ANNUAL REPORT
September 30, 2021

 

Biotech ETF BBH
Digital Transformation ETF DAPP
Environmental Services ETF EVX®
Gaming ETF BJK®
Pharmaceutical ETF PPH®
Retail ETF RTH®
Semiconductor ETF SMH®
Video Gaming and eSports ETF ESPO®

 

     
  800.826.2333 vaneck.com
 

 

 

President’s Letter 1
Management Discussion 3
Performance Comparison  
Biotech ETF 6
Digital Transformation ETF 7
Environmental Services ETF 8
Gaming ETF 9
Pharmaceutical ETF 10
Retail ETF 11
Semiconductor ETF 12
Video Gaming and eSports ETF 13
About Fund Performance 14
Explanation of Expenses 15
Schedule of Investments  
Biotech ETF 17
Digital Transformation ETF 18
Environmental Services ETF 20
Gaming ETF 21
Pharmaceutical ETF 23
Retail ETF 24
Semiconductor ETF 25
Video Gaming and eSports ETF 26
Statements of Assets and Liabilities 28
Statements of Operations 30
Statements of Changes in Net Assets 32
Financial Highlights  
Biotech ETF 36
Digital Transformation ETF 37
Environmental Services ETF 38
Gaming ETF 39
Pharmaceutical ETF 40
Retail ETF 41
Semiconductor ETF 42
Video Gaming and eSports ETF 43
Notes to Financial Statements 44
Report of Independent Registered Public Accounting Firm 52
Tax Information 54
Board of Trustees and Officers 55
Approval of Investment Management Agreements 58

 

 

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, 2021.

 

VANECK ETFs

PRESIDENT’S LETTER

September 30, 2021

(unaudited)

 

Dear Fellow Shareholders:

 

This letter addresses two topics: first, the risks to the markets today and, second, two multi-year themes.

 

The Economy

 

When we think about financial markets, since the future remains unknown, we seek to identify potential scenarios. At the beginning of this year, the global economy was like a car hurtling forward at 200 miles per hour. Over the summer, we expected an orderly slowdown, asking only “What are the risks to Goldilocks?1 We thought the car could slow to 70 miles per hour without putting too much pressure on interest rates, driven by inflation, which would upset the financial markets. The markets today are pondering the question, “Are we hitting the brakes too hard?” I think not.

 

In the U.S., will the U.S. Federal Reserve (Fed) hit the brakes too hard? I don’t think so. First, while the financial markets are still debating whether we have an inflation problem, I don’t think we will know whether we have permanent inflation until late next year. It is true that we are talking about supply chain issues and labor market issues longer than the transitory camp would like. But while commodity price inflation matters, the real concern about inflation and financial markets is wage inflation, since it tends to be longer-lasting and may affect long-term interest rates.

 

Second, if inflation doesn’t push rates higher, I don’t think the Fed will hit the brakes too hard by raising rates. Bank of America recently released a research note2 that said over half of the S&P 500® Index’s returns in the past decade can be attributed to the Fed’s balance sheet expansion, rather than earnings. We live in an era in which the Fed has an eye on the financial markets. Why would that change?

 

What about China? Will real estate or other factors like COVID-19 cause a recession? While China growth is becoming soggy, we think policy makers have all the tools, including liquidity moves, to avoid a crash.

 

Multi-Year Investment Themes

 

So what to do in your portfolio? We are focusing on two multi-year investment themes.

 

The first theme is the energy transition away from fossil fuels. We see this not only as being driven by government policy, but also by innovation in the private sector. In our resources portfolios, we’re looking for disruptive companies in the sectors that need to be more energy efficient. One is agriculture (which emits about as much CO2 as the energy sector). AgTech businesses are embracing technology to modernize agriculture, leading to higher crop yields, safer crop chemicals and other innovations in food production to provide healthy diets for the world’s growing population.

 

The second theme is the use of blockchain in a large variety of industries, but especially finance and entertainment. New open-source database technology is enabling incredibly rapid adoption and at much lower cost than traditional companies using prior generation technology. The fintech revolution that goes hand in hand with crypto is something we find really exciting. There are some over-valued companies, but we think it’s another interesting multi-year trend that investors should consider.

 

Another surprise that has affected commodity prices is that, as the economy grows and demand for commodities grows, increasing supply has become harder. This is in part due to environmental, social and governance (ESG) policies in place, causing “greenflation” and a multi-year trend of price pressure. Finding supply sources like new copper, lithium or gold mines is harder because of, to a certain extent, the environmental impact of these activities. I think this supply issue will continue to underpin commodity prices, and is why I believe that commodity equities are an interesting investment that people should have in their portfolios.

 

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, 2021. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.

1

VANECK ETFs

PRESIDENT’S LETTER

(unaudited) (continued)

 

 

Jan F. van Eck

CEO and President
VanEck ETF Trust

 

October 18, 2021

 

1 A Goldilocks economy is an economy that is not so hot that it causes inflation and not so cold that it causes a recession.
   
2 Source: Bloomberg, https://www.bloomberg.com/news/articles/2021-09-08/bofa-s-subramanian-dumps-dire-stock-call-to-catch-up-with-rally
2

VANECK ETFs

MANAGEMENT DISCUSSION

September 30, 2021 (unaudited)

 

Biotech

 

Biotech stocks had a good year, with the VanEck Biotech ETF gaining 25.13%. Rising steadily during the 12 month period, stocks hit highs in mid-October 2020 and early-February 2021 (both followed by downturns), and in early-August 2021. However, even after quite a significant sell-off in the first week of September 2021, the Fund ended the period having made a gain.

 

While, by mid-September 2020, the FDA had approved 40 “novel drugs”,1 over the next three months (despite COVID-19) a further 13 were added and the total tally for the year was 53.2 By mid-September 2021, a little down on the previous year at the same time, some 37 novel drugs had already been approved.3

 

The three top positive contributions to the Fund’s performance came from: Moderna (10.4% of Fund net assets), BioNTech (3.8% of Fund net assets) and Alexion Pharmaceuticals (not held at period end). The companies that detracted most from performance were: Vertex Pharmaceuticals (5.2% of Fund net assets), Amgen (8.6% of Fund net assets) and Sarepta Therapeutics (sold by Fund by period end).

 

Environmental Services

 

The VanEck Environmental Services ETF had an excellent year, gaining 44.50% over the 12 month period under review. Following a slight dip at the end of October 2020, environmental services stocks climbed slowly but surely through the end of the reporting period without any further, noteworthy declines.

 

Following the slowdown in economic activity resulting from the COVID-19 virus earlier in 2020, the pace of activity became more rapid as the year progressed “with many firms able to sustain and even beat revenue forecasts in the pandemic year.”4

 

Growth in 2021 has been, and continues to be driven, amongst other factors, by: corporations’ increasing commitment to ESG and sustainability, consolidation and M&A activity, sustained interested in both reuse and recycling and last, but not least, by the changing regulatory backdrop.

 

Large-cap stocks contributed the greatest total returns, followed, respectively, by mid- and small-cap stocks. Covanta Holding (3.1% of Fund net assets), Darling Ingredients (3.0% of Fund net assets) and Cantel Medical (sold by Fund by period end) were the top three contributors. PureCycle Technologies (3.0% of Fund net assets), Energy Recovery (3.1% of Fund net assets) and Clean Harbors (3.4% of Fund net assets) were the only three companies to detract from performance.

 

Gaming

 

The VanEck Gaming ETF posted a gain of 24.06% for the 12 month period. Gaming stocks continued to recover strongly in the final quarter of 2020 and into 2021, reaching highs in March, April and June. Thereafter, however, even following a recovery in early-September, the final two quarters of the reporting period proved to be disappointing.

 

In Macau, China, the world’s biggest gaming hub, while notably down on the figures for 2019, the gross revenue from “Games of Fortune” (as the Macau authorities describe them) in October 2020 through to the end of the year were not only relatively stable, but also demonstrated a noted improvement on prior months.5 Thereafter, revenues again remained relatively stable and, after April, considerably improved on 2020, but in August 2021, however, they nearly halved.6 In September, on the one hand, earlier in the month we saw optimism that lighter COVID-19 restrictions might help increase traffic and, on the other, later in the month, casino stocks fell across the board as the Macau government indicated that it would seek greater oversight and planned to impose more onerous concession agreements, moves that “could wrest control of the lucrative industry away from foreign shareholders.”7

 

In Nevada, during the 12 month period, we saw the “gaming win”8 remain relatively stable each month and trend higher as the period progressed—from a low of $683,733,423 in December 2020 to $1,359,876,493 in July 20219

3

VANECK ETFs

MANAGEMENT DISCUSSION (unaudited) (continued)

 

U.S.-, Sweden- and Australia-listed companies were the leading contributors to performance. Two countries detracted from performance: China and Cambodia.

 

Pharmaceutical

 

Despite a slight dip at the end of October 2020, pharmaceutical stocks had a solid, if uneventful, 12 months. By the end of the period, after somewhat of a downturn from early-September, the VanEck Pharmaceutical ETF had gained 19.10%. Vaccines for COVID-19 and expectations of potential higher government spending on drug discovery and development have helped underpin investor optimism in the sector.

 

While Eli Lilly, Catalent and Bausch Health Companies (4.7%, 4.3% and 3.0% of Fund net assets, respectively) were the three largest positive contributors to performance, Takeda Pharmaceutical (4.4% of Fund net assets), Viatris (4.4% of Fund net assets) and Novartis (4.9% of Fund net assets) were the Fund’s three largest detractors.

