ANNUAL
REPORT September 30, 2022 |
Durable High Dividend ETF | DURA |
Inflation Allocation ETF | RAAX |
Long/Flat Trend ETF | LFEQ |
Morningstar ESG Moat ETF | MOTE |
Morningstar Global Wide Moat ETF | MOTG |
Morningstar International Moat ETF | MOTI |
Morningstar Wide Moat ETF | MOAT® |
Social Sentiment ETF | BUZZ |
800.826.2333 | vaneck.com |
Certain information contained in this report represents the opinion of the investment adviser which may change at any time. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of September 30, 2022.
VANECK ETFs
September 30, 2022 (unaudited)
Dear Fellow Shareholders:
Back in July, I said that Market Volatility Has One Final Act.1 Stocks and bonds historically do not perform well when the U.S. Federal Reserve (Fed) tightens monetary conditions, and that’s just what the Fed announced it would be doing at the end of 2021. This would include raising rates and changing its balance sheet actions, which doesn’t create a great environment for financial assets. If we’re in the last, third act of the play, the third act may last a very long time.
There are three things investors are currently facing, none of which is either particularly positive for financial assets or likely to change soon.
1. | Monetary Policy: Tightening |
The typical range for the rate of growth of money supply is in the low single digits. This increased during the global financial crisis and then exploded during the COVID–19 pandemic, but the recent rate of growth of money supply is close to 0%.
Another component to monetary policy is the Fed balance sheet, which is one of the unknowns. After buying bonds during the pandemic, the Fed is now going to start shrinking the balance sheet and selling bonds into the market—one estimate indicates $279B net through the end of the year. The Fed has only shrunk its balance sheet once before, so we are facing a big unknown.
Commodity prices and the Consumer Price Index (CPI) receive much focus, but I think what the Fed is really fighting is wage inflation. That is the kind of inflation that is endemic and hard to manage once it takes hold, not least because it creates a spiraling effect. I think the Fed knows it can’t control oil prices or supply chain directly, but it wants to manage this wage inflation psychology.
Services typically don’t reflect the price of commodities and, this year, we have seen services inflation increase from 3% to 6%. That’s not slowing down, and this is a battle the Fed is fighting that I think will last for an extended period of time.
Last year when my colleagues and I spoke about inflation,2 I had noted that we wouldn’t know about wage inflation until the second half of this year, and now we know. Wage inflation is here. Another factor, which has only happened a couple times in a hundred years, is the pandemic. We don’t know how wage inflation is going to react, because the labor market is still tight in the U.S. and many workers have changed their behaviors and expectations. I think it will take another 6–12 months before we know whether wage inflation will be endemic and how the Fed responds.
2. | Fiscal Tightening: Wage Inflation Is the Real Battle |
Nominal wages are increasing, but because of inflation, take-home pay has been negative over the past year. This may result in a midterm effect in which Republicans take one or both houses, which means a higher likelihood of government gridlock. Even if the Democrats win, as Larry Summers pointed out, stimulus spending during the pandemic led to inflation, so we’re unlikely to see another big stimulus spending bill regardless of who controls government.
3. | Global Growth Has Almost Stopped |
Looking at global growth today, we see Europe in a recession and China has slowed down. Over the last 20 years, U.S. and China have been the two main pillars of global growth. China is now going to have a much lower GDP growth rate for the foreseeable future. Think about China growth being 2%, not the 6–8% of the past decades. China has anti–business regulatory policies, and there is a decoupling happening, spurred in part by the tariff fight and in part by re–appraisal of supply chain vulnerabilities, which may mean less foreign investment in China. While 2% GDP growth for China will still be a significant contributor to global growth, we may look to India, Indonesia and Africa to take up the baton as pillars of higher percentage global growth.
I believe that these conditions are going to be sticking around for a while, and what the markets are looking at now is the pressure on corporate profitability. Stocks are down because P/E ratios are down, but earnings
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VANECK ETFs
PRESIDENT’S LETTER
(unaudited) (continued)
are still flat. We don’t know yet what earnings will be like, so there will be a lot of information for equity investors to gather over the next few quarters. Monetary and fiscal policy, as well as global growth, are all contractionary.
Amidst all this market turbulence, bond investments are now offering attractive yields, so this is our favorite asset class to buy now. (See What to Buy? Bonds. When? Now.)3 Because of higher interest rates, bonds can offer adequate returns like they did in the 1970’s even though that decade was the worst for interest rates in the last 100 years.
We sincerely thank you for investing in VanEck’s investment strategies. On the following pages, you will find a performance discussion and financial statements for each of the funds for the twelve month period ended September 30, 2022. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
Jan F.
van Eck
CEO and President
VanEck ETF Trust
October 10, 2022
1 Market Volatility Has One Final Act, https://www.vaneck.com/us/en/blogs/investment-outlook/jan-van-eck-market-volatility-has-one-final-act/.
2 Navigating the Markets: Inflation and the Risks to Goldilocks, https://www.vaneck.com/us/en/blogs/investment-outlook/jan-van-eck-navigating-the-markets-inflation-and-the-risks-to-goldilocks/.
3 What to Buy? Bonds. When? Now, https://www.vaneck.com/us/en/blogs/investment-outlook/jan-van-eck-what-to-buy-bonds-when-now/.
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VANECK ETFs
September 30, 2022 (unaudited)
Market Review
Durable High Dividend
VanEck Durable High Dividend ETF (formerly VanEck Morningstar Durable Dividend ETF) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® US Dividend Valuation IndexSM. The index is intended to track the overall performance of high dividend yielding U.S. companies with strong financial health and attractive valuations according to Morningstar.
The Fund lost 6.58% over the 12 month period under review. The Fund’s focus on high yielding companies with strong financial health shielded it to an extent from the significant volatility it faced in unsettled markets. This did not, however, stop the Fund registering a loss.
The health care, utility and energy sectors were the only positive contributors to performance. All other sectors detracted from performance for the period, with the financial, communications services and information technology sectors detracting the most from performance.
Inflation Allocation
In its pursuit of long-term total return, VanEck Inflation Allocation ETF seeks to maximize real returns, while seeking to reduce downside risk during sustained market declines. The Fund seeks to achieve this by allocating primarily to exchange-traded products that provide exposure to real assets, which include commodities, real estate, natural resources, master limited partnerships (MLPs) and infrastructure. The Fund seeks to reduce downside risk by using a rules-based approach to determine when to allocate to cash and cash equivalents.
Over the 12 month period to September 30, 2022, the Fund lost 2.71%. Resources assets and, in particular, diversified commodities, contributed the most positively to the Fund’s total return. Commodity prices have remained elevated as a symptom of high inflation and structural demand and supply imbalances that have been further aggravated by Russia’s invasion of Ukraine. Income assets suffered from exposure to real estate and global infrastructure. Financial assets suffered from exposure to gold, which included both gold bullion and gold equities.
Long/Flat Trend
VanEck Long/Flat Trend ETF lost 15.70% in the 12 month period ended September 30, 2022. The Fund takes a guided allocation approach designed to help investors manage risk in the U.S. equity market. The Fund seeks to track the Ned Davis Research CMG US Large Cap Long/Flat Index (the “index”) from Ned Davis Research (NDR), a world-renowned provider of institutional quality research. It is a rules-based index that follows a proprietary model developed by NDR and CMG Capital Management Group, Inc. (CMG).
The model measures the overall health of the market through an evaluation of market breadth. In this case, market breadth refers to advancing and declining price trends and countertrends at the GICS®1 industry group level. The model computes a robust moving average score daily to capture multi-industry and multi-term trend and countertrend measures to gauge overall market health. It then calculates the score’s directional trend to see if it is improving or declining. Collectively, the score and its directional trend determine the equity allocation of either 100%, 50%, or 0%. At 0%, the allocation would be entirely to cash.
Over the 12 months ended September 30, 2022, the Fund (and model) was victim to violent bear market rallies to the upside with big downside reversals.
The model (and Fund) remained fully invested as the market entered 2022 at all-time highs. That all changed during the second quarter as the market declined over 16% and, mid-way through the quarter, the model (and Fund) went to a full cash allocation. After the worst first half since 1970, the S&P 500® Index2 (the “S&P 500”) rallied to its August 16 high, returning the index (and Fund) to a fully invested position in mid-August. However, stronger-than-expected inflation reports and a hawkish Fed proved to be too much for the market,
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VANECK ETFs
MANAGEMENT DISCUSSION (unaudited) (continued)
and the S&P 500 ended the third quarter at new lows for the year. The index (and Fund) returned to a 100% cash position in September.
Morningstar ESG Moat
VanEck Morningstar ESG Moat ETF seeks to track as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® US Sustainability Moat Focus IndexSM. The index is a rules-based index intended to offer exposure to attractively priced U.S. companies with long-term competitive advantages, according to Morningstar, that have been screened for ESG risks.
Over the period from inception (October 5, 2021) to September 30, 2022, the Fund lost 20.30%. Only the energy sector made a positive contribution to performance. The most significant negative contribution came from the information technology sector, followed by the financial and communication services sectors.
Morningstar Global Wide Moat
VanEck Morningstar Global Wide Moat ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Global Wide Moat Focus IndexSM. The index is intended to track the overall performance of global companies with sustainable competitive advantages, i.e., “moats,” and attractive valuations according to Morningstar’s equity research team. The index contains at least 50 stocks that are reviewed each quarter.
While the Fund’s focus on MOAT-rated companies and valuations provided a degree of resilience in global markets, VanEck Morningstar Global Wide Moat ETF still lost 19.41% for the 12 month period under review.
The energy sector was the only sector to contribute positively to performance. All other sectors detracted from performance with the information technology, industrial and communication services sectors detracting the most. Companies in Canada and Denmark contributed the most to performance, while those in the U.S. detracted from performance by far the most.
Morningstar International Moat
Launched over seven years ago as a means to capture moat-based opportunities abroad, VanEck Morningstar International Moat ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Global ex-US Moat Focus IndexSM. The index is intended to track the overall performance of wide and narrow moat rated companies in developed and emerging markets outside the U.S. with sustainable competitive advantages at attractive prices according to Morningstar’s equity research team. The index contains at least 50 stocks that are reviewed each quarter.
As with VanEck Morningstar Global Wide Moat ETF, the Fund’s focus on valuations and MOAT-rated companies helped is resiliency in the period’s choppy and volatile markets. However, for the 12 month period under review, the Fund lost 21.64%.
The single sector providing a positive contribution to performance was the industrial sector. All other sectors detracted from performance, with the information technology sector detracting the most. While companies in Italy and Singapore made a positive contribution to performance, all other countries detracted from performance with Chinese companies detracting the most.
Morningstar Wide Moat
VanEck Morningstar Wide Moat ETF, now with a ten year track record, seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Wide Moat Focus IndexSM. The index targets U.S. companies with sustainable competitive advantages, i.e., “moats,” and attractive valuations in the view of Morningstar’s team of more than 100 equity analysts.3
According to the forward-looking process of Morningstar’s Equity Research group, companies with moats have the potential to create above-average returns for longer periods of time. The index’s approach to
4 |
investing in U.S. companies with wide economic moats when they are attractively priced has resulted in long-term outperformance versus the broad U.S. equity market.4
Although the Fund lost 17.27% over the 12 month period under review, because of a focus on valuations and MOAT-rated companies, its performance remained relatively resilient (the S&P 500® Index lost 15.47%) over the period, particularly through the volatility of 2022.
The primary driver of negative performance was the Fund’s exposure to the information technology sector. The consumer staples sector contributed the most positively to performance.
Social Sentiment
VanEck Social Sentiment ETF provides exposure to U.S. large cap stocks with the highest degree of positive social sentiment and bullish investor perception, based on content aggregated from online sources including social media, news articles, blog posts and other alternative datasets. The Fund seeks to track, as closely as possible, before fees and expenses, the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index.
The negative momentum associated with the market selloff in 2022 had a more adverse effect on the Fund’s portfolio companies than it did the broad market and VanEck Social Sentiment ETF lost 48.34% over the 12 month period.
The primary drivers of negative performance was the Fund’s exposure to the information technology and communications services sectors. Only the energy sector contributed positively to performance.
* Returns based on NAV.
1Global Industry Classification Standard (GICS®) is a widely accepted equity securities classification system developed by Morgan Stanley Capital International (MSCI) and Standard & Poor’s.
2 Allocations to equities (long) represented by the S&P 500 Index. The S&P 500 Index consists of 500 widely held U.S. common stocks covering the industrial, utility, financial and transportation sectors. Allocations to cash (flat) represented by the Solactive 13-week U.S. T-bill Index. The Solactive 13-week U.S. T-bill Index is a rules-based index mirroring the performance of the current U.S. 13-week T-bill.
3 Equity analysts referred to are part of Morningstar’s Equity Research group which consists of various wholly-owned subsidiaries of Morningstar, Inc., including but not limited to, Morningstar Research Services LLC.
4 Based on the Morningstar Wide Moat Focus Index versus the Morningstar U.S. Market Index (The index targets 97% of the market capitalization of the U.S. stock market) from the period 2/14/2007 (inception of the index) to 9/30/2022.
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VANECK DURABLE HIGH DIVIDEND ETF
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | MSUSDVTU1 | SPTR2 | |||||
One Year | (6.65)% | (6.58)% | (6.26)% | (15.47)% | ||||
Life* | 5.51% | 5.50% | 5.80% | 9.59% |
* | Inception of Fund: 10/30/18; First Day of Secondary Market Trading: 10/31/18. | ||
1 | Morningstar® US Dividend Valuation IndexSM (MSUSDVTU) is a rules-based index intended to offer exposure to companies that Morningstar determines have a high dividend yield, strong financial health and an attractive uncertainty-adjusted valuation. | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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VANECK INFLATION ALLOCATION ETF
PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||
Share Price | NAV | BCOMTR1 | ||||
One Year | (2.94)% | (2.71)% | 11.80% | |||
Life* | 1.57% | 1.63% | 6.63% |
* | Inception of Fund: 4/9/18; First Day of Secondary Market Trading: 4/10/18. | ||
1 | The Bloomberg Commodity Index (BCOMTR) is the Fund’s broad-based benchmark index. BCOMTR is calculated on an excess return basis and reflects commodity futures price movements. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | NDRCMGLF1 | SPTR2 | |||||
One Year | (15.87)% | (15.70)% | (15.08)% | (15.47)% | ||||
Life* | 7.19% | 7.19% | 7.87% | 9.10% |
* | Inception of Fund: 10/4/17; First Day of Secondary Market Trading: 10/5/17. | ||
1 | The Ned Davis Research CMG US Large Cap Long/Flat Index (the “NDR CMG Index”) (NDRCMGLF) is a rules-based index that follows a proprietary model developed by Ned Davis Research, Inc. in conjunction with CMG Capital Management Group, Inc. To help limit potential loss associated with adverse market conditions, the model produces trade signals to dictate the NDR CMG Index’s equity allocation ranging from 100% fully invested (i.e., “long”) to 100% in cash (i.e., “flat”). When the NDR CMG Index is long, or 100% fully invested, it will be allocated to the S&P 500 Index. When the NDR CMG Index is flat, or 100% cash, it will be allocated to the Solactive 13-week U.S. T-bill Index. | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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VANECK MORNINGSTAR ESG MOAT ETF
PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | MSUSSMGU1 | SPTR2 | |||||
Life* | (20.26)% | (20.30)% | (19.93)% | (16.23)% |
* | Inception of Fund: 10/5/21; First Day of Secondary Market Trading: 10/6/21. | ||
1 | Morningstar® US Sustainability Moat Focus IndexSM (MSUSSMGU) is a rules-based index intended to provide exposure to companies that Morningstar determines are attractively valued and have long-term competitive advantages while excluding those companies with high environmental, social and governance (“ESG”) risks. | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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VANECK MORNINGSTAR GLOBAL WIDE MOAT ETF
PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | MSGWMFNU1 | SPTR2 | |||||
One Year | (19.78)% | (19.41)% | (19.07)% | (15.47)% | ||||
Life* | 6.80% | 6.84% | 7.17% | 9.59% |
* | Inception of Fund: 10/30/18; First Day of Secondary Market Trading: 10/31/18. | ||
1 | Morningstar® Global Wide Moat Focus IndexSM (MSGWMFNU) is a rules-based index intended to offer exposure to companies that Morningstar determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors. | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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VANECK MORNINGSTAR INTERNATIONAL MOAT ETF
PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | MGEUMFUN1 | SPTR2 | |||||
One Year | (22.20)% | (21.64)% | (20.90)% | (15.47)% | ||||
Five Year | (3.11)% | (2.89)% | (2.17)% | 9.24% | ||||
Life* | 0.43% | 0.52% | 1.26% | 9.75% |
* | Inception of Fund: 7/13/15; First Day of Secondary Market Trading: 7/14/15. | ||
1 | Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN) is a rules-based index intended to offer exposure to companies that Morningstar determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide and narrow moat companies”). | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
11 |
VANECK MORNINGSTAR WIDE MOAT ETF
PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | MWMFTR1 | SPTR2 | |||||
One Year | (17.22)% | (17.27)% | (16.78)% | (15.47)% | ||||
Five Year | 9.72% | 9.72% | 10.26% | 9.24% | ||||
Ten Year | 12.18% | 12.19% | 12.76% | 11.70% |
1 | Morningstar® Wide Moat Focus IndexSM (MWMFTR) is a rules-based index intended to offer exposure to companies that Morningstar determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide moat companies”). | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Ten Year)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV over the past 10 years. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
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PERFORMANCE COMPARISON
September 30, 2022 (unaudited)
Average Annual Total Return | ||||||||
Share Price | NAV | BUZZTR1 | SPTR2 | |||||
One Year | (48.34)% | (48.34)% | (48.15)% | (15.47)% | ||||
Life* | (34.72)% | (34.73)% | (34.46)% | (3.29)% |
* | Inception of Fund: 3/2/21; First Day of Secondary Market Trading: 3/3/21. | ||
1 | The BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR) is designed to track the performance of a subset of U.S. companies which are selected by analyzing data from online sources to identify those companies which rank highest in terms of bullish perception and breadth of discussion. | ||
2 | The S&P 500 Index (SPTR) is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the index proportionate to its market value. |
Hypothetical Growth of $10,000 (Since Inception)
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV since inception. The result is compared with the Fund’s benchmark and a broad-based index. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 14 for more information.
13 |
VANECK ETF TRUST
(unaudited)
The price used to calculate market return (Share Price) is determined by using the closing price listed on its primary listing exchange. Since the shares of each Fund did not trade in the secondary market until after each Fund’s commencement, for the period from commencement to the first day of secondary market trading in shares of each Fund, the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for each Fund reflects, if applicable, temporary waivers of expenses and/or fees. Had each Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.
