks of investing in the Fund by comparing the Fund’s
performance from year to year and by showing how the Fund’s average annual
returns for the one year, five year, ten year and/or since inception periods, as
applicable, compared with the Fund’s benchmark index and a broad
measure of market
performance. Prior to April 26, 2021, the Fund sought to
replicate as closely as possible, before fees and expenses, the price and yield
performance of the Ardour Global IndexSM
(Extra Liquid) (the “Prior Index”). Therefore, performance information prior to
April 26, 2021 reflects the performance of the Fund tracking the Prior Index.
All returns assume reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
50.97% |
4Q 2020 |
Worst
Quarter: |
-20.43% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck Low Carbon Energy ETF (return
before taxes) |
-3.02% |
26.43% |
18.07% |
|
|
VanEck Low Carbon Energy ETF (return
after taxes on distributions) |
-3.08% |
26.29% |
17.81% |
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|
VanEck Low Carbon Energy ETF (return
after taxes on distributions and sale of Fund
Shares) |
-1.67% |
21.92% |
15.40% |
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|
MVIS Global Low Carbon Energy Index
(reflects no deduction for fees, expenses or taxes, except withholding
taxes)* |
-2.18% |
27.23% |
18.13% |
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|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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*Prior to April 26, 2021,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior Index. Therefore, performance
information prior to April 26, 2021 reflects the performance of the Fund seeking
to replicate the Prior Index. Prior to April 26, 2021, index data reflects that
of the Prior Index. From April 26, 2021, the index data reflects that of the
MVIS Global Low Carbon Energy Index.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly
responsible
for the day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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Peter
H. Liao |
Portfolio
Manager |
May
2007 |
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Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
NATURAL RESOURCES ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Natural Resources ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the VanEck®
Natural Resources Index (the “Natural Resources
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.49 |
% |
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Other
Expenses(a)(b) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(b) |
0.49 |
% |
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(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least May 1,
2023.
(b) “Other Expenses” have been
restated to reflect current fees.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
|
|
1 |
$50 |
|
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3 |
$157 |
|
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|
5 |
$274 |
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|
10 |
$616 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
26% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in securities that comprise the Fund’s benchmark
index. The Natural Resources Index is comprised of publicly traded companies
engaged (derive greater than 50% of revenues from applicable sources) in the
production and distribution of commodities and commodity-related products and
services in the following sectors: 1) Agriculture; 2) Alternatives (Water &
Alternative Energy); 3) Base and Industrial Metals; 4) Energy; 5) Forest
Products; and 6) Precious Metals. Such companies may include small- and
medium-capitalization companies and foreign issuers.
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Natural Resources ETF.
As
of December 31, 2021, the Natural Resources Index included 391 securities of
companies with a market capitalization range of between approximately $391.72
million and $259.05 billion and a weighted average market capitalization of
$51.35 billion. These amounts are subject to change. The Fund’s 80% investment
policy is non-fundamental and may be change without shareholder approval upon 60
days’ prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Natural Resources Index by investing in a
portfolio of securities that generally replicates the Natural Resources Index.
Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Natural Resources Index and
does not seek temporary defensive positions that are inconsistent with its
investment objective of seeking to replicate the Natural Resources
Index.
The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Natural Resources Index concentrates in an industry or group of industries.
As of December 31, 2021, each of the basic materials, consumer staples, energy
and industrials sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Natural Resources Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of natural resources companies. Investments in
natural resources and natural resources companies, which include companies
engaged in agriculture, alternatives (e.g.,
water and alternative energy), base and industrial metals, energy, forest
products and precious metals, can be significantly affected by events relating
to these industries, including international political and economic
developments, embargoes, tariffs, inflation, weather and natural disasters,
livestock diseases, limits on exploration, rapid changes in the supply and
demand for natural resources and other factors. The Fund’s portfolio securities
may experience substantial price fluctuations as a result of these factors, and
may move independently of the trends of other operating companies. Companies
engaged in the industries listed above may be adversely affected by changes in
government policies and regulations, technological advances and/or obsolescence,
environmental damage claims, energy conservation efforts, the success of
exploration projects, limitations on the liquidity of certain natural resources
and commodities and competition from new market entrants. Changes in general
economic conditions, including commodity price volatility, changes in exchange
rates, imposition of import controls, rising interest rates, prices of raw
materials and other commodities, depletion of resources and labor relations,
could adversely affect the Fund’s portfolio companies.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Natural Resources Index, may
negatively affect the Fund’s ability to replicate the performance of the Natural
Resources Index. The issuers of depositary receipts may discontinue issuing new
depositary receipts and withdraw existing depositary receipts at any time, which
may result in costs and delays in the distribution of the underlying assets to
the Fund and may negatively impact the Fund’s performance and the Fund’s ability
to replicate/track the performance of its Index.
Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in the Consumer Staples Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the consumer staples sector. The consumer
staples sector comprises companies whose businesses are less sensitive to
economic cycles, such as manufacturers and distributors of food and beverages
and producers of non-durable household goods and personal products. Companies in
the consumer staples sector may be adversely affected by changes in the
worldwide economy, consumer spending, competition, demographics and consumer
preferences, exploration and production spending. Companies in this sector are
also affected by changes in government regulation, world events and economic
conditions.
Risk
of Investing in the Energy Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the energy sector. Companies operating in
the energy sector are subject to risks including, but not limited to, economic
growth, worldwide demand, political instability in the regions that the
companies operate, government regulation stipulating rates charged by utilities,
interest rate sensitivity, oil price volatility, energy conservation,
environmental policies, depletion of resources, the cost of providing the
specific utility services and other factors that they cannot control. In
addition, these companies are at risk of civil liability from accidents
resulting in injury, loss of life or property, pollution or other environmental
damage claims and risk of loss from terrorism and natural disasters. A downturn
in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.
Risk
of Investing in the Industrials Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the industrials sector. The industrials
sector comprises companies who produce capital goods used in construction and
manufacturing, such as companies that make and sell machinery, equipment and
supplies that are used to produce other goods. Companies in the industrials
sector may be adversely affected by changes in government regulation, world
events and economic conditions. In addition, companies in the industrials sector
may be adversely affected by environmental damages, product liability claims and
exchange rates.
Special
Risk Considerations of Investing in Asian Issuers.
Investments in securities of Asian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Certain Asian economies have experienced over-extension of credit,
currency devaluations and restrictions, high unemployment, high inflation,
decreased exports and economic recessions. Economic events in any one Asian
country can have a significant effect on the entire Asian region as well as on
major trading partners outside Asia, and any adverse effect on some or all of
the Asian countries and regions in which the Fund invests. The securities
markets in some Asian economies are relatively underdeveloped and may subject
the Fund to higher action costs or greater uncertainty than investments in more
developed securities markets. Such risks may adversely affect the value of the
Fund’s investments.
Special
Risk Considerations of Investing in European Issuers.
Investments in securities of European issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Economic and Monetary Union (“EMU”) of the European Union (“EU”)
requires member countries to comply with restrictions on inflation rates,
deficits, interest rates, debt levels and fiscal and monetary controls, each of
which may significantly affect every country in Europe. Decreasing imports or
exports, changes in governmental or EU regulations on trade, changes in the
exchange rate of the euro, the default or threat of default by an EU member
country on its sovereign debt, and/or an economic recession in an EU member
country may have a significant adverse effect on the economies of other EU
countries and on major trading partners outside Europe. The European financial
markets have previously experienced, and may continue to experience, volatility
and have been adversely affected, and may in the future be affected, by concerns
about economic downturns, credit rating downgrades, rising government debt
levels and possible default on or restructuring of government debt in several
European countries. These events have adversely affected, and may in the future
affect, the value and exchange rate of the euro and may continue to
significantly affect the economies of every country in Europe, including EU
member countries that do not use the euro and non-EU member countries. In a
referendum held on June 23, 2016, voters in the United Kingdom (“UK”) voted to
leave the EU, creating economic and political uncertainty in its wake. On
January 31, 2020, the UK officially withdrew from the EU and the UK entered a
transition period which ended on December 31, 2020. On December 30, 2020, the EU
and UK signed the EU-UK Trade and Cooperation Agreement (“TCA”), an agreement on
the terms governing certain aspects of the EU's and the UK's relationship
following the end of the transition period. Notwithstanding the TCA, following
the transition period, there is likely to be considerable uncertainty as to the
UK's post-transition framework.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Cash Transactions.
Unlike other exchange-traded funds (“ETFs”), the Fund expects to effect its
creations and redemptions at least partially for cash, rather than wholly for
in-kind securities. Therefore, it may be required to sell portfolio securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Natural Resources Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Natural Resources Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the Natural
Resources Index, or (to the extent the Fund effects creations and redemptions
for cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units, which are not factored into the return of the
Natural Resources Index. Transaction costs, including brokerage costs, will
decrease the Fund’s net asset value (“NAV”) to the extent not offset by the
transaction fee payable by an Authorized Participant (“AP”). Market disruptions
and regulatory restrictions could have an adverse effect on the Fund’s ability
to adjust its exposure to the required levels in order to track the Natural
Resources Index. Errors in the Natural Resources Index data, the Natural
Resources Index computations and/or the construction of the Natural Resources
Index in accordance with its methodology may occur from time to time and may not
be identified and corrected by the Natural Resources Index provider for a period
of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Natural
Resources Index provider's errors will be kept by the Fund and its shareholders
and any losses or costs resulting from the Natural Resources Index provider's
errors will be borne by the Fund and its shareholders. When the Natural
Resources Index is rebalanced and the Fund in turn rebalances its portfolio to
attempt to increase the correlation between the Fund’s portfolio and the Natural
Resources Index, any transaction costs and market exposure arising from such
portfolio rebalancing will be borne directly by the Fund and its shareholders.
The Fund may not be fully invested at times either as a result of cash flows
into the Fund or reserves of cash held by the Fund to meet redemptions or pay
expenses. Apart from scheduled rebalances, the Natural Resources Index provider
or its agents may carry out additional ad hoc rebalances to the Natural
Resources Index. Therefore, errors and additional ad hoc rebalances carried out
by the Natural Resources Index provider or its agents to the Natural Resources
Index may increase the costs to and the tracking error risk of the Fund. In
addition, the Fund may not be able to invest in certain securities included in
the Natural Resources Index, or invest in them in the exact proportions in which
they are represented in the Natural Resources Index. The Fund’s performance may
also deviate from the return of the Natural Resources Index due to legal
restrictions or limitations imposed by the governments of certain countries,
certain listing standards of the Fund’s listing exchange (the “Exchange”), a
lack of liquidity on stock exchanges in which such securities trade, potential
adverse tax consequences or other regulatory reasons or legal restrictions or
limitations (such as diversification requirements). The Fund may value certain
of its investments, underlying securities, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its NAV
based on fair value prices and the value of the Natural Resources Index is based
on securities’ closing prices on local foreign markets (i.e.,
the value of the Natural Resources Index is not based on fair value prices), the
Fund’s ability to track the Natural Resources Index may be adversely affected.
In addition, any issues the Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the index tracking risk. When markets are volatile, the
ability to sell securities at fair value prices may be adversely impacted and
may result in additional trading costs and/or increase the index tracking risk.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Natural Resources Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Natural Resources Index. Changes to the composition of the Natural Resources
Index in connection with a
rebalancing
or reconstitution of the Natural Resources Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Natural Resources Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Natural Resources Index provider to
postpone a scheduled rebalance or reconstitution, which could cause the Natural
Resources Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Natural Resources Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
21.95% |
4Q 2020 |
Worst
Quarter: |
-32.16% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck Natural Resources ETF (return
before taxes) |
25.38% |
10.62% |
5.97% |
|
|
VanEck Natural Resources ETF (return
after taxes on distributions) |
24.82% |
10.10% |
5.41% |
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VanEck Natural Resources ETF (return
after taxes on distributions and sale of Fund
Shares) |
15.54% |
8.44% |
4.68% |
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|
VanEck®
Natural Resources Index (reflects no deduction for fees, expenses or
taxes, except withholding taxes)* |
25.44% |
10.71% |
6.07% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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*Prior to April 11, 2017, the
Natural Resources Index was named the RogersTM – Van Eck Natural Resources
Index. Prior to May 1, 2014, the Natural Resources Index was named the
RogersTM
– Van Eck Hard Assets Producers Index.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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Peter
H. Liao |
Portfolio
Manager |
August
2008 |
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|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Oil Refiners ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS®
Global Oil Refiners Index (the “Oil Refiners
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
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Other
Expenses |
0.52 |
% |
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|
Total
Annual Fund Operating Expenses(a) |
1.02 |
% |
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Fee
Waivers and Expense Reimbursement(a) |
-0.43 |
% |
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|
Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.59 |
% |
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(a) 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, taxes and
extraordinary expenses) from exceeding 0.59% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
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YEAR |
EXPENSES |
|
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1 |
$60 |
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3 |
$282 |
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5 |
$521 |
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10 |
$1,209 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
18% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in securities that comprise the Fund’s benchmark
index. The Oil Refiners Index includes equity securities and depositary receipts
of companies in the global oil refining segment. To be initially eligible for
the Oil Refiners Index, companies must generate at least 50% of their revenues
from crude oil refining. Products of these
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Oil Refiners ETF.
companies
may include gasoline, diesel, jet fuel, fuel oil, naphtha, and other
petrochemicals. Companies which operate in the marketing and distribution of
these products may be included in the Oil Refiners Index if refining is
performed in company-owned refineries. Such companies may include
medium-capitalization companies and foreign and emerging market issuers. As of
December 31, 2021, the Oil Refiners Index included 25 securities of companies
with a market capitalization range of between approximately $1.3 billion and
$202.8 billion and a weighted average market capitalization of $32.1 billion.
These amounts are subject to change. The Fund’s 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Oil Refiners Index by investing in a portfolio
of securities that generally replicates the Oil Refiners Index. Unlike many
investment companies that try to “beat” the performance of a benchmark index,
the Fund does not try to “beat” the Oil Refiners Index and does not seek
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Oil Refiners Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Oil Refiners Index concentrates in an industry or group of industries. As of
December 31, 2021, the energy sector represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Oil Refining Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of oil refining companies. The profitability of
oil refining companies is related to supply and demand of all sources of energy.
The price of energy, the earnings of oil refining companies, and the value of
such companies’ securities are subject to significant volatility. Additionally,
the price of oil may experience significant volatility, which may materially
impact oil refining companies. Such companies are also subject to risks of
natural declines in the production of oil and natural gas fields (which utilize
their gathering and processing facilities as a way to market their production),
prolonged declines in the price of natural gas or crude oil (which curtails
drilling activity and, therefore, production) and declines in the prices of
natural gas liquids and refined petroleum products (which cause lower processing
margins). Changes in commodity prices, exploration and production spending,
interest rates and exchange rates, government regulation, the imposition of
import controls, world events, negative perception, depletion of resources,
development of alternative energy sources, technological developments, labor
relations and general economic conditions, as well as market, economic and
political risks of the countries where oil refining companies are located or do
business, fluctuations caused by events relating to international politics,
including political instability, expropriation, social unrest and acts of war,
acts of terrorism, economic sanctions, energy conservation, the success of
exploration projects and tax and other governmental regulatory policies. Changes
to U.S. trading policies could cause friction with certain oil-producing
countries and between the governments of the United States and other major
exporters of oil to the United States.
Oil
refining companies are also subject to risks related to environmental damage,
injury to persons and loss of life or the destruction of property, any of which
could expose such companies to, among other things, the risk of litigation and
clean-up or other remedial costs. Additionally, oil refining companies are
vulnerable to disruptions in operations, including those due to weather-related
events such as hurricanes and transportation-related disruptions that may affect
the flow of oil to the oil refining companies. Oil refining companies operate in
a highly competitive and cyclical industry, with intense price competition. The
operations of oil refineries are subject to stringent and complex federal, state
and local environmental laws and regulations. New and more stringent
environmental and health and safety laws, regulations and permit requirements or
stricter interpretations of current laws or regulations could impose substantial
additional costs on companies in which the Fund invests. On the other hand, even
regulatory changes such as the implementation of policies with less stringent
environmental protection standards and those geared away from sustainable energy
development could lead to fluctuations in supply, demand and prices of oil and
gas. Moreover, failure to comply with any such requirements could have a
material adverse effect on a company, and there can be no assurance that
companies will at all times comply with all applicable environmental laws,
regulations and permit requirements. A significant portion of an oil refining
company’s revenues may depend on a relatively small number of customers,
including governmental entities and utilities.
Special
Risk Considerations of Investing in Asian Issuers.
Investments
in securities of Asian issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. Certain
Asian economies have experienced over-extension of credit, currency devaluations
and restrictions, high unemployment, high inflation, decreased exports and
economic recessions. Economic events in any one Asian country can have a
significant effect on the entire Asian region as well as on major trading
partners outside Asia, and any adverse effect on some or all of the Asian
countries and
regions
in which the Fund invests. The securities markets in some Asian economies are
relatively underdeveloped and may subject the Fund to higher action costs or
greater uncertainty than investments in more developed securities markets. Such
risks may adversely affect the value of the Fund’s investments.
Special
Risk Considerations of Investing in European Issuers.
Investments
in securities of European issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. The
Economic and Monetary Union (“EMU”) of the European Union (“EU”) requires member
countries to comply with restrictions on inflation rates, deficits, interest
rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental or EU regulations on trade, changes in the exchange rate
of the euro, the default or threat of default by an EU member country on its
sovereign debt, and/or an economic recession in an EU member country may have a
significant adverse effect on the economies of EU member countries and on major
trading partners outside Europe. The European financial markets have previously
experienced, and may continue to experience, volatility and have been adversely
affected by concerns about economic downturns, credit rating downgrades, rising
government debt levels and possible default on or restructuring of government
debt in several European countries. These events have adversely affected, and
may in the future affect, the value and exchange rate of the euro and may
continue to significantly affect the economies of every country in Europe,
including EU member countries that do not use the euro and non-EU member
countries. In a referendum held on June 23, 2016, voters in the United Kingdom
(“UK”) voted to leave the EU, creating economic and political uncertainty in its
wake. On January 31, 2020, the UK officially withdrew from the EU and the UK
entered a transition period which ended on December 31, 2020. On December 30,
2020, the EU and UK signed the EU-UK Trade and Cooperation Agreement ("TCA"), an
agreement on the terms governing certain aspects of the EU's and the UK's
relationship following the end of the transition period. Notwithstanding the
TCA, following the transition period, there is likely to be considerable
uncertainty as to the UK's post-transition framework.
Special
Risk Considerations of Investing in Japanese Issuers.
Investments in securities of Japanese issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Investment in securities of Japanese issuers, including issuers located
outside of Japan that generate significant revenues from Japan, involves risks
that may negatively affect the value of your investment in the Fund. The risks
of investing in the securities of Japanese issuers also includes lack of natural
resources, fluctuations or shortages in the commodity markets, new trade
regulations, decreasing U.S. imports and changes in the U.S. dollar exchange
rates. Japan is located in a part of the world that has historically been prone
to natural disasters such as earthquakes, volcanoes and tsunamis and is
economically sensitive to environmental events. Any such event could result in a
significant adverse impact on the Japanese economy. In addition, such disasters,
and the resulting damage, could impair the long-term ability of issuers in which
the Fund invests to conduct their businesses in the manner normally
conducted.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by
banks
or trust companies that entitle the holder to all dividends and capital gains
that are paid out on the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Oil Refiners Index, may
negatively affect the Fund’s ability to replicate the performance of the Oil
Refiners Index. The issuers of depositary receipts may discontinue issuing new
depositary receipts and withdraw existing depositary receipts at any time, which
may result in costs and delays in the distribution of the underlying assets to
the Fund and may negatively impact the Fund’s performance and the Fund’s ability
to replicate/track the performance of its Index.
Risk
of Investing in the Energy Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the energy sector. Companies operating in
the energy sector are subject to risks including, but not limited to, economic
growth, worldwide demand, political instability in the regions that the
companies operate, government regulation stipulating rates charged by utilities,
interest rate sensitivity, oil price volatility, energy conservation,
environmental policies, depletion of resources, the cost of providing the
specific utility services and other factors that they cannot control. In
addition, these companies are at risk of civil liability from accidents
resulting in injury, loss of life or property, pollution or other environmental
damage claims and risk of loss from terrorism and natural disasters. A downturn
in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Risk
of Investing in 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.
Risk
of Cash Transactions.
Unlike other exchange-traded funds (“ETFs”), the Fund expects to effect its
creations and redemptions at least partially for cash, rather than wholly for
in-kind securities. Therefore, it may be required to sell portfolio securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Oil Refiners Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Oil Refiners Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the Oil
Refiners Index, or (to the extent the Fund effects creations and redemptions for
cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units, which are not factored into the return of the Oil
Refiners Index. Transaction costs, including brokerage costs, will decrease the
Fund’s net asset value (“NAV”) to the extent not offset by the transaction fee
payable by an Authorized Participant (“AP”). Market disruptions and regulatory
restrictions could have an adverse effect on the Fund’s ability to adjust its
exposure to the required levels in order to track the Oil Refiners Index. Errors
in the Oil Refiners Index data, the Oil Refiners Index computations and/or the
construction of the Oil Refiners Index in accordance with its methodology may
occur from time to time and may not be identified and corrected by the Oil
Refiners Index provider for a period of time or at all, which may have an
adverse impact on the Fund and its shareholders. Shareholders should understand
that
any
gains from the Oil Refiners Index provider's errors will be kept by the Fund and
its shareholders and any losses or costs resulting from the Oil Refiners Index
provider's errors will be borne by the Fund and its shareholders. When the Oil
Refiners Index is rebalanced and the Fund in turn rebalances its portfolio to
attempt to increase the correlation between the Fund’s portfolio and the Oil
Refiners Index, any transaction costs and market exposure arising from such
portfolio rebalancing will be borne directly by the Fund and its shareholders.
The Fund may not be fully invested at times as a result of cash flows into the
Fund (if the Fund effects creations and redemptions for cash) or reserves of
cash held by the Fund to meet redemptions or pay expenses. Apart from scheduled
rebalances, the Oil Refiners Index provider or its agents may carry out
additional ad hoc rebalances to the Oil Refiners Index. Therefore, errors and
additional ad hoc rebalances carried out by the Oil Refiners Index provider or
its agents to the Oil Refiners Index may increase the costs to and the tracking
error risk of the Fund. The Fund may not be fully invested at times either as a
result of cash flows into the Fund or reserves of cash held by the Fund to meet
redemptions or pay expenses. In addition, the Fund may not be able to invest in
certain securities included in the Oil Refiners Index, or invest in them in the
exact proportions in which they are represented in the Oil Refiners Index. The
Fund’s performance may also deviate from the return of the Oil Refiners Index
due to legal restrictions or limitations imposed by the governments of certain
countries, certain listing standards of the Fund’s listing exchange (the
“Exchange”), a lack of liquidity on stock exchanges in which such securities
trade, potential adverse tax consequences or other regulatory reasons or legal
restrictions or limitations (such as diversification requirements). The Fund may
value certain of its investments, underlying securities, underlying currencies
and/or other assets based on fair value prices. To the extent the Fund
calculates its NAV based on fair value prices and the value of the Oil Refiners
Index is based on securities’ closing prices on local foreign markets
(i.e.,
the value of the Oil Refiners Index is not based on fair value prices), the
Fund’s ability to track the Oil Refiners Index may be adversely affected. In
addition, any issues the Fund encounters with regard to currency convertibility
(including the cost of borrowing funds, if any) and repatriation may also
increase the index tracking risk. When markets are volatile, the ability to sell
securities at fair value prices may be adversely impacted and may result in
additional trading costs and/or increase the index tracking risk. The Fund may
also need to rely on borrowings to meet redemptions, which may lead to increased
expenses. For tax efficiency purposes, the Fund may sell certain securities, and
such sale may cause the Fund to realize a loss and deviate from the performance
of the Oil Refiners Index. In light of the factors discussed above, the Fund’s
return may deviate significantly from the return of the Oil Refiners Index.
Changes to the composition of the Oil Refiners Index in connection with a
rebalancing or reconstitution of the Oil Refiners Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Oil Refiners Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Oil Refiners Index provider to postpone
a scheduled rebalance or reconstitution, which could cause the Oil Refiners
Index to vary from its normal or expected composition. Therefore, the Fund’s
performance could be lower than funds that may actively shift their portfolio
assets to take advantage of market opportunities or to lessen the impact of a
market decline or a decline in the value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities
held
by the Fund may be traded in markets that close at a different time than the
Exchange. Liquidity in those securities may be reduced after the applicable
closing times. Accordingly, during the time when the Exchange is open but after
the applicable market closing, fixing or settlement times, bid/ask spreads on
the Exchange and the resulting premium or discount to the Shares’ NAV may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings. There are various methods by which
investors can purchase and sell Shares. Investors should consult their financial
intermediaries before purchasing or selling Shares of the Fund.
Issuer-Specific
Changes Risk. The
value of individual securities or particular types of securities in the Fund’s
portfolio can be more volatile than the market as a whole and can perform
differently from the value of the market as a whole, which may have a greater
impact if the Fund’s portfolio is concentrated in a country, group of countries,
region, market, industry, group of industries, sector or asset class. The value
of securities of smaller issuers can be more volatile than that of larger
issuers.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds. The Fund may be particularly
vulnerable to this risk because the Oil Refiners Index is comprised of
securities of a limited number of companies.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Oil Refiners Index concentrates in a
particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
29.42% |
4Q 2020 |
Worst
Quarter: |
-40.19% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation
and may differ from those shown below.
After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Since
Inception (8/18/2015) |
|
|
VanEck Oil Refiners ETF (return before
taxes) |
11.10% |
7.59% |
7.46% |
|
|
VanEck Oil Refiners ETF (return after
taxes on distributions) |
10.69% |
7.25% |
7.05% |
|
|
VanEck Oil Refiners ETF (return after
taxes on distributions and sale of Fund
Shares) |
7.22% |
6.14% |
6.02% |
|
|
MVIS Global Oil Refiners Index
(reflects no deduction for fees, expenses or taxes, except withholding
taxes) |
11.47% |
7.62% |
7.51% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
15.96% |
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See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Peter
H. Liao |
Portfolio
Manager |
August
2015 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Oil Services ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS®
US Listed Oil Services 25 Index (the “Oil Services
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.35 |
% |
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|
Other
Expenses(a)(b) |
0.00 |
% |
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|
|
Total
Annual Fund Operating Expenses(b) |
0.35 |
% |
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(a) Van Eck Associates
Corporation (the “Adviser”) will pay all expenses of the Fund, except for the
fee payment under the investment management agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least May 1,
2023.
(b) “Other Expenses” have been
restated to reflect current fees.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
|
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1 |
$36 |
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3 |
$113 |
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|
5 |
$197 |
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|
10 |
$443 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
28% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the Fund’s benchmark index. The Oil Services Index includes common
stocks and depositary receipts of U.S. exchange-listed companies in the oil
services segment. Such companies may include small- and medium-capitalization
companies and foreign companies that are listed on a U.S. exchange. To be
initially eligible for inclusion in the Oil Services Index, companies must
generate at least 50% of their revenues from oil services to the upstream oil
sector, which includes companies engaged primarily in oil equipment, oil
services or oil drilling. Of the largest 50 stocks in the oil services sector by
full market capitalization, the top 25 by free-float market capitalization
(e.g.,
includes
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Oil Services ETF.
only
shares that are readily available for trading in the market) and three month
average daily trading volume are included in the Oil Services Index. As of
December 31, 2021, the Oil Services Index included 25 securities of companies
with a market capitalization range of between approximately $305 million and $42
billion and a weighted average market capitalization of $14.4 billion. These
amounts are subject to change. The Fund’s 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Oil Services Index by investing in a portfolio
of securities that generally replicates the Oil Services Index. Unlike many
investment companies that try to “beat” the performance of a benchmark index,
the Fund does not try to “beat” the Oil Services Index and does not seek
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Oil Services Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Oil Services Index concentrates in an industry or group of industries. As of
December 31, 2021, each of the energy sector, oil and gas drilling sub-industry,
and oil and gas equipment and services sub-industry represented a significant
portion of the Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Oil Services Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of oil services companies. The profitability of
oil services companies is related to worldwide energy prices, including all
sources of energy, and exploration and production spending. The price of energy,
the earnings of oil services companies, and the value of such companies’
securities are subject to significant volatility. Oil services companies are
also subject to risks of changes in exchange rates and the price of oil and gas,
changes in prices for competitive energy services, changes in the global supply
of and demand for oil and gas, government regulation, the imposition of import
controls, world events, negative perception, depletion of resources and general
economic conditions, development of alternative energy sources, energy
conservation efforts, technological developments and labor relations, as well as
market, economic, social and political risks of the countries where oil services
companies are located or do business. Oil services companies operate in a highly
competitive and cyclical industry, with intense price competition.
Oil
services companies are exposed to significant and numerous operating hazards.
Oil services companies can be significantly affected by natural disasters and
adverse weather conditions in the regions in which they operate. The revenues of
oil services companies may be negatively affected by contract termination and
renegotiation. Oil services companies are subject to, and may be adversely
affected by, extensive federal, state, local and foreign laws, rules and
regulations. Oil services companies may also be adversely affected by
environmental damage claims and other types of litigation. Changes to
environmental protection laws, including the implementation of policies with
less stringent environmental protection standards and those geared away from
sustainable energy development, could lead to fluctuations in supply, demand and
prices of oil and gas. The international operations of oil services companies
expose them to risks associated with instability and changes in economic and
political conditions, social unrest and acts of war, foreign currency
fluctuations, changes in foreign regulations and other risks inherent to
international business. Additionally, changes to U.S. trading policies could
cause friction with certain oil producing countries and between the governments
of the United States and other major exporters of oil to the United States. Some
oil services companies are engaged in other lines of business unrelated to oil
services, and they may experience problems with these lines of business which
could adversely affect their operating results. The operating results of these
companies may fluctuate as a result of these additional risks and events in the
other lines of business. In addition, a company’s ability to engage in new
activities may expose it to business risks with which it has less experience
than it has with the business risks associated with its traditional businesses.
Despite a company’s possible success in traditional oil services activities,
there can be no assurance that the other lines of business in which these
companies are engaged will not have an adverse effect on a company’s business or
financial condition.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Oil Services Index, may
negatively affect the Fund’s ability to replicate the performance of the Oil
Services Index. The issuers of depositary receipts may discontinue issuing new
depositary receipts and withdraw existing depositary receipts at any time, which
may result in costs and delays in the distribution of the underlying assets to
the Fund and may negatively impact the Fund’s performance and the Fund’s ability
to replicate/track the performance of its Index.
Risk
of Investing in the Energy Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the energy sector. Companies operating in
the energy sector are subject to risks including, but not limited to, economic
growth, worldwide demand, political instability in the regions that the
companies operate, government regulation stipulating rates charged by utilities,
interest rate sensitivity, oil price volatility, energy conservation,
environmental policies, depletion of resources, the cost of providing the
specific utility services and other factors that they cannot control. In
addition, these companies are at risk of civil liability from accidents
resulting in injury, loss of life or property, pollution or other environmental
damage claims and risk of loss from terrorism and natural disasters. A downturn
in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Oil Services Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Oil Services Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the Oil
Services Index, or (to the extent the Fund effects creations and redemptions for
cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units, which are not factored into the return of the Oil
Services Index. Transaction costs, including brokerage costs, will decrease the
Fund’s net asset value (“NAV”) to the extent not offset by the transaction fee
payable by an Authorized Participant (“AP”). Market disruptions and regulatory
restrictions could have an adverse effect on the Fund’s ability to adjust its
exposure to the required levels in order to track the Oil Services Index. Errors
in the Oil Services Index data, the Oil Services Index computations and/or the
construction of the Oil Services Index in accordance with its methodology may
occur from time to time and may not be identified and corrected by the Oil
Services Index provider for a period of time or at all, which may have an
adverse impact on the Fund and its shareholders. Shareholders should understand
that any gains from the Oil Services Index provider's errors will be kept by the
Fund and its shareholders and any losses or costs resulting from the Oil
Services Index provider's errors will be borne by the Fund and its shareholders.
When the Oil Services Index is rebalanced and the Fund in turn rebalances its
portfolio to attempt to increase the correlation between the Fund’s portfolio
and the Oil Services Index, any transaction costs and market exposure arising
from such portfolio rebalancing will be borne directly by the Fund and its
shareholders. The Fund may not be fully invested at times as a result of cash
flows into the Fund (if the Fund effects creations and redemptions for cash) or
reserves of cash held by the Fund to meet redemptions or pay expenses. Apart
from scheduled rebalances, the Oil Services Index provider or its agents may
carry out additional ad hoc rebalances to the Oil Services Index. Therefore,
errors and additional ad hoc rebalances carried out by the Oil Services Index
provider or its agents to the Oil Services Index may increase the costs to and
the tracking error risk of the Fund. In addition, the Fund may not be able to
invest in certain securities included in the Oil Services Index, or invest in
them in the exact proportions in which they are represented in the Oil Services
Index. The Fund’s performance may also deviate from the return of the Oil
Services Index due to legal restrictions or limitations imposed by the
governments of certain countries, certain listing standards of the Fund’s
listing
exchange
(the “Exchange”), a lack of liquidity on stock exchanges in which such
securities trade, potential adverse tax consequences or other regulatory reasons
or legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities, underlying
currencies and/or other assets based on fair value prices. To the extent the
Fund calculates its NAV based on fair value prices and the value of the Oil
Services Index is based on securities’ closing prices on local foreign markets
(i.e.,
the value of the Oil Services Index is not based on fair value prices), the
Fund’s ability to track the Oil Services Index may be adversely affected. In
addition, any issues the Fund encounters with regard to currency convertibility
(including the cost of borrowing funds, if any) and repatriation may also
increase the index tracking risk. When markets are volatile, the ability to sell
securities at fair value prices may be adversely impacted and may result in
additional trading costs and/or increase the index tracking risk. The Fund may
also need to rely on borrowings to meet redemptions, which may lead to increased
expenses. For tax efficiency purposes, the Fund may sell certain securities, and
such sale may cause the Fund to realize a loss and deviate from the performance
of the Oil Services Index. In light of the factors discussed above, the Fund’s
return may deviate significantly from the return of the Oil Services Index.