 

Retail

 

Despite sudden declines from mid- to end-October 2020 and from mid-February to early-March 2021, retail stocks had a satisfactory 12 months and the VanEck Retail ETF returned 18.13% for the period under review. While “brick and mortar”, e.g., department stores, retail has taken a battering during the COVID-19 pandemic (no customers and no staff—a continuing problem), those companies with well-developed ecommerce capabilities and those involved in specialty retail or deemed “essential” during the crisis have benefited.

 

Businesses involved in the consumer discretionary sub-sector specialty retail contributed by far the most to the positive performance of the Fund. Home Depot (15.4% of Fund net assets), Target (4.4% of Fund net assets) and CVS Health (4.6% of Fund net assets) were the three top contributors to total returns. While no single sector (or sub-sector) detracted from performance, companies in the consumer discretionary textiles, apparel and luxury goods sub-sector contributed the least to performance. And just three companies detracted from performance: Wayfair (0.8% of Fund net assets), JD.com (4.1% of Fund net assets) and Best Buy (1.6% of Fund net assets).

 

Semiconductor

 

The VanEck Semiconductor ETF had an excellent year, returning 47.94% for the 12 month period under review. In 2021 in particular, the industry has had to deal with the disruption (and with demand outstripping supply), resulting from the well-publicized chip shortage which has affected anything from auto production to consumer tech (including smartphones).10 Despite this shortage, many companies have continued to perform well and semiconductor sales have remained firm. Sales in August 2021 alone were up 29.7% year-on-year and 3.3% month-on-month.11

 

Large-capitalization stocks continued to be key drivers of the Fund’s returns. Taiwan Semiconductor Manufacturing Company, Applied Materials and ASML Holding (15.5%, 4.6% and 6.8% of Fund net assets, respectively) were the three top contributing companies. A single company detracted from performance, Synopsys (2.4% of Fund net assets) with Intel (5.4% of Fund net assets) and Universal Display (0.4% of Fund net assets) contributing the least positively to total returns.

 

Video Games and eSports

 

In contrast with the 12 months ending September 30, 2020, video gaming and esports stocks provided disappointing, albeit positive, returns during the reporting period with the VanEck Video Gaming and eSports ETF up 6.15%. As the early restrictions on movement associated with the COVID-19 pandemic have subsided, consumers around the world have been forced to be inside less and less and traditional entertainment options have become more plentiful. Against this backdrop, video game-related revenue growth, having soared to all-time highs, have now pulled back to more normalized levels.

4

 

 

Leading contributing companies over the period were Sea, NVIDIA, and Bilibili (6.5%, 8.1% and 3.8% of the Fund’s net assets respectively). The three companies detracting most from performance were: CD Projekt (1.6% of Fund net assets), NEXON Company (3.4% of Fund net assets) and Ubisoft Entertainment (2.8% of Fund net assets).

 

† All Fund assets referenced are Total Net Assets as of September 30, 2021.

 

1 Food & Drug Administration: : Novel Drug Approvals for 2020, September 2, 2020, https://www.fda.gov/drugs/new-drugs-fda-cder-snew-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2020 (Accessed September 16, 2020)

 

2 Food & Drug Administration: New Drug Therapy Approvals 2020, January 2021, https://www.fda.gov/drugs/new-drugs-fda-cders-new-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2020 (Accessed September 22, 2021)

 

3 Food & Drug Administration: New Drug Therapy Approvals 2021, September 2021, https://www.fda.gov/drugs/new-drugs-fda-cders-new-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2021 (Accessed October 2, 2021)

 

4 Engineering News-Record: 2021 Top 200 Environmental Firms: Market is Whirlwind of Change, July 14, 2021, https://www.enr.com/articles/52090-top-200-environmental-firms-market-is-whirlwind-of-change

 

5 Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/ information/DadosEstat_mensal/2020/index.html

 

6 Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/ information/DadosEstat_mensal/2021/index.html

 

7 The Financial Times: Macau casino operators fear end of winning streak with new gaming law, September 21, 2021, https://www.ft.com/content/417f2513-37b2-4900-ac36-4729df36ae1b

 

8 Or “gross revenue,” defined (in short) as: the total of all:

 

(a) Cash received as winnings;

 

(b) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and

 

(c) Compensation received for conducting any game, or any contest or tournament in conjunction with interactive gaming, in which the licensee is not party to a wager, less the total of all cash paid out as losses to patrons, those amounts paid to fund periodic payments and any other items made deductible as losses by NRS 463.3715. For the purposes of this section, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses, except that losses in a contest or tournament conducted in conjunction with an inter-casino linked system may be deducted to the extent of the compensation received for the right to participate in that contest or tournament. For a full definition see Nevada Gaming Control Act, https://www.leg.state.nv.us/NRS/NRS-463.html#NRS463Sec0161

 

9 Nevada Gaming Control Board: Abbreviated Revenue Release, http://gaming.nv.gov/index.aspx?page=172

 

10 Vox: The chip shortage is getting worse, August 5, 2021, https://www.vox.com/recode/2021/8/5/22611031/chip-shortage-cars-electronics-automakers-gm-tesla-playstation-xbox

 

11 Semiconductor Industry Association: Global Semiconductor Sales Increase 29.7% Year-to-Year, 3.3% Month-to-Month in August, October 4, 2021, https://www.semiconductors.org/global-semiconductor-sales-increase-29-7-year-to-year-3-3-month-to-month-in-august/

5

VANECK BIOTECH ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVBBHTR1 SPTR2
One Year 25.16% 25.13% 25.36% 30.00%
Five Year 12.36% 12.33% 12.52% 16.90%
Life* 19.87% 19.86% 20.06% 15.87%
   
* Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11.
   
1 MVIS® US Listed Biotech 25 Index (MVBBHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the biotech industry.
   
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.

6

VANECK DIGITAL TRANSFORMATION ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVDAPPTR1 SPTR2
Life* (35.26)% (35.30)% (35.13)% 5.03%
   
* Commencement of Fund: 4/12/21; First Day of Secondary Market Trading: 4/13/21.
   
1 MVIS® Global Digital Assets Equity Index (MVDAPPTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the global digital asset segment.
   
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 14 for more information.

7

VANECK ENVIRONMENTAL SERVICES ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV AXENVTR1 SPTR2
One Year 43.96% 44.50% 45.33% 30.00%
Five Year 16.14% 16.13% 16.61% 16.90%
Ten Year 13.27% 13.42% 13.94% 16.63%
   
1 NYSE Arca Environmental Services Index (AXENVTR) is a rules based, modified equal dollar weighted index intended to give investors a means of tracking the overall performance of the common stocks and depositary receipts of U.S. exchange-listed companies involved in environmental services.
   
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.

8

VANECK GAMING ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVBJKTR1 SPTR2
One Year 24.61% 24.06% 25.29% 30.00%
Five Year 8.60% 8.59% 9.13% 16.90%
Ten Year 8.75% 8.59% 8.98% 16.63%
   
1 MVIS® Global Gaming Index (MVBJKTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the casino and gaming industry.
   
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.

9

VANECK PHARMACEUTICAL ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVPPHTR1 SPTR2
One Year 19.14% 19.10% 18.75% 30.00%
Five Year 6.79% 6.75% 6.60% 16.90%
Life* 9.80% 9.67% 9.56% 15.87%
   
* Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11.
   
1 MVIS® US Listed Pharmaceutical 25 Index (MVPPHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the pharmaceutical industry.
   
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.

10

VANECK RETAIL ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVRTHTR1 SPTR2
One Year 18.22% 18.13% 18.11% 30.00%
Five Year 18.94% 18.91% 18.78% 16.90%
Life* 18.63% 18.49% 18.33% 15.87%
   
* Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11.
   
1 MVIS® US Listed Retail 25 Index (MVRTHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the retail industry.
   
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 SEMICONDUCTOR ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVSMHTR1 SPTR2
One Year 48.14% 47.94% 48.11% 30.00%
Five Year 31.47% 31.51% 31.51% 16.90%
Life* 26.20% 26.23% 26.18% 15.87%
   
* Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11.
   
1 MVIS® US Listed Semiconductor 25 Index (MVSMHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the semiconductor industry.
   
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.

12

VANECK VIDEO GAMING AND ESPORTS ETF

PERFORMANCE COMPARISON

September 30, 2021 (unaudited)

 

Average Annual Total Return
  Share Price NAV MVESPOTR1 SPTR2
One Year 5.75% 6.15% 7.35% 30.00%
Life* 28.80% 28.83% 29.92% 17.66%
   
* Commencement of Fund: 10/16/18; First Day of Secondary Market Trading: 10/17/18.
   
1 The MVIS® Global Video Gaming and eSports Index (MVESPOTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in video gaming and eSports.
   
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 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 ETFs

ABOUT FUND PERFORMANCE

(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 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 Biotech Index, Digital Transformation Index, Gaming Index, Pharmaceutical Index, Retail Index, Semiconductor Index and Video Gaming and eSports Index are published by MV Index Solutions GmbH (MVIS®), which is a wholly owned subsidiary of the Adviser, Van Eck Associates Corporation. The Environmental Services Index is published by ICE Data Indices, LLC (ICE Data).

 

MVIS and ICE Data 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.

14

VANECK ETF TRUST

EXPLANATION OF EXPENSES

(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, 2021 to September 30, 2021.