Investment return and value of the shares of each Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Fund returns reflect reinvestment of dividends and capital gains distributions. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.
Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses.
The Morningstar® Global ex-US Moat Focus IndexSM, Morningstar® Global Wide Moat Focus IndexSM, Morningstar® US Dividend Valuation IndexSM, Morningstar® US Sustainability Moat Focus IndexSM and Morningstar® Wide Moat Focus IndexSM are published by Morningstar. The Morningstar name and logo are registered trademarks of Morningstar. Morningstar Global ex-US Moat Focus IndexSM, Morningstar Global Wide Moat Focus IndexSM, Morningstar® US Dividend Valuation IndexSM, Morningstar® US Sustainability Moat Focus IndexSM and Morningstar Wide Moat Focus IndexSM are service marks of Morningstar. The Ned Davis Research CMG US Large Cap Long/ Flat Index is published by Ned Davis Research, Inc. (“NDR”). The BUZZ NextGen AI US Sentiment Leaders Index is published by BUZZ Holdings ULC.
Morningstar, NDR and BUZZ Holdings ULC are referred to herein as the “Index Providers”. The Index Providers do not sponsor, endorse, or promote the Funds and bear no liability with respect to the Funds or any security.
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VANECK ETF TRUST
(unaudited)
Hypothetical $1,000 investment at beginning of period
As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2022 to September 30, 2022.
Actual Expenses
The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value April 1, 2022 |
Ending Account Value September 30, 2022 |
Annualized Expense Ratio During Period |
Expenses
Paid During the Period April 1, 2022 - September 30, 2022(a) | |||||
Durable High Dividend ETF | ||||||||
Actual | $1,000.00 | $865.00 | 0.30% | $1.40 | ||||
Hypothetical (b) | $1,000.00 | $1,023.56 | 0.30% | $1.52 | ||||
Inflation Allocation ETF | ||||||||
Actual | $1,000.00 | $814.90 | 0.51% | $2.32 | ||||
Hypothetical (b) | $1,000.00 | $1,022.51 | 0.51% | $2.59 | ||||
Long/Flat Trend ETF | ||||||||
Actual | $1,000.00 | $797.90 | 0.63% | $2.84 | ||||
Hypothetical (b) | $1,000.00 | $1,021.91 | 0.63% | $3.19 | ||||
Morningstar ESG Moat ETF | ||||||||
Actual | $1,000.00 | $808.20 | 0.49% | $2.22 | ||||
Hypothetical (b) | $1,000.00 | $1,022.61 | 0.49% | $2.48 | ||||
Morningstar Global Wide Moat ETF | ||||||||
Actual | $1,000.00 | $800.60 | 0.52% | $2.35 | ||||
Hypothetical (b) | $1,000.00 | $1,022.46 | 0.52% | $2.64 | ||||
Morningstar International Moat ETF | ||||||||
Actual | $1,000.00 | $790.50 | 0.58% | $2.60 | ||||
Hypothetical (b) | $1,000.00 | $1,022.16 | 0.58% | $2.94 | ||||
Morningstar Wide Moat ETF | ||||||||
Actual | $1,000.00 | $803.90 | 0.47% | $2.13 | ||||
Hypothetical (b) | $1,000.00 | $1,022.71 | 0.47% | $2.38 |
15 |
VANECK ETF TRUST
EXPLANATION OF EXPENSES
(unaudited) (continued)
Beginning Account Value April 1, 2022 |
Ending Account Value September 30, 2022 |
Annualized Expense Ratio During Period |
Expenses
Paid During the Period April 1, 2022 - September 30, 2022(a) | |||||
Social Sentiment ETF | ||||||||
Actual | $1,000.00 | $657.60 | 0.76% | $3.16 | ||||
Hypothetical (b) | $1,000.00 | $1,021.26 | 0.76% | $3.85 |
(a) | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2022), multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of the days in the fiscal year (to reflect the one-half year period). |
(b) | Assumes annual return of 5% before expenses |
16 |
VANECK DURABLE HIGH DIVIDEND ETF
September 30, 2022
Number of Shares |
Value | |||||||
COMMON STOCKS: 99.4% | ||||||||
Banks: 2.0% | ||||||||
US Bancorp | 35,615 | $ | 1,435,997 | |||||
Capital Goods: 8.8% | ||||||||
Eaton Corp. Plc | 5,917 | 789,091 | ||||||
Emerson Electric Co. | 9,789 | 716,751 | ||||||
General Dynamics Corp. | 3,262 | 692,098 | ||||||
Honeywell International, Inc. | 9,284 | 1,550,149 | ||||||
Hubbell, Inc. | 686 | 152,978 | ||||||
Illinois Tool Works, Inc. | 4,478 | 808,951 | ||||||
Lockheed Martin Corp. | 4,160 | 1,606,966 | ||||||
MSC Industrial Direct Co., Inc. | 1,155 | 84,096 | ||||||
6,401,080 | ||||||||
Consumer Services: 2.5% | ||||||||
Starbucks Corp. | 16,738 | 1,410,344 | ||||||
Wendy’s Co. | 2,881 | 53,846 | ||||||
Yum! Brands, Inc. | 3,602 | 383,036 | ||||||
1,847,226 | ||||||||
Diversified Financials: 4.6% | ||||||||
BlackRock, Inc. | 2,500 | 1,375,700 | ||||||
CME Group, Inc. | 4,479 | 793,365 | ||||||
Cohen & Steers, Inc. | 481 | 30,125 | ||||||
Evercore, Inc. | 783 | 64,402 | ||||||
Federated Hermes, Inc. | 1,863 | 61,703 | ||||||
Franklin Resources, Inc. | 8,129 | 174,936 | ||||||
Invesco Ltd. | 9,557 | 130,931 | ||||||
Janus Henderson Group Plc | 7,130 | 144,810 | ||||||
T Rowe Price Group, Inc. | 5,623 | 590,471 | ||||||
3,366,443 | ||||||||
Energy: 3.4% | ||||||||
Kinder Morgan, Inc. | 78,744 | 1,310,300 | ||||||
The Williams Companies, Inc. | 40,222 | 1,151,556 | ||||||
2,461,856 | ||||||||
Food, Beverage & Tobacco: 13.8% | ||||||||
Altria Group, Inc. | 86,714 | 3,501,511 | ||||||
Campbell Soup Co. | 3,959 | 186,548 | ||||||
Conagra Brands, Inc. | 11,439 | 373,255 | ||||||
Ingredion, Inc. | 1,334 | 107,414 | ||||||
J M Smucker Co. | 2,002 | 275,095 | ||||||
Kellogg Co. | 5,303 | 369,407 | ||||||
Kraft Heinz Co. | 20,034 | 668,134 | ||||||
Mondelez International, Inc. | 20,725 | 1,136,352 | ||||||
Philip Morris International, Inc. | 40,952 | 3,399,425 | ||||||
10,017,141 | ||||||||
Health Care Equipment & Services: 3.1% | ||||||||
Medtronic Plc | 26,013 | 2,100,550 | ||||||
Quest Diagnostics, Inc. | 1,549 | 190,047 | ||||||
2,290,597 | ||||||||
Household & Personal Products: 1.7% | ||||||||
Clorox Co. | 2,579 | 331,118 | ||||||
Kimberly-Clark Corp. | 8,008 | 901,220 | ||||||
1,232,338 | ||||||||
Insurance: 1.6% | ||||||||
Allstate Corp. | 4,817 | 599,861 | ||||||
Travelers Cos., Inc. | 3,438 | 526,702 | ||||||
1,126,563 |
Number of Shares |
Value | |||||||
Materials: 1.1% | ||||||||
Air Products and Chemicals, Inc. | 3,553 | $ | 826,890 | |||||
Pharmaceuticals, Biotechnology & Life Sciences: 26.3% | ||||||||
Amgen, Inc. | 10,770 | 2,427,558 | ||||||
Bristol-Myers Squibb Co. | 42,984 | 3,055,732 | ||||||
Gilead Sciences, Inc. | 36,372 | 2,243,789 | ||||||
Johnson & Johnson | 23,835 | 3,893,686 | ||||||
Merck & Co., Inc. | 44,504 | 3,832,684 | ||||||
Pfizer, Inc. | 85,004 | 3,719,775 | ||||||
19,173,224 | ||||||||
Semiconductors & Semiconductor Equipment: 9.9% | ||||||||
Analog Devices, Inc. | 6,785 | 945,422 | ||||||
Broadcom, Inc. | 7,716 | 3,425,981 | ||||||
Skyworks Solutions, Inc. | 2,449 | 208,826 | ||||||
Texas Instruments, Inc. | 16,805 | 2,601,078 | ||||||
7,181,307 | ||||||||
Software & Services: 5.3% | ||||||||
International Business Machines Corp. | 30,474 | 3,620,616 | ||||||
Western Union Co. | 16,323 | 220,360 | ||||||
3,840,976 | ||||||||
Technology Hardware & Equipment: 4.9% | ||||||||
Cisco Systems, Inc. | 86,515 | 3,460,600 | ||||||
National Instruments Corp. | 2,460 | 92,840 | ||||||
3,553,440 | ||||||||
Telecommunication Services: 5.1% | ||||||||
Cogent Communications Holdings, Inc. | 1,963 | 102,390 | ||||||
Verizon Communications, Inc. | 95,015 | 3,607,720 | ||||||
3,710,110 | ||||||||
Transportation: 0.9% | ||||||||
Norfolk Southern Corp. | 3,103 | 650,544 | ||||||
Utilities: 4.4% | ||||||||
Dominion Energy, Inc. | 16,598 | 1,147,088 | ||||||
Entergy Corp. | 4,531 | 455,955 | ||||||
FirstEnergy Corp. | 14,224 | 526,288 | ||||||
Hawaiian Electric Industries, Inc. | 2,530 | 87,690 | ||||||
NiSource, Inc. | 8,102 | 204,089 | ||||||
Pinnacle West Capital Corp. | 3,295 | 212,560 | ||||||
Public Service Enterprise Group, Inc. | 10,251 | 576,414 | ||||||
3,210,084 | ||||||||
Total
Common Stocks (Cost: $79,313,523) |
72,325,816 | |||||||
Total
Investments: 99.4% (Cost: $79,313,523) |
72,325,816 | |||||||
Other assets less liabilities: 0.6% | 447,594 | |||||||
NET ASSETS: 100.0% | $ | 72,773,410 |
See Notes to Financial Statements
17 |
VANECK DURABLE HIGH DIVIDEND ETF
SCHEDULE OF INVESTMENTS
(continued)
Summary of Investments by Sector | % of Investments |
Value | ||||||
Communication Services | 5.1 | % | $ | 3,710,110 | ||||
Consumer Discretionary | 2.6 | 1,847,226 | ||||||
Consumer Staples | 15.5 | 11,249,479 | ||||||
Energy | 3.4 | 2,461,856 | ||||||
Financials | 8.3 | 5,929,003 | ||||||
Health Care | 29.7 | 21,463,821 | ||||||
Industrials | 9.8 | 7,051,624 | ||||||
Information Technology | 20.1 | 14,575,723 | ||||||
Materials | 1.1 | 826,890 | ||||||
Utilities | 4.4 | 3,210,084 | ||||||
100.0 | % | $ | 72,325,816 |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks * | $ | 72,325,816 | $ | — | $ | — | $ | 72,325,816 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
18 |
VANECK INFLATION ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2022
Number of Shares |
Value | |||||||
EXCHANGE TRADED FUNDS: 99.7% (a) | ||||||||
Energy Select Sector SPDR Fund | 98,425 | $ | 7,088,569 | |||||
Global X US Infrastructure Development ETF † | 139,891 | 3,225,886 | ||||||
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF | 1,815,487 | 29,374,581 | ||||||
iShares Global Infrastructure ETF † | 390,881 | 16,350,552 | ||||||
iShares Gold Strategy ETF | 9,071 | 457,399 | ||||||
iShares Gold Trust | 6,254 | 197,189 | ||||||
iShares MSCI Global Metals & Mining Producers ETF † | 81,403 | 2,770,144 | ||||||
Nuveen Short-Term REIT ETF | 44,855 | 1,332,642 | ||||||
SPDR Gold MiniShares Trust | 5,993 | 197,649 | ||||||
SPDR S&P Oil & Gas Exploration & Production ETF † | 50,972 | 6,357,228 | ||||||
VanEck Agribusiness ETF † ‡ | 64,442 | 5,199,181 | ||||||
VanEck Energy Income ETF † ‡ | 139,851 | 7,942,124 | ||||||
VanEck Gold Miners ETF † ‡ | 230,642 | 5,563,085 | ||||||
VanEck Junior Gold Miners ETF † ‡ | 78,896 | 2,324,276 |
Number of Shares |
Value | |||||||
VanEck Merk Gold Trust ‡ | 1,427,539 | $ | 23,026,204 | |||||
VanEck Oil Services ETF † ‡ | 17,591 | 3,715,395 | ||||||
VanEck Rare Earth/Strategic Metals ETF † ‡ | 29,862 | 2,488,401 | ||||||
VanEck Steel ETF † ‡ | 69,555 | 3,321,251 | ||||||
Vanguard Real Estate ETF † | 120,596 | 9,668,180 | ||||||
Total
Exchange Traded Funds (Cost: $154,085,604) |
130,599,936 | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 13.2% | ||||||||
Money
Market Fund: 13.2% (Cost: $17,252,475) |
||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 17,252,475 | 17,252,475 | ||||||
Total
Investments: 112.9% (Cost: $171,338,079) |
147,852,411 | |||||||
Liabilities in excess of other assets: (12.9)% | (16,785,770) | |||||||
NET ASSETS: 100.0% | $ | 131,066,641 |
Footnotes:
(a) | Each underlying fund’s shareholder reports and registration documents are available free of charge on the SEC’s website at https://www.sec.gov. |
† | Security fully or partially on loan. Total market value of securities on loan is $25,748,539. |
‡ | Affiliated issuer – as defined under the Investment Company Act of 1940. |
Summary of
Investments by Sector Excluding Collateral for Securities Loaned |
% of Investments |
Value | ||||||
Agribusiness | 4.0 | % | $ | 5,199,181 | ||||
Diversified Commodities Futures | 22.5 | 29,374,580 | ||||||
Energy | 11.5 | 15,030,693 | ||||||
Global Metals and Mining | 4.0 | 5,258,545 | ||||||
Gold Bullion | 20.1 | 26,202,717 | ||||||
Gold Mining | 4.2 | 5,563,085 | ||||||
Industrials | 2.5 | 3,225,886 | ||||||
Oil Services | 7.8 | 10,072,623 | ||||||
Real Estate Investment Trusts | 8.4 | 11,000,823 | ||||||
Steel | 2.5 | 3,321,251 | ||||||
Utilities | 12.5 | 16,350,552 | ||||||
100.0 | % | $ | 130,599,936 |
See Notes to Financial Statements
19 |
VANECK INFLATION ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
(continued)
Transactions in securities of affiliates for the period ended September 30, 2022 were as follows:
Net Change in | ||||||||||||||||||||||||||||
Unrealized | ||||||||||||||||||||||||||||
Value | Sales | Realized Gain | Dividend | Appreciation | Value | |||||||||||||||||||||||
9/30/2021 | Purchases | Proceeds | (Loss) | Income | (Depreciation) | 9/30/2022 | ||||||||||||||||||||||
VanEck Agribusiness ETF | $784,573 | $7,097,075 | $(1,514,767) | $(7,772) | $17,661 | $(1,159,928) | $5,199,181 | |||||||||||||||||||||
VanEck Energy Income ETF | 980,050 | 9,545,860 | (1,869,634) | 278,543* | 96,975 | (920,705)† | 7,942,124 | |||||||||||||||||||||
VanEck Gold Miners ETF | 687,476 | 8,708,663 | (1,281,679) | (80,926) | 25,551 | (2,470,449) | 5,563,085 | |||||||||||||||||||||
VanEck Junior Gold Miners ETF | – | 4,119,195 | (525,722) | (41,229) | 10,559 | (1,227,968) | 2,324,276 | |||||||||||||||||||||
VanEck Low Carbon Energy ETF | 398,697 | 1,947,129 | (2,033,897) | (336,478) | 3,493 | 24,549 | – | |||||||||||||||||||||
VanEck Mortgage REIT Income ETF | 189,021 | 1,231,288 | (1,184,519) | (241,425)‡ | 26,073 | 6,395 | – | |||||||||||||||||||||
VanEck Oil Services ETF | 480,310 | 5,424,397 | (1,226,336) | 66,912 | 8,069 | (1,029,888) | 3,715,395 | |||||||||||||||||||||
VanEck Rare Earth/ Strategic Metals ETF | – | 3,619,471 | (728,366) | 2,195 | – | (404,899) | 2,488,401 | |||||||||||||||||||||
VanEck Steel ETF | 488,167 | 4,896,370 | (1,044,945) | (64,987) | 61,126 | (953,354) | 3,321,251 | |||||||||||||||||||||
VanEck Vectors Unconventional Oil & Gas ETF | 667,902 | 194,648 | (951,584) | 249,119 | – | (160,085) | – | |||||||||||||||||||||
$4,676,196 | $46,784,096 | $(12,361,449) | $(176,048) | $249,507 | $(8,296,332) | $30,553,713 |
* | Includes Return of Capital distribution reclassification of $16,867. |
† | Includes Return of Capital distribution reclassification of $55,123. |
‡ | Includes Return of Capital distribution reclassification of $760. |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Exchange Traded Funds | $ | 130,599,936 | $ | — | $ | — | $ | 130,599,936 | ||||||||
Money Market Fund | 17,252,475 | — | — | 17,252,475 | ||||||||||||
Total Investments | $ | 147,852,411 | $ | — | $ | — | $ | 147,852,411 |
See Notes to Financial Statements
20 |
SCHEDULE OF INVESTMENTS
September 30, 2022
Par (000’s) |
Value | |||||||
GOVERNMENT OBLIGATION: 97.7% (Cost: $32,793,750) |
||||||||
United
States Treasury Bill 0.01%, 12/15/22 |
33,000 | $ | 32,812,015 | |||||
Total Investments: 97.7% (Cost: $32,793,750) |
32,812,015 | |||||||
Other assets less liabilities: 2.3% | 763,046 | |||||||
NET ASSETS: 100.0% | $ | 33,575,061 |
% of | ||||||||
Summary of Investments by Sector | Investments | Value | ||||||
Government | 100.0 | % | $ | 32,812,015 |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Government Obligations | $ | — | $ | 32,812,015 | $ | — | $ | 32,812,015 |
See Notes to Financial Statements
21 |
VANECK MORNINGSTAR ESG MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2022
Number of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Capital Goods: 5.0% | ||||||||
Emerson Electric Co. | 394 | $ | 28,849 | |||||
Masco Corp. | 1,255 | 58,596 | ||||||
Rockwell Automation, Inc. | 167 | 35,923 | ||||||
123,368 | ||||||||
Commercial & Professional Services: 2.9% | ||||||||
Equifax, Inc. | 150 | 25,715 | ||||||
TransUnion | 804 | 47,830 | ||||||
73,545 | ||||||||
Consumer Durables & Apparel: 3.8% | ||||||||
NIKE, Inc. | 294 | 24,437 | ||||||
Polaris, Inc. | 725 | 69,346 | ||||||
93,783 | ||||||||
Consumer Services: 5.3% | ||||||||
McDonald’s Corp. | 156 | 35,995 | ||||||
Starbucks Corp. | 377 | 31,766 | ||||||
Yum! Brands, Inc. | 605 | 64,336 | ||||||
132,097 | ||||||||
Diversified Financials: 15.9% | ||||||||
American Express Co. | 257 | 34,672 | ||||||