Changes to the composition of the Oil Services Index in connection with a
rebalancing or reconstitution of the Oil Services Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Oil Services Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Oil Services Index provider to postpone
a scheduled rebalance or reconstitution, which could cause the Oil Services
Index to vary from its normal or expected composition. Therefore, the Fund’s
performance could be lower than funds that may actively shift their portfolio
assets to take advantage of market opportunities or to lessen the impact of a
market decline or a decline in the value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Issuer-Specific
Changes Risk. The
value of individual securities or particular types of securities in the Fund’s
portfolio can be more volatile than the market as a whole and can perform
differently from the value of the market as a whole, which may have a greater
impact if the Fund’s portfolio is concentrated in a country, group of countries,
region, market, industry, group of industries, sector or asset class. The value
of securities of smaller issuers can be more volatile than that of larger
issuers.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds. The Fund may be particularly
vulnerable to this risk because the Oil Services Index is comprised of
securities of a limited number of companies.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Oil Services Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
59.39% |
4Q 2020 |
Worst
Quarter: |
-69.68% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past
Ten Years |
|
|
VanEck Oil Services ETF (return before
taxes) |
21.18% |
-21.24% |
-11.74% |
|
|
VanEck Oil Services ETF (return after
taxes on distributions) |
20.91% |
-21.67% |
-12.21% |
|
|
VanEck Oil Services ETF (return after
taxes on distributions and sale of Fund
Shares) |
12.74% |
-14.01% |
-7.38% |
|
|
MVIS US Listed Oil Services 25 Index
(reflects no deduction for fees, expenses or taxes, except withholding
taxes) |
21.81% |
-21.36% |
-11.86% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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|
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Peter
H. Liao |
Portfolio
Manager |
December
2011 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
RARE EARTH/STRATEGIC METALS
ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Rare Earth/Strategic Metals ETF1
(the
“Fund”) seeks to replicate as closely as possible, before fees and expenses, the
price and yield performance of the MVIS®
Global Rare Earth/Strategic Metals Index (the “Rare Earth/Strategic Metals
Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
|
|
Other
Expenses |
0.03 |
% |
|
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|
|
|
Total
Annual Fund Operating Expenses(a) |
0.53 |
% |
|
|
Fee
Waivers and Expense Reimbursement(a) |
0.00 |
% |
|
|
Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.53 |
% |
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|
(a) 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, taxes and
extraordinary expenses) from exceeding 0.57% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
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|
YEAR |
EXPENSES |
|
|
1 |
$54 |
|
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|
3 |
$170 |
|
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|
5 |
$296 |
|
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|
10 |
$665 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
74% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in securities that comprise the Fund’s benchmark
index. The Rare Earth/Strategic Metals Index includes companies primarily
engaged in a variety of activities that are related to the producing, refining
and recycling of rare earth and strategic metals and minerals. Such companies
may include small- and medium- capitalization
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Rare
Earth/Strategic Metals ETF.
companies
and foreign and emerging market issuers. To be initially eligible for the Rare
Earth/Strategic Metals Index, companies must generate at least 50% of their
revenues from rare earth/strategic metals or have mining projects with the
potential to generate at least 50% of their revenues from rare earth/strategic
metals when developed. Rare earth/strategic metals are industrial metals that
are typically mined as by-products or secondary metals in operations focused on
precious metals and base metals. Compared to base metals, they have more
specialized uses and are often more difficult to extract. Currently,
approximately 44 elements in the periodic table are considered rare
earth/strategic metals. Rare earth metals (or rare earth elements), a subset of
strategic metals, are a collection of chemical elements that are crucial to many
of the world’s most advanced technologies, such as cellular phones, high
performance batteries, flat screen televisions, green energy technology, and are
expected to be critical to the future of hybrid and electric cars, high-tech
military applications and superconductors and fiber-optic communication systems.
The Rare Earth/Strategic Metals Index may include A-shares issued by companies
trading via the Shanghai-Hong Kong Stock Connect program and the Shenzhen-Hong
Kong Stock Connect program (together, “Stock Connect”). As of December 31, 2021,
the Rare Earth/Strategic Metals Index included 20 securities of companies with a
market capitalization range of between approximately $1 billion and $26.2
billion and a weighted average market capitalization of $6.7 billion. These
amounts are subject to change. The Fund’s 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Rare Earth/Strategic Metals Index by investing
in a portfolio of securities that generally replicates the Rare Earth/Strategic
Metals Index. Unlike many investment companies that try to “beat” the
performance of a benchmark index, the Fund does not try to “beat” the Rare
Earth/Strategic Metals Index and does not seek temporary defensive positions
that are inconsistent with its investment objective of seeking to replicate the
Rare Earth/Strategic Metals Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Rare Earth/Strategic Metals Index concentrates in an industry or group of
industries. As of December 31, 2021, each of basic materials sector and the
mining industry represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Rare Earth and Strategic Metals Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of rare earth/strategic metals companies. Rare
earth/strategic metals are industrial metals that are typically mined as
by-products or secondary metals in operations focused on precious metals and
base metals. Compared to base metals, they have more specialized uses and are
often more difficult to extract. Rare earth metals (or rare earth elements), a
subset of strategic metals, are a collection of chemical elements that are
crucial to many of the world’s most advanced technologies. Consequently, the
demand for strategic metals has strained supply, which has the potential to
result in a shortage of such materials which could adversely affect the
companies in the Fund’s portfolio. Companies involved in the various activities
that are related to the producing, refining and recycling of rare
earth/strategic metals tend to be small-, medium- and micro-capitalization
companies with volatile share prices, are highly dependent on the price of rare
earth/strategic metals, which may fluctuate substantially over short periods of
time. The value of such companies may be significantly affected by events
relating to international, national and local political and economic
developments, energy conservation efforts, the success of exploration projects,
commodity prices, tax and other government regulations, depletion of resources,
and mandated expenditures for safety and pollution control devices. The
producing, refining and recycling of rare earth/strategic metals can be capital
intensive and, if companies involved in such activities are not managed well,
the share prices of such companies could decline even as prices for the
underlying rare earth/strategic metals are rising. In addition, companies
involved in the various activities that are related to the producing, refining
and recycling of rare earth/strategic metals may be at risk for environmental
damage claims.
Risk
of Regulatory Action and Changes in Governments. The
producing, refining and recycling of rare earth/strategic metals may be
significantly affected by regulatory action and changes in governments. Actions
by countries essential to the producing, refining or recycling of rare
earth/strategic metals to limit exports could have a significant adverse effect
on industries around the globe and on the values of the businesses in which the
Fund invests.
Special
Risk Considerations of Investing in Australian Issuers. Investments
in securities of Australian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Australian economy is heavily dependent on exports from the
agriculture and mining industries. This makes the Australian economy susceptible
to fluctuations in the commodity markets. Australia is also dependent on trading
with key trading partners.
Special
Risk Considerations of Investing in Asian Issuers.
Investments
in securities of Asian issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. Certain
Asian economies have experienced over-extension of credit, currency devaluations
and restrictions, high unemployment, high inflation, decreased exports and
economic recessions. Economic events in any one Asian country can have a
significant effect on the entire Asian region as well as on major trading
partners outside Asia, and any adverse effect on some or all of the Asian
countries and regions in which the Fund invests. The securities markets in some
Asian economies are relatively underdeveloped and may subject the Fund to higher
action costs or greater uncertainty than investments in more developed
securities markets. Such risks may adversely affect the value of the Fund’s
investments.
Special
Risk Considerations of Investing in Chinese Issuers.
Investments in securities of Chinese issuers, including issuers located outside
of China that generate significant revenues from China, involve risks and
special considerations not typically associated with investments in the U.S.
securities markets. These risks, include, among others, (i) more frequent (and
potentially widespread) trading suspensions and government interventions with
respect to Chinese issuers resulting in lack of liquidity and in price
volatility, (ii) currency revaluations and other currency exchange rate
fluctuations or blockage, (iii) the nature and extent of intervention by the
Chinese government in the Chinese securities markets, whether such intervention
will continue and the impact of such intervention or its discontinuation, (iv)
the risk of nationalization or expropriation of assets, (v) the risk that the
Chinese government may decide not to continue to support economic reform
programs, (vi) limitations on the use of brokers, (vii) higher rates of
inflation, (viii) greater political, economic and social uncertainty, (ix)
market volatility caused by any potential regional or territorial conflicts or
natural disasters and (x) the risk of increased trade tariffs, embargoes,
sanctions, investment restrictions and other trade limitations. Certain
securities are, or may in future become restricted, and the Fund may be forced
to sell such restricted securities and incur a loss as a result. In addition,
the economy of China differs, often unfavorably, from the U.S. economy in such
respects as structure, general development, government involvement, wealth
distribution, rate of inflation, growth rate, interest rates, allocation of
resources and capital reinvestment, among others. The Chinese central government
has historically exercised substantial control over virtually every sector of
the Chinese economy through administrative regulation and/or state ownership and
actions of the Chinese central and local government authorities continue to have
a substantial effect on economic conditions in China. In addition, previously
the Chinese government has from time to time taken actions that influence the
prices at which certain goods may be sold, encourage companies to invest or
concentrate in particular industries, induce mergers between companies in
certain industries and induce private companies to publicly offer their
securities to increase or continue the rate of economic growth, control the rate
of inflation or otherwise regulate economic expansion. The Chinese government
may do so in the future as well, potentially having a significant adverse effect
on economic conditions in China.
Risks
of Investing through Stock Connect.
The Fund may invest in A-shares listed and traded on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange through Stock Connect, or on such other stock
exchanges in China which participate in Stock Connect from time to time or in
the future. Trading through Stock Connect is subject to a number of restrictions
that may affect the Fund’s investments and returns. For example, trading through
Stock Connect is subject to daily quotas that limit the maximum daily net
purchases on any particular day, which may restrict or preclude the Fund’s
ability to invest in Stock Connect A-shares. In addition, investments made
through Stock Connect are subject to trading, clearance and settlement
procedures that are relatively untested in the People’s Republic of China
(“PRC”), which could pose risks to the Fund. Furthermore, securities purchased
via Stock Connect will be held via a book entry omnibus account in the name of
Hong Kong Securities Clearing Company Limited (“HKSCC”), Hong Kong’s clearing
entity, at the China Securities Depository and Clearing Corporation (“CSDCC”).
The Fund’s ownership interest in Stock Connect securities will not be reflected
directly in book entry with CSDCC and will instead only be reflected on the
books of its Hong Kong sub-custodian. The Fund may therefore depend on HKSCC’s
ability or willingness as record-holder of Stock Connect securities to enforce
the Fund’s shareholder rights. PRC law did not historically recognize the
concept of beneficial ownership; while PRC regulations and the Hong Kong Stock
Exchange have issued clarifications and guidance supporting the concept of
beneficial ownership via Stock Connect, the interpretation of beneficial
ownership in the PRC by regulators and courts may continue to evolve. Moreover,
Stock Connect A-shares generally may not be sold, purchased or otherwise
transferred other than through Stock Connect in accordance with applicable
rules.
A
primary feature of Stock Connect is the application of the home market’s laws
and rules applicable to investors in A-shares. Therefore, the Fund’s investments
in Stock Connect A-shares are generally subject to PRC securities regulations
and listing rules, among other restrictions. The Fund will not benefit from
access to Hong Kong investor compensation funds, which are set up to protect
against defaults of trades, when investing through Stock Connect. Stock Connect
is only available on days when markets in both the PRC and Hong Kong are open,
which may limit the Fund’s ability to trade when it would be otherwise
attractive to do so. Since the inception of Stock Connect, foreign investors
(including the Fund) investing in A-shares through Stock Connect have been
temporarily exempt from the PRC corporate income tax and value-added tax on the
gains on disposal of such A-shares. Dividends are subject to PRC corporate
income tax on a withholding basis at 10%, unless reduced under a double tax
treaty with China upon application to and obtaining approval from the competent
tax authority. Additionally, uncertainties in permanent PRC tax rules governing
taxation of income and gains from investments in Stock Connect A-shares could
result in unexpected tax liabilities for the
Fund.
The
Stock Connect program is a relatively new program and may be subject to further
interpretation and guidance. There can be no assurance as to the program’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns. In addition, the
application and interpretation of the laws and regulations of Hong Kong and the
PRC, and the rules, policies or guidelines published or applied by relevant
regulators and exchanges in respect of the Stock Connect program are uncertain,
and they may have a detrimental effect on the Fund’s investments and
returns.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Rare Earth/Strategic Metals
Index, may negatively affect the Fund’s ability to replicate the performance of
the Rare Earth/Strategic Metals Index. The issuers of depositary receipts may
discontinue issuing new depositary receipts and withdraw existing depositary
receipts at any time, which may result in costs and delays in the distribution
of the underlying assets to the Fund and may negatively impact the Fund’s
performance and the Fund’s ability to replicate/track the performance of its
Index.
Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in the Mining Industry.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the mining industry. Investments in mining
companies may be speculative. Competitive pressures may have a significant
effect on the financial condition of such companies. Mining companies are highly
dependent on the price of the underlying metal or element. These prices may
fluctuate substantially over short periods of time so the Fund’s Share price may
be more volatile than other types of investments. In particular, a drop in the
price of rare earth/strategic metals would particularly adversely affect the
profitability of small- and medium-capitalization mining companies and their
ability to secure financing. Furthermore, companies that are only in the
exploration stage are typically unable to adopt specific strategies for
controlling the impact of such price changes. In addition, many early stage
miners operate at a loss and are dependent on securing equity and/or debt
financing, which might be more difficult to secure for an early stage mining
company than for a more established counterpart.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of
small-
and medium-capitalization companies could trail the returns on investments in
securities of large-capitalization companies.
Risk
of Cash Transactions.
Unlike other exchange-traded funds (“ETFs”), the Fund expects to effect its
creations and redemptions at least partially for cash, rather than wholly for
in-kind securities. Therefore, it may be required to sell portfolio securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Rare Earth/Strategic Metals
Index for a number of reasons. For example, the Fund incurs a number of
operating expenses, including taxes, not applicable to the Rare Earth/Strategic
Metals 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 Rare Earth/Strategic Metals Index, or (to the extent the
Fund effects creations and redemptions for cash) raising cash to meet
redemptions or deploying cash in connection with newly created Creation Units,
which are not factored into the return of the Rare Earth/Strategic Metals Index.
Transaction costs, including brokerage costs, will decrease the Fund’s net asset
value (“NAV”) to the extent not offset by the transaction fee payable by an
Authorized Participant (“AP”). Market disruptions and regulatory restrictions
could have an adverse effect on the Fund’s ability to adjust its exposure to the
required levels in order to track the Rare Earth/Strategic Metals Index. Errors
in the Rare Earth/Strategic Metals Index data, the Rare Earth/Strategic Metals
Index computations and/or the construction of the Rare Earth/Strategic Metals
Index in accordance with its methodology may occur from time to time and may not
be identified and corrected by the Rare Earth/Strategic Metals Index provider
for a period of time or at all, which may have an adverse impact on the Fund and
its shareholders. Shareholders should understand that any gains from the Rare
Earth/Strategic Metals Index provider's errors will be kept by the Fund and its
shareholders and any losses or costs resulting from the Rare Earth/Strategic
Metals Index provider's errors will be borne by the Fund and its shareholders.
When the Rare Earth/Strategic Metals Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Rare Earth/Strategic Metals Index, any transaction
costs and market exposure arising from such portfolio rebalancing will be borne
directly by the Fund and its shareholders. The Fund may not be fully invested at
times as a result of cash flows into the Fund (if the Fund effects creations and
redemptions for cash) or reserves of cash held by the Fund to meet redemptions
or pay expenses. Apart from scheduled rebalances, the Rare Earth/Strategic
Metals Index provider or its agents may carry out additional ad hoc rebalances
to the Rare Earth/Strategic Metals Index. Therefore, errors and additional ad
hoc rebalances carried out by the Rare Earth/Strategic Metals Index provider or
its agents to the Rare Earth/Strategic Metals Index may increase the costs to
and the tracking error risk of the Fund. The Fund may not be fully invested at
times either as a result of cash flows into the Fund or reserves of cash held by
the Fund to meet redemptions or pay expenses. In addition, the Fund may not be
able to invest in certain securities included in the Rare Earth/Strategic Metals
Index, or invest in them in the exact proportions in which they are represented
in the Rare Earth/Strategic Metals Index. The Fund’s performance may also
deviate from the return of the Rare Earth/Strategic Metals Index due to legal
restrictions or limitations imposed by the governments of certain countries
(including the availability of China A-shares through Stock Connect), certain
listing standards of the Fund’s listing exchange (the “Exchange”), a lack of
liquidity on stock exchanges in which such securities trade, potential adverse
tax consequences or other regulatory reasons or legal restrictions or
limitations (such as diversification requirements). The Fund may value certain
of its investments, underlying securities, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its NAV
based on fair value prices and the value of the Rare Earth/Strategic Metals
Index is based on securities’ closing prices on local foreign markets
(i.e.,
the value of the Rare Earth/Strategic Metals Index is not based on fair value
prices), the Fund’s ability to track the Rare Earth/Strategic Metals Index may
be
adversely
affected. In addition, any issues the Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the index tracking risk. When markets are volatile, the
ability to sell securities at fair value prices may be adversely impacted and
may result in additional trading costs and/or increase the index tracking risk.
The Fund may also need to rely on borrowings to meet redemptions, which may lead
to increased expenses. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Rare Earth/Strategic Metals Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Rare Earth/Strategic Metals Index. Changes to the composition of
the Rare Earth/Strategic Metals Index in connection with a rebalancing or
reconstitution of the Rare Earth/Strategic Metals Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Rare Earth/Strategic Metals Index, the Fund generally would not
sell a security because the security’s issuer was in financial trouble.
Additionally, unusual market conditions may cause the Rare Earth/Strategic
Metals Index provider to postpone a scheduled rebalance or reconstitution, which
could cause the Rare Earth/Strategic Metals Index to vary from its normal or
expected composition. Therefore, the Fund’s performance could be lower than
funds that may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Issuer-Specific
Changes Risk. The
value of individual securities or particular types of securities in the Fund’s
portfolio can be more volatile than the market as a whole and can perform
differently from the value of the market as a whole, which may have a greater
impact if the Fund’s portfolio is concentrated in a country, group of countries,
region, market, industry, group of industries, sector or asset class. The value
of securities of smaller issuers can be more volatile than that of larger
issuers.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds. The Fund may be particularly
vulnerable to this risk because the Rare Earth/Strategic Metals Index is
comprised of securities of a limited number of
companies.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Rare Earth/Strategic Metals
Index concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
71.95% |
4Q 2020 |
Worst
Quarter: |
-33.02% |
3Q
2015 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck Rare Earth/Strategic Metals ETF
(return before taxes) |
80.09% |
22.52% |
-1.53% |
|
|
VanEck Rare Earth/Strategic Metals ETF
(return after taxes on distributions) |
76.46% |
20.48% |
-2.68% |
|
|
VanEck Rare Earth/Strategic Metals ETF
(return after taxes on distributions and sale of Fund
Shares) |
47.50% |
17.26% |
-1.74% |
|
|
MVIS Global Rare Earth/Strategic Metals
Index (reflects no deduction for fees, expenses or taxes, except
withholding taxes) |
82.78% |
21.81% |
-2.04% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Peter
H. Liao |
Portfolio
Manager |
October
2010 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Steel ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the NYSE®
Arca®
Steel Index (the “Steel Index”).
FUND FEES AND EXPENSES
The following tables describe
the fees and expenses that you may pay if you buy, hold and sell shares of the
Fund (“Shares”). You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
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Other
Expenses |
0.06 |
% |
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|
Total
Annual Fund Operating Expenses(a) |
0.56 |
% |
|
|
Fee
Waivers and Expense Reimbursement(a) |
-0.01 |
% |
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|
Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.55 |
% |
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(a) 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, taxes and
extraordinary expenses) from exceeding 0.55% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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YEAR |
EXPENSES |
|
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1 |
$56 |
|
|
|
3 |
$178 |
|
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|
5 |
$312 |
|
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|
10 |
$700 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
25% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in common stocks and depositary receipts of
companies involved in the steel sector. Such companies may include small- and
medium-capitalization companies and foreign and emerging market issuers. As of
December 31, 2021, the Steel Index included 25 securities of companies with a
market capitalization range of between
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Steel ETF.
approximately
$260.3 million and $82.7 billion and a weighted average market capitalization of
$32 billion. These amounts are subject to change. The Fund’s 80% investment
policy is non-fundamental and may be changed without shareholder approval upon
60 days’ prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Steel Index by investing in a portfolio of
securities that generally replicates the Steel Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the Steel Index and does not seek temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the Steel Index. The Fund normally invests at least 80% of its total
assets in securities that comprise the Steel Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Steel Index concentrates in an industry or group of industries. As of
December 31, 2021, the basic materials sector represented a significant portion
of the Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Steel Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of steel companies. Competitive pressures may
have a significant effect on the financial condition of such steel companies.
Also, these companies are highly dependent on the price of steel. These prices
may fluctuate substantially over short periods of time, so the Fund’s Share
price may be more volatile than other types of investments. These companies are
also affected by changes in government regulation, tariffs and trade disputes,
world events and economic conditions. Steel companies may benefit from
government subsidies or certain trade protections. If those subsidies or trade
protections are reduced or removed, the profits of steel companies may be
affected, potentially drastically. In addition, these companies are at risk for
environmental damage claims.
Special
Risk Considerations of Investing in Brazilian Issuers.
Investments in securities of Brazilian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Brazilian economy has been characterized by frequent, and
occasionally drastic, interventions by the Brazilian government, including the
imposition of wage and price controls, exchange controls, limiting imports and
other measures. The Brazilian government has often changed monetary, taxation,
credit, trade and other policies to influence the core of Brazil’s economy.
Investments in Brazilian securities may be subject to certain restrictions on
foreign investment. Brazil has historically experienced high rates of inflation
and a high level of debt, each of which may constrain economic growth. Despite
rapid development in recent years, Brazil still suffers from high levels of
corruption, crime and income disparity. The Brazilian economy is also heavily
dependent upon commodity prices and international trade. Unanticipated political
or social developments may result in sudden and significant investment losses.
An increase in prices for commodities, such as petroleum, the depreciation of
the Brazilian real and future governmental measures seeking to maintain the
value of the Brazilian real in relation to the U.S. dollar, may trigger
increases in inflation in Brazil and may slow the rate of growth of the
Brazilian economy.
Special
Risk Considerations of Investing in Australian Issuers. Investments
in securities of Australian issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Australian economy is heavily dependent on exports from the
agriculture and mining industries. This makes the Australian economy susceptible
to fluctuations in the commodity markets. Australia is also dependent on trading
with key trading partners.
Special
Risk Considerations of Investing in European Issuers.
Investments
in securities of European issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. The
Economic and Monetary Union (“EMU”) of the European Union (“EU”) requires member
countries to comply with restrictions on inflation rates, deficits, interest
rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental or EU regulations on trade, changes in the exchange rate
of the euro, the default or threat of default by an EU member country on its
sovereign debt, and/or an economic recession in an EU member country may have a
significant adverse effect on the economies of EU member countries and on major
trading partners outside Europe. The European financial markets have previously
experienced, and may continue to experience, volatility and have been adversely
affected by concerns about economic downturns, credit rating downgrades, rising
government debt levels and possible default on or restructuring of government
debt in several European countries. These events have adversely affected, and
may in the future affect, the value and exchange rate of the euro and may
continue to significantly affect the economies of every country in Europe,
including EU member countries that do not use the euro and non-EU member
countries. In a referendum held on June 23, 2016, voters in the United Kingdom
(“UK”) voted to leave the EU, creating economic and political uncertainty in its
wake. On January 31, 2020, the UK officially withdrew from the EU and the UK
entered a transition period which ended on December 31, 2020. On December 30,
2020, the EU and UK signed the EU-UK
Trade
and Cooperation Agreement ("TCA"), an agreement on the terms governing certain
aspects of the EU's and the UK's relationship following the end of the
transition period. Notwithstanding the TCA, following the transition period,
there is likely to be considerable uncertainty as to the UK's post-transition
framework.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Steel Index, may negatively
affect the Fund’s ability to replicate the performance of the Steel Index. The
issuers of depositary receipts may discontinue issuing new depositary receipts
and withdraw existing depositary receipts at any time, which may result in costs
and delays in the distribution of the underlying assets to the Fund and may
negatively impact the Fund’s performance and the Fund’s ability to
replicate/track the performance of its Index.
Risk
of Investing in the Basic Materials Sector. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the basic materials sector. Companies engaged in
the production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and
public
health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Steel Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Steel 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 Steel Index, or (to the
extent the Fund effects creations and redemptions for cash) raising cash to meet
redemptions or deploying cash in connection with newly created Creation Units,
which are not factored into the return of the Steel Index.
Transaction
costs, including brokerage costs, will decrease the Fund’s net asset value
(“NAV”) to the extent not offset by the transaction fee payable by an Authorized
Participant (“AP”). Market disruptions and regulatory restrictions could have an
adverse effect on the Fund’s ability to adjust its exposure to the required
levels in order to track the Steel Index. Errors in the Steel Index data, the
Steel Index computations and/or the construction of the Steel Index in
accordance with its methodology may occur from time to time and may not be
identified and corrected by the Steel Index provider for a period of time or at
all, which may have an adverse impact on the Fund and its shareholders.
Shareholders should understand that any gains from the Steel Index provider's
errors will be kept by the Fund and its shareholders and any losses or costs
resulting from the Steel Index provider's errors will be borne by the Fund and
its shareholders. When the Steel Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Steel Index, any transaction costs and market exposure
arising from such portfolio rebalancing may be borne directly by the Fund and
its shareholders. The Fund may not be fully invested at times as a result of
cash flows into the Fund (if the Fund effects creations and redemptions for
cash) or reserves of cash held by the Fund to meet redemptions or pay expenses.
Apart from scheduled rebalances, the Steel Index provider or its agents may
carry out additional ad hoc rebalances to the Steel Index. Therefore, errors and
additional ad hoc rebalances carried out by the Steel Index provider or its
agents to the Steel Index may increase the costs to and the tracking error risk
of the Fund. In addition, the Fund may not be able to invest in certain
securities included in the Steel Index, or invest in them in the exact
proportions in which they are represented in the Steel Index. The Fund’s
performance may also deviate from the return of the Steel Index due to legal
restrictions or limitations imposed by the governments of certain countries,
certain listing standards of the Fund’s listing exchange (the “Exchange”), a
lack of liquidity on stock exchanges in which such securities trade, potential
adverse tax consequences or other regulatory reasons or legal restrictions or
limitations (such as diversification requirements). The Fund may value certain
of its investments, underlying securities, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its NAV
based on fair value prices and the value of the Steel Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Steel Index is not based on fair value prices), the Fund’s
ability to track the Steel Index may be adversely affected. In addition, any
issues the Fund encounters with regard to currency convertibility (including the
cost of borrowing funds, if any) and repatriation may also increase the index
tracking risk. When markets are volatile, the ability to sell securities at fair
value prices may be adversely impacted and may result in additional trading
costs and/or increase the index tracking risk. The Fund may also need to rely on
borrowings to meet redemptions, which may lead to increased expenses. For tax
efficiency purposes, the Fund may sell certain securities, and such sale may
cause the Fund to realize a loss and deviate from the performance of the Steel
Index. In light of the factors discussed above, the Fund’s return may deviate
significantly from the return of the Steel Index. Changes to the composition of
the Steel Index in connection with a rebalancing or reconstitution of the Steel
Index may cause the Fund to experience increased volatility, during which time
the Fund’s index tracking risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Steel Index, the Fund generally would not sell a security
because the security’s issuer was in financial trouble. Additionally, unusual
market conditions may cause the Steel Index provider to postpone a scheduled
rebalance or reconstitution, which could cause the Steel Index to vary from its
normal or expected composition. Therefore, the Fund’s performance could be lower
than funds that may actively shift their portfolio assets to take advantage of
market opportunities or to lessen the impact of a market decline or a decline in
the value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified”
fund under the 1940 Act. Therefore, the Fund may invest a relatively high
percentage of its assets in a smaller number of issuers or may invest a larger
proportion of its assets in a single issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds.
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 Steel Index concentrates in a
particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The bar chart that follows
shows how the Fund performed for the calendar years shown. The table below the
bar chart shows the Fund’s average annual returns (before and after taxes).
The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
47.11% |
4Q 2020 |
Worst
Quarter: |
-41.90% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck Steel ETF (return before
taxes) |
27.91% |
11.45% |
4.56% |
|
|
VanEck Steel ETF (return after taxes on
distributions) |
25.68% |
10.33% |
3.62% |
|
|
VanEck Steel ETF (return after taxes on
distributions and sale of Fund Shares) |
17.74% |
8.84% |
3.27% |
|
|
NYSE Arca Steel Index (reflects no
deduction for fees, expenses or taxes) |
28.84% |
12.07% |
4.92% |
|
|
S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
Peter
H. Liao |
Portfolio
Manager |
October
2006 |
|
|
Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
URANIUM+NUCLEAR ENERGY ETF |
SUMMARY
INFORMATION
INVESTMENT OBJECTIVE
VanEck®
Uranium+Nuclear Energy ETF1
(the “Fund”) seeks to replicate as closely as possible, before fees and
expenses, the price and yield performance of the MVIS®
Global Uranium & Nuclear Energy Index (the “Nuclear Energy
Index”).
FUND FEES AND EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees (fees
paid directly from your investment) |
None |
Annual Fund Operating Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Management
Fee |
0.50 |
% |
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Other
Expenses |
0.39 |
% |
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|
Total
Annual Fund Operating Expenses(a) |
0.89 |
% |
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|
Fee
Waivers and Expense Reimbursement(a) |
-0.29 |
% |
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|
Total
Annual Fund Operating Expenses After Fee Waivers and Expense
Reimbursement(a) |
0.60 |
% |
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(a) 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, taxes and
extraordinary expenses) from exceeding 0.60% of the Fund’s average daily net
assets per year until at least May 1,
2023. During such time, the expense limitation is expected to
continue until the Fund’s Board of Trustees acts to discontinue all or a portion
of such expense limitation.
EXPENSE EXAMPLE
This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. This example does not take into account brokerage
commissions that you pay when purchasing or selling Shares of the
Fund.
The example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell or hold all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% annual return and that the Fund’s operating expenses remain
the same (except that the example incorporates the fee waivers and/or expense
reimbursement arrangement for only the first year). Although your actual costs
may be higher or lower, based on these assumptions, your costs would
be:
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|
YEAR |
EXPENSES |
|
|
1 |
$61 |
|
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3 |
$255 |
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|
5 |
$465 |
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|
10 |
$1,069 |
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PORTFOLIO TURNOVER
The Fund will pay transaction
costs, such as commissions, when it purchases and sells securities (or “turns
over” its portfolio). A higher portfolio turnover will cause the Fund to incur
additional transaction costs and may result in higher taxes when Fund Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, may affect the Fund’s performance. During
the most recent fiscal year, the Fund’s portfolio turnover rate was
25% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at
least 80% of its total assets in securities that comprise the Fund’s benchmark
index. The Nuclear Energy Index includes equity securities and depositary
receipts issued by companies involved in uranium and nuclear energy. To be
initially eligible for the Nuclear Energy Index, companies must generate at
least 50% of their revenues from (i) uranium mining or uranium mining projects
that have the potential to generate at least 50% of a company’s revenues from
uranium when developed;
________________________________________
1Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Uranium+Nuclear Energy ETF.
(ii)
the construction, engineering and maintenance of nuclear power facilities and
nuclear reactors; (iii) the production of electricity from nuclear sources; or
(iv) equipment and technology or services to the nuclear power industry. Such
companies may include medium-capitalization companies and foreign issuers. As of
December 31, 2020, the Nuclear Energy Index included 25 securities of companies
with a market capitalization range of between approximately $880 million and
$80.7 billion and a weighted average market capitalization of $28.5 billion.
These amounts are subject to change. The Fund’s 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days’
prior written notice to shareholders.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Nuclear Energy Index by investing in a
portfolio of securities that generally replicates the Nuclear Energy Index.
Unlike many investment companies that try to “beat” the performance of a
benchmark index, the Fund does not try to “beat” the Nuclear Energy Index and
does not seek temporary defensive positions that are inconsistent with its
investment objective of seeking to replicate the Nuclear Energy Index.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940, as amended (the “1940 Act”), and, therefore, may invest a greater
percentage of its assets in a particular issuer. The Fund may concentrate its
investments in a particular industry or group of industries to the extent that
the Nuclear Energy Index concentrates in an industry or group of industries. As
of December 31, 2021, the energy and utilities sectors represented a significant
portion of the Fund.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk. An investment in the Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Risk
of Investing in Nuclear Energy Companies.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of nuclear energy companies. Nuclear energy
companies may face considerable risk as a result of, among other risks,
incidents and accidents, breaches of security, ill-intentioned acts of
terrorism, air crashes, natural disasters (such as floods or earthquakes),
equipment malfunctions or mishandling in storage, handling, transportation,
treatment or conditioning of substances and nuclear materials. Such events could
have serious consequences, especially in case of radioactive contamination and
irradiation of the environment, for the general population, as well as a
material, negative impact on the Fund’s portfolio companies and thus the Fund’s
financial situation. In addition, nuclear energy companies are subject to
competitive risk associated with the prices of other energy sources, such as
natural gas and oil. Consumers of nuclear energy may have the ability to switch
between nuclear energy and other energy sources and, as a result, during periods
when competing energy sources are less expensive, the revenues of nuclear energy
companies may decline with a corresponding impact on earnings.
Nuclear
activity is also subject to particularly detailed and restrictive regulations,
with a scheme for the monitoring and periodic re-examination of operating
authorization, which primarily takes into account nuclear safety, environmental
and public health protection, and also national security considerations
(terrorist threats in particular). These regulations and any future regulations
may be subject to significant tightening by national and international
authorities. This could result in increased operating costs, which would have a
negative impact on the Fund’s portfolio companies and may cause operating
businesses related to nuclear energy to become unprofitable or impractical to
operate. Furthermore, uranium prices are subject to fluctuation. The price of
uranium has been and will continue to be affected by numerous factors beyond the
Fund’s control. With respect to uranium, such factors include the demand for
nuclear power, political and economic conditions in uranium producing and
consuming countries, uranium supply from secondary sources and uranium
production levels and costs of production. In addition, the prices of crude oil,
natural gas and electricity produced from traditional hydro power and possibly
other undiscovered energy sources could potentially have a negative impact on
the competitiveness of nuclear energy companies in which the Fund
invests.
Special
Risk Considerations of Investing in Asian Issuers.
Investments
in securities of Asian issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. Certain
Asian economies have experienced over-extension of credit, currency devaluations
and restrictions, high unemployment, high inflation, decreased exports and
economic recessions. Economic events in any one Asian country can have a
significant effect on the entire Asian region as well as on major trading
partners outside Asia, and any adverse effect on some or all of the Asian
countries and regions in which the Fund invests. The securities markets in some
Asian economies are relatively underdeveloped and may subject the Fund to higher
action costs or greater uncertainty than investments in more developed
securities markets. Such risks may adversely affect the value of the Fund’s
investments.
Special
Risk Considerations of Investing in European Issuers.
Investments
in securities of European issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. The
Economic and Monetary Union (“EMU”) of the European Union (“EU”) requires member
countries to comply with restrictions on inflation rates, deficits, interest
rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental or EU regulations on trade, changes in the exchange rate
of the euro, the default or threat of default by an EU member country on its
sovereign debt, and/or an economic recession in an EU member country may have a
significant adverse effect on the economies of EU member countries and on major
trading
partners
outside Europe. The European financial markets have previously experienced, and
may continue to experience, volatility and have been adversely affected by
concerns about economic downturns, credit rating downgrades, rising government
debt levels and possible default on or restructuring of government debt in
several European countries. These events have adversely affected, and may in the
future affect, the value and exchange rate of the euro and may continue to
significantly affect the economies of every country in Europe, including EU
member countries that do not use the euro and non-EU member countries. In a
referendum held on June 23, 2016, voters in the United Kingdom (“UK”) voted to
leave the EU, creating economic and political uncertainty in its wake. On
January 31, 2020, the UK officially withdrew from the EU and the UK entered a
transition period which ended on December 31, 2020. On December 30, 2020, the EU
and UK signed the EU-UK Trade and Cooperation Agreement ("TCA"), an agreement on
the terms governing certain aspects of the EU's and the UK's relationship
following the end of the transition period. Notwithstanding the TCA, following
the transition period, there is likely to be considerable uncertainty as to the
UK's post-transition framework.
Risk
of Investing in Emerging Market Issuers. Investments
in securities of emerging market issuers are exposed to a number of risks that
may make these investments volatile in price or difficult to trade. Emerging
markets are more likely than developed markets to experience problems with the
clearing and settling of trades, as well as the holding of securities by local
banks, agents and depositories. Political risks may include unstable
governments, nationalization, restrictions on foreign ownership, laws that
prevent investors from getting their money out of a country and legal systems
that do not protect property rights as well as the laws of the United States.