 

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, 2021
Ending
Account
Value
September 30, 2021
Annualized
Expense
Ratio
During Period
Expenses Paid
During the Period
April 1, 2021 -
September 30, 2021*
Biotech ETF        
Actual $1,000.00 $1,152.90 0.35% $1.89
Hypothetical** $1,000.00 $1,023.31 0.35% $1.78
Digital Transformation ETF        
Actual *** $1,000.00 $647.00 0.58% $2.24
Hypothetical** $1,000.00 $1,022.16 0.58% $2.94
Environmental Services ETF        
Actual $1,000.00 $1,083.50 0.55% $2.87
Hypothetical** $1,000.00 $1,022.31 0.55% $2.79
Gaming ETF        
Actual $1,000.00 $906.50 0.61% $2.92
Hypothetical** $1,000.00 $1,022.01 0.61% $3.09
Pharmaceutical ETF        
Actual $1,000.00 $1,063.70 0.35% $1.81
Hypothetical** $1,000.00 $1,023.31 0.35% $1.78
Retail ETF        
Actual $1,000.00 $1,058.90 0.35% $1.81
Hypothetical** $1,000.00 $1,023.31 0.35% $1.78
Semiconductor ETF        
Actual $1,000.00 $1,053.10 0.35% $1.80
Hypothetical** $1,000.00 $1,023.31 0.35% $1.78
15

VANECK ETF TRUST

EXPLANATION OF EXPENSES

(unaudited) (continued)

 

  Beginning
Account
Value
April 1, 2021
Ending
Account
Value
September 30, 2021
Annualized
Expense
Ratio
During Period
Expenses Paid
During the Period
April 1, 2021 -
September 30, 2021*
Video Gaming and eSports ETF        
Actual $1,000.00 $954.20 0.57% $2.79
Hypothetical** $1,000.00 $1,022.21 0.57% $2.89
   
* Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2021), 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).
** Assumes annual return of 5% before expenses
*** Expenses are equal to the Fund’s annualized expense ratio (for the period from April 13, 2021 (commencement of operations) to September 30, 2021) multiplied by the average account value over the period, multiplied by the number of days since the commencement of operations divided by the number of days in the fiscal year.
16

VANECK BIOTECH ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 99.9%            
China: 3.3%            
BeiGene Ltd. (ADR) *     52,822     $ 19,174,386  
Germany: 3.9%                
BioNTech SE (ADR) *     84,828       23,157,196  
Ireland: 4.9%                
ICON Plc (USD) *     109,770       28,761,935  
Switzerland: 1.7%                
CRISPR Therapeutics AG (USD) * †     87,917       9,840,550  
United States: 86.1%                
10X Genomics, Inc. *     64,782       9,430,964  
Alnylam Pharmaceuticals, Inc. *     92,701       17,502,876  
Amgen, Inc.     228,255       48,538,426  
Biogen, Inc. *     98,560       27,891,494  
BioMarin Pharmaceutical, Inc. *     148,975       11,514,278  
Bio-Techne Corp.     48,899       23,694,988  
Charles River Laboratories International, Inc. *     60,602       25,008,627  
    Number
of Shares
    Value  
United States (continued)                
Exact Sciences Corp. * †     195,593     $ 18,669,352  
Gilead Sciences, Inc.     468,984       32,758,532  
Guardant Health, Inc. *     131,690       16,462,567  
Illumina, Inc. *     68,448       27,763,193  
Incyte Corp. *     168,665       11,600,779  
Intellia Therapeutics, Inc. *     66,874       8,971,147  
IQVIA Holdings, Inc. *     121,003       28,985,059  
Moderna, Inc. *     175,770       67,646,842  
Natera, Inc. *     117,348       13,077,261  
Novavax, Inc. *     93,200       19,321,292  
QIAGEN NV * †     293,518       15,169,010  
Regeneron Pharmaceuticals, Inc. *     47,359       28,660,720  
Seagen, Inc. *     150,779       25,602,274  
Vertex Pharmaceuticals, Inc. *     165,604       30,038,910  
              508,308,591  
Total Common Stocks
(Cost: $507,260,247)
            589,242,658  
Total Investments: 99.9%
(Cost: $507,260,247)
            589,242,658  
Other assets less liabilities: 0.1%             877,755  
NET ASSETS: 100.0%           $ 590,120,413  


 

 

Definitions:

ADR American Depositary Receipt
USD United States Dollar

 

Footnotes:

* Non-income producing
Security fully or partially on loan. Total market value of securities on loan is $24,961,286.

 

Summary of Investments by Sector             % of
Investments
  Value  
Biotechnology         70.3 %        $ 413,966,315  
Health Care Services     2.8       16,462,567  
Life Sciences Tools  & Services     26.9       158,813,776  
      100.0 %   $ 589,242,658  

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:    

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks *   $ 589,242,658     $     $     $ 589,242,658  

 

* See Schedule of Investments for geographic sector breakouts.

 

See Notes to Financial Statements

17

VANECK DIGITAL TRANSFORMATION ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 99.9%                
Canada: 13.7%                
Bitfarms Ltd. (USD) *     412,765     $ 1,754,251  
DMG Blockchain Solutions, Inc. *     623,956       453,124  
Hive Blockchain Technologies Ltd. (USD) * †     766,010       2,045,247  
Hut 8 Mining Corp. (USD) *     238,397       2,002,535  
              6,255,157  
China: 7.8%                
BC Technology Group Ltd. (HKD) # *     556,000       876,079  
Canaan, Inc. (ADR) * †     287,833       1,758,660  
Ebang International Holdings, Inc. (USD) *     489,798       930,616  
              3,565,355  
Germany: 5.3%                
Northern Data AG * †     27,995       2,404,160  
Hong Kong: 5.4%                
BIT Mining Ltd. (ADR) *     208,774       1,705,684  
Diginex Ltd. (USD) *     131,477       425,985  
Huobi Technology Holdings Ltd. # *     349,500       357,795  
              2,489,464  
Jersey, Channel Islands: 1.4%                
Coinshares International Ltd. (SEK) # * †     82,136       629,102  
United Kingdom: 4.4%                
Argo Blockchain Plc # * †     1,285,664       2,005,536  
United States: 61.9%                
Bit Digital, Inc. * †     151,732       1,097,022  
    Number
of Shares
    Value  
United States (continued)                
Cipher Mining, Inc. * †     102,815     $ 1,063,107  
Cleanspark, Inc. *     126,572       1,466,969  
Coinbase Global, Inc. *     16,766       3,813,930  
Galaxy Digital Holdings Ltd. (CAD) * †     115,966       1,889,362  
GreenBox POS *     75,430       625,315  
Marathon Digital Holdings, Inc. *     101,579       3,207,865  
MicroStrategy, Inc. *     5,508       3,185,827  
Riot Blockchain, Inc. *     106,854       2,746,148  
Silvergate Capital Corp. *     26,716       3,085,698  
Square, Inc. *     16,995       4,076,081  
Voyager Digital Ltd. (CAD) * †     195,954       1,972,146  
              28,229,470  
Total Common Stocks
(Cost: $54,684,650)
            45,578,244  
                 
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 10.9%
(Cost: $4,964,972)
         
Money Market Fund: 10.9%                
State Street Navigator Securities Lending Government Money Market Portfolio     4,964,972       4,964,972  
Total Investments: 110.8%
(Cost: $59,649,622)
            50,543,216  
Liabilities in excess of other assets: (10.8)%             (4,926,714)  
NET ASSETS: 100.0%           $ 45,616,502  


 

 

Definitions:

 

ADR American Depositary Receipt
CAD Canadian Dollar
HKD Hong Kong Dollar
SEK Swedish Krona
USD United States Dollar

 

Footnotes:

* Non-income producing
Security fully or partially on loan. Total market value of securities on loan is $7,998,120.
# Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $3,868,512 which represents 8.5% of net assets.

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Financials        23.5 %        $ 10,720,156  
Information Technology     76.5       34,858,088  
      100.0 %   $ 45,578,244  

 

See Notes to Financial Statements

18

 

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks                                
Canada   $ 6,255,157     $     $     $ 6,255,157  
China     2,689,276       876,079             3,565,355  
Germany     2,404,160                   2,404,160  
Hong Kong     2,131,669       357,795             2,489,464  
Jersey, Channel Islands           629,102             629,102  
United Kingdom           2,005,536             2,005,536  
United States     28,229,470                   28,229,470  
Money Market Fund     4,964,972                   4,964,972  
Total Investments   $ 46,674,704     $ 3,868,512     $     $ 50,543,216  

 