BlackRock, Inc. | 45 | 24,763 | ||||||
Charles Schwab Corp. | 546 | 39,241 | ||||||
CME Group, Inc. | 180 | 31,883 | ||||||
Intercontinental Exchange, Inc. | 659 | 59,541 | ||||||
Moody’s Corp. | 126 | 30,632 | ||||||
S&P Global, Inc. | 106 | 32,367 | ||||||
State Street Corp. | 521 | 31,682 | ||||||
T Rowe Price Group, Inc. | 215 | 22,577 | ||||||
The Bank of New York Mellon Corp. | 1,512 | 58,242 | ||||||
Tradeweb Markets, Inc. | 524 | 29,564 | ||||||
395,164 | ||||||||
Energy: 2.8% | ||||||||
Cheniere Energy, Inc. | 415 | 68,853 | ||||||
Food & Staples Retailing: 1.4% | ||||||||
Costco Wholesale Corp. | 76 | 35,892 | ||||||
Food, Beverage & Tobacco: 13.1% | ||||||||
Brown-Forman Corp. | 524 | 34,883 | ||||||
Constellation Brands, Inc. | 314 | 72,119 | ||||||
Kellogg Co. | 1,150 | 80,108 | ||||||
Mondelez International, Inc. | 1,204 | 66,015 | ||||||
PepsiCo, Inc. | 241 | 39,346 | ||||||
The Coca-Cola Co. | 705 | 39,494 | ||||||
331,965 | ||||||||
Health Care Equipment & Services: 2.3% | ||||||||
Medtronic Plc | 374 | 30,201 | ||||||
Veeva Systems, Inc. * | 159 | 26,216 | ||||||
56,417 | ||||||||
Household & Personal Products: 1.4% | ||||||||
Clorox Co. | 267 | 34,280 | ||||||
Materials: 2.1% | ||||||||
Ecolab, Inc. | 186 | 26,862 | ||||||
International Flavors & Fragrances, Inc. | 284 | 25,796 | ||||||
52,658 |
Number of Shares |
Value | |||||||
Media & Entertainment: 5.5% | ||||||||
Alphabet, Inc. * | 592 | $ | 56,625 | |||||
Comcast Corp. | 826 | 24,227 | ||||||
John Wiley & Sons, Inc. | 1,450 | 54,462 | ||||||
135,314 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences: 7.6% | ||||||||
Gilead Sciences, Inc. | 1,139 | 70,264 | ||||||
Johnson & Johnson | 242 | 39,533 | ||||||
Merck & Co., Inc. | 541 | 46,591 | ||||||
Thermo Fisher Scientific, Inc. | 65 | 32,967 | ||||||
189,355 | ||||||||
Retailing: 1.4% | ||||||||
Lowe’s Companies, Inc. | 186 | 34,933 | ||||||
Semiconductors & Semiconductor Equipment: 8.5% | ||||||||
Applied Materials, Inc. | 605 | 49,568 | ||||||
Intel Corp. | 845 | 21,776 | ||||||
KLA Corp. | 205 | 62,039 | ||||||
Lam Research Corp. | 61 | 22,326 | ||||||
Monolithic Power Systems, Inc. | 79 | 28,709 | ||||||
Teradyne, Inc. | 342 | 25,701 | ||||||
210,119 | ||||||||
Software & Services: 17.7% | ||||||||
Adobe, Inc. * | 157 | 43,206 | ||||||
Aspen Technology, Inc. * | 116 | 27,631 | ||||||
Blackbaud, Inc. * | 539 | 23,748 | ||||||
Guidewire Software, Inc. * | 446 | 27,465 | ||||||
Intuit, Inc. | 86 | 33,310 | ||||||
Mastercard, Inc. | 99 | 28,150 | ||||||
Microsoft Corp. | 259 | 60,321 | ||||||
Roper Technologies, Inc. | 174 | 62,577 | ||||||
Salesforce, Inc. * | 159 | 22,871 | ||||||
ServiceNow, Inc. * | 137 | 51,733 | ||||||
Tyler Technologies, Inc. * | 180 | 62,550 | ||||||
443,562 | ||||||||
Technology Hardware & Equipment: 1.6% | ||||||||
Keysight Technologies, Inc. * | 248 | 39,025 | ||||||
Transportation: 1.6% | ||||||||
CH Robinson Worldwide, Inc. | 412 | 39,680 | ||||||
Total
Common Stocks (Cost: $2,911,310) |
2,490,010 | |||||||
Total
Investments: 99.9% (Cost: $2,911,310) |
2,490,010 | |||||||
Other assets less liabilities: 0.1% | 1,344 | |||||||
NET ASSETS: 100.0% | $ | 2,491,354 |
See Notes to Financial Statements
22 |
Footnotes:
* | Non-income producing |
% of | ||||||||
Summary of Investments by Sector | Investments | Value | ||||||
Communication Services | 5.4 | % | $ | 135,313 | ||||
Consumer Discretionary | 10.5 | 260,814 | ||||||
Consumer Staples | 16.1 | 402,139 | ||||||
Energy | 2.8 | 68,853 | ||||||
Financials | 15.9 | 395,164 | ||||||
Health Care | 9.9 | 245,772 | ||||||
Industrials | 9.5 | 236,593 | ||||||
Information Technology | 27.8 | 692,704 | ||||||
Materials | 2.1 | 52,658 | ||||||
100.0 | % | $ | 2,490,010 |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks * | $ | 2,490,010 | $ | — | $ | — | $ | 2,490,010 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
23 |
VANECK MORNINGSTAR GLOBAL WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2022
Number of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Australia: 5.3% | ||||||||
Australia & New Zealand Banking Group Ltd. | 25,950 | $ | 381,837 | |||||
Brambles Ltd. | 24,135 | 177,469 | ||||||
Westpac Banking Corp. † | 28,293 | 376,247 | ||||||
935,553 | ||||||||
Belgium: 1.0% | ||||||||
Anheuser-Busch InBev SA | 3,935 | 178,170 | ||||||
Brazil: 2.3% | ||||||||
Ambev SA | 139,200 | 399,931 | ||||||
Canada: 2.0% | ||||||||
Royal Bank of Canada | 1,963 | 177,678 | ||||||
Toronto-Dominion Bank † | 2,826 | 174,243 | ||||||
351,921 | ||||||||
China: 5.7% | ||||||||
Inner Mongolia Yili Industrial Group Co. Ltd. | 73,900 | 341,061 | ||||||
JD.com, Inc. (HKD) | 12,200 | 307,774 | ||||||
Tencent Holdings Ltd. (HKD) | 4,800 | 162,121 | ||||||
Yum China Holdings, Inc. (USD) | 3,930 | 186,007 | ||||||
996,963 | ||||||||
France: 4.8% | ||||||||
Airbus SE | 3,939 | 339,404 | ||||||
Safran SA | 1,881 | 171,082 | ||||||
Sanofi | 4,298 | 327,144 | ||||||
837,630 | ||||||||
Germany: 2.0% | ||||||||
Bayer AG | 3,782 | 174,183 | ||||||
GEA Group AG * | 5,214 | 168,671 | ||||||
342,854 | ||||||||
Japan: 3.4% | ||||||||
Japan Tobacco, Inc. | 11,700 | 192,243 | ||||||
Kao Corp. | 4,800 | 195,293 | ||||||
Shimano, Inc. | 1,300 | 203,384 | ||||||
590,920 | ||||||||
Netherlands: 0.9% | ||||||||
ASML Holding NV | 402 | 166,472 | ||||||
Switzerland: 3.2% | ||||||||
Novartis AG | 2,387 | 182,430 | ||||||
Roche Holding AG | 1,186 | 387,043 | ||||||
569,473 | ||||||||
Taiwan: 1.8% | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 24,000 | 318,129 | ||||||
United Kingdom: 9.3% | ||||||||
British American Tobacco Plc | 9,378 | 336,196 | ||||||
Experian Plc | 13,163 | 385,229 | ||||||
GSK Plc | 12,462 | 179,945 | ||||||
Imperial Brands Plc | 17,417 | 358,063 | ||||||
London Stock Exchange Group Plc | 2,187 | 184,648 | ||||||
Unilever Plc | 4,268 | 187,493 | ||||||
1,631,574 | ||||||||
United States: 58.2% | ||||||||
Adobe, Inc. * | 506 | 139,251 |
Number | ||||||||
of Shares | Value | |||||||
United States (continued) | ||||||||
Alphabet, Inc. * | 3,471 | $ | 332,001 | |||||
Amazon.com, Inc. * | 1,484 | 167,692 | ||||||
Applied Materials, Inc. | 4,149 | 339,928 | ||||||
Berkshire Hathaway, Inc. * | 691 | 184,511 | ||||||
Blackbaud, Inc. * | 7,137 | 314,456 | ||||||
BlackRock, Inc. | 602 | 331,269 | ||||||
Boeing Co. * | 1,232 | 149,171 | ||||||
Charles Schwab Corp. | 3,082 | 221,503 | ||||||
Comcast Corp. | 4,832 | 141,723 | ||||||
Constellation Brands, Inc. | 1,589 | 364,961 | ||||||
Emerson Electric Co. | 4,709 | 344,793 | ||||||
Equifax, Inc. | 2,047 | 350,917 | ||||||
Fortinet, Inc. * | 3,808 | 187,087 | ||||||
Gilead Sciences, Inc. | 6,114 | 377,173 | ||||||
Guidewire Software, Inc. * | 2,575 | 158,568 | ||||||
Intel Corp. | 5,047 | 130,061 | ||||||
Intercontinental Exchange, Inc. | 2,036 | 183,953 | ||||||
International Flavors & Fragrances, Inc. | 1,697 | 154,139 | ||||||
Intuit, Inc. | 490 | 189,787 | ||||||
James Hardie Industries Plc (AUD) | 9,446 | 186,501 | ||||||
Kellogg Co. | 5,380 | 374,771 | ||||||
Lam Research Corp. | 888 | 325,008 | ||||||
Masco Corp. | 7,609 | 355,264 | ||||||
Medtronic Plc | 2,113 | 170,625 | ||||||
Merck & Co., Inc. | 2,214 | 190,670 | ||||||
Microchip Technology, Inc. | 2,954 | 180,283 | ||||||
Microsoft Corp. | 1,491 | 347,254 | ||||||
Philip Morris International, Inc. | 2,030 | 168,510 | ||||||
Polaris, Inc. | 3,598 | 344,149 | ||||||
Rockwell Automation, Inc. | 966 | 207,796 | ||||||
Roper Technologies, Inc. | 963 | 346,333 | ||||||
ServiceNow, Inc. * | 411 | 155,198 | ||||||
State Street Corp. | 5,731 | 348,502 | ||||||
Teradyne, Inc. | 4,322 | 324,798 | ||||||
The Bank of New York Mellon Corp. | 4,527 | 174,380 | ||||||
TransUnion | 2,388 | 142,062 | ||||||
Tyler Technologies, Inc. * | 1,104 | 383,640 | ||||||
Wells Fargo & Co. | 9,170 | 368,817 | ||||||
Western Union Co. | 13,140 | 177,390 | ||||||
Zimmer Biomet Holdings, Inc. | 1,769 | 184,949 | ||||||
10,219,844 | ||||||||
Total
Common Stocks (Cost: $18,989,392) |
17,539,434 | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 2.2% | ||||||||
Money
Market Fund: 2.2% (Cost: $382,291) |
See Notes to Financial Statements
24 |
Number | ||||||||
of Shares | Value | |||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 382,291 | $ | 382,291 | |||||
Total Investments: 102.1% (Cost: $19,371,683) |
17,921,725 | |||||||
Liabilities in excess of other assets: (2.1)% | (376,859) | |||||||
NET ASSETS: 100.0% | $ | 17,544,866 | ||||||
Definitions:
AUD | Australia Dollar |
HKD | Hong Kong Dollar |
USD | United States Dollar |
Footnotes:
† | Security fully or partially on loan. Total market value of securities on loan is $361,315. |
* | Non-income producing |
Summary of
Investments by Sector Excluding Collateral for Securities Loaned |
% of Investments |
Value | ||||||
Communication Services | 3.6 | % | $ | 635,845 | ||||
Consumer Discretionary | 6.9 | 1,209,005 | ||||||
Consumer Staples | 17.7 | 3,096,694 | ||||||
Financials | 17.7 | 3,107,588 | ||||||
Health Care | 12.4 | 2,174,160 | ||||||
Industrials | 15.9 | 2,791,859 | ||||||
Information Technology | 23.9 | 4,183,644 | ||||||
Materials | 1.9 | 340,639 | ||||||
100.0 | % | $ | 17,539,434 |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks | ||||||||||||||||
Australia | $ | — | $ | 935,553 | $ | — | $ | 935,553 | ||||||||
Belgium | — | 178,170 | — | 178,170 | ||||||||||||
Brazil | 399,931 | — | — | 399,931 | ||||||||||||
Canada | 351,921 | — | — | 351,921 | ||||||||||||
China | 186,007 | 810,956 | — | 996,963 | ||||||||||||
France | — | 837,630 | — | 837,630 | ||||||||||||
Germany | — | 342,854 | — | 342,854 | ||||||||||||
Japan | — | 590,920 | — | 590,920 | ||||||||||||
Netherlands | — | 166,472 | — | 166,472 | ||||||||||||
Switzerland | — | 569,473 | — | 569,473 | ||||||||||||
Taiwan | — | 318,129 | — | 318,129 | ||||||||||||
United Kingdom | — | 1,631,574 | — | 1,631,574 | ||||||||||||
United States | 10,219,844 | — | — | 10,219,844 | ||||||||||||
Money Market Fund | 382,291 | — | — | 382,291 | ||||||||||||
Total Investments | $ | 11,539,994 | $ | 6,381,731 | $ | — | $ | 17,921,725 |
See Notes to Financial Statements
25 |
VANECK MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESMENTS
September 30, 2022
Number of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Australia: 4.4% | ||||||||
AGL Energy Ltd. | 295,000 | $ | 1,293,551 | |||||
Link Administration Holdings Ltd. | 318,995 | 584,044 | ||||||
WiseTech Global Ltd. | 31,196 | 1,024,510 | ||||||
2,902,105 | ||||||||
Belgium: 2.0% | ||||||||
Anheuser-Busch InBev SA | 29,600 | 1,340,233 | ||||||
Canada: 2.1% | ||||||||
CI Financial Corp. † | 69,702 | 671,631 | ||||||
IGM Financial, Inc. | 28,624 | 717,032 | ||||||
1,388,663 | ||||||||
China: 23.7% | ||||||||
Anhui Conch Cement Co. Ltd. | 306,747 | 1,234,987 | ||||||
ASMPT Ltd. (HKD) | 182,700 | 1,107,484 | ||||||
Beijing Enterprises Holdings Ltd. (HKD) | 221,500 | 620,748 | ||||||
BOC Hong Kong Holdings Ltd. (HKD) | 212,000 | 705,029 | ||||||
China Merchants Bank Co. Ltd. | 150,500 | 707,801 | ||||||
China Resources Pharmaceutical Group Ltd. (HKD) 144A | 1,228,000 | 839,703 | ||||||
CSPC Pharmaceutical Group Ltd. (HKD) | 824,000 | 816,702 | ||||||
JD.com, Inc. (HKD) | 47,450 | 1,197,039 | ||||||
Midea Group Co. Ltd. | 94,699 | 652,993 | ||||||
NetEase, Inc. (HKD) | 81,300 | 1,226,731 | ||||||
Shanghai Junshi Biosciences Co. Ltd. * | 94,869 | 669,847 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. | 281,400 | 650,427 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd. (HKD) | 500,300 | 689,934 | ||||||
Sino Biopharmaceutical Ltd. (HKD) | 1,439,000 | 674,338 | ||||||
Sinopharm Group Co. Ltd. (HKD) | 672,800 | 1,342,721 | ||||||
Tencent Holdings Ltd. (HKD) | 18,100 | 611,332 | ||||||
WH Group Ltd. (HKD) 144A | 2,131,500 | 1,340,539 | ||||||
Yum China Holdings, Inc. (USD) | 14,661 | 693,905 | ||||||
15,782,260 | ||||||||
Denmark: 2.0% | ||||||||
Danske Bank A/S | 105,826 | 1,316,590 | ||||||
France: 6.8% | ||||||||
Accor SA * | 31,205 | 653,029 | ||||||
Airbus SE | 15,376 | 1,324,875 | ||||||
Safran SA | 7,018 | 638,305 | ||||||
Sodexo SA | 10,657 | 800,017 | ||||||
Ubisoft Entertainment SA * | 40,812 | 1,121,158 | ||||||
4,537,384 | ||||||||
Germany: 5.5% | ||||||||
Bayer AG | 14,179 | 653,024 |
Number of Shares |
Value | |||||||
Germany (continued) | ||||||||
Bayerische Motoren Werke AG | 18,911 | $ | 1,281,217 | |||||
Fresenius Medical Care AG & Co. KGaA | 14,864 | 418,592 | ||||||
Infineon Technologies AG | 30,456 | 666,227 | ||||||
SAP SE | 8,165 | 665,136 | ||||||
3,684,196 | ||||||||
Hong Kong: 1.0% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 18,600 | 635,773 | ||||||
Israel: 2.1% | ||||||||
Nice Ltd. * | 7,506 | 1,416,083 | ||||||
Italy: 1.0% | ||||||||
Leonardo SpA | 93,923 | 664,741 | ||||||
Japan: 7.1% | ||||||||
MEIJI Holdings Co. Ltd. † | 32,800 | 1,455,853 | ||||||
Mitsubishi Electric Corp. | 75,700 | 684,866 | ||||||
Murata Manufacturing Co. Ltd. | 14,100 | 648,916 | ||||||
Nabtesco Corp. | 31,700 | 648,405 | ||||||
Taiyo Yuden Co. Ltd. | 21,400 | 552,225 | ||||||
Z Holdings Corp. † | 280,100 | 742,374 | ||||||
4,732,639 | ||||||||
Mexico: 1.8% | ||||||||
Fomento Economico Mexicano SAB de CV | 109,000 | 684,222 | ||||||
Grupo Televisa SAB † | 448,700 | 486,468 | ||||||
1,170,690 | ||||||||
Netherlands: 4.0% | ||||||||
ABN AMRO Bank NV 144A † | 142,891 | 1,279,832 | ||||||
ING Groep NV | 159,486 | 1,365,986 | ||||||
2,645,818 | ||||||||
Singapore: 2.2% | ||||||||
Oversea-Chinese Banking Corp. Ltd. | 92,700 | 760,287 | ||||||
United Overseas Bank Ltd. | 39,800 | 721,559 | ||||||
1,481,846 | ||||||||
South Korea: 3.8% | ||||||||
KT Corp. | 55,071 | 1,384,348 | ||||||
Samsung Electro-Mechanics Co. Ltd. | 14,537 | 1,121,594 | ||||||
2,505,942 | ||||||||
Spain: 1.0% | ||||||||
Industria de Diseno Textil SA | 33,598 | 693,066 | ||||||
Sweden: 1.1% | ||||||||
Swedbank AB | 55,300 | 725,864 | ||||||
Switzerland: 5.2% | ||||||||
Chugai Pharmaceutical Co. Ltd. (JPY) | 31,900 | 796,877 | ||||||
Dufry AG * | 20,663 | 628,880 | ||||||
STMicroelectronics NV (EUR) | 42,795 | 1,329,408 | ||||||
Swatch Group AG | 3,130 | 704,743 | ||||||
3,459,908 | ||||||||
Taiwan: 3.5% | ||||||||
MediaTek, Inc. | 64,000 | 1,104,410 |
See Notes to Financial Statements
26 |
Number of Shares |
Value | |||||||
Taiwan (continued) | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 94,000 | $ | 1,246,007 | |||||
2,350,417 | ||||||||
United Kingdom: 17.5% | ||||||||
Admiral Group Plc | 29,320 | 622,723 | ||||||
BT Group Plc | 440,299 | 591,761 | ||||||
Experian Plc | 27,377 | 801,216 | ||||||
GSK Plc | 46,489 | 671,276 | ||||||
Hang Seng Bank Ltd. (HKD) | 46,900 | 712,505 | ||||||
HSBC Holdings Plc | 245,616 | 1,271,480 | ||||||
Imperial Brands Plc | 67,702 | 1,391,834 | ||||||
Lloyds Banking Group Plc | 2,905,112 | 1,312,779 | ||||||
London Stock Exchange Group Plc | 8,844 | 746,698 | ||||||
Pearson Plc | 83,410 | 796,353 | ||||||
Swire Properties Ltd. (HKD) | 646,200 | 1,390,108 | ||||||
WPP Plc | 161,947 | 1,336,603 | ||||||
11,645,336 |
Number of Shares |
Value | |||||||
United States: 2.1% | ||||||||
BRP, Inc. (CAD) † | 22,624 | $ | 1,401,023 | |||||
Total
Common Stocks (Cost: $78,940,450) |
66,480,577 | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.5% | ||||||||
Money
Market Fund: 1.5% (Cost: $974,695) |
||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 974,695 | 974,695 | ||||||
Total
Investments: 101.4% (Cost: $79,915,145) |
67,455,272 | |||||||