Market risks may also include economies that concentrate in only a few
industries, securities issues that are held by only a few investors, liquidity
issues and limited trading capacity in local exchanges and the possibility that
markets or issues may be manipulated by foreign nationals who have inside
information. The frequency, availability and quality of financial information
about investments in emerging markets varies. The Fund has limited rights and
few practical remedies in emerging markets and the ability of U.S. authorities
to bring enforcement actions in emerging markets may be limited, and the Fund's
passive investment approach does not take account of these risks. All of these
factors can make emerging market securities more volatile and potentially less
liquid than securities issued in more developed markets.
Risk
of Investing in Foreign Securities. Investments
in the securities of foreign issuers involve risks beyond those associated with
investments in U.S. securities. These additional risks include greater market
volatility, the availability of less reliable financial information, higher
transactional and custody costs, taxation by foreign governments, decreased
market liquidity and political instability. Because certain foreign securities
markets may be limited in size, the activity of large traders may have an undue
influence on the prices of securities that trade in such markets. The Fund
invests in securities of issuers located in countries whose economies are
heavily dependent upon trading with key partners. Any reduction in this trading
may have an adverse impact on the Fund’s investments.
Foreign
Currency Risk. Because
all or a portion of the income received by the Fund from its investments and/or
the revenues received by the underlying issuer will generally be denominated in
foreign currencies, the Fund’s exposure to foreign currencies and changes in the
value of foreign currencies versus the U.S. dollar may result in reduced returns
for the Fund, and the value of certain foreign currencies may be subject to a
high degree of fluctuation. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and foreign currencies.
Risk
of Investing in Depositary Receipts.
The
Fund may invest in depositary receipts which involve similar risks to those
associated with investments in foreign securities. Depositary receipts are
receipts listed on U.S. or foreign exchanges issued by banks or trust companies
that entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in the Nuclear Energy Index, may
negatively affect the Fund’s ability to replicate the performance of the Nuclear
Energy Index. The issuers of depositary receipts may discontinue issuing new
depositary receipts and withdraw existing depositary receipts at any time, which
may result in costs and delays in the distribution of the underlying assets to
the Fund and may negatively impact the Fund’s performance and the Fund’s ability
to replicate/track the performance of its Index.
Risk
of Investing in the Energy Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the energy sector. Companies operating in
the energy sector are subject to risks including, but not limited to, economic
growth, worldwide demand, political instability in the regions that the
companies operate, government regulation stipulating rates charged by utilities,
interest rate sensitivity, oil price volatility, energy conservation,
environmental policies, depletion of resources, the cost of providing the
specific utility services and other factors that they cannot control. In
addition, these companies are at risk of civil liability from accidents
resulting in injury, loss of life or property, pollution or other environmental
damage claims and risk of loss from terrorism and natural disasters. A downturn
in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.
Risk
of Investing in the Utilities Sector.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of the utilities sector. Companies in the
utilities sector may be adversely affected by changes in exchange rates,
domestic and international competition, difficulty in raising adequate amounts
of capital and governmental limitation on rates charged to
customers.
Risk
of Investing in Small- and Medium-Capitalization Companies.
Small- and medium-capitalization companies may be more volatile and more likely
than large-capitalization companies to have narrower product lines, fewer
financial resources, less management depth and experience and less competitive
strength. In addition, these companies often have greater price volatility,
lower trading volume and less liquidity than larger more established companies.
Returns on investments in securities of small- and medium-capitalization
companies could trail the returns on investments in securities of
large-capitalization companies.
Risk
of Cash Transactions.
Unlike other exchange-traded funds (“ETFs”), the Fund expects to effect its
creations and redemptions at least partially for cash, rather than wholly for
in-kind securities. Therefore, it may be required to sell portfolio securities
and subsequently incur brokerage costs and/or recognize gains or losses on such
sales that the Fund might not have recognized if it were to distribute portfolio
securities in kind. As such, investments in Shares may be less tax-efficient
than an investment in a conventional ETF.
Equity
Securities Risk.
The value of the equity securities held by the Fund may fall due to general
market and economic conditions, perceptions regarding the markets in which the
issuers of securities held by the Fund participate, or factors relating to
specific issuers in which the Fund invests. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the Fund may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
The Fund’s return may not match the return of the Nuclear Energy Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Nuclear Energy 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 Nuclear
Energy Index, or (to the extent the Fund effects creations and redemptions for
cash) raising cash to meet redemptions or deploying cash in connection with
newly created Creation Units, which are not factored into the return of the
Nuclear Energy Index. Transaction costs, including brokerage costs, will
decrease the Fund’s net asset value (“NAV”) to the extent not offset by the
transaction fee payable by an Authorized Participant (“AP”). Market disruptions
and regulatory restrictions could have an adverse effect on the Fund’s ability
to adjust its exposure to the required levels in order to track the Nuclear
Energy Index. Errors in the Nuclear Energy Index data, the Nuclear Energy Index
computations and/or the construction of the Nuclear Energy Index in accordance
with its methodology may occur from time to time and may not be identified and
corrected by the Nuclear Energy Index provider for a period of time or at all,
which may have an adverse impact on the Fund and its shareholders. Shareholders
should understand that any gains from the Nuclear Energy Index provider's errors
will be kept by the Fund and its shareholders and any losses or costs resulting
from the Nuclear Energy Index provider's errors will be borne by the Fund and
its shareholders. When the Nuclear Energy Index is rebalanced and the Fund in
turn rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Nuclear Energy Index, any transaction costs and market
exposure arising from such portfolio rebalancing will be borne directly by the
Fund and its shareholders. The Fund may not be fully invested at times as a
result of cash flows into the Fund (if the Fund effects creations and
redemptions for cash) or reserves of cash held by the Fund to meet redemptions
or pay expenses. Apart from scheduled rebalances, the Nuclear Energy Index
provider or its agents may carry out additional ad hoc rebalances to the Nuclear
Energy Index. Therefore, errors and additional ad hoc rebalances carried out by
the Nuclear Energy Index provider or its agents to the Nuclear Energy Index may
increase the costs to and the tracking error risk of the Fund. In addition, the
Fund may not be able to invest in certain securities included in the Nuclear
Energy Index, or invest in them in the exact proportions in which they are
represented in the Nuclear Energy Index. The Fund’s performance may also deviate
from the return of the Nuclear Energy Index due to legal restrictions or
limitations imposed by the governments of certain countries, certain listing
standards of the Fund’s listing exchange (the “Exchange”), a lack of liquidity
on stock exchanges in which such securities trade, potential adverse tax
consequences or other regulatory reasons or legal restrictions or limitations
(such as
diversification
requirements). The Fund may value certain of its investments, underlying
securities, underlying currencies and/or other assets based on fair value
prices. To the extent the Fund calculates its NAV based on fair value prices and
the value of the Nuclear Energy Index is based on securities’ closing prices on
local foreign markets (i.e.,
the value of the Nuclear Energy Index is not based on fair value prices), the
Fund’s ability to track the Nuclear Energy Index may be adversely affected. In
addition, any issues the Fund encounters with regard to currency convertibility
(including the cost of borrowing funds, if any) and repatriation may also
increase the index tracking risk. When markets are volatile, the ability to sell
securities at fair value prices may be adversely impacted and may result in
additional trading costs and/or increase the index tracking risk. The Fund may
also need to rely on borrowings to meet redemptions, which may lead to increased
expenses. For tax efficiency purposes, the Fund may sell certain securities, and
such sale may cause the Fund to realize a loss and deviate from the performance
of the Nuclear Energy Index. In light of the factors discussed above, the Fund’s
return may deviate significantly from the return of the Nuclear Energy Index.
Changes to the composition of the Nuclear Energy Index in connection with a
rebalancing or reconstitution of the Nuclear Energy Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Authorized
Participant Concentration Risk. The
Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk.
An investment in the Fund involves risks similar to those of investing in any
fund invested in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. However,
because the Fund is not “actively” managed, unless a specific security is
removed from the Nuclear Energy Index, the Fund generally would not sell a
security because the security’s issuer was in financial trouble. Additionally,
unusual market conditions may cause the Nuclear Energy Index provider to
postpone a scheduled rebalance or reconstitution, which could cause the Nuclear
Energy Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
The market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Issuer-Specific
Changes Risk. The
value of individual securities or particular types of securities in the Fund’s
portfolio can be more volatile than the market as a whole and can perform
differently from the value of the market as a whole, which may have a greater
impact if the Fund’s portfolio is concentrated in a country, group of countries,
region, market, industry, group of industries, sector or asset class. The value
of securities of smaller issuers can be more volatile than that of larger
issuers.
Non-Diversified
Risk.
The Fund is classified as a
“non-diversified” fund under the 1940 Act. Therefore, the Fund may invest a
relatively high percentage of its assets in a smaller number of issuers or may
invest a larger proportion of its assets in a single
issuer. Moreover, the gains and losses on a
single investment may have a greater impact on the Fund’s NAV and may make the
Fund more volatile than more diversified funds. The Fund may be particularly
vulnerable to this risk because the Nuclear Energy Index is comprised of
securities of a limited number of companies.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Nuclear Energy Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sector and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 24, 2014,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the DAXglobal®
Nuclear
Energy Index (the “Prior Index”). Therefore, performance information prior to
March 24, 2014 reflects the performance of the Fund while seeking to track the
Prior Index. All returns assume reinvestment of dividends and distributions.
The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns (%)—Calendar
Years
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Best
Quarter: |
13.49% |
4Q 2020 |
Worst
Quarter: |
-18.87% |
1Q
2020 |
Average Annual Total Returns for the Periods
Ended December 31, 2021
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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Past One
Year |
Past Five
Years |
Past Ten
Years |
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VanEck Uranium+Nuclear Energy ETF
(return before taxes) |
13.48% |
6.10% |
5.10% |
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VanEck Uranium+Nuclear Energy ETF
(return after taxes on distributions) |
12.88% |
5.33% |
4.36% |
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VanEck Uranium+Nuclear Energy ETF
(return after taxes distributions and sale of Fund
Shares) |
8.28% |
4.67% |
3.93% |
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MVIS Global Uranium & Nuclear
Energy Index (reflects no deduction for fees, expenses or taxes,
except withholding taxes)* |
13.18% |
5.82% |
4.68% |
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S&P
500®
Index (reflects no deduction for
fees, expenses or taxes) |
28.71% |
18.47% |
16.55% |
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*Prior to March 24, 2014,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior Index. Therefore, performance
information prior to March 24, 2014 reflects the performance of the Fund while
seeking to track the Prior Index. Prior to March 24, 2014, index data reflects
that of the Prior Index. From March 24, 2014, the index data reflects that of
the Nuclear Energy Index.
See “License Agreements
and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly
responsible
for the day-to-day management of the Fund’s portfolio:
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Name |
Title
with Adviser |
Date
Began Managing the Fund |
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Peter
H. Liao |
Portfolio
Manager |
August
2007 |
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Guo
Hua (Jason) Jin |
Portfolio
Manager |
March
2018 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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SUMMARY
INFORMATION ABOUT PURCHASES AND SALES OF FUND SHARES, TAXES AND PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL
INTERMEDIARIES |
PURCHASE
AND SALE OF FUND SHARES
Individual
Shares of a Fund may only be purchased and sold in secondary market transactions
through a broker or dealer at a market price. Shares of the Funds are listed on
the Exchange, and because Shares trade at market prices rather than NAV, Shares
of the Funds may trade at a price greater than NAV (i.e.,
a “premium”) or less than NAV (i.e.,
a “discount”).
An
investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares of a Fund (bid) and the
lowest price a seller is willing to accept for Shares (ask) when buying or
selling Shares in the secondary market (the “bid/ask spread”).
Recent
information, including information about each Fund’s NAV, market price, premiums
and discounts, and bid/ask spreads, is included on the Fund’s website at
www.vaneck.com.
TAX
INFORMATION
Each
Fund’s distributions are taxable and will generally be taxed as ordinary income
or capital gains.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of the Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer or other intermediary or its employees or associated persons to
recommend the Fund over another investment. Ask your financial adviser or visit
your financial intermediary’s website for more information.
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ADDITIONAL
INFORMATION ABOUT THE FUNDS’ INVESTMENT STRATEGIES AND
RISKS |
PRINCIPAL
INVESTMENT STRATEGIES
(All
Funds except VanEck Future of Food ETF)
The
Adviser anticipates that, generally, each Fund will hold or gain exposure to all
of the securities that comprise its benchmark index (the “Index”) in proportion
to their weightings in such Index. However, under various circumstances, it may
not be possible or practicable to purchase all of those securities in those
weightings. In these circumstances, a Fund may purchase a sample of securities
in its Index. There also may be instances in which the Adviser may choose to
underweight or overweight a security in a Fund’s Index, purchase securities not
in the Fund’s Index that the Adviser believes are appropriate to substitute for
certain securities in such Index or utilize various combinations of other
available investment techniques in seeking to replicate as closely as possible,
before fees and expenses, the price and yield performance of the Fund’s Index.
Each Fund may sell securities that are represented in its Index in anticipation
of their removal from its Index or purchase securities not represented in its
Index in anticipation of their addition to such Index. Each Fund may also, in
order to comply with the tax diversification requirements of the Internal
Revenue Code of 1986, as amended (the “Code”), temporarily invest in securities
not included in its Index that are expected to be highly correlated with the
securities included in its Index.
(VanEck
Future of Food ETF only)
Under
normal conditions, the Fund invests at least 80% of its total assets in domestic
and foreign equity securities of companies engaged in Agri-Food technology and
innovation. “Agri-Food technology and innovation” encompasses industries and
companies that are leading, enabling, supplying, disrupting, or benefiting from
new environmentally sustainable agriculture and food products and services. The
Adviser performs a qualitative and quantitative analysis of each company’s
financial statements, balance sheets and/or earnings reports to determine
whether a company is engaged in Agri-Food technology and innovation. The Fund is
an actively managed ETF.
The
Fund may also invest up to 20% of its net assets in special purpose vehicles
such as SPACs, IPOs and securities issued by other investment companies,
including ETFs and foreign investment companies. The Fund may also invest in
money market funds, but these investments are not subject to this limitation.
The Fund may invest in SPACs, IPOs, and ETFs to participate in, or gain exposure
to, certain market industries, or when direct investments in certain countries
are not permitted or available.
FUNDAMENTAL
AND NON-FUNDAMENTAL POLICIES
Each
Fund’s investment objective and each of its other investment policies are
non-fundamental policies that may be changed by the Board of Trustees of the
Trust (the “Board of Trustees”) without shareholder approval, except as noted in
this Prospectus or the Statement of Additional Information (“SAI”) under the
section entitled “Investment Policies and Restrictions—Investment
Restrictions.”
RISKS
OF INVESTING IN THE FUNDS
The
following section provides additional information regarding the principal risks
identified under “Principal Risks of Investing in the Fund” in each Fund’s
“Summary Information” section followed by additional risk information. The risks
listed below are applicable for each Fund unless otherwise noted.
Investors
in the Funds should be willing to accept a high degree of volatility in the
price of the Funds’ Shares and the possibility of significant losses. An
investment in the Funds involves a substantial degree of risk. An investment in
the Funds is not a deposit with a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Therefore,
you should consider carefully the following risks before investing in the Funds,
each of which could significantly and adversely affect the value of an
investment in a Fund.
Risk
of Investing in Agriculture Companies. (VanEck
Agribusiness ETF only.) The Fund will be sensitive to, and its performance will
depend to a greater extent on, the overall condition of the agriculture
companies. Economic forces affecting agricultural companies and related
industries, including forces affecting the agricultural commodity prices, labor
costs, and energy and financial markets, could adversely affect the Fund’s
portfolio companies and thus, the Fund’s financial situation and profitability.
Agricultural and livestock production and trade flows are significantly affected
by government policies and regulations, including subsidy policies and the
imposition of taxes, tariffs, duties and import and export restrictions. Such
policies and regulations can affect the planting/raising of certain
crops/livestock versus other uses of resources, the location and site of crop
and livestock production, whether processed or unprocessed commodity products
are traded and the volume and types of imports and exports. Agriculture
companies may be subject to the risk of liability for environmental damage,
worker safety, depletion of resources, mandated expenditures for safety and
pollution control devices, and litigation. An increased competitive landscape,
caused by increased availability of food and other agricultural commodities,
economic recession, labor difficulties or changing consumer tastes and spending,
may lead to a decrease in demand for the products and services provided by
companies involved in agriculture. Furthermore, companies involved in
agriculture are particularly sensitive to changing weather conditions and other
natural disasters, including floods, droughts and disease outbreaks. In
addition, these companies are also subject to risks associated with cyclicality
of revenues and earnings, currency fluctuations, changing consumer tastes,
extensive competition, consolidation, and excess capacity. In addition,
agriculture companies must comply with a broad range of environmental health,
food safety and worker safety laws and regulations which could adversely affect
the Fund. Additional or
more
stringent environmental and food safety laws and regulations may be enacted in
the future and such changes could have a material adverse effect on the business
of the agriculture companies.
Risk
of Investing in Agri-Food Technology and Innovation Food Companies.
(VanEck Future of Food ETF only). The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of
companies operating in the food technology, precision agriculture, and
agricultural sustainability markets. These companies may have limited product
lines, markets, financial resources or personnel. These companies may face
intense competition and potentially rapid product obsolescence. These companies
are also heavily dependent on intellectual property rights and may be adversely
affected by loss or impairment of those rights. These companies are also subject
to significant environmental and food safety regulations that could adversely
affect their business. Additional or more stringent environmental and food
safety regulations may be enacted in the future and such changes could have a
material adverse effect on the business of the Fund’s portfolio companies.
Companies operating in the food technology markets are subject to other risks
affecting the food industry. The food industry is highly competitive and can be
significantly affected by demographic and product trends, competitive pricing,
marketing campaigns, environmental factors, government regulation, adverse
changes in general economic conditions, evolving consumer preferences,
nutritional and health-related concerns, federal, state and local food
inspection and processing controls, consumer product liability claims, consumer
boycotts, risks of product tampering, and the availability and expense of
liability insurance. Food product recalls require companies in the food industry
to withdraw contaminated or mislabeled products from the market. Companies
operating in operating in the precision agriculture and agricultural
sustainability markets are subject to other risks affecting the agricultural
industry, including the impact of global climate change on agricultural
production. These companies, especially smaller companies, tend to be more
volatile than companies that do not rely heavily on technology. These companies
may be adversely affected by commodity price volatility, changes in exchange
rates, government policies and regulations such as taxes, tariffs, duties,
subsidies and import and export restrictions, availability of certain inputs and
materials required for production, depletion of resources, technological
developments and labor relations. The customers and/or suppliers of the
companies in which the Fund invests may be concentrated in a particular country,
region or industry. Any adverse event affecting one of these countries, regions
or industries could have a negative impact on such companies.
Risk
of Regulatory Action and Changes in Governments. (VanEck
Rare Earth/Strategic Metals ETF only.) The producing, refining and recycling of
rare earth/strategic metals will be significantly affected by regulatory action
and changes in governments. Actions by countries essential to the producing,
refining and recycling of rare earth/strategic metals to limit exports could
have a significant adverse effect on industries around the globe and on the
values of the businesses in which the Fund invests.
Risk
of Investing in Gold and Silver Mining Companies.
(VanEck Gold Miners ETF and VanEck Junior Gold Miners ETF only.) Each Fund will
be sensitive to, and its performance will depend to a greater extent on, the
overall condition of gold and silver mining companies. Because each Fund invests
in stocks and depositary receipts of U.S. and foreign companies that are
involved in the gold mining and silver mining industries, it is subject to
certain risks associated with such companies. Investments related to gold and
silver are considered speculative and are affected by a variety of factors.
Competitive pressures may have a significant effect on the financial condition
of gold mining and silver mining companies. Also, gold and silver mining
companies are highly dependent on the price of gold bullion and silver bullion,
respectively, but may also be adversely affected by a variety of worldwide
economic, financial and political factors. Therefore, the securities of gold or
silver mining companies may under- or over-perform commodities themselves over
the short-term or long-term. Gold bullion and silver bullion prices may
fluctuate substantially over short periods of time, even during periods of
rising prices, so the Fund’s Share price may be more volatile than other types
of investments. To the extent a Fund invests in gold bullion, such investments
may incur higher storage and custody costs as compared to purchasing, holding
and selling more traditional investments.
A
drop in the price of gold and/or silver bullion would particularly adversely
affect the profitability of small- and medium- capitalization mining companies
and their ability to secure financing. Mining operations have varying expected
life spans, and companies that have mines with short expected life spans may
experience more stock price volatility. Furthermore, companies that are only in
the exploration stage are typically unable to adopt specific strategies for
controlling the impact of the price of gold or silver. The price of gold and
silver may fluctuate. These prices may fluctuate substantially over short
periods of time so each Fund’s Share price may be more volatile than other types
of investments. Fluctuation in the prices of gold and silver may be due to a
number of factors, including the changes in inflation, changes in currency
exchange rates and changes in industrial and commercial demand for metals
(including fabricator demand). Additionally, increased environmental or labor
costs may depress the value of metal investments.
The
prices of gold and precious metals operation companies are affected by the price
of gold or other precious metals such as platinum, palladium and silver, as well
as other prevailing market conditions. These prices may be volatile, fluctuating
substantially over short periods of time. The prices of precious metals may also
be influenced by macroeconomic conditions, including confidence in the global
monetary system and the relative strength of various currencies, as well as
demand in the industrial and jewelry sectors. In times of significant inflation
or great economic uncertainty, gold, silver and other precious metals may
outperform traditional investments such as bonds and stocks. However, in times
of stable economic growth, traditional equity and debt investments could offer
greater appreciation potential and the value of gold, silver and other precious
metals may be adversely affected, which could in turn affect the Fund’s returns.
Gold-related investments as a group have not performed as well as the stock
market in general during periods when the U.S. dollar is strong, inflation is
low and general economic conditions are
stable.
Additionally, returns on gold-related investments have traditionally been more
volatile than investments in broader equity or debt markets. In addition, some
gold and precious metals mining companies have hedged, to varying degrees, their
exposure to decreases in the prices of gold or precious metals by selling
forward future production, which could limit the company’s benefit from future
rises in the prices of gold or precious metals or increase the risk that the
company could fail to meet its contractual obligations.
A
significant portion of the world’s gold reserves are held by governments,
central banks and related institutions. The production, purchase and sale of
precious metals by governments or central banks or other larger holders can be
negatively affected by various economic, financial, social and political
factors, which may be unpredictable and may have a significant adverse impact on
the supply and prices of precious metals.
The
principal supplies of metal industries also may be concentrated in a small
number of countries and regions, the governments of which may pass laws or
regulations limiting metal investments for strategic or other policy reasons.
Economic, social and political conditions in those countries that are the
largest producers of gold and silver may have a direct negative effect on the
production and marketing of gold and silver and on sales of central bank gold
holdings. Some gold, silver and precious metals mining operation companies may
hedge their exposure to declines in gold, silver and precious metals prices by
selling forward future production, which may result in lower returns during
periods when the prices of gold, silver and precious metals
increase.
The
gold, silver and precious metals industries can be significantly adversely
affected by events relating to international political developments, the success
of exploration projects, commodity prices, tax and government regulations and
intervention (including government restrictions on private ownership of gold and
mining land), changes in inflation or expectations regarding inflation in
various countries and investment speculation. If a natural disaster or other
event with a significant economic impact occurs in a region where the companies
in which each Fund invests operate, such disaster or event could negatively
affect the profitability of such companies and, in turn, the Fund’s investment
in them. Gold and silver mining companies may also be significantly adversely
affected by import controls, worldwide competition, environmental hazards,
liability for environmental damage, depletion of resources, industrial
accidents, underground fires, seismic activity, labor disputes, unexpected
geological formations, availability of appropriately skilled persons,
unanticipated ground and water conditions and mandated expenditures for safety
and pollution control devices.
A
significant number of the companies in the Junior Gold Miners Index may be early
stage mining companies that are in the exploration stage only or that hold
properties that might not ultimately produce gold or silver. The exploration and
development of mineral deposits involve significant financial risks over a
significant period of time which even a combination of careful evaluation,
experience and knowledge may not eliminate. Few properties which are explored
are ultimately developed into producing mines. Major expenditures may be
required to establish reserves by drilling and to construct mining and
processing facilities at a site. In addition, many early stage miners operate at
a loss and are dependent on securing equity and/or debt financing, which might
be more difficult to secure for an early stage mining company than for a more
established counterpart.
Risk
of Investing in “Green” Metals.
(VanEck Green Metals ETF only). Investments in companies involved in the
production, refining, processing and recycling of green metals used to
facilitate the energy transition from fossil fuels to cleaner energy sources and
technologies are subject to a variety of risks. Under certain market conditions,
the Fund may underperform as compared to funds that invest in a broader range of
investments. There may be significant differences in interpretations of what is
considered a “green” metal and the definition used by the Index Provider may
differ with those used by other investors, investment advisers or index
providers. In addition, some companies that rely on green metals may be
dependent on government tax incentives and subsidies and on political support
for certain environmental technologies and companies. The “green” sector may
also have challenges such as a limited number of issuers and limited liquidity
in the market. Additionally, there may also be a limited supply of companies
involved in green metals, which may adversely affect the Fund.
Risk
of Investing in Low Carbon Energy Companies.
(VanEck Low Carbon Energy ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of low
carbon (i.e.,
renewable) energy companies. Low carbon energy refers to the generation of power
through environmentally friendly sources that can replace or supplement
traditional fossil-fuel sources and that may reduce the global carbon footprint.
It includes power derived principally from bio fuels (such as ethanol), wind,
solar, hydro and geothermal sources and also includes the various technologies
that support the production, use and storage of these sources.
Renewable
energy companies may be significantly affected by the competition from new and
existing market entrants, obsolescence of technology, short product cycles,
production spending, varying prices and profits, commodity price volatility,
changes in exchange rates, imposition of import controls, depletion of
resources, seasonal weather conditions, technological developments and general
economic conditions, market sentiment, fluctuations in energy prices and supply
and demand of renewable energy fuels, fluctuations in the price of oil and gas,
energy conservation efforts, the success of exploration projects, tax and other
government regulations (such as incentives and subsidies) and international
political events. Additionally, adverse weather conditions may cause
fluctuations in renewable energy generation and adversely affect the cash flows
associated with these assets.
Renewable
energy companies also face a significant risk of liability from accidents
resulting in injury or loss of life or property, equipment malfunctions or
mishandling of materials and a risk of loss from terrorism, political strife or
natural disasters. Further, renewable energy companies may be subject to risks
associated with hazardous materials and can be significantly and adversely
affected by legislation resulting in more strict government regulations and
enforcement policies and specific expenditures for environmental cleanup
efforts. There are also risks associated with a failure to enforce environmental
law. If the government reduces environmental regulations or their enforcement,
companies that produce products designed to provide a clean environment are less
likely to prosper. Renewable energy companies may be more volatile than
companies operating in more established industries. Certain valuation methods
used to value renewable energy companies have not been in widespread use for a
significant period of time. As a result, the use of these valuation methods may
serve to further increase the volatility of certain renewable and transitional
energy company share prices. If government subsidies and incentives for
renewable energy sources are reduced or eliminated, the demand for renewable
energy may decline and cause corresponding declines in the revenues and profits
of renewable energy companies. In addition, changes in U.S., European and other
governments’ policies towards renewable energy technology also may have an
adverse effect on the Fund’s performance. Furthermore, the Fund may invest in
the shares of companies with a limited operating history, some of which may
never have operated profitably. Investment in young companies with a short
operating history is generally riskier than investing in companies with a longer
operating history. The Fund will carry greater risk and may be more volatile
than a portfolio composed of securities issued by companies operating in a wide
variety of different or more established industries.
Risk
of Investing in Natural Resources Companies.
(VanEck Natural Resources ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of the
natural resources companies. Investments in natural resources and natural
resources companies, which include companies engaged in agriculture,
alternatives (e.g.,
water and alternative energy), base and industrial metals, energy, forest
products and precious metals, can be significantly affected by events relating
to these industries, including international political and economic
developments, embargoes, tariffs, inflation, weather and natural disasters,
livestock disease, limits on exploration, rapid changes in the supply of and
demand for natural resources and other factors. Other risks may include
liabilities for environmental damage and general civil liabilities, depletion of
resources, and mandated expenditures for safety and pollution control. The
Fund’s portfolio securities may experience substantial price fluctuations as a
result of these factors, and may move independently of the trends of other
operating companies. Companies engaged in the industries listed above may be
adversely affected by changes in government policies and regulations,
technological advances and/or obsolescence, energy conservation efforts, the
success of exploration projects, limitations on the liquidity of certain natural
resources and commodities and competition from new market entrants. Political
risks and the other risks to which foreign securities are subject may also
affect domestic natural resource companies if they have significant operations
or investments in foreign countries. Changes in general economic conditions,
including commodity price volatility, changes in exchange rates, imposition of
import controls, rising interest rates, prices of raw materials and other
commodities, depletion of resources and labor relations, could adversely affect
the Fund’s portfolio companies. The highly cyclical nature of the natural
resources sector may affect the earnings or operating cash flows of natural
resources companies.
Natural
resources companies engaged in crude oil and natural gas exploration,
development, or production, natural gas gathering and processing, crude oil
refining and transportation and coal mining or sales may be directly affected by
their respective natural resources commodities prices. The volatility of, and
interrelationships between, commodity prices can also indirectly affect certain
natural resources companies due to the potential impact on the volume of
commodities transported, processed, stored or distributed. In addition, the
companies in which the Fund invests may also be subject to the risks associated
with the energy and basic materials sectors, including the risks generally
associated with the extraction of natural resources, such as the risks of mining
and drilling. Securities of companies within natural resources can perform
differently than the overall market. This may be due to changes in such things
as the regulatory or competitive environment or to changes in investor
perceptions regarding a particular type of natural resource. Because the Fund
may allocate relatively more assets to certain types of natural resources than
others, the Fund’s performance may be more sensitive to developments which
affect the types of natural resources focused on by the Fund.
Risk
of Investing in Oil Refining Companies.
(VanEck Oil Refiners ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of oil
refining companies. The profitability of oil refining companies is related to
supply and demand of all sources of energy. The price of energy, the earnings of
oil refining companies, and the value of such companies’ securities are subject
to significant volatility. Additionally, the price of oil may experience
significant volatility, which may materially impact oil refining companies. Such
companies are also subject to risks of natural declines in the production of oil
and natural gas fields (which utilize their gathering and processing facilities
as a way to market their production), prolonged declines in the price of natural
gas or crude oil (which curtails drilling activity and therefore production) and
declines in the prices of natural gas liquids and refined petroleum products
(which cause lower processing margins). Changes in commodity prices, exploration
and production spending, interest rates and exchange rates, government
regulation, the imposition of import controls, world events, negative
perception, depletion of resources, development of alternative energy sources,
technological developments, labor relations and general economic conditions, as
well as market, economic and political risks of the countries where oil refining
companies are located or do business, fluctuations caused by events relating to
international politics, including political instability, expropriation, social
unrest and acts of war, acts of terrorism, economic sanctions, energy
conservation, the success of exploration projects and tax and other governmental
regulatory policies. Changes to U.S. trading policies could cause
friction
with certain oil-producing countries and between the governments of the United
States and other major exporters of oil to the United States.
Oil
refining companies are also subject to risks related to environmental damage,
injury to persons and loss of life or the destruction of property, any of which
could expose such companies to, among other things, the risk of litigation,
clean-up or other remedial costs and disruption of operations. Additionally, oil
refining companies are vulnerable to disruptions in operations, including those
due to weather-related events such as hurricanes and transportation-related
disruptions that may affect the flow of oil to the oil refining companies. Oil
refining companies operate in a highly competitive and cyclical industry, with
intense price competition. The operations of oil refineries are subject to
stringent and complex federal, state and local environmental laws and
regulations. New and more stringent environmental and health and safety laws,
regulations and permit requirements or stricter interpretations of current laws
or regulations could impose substantial additional costs on companies in which
the Fund invests. On the other hand, even regulatory changes such as the
implementation of policies with less stringent environmental protection
standards and those geared away from sustainable energy development could lead
to fluctuations in supply, demand and prices of oil and gas. Moreover, failure
to comply with any such requirements could have a material adverse effect on a
company, and there can be no assurance that companies will at all times comply
with all applicable environmental laws, regulations and permit requirements. A
significant portion of an oil refining company’s revenues may depend on a
relatively small number of customers, including governmental entities and
utilities.
Risk
of Investing in Oil Services Companies.
(VanEck Oil Services ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of oil
services companies. The profitability of oil services companies is related to
worldwide energy prices, including all sources of energy, and exploration and
production costs. The price of energy, the earnings of oil services companies,
and the value of such companies’ securities are subject to significant
volatility. Oil services companies may have significant capital investments in,
or engage in transactions involving, emerging market countries, which may
heighten these risks. Oil services companies are also subject to risks of
changes in exchange rates and the price of oil and gas, changes in prices for
competitive energy services, changes in the global supply of and demand for oil
and gas, the imposition of import controls, world events, actions of OPEC,
negative perception and publicity, depletion of resources and general economic
conditions, development of alternative energy sources, energy conservation
efforts, technological developments and labor relations, as well as market,
economic, social and political risks of the countries where oil services
companies are located or do business. The values of securities of oil services
companies are subject to swift price and supply fluctuations caused by events
relating to international politics, including political instability,
expropriation, nationalization or other adverse policies, social unrest and acts
of war, energy conservation, the success of exploration projects and tax and
other governmental regulatory policies. Oil services companies may also be
subject to contractual fixed pricing, which may increase the cost of business
and limit these companies’ earnings. Additionally, a significant portion of the
revenues of these companies depend on a relatively small number of customers,
including governmental entities and utilities. As a result, governmental budget
restraints may have a material adverse effect on the stock prices of companies
in the industry. Oil services companies operate in a highly competitive and
cyclical industry, with intense price competition.
Oil
services companies are exposed to significant and numerous operating hazards.
Oil services companies’ operations are subject to hazards inherent in the oil
and gas industry, such as fire, explosion, blowouts, loss of well control, oil
spills, pipeline and equipment leaks and ruptures and discharges or releases of
toxic or hazardous gases. Oil and gas exploration and production can be
significantly affected by natural disasters and adverse weather conditions in
the regions in which they operate. The revenues of oil services companies may be
negatively affected by contract termination and renegotiation. In the oil
services sector, it is customary for contracts to provide for either automatic
termination or termination at the option of the customer if the drilling unit is
destroyed or lost or if drilling operations are suspended for a specified period
of time as a result of events beyond the control of either party or because of
equipment breakdowns. In periods of depressed market conditions, the customers
of oil services companies may not honor the terms of existing contracts and may
terminate contracts or seek to renegotiate contract rates and terms to reduce
their obligations.
Oil
services companies are subject to, and may be adversely affected by, extensive
federal, state, local and foreign laws, rules and regulations. Oil services
companies may also be adversely affected by environmental damage claims and
other types of litigation. Laws and regulations protecting the environment may
expose oil services companies to liability for the conduct of or conditions
caused by others or for acts that were in compliance with all applicable laws at
the time they were performed. Changes to environmental protection laws,
including the implementation of policies with less stringent environmental
protection standards and those geared away from sustainable energy development,
could lead to fluctuations in supply, demand and prices of oil and gas. The
international operations of oil services companies expose them to risks
associated with instability and changes in economic and political conditions,
foreign currency fluctuations, changes in interest rates, changes in foreign
regulations and other risks inherent to international business. Additionally,
changes to U.S. trading policies could cause friction with certain oil producing
countries and between the governments of the United States and other major
exporters of oil to the United States. Some oil services companies are engaged
in other lines of business unrelated to oil services, and they may experience
problems with these lines of business which could adversely affect their
operating results. Despite a company’s possible success in traditional oil
services activities, there can be no assurance that the other lines of business
in which these companies are engaged will not have an adverse effect on a
company’s business or financial condition.
Risk
of Investing in Rare Earth and Strategic Metals Companies.