See Notes to Financial Statements

19

VANECK ENVIRONMENTAL SERVICES ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 99.9%                
Canada: 5.4%                
GFL Environmental, Inc. (USD) †     58,036     $ 2,156,037  
Loop Industries, Inc. (USD) * †     128,311       1,466,595  
              3,622,632  
United States: 94.5%                
ABM Industries, Inc.     46,964       2,113,850  
Advanced Emissions Solutions, Inc. *     207,817       1,327,951  
Casella Waste Systems, Inc. *     28,221       2,143,103  
Clean Harbors, Inc. *     21,381       2,220,845  
Covanta Holding Corp.     105,278       2,118,193  
Darling Ingredients, Inc. *     28,056       2,017,226  
Donaldson Co., Inc.     35,122       2,016,354  
Ecolab, Inc.     31,029       6,473,270  
Energy Recovery, Inc. * †     108,738       2,069,284  
Evoqua Water Technologies Corp. *     55,743       2,093,707  
Heritage-Crystal Clean, Inc. *     48,496       1,405,414  
Montrose Environmental Group, Inc. *     35,768       2,208,316  
PureCycle Technologies, Inc. * †     163,865       2,176,127  
Republic Services, Inc.     54,884       6,589,373  
Schnitzer Steel Industries, Inc.     51,650       2,262,787  
    Number
of Shares
    Value  
United States (continued)                
Sharps Compliance Corp. *     155,922     $ 1,289,475  
Stericycle, Inc. *     31,222       2,122,159  
STERIS Plc     9,843       2,010,728  
Tennant Co.     29,441       2,177,162  
Tetra Tech, Inc.     14,629       2,184,695  
US Ecology, Inc. *     39,434       1,275,690  
Waste Connections, Inc.     53,049       6,680,461  
Waste Management, Inc.     44,373       6,627,551  
              63,603,721  
Total Common Stocks
(Cost: $58,120,603)
            67,226,353  
                 
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.8%
(Cost: $1,227,822)
         
Money Market Fund: 1.8%                
State Street Navigator Securities Lending Government Money Market Portfolio     1,227,822       1,227,822  
Total Investments: 101.7%
(Cost: $59,348,425)
            68,454,175  
Liabilities in excess of other assets: (1.7)%             (1,160,626)  
NET ASSETS: 100.0%           $ 67,293,549  


 

 

Definitions:
USD United States Dollar
   
Footnotes:
Security fully or partially on loan. Total market value of securities on loan is $3,719,858.
* Non-income producing

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Consumer Staples        3.0 %        $ 2,017,227  
Health Care     4.9       3,300,203  
Industrials     71.7       48,202,194  
Materials     20.4       13,706,729  
      100.0 %   $ 67,226,353  

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks *   $ 67,226,353     $     $     $ 67,226,353  
Money Market Fund     1,227,822                   1,227,822  
Total Investments   $ 68,454,175     $     $     $ 68,454,175  

 

* See Schedule of Investments for geographic sector breakouts.  

 

See Notes to Financial Statements

20

VANECK GAMING ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 99.9%                
Australia: 11.7%                
Aristocrat Leisure Ltd. #     241,427     $ 8,022,362  
Crown Resorts Ltd. # *     164,339       1,124,023  
Star Entertainment Group  Ltd. # *     456,952       1,450,195  
Tabcorp Holdings Ltd. #     958,509       3,327,660  
              13,924,240  
Cambodia: 0.6%                
NagaCorp Ltd. (HKD) #     842,000       718,357  
France: 2.3%                
La Francaise des Jeux SAEM  144A #     53,564       2,755,536  
Greece: 1.4%                
OPAP SA #     104,956       1,624,600  
Hong Kong: 0.9%                
Melco International                
Development Ltd. # *     229,000       269,761  
Melco Resorts  & Entertainment  Ltd. (ADR) *     82,720       847,053  
              1,116,814  
Ireland: 7.7%                
Flutter Entertainment Plc # *     45,735       9,075,404  
Italy: 1.2%                
International Game Technology  Plc (USD) * †     55,330       1,456,286  
Japan: 1.0%                
Heiwa Corp. # †     30,100       562,068  
Sankyo Co. Ltd. #     23,279       577,254  
              1,139,322  
Macao: 5.1%                
Galaxy Entertainment Group  Ltd. (HKD) # *     1,030,240       5,286,193  
SJM Holdings Ltd. (HKD) # * †     1,134,000       770,752  
              6,056,945  
Malaysia: 3.5%                
Genting Bhd     1,183,700       1,425,020  
Genting Malaysia Bhd #     1,554,898       1,110,802  
Genting Singapore Ltd. (SGD) #     3,058,100       1,612,621  
              4,148,443  
Malta: 1.5%                
Kindred Group Plc (SDR) #     115,421       1,732,011  
    Number
of Shares
    Value  
New Zealand: 0.6%                
SkyCity Entertainment Group  Ltd. #     303,389     $ 669,595  
South Korea: 1.4%                
Kangwon Land, Inc. # *     68,074       1,635,604  
Sweden: 7.7%                
Evolution AB 144A #     60,069       9,102,886  
United Kingdom: 6.0%                
Entain Plc # *     223,159       6,378,274  
Playtech Plc *     114,002       721,229  
              7,099,503  
United States: 47.3%                
Boyd Gaming Corp. *     28,446       1,799,494  
Caesars Entertainment, Inc. *     55,295       6,208,523  
Churchill Downs, Inc.     12,672       3,042,294  
DraftKings, Inc. * †     164,209       7,908,306  
Gaming and Leisure Properties, Inc.     78,343       3,628,848  
Las Vegas Sands Corp. *     177,672       6,502,795  
MGM China Holdings Ltd.  (HKD) # *     100       62  
MGM Growth Properties LLC     58,294       2,232,660  
MGM Resorts International     153,293       6,614,593  
Penn National Gaming, Inc. *     42,279       3,063,536  
Sands China Ltd. (HKD) # *     1,309,600       2,680,098  
Scientific Games Corp. *     34,302       2,849,467  
Skillz, Inc. * †     124,332       1,220,940  
VICI Properties, Inc. †     165,091       4,690,235  
Wynn Macau Ltd. (HKD) # * †     561,600       472,584  
Wynn Resorts Ltd. * †     36,182       3,066,425  
              55,980,860  
Total Common Stocks
(Cost: $117,538,290)
            118,236,406  
                 
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.0%
(Cost: $1,210,699)
               
Money Market Fund: 1.0%                
State Street Navigator  Securities Lending Government Money Market Portfolio     1,210,699       1,210,699  
Total Investments: 100.9%
(Cost: $118,748,989)
            119,447,105  
Liabilities in excess of other assets: (0.9)%             (1,057,702)  
NET ASSETS: 100.0%           $ 118,389,403  


 

 

Definitions:
ADR American Depositary Receipt
HKD Hong Kong Dollar
SDR Swedish Depositary Receipt
SGD Singapore Dollar
USD United States Dollar

 

See Notes to Financial Statements

21

VANECK GAMING ETF

SCHEDULE OF INVESTMENTS

(continued)

 

Footnotes:
# Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued
  securities is $60,958,702 which represents 51.5% of net assets.
* Non-income producing
Security fully or partially on loan. Total market value of securities on loan is $19,046,196.
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 $11,858,422, or 10.0% of net assets.

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Communication Services        1.0 %        $ 1,220,940  
Consumer Discretionary     90.1       106,463,723  
Real Estate     8.9       10,551,743  
      100.0 %   $ 118,236,406  

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:      

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks                                
Australia   $     $ 13,924,240     $     $ 13,924,240  
Cambodia           718,357             718,357  
France           2,755,536             2,755,536  
Greece           1,624,600             1,624,600  
Hong Kong     847,053       269,761             1,116,814  
Ireland           9,075,404             9,075,404  
Italy     1,456,286                   1,456,286  
Japan           1,139,322             1,139,322  
Macao           6,056,945             6,056,945  
Malaysia     1,425,020       2,723,423             4,148,443  
Malta           1,732,011             1,732,011  
New Zealand           669,595             669,595  
South Korea           1,635,604             1,635,604  
Sweden           9,102,886             9,102,886  
United Kingdom     721,229       6,378,274             7,099,503  
United States     52,828,116       3,152,744             55,980,860  
Money Market Fund     1,210,699                   1,210,699  
Total Investments   $ 58,488,403     $ 60,958,702     $     $ 119,447,105  

 

See Notes to Financial Statements

22

VANECK PHARMACEUTICAL ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 99.7%            
Denmark: 5.0%            
Novo Nordisk A/S (ADR)     165,036     $ 15,845,106  
France: 5.0%                
Sanofi SA (ADR)     331,587       15,985,809  
Ireland: 0.7%                
Amarin Corp. Plc (ADR) * †     477,546       2,435,485  
Israel: 3.8%                
Teva Pharmaceutical Industries Ltd. (ADR) *     1,260,713       12,279,345  
Japan: 4.5%                
Takeda Pharmaceutical Co. Ltd. (ADR) †     872,651       14,294,023  
Switzerland: 4.9%                
Novartis AG (ADR)     189,781       15,520,290  
United Kingdom: 9.9%                
AstraZeneca Plc (ADR)     291,206       17,489,832  
GlaxoSmithKline Plc (ADR) †     369,132       14,104,534  
              31,594,366  
United States: 65.9%                
AbbVie, Inc.     150,590       16,244,143  
AmerisourceBergen Corp.     120,322       14,372,463  
Bausch Health Cos, Inc. *     340,243       9,475,768  
Bristol-Myers Squibb Co.     255,994       15,147,165  
Catalent, Inc. *     105,074       13,982,197  
    Number
of Shares
    Value  
United States (continued)                
Elanco Animal Health, Inc. *     356,377     $ 11,364,863  
Eli Lilly  & Co.     65,214       15,067,695  
Jazz Pharmaceuticals Plc *     58,779       7,653,614  
Johnson  & Johnson     96,679       15,613,659  
McKesson Corp.     72,548       14,464,620  
Merck  & Co., Inc.     220,530       16,564,008  
Organon  & Co.     293,122       9,611,470  
Patterson Companies, Inc.     59,361       1,789,141  
Perrigo Co. Plc     118,111       5,590,194  
Pfizer, Inc.     357,324       15,368,505  
Viatris, Inc.     1,027,988       13,929,237  
Zoetis, Inc.     71,453       13,871,885  
              210,110,627  
Total Common Stocks
(Cost: $325,749,670)
            318,065,051  
                 
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 5.4%
(Cost: $17,187,701)
               
Money Market Fund: 5.4%                
State Street Navigator Securities Lending  Government Money   Market Portfolio     17,187,701       17,187,701  
Total Investments: 105.1%
(Cost: $342,937,371)
            335,252,752  
Liabilities in excess of other assets: (5.1)%             (16,314,385)  
NET ASSETS: 100.0%           $ 318,938,367  


 

 

Definitions:
ADR American Depositary Receipt
   
Footnotes:
Security fully or partially on loan. Total market value of securities on loan is $21,722,584.
* Non-income producing

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Biotechnology         5.9 %        $ 18,679,628  
Health Care Distributors     9.6       30,626,224  
Pharmaceuticals     84.5       268,759,199  
      100.0 %   $ 318,065,051  

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks *   $ 318,065,051     $     $     $ 318,065,051  
Money Market Fund     17,187,701                   17,187,701  
Total Investments   $ 335,252,752     $     $     $ 335,252,752  

 

* See Schedule of Investments for geographic sector breakouts.