Liabilities in excess of other assets: (1.4)% | (927,794) | |||||||
NET ASSETS: 100.0% | $ | 66,527,478 |
Definitions:
CAD | Canadian Dollar |
EUR | Euro |
HKD | Hong Kong Dollar |
JPY | Japanese Yen |
USD | United States Dollar |
Footnotes:
† | Security fully or partially on loan. Total market value of securities on loan is $2,680,566. |
* | Non-income producing |
144A | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted $3,460,074, or 5.2% of net assets. |
Summary of Investments by Sector | % of | |||||||
Excluding Collateral for Securities Loaned | Investments | Value | ||||||
Communication Services | 12.5 | % | $ | 8,297,128 | ||||
Consumer Discretionary | 13.0 | 8,705,911 | ||||||
Consumer Staples | 9.3 | 6,212,681 | ||||||
Financials | 21.5 | 14,273,569 | ||||||
Health Care | 12.4 | 8,223,442 | ||||||
Industrials | 7.2 | 4,762,408 | ||||||
Information Technology | 17.2 | 11,466,045 | ||||||
Materials | 1.9 | 1,234,987 | ||||||
Real Estate | 2.1 | 1,390,108 | ||||||
Utilities | 2.9 | 1,914,298 | ||||||
100.0 | % | $ | 66,480,577 |
See Notes to Financial Statements
27 |
VANECK MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESMENTS
(continued)
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks | ||||||||||||||||
Australia | $ | — | $ | 2,902,105 | $ | — | $ | 2,902,105 | ||||||||
Belgium | — | 1,340,233 | — | 1,340,233 | ||||||||||||
Canada | 1,388,663 | — | — | 1,388,663 | ||||||||||||
China | 693,905 | 15,088,355 | — | 15,782,260 | ||||||||||||
Denmark | — | 1,316,590 | — | 1,316,590 | ||||||||||||
France | — | 4,537,384 | — | 4,537,384 | ||||||||||||
Germany | — | 3,684,196 | — | 3,684,196 | ||||||||||||
Hong Kong | — | 635,773 | — | 635,773 | ||||||||||||
Israel | — | 1,416,083 | — | 1,416,083 | ||||||||||||
Italy | — | 664,741 | — | 664,741 | ||||||||||||
Japan | — | 4,732,639 | — | 4,732,639 | ||||||||||||
Mexico | 1,170,690 | — | — | 1,170,690 | ||||||||||||
Netherlands | — | 2,645,818 | — | 2,645,818 | ||||||||||||
Singapore | — | 1,481,846 | — | 1,481,846 | ||||||||||||
South Korea | — | 2,505,942 | — | 2,505,942 | ||||||||||||
Spain | — | 693,066 | — | 693,066 | ||||||||||||
Sweden | — | 725,864 | — | 725,864 | ||||||||||||
Switzerland | — | 3,459,908 | — | 3,459,908 | ||||||||||||
Taiwan | — | 2,350,417 | — | 2,350,417 | ||||||||||||
United Kingdom | — | 11,645,336 | — | 11,645,336 | ||||||||||||
United States | 1,401,023 | — | — | 1,401,023 | ||||||||||||
Money Market Fund | 974,695 | — | — | 974,695 | ||||||||||||
Total Investments | $ | 5,628,976 | $ | 61,826,296 | $ | — | $ | 67,455,272 |
See Notes to Financial Statements
28 |
VANECK MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2022
Number of Shares |
Value | |||||||
COMMON STOCKS: 100.0% | ||||||||
Banks: 2.6% | ||||||||
Wells Fargo & Co. | 3,825,089 | $ | 153,845,079 | |||||
Capital Goods: 13.5% | ||||||||
3M Co. | 1,251,643 | 138,306,552 | ||||||
Allegion plc | 829,605 | 74,398,976 | ||||||
Boeing Co. * | 1,075,102 | 130,173,350 | ||||||
Emerson Electric Co. | 1,965,376 | 143,904,831 | ||||||
Honeywell International, Inc. | 424,383 | 70,859,230 | ||||||
Masco Corp. | 3,175,681 | 148,272,546 | ||||||
Rockwell Automation, Inc. | 398,659 | 85,755,537 | ||||||
791,671,022 | ||||||||
Commercial & Professional Services: 4.6% | ||||||||
Equifax, Inc. | 853,873 | 146,379,448 | ||||||
TransUnion | 2,053,126 | 122,140,466 | ||||||
268,519,914 | ||||||||
Consumer Durables & Apparel: 2.5% | ||||||||
Polaris, Inc. † | 1,500,735 | 143,545,303 | ||||||
Diversified Financials: 9.0% | ||||||||
Berkshire Hathaway, Inc. * | 285,232 | 76,162,649 | ||||||
BlackRock, Inc. | 251,246 | 138,255,649 | ||||||
Charles Schwab Corp. | 1,271,332 | 91,370,631 | ||||||
Intercontinental Exchange, Inc. | 840,032 | 75,896,891 | ||||||
MarketAxess Holdings, Inc. | 328,190 | 73,018,993 | ||||||
State Street Corp. | 1,227,919 | 74,669,754 | ||||||
529,374,567 | ||||||||
Food, Beverage & Tobacco: 1.4% | ||||||||
Kellogg Co. | 1,136,217 | 79,148,876 | ||||||
Health Care Equipment & Services: 7.6% | ||||||||
Medtronic Plc | 1,802,653 | 145,564,230 | ||||||
Veeva Systems, Inc. * | 889,664 | 146,687,800 | ||||||
Zimmer Biomet Holdings, Inc. | 1,478,487 | 154,575,816 | ||||||
446,827,846 | ||||||||
Materials: 3.5% | ||||||||
Ecolab, Inc. | 974,720 | 140,769,062 | ||||||
International Flavors & Fragrances, Inc. | 718,072 | 65,222,480 | ||||||
205,991,542 | ||||||||
Media & Entertainment: 9.2% | ||||||||
Alphabet, Inc. * | 1,448,755 | 138,573,416 | ||||||
Comcast Corp. | 4,322,186 | 126,769,715 | ||||||
Meta Platforms, Inc. * | 977,012 | 132,560,988 | ||||||
Walt Disney Co. * | 1,527,890 | 144,125,864 | ||||||
542,029,983 |
Number of Shares |
Value | |||||||
Pharmaceuticals, Biotechnology & Life Sciences: 6.2% | ||||||||
Biogen, Inc. * | 777,857 | $ | 207,687,819 | |||||
Gilead Sciences, Inc. | 2,550,690 | 157,352,066 | ||||||
365,039,885 | ||||||||
Retailing: 8.6% | ||||||||
Amazon.com, Inc. * | 1,338,867 | 151,291,971 | ||||||
Etsy, Inc. * † | 1,802,023 | 180,436,563 | ||||||
MercadoLibre, Inc. * | 210,077 | 173,897,539 | ||||||
505,626,073 | ||||||||
Semiconductors & Semiconductor Equipment: 10.6% | ||||||||
Applied Materials, Inc. | 884,285 | 72,449,470 | ||||||
Intel Corp. | 2,081,698 | 53,645,358 | ||||||
KLA Corp. | 240,103 | 72,662,371 | ||||||
Lam Research Corp. | 370,737 | 135,689,742 | ||||||
Microchip Technology, Inc. | 1,247,308 | 76,123,207 | ||||||
NVIDIA Corp. | 592,825 | 71,963,027 | ||||||
Teradyne, Inc. | 1,809,083 | 135,952,587 | ||||||
618,485,762 | ||||||||
Software & Services: 20.7% | ||||||||
Adobe, Inc. * | 422,484 | 116,267,597 | ||||||
Fortinet, Inc. * | 1,611,506 | 79,173,290 | ||||||
Guidewire Software, Inc. * | 2,271,638 | 139,887,468 | ||||||
Microsoft Corp. | 622,130 | 144,894,077 | ||||||
Salesforce, Inc. * | 1,002,555 | 144,207,511 | ||||||
ServiceNow, Inc. * | 352,299 | 133,031,625 | ||||||
Tyler Technologies, Inc. * | 460,334 | 159,966,065 | ||||||
Western Union Co. | 10,420,037 | 140,670,500 | ||||||
Workday, Inc. * | 1,029,395 | 156,694,507 | ||||||
1,214,792,640 | ||||||||
Total
Common Stocks (Cost: $7,040,903,354) |
5,864,898,492 | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 0.0% | ||||||||
Money
Market Fund: 0.0% (Cost: $1,913,496) |
||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 1,913,496 | 1,913,496 | ||||||
Total
Investments: 100.0% (Cost: $7,042,816,850) |
5,866,811,988 | |||||||
Liabilities in excess of other assets: 0.0% | (1,014,180) | |||||||
NET ASSETS: 100.0% | $ | 5,865,797,808 |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $79,010,449. |
See Notes to Financial Statements
29 |
VANECK MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
(continued)
Summary of Investments by Sector | % of | |||||||
Excluding Collateral for Securities Loaned | Investments | Value | ||||||
Communication Services | 9.2 | % | $ | 542,029,983 | ||||
Consumer Discretionary | 11.1 | 649,171,376 | ||||||
Consumer Staples | 1.4 | 79,148,876 | ||||||
Financials | 11.6 | 683,219,646 | ||||||
Health Care | 13.8 | 811,867,731 | ||||||
Industrials | 18.1 | 1,060,190,936 | ||||||
Information Technology | 31.3 | 1,833,278,402 | ||||||
Materials | 3.5 | 205,991,542 | ||||||
100.0 | % | $ | 5,864,898,492 |
Transactions in securities of affiliates for the period ended September 30, 2022 were as follows:
Value 9/30/2021 |
Purchases | Sales Proceeds |
Realized Gain (Loss) |
Dividend Income |
Net Change in Unrealized Appreciation (Depreciation) |
Value 9/30/2022 |
||||||||||||||||||||||
Compass Minerals International, Inc. | $173,938,089 | $108,714,510 | $(194,189,198) | $(72,522,508) | $1,630,456 | $(15,940,893) | $– |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks * | $ | 5,864,898,492 | $ | — | $ | — | $ | 5,864,898,492 | ||||||||
Money Market Fund | 1,913,496 | — | — | 1,913,496 | ||||||||||||
Total Investments | $ | 5,866,811,988 | $ | — | $ | — | $ | 5,866,811,988 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
30 |
SCHEDULE OF INVESTMENTS
September 30, 2022
Number of Shares |
Value | |||||||
COMMON STOCKS: 99.9% | ||||||||
Automobiles & Components: 10.9% | ||||||||
Ford Motor Co. | 76,279 | $ | 854,325 | |||||
General Motors Co. | 48,597 | 1,559,478 | ||||||
Lucid Group, Inc. * † | 100,204 | 1,399,850 | ||||||
Rivian Automotive, Inc. * † | 20,496 | 674,523 | ||||||
Tesla, Inc. * | 6,773 | 1,796,537 | ||||||
6,284,713 | ||||||||
Banks: 3.0% | ||||||||
Bank of America Corp. | 22,334 | 674,487 | ||||||
Citigroup, Inc. | 10,439 | 434,993 | ||||||
JPMorgan Chase & Co. | 5,312 | 555,104 | ||||||
1,664,584 | ||||||||
Capital Goods: 3.0% | ||||||||
Boeing Co. * | 4,319 | 522,945 | ||||||
General Electric Co. | 4,674 | 289,367 | ||||||
Plug Power, Inc. * † | 44,252 | 929,735 | ||||||
1,742,047 | ||||||||
Consumer Durables & Apparel: 0.6% | ||||||||
Lululemon Athletica, Inc. * | 1,247 | 348,611 | ||||||
Consumer Services: 3.4% | ||||||||
Carnival Corp. * | 90,508 | 636,271 | ||||||
DraftKings, Inc. * | 64,527 | 976,939 | ||||||
Starbucks Corp. | 4,408 | 371,418 | ||||||
1,984,628 | ||||||||
Diversified Financials: 4.2% | ||||||||
Coinbase Global, Inc. * | 16,630 | 1,072,469 | ||||||
Goldman Sachs Group, Inc. | 1,139 | 333,784 | ||||||
Morgan Stanley | 4,626 | 365,500 | ||||||
Robinhood Markets, Inc. * | 62,662 | 632,886 | ||||||
2,404,639 | ||||||||
Energy: 5.3% | ||||||||
Cameco Corp. | 17,003 | 450,750 | ||||||
Devon Energy Corp. | 5,075 | 305,160 | ||||||
Exxon Mobil Corp. | 6,946 | 606,455 | ||||||
Occidental Petroleum Corp. | 27,478 | 1,688,523 | ||||||
3,050,888 | ||||||||
Food & Staples Retailing: 2.8% | ||||||||
Costco Wholesale Corp. | 632 | 298,475 | ||||||
Walmart, Inc. | 10,200 | 1,322,941 | ||||||
1,621,416 | ||||||||
Food, Beverage & Tobacco: 0.5% | ||||||||
The Coca-Cola Co. | 5,123 | 286,990 | ||||||
Health Care Equipment & Services: 0.5% | ||||||||
Abbott Laboratories | 2,836 | 274,411 | ||||||
Materials: 0.5% | ||||||||
Freeport-McMoRan, Inc. | 9,782 | 267,342 | ||||||
Media & Entertainment: 20.5% | ||||||||
Alphabet, Inc. * | 15,858 | 1,516,818 | ||||||
AMC Entertainment Holdings, Inc. * † | 227,796 | 1,587,738 | ||||||
Meta Platforms, Inc. * | 12,094 | 1,640,914 | ||||||
Netflix, Inc. * | 4,432 | 1,043,470 | ||||||
Pinterest, Inc. * | 15,194 | 354,020 | ||||||
Roblox Corp. * | 17,538 | 628,562 | ||||||
Roku, Inc. * | 10,739 | 605,680 | ||||||
Snap, Inc. * | 142,830 | 1,402,591 |
Number of Shares |
Value | |||||||
Media & Entertainment (continued) | ||||||||
Twitter, Inc. * | 46,833 | $ | 2,053,158 | |||||
Walt Disney Co. * | 9,596 | 905,191 | ||||||
11,738,142 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences: 2.0% | ||||||||
Moderna, Inc. * | 3,524 | 416,713 | ||||||
Pfizer, Inc. | 16,683 | 730,048 | ||||||
1,146,761 | ||||||||
Retailing: 9.6% | ||||||||
Amazon.com, Inc. * | 15,095 | 1,705,735 | ||||||
Best Buy Co., Inc. | 4,595 | 291,047 | ||||||
Chewy, Inc. * | 9,154 | 281,211 | ||||||
Dollar General Corp. | 1,376 | 330,047 | ||||||
GameStop Corp. * | 76,199 | 1,914,880 | ||||||
Target Corp. | 3,480 | 516,397 | ||||||
The Home Depot, Inc. | 1,646 | 454,197 | ||||||
5,493,514 | ||||||||
Semiconductors & Semiconductor Equipment: 9.1% | ||||||||
Advanced Micro Devices, Inc. * | 23,677 | 1,500,175 | ||||||
Applied Materials, Inc. | 3,195 | 261,766 | ||||||
Enphase Energy, Inc. * | 1,958 | 543,286 | ||||||
Intel Corp. | 30,796 | 793,613 | ||||||
Micron Technology, Inc. | 8,606 | 431,161 | ||||||
NVIDIA Corp. | 14,066 | 1,707,472 | ||||||
5,237,473 | ||||||||
Software & Services: 16.9% | ||||||||
Affirm Holdings, Inc. * † | 37,689 | 707,046 | ||||||
Block, Inc. * | 8,079 | 444,264 | ||||||
Crowdstrike Holdings, Inc. * | 3,271 | 539,094 | ||||||
Microsoft Corp. | 5,274 | 1,228,315 | ||||||
MongoDB, Inc. * | 1,570 | 311,739 | ||||||
Okta, Inc. * | 9,117 | 518,484 | ||||||
Palantir Technologies, Inc. * | 192,933 | 1,568,545 | ||||||
Palo Alto Networks, Inc. * | 2,093 | 342,812 | ||||||
PayPal Holdings, Inc. * | 5,720 | 492,320 | ||||||
Shopify, Inc. * | 32,258 | 869,031 | ||||||
Snowflake, Inc. * | 5,886 | 1,000,385 | ||||||
Twilio, Inc. * | 5,974 | 413,042 | ||||||
UiPath, Inc. * | 23,850 | 300,749 | ||||||
Visa, Inc. | 2,100 | 373,065 | ||||||
Zoom Video Communications, Inc. * | 10,293 | 757,462 | ||||||
9,866,353 | ||||||||
Technology Hardware & Equipment: 3.7% | ||||||||
Apple, Inc. | 12,690 | 1,753,758 | ||||||
Cisco Systems, Inc. | 10,748 | 429,920 | ||||||
2,183,678 | ||||||||
Telecommunication Services: 2.0% | ||||||||
AT&T, Inc. | 30,524 | 468,238 | ||||||
T-Mobile US, Inc. * | 2,331 | 312,750 | ||||||
Verizon Communications, Inc. | 11,277 | 428,188 | ||||||
1,209,176 | ||||||||
Transportation: 1.4% | ||||||||
American Airlines Group, Inc. * | 32,177 | 387,411 |
See Notes to Financial Statements
31 |
VANECK SOCIAL SENTIMENT ETF
SCHEDULE OF INVESTMENTS
(continued)
Number of Shares |
Value | |||||||
Transportation (continued) | ||||||||
Uber Technologies, Inc. * | 14,973 | $ | 396,785 | |||||
784,196 | ||||||||
Total
Common Stocks (Cost: $70,244,076) |
57,589,562 | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 5.2% | ||||||||
Money
Market Fund: 5.2% (Cost: $2,985,978) |
||||||||
State Street Navigator Securities Lending Government Money Market Portfolio | 2,985,978 | 2,985,978 | ||||||
Total
Investments: 105.1% (Cost: $73,230,054) |
60,575,540 | |||||||
Liabilities in excess of other assets: (5.1)% | (2,938,598) | |||||||
NET ASSETS: 100.0% | $ | 57,636,942 |
Footnotes:
† | Security fully or partially on loan. Total market value of securities on loan is $4,428,767. |
* | Non-income producing |
Summary of Investments by Sector | % of | |||||||
Excluding Collateral for Securities Loaned | Investments | Value | ||||||
Communication Services | 22.5 | % | $ | 12,947,318 | ||||
Consumer Discretionary | 24.4 | 14,111,469 | ||||||
Consumer Staples | 3.3 | 1,908,405 | ||||||
Energy | 5.3 | 3,050,888 | ||||||
Financials | 7.1 | 4,069,223 | ||||||
Health Care | 2.5 | 1,421,172 | ||||||
Industrials | 4.4 | 2,526,242 | ||||||
Information Technology | 30.0 | 17,287,503 | ||||||
Materials | 0.5 | 267,342 | ||||||
100.0 | % | $ | 57,589,562 |
The summary of inputs used to value the Fund’s investments as of September 30, 2022 is as follows:
Level 2 | Level 3 | |||||||||||||||
Level 1 | Significant | Significant | ||||||||||||||
Quoted | Observable | Unobservable | ||||||||||||||
Prices | Inputs | Inputs | Value | |||||||||||||
Common Stocks * | $ | 57,589,562 | $ | — | $ | — | $ | 57,589,562 | ||||||||
Money Market Fund | 2,985,978 | — | — | 2,985,978 | ||||||||||||
Total Investments | $ | 60,575,540 | $ | — | $ | — | $ | 60,575,540 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
32 |
VANECK ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2022
Durable High Dividend ETF |
Inflation Allocation ETF (a) |
Long/Flat Trend ETF |
Morningstar ESG Moat ETF |
||||||||||||||
Assets: | |||||||||||||||||
Investments, at value (1) | |||||||||||||||||
Unaffiliated issuers (2) | $ | 72,325,816 | $ | 100,046,223 | $ | 32,812,015 | $ | 2,490,010 | |||||||||
Affiliated issuers (3) | — | 30,553,713 | — | — | |||||||||||||
Short-term investments held as collateral for securities loaned (4) | — | 17,252,475 | — | — | |||||||||||||
Cash | 18,347 | 542,634 | 829,042 | 48,179 | |||||||||||||
Receivables: | |||||||||||||||||
Investment securities sold | 200,508 | 1,348,058 | — | — | |||||||||||||
Dividends and interest | 248,763 | 13,754 | 374 | 2,388 | |||||||||||||
Prepaid expenses | — | 4,259 | 1,436 | 1,411 | |||||||||||||