(VanEck Green Metals ETF and VanEck Rare Earth/Strategic Metals ETF only.) The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of rare earth/strategic metals companies. Rare
earth/strategic metals are industrial metals that are typically mined as
by-products or secondary metals in operations focused on precious metals and
base metals. Compared to base metals, they have more specialized uses and are
often more difficult to extract. Rare earth metals (or rare earth elements), a
subset of strategic metals, are a collection of chemical elements that are
crucial to many of the world’s most advanced technologies. Rare earth/strategic
metals are used in a variety of technologies including, but not limited to,
cellular phones, high performance batteries, flat screen televisions, and green
energy technology such as wind, solar and geothermal, and are expected to be
critical to the future of hybrid and electric cars, high-tech military
applications including radar, missile guidance systems, navigation and night
vision, and superconductors and fiber-optic communication systems.
The
demand for strategic metals has from time to time strained supply, and there is
a risk of a shortage of such materials in the world, which could adversely
affect the companies in the Fund’s portfolio. Competitive pressures may have a
significant effect on the financial condition of companies involved in the
various activities that are related to the producing, refining and recycling of
rare earth/strategic metals. Also, these companies are highly dependent on the
demand for and price of rare earth/strategic metals, which may fluctuate
substantially over short periods of time, so the Fund’s Share price may be more
volatile than other types of investments.
Companies
involved in the various activities that are related to the producing, refining
and recycling of rare earth/strategic metals tend to be small- to
medium-capitalization companies with volatile share prices and can be
significantly affected by events relating to changes in the level of industrial
activity, disruptions in mining, storing and refining the metals, adjustments to
inventory, variations in production costs, regulatory compliance costs,
international political and economic developments, energy conservation efforts,
the success of exploration projects, commodity prices, tax and other government
regulations, depletion of resources, and mandated expenditures for safety and
pollution control devices. Moreover, some companies may be subject to the risks
generally associated with extraction of natural resources, such as the risks of
mining, and the risks of the hazards associated with metals and mining, such as
fire, drought, and increased regulatory and environmental costs. These companies
may also be significantly affected by the conditions and events that occur in
the regions that the companies to which the Fund has exposure operate. The
producing, refining and recycling of rare earth/strategic metals can be capital
intensive and, if companies involved in such activities are not managed well,
the share prices of such companies could decline even as prices for the
underlying rare earth/strategic metals are rising. In addition, companies
involved in the various activities that are related to the producing, refining
and recycling of rare earth/strategic metals may be at risk for environmental
damage claims. Furthermore, demand for rare earth/strategic metals may change
rapidly and unpredictably, including as a result of the development of less
expensive alternatives.
Risk
of Investing in Steel Companies.
(VanEck Steel ETF only.) The Fund will be sensitive to, and its performance will
depend to a greater extent on, the overall condition of steel companies. Because
the Fund primarily invests in stocks and depositary receipts of companies that
are involved in a variety of activities related to steel production, it is
subject to certain risks associated with such companies. Competitive pressures
may have a significant effect on the financial condition of steel companies.
Also, these companies are highly dependent on the price of steel. These prices
may fluctuate substantially over short periods of time, so the Fund’s Share
price may be more volatile than other types of investments. These companies are
also affected by changes in government regulation, tariffs and trade disputes,
world events and economic conditions. Steel companies may benefit from
government subsidies or certain trade protections. If those subsidies or trade
protections are reduced or removed, the profits of steel companies may be
affected, potentially drastically. In addition, these companies are at risk for
environmental damage claims. Weather conditions, a strong or weak domestic
economy, political instability and conservation efforts may affect the demand
for steel. Companies involved in the manufacturing and storage of iron and steel
products are also impacted by the level and volatility of commodity prices, the
exchange value of the dollar, changing government regulations, import controls,
worldwide competition, innovation within the industry that may render a
company’s products obsolete, depletion of resources and mandated expenditures
for safety and pollution control devices. Production of industrial materials
such as steel often exceeds demand as a result of over-building or economic
downturns, which may lead to poor investment returns.
Risk
of Investing in Nuclear Energy Companies.
(VanEck Uranium+Nuclear Energy ETF only.) The Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of nuclear
energy companies. Nuclear energy companies may face considerable risk as a
result of, among other risks, incidents and accidents, breaches of security,
ill-intentioned acts of terrorism, natural disasters (such as floods or
earthquakes), equipment malfunctions or mishandling in storage, handling,
transportation, treatment or conditioning of substances and nuclear materials.
Such events could have serious consequences, especially in case of radioactive
contamination and irradiation of the environment, for the general population, as
well as a material, negative impact on the Fund’s portfolio companies and thus
the Fund’s financial situation. In addition, nuclear energy companies are
subject to competitive risk associated with the prices of other energy sources,
such as natural gas and oil, obsolescence of existing technology, short product
cycles, falling prices and profits, competition from new market entrants and
general economic conditions. The price of uranium may be affected by changes in
inflation rates, interest rates, monetary policy, economic conditions and
political stability. In addition, uranium mining companies may also be
significantly affected by import controls, energy conservation efforts, the
success of energy exploration projects, liability for environmental damage,
depletion of resources, and mandated expenditures for safety and pollution
control devices. Consumers of nuclear energy may have the ability
to
switch between nuclear energy and other energy sources and, as a result, during
periods when competing energy sources are less expensive, the revenues of
nuclear energy companies may decline with a corresponding impact on
earnings.
Nuclear
activity is also subject to particularly detailed and restrictive regulations,
with a scheme for the monitoring and periodic re-examination of operating
authorization, which primarily takes into account nuclear safety, environmental
and public health protection, and also national security considerations
(terrorist threats in particular). These regulations and any future regulations
may be subject to significant tightening by national and international
authorities. There are substantial differences among the regulatory practices
and policies of various jurisdictions, and any given regulatory agency may make
major shifts in policy from time to time. There is no assurance that regulatory
authorities will, in the future, grant rate increases or that such increases
will be adequate to permit the payment of dividends on common stocks issued by a
utility company. Additionally, existing and possible future regulatory
legislation may make it even more difficult for utilities to obtain adequate
relief. In addition, governmental authorities may from time to time review
existing policies and impose additional requirements governing the licensing,
construction and operation of nuclear power plants. This could result in
increased operating costs, which would have a negative impact on the Fund’s
portfolio companies and may cause operating businesses related to nuclear energy
to become unprofitable or impractical to operate.
Uranium
prices are subject to fluctuation. The price of uranium may be affected by
numerous factors beyond the Fund’s control. Such factors include the demand for
nuclear power, political and economic conditions in uranium producing and
consuming countries, uranium supply from secondary sources and uranium
production levels and costs of production. In addition, the prices of crude oil,
natural gas and electricity produced from traditional hydro power and possibly
other undiscovered energy sources could potentially have a negative impact on
the competitiveness of nuclear energy companies in which the Fund
invests.
Securities
of the companies involved in this industry have been significantly more volatile
than securities of companies operating in other more established industries.
Certain valuation methods currently used to value companies involved in the
nuclear power and power technology sectors, particularly those companies that
have not yet traded profitably, have not been in widespread use for a
significant period of time. As a result, the use of these valuation methods may
serve to increase further the volatility of certain alternative power and power
technology company share prices.
Risk
of Investing in the Mining Industry.
(VanEck Gold Miners ETF, VanEck Green Metals ETF, VanEck Junior Gold Miners ETF,
VanEck Natural Resources ETF, VanEck Rare Earth/Strategic Metals ETF and VanEck
Steel ETF only.) Companies operating in the mining industry invest in stocks and
depositary receipts of U.S. and foreign companies that are involved in mining
and are subject to certain risks associated with such companies. Investments in
mining companies may be speculative. Competitive pressures may have a
significant effect on the financial condition of such companies. Mining
companies are highly dependent on the price of the underlying metal or element.
These prices may fluctuate substantially over short periods of time so the
Fund’s Share price may be more volatile than other types of
investments.
In
particular, a drop in the price of gold, silver bullion, steel or rare
earth/strategic metals would particularly adversely affect the profitability of
small- and medium-capitalization mining companies and their ability to secure
financing. Furthermore, companies that are only in the exploration stage are
typically unable to adopt specific strategies for controlling the impact of such
price changes.
Some
of the companies in a Fund’s Index may be early stage mining companies that are
in the exploration stage only or that hold properties that might not ultimately
produce these metals. Exploration and development involves significant financial
risks over a significant period of time which even a combination of careful
evaluation, experience and knowledge may not eliminate. Few properties which are
explored are ultimately developed into producing mines. Major expenditures may
be required to establish reserves by drilling and to construct mining and
processing facilities at a site. In addition, many early stage miners operate at
a loss and are dependent on securing equity and/or debt financing, which might
be more difficult to secure for an early stage mining company than for a more
established counterpart. Furthermore, the principal supplies of metal industries
may be concentrated in a small number of countries and regions.
Special
Risk Considerations of Investing in Asian Issuers.
(VanEck Agribusiness ETF, VanEck Low Carbon Energy ETF, VanEck Oil Refiners ETF,
VanEck Rare Earth/Strategic Metals ETF, VanEck Steel ETF and VanEck
Uranium+Nuclear Energy ETF only.) Investments in securities of Asian issuers
involve risks and special considerations not typically associated with
investments in the U.S. securities markets. Certain Asian economies have
experienced over-extension of credit, currency devaluations and restrictions,
high unemployment, high inflation, decreased exports and economic recessions.
Economic events in any one Asian country can have a significant effect on the
entire Asian region as well as on major trading partners outside Asia, and any
adverse effect on some or all of the Asian countries and regions in which the
Fund invests. The securities markets in some Asian economies are relatively
underdeveloped and may subject the Fund to higher action costs or greater
uncertainty than investments in more developed securities markets. Such risks
may adversely affect the value of the Fund’s investments.
Governments
of many Asian countries have implemented significant economic reforms in order
to liberalize trade policy, promote foreign investment in their economies,
reduce government control of the economy and develop market mechanisms. There
can be no assurance these reforms will continue or that they will be effective.
Despite recent reform and privatizations, significant regulation of investment
and industry is still pervasive in many Asian countries and may restrict foreign
ownership of domestic
corporations
and repatriation of assets, which may adversely affect a Fund’s investments.
Governments in some Asian countries are authoritarian in nature, have been
installed or removed as a result of military coups or have periodically used
force to suppress civil dissent. Disparities of wealth, the pace and success of
democratization, and ethnic, religious and racial disaffection have led to
social turmoil, violence and labor unrest in some countries. Unanticipated or
sudden political or social developments may result in sudden and significant
investment losses. Investing in certain Asian countries involves risk of loss
due to expropriation, nationalization, or confiscation of assets and property or
the imposition of restrictions on foreign investments and on repatriation of
capital invested. In addition, several countries in Asia may be impacted by the
occurrence of global events such as war, terrorism, environmental disasters,
natural disasters or events, country instability, and infectious disease
epidemics and pandemics.
Special
Risk Considerations of Investing in Australian Issuers.
(VanEck Gold Miners ETF, VanEck Green Metals ETF, VanEck Junior Gold Miners ETF,
VanEck Rare Earth/Strategic Metals ETF and VanEck Steel ETF only.) Investments
in securities of Australian issuers, including issuers located outside of
Australia that generate significant revenues from Australia, involve risks and
special considerations not typically associated with investments in the U.S.
securities markets. Investments in Australian issuers may subject each Fund to
regulatory, political, currency, security, and economic risk specific to
Australia. The Australian economy is heavily dependent on exports from the
agricultural and mining sectors. As a result, the Australian economy is
susceptible to fluctuations in the commodity markets. The Australian economy is
also becoming increasingly dependent on its growing services industry. The
Australian economy is dependent on trading with key trading partners, including
the United States, China, Japan, Singapore and certain European countries.
Reduction in spending on Australian products and services, or changes in any of
the economies, may cause an adverse impact on the Australian
economy.
Additionally,
Australia is located in a part of the world that has historically been prone to
natural disasters, such as hurricanes, droughts and bushfires, and is
economically sensitive to environmental events. Any such event may adversely
impact the Australian economy, causing an adverse impact on the value of the
Fund.
Special
Risk Considerations of Investing in Brazilian Issuers.
(VanEck Steel ETF only.) Investments in securities of Brazilian issuers,
including issuers located outside of Brazil that generate significant revenues
from Brazil, involve risks and special considerations not typically associated
with investments in the U.S. securities markets. Such risks include, among
others, a high level of price volatility in the Brazilian markets, chronic
structural public sector deficits, a rising unemployment rate and disparities of
wealth. The Brazilian economy has been characterized by frequent, and
occasionally drastic, interventions by the Brazilian government, including the
imposition of wage and price controls, exchange controls, limiting imports,
blocking access to bank accounts and other measures. The Brazilian government
has often changed monetary, taxation, credit, trade and other policies to
influence the core of Brazil’s economy. Additionally, Brazilian accounting,
auditing and financial standards and requirements differ from those in the
United States, and this may affect the tax consequences with respect to and
valuation of investments in the Fund.
Actions
taken by the Brazilian government concerning the economy may have significant
effects on Brazilian companies and on market conditions and prices of Brazilian
securities. Such governmental actions to control inflation and affect other
economic policies have involved, among others, setting of wage and price
controls, blocking access to bank accounts, adjusting of the base interest
rates, imposing exchange controls and limiting imports into Brazil. Brazil’s
economy may be subject to sluggish economic growth due to, among other things,
weak consumer spending, political turmoil, high rates of inflation and low
commodity prices. Brazil suffers from chronic structural public sector deficits.
Additionally, the process of privatizing certain entities by the Brazilian
government may cause privatized entities to suffer losses due to, among other
things, the inability to adjust to a competitive environment.
The
market for Brazilian securities is directly influenced by the flow of
international capital, and economic and market conditions of certain countries,
especially emerging market countries. As a result, adverse economic conditions
or developments in other emerging market countries have at times significantly
affected the availability of credit in the Brazilian economy and resulted in
considerable outflows of funds and declines in the amount of foreign currency
invested in Brazil. In addition, currency devaluations and economic or political
developments in any Central and South American country could have a significant
adverse effect on the entire region, including Brazil.
Investments
in Brazilian securities may be subject to certain restrictions on foreign
investment. Brazilian law provides that whenever a serious imbalance in Brazil’s
balance of payments exists or is anticipated, the Brazilian government may
impose temporary restrictions on the remittance to foreign investors of the
proceeds of their investment in Brazil and on the conversion of the Brazilian
real into foreign currency. The likelihood of such restrictions may be affected
by the extent of Brazil’s foreign currency revenues, the size of Brazil’s debt
service burden relative to the economy as a whole, and political constraints to
which Brazil may be subject. Brazilian investment and repatriation controls
could also affect the Fund’s ability to operate and to qualify for the favorable
tax treatment afforded to regulated investment companies for U.S. federal income
tax purposes.
Brazil
has historically experienced high rates of inflation and a high level of debt,
each of which may constrain economic growth. Brazil suffers from high levels of
corruption, crime and income disparity. The Brazilian economy and Brazilian
companies may also be adversely affected by significant public health concerns
and associated declines in tourism.
The
Brazilian economy is heavily dependent upon commodity prices and international
trade. The Brazilian securities markets are smaller, less liquid and more
volatile than U.S. securities markets and the market for Brazilian securities is
influenced by economic and market conditions of certain countries, especially
emerging market countries in Central and South America. Unanticipated political
or social developments may result in sudden and significant investment losses.
An increase in prices for commodities, such as petroleum, the depreciation of
the Brazilian real and future governmental measures seeking to maintain the
value of the Brazilian real in relation to the U.S. dollar, may trigger
increases in inflation in Brazil and may slow the rate of growth of the
Brazilian economy. Conversely, appreciation of the Brazilian real relative to
the U.S. dollar may lead to the deterioration of Brazil’s current account and
balance of payments as well as limit the growth of exports.
Because
the Fund’s assets will be invested primarily in securities of Brazilian issuers,
the income received by the Fund will be principally in Brazilian real. The
Fund’s exposure to the Brazilian real and changes in value of the Brazilian real
versus the U.S. dollar may result in reduced returns for the Fund. Moreover, the
Fund may incur costs in connection with conversions between U.S. dollars and
Brazilian real.
Special
Risk Considerations of Investing in Canadian Issuers.
(VanEck Gold Miners ETF and VanEck Junior Gold Miners ETF only.) Investments in
securities of Canadian issuers, including issuers located outside of Canada that
generate significant revenue from Canada, involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Canadian economy is very dependent on the demand for, and supply
and price of, natural resources. The Canadian market is relatively concentrated
in issuers involved in the production and distribution of natural resources.
There is a risk that any changes in natural resources sectors could have an
adverse impact on the Canadian economy. Additionally, the Canadian economy is
heavily dependent on relationships with certain key trading partners, including
the United States, countries in the EU and China. Because the United States is
Canada’s largest trading partner and foreign investor, the Canadian economy is
dependent on and may be significantly affected by the U.S. economy. Reduction in
spending on Canadian products and services or changes in the U.S. economy may
adversely impact the Canadian economy. Trade agreements may further increase
Canada’s dependency on the U.S. economy, and uncertainty as to the future of
such trade agreements may cause a decline in the value of the Fund’s Shares.
Past periodic demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency movements in the
Canadian market and such demands may have this effect in the future. In
addition, certain sectors of Canada’s economy may be subject to foreign
ownership limitations. This may negatively impact the Fund’s ability to invest
in Canadian issuers and to track the Fund’s Index.
Special
Risk Considerations of Investing in Chinese Issuers.
(VanEck Green Metals ETF, VanEck Low Carbon Energy ETF and VanEck Rare
Earth/Strategic Metals ETF only.) Investments in securities of Chinese issuers
involve risks and special considerations not typically associated with
investments in the U.S. securities markets including, among others, (i) more
frequent (and potentially widespread) trading suspensions and government
interventions with respect to Chinese issuers, resulting in lack of liquidity
and in price volatility, (ii) currency revaluations and other currency exchange
rate fluctuations or blockage, (iii) the nature and extent of intervention by
the Chinese government in the Chinese securities markets, whether such
intervention will continue and the impact of such intervention or its
discontinuation, (iv) the risk of nationalization or expropriation of assets,
(v) the risk that the Chinese government may decide not to continue to support
economic reform programs, (vi) limitations on the use of brokers, (vii) higher
rates of inflation, (viii) greater political, economic and social uncertainty,
(ix) market volatility caused by any potential regional or territorial conflicts
or natural or other disasters, and (x) the risk of increased trade tariffs,
embargoes and other trade limitations. In addition, the economy of China
differs, often unfavorably, from the U.S. economy in such respects as structure,
general development, government involvement, wealth distribution, rate of
inflation, growth rate, interest rates, allocation of resources and capital
reinvestment, among others. The Chinese central government has historically
exercised substantial control over virtually every sector of the Chinese economy
through administrative regulation and/or state ownership and actions of the
Chinese central and local government authorities continue to have a substantial
effect on economic conditions in China. In addition, the Chinese government has
from time to time taken actions that influence the prices at which certain goods
may be sold, encourage companies to invest or concentrate in particular
industries, induce mergers between companies in certain industries and induce
private companies to publicly offer their securities to increase or continue the
rate of economic growth, control the rate of inflation or otherwise regulate
economic expansion. The Chinese government may do so in the future as well,
potentially having a significant adverse effect on economic conditions in
China.
Risks
of Investing through Stock Connect.
(VanEck Green Metals ETF and VanEck Rare Earth/Strategic Metals ETF only.) A
Fund may invest in A- shares listed and traded on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange through Stock Connect, or on such other stock
exchanges in the PRC which participate in Stock Connect from time to time or in
the future. Trading through Stock Connect is subject to a number of restrictions
that may affect the Fund’s investments and returns. For example, trading through
Stock Connect is subject to daily quotas that limit the maximum daily net
purchases on any particular day, each of which may restrict or preclude the
Fund’s ability to invest in Stock Connect A-shares. In addition, investments
made through Stock Connect are subject to trading, clearance and settlement
procedures that are relatively untested in the PRC, which could pose risks to
the Fund. Furthermore, securities purchased via Stock Connect will be held via a
book entry omnibus account in the name of HKSCC, Hong Kong’s clearing entity, at
the CSDCC. The Fund’s ownership interest in Stock Connect securities will not be
reflected directly in book entry with CSDCC and will instead only be reflected
on the books of its Hong Kong sub-custodian. The Fund may therefore depend on
HKSCC’s ability or willingness as record-holder of Stock Connect
securities
to enforce the Fund’s shareholder rights. PRC law did not historically recognize
the concept of beneficial ownership; while PRC regulations and the Hong Kong
Stock Exchange have issued clarifications and guidance supporting the concept of
beneficial ownership via Stock Connect, the interpretation of beneficial
ownership in the PRC by regulators and courts may continue to evolve. Moreover,
Stock Connect A-shares generally may not be sold, purchased or otherwise
transferred other than through Stock Connect in accordance with applicable
rules.
A
primary feature of Stock Connect is the application of the home market’s laws
and rules applicable to investors in A-shares. Therefore, the Fund’s investments
in Stock Connect A-shares are generally subject to PRC securities regulations
and listing rules, among other restrictions. The Fund will not benefit from
access to Hong Kong investor compensation funds, which are set up to protect
against defaults of trades, when investing through Stock Connect. Stock Connect
is only available on days when markets in both the PRC and Hong Kong are open,
which may limit the Fund’s ability to trade when it would be otherwise
attractive to do so. Since the inception of Stock Connect, foreign investors
(including the Fund) investing in A-shares through Stock Connect would be
temporarily exempt from the PRC corporate income tax and value-added tax on the
gains on disposal of such A-shares. Dividends would be subject to PRC corporate
income tax on a withholding basis at 10%, unless reduced under a double tax
treaty with China upon application to and obtaining approval from the competent
tax authority. Aside from these temporary measures, uncertainties in permanent
PRC tax rules governing taxation of income and gains from investments in Stock
Connect A-shares could result in unexpected tax liabilities for the
Fund.
The
Stock Connect program is a relatively new program and may be subject to further
interpretation and guidance. There can be no assurance as to the program’s
continued existence or whether future developments regarding the program may
restrict or adversely affect the Fund’s investments or returns. In addition, the
application and interpretation of the laws and regulations of Hong Kong and the
PRC, and the rules, policies or guidelines published or applied by relevant
regulators and exchanges in respect of the Stock Connect program are uncertain,
and they may have a detrimental effect on the Fund’s investments and
returns.
Special
Risk Considerations of Investing in European Issuers.
(VanEck Agribusiness ETF, VanEck Future of Food ETF, VanEck Green Metals ETF,
VanEck Low Carbon Energy ETF, VanEck Natural Resources ETF, VanEck Oil Refiners
ETF, VanEck Steel ETF and VanEck Uranium+Nuclear Energy ETF only.) Investments
in securities of European issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. The EMU of
the EU requires member countries to comply with restrictions on inflation rates,
deficits, interest rates, debt levels and fiscal and monetary controls, each of
which may significantly affect every country in Europe. Decreasing imports or
exports, changes in governmental or EU regulations on trade, changes in the
exchange rate of the euro, the default or threat of default by an EU member
country on its sovereign debt, and/or an economic recession in an EU member
country may have a significant adverse effect on the economies of EU member
countries and on major trading partners outside Europe. If any member country
exits the EMU, the departing country would face the risks of currency
devaluation and its trading partners and banks and others around the world that
hold the departing country’s debt would face the risk of significant losses. The
European financial markets have previously experienced, and may continue to
experience, volatility and have been adversely affected, and may in the future
effect, by concerns about economic downturns, credit rating downgrades, rising
government debt levels and possible default on or restructuring of government
debt in several European countries. These events have adversely affected, and
may in the future affect, the value and exchange rate of the euro and may
continue to significantly affect the economies of every country in Europe,
including EU member countries that do not use the euro and non-EU member
countries. In a referendum held on June 23, 2016, voters in the UK voted to
leave the EU, creating economic and political uncertainty in its wake. On
January 31, 2020, the UK officially withdrew from the EU. A transition phase has
commenced and is scheduled to conclude on December 31, 2020. During the
transition phase, the UK effectively remains in the EU from an economic
perspective but no longer has any political representation in the EU Parliament.
Significant uncertainty exists regarding the effect such withdrawal will have on
the euro, European economies and the global markets.
Responses
to the financial problems by European governments, central banks and others,
including austerity measures and reforms, may not work, may result in social
unrest and may limit future growth and economic recovery or have other
unintended consequences. The governments of EU countries may be subject to
change and such countries may experience social and political unrest.
Unanticipated or sudden political or social developments may result in sudden
and significant investment losses. The occurrence of terrorist incidents,
outbreaks of war or ongoing regional armed conflict throughout Europe also could
impact financial markets.
Further
defaults or restructurings by governments and other entities of their debt could
have additional adverse effects on economies, financial markets and asset
valuations around the world. In addition, one or more countries may abandon the
euro and/or withdraw from the EU. The impact of these actions, especially if
they occur in a disorderly fashion, is not clear but could be significant and
far-reaching.
Special
Risk Considerations of Investing in Japanese Issuers.
(VanEck Oil Refiners ETF and VanEck Uranium+Nuclear Energy ETF only.)
Investments in securities of Japanese issuers involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. Investment in securities of Japanese issuers, including issuers located
outside of Japan that generate significant revenues from Japan, involves risks
that may negatively affect the value of your investment in the
Fund.
The risks of investing in the securities of Japanese issuers also includes lack
of natural resources, fluctuations or shortages in the commodity markets, new
trade regulations, decreasing U.S. imports and changes in the U.S. dollar
exchange rates. Japan is located in a part of the world that has historically
been prone to natural disasters such as earthquakes, volcanoes and tsunamis and
is economically sensitive to environmental events. Any such event could result
in a significant adverse impact on the Japanese economy. In addition, such
disasters, and the resulting damage, could impair the long-term ability of
issuers in which the Fund invests to conduct their businesses in the manner
normally conducted.
Risk
of Investing in Foreign Securities.
Investments in the securities of foreign issuers involve risks beyond those
associated with investments in U.S. securities. These additional risks include
greater market volatility, the availability of less reliable financial
information, higher transactional and custody costs, taxation by foreign
governments, decreased market liquidity and political instability. Because
certain foreign securities markets may be limited in size, the activity of large
traders may have an undue influence on the prices of securities that trade in
such markets. Certain foreign markets that have historically been considered
relatively stable may become volatile in response to changed conditions or new
developments. Increased interconnectivity of world economies and financial
markets increases the possibility that adverse developments and conditions in
one country or region will affect the stability of economies and financial
markets in other countries or regions. Each Fund invests in securities of
issuers located in countries whose economies are heavily dependent upon trading
with key partners. Any reduction in this trading may have an adverse impact on a
Fund’s investments. Because each Fund may invest in securities denominated in
foreign currencies and some of the income received by each Fund may be in
foreign currency, changes in currency exchange rates may negatively impact each
Fund’s return. The risks of investing in emerging market countries are greater
than risks associated with investments in foreign developed
countries.
Foreign
issuers are often subject to less stringent requirements regarding accounting,
auditing, financial reporting and record keeping than are U.S. issuers, and
therefore, not all material information may be available or reliable. Securities
exchanges or foreign governments may adopt rules or regulations that may
negatively impact a Fund’s ability to invest in foreign securities or may
prevent each Fund from repatriating its investments. Each Fund may also invest
in depositary receipts, which involve similar risks to those associated with
investments in foreign securities. In addition, each Fund may not receive
shareholder communications or be permitted to vote the securities that it holds,
as the issuers may be under no legal obligation to distribute shareholder
communications.
Certain
foreign markets may rely heavily on particular industries or foreign capital and
are more vulnerable to diplomatic developments, the imposition of economic
sanctions against a particular country or countries, organizations, entities
and/or individuals, changes in international trade patterns, trade barriers, and
other protectionist or retaliatory measures. The United States and other nations
or international organizations may impose economic sanctions or take other
actions that may adversely affect issuers of specific countries. Economic
sanctions could, among other things, effectively restrict or eliminate each
Fund’s ability to purchase or sell securities or groups of securities for a
substantial period of time, and may make each Fund’s investments in such
securities harder to value. These sanctions, any future sanctions or other
actions, or even the threat of future sanctions or other actions, may negatively
affect the value and liquidity of a Fund.
Also,
certain issuers located in foreign countries in which each Fund invests may
operate in, or have dealings with, countries subject to sanctions and/or
embargoes imposed by the U.S. Government and the United Nations and/or countries
identified by the U.S. Government as state sponsors of terrorism. As a result,
an issuer may sustain damage to its reputation if it is identified as an issuer
which operates in, or has dealings with, such countries. A Fund, as an investor
in such issuers, may be indirectly subject to those risks.
Risk
of Investing in Emerging Market Issuers.
(VanEck Agribusiness ETF, VanEck Gold Miners ETF, VanEck Green Metals ETF,
VanEck Junior Gold Miners ETF, VanEck Low Carbon Energy ETF, VanEck Oil Refiners
ETF, VanEck Rare Earth/Strategic Metals ETF and VanEck Steel ETF only.)
Investments in securities of emerging market issuers involve risks not typically
associated with investments in securities of issuers in more developed countries
that may negatively affect the value of your investment in a Fund. Such
heightened risks may include, among others, expropriation and/or nationalization
of assets, restrictions on and government intervention in international trade,
confiscatory taxation, political instability, including authoritarian and/or
military involvement in governmental decision making, armed conflict, the impact
on the economy as a result of civil war, crime (including drug violence) and
social instability as a result of religious, ethnic and/or socioeconomic unrest.
Issuers in certain emerging market countries are subject to less stringent
requirements regarding accounting, auditing, financial reporting and record
keeping than are issuers in more developed markets, and therefore, all material
information may not be available or reliable. Emerging markets are also more
likely than developed markets to experience problems with the clearing and
settling of trades, as well as the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed
markets may make trades harder to complete and settle, and governments or trade
groups may compel local agents to hold securities in designated depositories
that may not be subject to independent evaluation. Local agents are held only to
the standards of care of their local markets. In general, the less developed a
country’s securities markets are, the greater the likelihood of custody
problems. Additionally, each of the factors described below could have a
negative impact on the Fund’s performance and increase the volatility of a
Fund.
Securities
Markets.
Securities markets in emerging market countries are underdeveloped and are often
considered to be less correlated to global economic cycles than those markets
located in more developed countries. Securities markets in emerging market
countries are subject to greater risks associated with market volatility, lower
market capitalization, lower trading volume, illiquidity, inflation, greater
price fluctuations, uncertainty regarding the existence of trading markets,
governmental control and heavy regulation of labor and industry. These factors,
coupled with restrictions on foreign investment and other factors, limit the
supply of securities available for investment by a Fund. This will affect the
rate at which a Fund is able to invest in emerging market countries, the
purchase and sale prices for such securities and the timing of purchases and
sales. Emerging markets can experience high rates of inflation, deflation and
currency devaluation. The prices of certain securities listed on securities
markets in emerging market countries have been subject to sharp fluctuations and
sudden declines, and no assurance can be given as to the future performance of
listed securities in general. Volatility of prices may be greater than in more
developed securities markets. Moreover, securities markets in emerging market
countries may be closed for extended periods of time or trading on securities
markets may be suspended altogether due to political or civil unrest. Market
volatility may also be heightened by the actions of a small number of investors.
Brokerage firms in emerging market countries may be fewer in number and less
established than brokerage firms in more developed markets. Since a Fund may
need to effect securities transactions through these brokerage firms, the Fund
is subject to the risk that these brokerage firms will not be able to fulfill
their obligations to the Fund. This risk is magnified to the extent a Fund
effects securities transactions through a single brokerage firm or a small
number of brokerage firms. In addition, the infrastructure for the safe custody
of securities and for purchasing and selling securities, settling trades,
collecting dividends, initiating corporate actions, and following corporate
activity is not as well developed in emerging market countries as is the case in
certain more developed markets.
Political
and Economic Risk.
Certain emerging market countries have historically been subject to political
instability and their prospects are tied to the continuation of economic and
political liberalization in the region. Instability may result from factors such
as government or military intervention in decision making, terrorism, civil
unrest, extremism or hostilities between neighboring countries. Any of these
factors, including an outbreak of hostilities could negatively impact a Fund’s
returns. Limited political and democratic freedoms in emerging market countries
might cause significant social unrest. These factors may have a significant
adverse effect on an emerging market country’s economy.
Many
emerging market countries may be heavily dependent upon international trade and,
consequently, may continue to be negatively affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which it
trades. They also have been, and may continue to be, adversely affected by
economic conditions in the countries with which they trade.
In
addition, commodities (such as oil, gas and minerals) represent a significant
percentage of certain emerging market countries’ exports and these economies are
particularly sensitive to fluctuations in commodity prices. Adverse economic
events in one country may have a significant adverse effect on other countries
of this region. In addition, most emerging market countries have experienced, at
one time or another, severe and persistent levels of inflation, including, in
some cases, hyperinflation. This has, in turn, led to high interest rates,
extreme measures by governments to keep inflation in check, and a generally
debilitating effect on economic growth.
Although
inflation in many countries has lessened, there is no guarantee it will remain
at lower levels. The political history of certain emerging market countries has
been characterized by political uncertainty, intervention by the military in
civilian and economic spheres, and political corruption. Such events could
reverse favorable trends toward market and economic reform, privatization, and
removal of trade barriers, and result in significant disruption in securities
markets in the region.
Also,
from time to time, certain issuers located in emerging market countries in which
a Fund invests may operate in, or have dealings with, countries subject to
sanctions and/or embargoes imposed by the U.S. Government and the United Nations
and/or countries identified by the U.S. Government as state sponsors of
terrorism. As a result, an issuer may sustain damage to its reputation if it is
identified as an issuer which operates in, or has dealings with, such countries.
A Fund, as an investor in such issuers, may be indirectly subject to those
risks.
The
economies of one or more countries in which a Fund may invest may be in various
states of transition from a planned economy to a more market oriented economy.
The economies of such countries differ from the economies of most developed
countries in many respects, including levels of government involvement, states
of development, growth rates, control of foreign exchange and allocation of
resources. Economic growth in these economies may be uneven both geographically
and among various sectors of their economies and may also be accompanied by
periods of high inflation. Political changes, social instability and adverse
diplomatic developments in these countries could result in the imposition of
additional government restrictions, including expropriation of assets,
confiscatory taxes or nationalization of some or all of the property held by the
underlying issuers of securities included in a Fund’s Index. There is no
guarantee that the governments of these countries will not revert back to some
form of planned or non-market oriented economy, and such governments continue to
be active participants in many economic sectors through ownership positions and
regulation. The allocation of resources in such countries is subject to a high
level of government control. Such countries’ governments may strictly regulate
the payment of foreign currency denominated obligations and set monetary policy.
Through their policies, these
governments
may provide preferential treatment to particular industries or companies. The
policies set by the government of one of these countries could have a
substantial effect on that country’s economy.
Investment
and Repatriation Restrictions.
The government in an emerging market country may restrict or control to varying
degrees the ability of foreign investors to invest in securities of issuers
located or operating in such emerging market countries. These restrictions
and/or controls may at times limit or prevent foreign investment in securities
of issuers located or operating in emerging market countries and may inhibit a
Fund’s ability to track its Index. In addition, a Fund may not be able to buy or
sell securities or receive full value for such securities. Moreover, certain
emerging market countries may require governmental approval or special licenses
prior to investments by foreign investors and may limit the amount of
investments by foreign investors in a particular industry and/or issuer; may
limit such foreign investment to a certain class of securities of an issuer that
may have less advantageous rights than the classes available for purchase by
domiciliaries of such emerging market countries; and/or may impose additional
taxes on foreign investors. A delay in obtaining a required government approval
or a license would delay investments in those emerging market countries, and, as
a result, a Fund may not be able to invest in certain securities while approval
is pending. The government of certain emerging market countries may also
withdraw or decline to renew a license that enables a Fund to invest in such
country. These factors make investing in issuers located or operating in
emerging market countries significantly riskier than investing in issuers
located or operating in more developed countries, and any one of them could
cause a decline in the value of a Fund’s Shares.