 

See Notes to Financial Statements

23

VANECK RETAIL ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 100.0%                
China: 4.1%                
JD.com, Inc. (ADR) *     137,051     $ 9,900,564  
United States: 95.9%                
Amazon.com, Inc. *     14,122       46,391,335  
AmerisourceBergen Corp.     28,177       3,365,743  
AutoZone, Inc. *     4,161       7,065,336  
Bath & Body Works, Inc.     34,027       2,144,722  
Best Buy Co., Inc.     36,182       3,824,799  
Cardinal Health, Inc.     48,065       2,377,295  
Costco Wholesale Corp.     26,725       12,008,879  
CVS Health Corp.     129,914       11,024,502  
Dollar General Corp.     36,464       7,735,473  
Dollar Tree, Inc. *     41,354       3,958,405  
Lowe’s Companies, Inc.     60,979       12,370,200  
Lululemon Athletica, Inc. *     15,467       6,259,495  
McKesson Corp.     28,442       5,670,766  
O’Reilly Automotive, Inc. *     13,471       8,231,589  
Ross Stores, Inc.     57,988       6,311,994  
Sysco Corp.     92,981       7,299,009  
Target Corp.     45,514       10,412,238  
The Gap, Inc.     63,966       1,452,028  
    Number
of Shares
    Value  
United States (continued)                
The Home Depot, Inc.     112,604     $ 36,963,389  
The Kroger Co.     128,806       5,207,627  
The TJX Companies, Inc.     160,428       10,585,039  
Walgreens Boots Alliance, Inc.     115,307       5,425,194  
Walmart, Inc.     84,401       11,763,811  
Wayfair, Inc. * †     7,645       1,953,374  
              229,802,242  
Total Common Stocks
(Cost: $243,244,076)
            239,702,806  
       
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 0.1%
(Cost: $293,092)
     
Money Market Fund: 0.1%                
State Street Navigator Securities Lending Government Money Market Portfolio     293,092       293,092  
Total Investments: 100.1%
(Cost: $243,537,168)
            239,995,898  
Liabilities in excess of other assets: (0.1)%       (321,006)  
NET ASSETS: 100.0%           $ 239,674,892  


 

 

Definitions:
ADR American Depositary Receipt
   
Footnotes:
* Non-income producing
Security fully or partially on loan. Total market value of securities on loan is $1,855,514.

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Consumer Discretionary        73.2 %        $ 175,559,981  
Consumer Staples     17.4       41,704,520  
Health Care     9.4       22,438,305  
      100.0 %   $ 239,702,806  

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:      

 

          Level 2     Level 3        
    Level 1     Significant     Significant        
    Quoted     Observable     Unobservable        
    Prices     Inputs     Inputs     Value  
Common Stocks *   $ 239,702,806     $     $     $ 239,702,806  
Money Market Fund     293,092                   293,092  
Total Investments   $ 239,995,898     $     $     $ 239,995,898  

 

* See Schedule of Investments for geographic sector breakouts.

 

See Notes to Financial Statements

24

VANECK SEMICONDUCTOR ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 99.8%                
Netherlands: 9.6%                
ASML Holding N.V. (USD)     538,867     $ 401,515,190  
NXP Semiconductors N.V. (USD)     871,339       170,669,170  
              572,184,360  
Switzerland: 1.9%                
STMicroelectronics N.V. (USD) †     2,533,870       110,552,748  
Taiwan: 15.5%                
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)     8,253,872       921,544,809  
United States: 72.8%                
Advanced Micro Devices, Inc. *     2,648,492       272,529,827  
Analog Devices, Inc.     1,698,144       284,405,157  
Applied Materials, Inc.     2,105,354       271,022,220  
Broadcom, Inc.     568,770       275,813,636  
Cadence Design Systems, Inc. *     804,626       121,852,562  
Intel Corp.     5,832,259       310,742,760  
KLA Corp.     450,458       150,682,706  
Lam Research Corp.     460,526       262,108,373  
Marvell Technology, Inc.     2,324,878       140,213,392  
Microchip Technology, Inc.     808,196       124,050,004  
Micron Technology, Inc.     3,890,835       276,171,468  
NVIDIA Corp.     3,216,957       666,424,812  
ON Semiconductor Corp. *     1,241,352       56,816,681  
    Number
of Shares
    Value  
United States (continued)                
Qorvo, Inc. *     384,226     $ 64,238,745  
Qualcomm, Inc.     2,192,221       282,752,665  
Skyworks Solutions, Inc.     556,625       91,720,668  
Synopsys, Inc. *     475,468       142,359,874  
Teradyne, Inc.     556,049       60,703,869  
Texas Instruments, Inc.     1,654,840       318,076,796  
Universal Display Corp.     154,846       26,472,472  
Xilinx, Inc.     838,972       126,676,382  
              4,325,835,069  
Total Common Stocks
(Cost: $6,083,422,970)
            5,930,116,986  
                 
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.5%
(Cost: $86,922,750)
       
Money Market Fund: 1.5%                
State Street Navigator Securities Lending Government Money Market Portfolio     86,922,750       86,922,750  
Total Investments: 101.3%
(Cost: $6,170,345,720)
            6,017,039,736  
Liabilities in excess of other assets: (1.3)%             (79,428,729)  
NET ASSETS: 100.0%           $ 5,937,611,007  


 

 

Definitions:
ADR American Depositary Receipt
USD United States Dollar
 
Footnotes:
Security fully or partially on loan. Total market value of securities on loan is $87,531,989.
* Non-income producing

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Application Software        4.5 %        $ 264,212,435  
Semiconductor Equipment     19.3       1,146,032,359  
Semiconductors     76.2       4,519,872,192  
      100.0 %   $ 5,930,116,986  

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks *   $ 5,930,116,986     $     $     $ 5,930,116,986  
Money Market Fund     86,922,750                   86,922,750  
Total Investments   $ 6,017,039,736     $     $     $ 6,017,039,736  

 

* See Schedule of Investments for geographic sector breakouts.

 

See Notes to Financial Statements

25

VANECK VIDEO GAMING AND ESPORTS ETF

SCHEDULE OF INVESTMENTS

September 30, 2021

 

    Number
of Shares
    Value  
COMMON STOCKS: 100.0%                
China: 17.9%                
Bilibili, Inc. (ADR) * †     359,097     $ 23,761,449  
Kingsoft Corp. Ltd. (HKD) #     2,163,000       8,611,723  
NetEase, Inc. (ADR)     377,108       32,205,023  
Tencent Holdings Ltd. (HKD) #     812,000       48,475,358  
              113,053,553  
France: 2.7%                
Ubisoft Entertainment SA # *     285,408       17,099,717  
Japan: 20.4%                
Bandai Namco Holdings, Inc. #     403,400       30,250,555  
Capcom Co. Ltd. #     514,000       14,246,223  
Konami Holdings Corp. # †     255,500       15,974,350  
Nexon Co. Ltd. #     1,361,300       21,794,782  
Nintendo Co. Ltd. #     83,000       39,564,719  
Square Enix Holdings Co. Ltd. #     125,300       6,679,947  
              128,510,576  
Poland: 1.6%                
CD Projekt SA # †     205,787       9,937,283  
South Korea: 4.2%                
NCSoft Corp. #     40,363       20,446,024  
Netmarble Corp. 144A #     62,710       6,189,947  
              26,635,971  
Sweden: 2.8%                
Embracer Group AB # * †     1,390,342       13,331,512  
Stillfront Group AB # * †     672,297       4,236,458  
              17,567,970  
Taiwan: 8.1%                
Micro-Star International Co. Ltd. #     2,170,000       10,008,413  
    Number
of Shares
    Value  
Taiwan (continued)            
Sea Ltd. (ADR) *     129,448     $ 41,258,961  
              51,267,374  
United States: 42.3%                
Activision Blizzard, Inc.     469,015       36,297,071  
Advanced Micro Devices, Inc. *     451,421       46,451,221  
Electronic Arts, Inc.     213,814       30,415,041  
NVIDIA Corp.     245,195       50,794,596  
Roblox Corp. * †     368,943       27,873,644  
Take-Two Interactive Software, Inc. *     193,230       29,770,946  
Unity Software, Inc. * †     230,582       29,110,977  
Zynga, Inc. *     2,134,909       16,075,865  
              266,789,361  
Total Common Stocks
(Cost: $579,029,696)
            630,861,805  
                 
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.5%
(Cost: $9,305,364)
 
Money Market Fund: 1.5%                
State Street Navigator Securities Lending Government Money Market Portfolio     9,305,364       9,305,364  
Total Investments: 101.5%
(Cost: $588,335,060)
            640,167,169  
Liabilities in excess of other assets: (1.5)%       (9,166,896)  
NET ASSETS: 100.0%           $ 631,000,273  


 

 

Definitions:
ADR American Depositary Receipt
HKD Hong Kong Dollar

 

Footnotes:
Security fully or partially on loan. Total market value of securities on loan is $46,566,368.
* Non-income producing
# Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $266,847,011 which represents 42.3% of net assets.
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 $6,189,947, or 1.0% of net assets.