Total assets | 72,793,434 | 149,761,116 | 33,642,867 | 2,541,988 | |||||||||||||
Liabilities: | |||||||||||||||||
Payables: | |||||||||||||||||
Shares of beneficial interest redeemed | — | 1,349,862 | — | — | |||||||||||||
Collateral for securities loaned | — | 17,252,475 | — | — | |||||||||||||
Due to Adviser | 18,979 | 32,725 | 17,662 | 7,472 | |||||||||||||
Deferred Trustee fees | 624 | 437 | 1,020 | 1 | |||||||||||||
Accrued expenses | 421 | 58,976 | 49,124 | 43,161 | |||||||||||||
Total liabilities | 20,024 | 18,694,475 | 67,806 | 50,634 | |||||||||||||
NET ASSETS | $ | 72,773,410 | $ | 131,066,641 | $ | 33,575,061 | $ | 2,491,354 | |||||||||
Shares outstanding | 2,625,000 | 5,750,000 | 1,000,000 | 125,000 | |||||||||||||
Net asset value, redemption and offering price per share | $ | 27.72 | $ | 22.79 | $ | 33.58 | $ | 19.93 | |||||||||
Net Assets consist of: | |||||||||||||||||
Aggregate paid in capital | $ | 87,650,138 | $ | 167,663,626 | $ | 41,731,342 | $ | 3,049,307 | |||||||||
Total distributable earnings (loss) | (14,876,728 | ) | (36,596,985 | ) | (8,156,281 | ) | (557,953 | ) | |||||||||
NET ASSETS | $ | 72,773,410 | $ | 131,066,641 | $ | 33,575,061 | $ | 2,491,354 | |||||||||
(1) | Value of securities on loan | $ | — | $ | 25,748,539 | $ | — | $ | — | ||||||||
(2) | Cost of investments - Unaffiliated issuers | $ | 79,313,523 | $ | 115,419,514 | $ | 32,793,750 | $ | 2,911,310 | ||||||||
(3) | Cost of investments - Affiliated issuers | $ | — | $ | 38,666,090 | $ | — | $ | — | ||||||||
(4) | Cost of short-term investments held as collateral for securities loaned | $ | — | $ | 17,252,475 | $ | — | $ | — |
(a) | Consolidated Statement of Assets and Liabilities |
See Notes to Financial Statements
33 |
VANECK ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2022
Morningstar Global Wide Moat ETF |
Morningstar International Moat ETF |
Morningstar Wide Moat ETF |
Social Sentiment ETF |
||||||||||||||
Assets: | |||||||||||||||||
Investments, at value (1) | |||||||||||||||||
Unaffiliated issuers (2) | $ | 17,539,434 | $ | 66,480,577 | $ | 5,864,898,492 | $ | 57,589,562 | |||||||||
Short-term investments held as collateral for securities loaned (3) | 382,291 | 974,695 | 1,913,496 | 2,985,978 | |||||||||||||
Cash | 28,043 | 2 | 2,509 | 62,691 | |||||||||||||
Cash denominated in foreign currency, at value (4) | 4,712 | 268,069 | — | — | |||||||||||||
Receivables: | |||||||||||||||||
Investment securities sold | — | — | 15,198,954 | — | |||||||||||||
Due from Adviser | — | — | — | 96,969 | |||||||||||||
Dividends and interest | 26,827 | 247,754 | 4,869,157 | 24,851 | |||||||||||||
Prepaid expenses | 1,424 | 2,842 | 28,319 | — | |||||||||||||
Total assets | 17,982,731 | 67,973,939 | 5,886,910,927 | 60,760,051 | |||||||||||||
Liabilities: | |||||||||||||||||
Payables: | |||||||||||||||||
Shares of beneficial interest redeemed | — | — | 15,198,245 | — | |||||||||||||
Collateral for securities loaned | 382,291 | 974,695 | 1,913,496 | 2,985,978 | |||||||||||||
Line of credit | — | 371,550 | 1,262,343 | — | |||||||||||||
Due to Adviser | 1,353 | 31,742 | 2,365,128 | — | |||||||||||||
Deferred Trustee fees | 203 | 1,816 | 115,771 | — | |||||||||||||
Accrued expenses | 54,018 | 66,658 | 258,136 | 137,131 | |||||||||||||
Total liabilities | 437,865 | 1,446,461 | 21,113,119 | 3,123,109 | |||||||||||||
NET ASSETS | $ | 17,544,866 | $ | 66,527,478 | $ | 5,865,797,808 | $ | 57,636,942 | |||||||||
Shares outstanding | 600,000 | 2,650,000 | 97,800,000 | 4,525,000 | |||||||||||||
Net asset value, redemption and offering price per share | $ | 29.24 | $ | 25.10 | $ | 59.98 | $ | 12.74 | |||||||||
Net Assets consist of: | |||||||||||||||||
Aggregate paid in capital | $ | 18,546,647 | $ | 94,182,611 | $ | 7,826,043,456 | $ | 165,144,372 | |||||||||
Total distributable earnings (loss) | (1,001,781 | ) | (27,655,133 | ) | (1,960,245,648 | ) | (107,507,430 | ) | |||||||||
NET ASSETS | $ | 17,544,866 | $ | 66,527,478 | $ | 5,865,797,808 | $ | 57,636,942 | |||||||||
(1) | Value of securities on loan | $ | 361,315 | $ | 2,680,566 | $ | 79,010,449 | $ | 4,428,767 | ||||||||
(2) | Cost of investments - Unaffiliated issuers | $ | 18,989,392 | $ | 78,940,450 | $ | 7,040,903,354 | $ | 70,244,076 | ||||||||
(3) | Cost of short-term investments held as collateral for securities loaned | $ | 382,291 | $ | 974,695 | $ | 1,913,496 | $ | 2,985,978 | ||||||||
(4) | Cost of cash denominated in foreign currency | $ | 4,659 | $ | 273,617 | $ | — | $ | — |
See Notes to Financial Statements
34 |
VANECK ETF TRUST
For the Year Ended September 30, 2022
Durable High Dividend ETF |
Inflation Allocation ETF (a) |
Long/Flat Trend ETF |
Morningstar ESG Moat ETF (b) |
|||||||||||||
Income: | ||||||||||||||||
Dividends - unaffiliated issuers | $ | 2,217,101 | $ | 3,150,828 | $ | 309,050 | $ | 31,495 | ||||||||
Dividends - affiliated issuers | — | 249,507 | — | — | ||||||||||||
Interest | — | 2,555 | 208,619 | 55 | ||||||||||||
Securities lending income | 95 | 93,645 | 1,596 | — | ||||||||||||
Total income | 2,217,196 | 3,496,535 | 519,265 | 31,550 | ||||||||||||
Expenses: | ||||||||||||||||
Management fees | 184,775 | 428,583 | 217,594 | 9,178 | ||||||||||||
Professional fees | — | 56,575 | 34,695 | 45,402 | ||||||||||||
Custody and accounting fees | — | 25,384 | 23,011 | 15,373 | ||||||||||||
Reports to shareholders | — | 16,486 | 6,943 | 5,119 | ||||||||||||
Trustees’ fees and expenses | — | 3,940 | 1,370 | 1,335 | ||||||||||||
Registration fees | — | 3,036 | 5,786 | 5,978 | ||||||||||||
Insurance | — | 1,723 | 1,442 | 202 | ||||||||||||
Interest and taxes | 2,587 | 1,818 | 18,145 | 2 | ||||||||||||
Other | — | 2,985 | 4,153 | 3,592 | ||||||||||||
Total expenses | 187,362 | 540,530 | 313,139 | 86,181 | ||||||||||||
Waiver of management fees | — | (98,801 | ) | (55,641 | ) | (9,178 | ) | |||||||||
Expenses assumed by the Adviser | — | — | — | (67,007 | ) | |||||||||||
Net expenses | 187,362 | 441,729 | 257,498 | 9,996 | ||||||||||||
Net investment income | 2,029,834 | 3,054,806 | 261,767 | 21,554 | ||||||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments - unaffiliated issuers | (4,103,553 | ) | (3,330,543 | ) | (5,469,535 | ) | (154,404 | ) | ||||||||
Investments - affiliated issuers | — | (597,633 | ) | — | — | |||||||||||
In-kind redemptions - unaffiliated issuers | 4,468,894 | 1,807,046 | 6,443,995 | 97,807 | ||||||||||||
In-kind redemptions - affiliated issuers | — | 421,585 | — | — | ||||||||||||
Net realized gain (loss) | 365,341 | (1,699,545 | ) | 974,460 | (56,597 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments - unaffiliated issuers | (8,605,947 | ) | (16,251,891 | ) | (8,534,839 | ) | (421,300 | ) | ||||||||
Investments - affiliated issuers | — | (8,296,332 | ) | — | — | |||||||||||
Net change in unrealized appreciation (depreciation) | (8,605,947 | ) | (24,548,223 | ) | (8,534,839 | ) | (421,300 | ) | ||||||||
Net Decrease in Net Assets Resulting from Operations | $ | (6,210,772 | ) | $ | (23,192,962 | ) | $ | (7,298,612 | ) | $ | (456,343 | ) |
(a) | Consolidated Statement of Operations |
(b) | For the period October 6, 2021 (commencement of operations) through September 30, 2022. |
See Notes to Financial Statements
35 |
VANECK ETF TRUST
STATEMENTS OF OPERATIONS
For the Year Ended September 30, 2022
Morningstar Global Wide Moat ETF |
Morningstar International Moat ETF |
Morningstar Wide Moat ETF |
Social Sentiment ETF |
|||||||||||||
Income: | ||||||||||||||||
Dividends - unaffiliated issuers | $ | 448,015 | $ | 3,695,327 | $ | 111,954,173 | $ | 720,988 | ||||||||
Dividends - affiliated issuers | — | — | 1,630,456 | — | ||||||||||||
Interest | 146 | — | 23,388 | 63 | ||||||||||||
Securities lending income | 927 | 18,117 | 71,941 | 236,027 | ||||||||||||
Foreign taxes withheld | (23,610 | ) | (255,517 | ) | — | (3,582 | ) | |||||||||
Total income | 425,478 | 3,457,927 | 113,679,958 | 953,496 | ||||||||||||
Expenses: | ||||||||||||||||
Management fees | 83,985 | 353,033 | 30,836,907 | 828,108 | ||||||||||||
Professional fees | 52,139 | 48,502 | 22,701 | 452,219 | ||||||||||||
Custody and accounting fees | 26,347 | 32,929 | 58,594 | — | ||||||||||||
Reports to shareholders | 7,480 | 9,476 | 321,916 | — | ||||||||||||
Trustees’ fees and expenses | 804 | 1,478 | 172,172 | — | ||||||||||||
Registration fees | 2,503 | 1,817 | 179,838 | — | ||||||||||||
Insurance | 1,336 | 2,866 | 51,896 | — | ||||||||||||
Interest and taxes | 92 | 11,126 | 57,428 | 2,471 | ||||||||||||
Other | 5,299 | 10,718 | 35,350 | — | ||||||||||||
Total expenses | 179,985 | 471,945 | 31,736,802 | 1,282,798 | ||||||||||||
Waiver of management fees | (82,836 | ) | (65,416 | ) | — | — | ||||||||||
Reimbursement from the Adviser | — | — | — | (452,219 | ) | |||||||||||
Net expenses | 97,149 | 406,529 | 31,736,802 | 830,579 | ||||||||||||
Net investment income | 328,329 | 3,051,398 | 81,943,156 | 122,917 | ||||||||||||
Net realized gain (loss) on: | ||||||||||||||||
Investments - unaffiliated issuers | 234,265 | (9,293,337 | ) | (407,110,821 | ) | (79,022,486 | ) | |||||||||
Investments - affiliated issuers | — | — | (74,132,582 | ) | — | |||||||||||
In-kind redemptions - unaffiliated issuers | — | 811,640 | 781,296,081 | 24,153,447 | ||||||||||||
In-kind redemptions - affiliated issuers | — | — | 1,610,074 | — | ||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | (4,479 | ) | (76,768 | ) | — | — | ||||||||||
Net realized gain (loss) | 229,786 | (8,558,465 | ) | 301,662,752 | (54,869,039 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments - unaffiliated issuers | (4,369,990 | ) | (12,820,060 | ) | (1,672,209,474 | ) | (13,810,175 | ) | ||||||||
Investments - affiliated issuers | — | — | (15,940,893 | ) | — | |||||||||||
Foreign currency translations and foreign denominated assets and liabilities | (515 | ) | (11,393 | ) | — | — | ||||||||||
Net change in unrealized appreciation (depreciation) | (4,370,505 | ) | (12,831,453 | ) | (1,688,150,367 | ) | (13,810,175 | ) | ||||||||
Net Decrease in Net Assets Resulting from Operations | $ | (3,812,390 | ) | $ | (18,338,520 | ) | $ | (1,304,544,459 | ) | $ | (68,556,297 | ) |
See Notes to Financial Statements
36 |
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Durable High Dividend ETF | Inflation Allocation ETF (a) | |||||||||||||||
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 2,029,834 | $ | 1,505,290 | $ | 3,054,806 | $ | 63,810 | ||||||||
Net realized gain (loss) | 365,341 | 3,695,180 | (1,699,545 | ) | 2,155,802 | |||||||||||
Net change in unrealized appreciation (depreciation) | (8,605,947 | ) | 1,294,475 | (24,548,223 | ) | 298,367 | ||||||||||
Net increase (decrease) in net assets resulting from operations | (6,210,772 | ) | 6,494,945 | (23,192,962 | ) | 2,517,979 | ||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (1,834,915 | ) | (1,311,545 | ) | (2,650,043 | ) | (870,000 | ) | ||||||||
Share transactions*: | ||||||||||||||||
Proceeds from sale of shares | 66,874,815 | 38,886,433 | 167,278,949 | 22,438,966 | ||||||||||||
Cost of shares redeemed | (37,292,890 | ) | (25,634,055 | ) | (26,924,747 | ) | (16,597,432 | ) | ||||||||
Increase in net assets resulting from share transactions | 29,581,925 | 13,252,378 | 140,354,202 | 5,841,534 | ||||||||||||
Total increase in net assets | 21,536,238 | 18,435,778 | 114,511,197 | 7,489,513 | ||||||||||||
Net Assets, beginning of year | 51,237,172 | 32,801,394 | 16,555,444 | 9,065,931 | ||||||||||||
Net Assets, end of year | $ | 72,773,410 | $ | 51,237,172 | $ | 131,066,641 | $ | 16,555,444 | ||||||||
*Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 2,175,000 | 1,300,000 | 6,200,000 | 925,000 | ||||||||||||
Shares redeemed | (1,225,000 | ) | (850,000 | ) | (1,100,000 | ) | (725,000 | ) | ||||||||
Net increase | 950,000 | 450,000 | 5,100,000 | 200,000 |
(a) | Consolidated Statement of Changes in Net Assets |
See Notes to Financial Statements
37 |
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Long/Flat Trend ETF | Morningstar ESG Moat ETF |
|||||||||||
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
Period Ended September 30, 2022 (a) |
||||||||||
Operations: | ||||||||||||
Net investment income | $ | 261,767 | $ | 296,261 | $ | 21,554 | ||||||
Net realized gain (loss) | 974,460 | 1,967,724 | (56,597 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (8,534,839 | ) | 5,441,917 | (421,300 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | (7,298,612 | ) | 7,705,902 | (456,343 | ) | |||||||
Distributions to shareholders from: | ||||||||||||
Distributable earnings | (175,010 | ) | (625,013 | ) | (3,803 | ) | ||||||
Share transactions*: | ||||||||||||
Proceeds from sale of shares | 86,232,358 | 10,130,756 | 4,181,504 | |||||||||
Cost of shares redeemed | (86,143,141 | ) | (7,800,977 | ) | (1,230,004 | ) | ||||||
Increase in net assets resulting from share transactions | 89,217 | 2,329,779 | 2,951,500 | |||||||||
Total increase (decrease) in net assets | (7,384,405 | ) | 9,410,668 | 2,491,354 | ||||||||
Net Assets, beginning of period | 40,959,466 | 31,548,798 | — | |||||||||
Net Assets, end of period | $ | 33,575,061 | $ | 40,959,466 | $ | 2,491,354 | ||||||
*Shares of Common Stock Issued (no par value) | ||||||||||||
Shares sold | 2,350,000 | 250,000 | 175,000 | |||||||||
Shares redeemed | (2,375,000 | ) | (225,000 | ) | (50,000 | ) | ||||||
Net increase (decrease) | (25,000 | ) | 25,000 | 125,000 |
(a) | For the period October 6, 2021 (commencement of operations) through September 30, 2022. |
See Notes to Financial Statements
38 |
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Morningstar Global Wide Moat ETF | Morningstar International Moat ETF | |||||||||||||||
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 328,329 | $ | 226,976 | $ | 3,051,398 | $ | 2,011,501 | ||||||||
Net realized gain (loss) | 229,786 | 832,215 | (8,558,465 | ) | 3,567,957 | |||||||||||
Net change in unrealized appreciation (depreciation) | (4,370,505 | ) | 1,569,691 | (12,831,453 | ) | 2,278,041 | ||||||||||
Net increase (decrease) in net assets resulting from operations | (3,812,390 | ) | 2,628,882 | (18,338,520 | ) | 7,857,499 | ||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (1,104,550 | ) | (360,080 | ) | (3,150,000 | ) | (1,260,000 | ) | ||||||||
Share transactions*: | ||||||||||||||||
Proceeds from sale of shares | 3,251,806 | 7,288,863 | 36,287,916 | 12,422,953 | ||||||||||||
Cost of shares redeemed | — | — | (18,708,747 | ) | — | |||||||||||
Increase in net assets resulting from share transactions | 3,251,806 | 7,288,863 | 17,579,169 | 12,422,953 | ||||||||||||
Total increase (decrease) in net assets | (1,665,134 | ) | 9,557,665 | (3,909,351 | ) | 19,020,452 | ||||||||||
Net Assets, beginning of year | 19,210,000 | 9,652,335 | 70,436,829 | 51,416,377 | ||||||||||||
Net Assets, end of year | $ | 17,544,866 | $ | 19,210,000 | $ | 66,527,478 | $ | 70,436,829 | ||||||||
*Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 100,000 | 200,000 | 1,150,000 | 350,000 | ||||||||||||
Shares redeemed | — | — | (600,000 | ) | — | |||||||||||
Net increase | 100,000 | 200,000 | 550,000 | 350,000 |
See Notes to Financial Statements
39 |
VANECK ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Morningstar Wide Moat ETF | Social Sentiment ETF | |||||||||||||||
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
Year Ended September 30, 2022 |
Period Ended September 30, 2021 (a) |
|||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 81,943,156 | $ | 72,415,469 | $ | 122,917 | $ | (314,808 | ) | |||||||