Additionally,
investments in issuers located in certain emerging market countries may be
subject to a greater degree of risk associated with governmental approval in
connection with the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. Moreover, there is the risk that if
the balance of payments in an emerging market country declines, the government
of such country may impose temporary restrictions on foreign capital
remittances. Consequently, a Fund could be adversely affected by delays in, or a
refusal to grant, required governmental approval for repatriation of capital, as
well as by the application to a Fund of any restrictions on investments.
Furthermore, investments in emerging market countries may require a Fund to
adopt special procedures, seek local government approvals or take other actions,
each of which may involve additional costs to the Fund.
Available
Disclosure About Emerging Market Issuers. Issuers
located or operating in emerging market countries are not subject to the same
rules and regulations as issuers located or operating in more developed
countries. Therefore, there may be less financial and other information publicly
available with regard to issuers located or operating in emerging market
countries and such issuers are not subject to the uniform accounting, auditing
and financial reporting standards applicable to issuers located or operating in
more developed countries.
Foreign
Currency Considerations.
A Fund’s assets that are invested in equity securities of issuers in emerging
market countries will generally be denominated in foreign currencies, and the
proceeds received by the Fund from these investments will be principally in
foreign currencies. The value of an emerging market country’s currency may be
subject to a high degree of fluctuation. This fluctuation may be due to changes
in interest rates, the effects of monetary policies issued by the United States,
foreign governments, central banks or supranational entities, the imposition of
currency controls or other national or global political or economic
developments. The economies of certain emerging market countries can be
significantly affected by currency devaluations. Certain emerging market
countries may also have managed currencies which are maintained at artificial
levels relative to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors.
A
Fund’s exposure to an emerging market country’s currency and changes in value of
such foreign currencies versus the U.S. dollar may reduce the Fund’s investment
performance and the value of your investment in the Fund. Meanwhile, a Fund will
compute and expects to distribute its income in U.S. dollars, and the
computation of income will be made on the date that the income is earned by the
Fund at the foreign exchange rate in effect on that date. Therefore, if the
value of the respective emerging market country’s currency falls relative to the
U.S. dollar between the earning of the income and the time at which a Fund
converts the relevant emerging market country’s currency to U.S. dollars, the
Fund may be required to liquidate certain positions in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements under the Internal Revenue Code. The liquidation of
investments, if required, could be at disadvantageous prices or otherwise have
an adverse impact on a Fund’s performance.
Certain
emerging market countries also restrict the free conversion of their currency
into foreign currencies, including the U.S. dollar. There is no significant
foreign exchange market for many such currencies and it would, as a result, be
difficult for a Fund to engage in foreign currency transactions designed to
protect the value of the Fund’s interests in securities denominated in such
currencies. Furthermore, if permitted, a Fund may incur costs in connection with
conversions between U.S. dollars and an emerging market country’s currency.
Foreign exchange dealers realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a dealer
normally will offer to sell a foreign currency to a Fund at one rate, while
offering a lesser rate of exchange should the Fund desire immediately to resell
that currency to the dealer. A Fund will conduct its foreign currency exchange
transactions either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward, futures or options contracts to purchase or
sell foreign currencies.
Operational
and Settlement Risk.
In addition to having less developed securities markets, emerging market
countries have less developed custody and settlement practices than certain
developed countries. Rules adopted under the 1940 Act permit a Fund to maintain
its foreign securities and cash in the custody of certain eligible non-U.S.
banks and securities depositories. Banks in emerging market countries that are
eligible foreign sub-custodians may be recently organized or otherwise lack
extensive operating experience. In addition, in certain emerging market
countries there may be legal restrictions or limitations on the ability of a
Fund to recover assets held in custody by a foreign sub-custodian in the event
of the bankruptcy of the sub-custodian. Because settlement systems in emerging
market countries may be less organized than in other developed markets, there
may be a risk that settlement may be delayed and that cash or securities of the
Fund may be in jeopardy because of failures of or defects in the systems. Under
the laws in many emerging market countries, a Fund may be required to release
local shares before receiving cash payment or may be required to make cash
payment prior to receiving local shares, creating a risk that the Fund may
surrender cash or securities without ever receiving securities or cash from the
other party. Settlement systems in emerging market countries also have a higher
risk of failed trades and back to back settlements may not be
possible.
A
Fund may not be able to convert a foreign currency to U.S. dollars in time for
the settlement of redemption requests. In the event of a redemption request from
an AP, a Fund will be required to deliver U.S. dollars to the AP on the
settlement date. In the event that a Fund is not able to convert the foreign
currency to U.S. dollars in time for settlement, which may occur as a result of
the delays described above, the Fund may be required to liquidate certain
investments and/or borrow money in order to fund such redemption. The
liquidation of investments, if required, could be at disadvantageous prices or
otherwise have an adverse impact on the Fund’s performance (e.g.,
by causing the Fund to overweight foreign currency denominated holdings and
underweight other holdings which were sold to fund redemptions). In addition, a
Fund will incur interest expense on any borrowings and the borrowings will cause
the Fund to be leveraged, which may magnify gains and losses on its
investments.
In
certain emerging market countries, the marketability of quoted shares may be
limited due to the restricted opening hours of stock exchanges, and a narrow
range of investors and a relatively high proportion of market value may be
concentrated in the hands of a relatively small number of shareholders. In
addition, because certain emerging market countries’ stock exchanges on which a
Fund’s portfolio securities may trade are open when the relevant Exchanges are
closed, the Fund may be subject to heightened risk associated with market
movements. Trading volume may be lower on certain emerging market countries’
stock exchanges than on more developed securities markets and equities may be
generally less liquid. The infrastructure for clearing, settlement and
registration on the primary and secondary markets of certain emerging market
countries are less developed than in certain other markets and under certain
circumstances this may result in a Fund experiencing delays in settling and/or
registering transactions in the markets in which it invests, particularly if the
growth of foreign and domestic investment in certain emerging market countries
places an undue burden on such investment infrastructure. Such delays could
affect the speed with which a Fund can transmit redemption proceeds and may
inhibit the initiation and realization of investment opportunities at optimum
times.
Certain
issuers in emerging market countries may utilize share blocking schemes. Share
blocking refers to a practice, in certain foreign markets, where voting rights
related to an issuer’s securities are predicated on these securities being
blocked from trading at the custodian or sub-custodian level for a period of
time around a shareholder meeting. These restrictions have the effect of barring
the purchase and sale of certain voting securities within a specified number of
days before and, in certain instances, after a shareholder meeting where a vote
of shareholders will be taken. Share blocking may prevent the Fund from buying
or selling securities for a period of time. During the time that shares are
blocked, trades in such securities will not settle. The blocking period can last
up to several weeks. The process for having a blocking restriction lifted can be
quite onerous with the particular requirements varying widely by country. In
addition, in certain countries, the block cannot be removed. As a result of the
ramifications of voting ballots in markets that allow share blocking, the
Adviser, on behalf of the Fund, reserves the right to abstain from voting
proxies in those markets.
Corporate
and Securities Laws.
Securities laws in emerging market countries are relatively new and unsettled
and, consequently, there is a risk of rapid and unpredictable change in laws
regarding foreign investment, securities regulation, title to securities and
shareholder rights. Accordingly, foreign investors may be adversely affected by
new or amended laws and regulations. In addition, the systems of corporate
governance to which emerging market issuers are subject may be less advanced
than those systems to which issuers located in more developed countries are
subject, and therefore, shareholders of issuers located in emerging market
countries may not receive many of the protections available to shareholders of
issuers located in more developed countries. In circumstances where adequate
laws and shareholder rights exist, it may not be possible to obtain swift and
equitable enforcement of the law. In addition, the enforcement of systems of
taxation at federal, regional and local levels in emerging market countries may
be inconsistent and subject to sudden change. A Fund has limited rights and few
practical remedies in emerging markets and the ability of U.S. authorities to
bring enforcement actions in emerging markets may be limited.
Foreign
Currency Risk. Because
a Fund’s assets that are invested in equity securities of issuers in foreign
countries may be denominated in foreign currencies, the proceeds received by the
Fund from these investments will generally be in foreign currencies. A Fund’s
exposure to foreign currencies and changes in the value of foreign currencies
versus the U.S. dollar may result in reduced returns for the Fund, and the value
of certain foreign currencies may be subject to a high degree of fluctuation.
Moreover,
a Fund may incur costs in connection with conversions between U.S. dollars and
foreign currencies. The value of certain emerging market countries’ currency may
be subject to a high degree of fluctuation. This fluctuation may be due to
changes in interest rates, investors’ expectations concerning inflation and
interest rates, the emerging market country’s debt levels and trade deficit, the
effects of monetary policies issued by the United States, foreign governments,
central banks or supranational entities, the imposition of currency controls or
other national or global political or economic developments. For example,
certain emerging market countries have experienced economic challenges and
liquidity issues with respect to their currency. The economies of certain
emerging market countries can be significantly affected by currency
devaluations. Certain emerging market countries may also have managed currencies
which are maintained at artificial levels relative to the U.S. dollar rather
than at levels determined by the market. This type of system could lead to
sudden and large adjustments in the currency, which in turn, may have a negative
effect on a Fund and its investments.
Risk
of Investing in Depositary Receipts.
A Fund may invest in depositary receipts (including American Depositary Receipts
(“ADRs”), which involve similar risks to those associated with investments in
foreign securities. Depositary receipts are receipts listed on U.S. or foreign
exchanges issued by banks or trust companies that entitle the holder to all
dividends and capital gains that are paid out on the underlying foreign shares.
The issuers of certain depositary receipts are under no obligation to distribute
shareholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities. Investments
in depositary receipts may be less liquid than the underlying shares in their
primary trading market and, if not included in a Fund’s Index, may negatively
affect a Fund’s ability to replicate the performance of its Index. In addition,
investments in depositary receipts that are not included in a Fund’s Index may
increase tracking error. The issuers of depositary receipts may discontinue
issuing new depositary receipts and withdraw existing depositary receipts at any
time, which may result in costs and delays in the distribution of the underlying
assets to the Fund and may negatively impact the Fund’s performance and the
Fund’s ability to replicate/track the performance of its Index.
Risk
of Investing in the Basic Materials Sector.
(VanEck Agribusiness ETF, VanEck Future of Food ETF, VanEck Gold Miners ETF,
VanEck Green Metals ETF, VanEck Junior Gold Miners ETF, VanEck Natural Resources
ETF, VanEck Rare Earth/Strategic Metals ETF and VanEck Steel ETF only.) A Fund
will be sensitive to, and its performance will depend to a greater extent on,
the overall condition of the basic materials sector. Companies engaged in the
production and distribution of basic materials may be adversely affected by
changes in world events, political and economic conditions, energy conservation,
environmental policies, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in the Consumer Discretionary Sector. (VanEck
Low Carbon Energy ETF only.)
A
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the consumer discretionary sector. The consumer
discretionary sector comprises companies whose businesses are sensitive to
economic cycles, such as manufacturers of high-end apparel and automobile and
leisure companies. Companies in the consumer discretionary sector are subject to
fluctuations in supply and demand. These companies may also be adversely
affected by changes in consumer spending as a result of world events, political
and economic conditions, commodity price volatility, changes in exchange rates,
imposition of import controls, increased competition, depletion of resources and
labor relations.
Risk
of Investing in the Consumer Staples Sector.
(VanEck Agribusiness ETF, VanEck Future of Food ETF and VanEck Natural Resources
ETF only.) The Fund will be sensitive to, and its performance will depend to a
greater extent on, the overall condition of the consumer staples sector. The
consumer staples sector comprises companies whose businesses are less sensitive
to economic cycles, such as manufacturers and distributors of food and beverages
and producers of non-durable household goods and personal products. Companies in
the consumer staples sector may be adversely affected by changes in the
worldwide economy, consumer spending, competition, demographics and consumer
preferences, exploration and production spending. Companies in this sector are
also affected by changes in government regulation, world events and economic
conditions.
Risk
of Investing in the Energy Sector.
(VanEck Natural Resources ETF, VanEck Oil Refiners ETF, VanEck Oil Services ETF,
and VanEck Uranium+Nuclear Energy ETF only.) A Fund will be sensitive to changes
in, and its performance will depend to a greater extent on, the overall
condition of the energy sector. Companies operating in the energy sector are
subject to risks including, but not limited to, economic growth, worldwide
demand, political instability in the regions that the companies operate,
government regulation stipulating rates charged by utilities, interest rate
sensitivity, oil price volatility, energy conservation, environmental policies,
depletion of resources and the cost of providing the specific utility services
and other factors that they cannot control.
The
energy sector is cyclical and is highly dependent on commodity prices; prices
and supplies of energy may fluctuate significantly over short and long periods
of time due to, among other things, national and international political
changes, Organization of Petroleum Exporting Countries (“OPEC”) policies,
changes in relationships among OPEC members and between OPEC and oil-importing
nations, the regulatory environment, taxation policies, and the economy of the
key energy-consuming countries. Commodity prices have recently been subject to
increased volatility and declines, which may negatively affect companies in
which the Fund invests.
Companies
in the energy sector may be adversely affected by terrorism, natural disasters
or other catastrophes. Companies in the energy sector are at risk of civil
liability from accidents resulting in injury, loss of life or property,
pollution or other environmental
damage
claims. Disruptions in the oil industry or shifts in fuel consumption may
significantly impact companies in this sector. Significant oil and gas deposits
are located in emerging markets countries where corruption and security may
raise significant risks, in addition to the other risks of investing in emerging
markets.
Companies
in the energy sector may also be adversely affected by changes in exchange
rates, tax treatment, government regulation and intervention, negative
perception, efforts at energy conservation and world events in the regions in
which the companies operate (e.g.,
expropriation, nationalization, confiscation of assets and property or the
imposition of restrictions on foreign investments and repatriation of capital,
military coups, social unrest, violence or labor unrest). Because a significant
portion of revenues of companies in this sector is derived from a relatively
small number of customers that are largely comprised of governmental entities
and utilities, governmental budget constraints may have a significant impact on
the stock prices of companies in this sector. The energy sector is highly
regulated. Entities operating in the energy sector are subject to significant
regulation of nearly every aspect of their operations by federal, state and
local governmental agencies. Such regulation can change rapidly or over time in
both scope and intensity. Stricter laws, regulations or enforcement policies
could be enacted in the future which would likely increase compliance costs and
may materially adversely affect the financial performance of companies in the
energy sector.
A
downturn in the energy sector of the economy, adverse political, legislative or
regulatory developments or other events could have a larger impact on the Fund
than on an investment company that does not invest a substantial portion of its
assets in the energy sector. At times, the performance of securities of
companies in the energy sector may lag the performance of other sectors or the
broader market as a whole. The price of oil, natural gas and other fossil fuels
may decline and/or experience significant volatility, which could adversely
impact companies operating in the energy sector.
Risk
of Investing in the Health Care Sector.
(VanEck Agribusiness ETF only.) A Fund will be sensitive to, 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.
Risk
of Investing in the Industrials Sector.
(VanEck Agribusiness ETF, VanEck Future of Food ETF, VanEck Low Carbon Energy
ETF and VanEck Natural Resources ETF only.) A Fund will be sensitive to, and its
performance will depend to a greater extent on, the overall condition of the
industrials sector. The industrials sector comprises companies who produce
capital goods used in construction and manufacturing, such as companies that
make and sell machinery, equipment and supplies that are used to produce other
goods. Companies in the industrials sector may be adversely affected by changes
in government regulation, world events and economic conditions. In addition,
companies in the industrials sector may be adversely affected by environmental
damages, product liability claims and exchange rates. The stock prices of
companies in the industrials sector are affected by supply and demand both for
their specific product or service and for industrial sector products in general.
The products of manufacturing companies may face product obsolescence due to
rapid technological developments and frequent new product introduction. In
addition, the industrials sector may also be adversely affected by changes or
trends in commodity prices, which may be influenced or characterized by
unpredictable factors.
Risks
of Investing in the Information Technology Sector.
(VanEck Low Carbon Energy ETF only.) A Fund will be sensitive to, and its
performance will 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.
Risk
of Investing in the Utilities Sector.
(VanEck Low Carbon Energy ETF and VanEck Uranium+Nuclear Energy ETF only.) A
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of the utilities sector. Issuers in the utilities
sector are subject to a variety of factors that may adversely affect their
business or operations, including high interest costs in connection with capital
construction and improvement programs, difficulty in raising capital in adequate
amounts on reasonable terms in periods of high inflation and unsettled capital
markets, and the effects of effects of economic slowdowns and surplus capacity.
Companies in the utilities sector are subject to extensive regulation, including
governmental regulation of rates charged to customers, and may face difficulty
in obtaining regulatory approval of new technologies. The effects of a U.S.
national energy policy and lengthy delays and greatly increased costs and other
problems associated with the design, construction, licensing, regulation and
operation of nuclear facilities for electric generation, including, among other
considerations, the problems
associated
with the use of radioactive materials and the disposal of radioactive wastes,
may adversely affect companies in the utilities sector. Certain companies in the
utilities sector may be inexperienced and may suffer potential losses resulting
from a developing deregulatory environment. Technological innovations may render
existing plants, equipment or products obsolete. Companies in the utilities
sector may face increased competition from other providers of utility services.
The potential impact of terrorist activities on companies in the utilities
sector and its customers and the impact of natural or man-made disasters may
adversely affect the utilities sector. Issuers in the utilities sector also may
be subject to regulation by various governmental authorities and may be affected
by the imposition of special tariffs and changes in tax laws, regulatory
policies and accounting standards.
Risk
of Investing in Micro-Capitalization Companies.
(VanEck Junior Gold Miners ETF only.) The Fund may invest in
micro-capitalization companies. These companies are subject to substantially
greater risks of loss and price fluctuations because their earnings and revenues
tend to be less predictable (and some companies may be experiencing significant
losses), and their share prices tend to be more volatile and their markets less
liquid than companies with larger market capitalizations. Micro-capitalization
companies may be newly formed or in the early stages of development, with
limited product lines, markets or financial resources and may lack management
depth. In addition, there may be less public information available about these
companies. The shares of micro-capitalization companies tend to trade less
frequently than those of larger, more established companies, which can adversely
affect the pricing of these securities and the future ability to sell these
securities. Also, it may take a long time before the Fund realizes a gain, if
any, on an investment in a micro-capitalization company.
Risk
of Investing in Small- and/or Medium-Capitalization Companies.
A Fund may invest in small- and/or medium-capitalization companies and,
therefore, may be subject to certain risks associated with small- and/or
medium-capitalization companies. These companies are often subject to less
analyst coverage and may be in early and less predictable periods of their
corporate existences, with little or no record of profitability. In addition,
these companies often have greater price volatility, lower trading volume and
less liquidity than larger more established companies. These companies tend to
have smaller revenues, narrower product lines, less management depth and
experience, smaller shares of their product or service markets, fewer financial
resources and less competitive strength than large-capitalization companies.
Returns on investments in securities of small- and/or medium-capitalization
companies could trail the returns on investments in securities of larger
companies.
Risk
of Cash Transactions.
Unlike other ETFs, VanEck Agribusiness ETF, VanEck Green Metals ETF, VanEck Low
Carbon Energy ETF, VanEck Natural Resources ETF, VanEck Oil Refiners ETF, VanEck
Rare Earth/Strategic Metals ETF and VanEck Uranium+Nuclear Energy ETF effect
their creations and redemptions at least partially for cash, rather than wholly
for in-kind securities. Because these Funds currently intend to effect a portion
of redemptions for cash, rather than in-kind distributions, they may be required
to sell portfolio securities in order to obtain the cash needed to distribute
redemption proceeds, which involves transaction costs that the Funds may not
have incurred had they effected redemptions entirely in kind. These costs may
include brokerage costs and/or taxable gains or losses, which may be imposed on
the Funds and decrease the Funds’ NAV to the extent such costs are not offset by
a transaction fee payable by an AP. If a Fund recognizes gain on these sales,
this generally will cause the Fund to recognize gain it might not otherwise have
recognized if it were to distribute portfolio securities in-kind, or to
recognize such gain sooner than would otherwise be required. As a result, an
investment in such Fund may be less tax-efficient than an investment in a more
conventional ETF. Other ETFs generally are able to make in-kind redemptions and
avoid realizing gains in connection with transactions designed to raise cash to
meet redemption requests. The Funds generally intend to distribute these gains
to shareholders to avoid being taxed on this gain at the Fund level and
otherwise comply with the special tax rules that apply to it. This strategy may
cause shareholders to be subject to tax on gains they would not otherwise be
subject to, or at an earlier date than, if they had made an investment in a
different ETF. Additionally, transactions may have to be carried out over
several days if the securities market is relatively illiquid and may involve
considerable transaction fees and taxes.
Initial
Public Offerings Risk. (VanEck
Future of Food ETF only.) The Fund may invest in IPOs of common stock or other
primary or secondary syndicated offerings of equity or debt securities issued by
a corporate issuer. A purchase of IPO securities often involves higher
transaction costs than those associated with the purchase of securities already
traded on exchanges or markets. IPO securities are subject to market risk and
liquidity risk. The market value of recently issued IPO securities may fluctuate
considerably due to factors such as the absence of a prior public market,
unseasoned trading and speculation, a potentially small number of securities
available for trading, limited information about the issuer, and other factors.
The Fund may hold IPO securities for a period of time, or may sell them soon
after the purchase. Investments in IPOs could have a magnified impact – either
positive or negative – on the Fund’s performance while the Fund’s assets are
relatively small. The impact of an IPO on the Fund’s performance may tend to
diminish as the Fund’s assets grow. In circumstances when investments in IPOs
make a significant contribution to the Fund’s performance, there can be no
assurance that similar contributions from IPOs will continue in the
future.
Special
Purpose Acquisition Companies.
(VanEck Future of Food ETF only.) Equity securities in which the Fund invests
include stock, rights, warrants, and other interests in SPACs or similar special
purpose entities. A SPAC is typically a publicly traded company that raises
investment capital via an initial public offering for the purpose of acquiring
one or more existing companies (or interests therein) via merger, combination,
acquisition or other similar transactions. Since SPACs have no operating history
or ongoing business other than seeking a transaction, the value of their
securities may be particularly dependent on the quality of its management and on
the ability of the SPAC’s management to identify and complete a profitable
transaction. Additionally, the securities issued by a SPAC may become illiquid
and/or may be subject to restrictions on resale, among other risks.
Clean
Energy Companies Risk. (VanEck
Green Metals ETF only.) Companies involved with green metals may be dependent
upon renewable and alternative energy companies. Renewable and alternative
energy companies can be significantly affected by the following factors:
obsolescence of existing technology, short product cycles, legislation resulting
in more strict government regulations and enforcement policies, fluctuations in
energy prices and supply and demand of alternative energy fuels, energy
conservation, the success of exploration projects, the supply of and demand for
oil and gas, world events and economic conditions. In addition, shares of clean
energy companies have been significantly more volatile than shares of companies
operating in other more established industries and the securities included in
the Fund may be subject to sharp price declines. This industry is relatively
nascent and under-researched in comparison to more established and mature
sectors, and should therefore be regarded as having greater investment
risk.
Risks
of Regulatory Action and Changes in Governments.
(VanEck Green Metals ETF and VanEck Rare Earth/Strategic Metals ETF only.) The
producing, refining and recycling of rare earth/strategic metals may be
significantly affected by regulatory action and changes in governments. For
example, China, which produces more than 90% of the world’s rare earth supplies,
has implemented a reduction in its export quota of rare earth/strategic metals
and has considered a complete ban on the export of such metals. Such moves could
have a significant impact on industries around the globe and on the values of
the businesses in which the Fund expects to invest. Moreover, while it is
expected that China will consume most, if not all, of the rare earth/strategic
metals produced within the country to support its growing economy, China has
shown a willingness to flood the market for rare earth/strategic metals as it
did in the late 1990s, thereby causing many operations in other countries to
shut down.
Equity
Securities Risk.
The value of the equity securities held by a Fund may fall due to general market
and economic conditions, perceptions regarding the markets in which the issuers
of securities held by a Fund participate, or factors relating to specific
issuers in which a Fund invests. For example, an adverse event, such as an
unfavorable earnings report, may result in a decline in the value of equity
securities of an issuer held by a Fund; the price of the equity securities of an
issuer may be particularly sensitive to general movements in the securities
markets; or a drop in the securities markets may depress the price of most or
all of the equities securities held by a Fund. In addition, the equity
securities of an issuer in a Fund’s portfolio may decline in price if the issuer
fails to make anticipated dividend payments. Equity securities are subordinated
to preferred securities and debt in a company’s capital structure with respect
to priority in right to a share of corporate income, and therefore will be
subject to greater dividend risk than preferred securities or debt instruments.
In addition, while broad market measures of equity securities have historically
generated higher average returns than fixed income securities, equity securities
have generally also experienced significantly more volatility in those returns,
although under certain market conditions fixed income securities may have
comparable or greater price volatility. A change in the financial condition,
market perception or the credit rating of an issuer of securities included in a
Fund’s Index may cause the value of its securities to decline.
Market
Risk.
The prices of the securities in a Fund are subject to the risks associated with
investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. Overall securities
values could decline generally or could underperform other investments. An
investment in a Fund may lose money.
Operational
Risk.
Each Fund is exposed to operational risk arising from a number of factors,
including but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third- parties,
failed or inadequate processes and technology or system failures.
Index
Tracking Risk.
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, including taxes,
not applicable to its Index and incurs costs associated with buying and selling
securities, and entering into derivatives transactions (if applicable),
especially when rebalancing the Fund’s securities holdings to reflect changes in
the composition of its Index and (to the extent the Fund effects creations and
redemptions are effected in cash) raising cash to meet redemptions or deploying
cash in connection with newly created Creation Units (defined herein), which are
not factored into the return of its Index. Transaction costs, including
brokerage costs, will decrease the Fund’s NAV to the extent not offset by the
transaction fee payable by an AP. Market disruptions and regulatory restrictions
could have an adverse effect on the Fund’s ability to adjust its exposure to the
required levels in order to track its Index. Unusual market conditions may cause
the Index Provider to postpone a scheduled rebalance, which could cause the
Index to vary from its normal or expected composition. There is no assurance
that the Fund’s Index Provider (defined herein) or any agents that may act on
its behalf will compile the Index 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 the Index Provider for a
period of time or at all, particularly where the indices are less commonly used
as benchmarks by funds or managers. Therefore, gains, losses or costs associated
with errors of the Index Provider 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 the Index Provider’s or others’ errors will be kept by the Fund and
its shareholders and any losses resulting from the Index Provider’s or others’
errors will be borne by the Fund and its shareholders. When the Fund’s Index is
rebalanced and the Fund
in
turn rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and its Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the applicable
Fund and its shareholders. In addition, if applicable, the Fund’s use of a
representative sampling approach may cause the Fund’s returns to not be as
closely correlated with the return of its Index as would be the case if the Fund
purchased all of the securities in its Index. The Fund may not be fully invested
at times either as a result of cash flows into the Fund or reserves of cash held
by the Fund to pay expenses and (to the extent creations and redemptions are
effected in cash) to meet redemptions. In addition, the Fund may not be able to
invest in certain securities and/or other assets included in its Index, or
invest in them in the exact proportions in which they are represented in its
Index, due to legal restrictions or limitations imposed by the governments of
certain countries, certain Exchange listing standards, a lack of liquidity in
markets in which such securities trade, potential adverse tax consequences or
other regulatory reasons (such as diversification requirements). A lack of
liquidity may be due to various events, including market events, economic
conditions or investor perceptions. Illiquid securities may be difficult to
value and their value may be lower than the market price of comparable liquid
securities, which would negatively affect the Fund’s performance. Moreover, the
Fund may be delayed in purchasing or selling securities included in its Index.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. To the extent the Fund encounters any issues
with regard to currency convertibility (including the cost of borrowing funds,
if any) and repatriation, such issues may also increase index tracking risk. The
Fund may also need to rely on borrowings to meet redemptions, which may lead to
increased expenses. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of its Index.
The
Fund may accept cash in connection with a purchase of Creation Units or effect
its redemptions in cash rather than in-kind and, as a result, the Fund’s ability
to match the return of the Index will be affected. The Fund may fair value
certain of the securities, underlying currencies and/or other assets it holds,
except those securities primarily traded on exchanges that close at the same
time the Fund calculates its NAV. To the extent the Fund calculates its NAV
based on fair value prices and the value of its Index is based on securities’
closing prices on local foreign markets (i.e., the value of its Index is not
based on fair value prices) or if the Fund otherwise calculates its NAV based on
prices that differ from those used in calculating its Index, the Fund’s ability
to track its Index may be adversely affected. The need to comply with the tax
diversification and other requirements of the Internal Revenue Code may also
impact the Fund’s ability to replicate the performance of its Index. In
addition, if the Fund utilizes depositary receipts or other derivative
instruments, its return may not correlate as well with the return of its Index
as would be the case if the Fund purchased all the securities in its Index
directly. Actions taken in response to proposed corporate actions could result
in increased tracking error. In light of the factors discussed above, the Fund’s
return may deviate significantly from the return of its Index. Apart from
scheduled rebalances, the Index Provider or its agents may carry out additional
ad hoc rebalances to the Index in order, for example, to correct an error in the
selection of index constituents. When the Index is rebalanced and the Fund in
turn rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Therefore, errors and additional ad hoc rebalances carried out
by the Index Provider to the Index may increase the costs to and the tracking
error risk of the Fund. Index tracking risk may be heightened during times of
increased market volatility or other unusual market conditions. Changes to the
composition of the Fund’s Index in connection with a rebalancing or
reconstitution of the Index may cause the Fund to experience increased
volatility, during which time the Fund’s index tracking risk may be
heightened.
Authorized
Participant Concentration Risk.
A Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in a
Fund’s market price from its NAV. The Distributor (defined herein), does not
maintain a secondary market in the Shares. Investors purchasing and selling
Shares in the secondary market may not experience investment results consistent
with those experienced by those APs creating and redeeming directly with a Fund.
Decisions
by market makers or APs to reduce their role or “step away” from these
activities in times of market stress could inhibit the effectiveness of the
arbitrage process in maintaining the relationship between the underlying value
of a Fund’s portfolio securities and the Fund’s market price. This reduced
effectiveness could result in Fund Shares trading at a price which differs
materially from NAV and also in greater than normal intraday bid/ask spreads for
Fund Shares.
Trading
Issues.
Trading in Shares on an Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on an Exchange is subject to trading halts caused
by extraordinary market volatility pursuant to the relevant Exchange’s “circuit
breaker” rules. If a trading halt or unanticipated early
close
of an Exchange occurs, a shareholder may be unable to purchase or sell Shares of
a Fund. There can be no assurance that the requirements of an Exchange necessary
to maintain the listing of a Fund will continue to be met or will remain
unchanged.
Active
Management Risk.
(VanEck Future of Food ETF only.)
The
Fund is subject to management risk because it is an actively managed ETF. In
managing the Fund’s portfolio, the Adviser will apply investment techniques and
risk analyses in making investment decisions for the Fund, but there can be no
guarantee that these will produce the desired results.
Passive
Management Risk. (All
Funds except VanEck Future of Food ETF.) Unlike many investment companies, the
Funds are not “actively” managed. Therefore, unless a specific security is
removed from its Index, a Fund generally would not sell a security because the
security’s issuer is in financial trouble. If a specific security is removed
from a Fund’s Index, the Fund may be forced to sell such security at an
inopportune time or for prices other than at current market values. An
investment in a Fund involves risks similar to those of investing in any Fund
that invests in equity securities traded on an exchange, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. Each Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of a Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause a Fund's Index Provider to postpone a scheduled rebalance
or reconstitution, which could cause a Fund's Index to vary from its normal or
expected composition. This means that, based on market and economic conditions,
a Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares.
Disruptions to creations and redemptions, the existence of market volatility or
potential lack of an active trading market for Shares (including through a
trading halt), as well as other factors, may result in Shares trading at a
significant premium or discount to NAV or to the intraday value of a Fund’s
holdings. The NAV of the Shares will fluctuate with changes in the market value
of a Fund’s securities holdings. The market price of Shares will fluctuate, in
some cases materially, in accordance with changes in NAV and the intraday value
of a Fund’s holdings, as well as supply and demand on an Exchange. The Adviser
cannot predict whether Shares will trade below, at or above their NAV. Given the
fact that Shares can be created and redeemed by APs in Creation Units, the
Adviser believes that large discounts or premiums to the NAV of Shares should
not be sustained in the long-term. While the creation/redemption feature is
designed to make it likely that Shares normally will trade close to the value of
a Fund’s holdings, market prices are not expected to correlate exactly to a
Fund’s NAV due to timing reasons, supply and demand imbalances and other
factors. The price differences may be due, in large part, to the fact that
supply and demand forces at work in the secondary trading market for Shares may
be closely related to, but not necessarily identical to, the same forces
influencing the prices of the securities of a Fund’s portfolio of investments
trading individually or in the aggregate at any point in time. If a shareholder
purchases Shares at a time when the market price is at a premium to the NAV or
sells Shares at a time when the market price is at a discount to the NAV, the
shareholder may pay significantly more or receive significantly less than the
underlying value of the Shares that were bought or sold or the shareholder may
be unable to sell his or her Shares. Any of these factors, discussed above and
further below, may lead to the Shares trading at a premium or discount to a
Fund’s NAV. In addition, because certain of a Fund’s underlying securities trade
on exchanges that are closed when an Exchange (i.e.,
the exchange that Shares of the Fund trade on) is open, there are likely to be
deviations between the expected value of an underlying security and the closing
security’s price (i.e.,
the last quote from its closed foreign market) resulting in premiums or
discounts to NAV that may be greater than those experienced by other ETFs. In
addition, the securities held by a Fund may be traded in markets that close at a
different time than an Exchange. Liquidity in those securities may be reduced
after the applicable closing times. Accordingly, during the time when an
Exchange is open but after the applicable market closing, fixing or settlement
times, bid/ask spreads and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for a Fund’s
Shares may become less liquid in response to deteriorating liquidity in the
markets for the Fund’s underlying portfolio holdings. There are various methods
by which investors can purchase and sell Shares. Investors should consult their
financial intermediaries before purchasing or selling Shares of the
Funds.
When
you buy or sell Shares of a Fund through a broker, you will likely incur a
brokerage commission or other charges imposed by brokers. In addition, the
market price of Shares, like the price of any exchange-traded security, includes
a bid/ask spread charged by the market makers or other participants that trade
the particular security. The spread of a Fund’s Shares varies over time based on
a Fund’s trading volume and market liquidity and may increase if a Fund’s
trading volume, the spread of a Fund’s underlying securities, or market
liquidity decrease. In times of severe market disruption, including when trading
of a Fund’s holdings may be halted, the bid/ask spread may increase
significantly. This means that Shares may trade at a discount to a Fund’s NAV,
and the discount is likely to be greatest during significant market
volatility.
Issuer-Specific
Changes Risk.
(VanEck Oil Refiners ETF, VanEck Oil Services ETF, VanEck Rare Earth/Strategic
Metals ETF and VanEck Uranium+Nuclear Energy ETF only.) The value of individual
securities or particular types of securities in a Fund’s portfolio can be more
volatile than the market as a whole and can perform differently from the value
of the market as a whole, which may have a greater impact if the Fund’s
portfolio is concentrated in a country, group of countries, region, market,
industry, group of industries, sector or asset class. The value of securities of
smaller issuers can be more volatile than that of larger issuers.
A
change in the financial condition, market perception or credit rating of an
issuer of securities included in a Fund’s Index may cause the value of its
securities to decline.