 

Summary of Investments by Sector
Excluding Collateral for Securities Loaned
  % of
Investments
  Value  
Communication Services        73.6 %        $ 464,246,042  
Consumer Discretionary     4.8       30,250,555  
Information Technology     21.6       136,365,208  
      100.0 %   $ 630,861,805  

 

See Notes to Financial Statements

26

 

 

The summary of inputs used to value the Fund’s investments as of September 30, 2021 is as follows:

 

    Level 1
Quoted
Prices
    Level 2
Significant
Observable
Inputs
    Level 3
Significant
Unobservable
Inputs
    Value  
Common Stocks                          
China   $ 55,966,472     $ 57,087,081     $     $ 113,053,553  
France           17,099,717             17,099,717  
Japan           128,510,576             128,510,576  
Poland           9,937,283             9,937,283  
South Korea           26,635,971             26,635,971  
Sweden           17,567,970             17,567,970  
Taiwan     41,258,961       10,008,413             51,267,374  
United States     266,789,361                   266,789,361  
Money Market Fund     9,305,364                   9,305,364  
Total Investments   $ 373,320,158     $ 266,847,011     $     $ 640,167,169  

 

See Notes to Financial Statements

27

VANECK ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

September 30, 2021

 

    Biotech ETF     Digital
Transformation
ETF
    Environmental
Services ETF
    Gaming ETF  
Assets:                                
Investments, at value (1)                                
Unaffiliated issuers (2)   $ 589,242,658     $ 45,578,244     $ 67,226,353     $ 118,236,406  
Short-term investments held as collateral for securities loaned (3)           4,964,972       1,227,822       1,210,699  
Cash     1,186,817       1,143,669       121,420       158,021  
Receivables:                                
Investment securities sold                 8,189,958        
Shares of beneficial interest sold     5,042,409             4,427,492       658  
Dividends and interest     10,357       54,261       45,575       128,503  
Prepaid expenses                 2,100       3,150  
Total assets     595,482,241       51,741,146       81,240,720       119,737,437  
Liabilities:                                
Payables:                                
Investment securities purchased     5,042,503       1,137,857       8,253,745        
Shares of beneficial interest redeemed                 4,362,412        
Collateral for securities loaned           4,964,972       1,227,822       1,210,699  
Due to Adviser     170,847       21,815       31,403       52,078  
Deferred Trustee fees     64,926             3,589       8,813  
Accrued expenses     83,552             68,200       76,444  
Total liabilities     5,361,828       6,124,644       13,947,171       1,348,034  
NET ASSETS   $ 590,120,413     $ 45,616,502     $ 67,293,549     $ 118,389,403  
Shares outstanding     2,921,503       2,000,000       470,000       2,450,000  
Net asset value, redemption and offering price per share   $ 201.99     $ 22.81     $ 143.18     $ 48.32  
Net Assets consist of:                                
Aggregate paid in capital   $ 615,599,336     $ 57,095,368     $ 71,567,242     $ 132,017,344  
Total distributable earnings (loss)     (25,478,923)       (11,478,866)       (4,273,693)       (13,627,941)  
NET ASSETS   $ 590,120,413     $ 45,616,502     $ 67,293,549     $ 118,389,403  
(1) Value of securities on loan   $ 24,961,286     $ 7,998,120     $ 3,719,858     $ 19,046,196  
(2) Cost of investments - Unaffiliated issuers   $ 507,260,247     $ 54,684,650     $ 58,120,603     $ 117,538,290  
(3) Cost of short-term investments held as collateral for securities loaned   $     $ 4,964,972     $ 1,227,822     $ 1,210,699  

 

See Notes to Financial Statements

28

VANECK ETF TRUST

STATEMENTS OF ASSETS AND LIABILITIES

September 30, 2021

 

    Pharmaceutical
ETF
    Retail ETF     Semiconductor
ETF
    Video Gaming
and eSports ETF
 
Assets:                                
Investments, at value (1)                                
Unaffiliated issuers (2)   $ 318,065,051     $ 239,702,806     $ 5,930,116,986     $ 630,861,805  
Short-term investments held as collateral for securities loaned (3)     17,187,701       293,092       86,922,750       9,305,364  
Cash     167,317       7,850       5,025,946       105,930  
Cash denominated in foreign currency, at value (4)                       5,403,302  
Receivables:                                
Investment securities sold                 179,426,084       362,254  
Shares of beneficial interest sold     3,666,229             217,872,871       601  
Dividends and interest     911,461       101,803       4,267,379       253,044  
Prepaid expenses                       5,250  
Total assets     339,997,759       240,105,551       6,423,632,016       646,297,550  
Liabilities:                                
Payables:                                
Investment securities purchased     3,666,457             217,866,158       5,584,531  
Shares of beneficial interest redeemed                 179,430,840        
Collateral for securities loaned     17,187,701       293,092       86,922,750       9,305,364  
Due to Adviser     101,322       55,887       1,500,685       282,575  
Deferred Trustee fees     36,037       10,259       97,454       9,660  
Accrued expenses     67,875       71,421       203,122       115,147  
Total liabilities     21,059,392       430,659       486,021,009       15,297,277  
NET ASSETS   $ 318,938,367     $ 239,674,892     $ 5,937,611,007     $ 631,000,273  
Shares outstanding     4,388,138       1,371,531       23,170,937       9,700,000  
Net asset value, redemption and offering price per share   $ 72.68     $ 174.75     $ 256.25     $ 65.05  
Net Assets consist of:                                
Aggregate paid in capital   $ 413,099,809     $ 253,485,607     $ 6,185,336,815     $ 559,469,711  
Total distributable earnings (loss)     (94,161,442)       (13,810,715)       (247,725,808)       71,530,562  
NET ASSETS   $ 318,938,367     $ 239,674,892     $ 5,937,611,007     $ 631,000,273  
(1) Value of securities on loan   $ 21,722,584     $ 1,855,514     $ 87,531,989     $ 46,566,368  
(2) Cost of investments - Unaffiliated issuers   $ 325,749,670     $ 243,244,076     $ 6,083,422,970     $ 579,029,696  
(3) Cost of short-term investments held as collateral for securities loaned   $ 17,187,701     $ 293,092     $ 86,922,750     $ 9,305,364  
(4) Cost of cash denominated in foreign currency   $     $     $     $ 5,466,241  

 

See Notes to Financial Statements

29

VANECK ETF TRUST

STATEMENTS OF OPERATIONS

For the Year Ended September 30, 2021

 

    Biotech ETF     Digital
Transformation
ETF (a)
    Environmental
Services ETF
    Gaming ETF  
Income:                                
Dividends   $ 3,012,996     $ 15,969     $ 376,963     $ 1,069,642  
Interest                 50       255  
Securities lending income     47,903       83,172       40,788       60,281  
Foreign taxes withheld           (3,249)       (5,732)       (23,428)  
Total income     3,060,899       95,892       412,069       1,106,750  
Expenses:                                
Management fees     1,851,610       92,680       251,107       584,280  
Professional fees     53,468             50,642       52,348  
Custody and accounting fees     36,116             30,829       56,474  
Reports to shareholders     32,675             11,331       24,786  
IOPV fees     1,192                   1,509  
Trustees’ fees and expenses     4,575             652       619  
Registration fees     4,001             5,705       393  
Insurance     15,838             2,201       2,513  
Interest     10,792       290       475       2,653  
Other     4,992             2,128       5,022  
Total expenses     2,015,259       92,970       355,070       730,597  
Waiver of management fees     (154,118)             (78,229)        
Net expenses     1,861,141       92,970       276,841       730,597  
Net investment income     1,199,758       2,922       135,228       376,153  
Net realized gain (loss) on:                                
Investments     (24,416,406)       (2,364,313)       (155,063)       (886,045)  
In-kind redemptions     103,683,050       65,835       8,380,048       12,931,064  
Foreign currency transactions and foreign denominated assets and liabilities           (18,165)       (23)       (972)  
Net realized gain (loss)     79,266,644       (2,316,643)       8,224,962       12,044,047  
Net change in unrealized appreciation (depreciation) on:                                
Investments     36,737,909       (9,106,406)       6,390,584       (2,949,714)  
Foreign currency transactions and foreign denominated assets and liabilities                       (560)  
Net change in unrealized appreciation (depreciation)     36,737,909       (9,106,406)       6,390,584       (2,950,274)  
Net Increase (Decrease) in Net Assets Resulting from Operations   $ 117,204,311     $ (11,420,127)     $ 14,750,774     $ 9,469,926  

 

(a) For the period April 13, 2021 (commencement of operations) through September 30, 2021.