Net realized gain (loss) | 301,662,752 | 787,975,019 | (54,869,039 | ) | 6,566,363 | |||||||||||
Net change in unrealized appreciation (depreciation) | (1,688,150,367 | ) | 424,479,685 | (13,810,175 | ) | 1,155,660 | ||||||||||
Net increase (decrease) in net assets resulting from operations | (1,304,544,459 | ) | 1,284,870,173 | (68,556,297 | ) | 7,407,215 | ||||||||||
Distributions to shareholders from: | ||||||||||||||||
Distributable earnings | (77,004,720 | ) | (58,997,340 | ) | — | — | ||||||||||
Share transactions*: | ||||||||||||||||
Proceeds from sale of shares | 5,173,745,502 | 4,832,747,019 | 101,939,141 | 670,932,819 | ||||||||||||
Cost of shares redeemed | (4,525,615,899 | ) | (2,857,369,614 | ) | (168,680,113 | ) | (485,405,823 | ) | ||||||||
Increase (decrease) in net assets resulting from share transactions | 648,129,603 | 1,975,377,405 | (66,740,972 | ) | 185,526,996 | |||||||||||
Total increase (decrease) in net assets | (733,419,576 | ) | 3,201,250,238 | (135,297,269 | ) | 192,934,211 | ||||||||||
Net Assets, beginning of period | 6,599,217,384 | 3,397,967,146 | 192,934,211 | — | ||||||||||||
Net Assets, end of period | $ | 5,865,797,808 | $ | 6,599,217,384 | $ | 57,636,942 | $ | 192,934,211 | ||||||||
*Shares of Common Stock Issued (no par value) | ||||||||||||||||
Shares sold | 74,050,000 | 68,550,000 | 4,975,000 | 27,525,000 | ||||||||||||
Shares redeemed | (66,300,000 | ) | (40,700,000 | ) | (8,275,000 | ) | (19,700,000 | ) | ||||||||
Net increase (decrease) | 7,750,000 | 27,850,000 | (3,300,000 | ) | 7,825,000 |
(a) | For the period March 3, 2021 (commencement of operations) through September 30, 2021. |
See Notes to Financial Statements
40 |
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 30, 2018 (commencement of operations) through September 30, 2019. |
(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) | Periods after September 30, 2021 reflect a unitary management fee structure. |
(f) | Annualized |
(g) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
41 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | Consolidated Financial Highlights |
(b) | For the period April 9, 2018 (commencement of operations) through September 30, 2018. |
(c) | Calculated based upon average shares outstanding |
(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) | Not Annualized |
(f) | The ratios presented do not reflect the Fund’s proportionate share of income and expenses from the Fund’s investment in underlying funds. |
(g) | Annualized |
(h) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
42 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 4, 2017 (commencement of operations) through September 30, 2018. |
(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) | Not Annualized |
(f) | The ratios presented do not reflect the Fund’s proportionate share of income and expenses from the Fund’s investment in underlying funds. |
(g) | Annualized |
(h) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
43 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 6, 2021 (commencement of operations) through September 30, 2022. |
(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. |
See Notes to Financial Statements
44 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period October 30, 2018 (commencement of operations) through September 30, 2019. |
(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. |
See Notes to Financial Statements
45 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(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. |
See Notes to Financial Statements
46 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(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. |
See Notes to Financial Statements
47 |
VANECK ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | For the period March 3, 2021 (commencement of operations) through September 30, 2021. |
(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) | Not Annualized |
(f) | Annualized |
(g) | Portfolio turnover rate excludes in-kind transactions. |
See Notes to Financial Statements
48 |
VANECK ETF TRUST
September 30, 2022
Note 1—Fund Organization—VanEck ETF Trust (the “Trust”), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and offers multiple investment portfolios, each of which represents a separate series of the Trust. These financial statements relate only to the investment portfolios listed in the diversification table below (each a “Fund” and, collectively, the “Funds”).
Fund | Diversification Classification |
Durable High Dividend ETF* | Diversified |
Inflation Allocation ETF | Non-Diversified |
Long/Flat Trend ETF | Diversified |
Morningstar ESG Moat ETF | Non-Diversified |
Morningstar Global Wide Moat ETF | Diversified |
Morningstar International Moat ETF | Diversified |
Morningstar Wide Moat ETF | Diversified |
Social Sentiment ETF | Non-Diversified |
* | Formerly Morningstar Durable Dividend ETF |
Each Fund, except for Inflation Allocation ETF, was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in approximately the same weighting as their index.
Using a proprietary, rules-based real asset allocation model, the Inflation Allocation ETF seeks to achieve its investment objective by investing primarily in exchange traded products (“ETPs”) that provide exposure to real assets, which include commodities, real estate, natural resources and infrastructure, as well as companies that own, operate, or derive a significant portion of their value from real assets or the production thereof.
Van Eck Associates Corp. (“VEAC”) serves as the investment adviser for the Funds, except for Inflation Allocation ETF. Van Eck Absolute Return Advisers Corp. (“VEARA”) serves as the investment adviser to Inflation Allocation ETF and its Subsidiary. VEAC and VEARA are collectively referred to as the “Adviser”.
Note 2—Significant Accounting Policies—The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The Funds are investment companies and follow accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services—Investment Companies.
The following summarizes the Funds’ significant accounting policies.
A. | Security Valuation—The Funds value their investments in securities and other assets and liabilities at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. Securities traded on the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Over-the-counter securities not included on NASDAQ and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Certain foreign securities, whose values may be affected by market direction or events occurring before the Funds’ pricing time (4:00 p.m. Eastern Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair |
49 |
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
value securities in other situations, such as when a particular foreign market is closed but the Fund is open. Short-term debt securities with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered as Level 1 in the fair value hierarchy. The Board has designated the Adviser as valuation designee under Rule 2a-5 to perform the Funds’ fair value determinations, subject to board oversight and certain reporting and other requirements. The Adviser has adopted policies and procedures reasonably designed to comply with the requirements of Rule 2a-5. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes they do not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation policies and procedures. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, including a regular review of key inputs and assumptions, periodic comparisons to valuations provided by other independent pricing services, transactional back-testing and disposition analysis. | |
Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be classified either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments. | |
The Funds utilize various methods to measure the fair value of their investments on a recurring basis, which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three levels of the fair value hierarchy are described below: | |
Level 1 — Quoted prices in active markets for identical securities. | |
Level 2 — Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
Level 3 — Significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments). | |
A summary of the inputs and the levels used to value the Funds’ investments are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments. | |
B. | Basis for Consolidation—The Inflation Allocation ETF invests in certain ETPs through the Real Asset Allocation Subsidiary (the “Subsidiary”), a wholly-owned subsidiary organized under the laws of the Cayman Islands. The Fund’s investment in the Subsidiary may not exceed 25% of the value of the Fund’s total assets at each quarter-end of the Fund’s fiscal year. Consolidated financial statements of the Fund present the financial position and results of operations for the Fund and its wholly-owned Subsidiary. All interfund account balances and transactions between the Fund and Subsidiary have been eliminated in consolidation. |
C. | Federal Income Taxes—It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net investment income |
50 |
and net realized capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. | |
D. | Dividends and Distributions to Shareholders—Dividends to shareholders from net investment income and distributions from net realized capital gains, if any, are declared and paid annually by each Fund (except for dividends from net investment income from Durable High Dividend ETF, which are declared and paid quarterly). Income dividends and capital gain distributions are determined in accordance with U.S. income tax regulations, which may differ from such amounts determined in accordance with GAAP. |
E. | Currency Translation—Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day as quoted by one or more sources. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates are not separately disclosed in the financial statements. Such amounts are included with the net realized and unrealized gains and losses on investment securities in the Statements of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) and net change in unrealized appreciation (depreciation) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations. |
F. | Restricted Securities—The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments. |
G. | Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of offset in those agreements allows the Funds to offset any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may receive cash and or securities as collateral for securities lending. For financial reporting purposes, the Funds present securities lending assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Cash collateral received for securities lending in the form of money market fund investments, if any, at September 30, 2022, is presented in the Schedules of Investments and in the Statements of Assets and Liabilities. Non-cash collateral is disclosed in Note 9 (Securities Lending). |
H. | Other—Security transactions are accounted for on trade date. Realized gains and losses are determined based on the specific identification method. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized upon notification of the ex-dividend date. Interest income, including amortization of premiums and discounts, is accrued as earned. |
The Funds earn interest income on uninvested cash balances held at the custodian bank. Such amounts, if any, are presented as interest income in the Statements of Operations. | |
The character of distributions received from certain investments may be comprised of income, capital gains, and return of capital. It is the Funds’ policy to estimate the character of distributions received from these investments based on historical data if actual amounts are not available. Such amounts are based on historical information available to the Funds and other industry sources. After each calendar year end, these investments report the actual tax character of these distributions. Differences between the estimated and actual amounts are reflected in the Funds’ records in the year in which they are reported by adjusting the related cost basis of investments, capital gains and income, as necessary. | |
In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would |
51 |
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote. |
Note 3—Investment Management and Other Agreements—The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The Adviser has agreed, until at least February 1, 2023, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding expense limitations listed in the following table.
The management fee rate and expense limitations for the year ended September 30, 2022, are as follows:
Fund | Management Fees |
Expense Limitations | ||||||
Inflation Allocation ETF | 0.50 | % | 0.55 | % | ||||
Long/Flat Trend ETF | 0.50 | 0.55 | ||||||
Morningstar ESG Moat ETF | 0.45 | 0.49 | ||||||
Morningstar Global Wide Moat ETF | 0.45 | 0.52 | ||||||
Morningstar International Moat ETF | 0.50 | 0.56 | ||||||
Morningstar Wide Moat ETF | 0.45 | 0.49 |
Refer to the Statements of Operations for amounts waived/assumed by the Adviser.
The Adviser waives the management fees it charges the Funds by the amount it collects as a management fee from underlying funds managed by the Adviser. For the year ended September 30, 2022, the Adviser waived management fees of $98,801 due to such investments held in the Inflation Allocation ETF.
The Funds listed below utilize a unitary management fee structure where 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, trading expenses, taxes and extraordinary expenses. In addition, for Social Sentiment ETF, the Adviser has (i) agreed to pay the offering costs until at least February 1, 2024 and (ii) contractually agreed to waive or reduce its management fees and/or pay Fund expenses in an amount equal to the Fund’s extraordinary legal expenses up to $500,000 until at least February 1, 2024 , and prior to such date the Adviser may not terminate this arrangement without the approval of the Fund’s Board of Trustees.
Fund | Unitary Management Fee Rate | |||
Durable High Dividend ETF | 0.29 | % | ||
Social Sentiment ETF | 0.75 |
In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ distributor (“the Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.
At September 30, 2022, the Adviser owned approximately 40% of Morningstar ESG Moat ETF and 6% of Durable High Dividend ETF.
Note 4—Capital Share Transactions—As of September 30, 2022, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”).
The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on
52 |
the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of market circumstances, or when the securities are not available in sufficient quantity for delivery, or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including, for the benefit of the Funds, a requirement to maintain cash collateral on deposit at the custodian equal to at least 115% of the daily marked to market value of the missing Deposit Securities.
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to the transfer agent. In addition, the Funds may impose certain variable fees on the purchase or redemption of Creation Units for cash, or on transactions effected outside the clearing process, to defray certain transaction costs. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.