Non-Diversified
Risk.
Each Fund is a separate investment portfolio of VanEck ETF Trust (the “Trust”),
which is an open-end investment company registered under the 1940 Act. Each of
VanEck Agribusiness ETF, VanEck Future of Food ETF, VanEck Green Metals ETF,
VanEck Low Carbon Energy ETF, VanEck Gold Miners ETF, VanEck Junior Gold Miners
ETF, VanEck Oil Refiners ETF, VanEck Oil Services ETF, VanEck Rare
Earth/Strategic Metals ETF, VanEck Steel ETF and VanEck Uranium+Nuclear Energy
ETF is classified as a “non-diversified” fund under the 1940 Act. As a result,
each Fund is subject to the risk that it will be more volatile than a
diversified fund because the Fund may invest its assets in a smaller number of
issuers or may invest a larger proportion of its assets in a single issuer.
Moreover, the gains and losses on a single investment may have a greater impact
on a Fund’s NAV and may make the Fund more volatile than more diversified funds.
Certain Funds may be particularly vulnerable to this risk because their
respective Indices are comprised of securities of a limited number of companies.
Concentration
Risk.
Each Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent that its respective Index
concentrates in a particular sector or sectors or industry or group of
industries. With respect to VanEck Future of Food ETF, the Fund’s assets are
concentrated in the food technology, precision agriculture, and agricultural
sustainability group of industries. The securities of many or all of the
companies in the same sector or industry may decline in value due to
developments adversely affecting such sector or industry. By concentrating its
assets in a particular sector or sectors or industry or group of industries, a
Fund is subject to the risk that economic, political or other conditions that
have a negative effect on those sectors and/or industries may negatively impact
the Fund to a greater extent than if the Fund’s assets were invested in a wider
variety of sectors or industries.
Tax
Reform Legislation.
(VanEck Junior Gold Miners ETF only.) A provision in the 2017 tax reform
legislation generally required U.S. shareholders, such as the Fund, to recognize
on a deemed basis their pro rata shares of the accumulated undistributed
earnings of any foreign corporations in which they hold a 10 percent-or-greater
interest. The Fund is monitoring the effects of this provision and relevant
regulatory guidance on its minimum distribution and qualifying income
requirements.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGIES
Each
Fund may invest in securities not included in its Index, money market
instruments, including repurchase agreements or other funds which invest
exclusively in money market instruments, convertible securities, structured
notes (notes on which the amount of principal repayment and interest payments
are based on the movement of one or more specified factors, such as the movement
of a particular stock or stock index) and/or certain derivatives, which the
Adviser believes will help a Fund track its Index. A Fund may invest in master
limited partnerships (“MLPs”) to the extent they are included in its Index. MLPs
are limited partnerships that are operated under the supervision of one or more
managing general partners. The ownership interests/common units of an MLP are
listed and publicly traded on securities exchanges or in the over-the-counter
market. Depositary receipts not included in a Fund’s Index may be used by the
Fund in seeking performance that corresponds to the Index and in managing cash
flows, and may count towards compliance with a Fund’s 80% policy. Each Fund may
also invest, to the extent permitted by the 1940 Act, in other affiliated and
unaffiliated funds, such as open-end or closed-end management investment
companies, including other ETFs.
BORROWING
MONEY
Each
Fund may borrow money from a bank up to a limit of one-third of the market value
of its assets. Each Fund has entered or intends to enter into a credit facility
to borrow money for temporary, emergency or other purposes, including the
funding of shareholder redemption requests, trade settlements and as necessary
to distribute to shareholders any income required to maintain such Fund’s status
as a regulated investment company. To the extent that a Fund borrows money, it
may be leveraged; at such times, the Fund will appreciate or depreciate in value
more rapidly than its Index. Leverage generally has the effect of increasing the
amount of loss or gain a Fund might realize, and may increase volatility in the
value of such Fund’s investments.
LENDING
PORTFOLIO SECURITIES
Each
Fund may lend its portfolio securities to brokers, dealers and other financial
institutions desiring to borrow securities to complete transactions and for
other purposes. In connection with such loans, a Fund receives cash, U.S.
government securities and stand-by letters of credit not issued by the Funds’
bank lending agent liquid collateral equal to at least 102% of the value of the
portfolio securities being loaned. This collateral is marked-to-market on a
daily basis. Although a Fund will receive collateral in connection with all
loans of its securities holdings, the Fund would be exposed to a risk of loss
should a borrower fail to return the borrowed securities (e.g.,
the Fund would have to buy replacement securities and the loaned securities may
have appreciated beyond the value of the collateral held by the Fund) or become
insolvent. A Fund may pay fees to the party arranging the loan of securities. In
addition, a Fund will bear the risk that it may lose money because the borrower
of the loaned securities fails to return the securities in a timely manner or at
all. Each Fund could also lose money in the event of a decline in the value of
any cash collateral or in the value of investments made with the cash
collateral. These events could trigger adverse tax consequences for the Funds.
Substitute payments for dividends received by a Fund for securities loaned out
by a Fund will not be considered qualified dividend income.
ADDITIONAL
NON-PRINCIPAL RISKS
Risk
of Investing in MLPs.
MLP units may trade infrequently and in limited volume. Investments in MLPs
could also expose a Fund to volatility risk, because units of MLPs may be
subject to more abrupt or erratic price movements than securities of larger or
more
broadly based companies. Holders of MLP units are subject to certain risks
inherent in the structure of MLPs, including (i) tax risks (described further
below), (ii) the limited ability to elect or remove management or the general
partner or managing member, (iii) limited voting rights, (iv) conflicts of
interest between the general partner or managing member and its affiliates and
the limited partners or members, (v) dilution risks and risks related to the
general partner’s right to require unit- holders to sell their common units at
an undesirable time or price, resulting from regulatory changes or other reasons
and (vi) cash flow risks as described below. Holders of units of MLPs have more
limited control rights and limited rights to vote on matters affecting the MLP
as compared to holders of stock of a corporation. For example, MLP unit holders
may not elect the general partner or the directors of the general partner and
the MLP unit holders have limited ability to remove an MLP’s general partner.
MLPs are controlled by their general partners, which generally have conflicts of
interest and limited fiduciary duties to the MLP, which may permit the general
partner to favor its own interests over the MLPs. The amount of cash that each
individual MLP can distribute to its partners will depend on the amount of cash
it generates from operations, which will vary from quarter to quarter depending
on factors affecting the particular business lines of the MLP. Available cash
will also depend on the MLPs’ level of operating costs (including incentive
distributions to the general partner), level of capital expenditures, debt
service requirements, acquisition costs (if any), fluctuations in working
capital needs and other factors.
Some
MLPs may be treated as corporations for U.S. federal income tax purposes. The
manner and extent of a Fund’s investments in MLPs may be limited by its
intention to qualify as a regulated investment company under the Internal
Revenue Code (which would increase the risk of tracking error), and any such
investments by the Fund may adversely affect the ability of the Fund to so
qualify. If any of the MLPs owned by a Fund were treated as entities other than
partnerships for U.S. federal income tax purposes, such treatment could result
in the deemed liquidation of the MLP for income tax purposes and also result in
entity level tax, which could result in a reduction of the value of an
investment in the Fund.
Risk
of Investing in Derivatives.
Derivatives are financial instruments whose values are based on the value of one
or more reference assets or indicators, such as a security, currency, interest
rate, or index. The Funds’ use of derivatives involves risks different from, and
possibly greater than, the risks associated with investing directly in
securities and other more traditional investments. Moreover, although the value
of a derivative is based on an underlying asset or indicator, a derivative
typically does not carry the same rights as would be the case if a Fund invested
directly in the underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage, and may be highly volatile, and a Fund could lose more than the amount
it invests. The use of derivatives may increase the amount and affect the timing
and character of taxes payable by shareholders of a Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of a Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, a Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). A liquid secondary market may not always exist for a
Fund’s derivative positions at any time, and a Fund may not be able to initiate
or liquidate a swap position at an advantageous time or price, which may result
in significant losses.
In
October 2020, the Securities and Exchange Commission (the “SEC”) adopted a final
rule related to the use of derivatives, short sales, reverse repurchase
agreements and certain other transactions by registered investment companies
that will rescind and withdraw the guidance of the SEC and its staff regarding
asset segregation and cover transactions. The final rule requires funds to trade
derivatives and other transactions that create future payment or delivery
obligations (except reverse repurchase agreements and similar financing
transactions) subject to a value-at-risk (“VaR”) leverage limit, certain
derivatives risk management program and reporting requirements. Generally, these
requirements apply unless a fund qualifies as a “limited derivatives user,” as
defined in the final rule. Under the final rule, when a fund trades reverse
repurchase agreements or similar financing transactions, including certain
tender option bonds, it needs to aggregate the amount of indebtedness associated
with the reverse repurchase agreements or similar financing transactions with
the aggregate amount of any other senior securities representing indebtedness
when calculating the fund’s asset coverage ratio or treat all such transactions
as derivatives transactions. Reverse repurchase agreements or similar financing
transactions aggregated with other indebtedness do not need to be included in
the calculation of whether a fund is a limited derivatives user, but for funds
subject to the VaR testing, reverse repurchase agreements and similar financing
transactions must be included for purposes of such testing whether treated as
derivatives transactions or not. The SEC also provided guidance in connection
with the new rule regarding use of securities lending collateral that may limit
a fund's securities lending activities. Compliance with these new requirements
will be required after an eighteen-month transition period.
Relationship
to Commodities.
(VanEck Gold Miners ETF, VanEck Green Metals ETF, VanEck Junior Gold Miners ETF,
VanEck Rare Earth/Strategic Metals ETF, VanEck Oil Refiners ETF, VanEck Oil
Services ETF, VanEck Steel ETF and VanEck Uranium+Nuclear Energy ETF only.) Each
Fund’s respective Index measures the performance of equity securities of
companies in the gold and silver mining, rare earth/strategic metals, steel, oil
& gas and uranium industries, as applicable. Commodities markets
have
historically been extremely volatile, and commodity prices are affected by
various factors, including changes in overall market movements, commodity index
volatility, changes in interest rates, or factors affecting a particular
industry or commodity, such as weather, embargoes, tariffs and international
economic, political and regulatory developments. Each Fund’s respective Index
does not measure the performance of direct investments in gold, silver, rare
earth/strategic metals, steel or uranium (as applicable) and, therefore, may not
move in the same direction and to the same extent as direct investments in the
underlying commodities.
Shareholder
Risk.
Certain shareholders, including other funds advised by the Adviser, may from
time to time own a substantial amount of the Funds’ Shares. In addition, a third
party investor, the Adviser or an affiliate of the Adviser, an AP, a market
maker, or another entity may invest in a Fund and hold its investment for a
limited period of time. There can be no assurance that any large shareholder
would not redeem its investment. Redemptions by shareholders could have a
negative impact on a Fund. In addition, transactions by large shareholders may
account for a large percentage of the trading volume on an Exchange and may,
therefore, have a material effect on the market price of the
Shares.
Leverage
Risk. To
the extent that a Fund borrows money or utilizes certain derivatives, it may be
leveraged. Leveraging generally exaggerates the effect on NAV of any increase or
decrease in the market value of a Fund’s portfolio securities. To manage the
risk associated with leveraging, each Fund may segregate liquid assets, or
otherwise “cover” its derivatives position in a manner consistent with the 1940
Act and the rules and SEC interpretations thereunder. Each Fund may modify its
asset segregation policies at any time to comply with any changes in the SEC’s
positions regarding asset segregation.
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TAX
ADVANTAGED PRODUCT STRUCTURE |
Unlike
many conventional mutual funds which are only bought and sold at closing NAVs,
the Shares of each Fund have been designed to be tradable in a secondary market
on an intra-day basis and to be created and redeemed in-kind, except for VanEck
Agribusiness ETF, VanEck Green Metals ETF, VanEck Low Carbon Energy ETF, VanEck
Natural Resources ETF, VanEck Oil Refiners ETF, VanEck Rare Earth/Strategic
Metals ETF and VanEck Uranium+Nuclear Energy ETF, whose Shares are created and
redeemed partially for cash, in Creation Units at each day’s market close. These
in-kind arrangements are designed to mitigate the adverse effects on a Fund’s
portfolio that could arise from frequent cash purchase and redemption
transactions that affect the NAV of the Fund. Moreover, in contrast to
conventional mutual funds, where frequent redemptions can have an adverse tax
impact on taxable shareholders because of the need to sell portfolio securities
which, in turn, may generate taxable gain, the in-kind redemption mechanism of
certain Funds, to the extent used, generally is not expected to lead to a tax
event for shareholders whose Shares are not being redeemed.
A
description of each Fund’s policies and procedures with respect to the
disclosure of the Fund’s portfolio securities is available in the Funds’
SAI.
Board
of Trustees.
The Board of Trustees of the Trust has responsibility for the general oversight
of the management of the Funds, including general supervision of the Adviser and
other service providers, but is not involved in the day-to-day management of the
Trust. A list of the Trustees and the Trust officers, and their present
positions and principal occupations, is provided in the Funds’ SAI.
Investment
Adviser.
Under the terms of an investment management agreement between the Trust and Van
Eck Associates Corporation with respect to VanEck Gold Miners ETF (the “Gold
Miners Investment Management Agreement”) and an investment management agreement
between the Trust and Van Eck Associates Corporation with respect to each of the
other Funds (the “Investment Management Agreement” and, together with the Gold
Miners Investment Management Agreement, the “Investment Management Agreements”),
Van Eck Associates Corporation serves as the adviser to each Fund and, subject
to the supervision of the Board of Trustees, is responsible for the day-to-day
investment management of the Funds. Under the Gold Miners Investment Management
Agreement (but not the Investment Management Agreement), the Adviser is
obligated to provide certain fund accounting services to VanEck Gold Miners ETF.
As of December 31, 2021, the Adviser managed approximately $81.93 billion in
assets. The Adviser has been an investment adviser since 1955 and also acts as
adviser or sub-adviser to mutual funds, other ETFs, other pooled investment
vehicles and separate accounts. The Adviser’s principal business address is 666
Third Avenue, 9th Floor, New York, New York 10017.
A
discussion regarding the Board of Trustees’ approval of the Investment
Management Agreements is available in the Trust’s semi-annual report for the
period ended June 30, 2021. A discussion regarding the Board of Trustees’
approval of the Investment Management Agreement with respect to VanEck Natural
Resources ETF and VanEck Oil Services ETF is also available in the Trust’s
annual report for the period ended December 31, 2021.
For
the services provided to each of VanEck Agribusiness ETF, VanEck Gold Miners
ETF, VanEck Junior Gold Miners ETF, VanEck Low Carbon Energy ETF, VanEck Oil
Refiners ETF, VanEck Rare Earth/Strategic Metals ETF, VanEck Steel ETF, and
VanEck Uranium+Nuclear Energy ETF under the Investment Management Agreements,
each Fund pays the Adviser monthly fees based on a percentage of each Fund’s
average daily net assets at the annual rate of 0.50%.
From
time to time, the Adviser may waive all or a portion of its fee. Until at least
May 1, 2023 the Adviser has agreed to waive fees and/or pay Fund expenses to the
extent necessary to prevent the operating expenses of each Fund (excluding
acquired fund fees and expenses, interest expense, trading expenses, taxes and
extraordinary expenses) from exceeding 0.53% (with respect to VanEck Gold Miners
ETF), 0.55% (with respect to VanEck Steel ETF), 0.56% (with respect to VanEck
Agribusiness ETF and VanEck Junior Gold Miners ETF), 0.57% (with respect to
VanEck Rare Earth/Strategic Metals ETF), 0.59% (with respect to VanEck Oil
Refiners ETF), 0.60% (with respect to VanEck Uranium+Nuclear Energy ETF) and
0.62% (with respect to VanEck Low Carbon Energy ETF) of its average daily net
assets per year.
Each
of VanEck Agribusiness ETF, VanEck Gold Miners ETF, VanEck Junior Gold Miners
ETF, VanEck Low Carbon Energy ETF, VanEck Oil Refiners ETF, VanEck Rare
Earth/Strategic Metals ETF, VanEck Steel ETF, and VanEck Uranium+Nuclear Energy
ETF is responsible for all of its expenses, including the investment advisory
fees, costs of transfer agency, custody, legal, audit and other services,
interest, taxes, any distribution fees or expenses, offering fees or expenses
and extraordinary expenses.
Pursuant
to the Investment Management Agreement, the Adviser is responsible for all
expenses of VanEck Future of Food ETF, VanEck Green Metals ETF, VanEck Natural
Resources ETF and VanEck Oil Services ETF including the costs of transfer
agency, custody, fund administration, legal, audit and other services, except
for the fee payment under the Investment Management Agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. For its services to each Fund, each Fund has agreed to
pay the Adviser an annual unitary management fee as a percentage of the average
daily net assets equal to 0.69% (with respect of VanEck Future of Food ETF),
0.59% (with respect to VanEck Green Metals ETF), 0.49% (with respect to VanEck
Natural Resources ETF), and 0.35% (with respect to VanEck Oil Services ETF).
Offering costs excluded from the annual unitary management fee are: (a) legal
fees pertaining to a Fund’s Shares offered for sale; (b) SEC and state
registration fees; and (c) initial fees paid for Shares of a Fund to be listed
on an exchange. Notwithstanding the foregoing, the Adviser has agreed to pay all
such offering costs until at least May 1, 2023 with respect to VanEck Future of
Food ETF, VanEck Green Metals ETF, VanEck Natural Resources ETF and VanEck Oil
Services ETF.
Prior
to January 1, 2022, for the services provided to VanEck Natural Resources ETF
under the Investment Management Agreement, the Fund paid the Adviser monthly
fees based on a percentage of the Fund’s average daily net assets at the annual
rate of 0.50%, and for services provided to VanEck Oil Services ETF under the
Investment Management Agreement, the Fund paid the Adviser monthly fees based on
a percentage of the Fund’s average daily net assets at the annual rate of 0.35%.
Manager
of Managers Structure.
With respect to VanEck Future of Food ETF, VanEck Green Metals ETF and VanEck
Oil Refiners ETF, the Adviser and the Trust may rely on an exemptive order (the
“Order”) from the SEC that permits the Adviser to enter into investment
sub-advisory agreements with unaffiliated sub-advisers without obtaining
shareholder approval. The Adviser, subject to the review and approval of the
Board of Trustees, may select one or more sub-advisers for the Fund and
supervise, monitor and evaluate the performance of each
sub-adviser.
The
Order also permits the Adviser, subject to the approval of the Board of
Trustees, to replace sub-advisers and amend investment sub-advisory agreements,
including applicable fee arrangements, without shareholder approval whenever the
Adviser
and
the Board of Trustees believe such action will benefit the Fund and its
shareholders. The Adviser thus would have the responsibility (subject to the
oversight of the Board of Trustees) to recommend the hiring and replacement of
sub-advisers as well as the discretion to terminate any sub-adviser and
reallocate the Fund’s assets for management among any other sub-adviser(s) and
itself. This means that the Adviser would be able to reduce the sub-advisory
fees and retain a larger portion of the management fee, or increase the
sub-advisory fees and retain a smaller portion of the management fee. The
Adviser would compensate each sub-adviser out of its management
fee.
Administrator,
Custodian and Transfer Agent.
Van Eck Associates Corporation is the administrator for the Funds (the
“Administrator”), and State Street Bank and Trust Company is the custodian of
the Funds’ assets and provides transfer agency and fund accounting services to
the Funds. The Administrator is responsible for certain clerical, recordkeeping
and/or bookkeeping services which are required to be provided pursuant to the
Investment Management Agreement.
Distributor.
Van Eck Securities Corporation is the distributor of the Shares (the
“Distributor”). The Distributor will not distribute Shares in less than a
specified number of Shares, each called a “Creation Unit,” and does not maintain
a secondary market in the Shares. The Shares are traded in the secondary market.
The
portfolio managers who currently share joint responsibility for the day-to-day
management of each Fund’s portfolio (except for VanEck Future of Food ETF) are
Peter H. Liao, CFA, and Guo Hua (Jason) Jin. Mr. Liao has been employed by the
Adviser as an analyst since the summer of 2004 and has been a portfolio manager
since 2006. Mr. Liao graduated from New York University in 2004 with a Bachelor
of Arts in Economics and Mathematics. Mr. Jin has been employed by the Adviser
as an analyst since January 2007 and has been a portfolio manager since 2018.
Mr. Jin graduated from the State University of New York at Buffalo in 2004 with
a Bachelor of Science degree in Business Administration with a concentration in
Financial Analysis. Messrs. Liao and Jin also serve as portfolio managers for
certain other investment companies and pooled investment vehicles advised by the
Adviser. See the Funds’ SAI for additional information about the portfolio
managers’ compensation, other accounts managed by the portfolio managers and
their respective ownership of Shares.
The
portfolio managers who currently share joint responsibility for the day-to-day
management of VanEck Future of Food ETF’s portfolio are Shawn Reynolds and Ammar
James. Mr. Reynolds is Portfolio Manager of the Fund and is primarily
responsible for company research and portfolio construction. He has been with
the Adviser since 2005 and has over 30 years of experience in the international
and financial markets. Prior to joining the Adviser, Mr. Reynolds was an analyst
covering U.S. oil and gas exploration and production companies at Petrie Parkman
& Co. He has also served as an analyst with Credit Suisse First Boston,
Goldman Sachs and Lehman Brothers. Mr. James is deputy portfolio manager of the
Fund. He has been employed by the Adviser as an analyst since 2019 and has been
a portfolio manager since 2021. Mr. James graduated from the State University of
New York at Stony Brook with a Bachelor of Science in Mathematics. Mr. Reynolds
also serves as portfolio manager for certain other investment companies and
pooled investment vehicles advised by the Adviser. See the Fund’s SAI for
additional information about the portfolio managers’ compensation, other
accounts managed by the portfolio managers and their respective ownership of
Shares.
DETERMINATION
OF NAV
The
NAV per Share for each Fund is computed by dividing the value of the net assets
of the Fund (i.e.,
the value of its total assets less total liabilities) by the total number of
Shares outstanding. Expenses and fees, including the management fee, are accrued
daily and taken into account for purposes of determining NAV. The NAV of each
Fund is determined each business day as of the close of trading (ordinarily 4:00
p.m., Eastern time) on the New York Stock Exchange.
The
values of each Fund’s portfolio securities are based on the securities’ closing
prices on the markets on which the securities trade, when available. Due to the
time differences between the United States and certain countries in which
certain Funds invest, securities on these exchanges may not trade at times when
Shares of the Fund will trade. In the absence of a last reported sales price, or
if no sales were reported, and for other assets for which market quotes are not
readily available, values may be based on quotes obtained from a quotation
reporting system, established market makers or by an outside independent pricing
service. Debt instruments with remaining maturities of more than 60 days are
valued at the evaluated mean price provided by an outside independent pricing
service. If an outside independent pricing service is unable to provide a
valuation, the instrument is valued at the mean of the highest bid and the
lowest asked quotes obtained from one or more brokers or dealers selected by the
Adviser. Prices obtained by an outside independent pricing service may use
information provided by market makers or estimates of market values obtained
from yield data related to investments or securities with similar
characteristics and may use a computerized grid matrix of securities and its
evaluations in determining what it believes is the fair value of the portfolio
securities. Short-term debt instruments having a maturity of 60 days or less are
valued at amortized cost. Any assets or liabilities denominated in currencies
other than the U.S. dollar are converted into U.S. dollars at the current market
rates on the date of valuation as quoted by one or more sources. If a market
quotation for a security or other asset is not readily available or the Adviser
believes it does not otherwise accurately reflect the market value of the
security or asset at the time a Fund calculates its NAV, the security or asset
will be fair valued by the Adviser in accordance with the Trust’s valuation
policies and procedures approved by the Board of Trustees. Each Fund may also
use fair value pricing in a variety of circumstances, including but not limited
to, situations when the value of a security in the Fund’s portfolio has been
materially affected by events occurring after the close of the market on which
the security is principally traded (such as a corporate action or other news
that may materially affect the price of a security) or trading in a security has
been suspended or halted. In addition, each Fund that holds foreign equity
securities currently expects that it will fair value certain of the foreign
equity securities held by the Fund, if any, each day the Fund calculates its
NAV, except those securities principally traded on exchanges that close at the
same time the Fund calculates its NAV.
Accordingly,
a Fund’s NAV may reflect certain portfolio securities’ fair values rather than
their market prices at the time the exchanges on which they principally trade
close. Fair value pricing involves subjective judgments and it is possible that
a fair value determination for a security or other asset is materially different
than the value that could be realized upon the sale of such security or asset.
In addition, fair value pricing could result in a difference between the prices
used to calculate a Fund’s NAV and the prices used by such Fund’s respective
Index. This may adversely affect a Fund’s ability to track its Index. With
respect to securities that are principally traded on foreign exchanges, the
value of a Fund’s portfolio securities may change on days when you will not be
able to purchase or sell your Shares.
INTRADAY
VALUE
The
trading prices of the Funds’ Shares in the secondary market generally differ
from the Funds’ daily NAV and are affected by market forces such as the supply
of and demand for Fund Shares and underlying securities held by each Fund,
economic conditions and other factors. Information regarding the intraday value
of the Funds’ Shares (“IIV”) may be disseminated throughout each trading day by
an Exchange or by market data vendors or other information providers. The IIV is
based on the current market value of the securities and/or cash required to be
deposited in exchange for a Creation Unit. The IIV does not necessarily reflect
the precise composition of the current portfolio of securities held by each Fund
at a particular point in time or the best possible valuation of the current
portfolio. Therefore, the IIV should not be viewed as a “real-time” update of
the Funds’ NAV, which is computed only once a day. The IIV is generally
determined by using current market quotations and/or price quotations obtained
from broker-dealers and other market intermediaries that may trade in the
portfolio securities held by each Fund and valuations based on current market
rates. The quotations and/or valuations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the United
States. Each Fund is not involved in, or responsible for, the calculation or
dissemination of the IIV and makes no warranty as to its accuracy.
RULE
144A AND OTHER UNREGISTERED SECURITIES
An
AP (i.e.,
a person eligible to place orders with the Distributor to create or redeem
Creation Units of a Fund) that is not a “qualified institutional buyer,” as such
term is defined under Rule 144A of the Securities Act of 1933, as amended (the
“Securities Act”), will not be able to receive, as part of a redemption,
restricted securities eligible for resale under Rule 144A or other unregistered
securities.
BUYING
AND SELLING EXCHANGE-TRADED SHARES
The
Shares of the Funds are listed on an Exchange. If you buy or sell Shares in the
secondary market, you will incur customary brokerage commissions and charges and
may pay some or all of the “spread,” which is any difference between the bid
price and the ask price. The spread varies over time for a Fund’s Shares based
on the Fund’s trading volume and market liquidity, and is generally lower if the
Funds have high trading volume and market liquidity, and generally higher if the
Funds have little trading volume and market liquidity (which is often the case
for funds that are newly launched or small in size). In times of severe market
disruption
or low trading volume in a Fund’s Shares, this spread can increase
significantly. It is anticipated that the Shares will trade in the secondary
market at prices that may differ to varying degrees from the NAV of the Shares.
During periods of disruptions to creations and redemptions or the existence of
extreme market volatility, the market prices of Shares are more likely to differ
significantly from the Shares’ NAV.
The
Depository Trust Company (“DTC”) serves as securities depository for the Shares.
(The Shares may be held only in book-entry form; stock certificates will not be
issued.) DTC, or its nominee, is the record or registered owner of all
outstanding Shares. Beneficial ownership of Shares will be shown on the records
of DTC or its participants (described below). Beneficial owners of Shares are
not entitled to have Shares registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and are
not considered the registered holder thereof. Accordingly, to exercise any
rights of a holder of Shares, each beneficial owner must rely on the procedures
of: (i) DTC; (ii) “DTC Participants,” i.e.,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom (and/or their representatives) own
DTC; and (iii) “Indirect Participants,” i.e.,
brokers, dealers, banks and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly,
through which such beneficial owner holds its interests. The Trust understands
that under existing industry practice, in the event the Trust requests any
action of holders of Shares, or a beneficial owner desires to take any action
that DTC, as the record owner of all outstanding Shares, is entitled to take,
DTC would authorize the DTC Participants to take such action and that the DTC
Participants would authorize the Indirect Participants and beneficial owners
acting through such DTC Participants to take such action and would otherwise act
upon the instructions of beneficial owners owning through them. As described
above, the Trust recognizes DTC or its nominee as the owner of all Shares for
all purposes. For more information, see the section entitled “Book Entry Only
System” in the Funds’ SAI.
Each
Exchange is open for trading Monday through Friday and is closed on weekends and
the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’
Day, Good Friday, Memorial Day, Juneteenth National Independence Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Because
non-U.S. exchanges may be open on days when a Fund does not price its Shares,
the value of the securities in the Fund’s portfolio may change on days when
shareholders will not be able to purchase or sell a Fund’s Shares.
The
right of redemption by an AP may be suspended or the date of payment postponed
(1) for any period during which an Exchange is closed (other than customary
weekend and holiday closings); (2) for any period during which trading on an
Exchange is suspended or restricted; (3) for any period during which an
emergency exists as a result of which disposal of the Shares of a Fund or
determination of its NAV is not reasonably practicable; or (4) in such other
circumstance as is permitted by the SEC..
Market
Timing and Related Matters.
The Funds impose no restrictions on the frequency of purchases and redemptions.
Frequent purchases and redemptions of Fund Shares may attempt to take advantage
of a potential arbitrage opportunity presented by a lag between a change in the
value of a Fund’s portfolio securities after the close of the primary markets
for a Fund’s portfolio securities and the reflection of that change in a Fund’s
NAV (“market timing”). The Board of Trustees considered the nature of each Fund
(i.e.,
a fund whose Shares are expected to trade intraday), that the Adviser monitors
the trading activity of APs for patterns of abusive trading, that the Funds
reserve the right to reject orders that may be disruptive to the management of
or otherwise not in the Funds’ best interests, and that each Fund may fair value
certain of its securities. Given this structure, the Board of Trustees
determined that it is not necessary to impose restrictions on the frequency of
purchases and redemptions for the Funds at the present time.
DISTRIBUTIONS
Net
Investment Income and Capital Gains.
As a shareholder of a Fund, you are entitled to your share of such Fund’s
distributions of net investment income and net realized capital gains on its
investments. Each Fund pays out substantially all of its net earnings to its
shareholders as “distributions.”
Each
Fund typically earns income dividends from stocks and interest from debt
securities. These amounts, net of expenses, are typically passed along to Fund
shareholders as dividends from net investment income. Each Fund realizes capital
gains or losses whenever it sells securities. Net capital gains are distributed
to shareholders as “capital gain distributions.”
Net
investment income, if any, and net capital gains,
if
any, are typically distributed to shareholders at least annually. Dividends may
be declared and paid more frequently to improve index tracking or to comply with
the distribution requirements of the Code. In addition, in situations where a
Fund acquires investment securities after the beginning of a dividend period, a
Fund may elect to distribute at least annually amounts representing the full
dividend yield net of expenses on the underlying investment securities, as if
the Fund owned the underlying investment securities for the entire dividend
period. If a Fund so elects, some portion of each distribution may result in a
return of capital, which, for tax purposes, is treated as a return of your
investment in Shares. You will be notified regarding the portion of the
distribution which represents a return of capital.
Distributions
in cash may be reinvested automatically in additional Shares of a Fund only if
the broker through which you purchased Shares makes such option
available.
TAX
INFORMATION
As
with any investment, you should consider how your Fund investment will be taxed.
The tax information in this Prospectus is provided as general information. You
should consult your own tax professional about the tax consequences of an
investment in a Fund, including the possible application of foreign, state and
local taxes. Unless your investment in a Fund is through a tax-exempt entity or
tax-deferred retirement account, such as a 401(k) plan, you need to be aware of
the possible tax consequences when: (i) the Fund makes distributions, (ii) you
sell Shares in the secondary market or (iii) you create or redeem Creation
Units.
Taxes
on Distributions. As
noted above, each Fund expects to distribute net investment income, if any, at
least annually, and any net realized long-term or short-term capital gains, if
any, annually. Each Fund may also pay a special distribution at any time to
comply with U.S. federal tax requirements.
In
general, your distributions are subject to U.S. federal income tax when they are
paid, whether you take them in cash or reinvest them in a Fund. Distributions of
net investment income, including net short-term gains, if any, are generally
taxable as ordinary income. Whether distributions of capital gains represent
long-term or short-term capital gains is determined by how long a Fund owned the
investments that generated them, rather than how long you have owned your
Shares. Distributions of net short-term capital gains in excess of net long—term
capital losses, if any, are generally taxable as ordinary income. Distributions
of net long-term capital gains in excess of net short-term capital losses, if
any, that are properly reported as capital gain dividends are generally taxable
as long-term capital gains. Long-term capital gains of a non-corporate
shareholder are generally taxable at a maximum rate of 15% or 20%, depending on
whether the shareholder’s income exceeds certain threshold amounts.
The
Funds may receive dividends, the distribution of which a Fund may report as
qualified dividends. In the event that a Fund receives such a dividend and
reports the distribution of such dividend as a qualified dividend, the dividend
may be taxed at the maximum capital gains rates of 15% or 20%, provided holding
period and other requirements are met at both the shareholder and the Fund
level. There can be no assurance that any significant portion of a Fund’s
distributions will be eligible for qualified dividend treatment.
Distributions
in excess of a Fund’s current and accumulated earnings and profits are treated
as a tax-free return of your investment to the extent of your basis in the
Shares, and generally as capital gain thereafter. A return of capital, which for
tax purposes is treated as a return of your investment, reduces your basis in
Shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition of Shares. A distribution will reduce a Fund’s NAV per Share and may
be taxable to you as ordinary income or capital gain even though, from an
economic standpoint, the distribution may constitute a return of
capital.
Dividends,
interest and gains from non-U.S. investments of a Fund may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may, in some cases, reduce or
eliminate such taxes.
Each
Fund may make investments in companies classified as passive foreign investment
companies (“PFICs”) for U.S. federal income tax purposes. Investments in PFICs
are subject to special tax rules which may result in adverse tax consequences to
the Fund and its shareholders. Each Fund generally intends to elect to “mark to
market” these investments at the end of each taxable year. By making this
election, a Fund will recognize as ordinary income any increase in the value of
such shares as of the close of the taxable year over their adjusted basis and as
ordinary loss any decrease in such investment (but only to the extent of prior
income from such investment under the mark to market rules). Gains realized with
respect to a disposition of a PFIC that a Fund has elected to mark to market
will be ordinary income. By making the mark to market election, a Fund may
recognize income in excess of the distributions that it receives from its
investments. Accordingly, a Fund may need to borrow money or dispose of some of
its investments in order to meet its distribution requirements. If a Fund does
not make the mark to market election with respect to an investment in a PFIC,
the Fund could become subject to U.S. federal income tax with respect to certain
distributions from, and gain on the dispositions of, the PFIC which cannot be
avoided by distributing such amounts to the Fund’s shareholders.
If
more than 50% of a Fund’s total assets at the end of its taxable year consist of
foreign securities, the Fund may elect to “pass through” to its investors
certain foreign income taxes paid by the Fund, with the result that each
investor will (i) include in gross income, even though not actually received,
the investor’s pro rata share of the Fund’s foreign income taxes, and (ii)
either deduct (in calculating U.S. taxable income) or credit (in calculating
U.S. federal income), subject to certain holding period and other limitations,
the investor’s pro rata share of the Fund’s foreign income taxes. It is expected
that more than 50% of each Fund’s (except for VanEck Agribusiness ETF’s, VanEck
Future of Food ETF's, VanEck Low Carbon Energy ETF’s, VanEck Oil Services ETF’s,
and VanEck Uranium+Nuclear Energy ETF’s) assets will consist of foreign
securities.