 

See Notes to Financial Statements

30

VANECK ETF TRUST

STATEMENTS OF OPERATIONS

For the Year Ended September 30, 2021

 

    Pharmaceutical
ETF
    Retail ETF     Semiconductor
ETF
    Video Gaming
and eSports ETF
 
Income:                                
Dividends   $ 5,700,146     $ 2,739,929     $ 54,596,802     $ 4,826,056  
Interest     56       77       1,013       260  
Securities lending income     63,193       2,302       155,164       201,732  
Foreign taxes withheld     (147,132)             (2,970,022)       (484,235)  
Total income     5,616,263       2,742,308       51,782,957       4,543,813  
Expenses:                                
Management fees     891,904       754,573       16,978,049       3,743,207  
Professional fees     55,293       53,339       58,253       56,570  
Custody and accounting fees     33,339       35,931       16,678       109,763  
Reports to shareholders     17,084       27,964       311,785       115,377  
IOPV fees     1,331       1,243       1,228       1,045  
Trustees’ fees and expenses     3,027       2,690       105,774       10,936  
Registration fees     8,095       8,564       60,601       40,006  
Insurance     9,301       7,400       51,573       6,442  
Interest     7,745       766       26,142       9,590  
Other     3,312       2,865       37,548       9,386  
Total expenses     1,030,431       895,335       17,647,631       4,102,322  
Waiver of management fees     (131,784)       (140,149)       (629,776)        
Net expenses     898,647       755,186       17,017,855       4,102,322  
Net investment income     4,717,616       1,987,122       34,765,102       441,491  
Net realized gain (loss) on:                                
Investments     (18,293,702)       (1,818,601)       (44,455,745)       22,646,579  
In-kind redemptions     34,382,583       56,606,575       1,705,736,191       75,126,692  
Foreign currency transactions and foreign denominated assets and liabilities                       (23,520)  
Net realized gain     16,088,881       54,787,974       1,661,280,446       97,749,751  
Net change in unrealized appreciation (depreciation) on:                                
Investments     20,215,746       (23,437,570)       (254,053,014)       (77,263,466)  
Foreign currency transactions and foreign denominated assets and liabilities                       6,279  
Net change in unrealized appreciation (depreciation)     20,215,746       (23,437,570)       (254,053,014)       (77,257,187)  
Net Increase in Net Assets Resulting from Operations   $ 41,022,243     $ 33,337,526     $ 1,441,992,534     $ 20,934,055  

 

See Notes to Financial Statements

31

VANECK ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

    Biotech ETF     Digital Transformation ETF  
    Year Ended
September 30,
2021
    Year Ended
September 30,
2020
    Period Ended
September 30,
2021 (a)
 
                   
Operations:                        
Net investment income   $ 1,199,758     $ 1,628,771     $ 2,922  
Net realized gain (loss)     79,266,644       3,573,293       (2,316,643)  
Net change in unrealized appreciation (depreciation)     36,737,909       111,943,737       (9,106,406)  
Net increase (decrease) in net assets resulting from operations     117,204,311       117,145,801       (11,420,127)  
Distributions to shareholders from:                        
Distributable earnings     (1,699,994)       (1,250,208)        
                         
Share transactions**:                        
Proceeds from sale of shares     219,670,586       195,549,299       58,233,162  
Cost of shares redeemed     (230,504,701)       (144,293,768)       (1,196,533)  
Increase (decrease) in net assets resulting from share transactions     (10,834,115)       51,255,531       57,036,629  
Total increase in net assets     104,670,202       167,151,124       45,616,502  
Net Assets, beginning of period     485,450,211       318,299,087        
Net Assets, end of period   $ 590,120,413     $ 485,450,211     $ 45,616,502  
**Shares of Common Stock Issued (no par value)                        
Shares sold     1,150,000       1,275,000       2,050,000  
Shares redeemed     (1,225,000)       (975,000)       (50,000)  
Net increase (decrease)     (75,000)       300,000       2,000,000  

 

(a) For the period April 13, 2021 (commencement of operations) through September 30, 2021.

 

See Notes to Financial Statements

32

VANECK ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

    Environmental Services ETF     Gaming ETF  
    Year Ended
September 30,
2021
    Year Ended
September 30,
2020
    Year Ended
September 30,
2021
    Year Ended
September 30,
2020
 
                         
Operations:                                
Net investment income   $ 135,228     $ 159,675     $ 376,153     $ 467,263  
Net realized gain (loss)     8,224,962       (1,782,863)       12,044,047       (1,364,835)  
Net change in unrealized appreciation (depreciation)     6,390,584       239,751       (2,950,274)       8,615,747  
Net increase (decrease) in net assets resulting from operations     14,750,774       (1,383,437)       9,469,926       7,718,175  
Distributions to shareholders from:                                
Distributable earnings     (124,993)       (165,025)       (349,965)       (800,020)  
                                 
Share transactions**:                                
Proceeds from sale of shares     40,559,653       12,786,779       90,865,077       33,435,454  
Cost of shares redeemed     (18,707,729)       (16,911,063)       (36,388,492)       (9,359,864)  
Increase (decrease) in net assets resulting from share transactions     21,851,924       (4,124,284)       54,476,585       24,075,590  
Total increase (decrease) in net assets     36,477,705       (5,672,746)       63,596,546       30,993,745  
Net Assets, beginning of year     30,815,844       36,488,590       54,792,857       23,799,112  
Net Assets, end of year   $ 67,293,549     $ 30,815,844     $ 118,389,403     $ 54,792,857  
**Shares of Common Stock Issued (no par value)                                
Shares sold     300,000       130,000       1,775,000       1,000,000  
Shares redeemed     (140,000)       (170,000)       (725,000)       (250,000)  
Net increase (decrease)     160,000       (40,000)       1,050,000       750,000  

 

See Notes to Financial Statements

33

VANECK ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

    Pharmaceutical ETF     Retail ETF  
    Year Ended
September 30,
2021
    Year Ended
September 30,
2020
    Year Ended
September 30,
2021
    Year Ended
September 30,
2020
 
                         
Operations:                                
Net investment income   $ 4,717,616     $ 3,499,787     $ 1,987,122     $ 1,033,181  
Net realized gain     16,088,881       4,349,184       54,787,974       7,270,080  
Net change in unrealized appreciation (depreciation)     20,215,746       20,416,513       (23,437,570)       24,679,366  
Net increase in net assets resulting from operations     41,022,243       28,265,484       33,337,526       32,982,627  
Distributions to shareholders from:                                
Distributable earnings     (4,063,401)       (3,321,670)       (1,274,964)       (950,056)  
                                 
Share transactions**:                                
Proceeds from sale of shares     506,408,386       388,323,148       278,009,892       145,515,451  
Cost of shares redeemed     (459,578,185)       (319,778,063)       (252,249,346)       (66,852,325)  
Increase in net assets resulting from share transactions     46,830,201       68,545,085       25,760,546       78,663,126  
Total increase in net assets     83,789,043       93,488,899       57,823,108       110,695,697  
Net Assets, beginning of year     235,149,324       141,660,425       181,851,784       71,156,087  
Net Assets, end of year   $ 318,938,367     $ 235,149,324     $ 239,674,892     $ 181,851,784  
**Shares of Common Stock Issued (no par value)                                
Shares sold     7,300,000       6,450,000       1,600,000       1,150,000  
Shares redeemed     (6,700,000)       (5,150,000)       (1,450,000)       (550,000)  
Net increase     600,000       1,300,000       150,000       600,000  

 

See Notes to Financial Statements

34

VANECK ETF TRUST

STATEMENTS OF CHANGES IN NET ASSETS

 

    Semiconductor ETF     Video Gaming and eSports ETF  
    Year Ended
September 30,
2021
    Year Ended
September 30,
2020
    Year Ended
September 30,
2021
   

Year Ended
September 30,

2020 

 
                         
Operations:                                
Net investment income   $ 34,765,102     $ 24,886,743     $ 441,491     $ 103,970  
Net realized gain (loss)     1,661,280,446       539,805,772       97,749,751       (926,333)  
Net change in unrealized appreciation (depreciation)     (254,053,014)       193,386,180       (77,257,187)       126,217,297  
Net increase in net assets resulting from operations     1,441,992,534       758,078,695       20,934,055       125,394,934  
Distributions to shareholders from:                                
Distributable earnings     (29,249,241)       (19,250,343)       (870,225)       (125,100)  
                                 
Share transactions**:                                
Proceeds from sale of shares     15,625,608,376       13,726,301,764       266,565,899       357,494,489  
Cost of shares redeemed     (13,747,005,339)       (13,179,602,021)       (177,196,989)        
Increase in net assets resulting from share transactions     1,878,603,037       546,699,743       89,368,910       357,494,489  
Total increase in net assets     3,291,346,330       1,285,528,095       109,432,740       482,764,323  
Net Assets, beginning of year     2,646,264,677       1,360,736,582       521,567,533       38,803,210  
Net Assets, end of year   $ 5,937,611,007     $ 2,646,264,677     $ 631,000,273     $ 521,567,533  
**Shares of Common Stock Issued (no par value)                                
Shares sold     66,350,000       99,350,000       3,850,000       7,350,000  
Shares redeemed     (58,350,000)       (95,600,000)       (2,650,000)        
Net increase     8,000,000       3,750,000       1,200,000       7,350,000  