Note 5—Investments—For the year ended September 30, 2022, purchases and sales of investments (excluding short-term investments and in-kind capital share transactions) and purchases and sales of investments resulting from in-kind capital share transactions (excluding short-term investments) were as follows:
In-Kind Capital Share Transactions | ||||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
Durable High Dividend ETF | $ | 31,817,714 | $ | 31,733,820 | $ | 66,811,555 | $ | 37,219,935 | ||||||||
Inflation Allocation ETF* | 46,239,358 | 26,600,342 | 146,589,561 | 24,837,146 | ||||||||||||
Long/Flat Trend ETF | 91,038,343 | 71,454,713 | 65,748,536 | 118,651,850 | ||||||||||||
Morningstar ESG Moat ETF | 945,212 | 928,631 | 4,173,409 | 1,172,098 | ||||||||||||
Morningstar Global Wide Moat ETF | 12,521,631 | 12,980,192 | 3,058,861 | — | ||||||||||||
Morningstar International Moat ETF | 79,893,713 | 74,473,848 | 28,961,841 | 17,127,304 | ||||||||||||
Morningstar Wide Moat ETF | 3,471,412,127 | 3,417,005,932 | 5,173,930,661 | 4,513,677,404 | ||||||||||||
Social Sentiment ETF | 293,605,121 | 293,141,093 | 101,983,741 | 169,185,703 |
* | Represents consolidated cost of investments purchased and proceeds from investments sold. |
Note 6—Income Taxes—As of September 30, 2022, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) of investments owned were as follows:
Fund | Tax
Cost of Investments |
Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net
Unrealized Appreciation (Depreciation) | ||||
Durable High Dividend ETF | $79,325,368 | $1,215,872 | $(8,215,424) | $(6,999,552) | ||||
Inflation Allocation ETF | 173,081,034 | 546,981 | (25,745,324) | (25,198,343) | ||||
Long/Flat Trend ETF | 33,990,846 | 18,265 | (1,197,096) | (1,178,831) | ||||
Morningstar ESG Moat ETF | 2,924,928 | 51,853 | (486,771) | (434,918) | ||||
Morningstar Global Wide Moat ETF | 19,374,251 | 915,557 | (2,368,083) | (1,452,526) | ||||
Morningstar International Moat ETF | 79,982,207 | 604,207 | (13,131,142) | (12,526,935) | ||||
Morningstar Wide Moat ETF | 7,046,133,667 | 109,724,887 | (1,289,046,566) | (1,179,321,679) | ||||
Social Sentiment ETF | 81,091,733 | 660,683 | (21,176,876) | (20,516,193) |
At September 30, 2022, the components of distributable earnings (loss) on a tax basis, for each Fund, were as follows:
Fund | Undistributed Ordinary Income |
Accumulated Capital Losses/ Undistributed Capital Gains |
Other Temporary Differences |
Unrealized Appreciation (Depreciation) |
Total Distributable Earnings (Loss) | |||||||||||||||
Durable High Dividend ETF | $610,403 | $(8,486,955 | ) | $(624 | ) | $(6,999,552 | ) | $(14,876,728 | ) | |||||||||||
Inflation Allocation ETF | 803,776 | (12,135,308 | ) | (436 | ) | (25,265,019 | ) | (36,596,987 | ) | |||||||||||
Long/Flat Trend ETF | 147,593 | (7,124,021 | ) | (1,020 | ) | (1,178,832 | ) | (8,156,280 | ) | |||||||||||
Morningstar ESG Moat ETF | 17,752 | (140,786 | ) | (1 | ) | (434,918 | ) | (557,953 | ) |
53 |
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
Fund | Undistributed Ordinary Income |
Accumulated Capital Losses/ Undistributed Capital Gains |
Other Temporary Differences |
Unrealized Appreciation (Depreciation) |
Total Distributable Earnings (Loss) | |||||||||||||||
Morningstar Global Wide Moat ETF | 216,385 | 235,116 | (205 | ) | (1,453,079 | ) | (1,001,783 | ) | ||||||||||||
Morningstar International Moat ETF | 1,649,966 | (16,759,546 | ) | (1,816 | ) | (12,543,737 | ) | (27,655,133 | ) | |||||||||||
Morningstar Wide Moat ETF | 60,264,203 | (841,072,401 | ) | (115,771 | ) | (1,179,321,680 | ) | (1,960,245,649 | ) | |||||||||||
Social Sentiment ETF | 122,917 | (87,114,154 | ) | – | (20,516,193 | ) | (107,507,430 | ) |
The tax character of dividends paid to shareholders during the years ended September 30, 2022 and September 30, 2021 were as follows:
September 30, 2022 | September 30, 2021 | |||||||
Fund | Ordinary Income* |
Long-Term Capital Gains |
Ordinary Income* |
Long-Term Capital Gains | ||||
Durable High Dividend ETF | $1,834,915 | $– | $1,311,545 | $– | ||||
Inflation Allocation ETF | 2,650,043 | – | 870,000 | – | ||||
Long/Flat Trend ETF | 175,010 | – | 625,013 | – | ||||
Morningstar ESG Moat ETF | 3,803 | – | – | – | ||||
Morningstar Global Wide Moat ETF | 871,150 | 233,400 | 247,940 | 112,140 | ||||
Morningstar International Moat ETF | 3,150,000 | – | 1,260,000 | – | ||||
Morningstar Wide Moat ETF | 77,004,720 | – | 58,997,340 | – |
* | Includes short-term capital gains (if any). |
At September 30, 2022, the Funds had capital loss carryforwards available to offset future capital gains, as follows:
Fund | Short-Term Capital Losses with No Expiration |
Long-Term Capital Losses with No Expiration |
Total | |||||||||
Durable High Dividend ETF | $ | (5,236,742 | ) | $ | (3,250,213 | ) | $ | (8,486,955 | ) | |||
Inflation Allocation ETF | (12,017,104 | ) | (118,204 | ) | (12,135,308 | ) | ||||||
Long/Flat Trend ETF | (7,039,578 | ) | (84,443 | ) | (7,124,021 | ) | ||||||
Morningstar ESG Moat ETF | (140,786 | ) | – | (140,786 | ) | |||||||
Morningstar International Moat ETF | (9,629,142 | ) | (7,130,404 | ) | (16,759,546 | ) | ||||||
Morningstar Wide Moat ETF | (515,103,282 | ) | (325,969,119 | ) | (841,072,401 | ) | ||||||
Social Sentiment ETF | (80,568,051 | ) | (6,546,103 | ) | (87,114,154 | ) |
During the year ended September 30, 2022, as a result of permanent book to tax differences primarily due to the tax treatment of in-kind redemptions and differences in the treatment of income and realized gains from the Inflation Allocation ETF’s controlled foreign corporation subsidiary, the Funds incurred differences that affected distributable earnings / (loss) and aggregate paid in capital by the amounts in the table below. Net assets were not affected by these reclassifications.
Fund | Increase (Decrease) in Total Distributable Earnings (Loss) |
Increase (Decrease) in Aggregate Paid in Capital | ||||||
Durable High Dividend ETF | $ | (4,466,404 | ) | $ | 4,466,404 | |||
Inflation Allocation ETF | (1,486,533 | ) | 1,486,533 | |||||
Long/Flat Trend ETF | (6,443,996 | ) | 6,443,996 | |||||
Morningstar ESG Moat ETF | (97,807 | ) | 97,807 | |||||
Morningstar International Moat ETF | (811,588 | ) | 811,588 | |||||
Morningstar Wide Moat ETF | (781,478,723 | ) | 781,478,723 | |||||
Social Sentiment ETF | (10,092,169 | ) | 10,092,169 |
54 |
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended September 30, 2022, the Funds did not incur any interest or penalties.
Note 7—Principal Risks—Non-diversified funds generally hold securities of fewer issuers than diversified funds (See Note 1) and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse economic developments and political conflicts, or natural or other disasters, such as the recent coronavirus outbreak. Additionally, certain Funds may invest in securities of emerging market issuers, which are exposed to a number of risks that may make these investments volatile in price or difficult to trade. Political risks may include unstable governments, nationalization, restrictions on foreign ownership, laws that prevent investors from getting their money out of a country, sanctions and investment restrictions and legal systems that do not protect property risks as well as the laws of the United States. These and other factors can make emerging market securities more volatile and potentially less liquid than securities issued in more developed markets. Certain securities of Chinese issuers are, or may in the future become restricted, and the Funds may be forced to sell such restricted securities and incur a loss as a result.
Long/Flat Trend ETF may invest in shares of other funds, including ETFs that track the S&P 500 Index. As a result, the Fund will indirectly be exposed to the risks of an investment in the underlying funds. Shares of other funds have many of the same risks as direct investments in common stocks or bonds. In addition, the market value of the Fund’s shares is expected to rise and fall as the value of the underlying index or bond rises and falls. The market value of such funds’ shares may differ from the net asset value of the particular fund.
Inflation Allocation ETF may concentrate its investments in ETPs that invest directly in, or have exposure to, equity and debt securities, as well as real asset categories such as commodities, real estate, natural resources and infrastructure. Such investments may subject the ETPs to greater volatility than investments in traditional securities. The Fund is dependent on the performance of underlying funds and is subject to the risks of those funds. Changes in laws or government regulations by the United States and/or the Cayman Islands could adversely affect the operations of the Fund. In addition, the Fund may gain exposure to the cryptocurrency Bitcoin by investing in pooled investment vehicles that invest in Bitcoin, which generally operates without central authority (such as a bank) and is not backed by any government; nor is it legal tender. Federal, state and/or foreign governments may restrict the use and exchange of cryptocurrencies, and regulation in the United States is still developing. Cryptocurrencies are susceptible to theft, loss and destruction. Cryptocurrency exchanges have in the past, and may in the future, stop operating or permanently shut down due to fraud, cybersecurity issues, manipulation, technical glitches, hackers or malware, which may also affect the price of Bitcoin.
Social Sentiment ETF may concentrate its investment in the information technology and communication services sectors. The Fund will be sensitive to, and its performance may depend to a greater extent on, the overall condition of these sectors. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. The products of information technology companies may face product obsolescence due to rapid technological developments
55 |
VANECK ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
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. Companies in the communication services sector may be affected by industry competition, substantial capital requirements, government regulations and obsolescence of communications products and services due to technological advancement. The index provider relies on social media analytics, which are relatively new and untested. Investing in companies based on social media analytics involves the potential risk of market manipulation because social media posts may be made with an intent to inflate, or otherwise manipulate, the public perception of a company stock or other investment. Furthermore, text and sentiment analysis of social media postings may prove inaccurate in predicting a company’s stock performance.
Economies and financial markets throughout the world have experienced periods of increased volatility, uncertainty and distress as a result of conditions associated with the COVID-19 pandemic. To the extent these conditions continue, the risks associated with an investment in a Fund could be heightened and the Fund’s investments (and thus a shareholder’s investment in a Fund) may be particularly susceptible to sudden and substantial losses, reduced yield or income or other adverse developments.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
Note 8—Trustee Deferred Compensation Plan—The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.
A unitary management fee was adopted on October 1, 2021, for Durable High Dividend ETF. For this Fund, the liability of the Plan shown as “Deferred Trustee fees” in the Statements of Asset and Liabilities represents amounts accrued through September 30, 2021. Social Sentiment ETF commenced operations with a unitary management fee and therefore bears no costs or liabilities relative to the Plan.
For Inflation Allocation ETF, Long/Flat Trend ETF, Morningstar ESG Moat ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, and Morningstar Wide Moat ETF, the expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations, and the liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.
Note 9—Securities Lending—To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with the securities lending agent. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, cash equivalents, U.S. government securities, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower and or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. Securities lending income is disclosed as such in the Statements of Operations. Cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in the State Street Navigator Securities Lending Government Money Market Portfolio. Non-cash collateral consists of U.S. Treasuries and U.S. Government Agency securities, and is not disclosed in the Funds’ Schedules of Investments or Statements of Assets and Liabilities as it is held by the agent on behalf of the Funds. The Funds do not have the ability to re-hypothecate those securities. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the Fund securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related cash collateral, if any, at September 30, 2022, is presented on a gross basis in the Schedules of Investments and Statements of
56 |
Assets and Liabilities. The following is a summary of the Funds’ securities on loan and related collateral as of September 30, 2022:
Fund | Market Value of Securities on Loan |
Cash Collateral |
Non-Cash Collateral |
Total Collateral | ||||||||||||
Inflation Allocation ETF | $ | 25,748,539 | $ | 17,252,475 | $ | 9,083,892 | $ | 26,336,367 | ||||||||
Morningstar Global Wide Moat ETF | 361,315 | 382,291 | – | 382,291 | ||||||||||||
Morningstar International Moat ETF | 2,680,566 | 974,695 | 1,946,961 | 2,921,656 | ||||||||||||
Morningstar Wide Moat ETF | 79,010,449 | 1,913,496 | 80,555,570 | 82,469,066 | ||||||||||||
Social Sentiment ETF | 4,428,767 | 2,985,978 | 1,606,822 | 4,592,800 |
The following table presents money market fund investments held as collateral by type of security on loan as of September 30, 2022:
Gross Amount of Recognized Liabilities for Securities Lending Transactions* in the Statements of Assets and Liabilities | ||||
Fund | Equity Securities | |||
Inflation Allocation ETF | $17,252,475 | |||
Morningstar Global Wide Moat ETF | 382,291 | |||
Morningstar International Moat ETF | 974,695 | |||
Morningstar Wide Moat ETF | 1,913,496 | |||
Social Sentiment ETF | 2,985,978 |
* | Remaining contractual maturity: overnight and continuous |
Note 10—Bank Line of Credit—The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds based on prevailing market rates in effect at the time of borrowings. During the year ended September 30, 2022, the following Funds borrowed under this Facility:
Fund | Days Outstanding |
Average Daily Loan Balance |
Average Interest Rate | |||||||||
Durable High Dividend ETF | 192 | $156,159 | 2.41 | % | ||||||||
Inflation Allocation ETF | 39 | 774,593 | 1.84 | |||||||||
Long/Flat Trend ETF | 19 | 3,268,067 | 2.54 | |||||||||
Morningstar Global Wide Moat ETF | 9 | 71,167 | 1.82 | |||||||||
Morningstar International Moat ETF | 345 | 382,289 | 2.14 | |||||||||
Morningstar Wide Moat ETF | 172 | 4,950,141 | 2.35 | |||||||||
Social Sentiment ETF | 69 | 169,296 | 1.78 |
Outstanding loan balances as of September 30, 2022, if any, are reflected in the Statements of Assets and Liabilities.
57 |
VANECK ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of VanEck ETF Trust and Shareholders of each of the eight funds listed in the table below
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, (the consolidated statement of assets and liabilities, including the consolidated schedule of investments, for VanEck Inflation Allocation ETF) of each of the funds listed in the table below, (eight of the funds constituting VanEck ETF Trust, hereafter collectively referred to as the “Funds”) as of September 30, 2022, the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of September 30, 2022, the results of each of their operations, the changes in each of their net assets, and each of the financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
Funds
VanEck Durable High Dividend ETF (Formerly known as VanEck Morningstar Durable Dividend ETF) (1)
VanEck Inflation Allocation ETF (2)
VanEck Long/Flat Trend ETF (1)
VanEck Morningstar ESG Moat ETF (3)
VanEck Morningstar Global Wide Moat ETF (1)
VanEck Morningstar International Moat ETF (1)
VanEck Morningstar Wide Moat ETF (1)
VanEck Social Sentiment ETF (1)
(1) Statement of operations, statement of changes in net assets and financial highlights for the year ended September 30, 2022
(2) Consolidated statement of operations, consolidated statement of changes in net assets and consolidated financial highlights for the year ended September 30, 2022
(3) Statement of operations, statement of changes in net assets and financial highlights for the period October 6, 2021 (commencement of operations) through September 30, 2022
The financial statements of the Funds as of and for the year or period ended September 30, 2021 and the financial highlights for each of the periods ended on or prior to September 30, 2021 (not presented herein, other than the statements of changes in net assets and the financial highlights) were audited by other auditors whose report dated November 19, 2021 expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
58 |
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2022, by correspondence with the custodian and transfer agent; when replies were not received, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
New York, New York
November 21, 2022
We have served as the auditor of one or more investment companies in the VanEck Funds complex since 2022.
59 |
VANECK ETF TRUST
(unaudited)
The information set forth below relates to distributions paid during each Fund’s current fiscal year as required by federal laws. Shareholders, however, must report dividends on a calendar year basis for income tax purposes, which may include dividends for portions of two fiscal years of a Fund.
Accordingly, the information needed by shareholders for calendar year 2022 income tax purposes will be sent to them in early 2023. Please consult your tax advisor for proper treatment of this information.
The following information is provided with respect to the distributions paid during the taxable year ended September 30, 2022:
Fund | Ordinary Income Amount Paid Per Share |
Qualified Dividend Income for Individuals* |
Dividends Qualifying for the Dividend Received Deduction for Corporations* |
Foreign Source Income* |
Foreign Taxes Paid Per Share** | ||||||
Durable High Dividend ETF | $0.9618 | 100.00 | % | 100.00 | % | —% | $— | ||||
Inflation Allocation ETF | 2.1633 | 4.67 | 2.85 | 0.43 | 0.0010 | ||||||
Long/Flat Trend ETF | 0.1628 | 100.00 | 95.00 | — | — | ||||||
Morningstar ESG Moat ETF | 0.0507 | 100.00 | 100.00 | — | — | ||||||
Morningstar Global Wide Moat ETF | 1.7423 | 36.69 | 18.63 | — | — | ||||||
Morningstar International Moat ETF | 1.5000 | 60.55 | 0.13 | 95.74 | 0.0435 | ||||||
Morningstar Wide Moat ETF | 0.8227 | 100.00 | 100.00 | — | — |
Fund | Qualified Business Income*** |
Qualified Short-Term Capital Gains Per Share**** |
Long-Term Capital Gain Per Share | |||
Inflation Allocation ETF | 1.01% | $— | $— | |||
Morningstar Global Wide Moat ETF | — | 1.1923 | 0.4668 |
*Expressed as a percentage of the cash distribution grossed up for foreign taxes.
**The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid.
*** Qualified Business Income (QBI) under Section 199A represents the percentage of ordinary income distributions that is eligible for the Section 199A deduction. Section 199A allows a deduction of up to 20% on QBI for non-corporate taxpayers. Tax regulations enable a regulated investment company to flow-through QBI received from pass through entities such as real estate investment trusts, to its shareholders.
****These amounts represent Qualified Short-Term Capital Gains (“QSTG”) which may be exempt from United States withholding tax when distributed to non-U.S. shareholders with proper documentation.