Backup
Withholding.
Each Fund may be required to withhold a percentage of your distributions and
proceeds if you have not provided a taxpayer identification number or social
security number or otherwise established a basis for exemption from backup
withholding. The backup withholding rate for individuals is currently 24%. This
is not an additional tax and may be refunded, or credited against your U.S.
federal income tax liability, provided certain required information is furnished
to the Internal Revenue Service).
Taxes
on the Sale or Cash Redemption of Exchange Listed Shares.
Currently, any capital gain or loss realized upon a sale of Shares is generally
treated as long-term capital gain or loss if the Shares have been held for more
than one year and as a
short
term capital gain or loss if held for one year or less. The ability to deduct
capital losses may be limited. To the extent that a Fund shareholder’s Shares
are redeemed for cash, this is normally treated as a sale for tax
purposes.
Taxes
on In-Kind Creations and In-Kind Redemptions of Creation Units.
To the extent a person exchanges securities or securities and cash for Creation
Units, such person generally will recognize a gain or loss. The gain or loss
will be equal to the difference between the market value of the Creation Units
at the time of exchange and the sum of the exchanger’s aggregate basis in the
securities surrendered and the amount of any cash paid for such Creation Units.
A person who exchanges Creation Units for securities or securities and cash will
generally recognize a gain or loss equal to the difference between the
exchanger’s basis in the Creation Units and the sum of the aggregate market
value of the securities received and the amount of any cash received for such
Creation Units. The IRS, however, may assert that a loss realized upon an
exchange of primarily securities for Creation Units cannot be deducted currently
under the rules governing “wash sales,” or on the basis that there has been no
significant change in economic position. Persons exchanging primarily securities
for Creation Units or redeeming Creation Units should consult their own tax
adviser with respect to whether wash sale rules apply and when a loss might be
deductible and the tax treatment of any creation or redemption
transaction.
Under
current U.S. federal income tax laws, any capital gain or loss realized upon a
redemption (or creation) of Creation Units held as capital assets is generally
treated as long-term capital gain or loss if the Shares (or securities
surrendered) have been held for more than one year and as a short-term capital
gain or loss if the Shares (or securities surrendered) have been held for one
year or less.
If
you create or redeem Creation Units, you will be sent a confirmation statement
showing how many Shares you created or sold and at what price.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Fund
Shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
Non-U.S.
Shareholders.
Dividends paid by the Funds to Non-U.S. shareholders are generally subject to
withholding tax at a 30% rate or a reduced rate specified by an applicable
income tax treaty to the extent derived from investment income and short-term
capital gains. Dividends paid by the Funds from net tax-exempt income or
long-term capital gains are generally not subject to such withholding tax.
Properly-reported dividends are generally exempt from U.S. federal withholding
tax where they (i) are paid in respect of the Funds’ “qualified net interest
income” (generally, the Funds’ U.S. source interest income, other than certain
contingent interest and interest from obligations of a corporation or
partnership in which the Fund is at least a 10% shareholder, reduced by expenses
that are allocable to such income); or (ii) are paid in respect of the Funds’
“qualified short-term capital gains” (generally, the excess of the Funds’ net
short-term capital gain over the Fund’s long-term capital loss for such taxable
year). However, depending on its circumstances, the Funds may report all, some
or none of its potentially eligible dividends as such qualified net interest
income or as qualified short-term capital gains and/or treat such dividends, in
whole or in part, as ineligible for this exemption from
withholding.
Any
capital gain realized by a Non-U.S. shareholder upon a sale of Shares of a Fund
will generally not be subject to U.S. federal income or withholding tax unless
(i) the gain is effectively connected with the shareholder’s trade or business
in the United States, or in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the United States for 183 days or more
during the taxable year and certain other conditions are met or (ii) the Fund is
or has been a U.S. real property holding corporation, as defined below, at any
time within the five-year period preceding the date of disposition of the Fund’s
Shares or, if shorter, within the period during which the Non-U.S. shareholder
has held the Shares. Generally, a corporation is a U.S. real property holding
corporation if the fair market value of its U.S. real property interests, as
defined in the Code and applicable regulations, equals or exceeds 50% of the
aggregate fair market value of its worldwide real property interests and its
other assets used or held for use in a trade or business. A Fund may be, or may
prior to a Non-U.S. shareholder’s disposition of Shares become, a U.S. real
property holding corporation. If a Fund is or becomes a U.S. real property
holding corporation, so long as the Fund’s Shares are regularly traded on an
established securities market, only a Non-U.S. shareholder who holds or held (at
any time during the shorter of the five year period preceding the date of
disposition or the holder’s holding period) more than 5% (directly or indirectly
as determined under applicable attribution rules of the Code) of the Fund’s
Shares will be subject to United States federal income tax on the disposition of
Shares.
As
part of the Foreign Account Tax Compliance Act, (“FATCA”), a Fund may be
required to withhold 30% tax on certain types of U.S. sourced income
(e.g.,
dividends, interest, and other types of passive income), paid to (i) foreign
financial institutions (“FFIs”), including non-U.S. investment funds, unless
they agree to collect and disclose to the IRS information regarding their direct
and indirect U.S. account holders and (ii) certain nonfinancial foreign entities
(“NFFEs”), unless they certify certain information regarding their direct and
indirect U.S. owners. To avoid possible withholding, FFIs will need to enter
into agreements with the IRS which state that they will provide the IRS
information, including the names, account numbers and balances, addresses and
taxpayer identification numbers of U.S. account holders and comply with due
diligence procedures with respect to the identification of U.S. accounts as well
as agree to withhold tax on certain types of withholdable payments made to
non-compliant foreign financial institutions or to applicable foreign account
holders who fail to provide the required information to the IRS, or similar
account
information
and required documentation to a local revenue authority, should an applicable
intergovernmental agreement be implemented. NFFEs will need to provide certain
information regarding each substantial U.S. owner or certifications of no
substantial U.S. ownership, unless certain exceptions apply, or agree to provide
certain information to the IRS.
A
Fund may be subject to the FATCA withholding obligation, and also will be
required to perform due diligence reviews to classify foreign entity investors
for FATCA purposes. Investors are required to agree to provide information
necessary to allow a Fund to comply with the FATCA rules. If a Fund is required
to withhold amounts from payments pursuant to FATCA, investors will receive
distributions that are reduced by such withholding amounts.
Non-U.S.
shareholders are advised to consult their tax advisors with respect to the
particular tax consequences to them of an investment in the Funds, including the
possible applicability of the U.S. estate tax.
The
foregoing discussion summarizes some of the consequences under current U.S.
federal income tax law of an investment in a Fund. It is not a substitute for
personal tax advice. Consult your own tax advisor about the potential tax
consequences of an investment in a Fund under all applicable tax laws. Changes
in applicable tax authority could materially affect the conclusions discussed
above and could adversely affect the Funds, and such changes often
occur.
The
Gold Miners Index and Steel Index are published by ICE Data Indices, LLC (“ICE
Data”). The Agribusiness Index, Clean-Tech Metals Index, Junior Gold Miners
Index, Low Carbon Energy Index, Oil & Gas Index, Oil Refiners Index, Oil
Services Index, Rare Earth/Strategic Metals Index and Nuclear Energy Index are
published by MV Index Solutions GmbH (“MVIS”), which is an indirectly wholly
owned subsidiary of the Adviser. The Natural Resources Index is published by
S-Network Global Indexes, LLC (“S-Network”).
ICE
Data, MVIS and S-Network are each referred to herein as an “Index Provider” and
collectively the “Index Providers.” The Index Providers do not sponsor, endorse,
or promote the Funds and bear no liability with respect to the Funds or any
security.
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MVIS®
GLOBAL AGRIBUSINESS INDEX |
The
Agribusiness Index is a rules based index intended to give investors a means of
tracking the overall performance of the companies in the global agribusiness
segment which includes: agri-chemicals, animal health and fertilizers, seeds and
traits, from farm/irrigation equipment and farm machinery, aquaculture and
fishing, livestock, cultivation and plantations (including grain, oil palms,
sugar cane, tobacco leafs, grapevines etc.) and trading of agricultural
products. Companies that produce the majority of their revenues from the
distribution and/or sale of packaged food products or goods, Biodiesel and
Ethanol or Forestry are not included in the Agribusiness Index.
To
be initially eligible for the Agribusiness Index, (i) companies must generate at
least 50% of their revenues from agribusiness (as defined above) and (ii) all
stocks must have a market capitalization of greater than $150 million as of the
end of the month prior to the month in which a rebalancing date
occurs.
The
Agribusiness Index is the exclusive property of MVIS (a wholly owned subsidiary
of the Adviser), which has contracted with Solactive AG to maintain and
calculate the Agribusiness Index. Solactive AG uses its best efforts to ensure
that the Agribusiness Index is calculated correctly. Irrespective of its
obligations towards MVIS, Solactive AG has no obligation to point out errors in
the Agribusiness Index to third parties. VanEck Agribusiness ETF is not
sponsored, endorsed, sold or promoted by MVIS and MVIS makes no representation
regarding the advisability of investing in the VanEck Agribusiness
ETF.
The
Agribusiness Index is reconstituted and rebalanced quarterly. MVIS may delay or
change a scheduled rebalancing or reconstitution of the Agribusiness Index or
the implementation of certain rules at its sole discretion.
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NYSE
ARCA GOLD MINERS INDEX |
The
NYSE Arca Gold Miners Index is a modified market capitalization weighted index
primarily comprised of publicly traded companies involved in the mining for gold
and silver. The NYSE Arca Gold Miners Index includes common stocks, ADRs and
GDRs of selected companies that are involved in mining for gold and silver and
that are listed for trading and electronically quoted on a major stock market
that is accessible by foreign investors. Only companies with market
capitalizations greater than $750 million that have an average daily volume of
at least 50,000 shares over the past three months and an average daily value
traded of at least $1 million over the past three months are eligible for
inclusion in the NYSE Arca Gold Miners Index. The weight of companies whose
revenues are more significantly exposed to silver mining will not exceed 20% of
the NYSE Arca Gold Miners Index at rebalance.
The
NYSE Arca Gold Miners Index is calculated using a modified market-capitalization
weighting methodology. The NYSE Arca Gold Miners Index is weighted based on the
market capitalization of each of the component securities, modified to conform
to the following asset diversification requirements, which are applied in
conjunction with the scheduled quarterly adjustments to the NYSE Arca Gold
Miners Index:
(1)
the weight of any single component security may not
account for more than 20% of the total value of the NYSE Arca Gold Miners
Index;
(2)
the component securities are split into two
subgroups-large and small, which are ranked by market capitalization weight in
the NYSE Arca Gold Miners Index. Large stocks are defined as having a starting
NYSE Arca Gold Miners Index weight greater than or equal to 5%. Small securities
are defined as having a starting NYSE Arca Gold Miners Index weight below 5%.
The large group and small group will represent 45% and 55%, respectively, of the
NYSE Arca Gold Miners Index; and
(3)
the final aggregate weight of those component securities
which individually represent more than 4.5% of the total value of the NYSE Arca
Gold Miners Index may not account for more than 45% of the total NYSE Arca Gold
Miners Index value.
The
information utilized in this modification process is taken from the close of
trading on the second Friday of the rebalance month.
The
NYSE Arca Gold Miners Index is reviewed quarterly so that the NYSE Arca Gold
Miners Index components continue to represent the universe of companies involved
in the gold mining industry. Companies will be removed from the NYSE Arca Gold
Miners Index if the market capitalization is lower than $450 million, or the
average daily volume for the past three months is lower than 30,000 shares and
the average daily value traded for the past three months is lower than $600,000.
ICE Data Indices, LLC (“ICE Data”), as the NYSE Arca Gold Miners Index
Administrator, may at any time and from time to time change the number of
securities comprising the group by adding or deleting one or more securities, or
replacing one or more securities contained in the group with one or more
substitute securities of its choice, if in ICE Data’s discretion such addition,
deletion or substitution is necessary or appropriate to maintain the quality
and/or character of the NYSE Arca Gold Miners Index. Changes to the NYSE Arca
Gold Miners Index compositions and/or the component share weights in the NYSE
Arca Gold Miners Index typically take effect at the open of the first trading
day after the third Friday of each calendar quarter end month in connection with
the quarterly index rebalance. ICE Data may delay or change a scheduled
rebalancing or reconstitution of the NYSE Arca Gold Miners Index or the
implementation of certain rules at its sole discretion.
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MVIS
GLOBAL CLEAN-TECH METALS INDEX |
The
Clean-Tech Metals Index is a rules based, modified capitalization weighted,
float adjusted index intended to give investors a means of tracking the overall
performance of companies involved in the green metals segment which includes:
“Processors” and “Producers” of green metals. “Green metals” are metals used in
the applications, products and processes that enable the energy transition from
fossil fuels to cleaner energy sources and technologies.
To
be initially eligible for the Clean-Tech Metals Index, (i) companies must
generate at least 50% of their revenues from green metals (as defined above) or
have mining projects that have the potential to generate at least 50% of their
revenues from green metals when developed and (ii) all stocks must have a market
capitalization of greater than $150 million as of the end of the month prior to
the month in which a rebalancing date occurs. Companies that are current
components of the Clean-Tech Metals Index must generate at least 25% of their
revenues from green metals or have mining projects with the potential to
generate at least 25% of their revenues from green metals when developed in
order to remain in the Clean-Tech Metals Index. The Clean-Tech Metals Index
currently includes a minimum of 25 Index components.
The
Clean-Tech Metals Index is the exclusive property of MVIS (a wholly owned
subsidiary of the Adviser), which has contracted with Solactive AG to maintain
and calculate the Clean-Tech Metals Index. Solactive AG uses its best efforts to
ensure that the Clean-Tech Metals Index is calculated correctly. Irrespective of
its obligations towards MVIS, Solactive AG has no obligation to point out errors
in the Clean-Tech Metals Index to third parties. The Fund is not sponsored,
endorsed, sold or promoted by MVIS and MVIS makes no representation regarding
the advisability of investing in the Fund.
The
Clean-Tech Metals Index is reconstituted and rebalanced quarterly. MVIS may
delay or change a scheduled rebalancing or reconstitution of the Clean-Tech
Metals Index or the implementation of certain rules at its sole
discretion.
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MVIS®
GLOBAL JUNIOR GOLD MINERS
INDEX |
The
Junior Gold Miners Index is a rules based, modified capitalization weighted,
float adjusted index intended to give investors a means of tracking the overall
performance of small-capitalization companies that are involved primarily in the
mining for gold and/or silver.
To
be initially eligible for the Junior Gold Miners Index, (i) companies must
generate at least 50% of their revenues from gold and/or silver
mining/royalties/streaming or have mining projects with the potential to
generate at least 50% of their revenues from gold and/or silver when developed,
and (ii) all stocks must have a market capitalization of greater than $150
million as of the end of the month prior to the month in which a rebalancing
date occurs.
The
Junior Gold Miners Index is the exclusive property of MVIS (a wholly owned
subsidiary of the Adviser), which has contracted with Solactive AG to maintain
and calculate the Junior Gold Miners Index. Solactive AG uses its best efforts
to ensure that the Junior Gold Miners Index is calculated correctly.
Irrespective of its obligations towards MVIS, Solactive AG has no obligation to
point out errors in the Junior Gold Miners Index to third parties. VanEck Junior
Gold Miners ETF is not sponsored, endorsed, sold or promoted by MVIS and MVIS
makes no representation regarding the advisability of investing in the VanEck
Junior Gold Miners ETF.
The
Junior Gold Miners Index is reconstituted and rebalanced quarterly. MVIS may
delay or change a scheduled rebalancing or reconstitution of the Junior Gold
Miners Index or the implementation of certain rules at its sole
discretion.
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MVIS
GLOBAL LOW CARBON ENERGY INDEX |
The
Low Carbon Energy Index is a rules based index intended to give investors a
means of tracking the overall performance of renewable energy companies which
may include, but is not limited to: wind, solar, hydro, hydrogen, bio-fuel or
geothermal technology, lithium-ion batteries, electric vehicles and related
equipment, waste-to-energy production, smart grid technologies, or building or
industrial materials that reduce carbon emissions or energy
consumption.
To
be initially eligible for the Low Carbon Energy Index, (i) companies must
generate at least 50% of their revenues, operating activity or energy generation
capacity from renewable energy (as defined above) and (ii) all stocks must have
a market capitalization of greater than $150 million as of the end of the month
prior to the month in which a rebalancing date occurs.
The
Low Carbon Energy Index is the exclusive property of MV Index Solutions GmbH
(“MVIS”) (a wholly owned subsidiary of the Adviser), which has contracted with
Solactive AG to maintain and calculate the Low Carbon Energy Index. Irrespective
of its obligations towards MVIS, Solactive AG has no obligation to point out
errors in the Low Carbon Energy Index to third parties. VanEck Low Carbon Energy
ETF is not sponsored, endorsed, sold or promoted by MVIS and MVIS makes no
representation regarding the advisability of investing in the VanEck Low Carbon
Energy ETF.
The
Low Carbon Energy Index is reconstituted and rebalanced quarterly. MVIS may
delay or change a scheduled rebalancing or reconstitution of the Low Carbon
Energy Index or the implementation of certain rules at its sole
discretion.
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VANECK®
NATURAL RESOURCES INDEX |
The
Natural Resources Index is a rules based index intended to give investors a
means of tracking the overall performance of a global universe of listed
companies engaged in the production and distribution of commodities and
commodity-related products and services. The Natural Resources Index is a
modified capitalization weighted, float adjusted index comprising publicly
traded companies engaged in the production and distribution of commodities and
commodity-related products and services in the following sectors: 1)
Agriculture; 2) Alternatives (Water & Alternative Energy); 3) Base and
Industrial Metals; 4) Energy; 5) Forest Products; and 6) Precious Metals. Index
constituents include certain companies that produce products and services
directly related to the production of commodities, but not the commodities
themselves.
The
six sectors are weighted based on estimates of the global consumption of various
commodities included in each of the sectors. Sector weights are set annually on
the third Friday of the last month of the third calendar quarter and the Natural
Resources Index is rebalanced quarterly to the sector weights. The Natural
Resources Index includes companies worldwide that are principally engaged
(derive greater than 50% of revenues from applicable sources) in the production
and/or distribution of commodities and commodity-related products and
services.
The
Natural Resources Index strives to capture at least 90% of the global investable
market capitalization of its various sectors except for the agriculture and
alternatives sectors where the Natural Resources Index strives to capture 100%
and 95% respectively of the global investable market capitalization. Constituent
stocks must have a market capitalization of greater than $500 million on a
rebalancing date to be added to the Natural Resources Index. Stocks whose market
capitalizations fall below $400 million as of any rebalancing date will be
deleted from the Natural Resources Index. Stocks must have a three-month trading
volume equal to or greater than $1 million per day to be included in the Natural
Resources Index. Stocks whose three-month trading volume falls below $600
thousand per day as of any rebalancing date will be deleted from the Natural
Resources Index. Only shares that trade on a recognized domestic or
international stock exchange that provides a “last closing price” may qualify
(e.g., National Stock Market stocks must be “reported securities” under Rule
11Aa3-1 of the Exchange Act. Similar criteria and standards apply to stocks with
foreign listings).
S-Network
Global Indexes Inc. (“S-Network”), an independent third party (the “Calculation
Agent”), is responsible for the ongoing maintenance, compilation, calculation
and administration of The Ardour Global Index and AGI Composite Index. Real-time
index values are provided by Thomson Reuters. Index values are calculated daily,
except Saturdays and Sundays, and are distributed over the New York Stock
Exchange Global Index Feed (GIF) between the hours of approximately 9:30 a.m.
and 4:15 p.m. (New York time), under the symbol “RVEIT.” Index values are
disseminated every 15 seconds.
The
Natural Resources Index is calculated using a capitalization weighting
methodology, adjusted for float, which is modified so as to ensure compliance
with the diversification requirements of Subchapter M of the Internal Revenue
Code. The Natural Resources Index is reconstituted quarterly, at the close of
business on the third Friday of the last month of each calendar quarter, and
companies are added and/or deleted based upon the Natural Resources Index
eligibility criteria. Companies with recent stock exchange listings, i.e.,
recent initial public offerings, may be added to the Natural Resources Index on
any rebalancing date, provided the companies meet all eligibility criteria and
have been trading for more than 22 trading days. The share weights of the
Natural Resources Index components are adjusted on each rebalancing
date.
Rebalancing
data, including constituent weights and related information, is posted on the
Natural Resources Index’s web site prior to the start of trading on the first
business day following the third Friday of the last month of each calendar
quarter. A press announcement identifying additions and deletions to the Natural
Resources Index is issued no later than the Wednesday prior to the second Friday
of the rebalancing month. Share weights of the constituents remain constant
between quarters except in the event of certain types of corporate actions,
including stock splits and reverse stock splits. Share weights of the Natural
Resources Index are not adjusted between rebalancing dates for shares issued or
shares repurchased. S-Network may delay or change the scheduled rebalancing or
reconstitution of the Natural Resources Index or the implementation of certain
rules at its sole discretion.
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MVIS®
GLOBAL OIL REFINERS INDEX |
The
Oil Refiners Index is a rules based, modified capitalization weighted, float
adjusted index intended to give investors a means of tracking the overall
performance of companies involved in crude oil refining which may include:
gasoline, diesel, jet fuel, fuel oil, naphtha, and other petrochemicals.
Companies which operate in the marketing and distribution of these products may
be included in the Oil Refiners Index if refining is performed in company-owned
refineries.
To
be initially eligible for the Oil Refiners Index, (i) companies must generate at
least 50% of their revenues from crude oil refining (as defined above) and (ii)
all stocks must have a market capitalization of greater than $150 million as of
the end of the month prior to the month in which a rebalancing date
occurs.
The
Oil Refiners Index is the exclusive property of MVIS (a wholly owned subsidiary
of the Adviser), which has contracted with Solactive AG to maintain and
calculate the Oil Refiners Index. Solactive AG uses its best efforts to ensure
that the Oil Refiners Index is calculated correctly. Irrespective of its
obligations towards MVIS, Solactive AG has no obligation to point out errors in
the Oil Refiners Index to third parties. VanEck Oil Refiners ETF is not
sponsored, endorsed, sold or promoted by MVIS and MVIS makes no representation
regarding the advisability of investing in the VanEck Oil Refiners
ETF.
The
Oil Refiners Index is reconstituted and rebalanced quarterly. MVIS may delay or
change a scheduled rebalancing or reconstitution of the Oil Refiners Index or
the implementation of certain rules at its sole discretion.
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MVIS®
US LISTED OIL SERVICES 25
INDEX |
The
Oil Services Index is a rules based, modified capitalization weighted, float
adjusted index intended to give investors a means of tracking the overall
performance of the largest and the most liquid common stocks and depositary
receipts of U.S. exchange-listed companies involved in: oil services to the
upstream oil sector, which includes companies engaged primarily in oil
equipment, oil services or oil drilling.
To
be initially eligible for the Oil Services Index, (i) companies must generate at
least 50% of their revenues from oil services (as defined above) and (ii) all
stocks must have a market capitalization of greater than $150 million as of the
end of the month prior to the month in which a rebalancing date
occurs.
The
Oil Services Index is the exclusive property of MVIS (a wholly owned subsidiary
of the Adviser), which has contracted with Solactive AG to maintain and
calculate the Oil Services Index. Solactive AG uses its best efforts to ensure
that the Oil Services Index is calculated correctly. Irrespective of its
obligations towards MVIS, Solactive AG has no obligation to point out errors in
the Oil Services Index to third parties. VanEck Oil Services ETF is not
sponsored, endorsed, sold or promoted by MVIS and MVIS makes no representation
regarding the advisability of investing in the VanEck Oil Services
ETF.
The
Oil Services Index is reconstituted semi-annually and rebalanced quarterly. MVIS
may delay or change a scheduled rebalancing or reconstitution of the Oil
Services Index or the implementation of certain rules at its sole
discretion.
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MVIS®
GLOBAL RARE EARTH/STRATEGIC METALS
INDEX |
The
Rare Earth/Strategic Metals Index is a rules based, modified capitalization
weighted, float adjusted index intended to give investors a means of tracking
the overall performance of companies involved in the rare earth and strategic
metals segment which includes: “Refiners,” “Recyclers” and “Producers” of rare
earth/strategic metals and minerals.
To
be initially eligible for the Rare Earth/Strategic Metals Index, (i) companies
must generate at least 50% of their revenues from rare earth/strategic metals
(as defined above) or have mining projects that have the potential to generate
at least 50% of their revenues from rare earth/strategic metals when developed,
and (ii) all stocks must have a market capitalization of greater than $150
million as of the end of the month prior to the month in which a rebalancing
date occurs and may include Shanghai-Listed companies trading via Shanghai-Hong
Kong Stock Connect.
The
Rare Earth/Strategic Metals Index is the exclusive property of MVIS (a wholly
owned subsidiary of the Adviser), which has contracted with Solactive AG to
maintain and calculate the Rare Earth/Strategic Metals Index. Solactive AG uses
its best efforts to ensure that the Rare Earth/Strategic Metals Index is
calculated correctly. Irrespective of its obligations towards MVIS, Solactive AG
has no obligation to point out errors in the Rare Earth/Strategic Metals Index
to third parties. VanEck Rare Earth/Strategic Metals ETF is not sponsored,
endorsed, sold or promoted by MVIS and MVIS makes no representation regarding
the advisability of investing in the VanEck Rare Earth/Strategic Metals
ETF.
The
Rare Earth/Strategic Metals Index is reconstituted and rebalanced quarterly.
MVIS may delay or change a scheduled rebalancing or reconstitution of the Rare
Earth/Strategic Metals Index or the implementation of certain rules at its sole
discretion.
The
NYSE Arca Steel Index is a modified market capitalization weighted index
comprised of common stocks and ADRs of selected companies that are primarily
involved in a variety of activities that are related to steel production,
including the operation of mills manufacturing steel, the fabrication of steel
shapes or products, or the extraction and reduction of iron ore, and that are
listed for trading on the New York Stock Exchange® (“NYSE”), NYSE American® or
the NASDAQ. Only companies with market capitalizations greater than $100 million
that have a daily average trading volume of at least $1 million over the past
three months are eligible for inclusion in the NYSE Arca Steel Index. The NYSE
Arca Steel Index is weighted based on the market capitalization of each of the
component securities, modified to conform to the following asset diversification
requirements, which are applied in conjunction with the scheduled quarterly
adjustments to the NYSE Arca Steel Index:
(1) the
weight of any single component security may not account for more than 20% of the
total value of the NYSE Arca Steel Index; and
(2) the
aggregate weight of those component securities which individually represent more
than 5% of the total value of the NYSE Arca Steel Index may not account for more
than 50% of the total NYSE Arca Steel Index value.
The
NYSE Arca Steel Index is reviewed quarterly so that the NYSE Arca Steel Index
components continue to represent the universe of companies involved in iron ore
mining or steel production. ICE Data Indices, LLC (“ICE Data”), as the NYSE Arca
Steel Index Administrator, may at any time and from time to time change the
number of stocks comprising the group by adding or deleting one or more stocks,
or replace one or more stocks contained in the group with one or more substitute
stocks of its choice, if in ICE Data’s discretion, such addition, deletion or
substitution is necessary or appropriate to maintain the quality and/or
character of the index to which the group relates. Changes to the NYSE Arca
Steel Index compositions and/or the component share weights in the NYSE Arca
Steel Index typically take effect as of the market open on the last business day
of each calendar quarter end month in connection with the quarterly index
rebalance. ICE Data may delay or change a scheduled rebalancing or
reconstitution of the NYSE Arca Steel Index or the implementation of certain
rules at its sole discretion.
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MVIS®
GLOBAL URANIUM & NUCLEAR ENERGY
INDEX |
The
Uranium & Nuclear Energy Index is a rules based, modified capitalization
weighted, float adjusted index intended to give investors a means of tracking
the overall performance of companies involved in uranium and nuclear energy
which include: uranium mining, the construction, engineering and maintenance of
nuclear power facilities and nuclear reactors, the production of electricity
from nuclear sources, or equipment and technology as well as services to the
nuclear power industry.
To
be initially eligible for the Uranium & Nuclear Energy Index, (i) companies
must generate at least 50% of their revenues from uranium and nuclear energy (as
defined above) or mining projects that have the potential to generate at least
50% of their revenues from uranium when developed and (ii) all stocks must have
a market capitalization of greater than $150 million as of the end of the month
prior to the month in which a rebalancing date occurs. In exceptional cases,
companies with less than 50% of their revenues derived from uranium and nuclear
energy may be eligible for inclusion in the Uranium & Nuclear Energy
Index.
The
Uranium & Nuclear Energy Index is the exclusive property of MVIS (a wholly
owned subsidiary of the Adviser), which has contracted with Solactive AG to
maintain and calculate the Uranium & Nuclear Energy Index. Solactive AG uses
its best efforts to ensure that the Uranium & Nuclear Energy Index is
calculated correctly. Irrespective of its obligations towards MVIS, Solactive AG
has no obligation to point out errors in the Uranium & Nuclear Energy Index
to third parties. VanEck Uranium+Nuclear Energy ETF is not sponsored, endorsed,
sold or promoted by MVIS and MVIS makes no representation regarding the
advisability of investing in the VanEck Uranium+Nuclear Energy ETF.
The
Uranium & Nuclear Energy Index is reconstituted and rebalanced quarterly.
MVIS may delay or change a scheduled rebalancing or reconstitution of the
Uranium & Nuclear Energy Index or the implementation of certain rules at its
sole discretion.
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LICENSE
AGREEMENTS AND DISCLAIMERS |
The
Adviser has entered into a licensing agreement with ICE Data Indices, LLC to use
the NYSE Arca Gold Miners Index and NYSE Arca Steel Index. Each of VanEck Gold
Miners ETF and VanEck Steel ETF is entitled to use its respective Index pursuant
to a sub-licensing arrangement with the Adviser.
Source
ICE Data Indices, LLC (“ICE Data”) is used with permission.
“ICE”
is a registered trademark of ICE Data or its affiliates. “NYSE”, “NYSE Arca Gold
Miners Index” and “NYSE Arca” are registered trademarks of NYSE Group, Inc., and
are used by ICE Data with permission and under a license. These trademarks have
been licensed, along with the NYSE Arca Gold Miners Index and the NYSE Arca
Steel Index (the “Indices”) for use by the Adviser in connection with the VanEck
Gold Miners ETF and the VanEck Steel ETF (the “Products”). Neither the Adviser,
the Trust nor the Products, as applicable, are sponsored, endorsed, sold or
promoted by ICE Data, its affiliates or its and their third party suppliers
(“ICE Data and its Suppliers”). ICE Data and its Suppliers make no
representations or warranties regarding the advisability of investing in
securities generally, in the Products particularly, the Trust or the ability of
the Indices to track general market performance. Past performance of an Index is
not an indicator of or a guarantee of future results.
ICE
Data’s only relationship to the Adviser is the licensing of certain trademarks
and trade names and the Indices or components thereof. The Indices are
determined, composed and calculated by ICE Data without regard to the Adviser or
the Products or their holders. ICE Data has no obligation to take the needs of
the Adviser or the holders of the Products into consideration in determining,
composing or calculating the Indices. ICE Data is not responsible for and has
not participated in the determination of the timing of, prices of, or quantities
of the Products to be issued or in the determination or calculation of the
equation by which the Products are to be priced, sold, purchased, or redeemed.
Except for certain custom index calculation services, all information provided
by ICE Data is general in nature and not tailored to the needs of the Adviser or
any other person, entity or group of persons. ICE Data has no obligation or
liability in connection with the administration, marketing, or trading of the
Products. ICE Data is not an investment advisor. Inclusion of a security within
an index is not a recommendation by ICE Data to buy, sell, or hold such
security, nor is it considered to be investment advice.
ICE
DATA AND ITS SUPPLIERS DISCLAIM ANY AND ALL WARRANTIES AND REPRESENTATIONS,
EXPRESS AND/OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE, INCLUDING THE INDICES, INDEX DATA AND ANY
INFORMATION INCLUDED IN, RELATED TO, OR DERIVED THEREFROM (“INDEX DATA”). ICE
DATA AND ITS SUPPLIERS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY WITH
RESPECT TO THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDICES AND
THE INDEX DATA, WHICH ARE PROVIDED ON AN “AS IS” BASIS AND YOUR USE IS AT YOUR
OWN RISK.
In
addition, and although ICE Data shall obtain information for inclusion in or for
use in the calculation of each of the Indices from sources which it considers
reliable, ICE Data and its Suppliers do not guarantee the accuracy and/or the
completeness of the component data of each of the Indices obtained from
independent sources. Without limiting any of the foregoing, in no event shall
ICE Data and its Suppliers have any liability for any direct, indirect, special,
punitive, consequential or any other damages (including lost profits) even if
notified of an Index’s possibility of such damages.
The
Adviser has entered into a licensing agreement with MVIS to use the Agribusiness
Index, Clean-Tech Metals Index, Junior Gold Miners Index, Low Carbon Energy
Index, Oil & Gas Index, Oil Refiners Index, Oil Services Index, Rare
Earth/Strategic Metals Index and Nuclear Energy Index (each an “MVIS Index,” and
together, the “MVIS Indices”). The Adviser has also granted MVIS a license to
use the phrase “VanEck” in connection with the MVIS Indices. VanEck Agribusiness
ETF, VanEck Green Metals ETF, VanEck Junior Gold Miners ETF, VanEck Low Carbon
Energy ETF, VanEck Oil Refiners ETF, VanEck Oil Services ETF, VanEck Rare
Earth/Strategic Metals ETF and VanEck Uranium+Nuclear Energy ETF (each an “MVIS
Index ETF,” and together, the “MVIS Index ETFs”) are entitled to use the MVIS
Indices, respectively, pursuant to a sub-licensing arrangement with the
Adviser.
Shares
of the MVIS Index ETFs are not sponsored, endorsed, sold or promoted by MVIS.
MVIS makes no representation or warranty, express or implied, to the owners of
the Shares of the MVIS Index ETFs or any member of the public regarding the
advisability of investing in securities generally or in the Shares of the MVIS
Index ETFs particularly or the ability of the MVIS Indices to track the
performance of the securities markets. The MVIS Indices are determined and
composed by MVIS without regard to the Adviser or the Shares of the MVIS Index
ETFs. MVIS has no obligation to take the needs of the Adviser or the owners of
the Shares of the MVIS Index ETFs into consideration in determining or composing
the MVIS Indices. MVIS is not responsible for and has not participated in the
determination of the timing of, prices at, or quantities of the Shares of the
MVIS Index ETFs to be issued or in the determination or calculation of the
equation by which the Shares of the MVIS Index ETFs are to be converted into
cash. MVIS has no obligation or liability in connection with the administration,
marketing or trading of the Shares of the MVIS Index ETFs.
The
MVIS Indices are the exclusive property of MVIS, which has contracted with
Solactive AG to maintain and calculate the MVIS Indices. Solactive AG uses its
best efforts to ensure that the MVIS Indices are calculated correctly.
Irrespective of its obligations towards MVIS, Solactive AG has no obligation to
point out errors in the MVIS Indices to third parties including but not limited
to investors and/or financial intermediaries of the financial
instrument.
MVIS
Index ETFs are not sponsored, promoted, sold or supported in any other manner by
Solactive AG nor does Solactive AG offer any express or implicit guarantee or
assurance either with regard to the results of using the MVIS Indices and/or
their trademarks or their prices at any time or in any other respect. The MVIS
Indices are calculated and maintained by Solactive AG.
Solactive
AG uses its best efforts to ensure that the MVIS Indices are calculated
correctly. Irrespective of its obligations towards MVIS, Solactive AG has no
obligation to point out errors in the MVIS Indices to third parties including
but not limited to investors and/or financial intermediaries of the MVIS Index
ETFs. Neither the publication of the MVIS Indices or their trademarks for the
purpose of use in connection with the MVIS Index ETFs constitutes a
recommendation by Solactive AG to invest capital in the MVIS Index ETFs nor does
it in any way represent an assurance or opinion of Solactive AG with regard to
any investment in the MVIS Index ETFs. Solactive AG is not responsible for
fulfilling the legal requirements concerning the accuracy and completeness of
the Prospectus.
MVIS
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE MVIS INDICES OR
ANY DATA INCLUDED THEREIN AND MVIS SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS OR INTERRUPTIONS THEREIN. MVIS MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE ADVISER, OWNERS OF THE SHARES OF THE MVIS
INDEX ETFS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE MVIS INDICES OR
ANY DATA INCLUDED THEREIN. MVIS MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MVIS INDICES OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MVIS HAVE ANY
LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
The
Adviser has entered into a licensing agreement with S-Network to use the Natural
Resources Index. The Adviser has also granted S-Network a license to use the
VanEck name in connection with the Natural Resources Index and S-Network will
pay the Adviser a share of the revenues received by S-Network from the licensing
of the Natural Resources Index. VanEck Natural Resources ETF is entitled to use
its Natural Resources Index pursuant to a sub-licensing arrangement with the
Adviser.
S-Network®
is a service mark of S-Network and has been licensed for use by the Adviser in
connection with VanEck Natural Resources ETF. VanEck Natural Resources ETF is
not sponsored, endorsed, sold or promoted by S-Network, which makes no
representation regarding the advisability of investing in VanEck Natural
Resources ETF.
“S-Network
Global Indexes, LLCSM,” is a service mark of S-Network and have been licensed
for use by the Adviser.
The
Shares of VanEck Natural Resources ETF are not sponsored, endorsed, sold or
promoted by S-Network. S-Network makes no representation or warranty, express or
implied, to the owners of Shares of VanEck Natural Resources ETF or any member
of the public regarding the advisability of investing in securities generally or
in the Shares of VanEck Natural Resources ETF particularly or the ability of the
Natural Resources Index to track the performance of the physical commodities
market. S-Network’s only relationship to the Adviser (“Licensee”) is the
licensing of certain service marks and trade names of S-Network and of the
Natural Resources Index that are determined, composed and calculated by
S-Network without regard to the Licensee or the Shares of VanEck Natural
Resources ETF. S-Network has no obligation to take the needs of the Licensee or
the owners of Shares of VanEck Natural Resources ETF into consideration in
determining, composing or calculating the Natural Resources Index. S-Network is
not responsible for and has not participated in the determination of the timing
of, prices at, or quantities of the Shares of VanEck Natural Resources ETF to be
issued or in the determination or calculation of the equation by which the
Shares of VanEck Natural Resources ETF are to be converted into cash. S-Network
has no obligation or liability in connection with the administration, marketing
or trading of the Shares of VanEck Natural Resources ETF.
S-NETWORK
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE NATURAL RESOURCES
INDEX OR ANY DATA INCLUDED THEREIN AND S-NETWORK SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S-NETWORK MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF SHARES
OF VANECK NATURAL RESOURCES ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE NATURAL RESOURCES INDEX OR ANY DATA INCLUDED THEREIN. S-NETWORK MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
NATURAL RESOURCES INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF
THE FOREGOING, IN NO EVENT SHALL S-NETWORK HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
VANECK
AND ITS AFFILIATES SHALL NOT HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS, OR
INTERRUPTIONS, AND MAKES NO WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE
OBTAINED BY OWNERS OF VANECK NATURAL RESOURCES ETF, OR ANY OTHER PERSON OR
ENTITY FROM THE USE OF THE NATURAL RESOURCES INDEX. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL VANECK OR ANY OF ITS AFFILIATES HAVE ANY LIABILITY
FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR
LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
THOMSON
REUTERS PLC, ITS AFFILIATES, SOURCES AND DISTRIBUTION AGENTS (TOGETHER, THE
“INDICATIVE VALUE CALCULATION AGENT”) SHALL NOT BE LIABLE TO THE ADVISER, ANY
CUSTOMER OR ANY THIRD PARTY FOR ANY LOSS OR DAMAGE, DIRECT, INDIRECT OR
CONSEQUENTIAL, ARISING FROM (I) ANY INACCURACY OR INCOMPLETENESS IN, OR DELAYS,
INTERRUPTIONS, ERRORS OR OMISSIONS IN THE DELIVERY OF THE INTRA-DAY INDICATIVE
VALUE WITH RESPECT TO VANECK URANIUM+NUCLEAR ENERGY ETF (THE “INDICATIVE VALUE”)
OR ANY DATA RELATED THERETO
(THE
“DATA”) OR (II) ANY DECISION MADE OR ACTION TAKEN BY THE ADVISER, ANY CUSTOMER
OR THIRD PARTY IN RELIANCE UPON THE DATA. THE INDICATIVE VALUE CALCULATION AGENT
DOES NOT MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, TO THE ADVISER, ANY INVESTOR
IN VANECK URANIUM+NUCLEAR ENERGY ETF OR ANY ONE ELSE REGARDING THE DATA,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES WITH RESPECT TO THE TIMELINESS,
SEQUENCE, ACCURACY, COMPLETENESS, CORRECTNESS, MERCHANTABILITY, QUALITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTIES AS TO THE RESULTS TO BE
OBTAINED BY THE ADVISER, ANY INVESTORS IN VANECK URANIUM+NUCLEAR ENERGY ETF OR
OTHER PERSON IN CONNECTION WITH THE USE OF THE DATA. THE INDICATIVE VALUE
CALCULATION AGENT SHALL NOT BE LIABLE TO THE ADVISER, ANY INVESTOR IN VANECK
URANIUM+NUCLEAR ENERGY ETF OR OTHER THIRD PARTIES FOR ANY DAMAGES, INCLUDING,
WITHOUT LIMITATION, LOSS OF BUSINESS REVENUES, LOST PROFITS OR ANY INDIRECT,
CONSEQUENTIAL, SPECIAL OR SIMILAR DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT
OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
The
S&P 500®
Index included in each Fund’s performance table is a product of S&P Dow
Jones Indices LLC and/or its affiliates and has been licensed for use by the
Adviser. Copyright © 2021 S&P Dow Jones Indices LLC, a division of S&P
Global, Inc., and/or its affiliates. All rights reserved. Redistribution or
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is a registered trademark of S&P Global and Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P
Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor
their third party licensors make any representation or warranty, express or
implied, as to the ability of any index to accurately represent the asset class
or market sector that it purports to represent and neither S&P Dow Jones
Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third
party licensors shall have any liability for any errors, omissions, or
interruptions of any index or the data included therein.
S&P
DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR
THE COMPLETENESS OF EACH INDEX OR ANY DATA RELATED THERETO, OR ANY COMMUNICATION
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THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE ADVISER, OR ANY
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SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF
PROFITS, TRADING LOSSES, LOST TIME, OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY,
OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR
ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE ADVISER, OTHER THAN THE
LICENSORS OF S&P DOW JONES INDICES.
The
financial highlights tables which follow are intended to help you understand the
Funds’ financial performance for the past five years or as indicated. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned (or
lost) on an investment in a Fund (assuming reinvestment of all dividends and
distributions). The information below has been audited by Ernst & Young LLP,
the Trust’s independent registered public accounting firm, whose report, along
with the Funds’ financial statements, are included in the Funds’ Annual Report,
which is available upon request.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
ETF |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
77.82 |
|
|
$ |
68.59 |
|
|
$ |
57.11 |
|
|
$ |
61.63 |
|
|
$ |
51.38 |
|
|
|
|
Net
investment income (a) |
1.14 |
|
0.90 |
|
0.83 |
|
0.83 |
|
0.83 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
17.54 |
|
9.19 |
|
11.56 |
|
(4.39) |
|
10.30 |
|
|
|
Total
from investment operations |
18.68 |
|
10.09 |
|
12.39 |
|
(3.56) |
|
11.13 |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.12) |
|
(0.86) |
|
(0.91) |
|
(0.96) |
|
(0.88) |
|
|
|
Net
asset value, end of year |
$ |
95.38 |
|
|
$ |
77.82 |
|
|
$ |
68.59 |
|
|
$ |
57.11 |
|
|
$ |
61.63 |
|
|
|
|
Total
return (b) |
23.99 |
|
% |
14.73 |
|
% |
21.70 |
|
% |
(5.76) |
|
% |
21.68 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
0.52 |
|
% |
0.55 |
|
% |
0.56 |
|
% |
0.54 |
|
% |
0.54 |
|
% |
|
|
Expenses
excluding interest expense |
0.52 |
|
% |
0.55 |
|
% |
0.56 |
|
% |
0.54 |
|
% |
0.53 |
|
% |
|
|
Net
investment income |
1.25 |
|
% |
1.41 |
|
% |
1.29 |
|
% |
1.32 |
|
% |
1.48 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$1,183 |
|
|
$794 |
|
|
$717 |
|
|
$757 |
|
|
$854 |
|
|
|
|
Portfolio
turnover rate (c) |
17 |
|
% |
13 |
|
% |
21 |
|
% |
16 |
|
% |
22 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
Future
of Food ETF |
|
|
Period Ended December
31, 2021(a) |
|
Net
asset value, beginning of period |
$ |
24.33 |
|
|
Net
investment income (b) |
0.02 |
|
|
Net
realized and unrealized gain on investments |
0.35 |
|
|
Total
from investment operations |
0.37 |
|
Net
asset value, end of period |
$ |
24.70 |
|
|
Total
return (c) |
1.53 |
|
%(d) |
Ratios
to average net assets |
|
|
Expenses
|
0.69 |
|
%(e) |
Net
investment income |
0.93 |
|
%(e) |
Supplemental
data |
|
|
Net
assets, end of period (in millions) |
$2 |
|
|
Portfolio
turnover rate (f) |
0 |
|
%(d) |
(a) For
the period December 1, 2021 (commencement of operations) through December 31,
2021.
(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
(f) Portfolio
turnover rate excludes in-kind transactions.
|
|
|
FINANCIAL
HIGHLIGHTS (continued) |
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
Miners ETF |
|
|
Year
Ended December 31, |
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
Net
asset value, beginning of year |
$ |
35.98 |
|
|
$ |
29.34 |
|
|
$ |
21.07 |
|
|
$ |
23.25 |
|
|
$ |
20.92 |
|
|
Net
investment income (a) |
0.52 |
|
0.21 |
|
0.19 |
|
0.14 |
|
0.10 |
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
investments |
(3.97) |
|
6.62 |
|
8.27 |
|
(2.21) |
|
2.41 |
|
Total
from investment operations |
(3.45) |
|
6.83 |
|
8.46 |
|
(2.07) |
|
2.51 |
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.53) |
|
(0.19) |
|
(0.19) |
|
(0.11) |
|
(0.18) |
|
Net
asset value, end of year |
$ |
32.00 |
|
|
$ |
35.98 |
|
|
$ |
29.34 |
|
|
$ |
21.07 |
|
|
$ |
23.25 |
|
|
Total
return (b) |
(9.56) |
|
% |
23.30 |
|
% |
40.15 |
|
% |
(8.92) |
|
% |
11.99 |
|
% |
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
Expenses |
0.51 |
|
% |
0.51 |
|
% |
0.52 |
|
% |
0.52 |
|
% |
0.53 |
|
% |
Net
investment income |
1.53 |
|
% |
0.61 |
|
% |
0.76 |
|
% |
0.66 |
|
% |
0.42 |
|
% |
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$13,273 |
|
|
$16,504 |
|
|
$12,999 |
|
|
$10,576 |
|
|
$7,575 |
|
|
Portfolio
turnover rate (c) |
15 |
|
% |
13 |
|
% |
14 |
|
% |
15 |
|
% |
12 |
|
% |
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
Green Metals
ETF |
|
|
Period Ended December
31, 2021(a) |
|
|
2021 |
|
Net
asset value, beginning of period |
$ |
34.67 |
|
|
Net
investment loss(b) |
(0.01) |
|
|
Net
realized and unrealized gain on |
|
|
investments |
0.22 |
|
|
Total
from investment operations |
0.21 |
|
Net
asset value, end of period |
$ |
34.88 |
|
|
Total
return(c)
|
0.61 |
|
%(d) |
Ratios
to average net assets |
|
|
Expenses |
0.60 |
|
%(e) |
Expenses
excluding interest expense |
0.59 |
|
%(e) |
Net
investment (loss) |
(0.30) |
|
%(e) |
Supplemental
data |
|
|
Net
assets, end of period (in millions) |
$16 |
|
|
Portfolio
turnover rate(f) |
0.10 |
|
%(d) |
(a) For
the period November 10, 2021 (commencement of operations) through December 31,
2021.
(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
(f) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior
Gold Miners ETF |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
54.26 |
|
|
$ |
42.39 |
|
|
$ |
30.11 |
|
|
$ |
34.21 |
|
|
$ |
31.72 |
|
|
|
|
Net
investment income (a) |
0.39 |
|
0.22 |
|
0.08 |
|
0.14 |
|
0.05 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
(12.02) |
|
12.51 |
|
12.36 |
|
(4.10) |
|
2.45 |
|
|
|
Total
from investment operations |
(11.63) |
|
12.73 |
|
12.44 |
|
(3.96) |
|
2.50 |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.75) |
|
(0.86) |
|
(0.16) |
|
(0.14) |
|
(0.01) |
|
|
|
Net
asset value, end of year |
$ |
41.88 |
|
|
$ |
54.26 |
|
|
$ |
42.39 |
|
|
$ |
30.11 |
|
|
$ |
34.21 |
|
|
|
|
Total
return (b) |
(21.44) |
|
% |
30.07 |
|
% |
41.31 |
|
% |
(11.58) |
|
% |
7.89 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.52 |
|
% |
0.52 |
|
% |
0.53 |
|
% |
0.53 |
|
% |
0.55 |
|
%(c) |
|
|
Net
expenses |
0.52 |
|
% |
0.52 |
|
% |
0.53 |
|
% |
0.53 |
|
% |
0.54 |
|
%(c) |
|
|
Net
expenses excluding interest expense |
0.52 |
|
% |
0.52 |
|
% |
0.53 |
|
% |
0.53 |
|
% |
0.53 |
|
%(c) |
|
|
Net
investment income |
0.84 |
|
% |
0.46 |
|
% |
0.24 |
|
% |
0.45 |
|
% |
0.16 |
|
%(c) |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$4,495 |
|
|
$6,315 |
|
|
$5,219 |
|
|
$4,273 |
|
|
$4,634 |
|
|
|
|
Portfolio
turnover rate (d) |
24 |
|
% |
34 |
|
% |
19 |
|
% |
28 |
|
% |
67 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) The
ratios presented do not reflect the Fund’s proportionate share of income and
expenses from the Fund’s investment in underlying funds.
(d) Portfolio
turnover rate excludes in-kind transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low
Carbon Energy ETF |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
165.41 |
|
|
$ |
75.70 |
|
|
$ |
55.10 |
|
|
$ |
60.94 |
|
|
$ |
50.62 |
|
|
|
|
Net
investment income (a) |
0.78 |
|
0.16 |
|
0.05 |
|
0.26 |
|
1.12 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
(5.79) |
|
89.64 |
|
20.55 |
|
(5.76) |
|
9.97 |
|
|
|
Total
from investment operations |
(5.01) |
|
89.80 |
|
20.60 |
|
(5.50) |
|
11.09 |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.71) |
|
|
(0.09) |
|
|
— |
|
|
(0.34) |
|
(0.77) |
|
|
|
Net
asset value, end of year |
$ |
159.69 |
|
|
$ |
165.41 |
|
|
$ |
75.70 |
|
|
$ |
55.10 |
|
|
$ |
60.94 |
|
|
|
|
Total
return (b) |
(3.02) |
|
% |
118.65 |
|
% |
37.38 |
|
% |
(9.02) |
|
% |
21.90 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.55 |
|
% |
0.64 |
|
% |
0.65 |
|
% |
0.65 |
|
% |
0.67 |
|
% |
|
|
Net
expenses |
0.55 |
|
% |
0.62 |
|
% |
0.62 |
|
% |
0.63 |
|
% |
0.63 |
|
% |
|
|
Net
expenses excluding interest expense |
0.55 |
|
% |
0.62 |
|
% |
0.62 |
|
% |
0.62 |
|
% |
0.62 |
|
% |
|
|
Net
investment income |
0.49 |
|
% |
0.16 |
|
% |
0.08 |
|
% |
0.44 |
|
% |
1.94 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$301 |
|
|
$270 |
|
|
$105 |
|
|
$79 |
|
|
$87 |
|
|
|
|
Portfolio
turnover rate(c) |
77 |
|
% |
84 |
|
% |
40 |
|
% |
31 |
|
% |
21 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
|
|
|
FINANCIAL
HIGHLIGHTS (continued) |
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
Resources ETF |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
38.65 |
|
|
$ |
37.10 |
|
|
$ |
32.20 |
|
|
$ |
37.09 |
|
|
$ |
32.31 |
|
|
|
|
Net
investment income (a) |
1.21 |
|
0.84 |
|
0.96 |
|
0.81 |
|
0.72 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
8.60 |
|
1.65 |
(b) |
4.94 |
|
(4.78) |
|
4.81 |
|
|
|
Total
from investment operations |
9.81 |
|
2.49 |
|
5.90 |
|
(3.97) |
|
5.53 |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.02) |
|
(0.94) |
|
(1.00) |
|
(0.92) |
|
(0.75) |
|
|
|
Net
asset value, end of year |
$ |
47.44 |
|
|
$ |
38.65 |
|
|
$ |
37.10 |
|
|
$ |
32.20 |
|
|
$ |
37.09 |
|
|
|
|
Total
return (c) |
25.38 |
|
% |
6.73 |
|
% |
18.34 |
|
% |
(10.69) |
|
% |
17.14 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.78 |
|
% |
0.90 |
|
% |
0.79 |
|
% |
0.72 |
|
% |
0.80 |
|
% |
|
|
Net
expenses |
0.49 |
|
% |
0.49 |
|
% |
0.50 |
|
% |
0.50 |
|
% |
0.50 |
|
% |
|
|
Net
expenses excluding interest expense |
0.49 |
|
% |
0.49 |
|
% |
0.49 |
|
% |
0.49 |
|
% |
0.49 |
|
% |
|
|
Net
investment income |
2.63 |
|
% |
2.59 |
|
% |
2.70 |
|
% |
2.21 |
|
% |
2.09 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$97 |
|
|
$52 |
|
|
$70 |
|
|
$77 |
|
|
$104 |
|
|
|
|
Portfolio
turnover rate (c) |
26 |
|
% |
26 |
|
% |
24 |
|
% |
23 |
|
% |
34 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) The
amount shown does not correspond with the aggregate net gain (loss) on
investments for the period due to the timing of sales and repurchase of shares
in relation to fluctuating market values of the investments of the
Fund.
(c) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(d) Portfolio
turnover rate excludes in-kind transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Refiners ETF |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
25.01 |
|
|
$ |
29.01 |
|
|
$ |
26.95 |
|
|
$ |
30.40 |
|
|
$ |
20.86 |
|
|
|
|
Net
investment income (a) |
0.66 |
|
|
0.58 |
|
|
0.56 |
|
|
0.74 |
|
|
0.61 |
|
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
2.12 |
|
|
(3.92) |
|
|
1.91 |
|
|
(3.54) |
|
|
9.38 |
|
|
|
|
Total
from investment operations |
2.78 |
|
|
(3.34) |
|
|
2.47 |
|
|
(2.80) |
|
|
9.99 |
|
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(0.65) |
|
|
(0.64) |
|
|
(0.41) |
|
|
(0.52) |
|
|
(0.37) |
|
|
|
|
Net
realized capital gains |
— |
|
|
— |
|
|
— |
|
|
(0.13) |
|
|
(0.08) |
|
|
|
|
Return
of capital |
— |
|
|
(0.02) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Total
distributions |
(0.65) |
|
|
(0.66) |
|
|
(0.41) |
|
|
(0.65) |
|
|
(0.45) |
|
|
|
|
Net
asset value, end of year |
$ |
27.14 |
|
|
$ |
25.01 |
|
|
$ |
29.01 |
|
|
$ |
26.95 |
|
|
$ |
30.40 |
|
|
|
|
Total
return (b) |
11.10 |
|
% |
(11.50) |
|
% |
9.19 |
|
% |
(9.22) |
|
% |
47.91 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
1.02 |
|
% |
1.29 |
|
% |
1.03 |
|
% |
0.72 |
|
% |
2.71 |
|
% |
|
|
Net
expenses |
0.59 |
|
% |
0.59 |
|
% |
0.60 |
|
% |
0.60 |
|
% |
0.59 |
|
% |
|
|
Net
expenses excluding interest expense |
0.59 |
|
% |
0.59 |
|
% |
0.59 |
|
% |
0.59 |
|
% |
0.59 |
|
% |
|
|
Net
investment income |
2.32 |
|
% |
2.56 |
|
% |
1.97 |
|
% |
2.32 |
|
% |
2.43 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$20 |
|
|
$18 |
|
|
$35 |
|
|
$49 |
|
|
$11 |
|
|
|
|
Portfolio
turnover rate (c) |
18 |
|
% |
37 |
|
% |
30 |
|
% |
31 |
|
% |
24 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Services ETF(a) |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
153.90 |
|
|
$ |
265.47 |
|
|
$ |
280.60 |
|
|
$ |
520.40 |
|
|
$ |
667.20 |
|
|
|
|
Net
investment income (b) |
2.41 |
|
2.26 |
|
6.60 |
|
7.00 |
|
18.00 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
30.24 |
(c) |
(111.94) |
|
(15.93) |
(c) |
(240.80) |
|
(151.20) |
|
|
|
Total
from investment operations |
32.65 |
|
(109.68) |
|
(9.33) |
|
(233.80) |
|
(133.20) |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.81) |
|
(1.89) |
|
(5.80) |
|
(6.00) |
|
(13.60) |
|
|
|
Net
asset value, end of year |
$ |
184.74 |
|
|
$ |
153.90 |
|
|
$ |
265.47 |
|
|
$ |
280.60 |
|
|
$ |
520.40 |
|
|
|
|
Total
return(d) |
21.18 |
|
|
(41.31) |
|
% |
(3.35) |
|
% |
(44.93) |
|
% |
(19.95) |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.36 |
|
% |
0.40 |
|
% |
0.39 |
|
% |
0.38 |
|
% |
0.39 |
|
% |
|
|
Net
expenses |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
0.35 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
1.21 |
|
% |
1.68 |
|
% |
2.28 |
|
% |
1.44 |
|
% |
3.36 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$2,143 |
|
|
$723 |
|
|
$773 |
|
|
$1,045 |
|
|
$1,651 |
|
|
|
|
Portfolio
turnover rate(e) |
28 |
|
% |
33 |
|
% |
29 |
|
% |
22 |
|
% |
34 |
|
% |
|
|
(a) On
April 15, 2020, the Fund effected a 1 for 20 reverse share split. Per share data
has been adjusted to reflect the reverse share split.
(b) Calculated
based upon average shares outstanding
(c) The
amount shown does not correspond with the aggregate net gain (loss) on
investments for the period due to the timing of sales and repurchase of shares
in relation to fluctuating market values of the investments of the
Fund.
(d) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(e) Portfolio
turnover rate excludes in-kind transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rare
Earth/Strategic Metals ETF(a) |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
65.41 |
|
|
$ |
40.41 |
|
|
$ |
40.68 |
|
|
$ |
89.25 |
|
|
$ |
50.70 |
|
|
|
|
Net
investment income (b) |
0.08 |
|
0.58 |
|
0.90 |
|
1.98 |
|
1.32 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
52.12 |
|
24.95 |
|
(0.54) |
(c) |
(45.48) |
|
39.84 |
|
|
|
Total
from investment operations |
52.20 |
|
25.53 |
|
0.36 |
|
(43.50) |
|
41.16 |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(5.89) |
|
(0.53) |
|
(0.63) |
|
(5.07) |
|
(2.61) |
|
|
|
Net
asset value, end of year |
$ |
111.72 |
|
|
$ |
65.41 |
|
|
$ |
40.41 |
|
|
$ |
40.68 |
|
|
$ |
89.25 |
|
|
|
|
Total
return (d) |
80.09 |
|
% |
63.22 |
|
% |
0.91 |
|
% |
(48.70) |
|
% |
81.43 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.53 |
|
% |
0.63 |
|
% |
0.64 |
|
% |
0.63 |
|
% |
0.73 |
|
% |
|
|
Net
expenses |
0.53 |
|
% |
0.59 |
|
% |
0.60 |
|
% |
0.59 |
|
% |
0.61 |
|
% |
|
|
Net
expenses excluding interest expense |
0.53 |
|
% |
0.57 |
|
% |
0.57 |
|
% |
0.57 |
|
% |
0.57 |
|
% |
|
|
Net
investment income |
0.08 |
|
% |
1.44 |
|
% |
2.14 |
|
% |
2.73 |
|
% |
1.99 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$ |
1,014 |
|
|
$ |
322 |
|
|
$ |
193 |
|
|
$ |
93 |
|
|
$ |
182 |
|
|
|
|
Portfolio
turnover rate(e) |
74 |
|
% |
70 |
|
% |
64 |
|
% |
68 |
|
% |
57 |
|
% |
|
|
(a) On
April 15, 2020, the Fund effected a 1 for 3 reverse share split. Per share data
has been adjusted to reflect the reverse share split.
(b) Calculated
based upon average shares outstanding
(c) The
amount shown does not correspond with the aggregate net gain (loss) on
investments for the period due to the timing of sales and repurchase of shares
in relation to fluctuating market values of the investments of the
Fund.
(d) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(e) Portfolio
turnover rate excludes in-kind transactions.
|
|
|
FINANCIAL
HIGHLIGHTS (continued) |
For
a share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
ETF |
|
|
|
|
Year
Ended December 31, |
|
|
|
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
44.57 |
|
|
$ |
37.74 |
|
|
$ |
34.87 |
|
|
$ |
45.74 |
|
|
$ |
37.82 |
|
|
|
|
Net
investment income(a) |
3.19 |
|
0.71 |
|
1.16 |
|
1.30 |
|
0.92 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
9.25 |
|
6.95 |
|
2.75 |
|
(9.99) |
|
8.12 |
|
|
|
Total
from investment operations |
12.44 |
|
7.66 |
|
3.91 |
|
(8.69) |
|
9.04 |
|
|
|
Distributions
from: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(3.76) |
|
(0.77) |
|
(1.04) |
|
(2.18) |
|
(1.12) |
|
|
|
Return
of capital |
— |
|
(0.06) |
|
— |
|
|
— |
|
|
— |
|
|
|
|
Total
distributions |
(3.76) |
|
(0.83) |
|
(1.04) |
|
(2.18) |
|
(1.12) |
|
|
|
Net
asset value, end of year |
$ |
53.25 |
|
|
$ |
44.57 |
|
|
$ |
37.74 |
|
|
$ |
34.87 |
|
|
$ |
45.74 |
|
|
|
|
Total
return(b) |
27.91 |
|
% |
20.57 |
|
% |
11.02 |
|
% |
(18.94) |
|
% |
23.86 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.56 |
|
% |
0.95 |
|
% |
0.71 |
|
% |
0.61 |
|
% |
0.62 |
|
% |
|
|
Net
expenses |
0.55 |
|
% |
0.56 |
|
% |
0.56 |
|
% |
0.56 |
|
% |
0.56 |
|
% |
|
|
Net
expenses excluding interest expense |
0.55 |
|
% |
0.55 |
|
% |
0.55 |
|
% |
0.55 |
|
% |
0.55 |
|
% |
|
|
Net
investment income |
5.48 |
|
% |
2.31 |
|
% |
3.11 |
|
% |
2.80 |
|
% |
2.25 |
|
% |
|
|
Supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in millions) |
$112 |
|
|
$77 |
|
|
$66 |
|
|
$58 |
|
|
$151 |
|
|
|
|
Portfolio
turnover rate(c) |
25 |
|
% |
34 |
|
% |
19 |
|
% |
16 |
|
% |
31 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions.
For
a share outstanding throughout each year:
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Uranium+Nuclear
Energy ETF |
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For
the Year Ended December 31, |
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2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
Net
asset value, beginning of year |
$ |
49.35 |
|
|
$ |
48.71 |
|
|
$ |
49.67 |
|
|
$ |
49.09 |
|
|
$ |
47.55 |
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|
|
|
Net
investment income (a) |
1.44 |
|
0.89 |
|
1.07 |
|
1.30 |
|
1.35 |
|
|
|
Net
realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
|
|
|
|
|
investments |
5.20 |
|
0.85 |
|
(0.85) |
|
1.22 |
|
2.57 |
|
|
|
Total
from investment operations |
6.64 |
|
1.74 |
|
0.22 |
|
2.52 |
|
3.92 |
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|
|
Distributions
from: |
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|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
(1.09) |
|
(1.10) |
|
(1.18) |
|
(1.94) |
|
(2.38) |
|
|
|
Net
asset value, end of year |
$ |
54.90 |
|
|
$ |
49.35 |
|
|
$ |
48.71 |
|
|
$ |
49.67 |
|
|
$ |
49.09 |
|
|
|
|
Total
return (b) |
13.48 |
|
% |
3.59 |
|
% |
0.44 |
|
% |
5.15 |
|
% |
8.27 |
|
% |
|
|
Ratios
to average net assets |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
0.89 |
|
% |
1.25 |
|
% |
0.93 |
|
% |
0.85 |
|
% |
0.89 |
|
% |
|
|
Net
expenses |
0.60 |
|
% |
0.60 |
|
% |
0.61 |
|
% |
0.60 |
|
% |
0.61 |
|
% |
|
|
Net
expenses excluding interest expense |
0.60 |
|
% |
0.60 |
|
% |
0.60 |
|
% |
0.60 |
|
% |
0.60 |
|
% |
|
|
Net
investment income |
2.70 |
|
% |
1.97 |
|
% |
2.13 |
|
% |
2.58 |
|
% |
2.67 |
|
% |
|
|
Supplemental
data |
|
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Net
assets, end of year (in millions) |
$35 |
|
|
$18 |
|
|
$23 |
|
|
$26 |
|
|
$28 |
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|
|
|
Portfolio
turnover rate (c) |
25 |
|
% |
25 |
|
% |
15 |
|
% |
32 |
|
% |
19 |
|
% |
|
|
(a) Calculated
based upon average shares outstanding
(b) Returns
include adjustments in accordance with U.S. Generally Accepted Accounting
Principles. Net asset values and returns for financial reporting purposes may
differ from those for shareholder transactions.
(c) Portfolio
turnover rate excludes in-kind transactions
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PREMIUM/
DISCOUNT INFORMATION |
Information
regarding how often the closing trading price of the Shares of each Fund was
above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund
for the most recently completed calendar year and the most recently completed
calendar quarter(s) since that year (or the life of the Fund, if shorter) can be
found at www.vaneck.com.
CONTINUOUS
OFFERING
The
method by which Creation Units are created and traded may raise certain issues
under applicable securities laws. Because new Creation Units are issued and sold
by the Trust on an ongoing basis, a “distribution,” as such term is used in the
Securities Act, may occur at any point. Broker dealers and other persons are
cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner which could render them statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act.
For
example, a broker dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares, and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a categorization
as an underwriter.
Broker
dealers who are not “underwriters” but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus dealing with
Shares that are part of an “unsold allotment” within the meaning of Section
4(a)(3)(C) of the Securities Act, would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
This is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, broker dealer firms should note that
dealers who are not underwriters but are participating in a distribution (as
contrasted with ordinary secondary market transactions) and thus dealing with
the Shares that are part of an overallotment within the meaning of Section
4(a)(3)(A) of the Securities Act would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
Firms that incur a prospectus delivery obligation with respect to Shares are
reminded that, under Rule 153 of the Securities Act, a prospectus delivery
obligation under Section 5(b)(2) of the Securities Act owed to an exchange
member in connection with a sale on an Exchange is satisfied by the fact that
the prospectus is available at an Exchange upon request. The prospectus delivery
mechanism provided in Rule 153 is only available with respect to transactions on
an Exchange.
In
addition, certain affiliates of the Funds and the Adviser may purchase and
resell Fund shares pursuant to this Prospectus.
OTHER
INFORMATION
The
Trust was organized as a Delaware statutory trust on March 15, 2001. Its
Declaration of Trust currently permits the Trust to issue an unlimited number of
Shares of beneficial interest. If shareholders are required to vote on any
matters, each Share outstanding would be entitled to one vote. Annual meetings
of shareholders will not be held except as required by the 1940 Act and other
applicable law. See the Funds’ SAI for more information concerning the Trust’s
form of organization. Section 12(d)(1) of the 1940 Act restricts investments by
investment companies in the securities of other investment companies, including
Shares of a Fund. Registered investment companies are permitted to invest in the
Funds beyond the limits set forth in Section 12(d)(1) subject to certain terms
and conditions set forth in SEC Regulations, including that such investment
companies enter into an agreement with the Funds.
The
Prospectus, SAI and any other Fund communication do not create any contractual
obligations between the Funds’ shareholders and the Trust, the Funds, the
Adviser and/or the Trustees. Further, shareholders are not intended third party
beneficiaries of any contracts entered into by (or on behalf of) any Fund,
including contracts with the Adviser or other parties who provide services to
the Fund.
Dechert
LLP serves as counsel to the Trust, including the Funds. Ernst & Young LLP
serves as the Trust’s independent registered public accounting firm and will
audit the Fund’s financial statements annually.
ADDITIONAL
INFORMATION
This
Prospectus does not contain all the information included in the Registration
Statement filed with the SEC with respect to the Funds’ Shares. The Funds’
Registration Statement, including this Prospectus, the Funds’ SAI and the
exhibits are available on the EDGAR database at the SEC’s website
(http://www.sec.gov), and copies may be obtained, after paying a duplicating
fee, by electronic request at the following email address: [email protected].
The
SAI for the Funds, which has been filed with the SEC, provides more information
about the Funds. The SAI for the Funds is incorporated herein by reference and
is legally part of this Prospectus. Additional information about the Funds’
investments is available in each Fund’s annual and semi-annual reports to
shareholders. In each Fund’s annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund’s performance during its last fiscal year. The SAI and the Funds’ annual
and semi-annual reports may be obtained without charge by writing to the Funds
at Van Eck Securities Corporation, the Funds’ Distributor, at 666 Third Avenue,
9th Floor, New York, New York 10017 or by calling the Distributor at the
following number: Investor Information: 800.826.2333.
Shareholder
inquiries may be directed to the Funds in writing to 666 Third Avenue, 9th
Floor, New York, New York 10017 or by calling 800.826.2333.
The
Funds’ SAI is available at www.vaneck.com.
(Investment
Company Act file no. 811-10325)
For
more detailed information about the Funds, see the SAI dated May 1, 2022, as may
be supplemented from time to time. Additional information about each of the
Funds’ investments is or will be available in each Fund’s annual and semi-annual
reports to shareholders. In each Fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected each Fund’s performance during its last fiscal year.
Call
VanEck at 800.826.2333 to request, free of charge, the annual or semi-annual
reports, the SAI, or other information about the Funds or to make shareholder
inquiries. You may also obtain the SAI or a Fund’s annual or semi-annual
reports, by visiting the VanEck website at www.vaneck.com.
Reports
and other information about the Funds are available on the EDGAR Database on the
SEC’s internet site at http://www.sec.gov. In addition, copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following email address: [email protected].
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Transfer
Agent: State Street Bank and Trust Company SEC Registration Number:
333-123257 1940 Act Registration Number: 811-10325 |
800.826.2333 vaneck.com |
NATPRO |