60 |
BOARD OF TRUSTEES AND OFFICERS
September 30, 2022 (unaudited)
Name, Address1 and Year of Birth |
Position(s) Held with the Trust |
Term of Office2 and Length of Time Served |
Principal Occupation(s) During Past Five Years |
Number of Portfolios in Fund Complex3 Overseen |
Other Directorships Held By Trustee During Past Five Years | |||||
Independent Trustees | ||||||||||
David H. Chow, 1957*† | Trustee | Since 2006 | Founder and CEO, DanCourt Management LLC (financial/strategy consulting firm and Registered Investment Adviser), March 1999 to present. | 68 | Trustee, Berea College of Kentucky, May 2009 to present and currently Chairman of the Investment Committee; Trustee, MainStay Fund Complex4, January 2016 to present and currently Chairman of the Risk and Compliance Committee. Formerly, Member of the Governing Council of the Independent Directors Council, October 2012 to September 2020. | |||||
Laurie A. Hesslein, 1959*† | Trustee | Since 2019 | Citigroup, Managing Director and Business Head, Local Consumer Lending North America, and CEO and President, CitiFinancial Servicing LLC (2013 - 2017). | 68 | Formerly, Trustee, First Eagle Senior Loan Fund, March 2017 to December 2021; and Trustee, Eagle Growth and Income Opportunities Fund, March 2017 to December 2020. | |||||
R. Alastair Short, 1953*† | Trustee | Since 2006 | President, Apex Capital Corporation (personal investment vehicle). | 80 | Chairman and Independent Director, EULAV Asset Management; Lead Independent Director, Total Fund Solution; Independent Director, Contingency Capital, LLC; Trustee, Kenyon Review; Trustee, Children’s Village. Formerly, Independent Director, Tremont offshore funds. | |||||
Peter J. Sidebottom, 1962*† |
Chairman Trustee | Since 2022 Since 2012 |
Lead Partner, North America Banking and Capital Markets Strategy, Accenture, May 2017 to present; Partner, PWC/Strategy & Financial Services Advisory, February 2015 to March 2017; Founder and Board Member, AspenWoods Risk Solutions, September 2013 to February 2016; Independent consultant, June 2013 to February 2015; Partner, Bain & Company (management consulting firm), April 2012 to December 2013; Executive Vice President and Senior Operating Committee Member, TD Ameritrade (on-line brokerage firm), February 2009 to January 2012. | 68 | Formerly, Board Member, Special Olympics, New Jersey, November 2011 to September 2013; Director, The Charlotte Research Institute, December 2000 to 2009; Board Member, Social Capital Institute, University of North Carolina Charlotte, November 2004 to January 2012; Board Member, NJ-CAN, July 2014 to 2016. | |||||
Richard
D. Stamberger, 1959*† |
Trustee | Since 2006 | Senior Vice President, B2B, Future Plc (a global media company), July 2020 to August 2022; President, CEO and co-founder, SmartBrief, Inc., 1999 to 2020. | 80 | Director, Food and Friends, Inc., 2013 to present. |
61 |
VANECK ETF TRUST
BOARD OF TRUSTEES AND OFFICERS
(unaudited) (continued)
Name, Address1 and Year of Birth |
Position(s) Held with the Trust |
Term of Office2 and Length of Time Served |
Principal Occupation(s) During Past Five Years |
Number of Portfolios in Fund Complex3 Overseen |
Other Directorships Held By Trustee During Past Five Years | |||||
Interested Trustee | ||||||||||
Jan F. van Eck, 19635 | Trustee, Chief Executive Officer and President | Trustee (Since 2006); Chief Executive Officer and President (Since 2009) | Director, President and Chief Executive Officer of Van Eck Associates Corporation (VEAC), Van Eck Absolute Return Advisers Corporation (VEARA) and Van Eck Securities Corporation (VESC); Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | 80 | Director, National Committee on US-China Relations. |
1 | The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees. |
3 | The Fund Complex consists of the VanEck Funds, VanEck VIP Trust and the Trust. |
4 | The MainStay Fund Complex consists of MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust and MainStay MacKay Defined Term Municipal Opportunities Fund. |
5 | “Interested person” of the Trust within the meaning of the Investment Company Act of 1940, as amended. Mr. van Eck is an officer of VEAC, VEARA and VESC. |
* | Member of the Audit Committee. |
† | Member of the Nominating and Corporate Governance Committee. |
Officer’s Name, Address1 and Year of Birth |
Position(s) Held with the Trust |
Term of Office2 And Length of Time Served |
Principal Occupation(s) During Past Five Years | |||
Officer Information | ||||||
Matthew A. Babinsky, 1983 | Assistant Vice President and Assistant Secretary | Since 2016 | Assistant Vice President, Assistant General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. | |||
Russell G. Brennan, 1964 | Assistant Vice President and Assistant Treasurer | Since 2008 | Assistant Vice President of VEAC; Officer of other investment companies advised by VEAC and VEARA. | |||
Charles T. Cameron, 1960 | Vice President | Since 2006 | Portfolio Manager of VEAC; Officer and/or Portfolio Manager of other investment companies advised by VEAC and VEARA. Formerly, Director of Trading of VEAC. | |||
John J. Crimmins, 1957 | Vice President, Treasurer, Chief Financial Officer and Principal Accounting Officer | Vice President, Chief Financial Officer and Principal Accounting Officer (Since 2012); Treasurer (Since 2009) | Vice President of VEAC and VEARA; Officer of other investment companies advised by VEAC and VEARA. Formerly, Vice President of VESC. | |||
Susan Curry, 1966 |
Assistant Vice President | Since 2022 | Assistant Vice President of VEAC, VEARA and VESC; Formerly, Managing Director, Legg Mason, Inc. | |||
Eduardo Escario, 1975 | Vice President | Since 2012 | Regional Director, Business Development/Sales for Southern Europe and South America of VEAC. | |||
F. Michael Gozzillo, 1965 |
Chief Compliance Officer | Since 2018 | Vice President and Chief Compliance Officer of VEAC and VEARA; Chief Compliance Officer of VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Chief Compliance Officer of City National Rochdale, LLC and City National Rochdale Funds. | |||
Laura Hamilton, 1977 |
Vice President | Since 2019 | Assistant Vice President of VEAC and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Operations Manager of Royce & Associates. |
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Nicholas Jackson, 1974 |
Assistant Vice President | Since 2018 | Director, Business Development of VanEck Australia Pty Ltd. Formerly, Vice President, Business Development of VanEck Australia Pty Ltd. | |||
Laura I. Martínez, 1980 |
Vice President and Assistant Secretary | Vice President (Since 2016); Assistant Secretary (Since 2008) | Vice President, Associate General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Assistant Vice President of VEAC, VEARA and VESC. | |||
Matthew McKinnon, 1970 |
Assistant Vice President | Since 2018 | Head of Asia - Business Development of VanEck Australia Pty Ltd. Formerly, Director, Intermediaries and Institutions of VanEck Australia Pty Ltd. | |||
Lisa A. Moss, 1965 |
Assistant Vice President and Assistant Secretary | Since 2022 | Assistant Vice President of VEAC, VEARA and VESC; Fomerly Senior Counsel, Perkins Coie LLP; Assistant General Counsel, Fred Alger Management, Inc. | |||
Arian Neiron, 1979 |
Vice President | Since 2018 | CEO (since 2021) & Managing Director and Head of Asia Pacific of VanEck Australia Pty Ltd.; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | |||
James Parker, 1969 |
Assistant Treasurer | Since 2014 | Assistant Vice President of VEAC and VEARA; Manager, Portfolio Administration of VEAC and VEARA. Officer of other investment companies advised by VEAC and VEARA. | |||
Adam Phillips, 1970 |
Vice President | Since 2018 | ETF Chief Operating Officer of VEAC; Director of other companies affiliated with VEAC. | |||
Philipp Schlegel, 1974 |
Vice President | Since 2016 | Managing Director of Van Eck Switzerland AG. | |||
Jonathan R. Simon, 1974 |
Senior Vice President, Secretary and Chief Legal Officer | Senior Vice President (Since 2016); Secretary and Chief Legal Officer (since 2014) | Senior Vice President, General Counsel and Secretary of VEAC, VEARA and VESC; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. Formerly, Vice President of VEAC, VEARA and VESC. | |||
Andrew Tilzer, 1972 |
Assistant Vice President | Since 2021 | Vice President of VEAC and VEARA; Vice President of Portfolio Administration of VEAC. Formerly, Assistant Vice President, Portfolio Operations of VEAC. |
1 | The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Officers are elected yearly by the Trustees. |
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APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2022 (unaudited)
At a meeting held on June 7, 2022 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the VanEck Biotech ETF, Digital Assets Mining ETF, Digital Transformation ETF, Environmental Services ETF, Gaming ETF, Long/Flat Trend ETF, Durable High Dividend ETF (formerly “Morningstar Durable Dividend ETF”), Morningstar ESG Moat ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, Pharmaceutical ETF, Retail ETF, Semiconductor ETF, Social Sentiment ETF and Video Gaming and eSports ETF (each, a “Fund” and together, the “Funds”).
The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 6, 2022. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Funds and the Funds’ peer funds (certain other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance information for the Funds against their peer groups, the Trustees considered that each Fund seeks to track a different index than the funds in its designated peer group and, therefore, each Fund’s performance will differ from its peers. They also considered the fact that each of the VanEck Digital Assets Mining ETF and Morningstar ESG Moat ETF had only recently commenced operations and therefore each had a limited operational history that could be used for comparative purposes, since tracking error measurements and the performance comparisons provided by Broadridge were not available for each Fund. In addition, as noted below, the Trustees reviewed certain performance information for each Fund which was not provided by Broadridge and which did not compare each Fund’s performance to the performance of its peer group. The Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Funds.
The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 6, 2022 meeting regarding the management of the Funds and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, where applicable, (i) (with respect to the VanEck Environmental Services ETF, Gaming ETF, Long/Flat Trend ETF, Morningstar ESG Moat ETF, VanEck Morningstar Global Wide Moat ETF, VanEck Morningstar Wide Moat ETF, Morningstar International Moat ETF and Video Gaming and eSports ETF) (the “Non-Unitary Funds”) the Adviser’s commitment to waive certain fees and/or pay expenses of each of the Funds to the extent necessary to prevent the operating expenses of each of the Funds from exceeding agreed upon limits for a period of time and (ii) (with respect to all the other Funds) (the “Unitary Funds”) the Adviser’s agreement to pay all of the direct expenses of the Funds (excluding the fee payment under the Investment Management Agreements, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses).
The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance of each Fund, the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Fund (i.e.,
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measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any systematic fair value adjustments to the underlying securities. Based on the foregoing, the Trustees concluded that the investment performance of the Funds was satisfactory.
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Funds’ expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that each Fund (except as noted below) had management fees (after the effect of any applicable fee waiver) below the average and median of its respective peer group of funds, the VanEck Gaming ETF and Video Gaming and eSports ETF each had management fees (after the effect of any applicable fee waiver) below the average and equal to the median of its respective peer group of funds, the VanEck Social Sentiment ETF had management fees above the average and equal to the median of its peer group of funds, and each of the VanEck Morningstar ESG Moat ETF and Morningstar Wide Moat ETF had management fees (after the effect of any applicable fee waiver) above the average and median of its respective peer group of funds. The Trustees also noted that the information provided showed that each Fund (except as noted below) had a total expense ratio (after the effect of any applicable expense limitation) below the average and median of its respective peer group of funds, the VanEck Environmental Services ETF had a total expense ratio (after the effect of any applicable expense limitation) equal to the average and above the median of its peer group of funds, the VanEck Long/Flat Trend ETF had a total expense ratio (after the effect of any applicable expense limitation) above the average and below the median of its peer group of funds, each of the VanEck Morningstar Global Wide Moat ETF (after the effect of any applicable expense limitation) and Social Sentiment ETF had a total expense ratio above the average and equal to the median of its respective peer group of funds, and each of the VanEck Gaming ETF, Morningstar ESG Moat ETF, Morningstar International Moat ETF and Morningstar Wide Moat ETF had a total expense ratio (after the effect of any applicable expense limitation) above the average and median of its respective peer group of funds. The Trustees reviewed the amount by which certain Funds’ management fees and/or total expense ratios (after the effect of any applicable fee waivers and/or expense limitations) exceeded the average and/or median of their respective peer groups and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Funds were reasonable in light of the performance of the Funds and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreements, received by the Adviser from serving as adviser to the Funds.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Fund. The Trustees reviewed each Fund’s asset size, expense ratio and expense cap, as applicable, and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees considered the volatility of the asset classes in which certain of the Funds invest, potential variability in the net assets of these Funds and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Funds may effectively incorporate the benefits of economies of scale. The Trustees also considered the risks being assumed by the Adviser under the unitary fee structure arrangement and the potential expense stability that may inure to the benefit of shareholders of the Unitary Funds and noted that the Adviser has capped expenses on each of the Non-Unitary Funds since its inception, although the cap was not necessarily exceeded each year. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Fund is reasonable and appropriate in relation to the current asset size of each Fund and the other factors discussed above and that the advisory fee rate for each Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist. The Trustees also determined that the profits earned by the Adviser with respect to the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2022 (unaudited) (continued)
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 6, 2022 meeting as part of their consideration of the Investment Management Agreements.
In voting to approve the continuation of the Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that, at the time of their considerations, each Investment Management Agreement is in the best interest of each Fund and such Fund’s shareholders.
VanEck Inflation Allocation ETF
At a meeting held on June 7, 2022 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreement between the Trust and Van Eck Absolute Return Advisers Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Inflation Allocation ETF (the “Fund”).
The Board’s approval of the Investment Management Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 6, 2022. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Fund and the Fund’s peer funds (certain other exchange-traded funds (“ETFs”)), information about the advisory services provided to the Fund and the personnel providing those services, and the absence of profitability and the benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Fund. In addition, as noted below, the Trustees reviewed certain performance information for the Fund which was not provided by Broadridge and which did not compare the Fund’s performance to the performance of its peer group. The Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Fund.
The Independent Trustees’ consideration of the Investment Management Agreement was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 6, 2022 meeting regarding the management of the Fund and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Fund. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreement, including the Adviser’s commitment to waive certain fees and/or pay expenses of the Fund to the extent necessary to prevent the operating expenses of the Fund from exceeding an agreed upon limit for a period of time.
In evaluating the performance of the Fund, the Trustees reviewed various performance metrics, including various data from Broadridge comparing the Fund’s performance to that of certain other ETFs. The Trustees also considered information from the Adviser regarding the performance of the Fund against its benchmark and the Adviser’s statement that the Fund’s performance against its benchmark. The Trustees noted that the Fund had underperformed its benchmark for the one- and three-year periods ended December 31, 2021 and the period since its inception on April 10, 2018 through December 31, 2021, but also that the Fund’s performance materially outpaced the level of inflation during these periods. Based on the foregoing, the Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Fund’s portfolio.
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The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Fund’s expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that the Fund had management fees (after the effect of any applicable fee waiver) below the average and median of its peer group of funds. The Trustees also noted that the information provided showed that the Fund had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its peer group of funds. The Trustees reviewed the amount by which the Fund’s total expense ratio exceeded the average and median of its peer group and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Fund were reasonable in light of the performance of the Fund and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreement, received by the Adviser from serving as adviser to the Fund.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and the fact that the Adviser did not earn any profits from managing the Fund. The Trustees reviewed the Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreement does not include breakpoints in the advisory fee rates as asset levels in the Fund increase. The Trustees considered the volatility of the asset classes in which the Fund invests, potential variability in the net assets of the Fund and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Fund may effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on the Fund since its inception. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for the Fund is reasonable and appropriate in relation to the current asset size of the Fund and the other factors discussed above and that the advisory fee rate for the Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 6, 2022 meeting as part of their consideration of the Investment Management Agreement.
In voting to approve the continuation of the Investment Management Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that, at the time of their considerations, the Investment Management Agreement is in the best interest of the Fund and the Fund’s shareholders.
VanEck CLO ETF, VanEck Green Infrastructure ETF, VanEck Muni ETF and VanEck Morningstar SMID Moat ETF
At a meeting held on June 7, 2022 (the “Meeting”), the Board of Trustees (the “Board”) of VanEck® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), considered and approved the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the VanEck CLO ETF, VanEck Green Infrastructure ETF, VanEck Muni ETF and VanEck Morningstar SMID Moat ETF (each, a “Fund” and together, the “Funds”) and (ii) a sub-advisory agreement between the Adviser and PineBridge Investments LLC (the “Sub-Adviser”) (the “Sub-Advisory Agreement”) with respect to VanEck CLO ETF. The Investment Management Agreements and the Sub-Advisory Agreement are collectively referred to as the “Agreements.”
The Board’s approval of the Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors
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VANECK ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2022 (unaudited) (continued)
that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In advance of the Meeting, the Trustees received materials from the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF), including expense information for other funds. The Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF) provided the Trustees with information regarding, among other things, the various aspects of the Funds’ proposed investment programs, fee arrangements and service provider arrangements, as well as the rationale for retaining a sub-adviser to manage the VanEck CLO ETF’s investments in collateralized loan obligation (“CLO”) securities. The Independent Trustees’ consideration of the Agreements was based, in part, on their review of information obtained through discussions with the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF) at the Meeting regarding the management of the Funds, information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF), including the background and experience of the portfolio managers and others proposed to be involved in the management and administration of the Funds. The Trustees also considered the terms and scope of services that the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF) would provide under each Agreement, including (i) the Adviser’s agreement to pay all of the direct expenses of each of the VanEck CLO ETF, VanEck Green Infrastructure ETF and VanEck Muni ETF (excluding the fee payment under the respective Investment Management Agreements, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses), and (ii) the Adviser’s commitment to waive certain fees and/or pay expenses of the VanEck Morningstar SMID Moat ETF to the extent necessary to prevent the operating expenses of the Fund from exceeding an agreed-upon limit for a period of time. With respect to the VanEck CLO ETF, the Trustees noted the Sub-Adviser’s experience and investment management process with respect to investments in CLO securities and the Sub-Adviser’s experience serving as a sub-adviser for other registered investment companies. The Trustees also considered the sub-advisory fees to be paid to the Sub-Adviser by the Adviser, and the advisory fees to be retained by the Adviser under the Sub-Advisory Agreement.
The Trustees considered the benefits, other than the fees under the Agreements, that the Adviser would receive from serving as adviser to the Funds. The Trustees did not consider historical information about the cost of the services to be provided by the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF) or the profitability of the Funds to the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF) because the Funds had not yet commenced operations. In addition, because the Funds had not yet commenced operations, the Trustees could not consider the historical performance or actual management fees or operating expenses of, or the quality of services previously provided to, the Funds by the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF), although they concluded that the nature, quality and extent of the services to be provided by the Adviser and the Sub-Adviser (with respect to the VanEck CLO ETF) were appropriate based on the Trustees’ knowledge of the Adviser and its personnel and the operations of the other series of the Trust, as well as the information provided by the Sub-Adviser (with respect to the VanEck CLO ETF) about its personnel and operations.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Meeting as part of their consideration of the Agreements.
In voting to approve the Agreements, the Trustees, including the Independent Trustees, concluded that the terms of the Agreements are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that the Agreements are in the best interest of the Funds and the Funds’ shareholders.
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck ETF Trust (the “Trust”) prospectus and summary prospectus, which includes more complete information. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
Additional information about the Trust’s Board of Trustees/Officers and a description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities are provided in the Statement of Additional Information. The Statement of Additional Information and information regarding how the Trust voted proxies relating to portfolio securities during the most recent twelve month period ending June 30 is available, without charge, by calling 800.826.2333, or by visiting vaneck.com, or on the Securities and Exchange Commission’s website at http://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-PORT. The Trust’s Form N-PORT filings are available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Funds’ complete schedules of portfolio holdings are also available by calling 800.826.2333 or by visiting vaneck.com.
Investment Adviser: Distributor: | VanEck Associates Corporation VanEck Securities Corporation 666 Third Avenue, New York, NY 10017 vaneck.com |
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Account Assistance: | 800.826.2333 | STRATAR |