 

See Notes to Financial Statements

35

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each year:

 

    Biotech ETF  
    Year Ended September 30,  
    2021     2020     2019     2018     2017  
                               
Net asset value, beginning of year   $ 162.01     $ 118.04     $ 136.11     $ 134.17     $ 115.25  
Net investment income (a)     0.42       0.59       0.39       0.52       0.58  
Net realized and unrealized gain (loss) on investments     40.17       43.85       (17.91 )     2.10 (b)     18.67  
Total from investment operations     40.59       44.44       (17.52 )     2.62       19.25  
Distributions from:                                        
Net investment income     (0.61 )     (0.47 )     (0.55 )     (0.68 )     (0.33 )
Net asset value, end of year   $ 201.99     $ 162.01     $ 118.04     $ 136.11     $ 134.17  
Total return (c)     25.13 %     37.71 %     (12.84 )%     2.00 %     16.77 %
Ratios to average net assets                                        
Gross expenses     0.38 %     0.39 %     0.40 %     0.40 %     0.39 %
Net expenses     0.35 %     0.35 %     0.35 %     0.35 %     0.35 %
Net investment income     0.23 %     0.40 %     0.31 %     0.41 %     0.48 %
Supplemental data                                        
Net assets, end of year (in millions)     $590       $485       $318       $476       $717  
Portfolio turnover rate (d)     41 %     40 %     24 %     30 %     27 %

 

(a) Calculated based upon average shares outstanding
(b) The amount shown does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchase of shares in relation to fluctuating market values of the investments of the Fund.
(c) Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions.
(d) Portfolio turnover rate excludes in-kind transactions.

 

See Notes to Financial Statements

36

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

    Digital  
    Transformation  
    ETF  
       
    Period Ended  
    September 30,  
    2021(a)  
       
Net asset value, beginning of period     $35.25  
Net investment income (b)     (c)
Net realized and unrealized loss on investments     (12.44 )
Total from investment operations     (12.44 )
Net asset value, end of period     $22.81  
Total return (d)     (35.30)% (e)
Ratios to average net assets        
Expenses     0.58% (f)
Net investment income     0.02% (f)
Supplemental data        
Net assets, end of period (in millions)     $46  
Portfolio turnover rate (g)     49% (e)

 

(a) For the period April 13, 2021 (commencement of operations) through September 30, 2021.
(b) Calculated based upon average shares outstanding
(c) Amount represents less than $0.005 per share.
(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

37

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each year:

 

    Environmental Services ETF  
    Year Ended September 30,  
    2021     2020     2019     2018     2017  
                               
Net asset value, beginning of year     $99.41     $ 104.25       $96.64     $ 86.02     $ 69.68  
Net investment income (a)     0.36       0.46       0.46       0.42       0.66  
Net realized and unrealized gain (loss) on investments     43.80       (4.83 )     7.47       10.98       16.21  
Total from investment operations     44.16       (4.37 )     7.93       11.40       16.87  
Distributions from:                                        
Net investment income     (0.39 )     (0.47 )     (0.32 )     (0.78 )     (0.53 )
Net asset value, end of year   $ 143.18       $99.41     $ 104.25     $ 96.64     $ 86.02  
Total return (b)     44.50 %     (4.23 )%     8.30 %     13.36 %     24.31 %
Ratios to average net assets                                        
Gross expenses     0.71 %     0.85 %     0.81 %     0.98 %     0.95 %
Net expenses     0.55 %     0.55 %     0.55 %     0.56 %     0.55 %
Net expenses excluding interest expense     0.55 %     0.55 %     0.55 %     0.55 %     0.55 %
Net investment income     0.27 %     0.47 %     0.47 %     0.47 %     0.86 %
Supplemental data                                        
Net assets, end of year (in millions)     $67       $31       $36       $24       $17  
Portfolio turnover rate (c)     21 %     38 %     20 %     24 %     20 %

 

(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

38

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each year:

 

    Gaming ETF  
    Year Ended September 30,  
    2021     2020     2019     2018     2017  
                               
Net asset value, beginning of year   $ 39.14     $ 36.61     $ 39.76     $ 42.61     $ 36.15  
Net investment income (a)     0.16       0.51       1.07       1.03       1.13  
Net realized and unrealized gain (loss) on investments     9.24       3.25       (3.09 )     (2.80 )     6.40  
Total from investment operations     9.40       3.76       (2.02 )     (1.77 )     7.53  
Distributions from:                                        
Net investment income     (0.22 )     (1.23 )     (1.13 )     (1.08 )     (1.07 )
Net asset value, end of year   $ 48.32     $ 39.14     $ 36.61     $ 39.76     $ 42.61  
Total return (b)     24.06 %     10.03 %     (4.73 )%     (4.51 )%     21.58 %
Ratios to average net assets                                        
Gross expenses     0.62 %     0.92 %     0.94 %     0.86 %     0.94 %
Net expenses     0.62 %     0.65 %     0.66 %     0.66 %     0.65 %
Net expenses excluding interest expense     0.62 %     0.65 %     0.65 %     0.65 %     0.65 %
Net investment income     0.32 %     1.41 %     2.92 %     2.24 %     2.97 %
Supplemental data                                        
Net assets, end of year (in millions)     $118       $55       $24       $26       $23  
Portfolio turnover rate (c)     20 %     29 %     20 %     31 %     22 %

 

(a) Calculated based upon average shares outstanding
(b) Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions.
(c) Portfolio turnover rate excludes in-kind transactions.

 

See Notes to Financial Statements

39

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each year:

 

    Pharmaceutical ETF  
    Year Ended September 30,  
    2021     2020     2019     2018     2017  
                               
Net asset value, beginning of year   $ 62.08     $ 56.93     $ 64.37     $ 57.75     $ 57.44  
Net investment income (a)     1.29       1.06       1.04       1.01       1.18  
Net realized and unrealized gain (loss) on investments     10.46       5.14       (7.37 )     6.62       0.26  
Total from investment operations     11.75       6.20       (6.33 )     7.63       1.44  
Distributions from:                                        
Net investment income     (1.15 )     (1.05 )     (1.11 )     (1.01 )     (1.13 )
Net asset value, end of year   $ 72.68     $ 62.08     $ 56.93     $ 64.37     $ 57.75  
Total return (b)     19.10 %     11.02 %     (9.88 )%     13.42 %     2.59 %
Ratios to average net assets                                        
Gross expenses     0.40 %     0.42 %     0.43 %     0.43 %     0.40 %
Net expenses     0.35 %     0.35 %     0.36 %     0.36 %     0.35 %
Net expenses excluding interest expense     0.35 %     0.35 %     0.35 %     0.35 %     0.35 %
Net investment income     1.85 %     1.74 %     1.77 %     1.70 %     2.14 %
Supplemental data                                        
Net assets, end of year (in millions)     $319       $235       $142       $276       $285  
Portfolio turnover rate (c)     20 %     18 %     21 %     18 %     40 %

 

(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

40

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each year:

 

    Retail ETF  
    Year Ended September 30,  
    2021     2020     2019     2018     2017  
                               
Net asset value, beginning of year   $ 148.87     $ 114.49     $ 111.44       $81.42     $ 78.02  
Net investment income (a)     1.54       1.22       1.31       1.13       1.15  
Net realized and unrealized gain on investments     25.34       34.25       2.72       30.32       3.64  
Total from investment operations     26.88       35.47       4.03       31.45       4.79  
Distributions from:                                        
Net investment income     (1.00 )     (1.09 )     (0.98 )     (1.43 )     (1.39 )
Net asset value, end of year   $ 174.75     $ 148.87     $ 114.49     $111.44     $ 81.42  
Total return (b)     18.13 %     31.22 %     3.82 %     39.01 %     6.25 %
Ratios to average net assets                                        
Gross expenses     0.42 %     0.47 %     0.48 %     0.52 %     0.50 %
Net expenses     0.35 %     0.35 %     0.35 %     0.35 %     0.35 %
Net investment income     0.92 %     0.96 %     1.25 %     1.15 %     1.46 %
Supplemental data                                        
Net assets, end of year (in millions)     $240       $182       $71       $136       $59  
Portfolio turnover rate (c)     12 %     12 %     9 %     16 %     17 %

 

(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

41

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each year:

 

    Semiconductor ETF  
    Year Ended September 30,  
    2021     2020     2019     2018     2017  
                               
Net asset value, beginning of year   $ 174.43     $ 119.14     $ 106.41       $93.34     $ 69.36  
Net investment income (a)     1.71       1.88       1.75       1.19       1.10  
Net realized and unrealized gain on investments     81.61       55.53       12.62       13.28       23.46  
Total from investment operations     83.32       57.41       14.37       14.47       24.56  
Distributions from:                                        
Net investment income     (1.50 )     (2.12 )     (1.64 )     (1.40 )     (0.58 )
Net asset value, end of year   $ 256.25     $ 174.43     $ 119.14     $ 106.41     $ 93.34  
Total return (b)     47.94 %     48.60 %     14.09 %     15.61 %     35.63 %
Ratios to average net assets                                        
Gross expenses     0.36 %     0.37 %     0.39 %     0.39 %     0.38 %
Net expenses     0.35 %     0.35 %     0.35 %     0.35 %     0.35 %
Net investment income     0.72 %     1.31 %     1.68 %     1.14 %     1.38 %
Supplemental data                                        
Net assets, end of year (in millions)     $5,938       $2,646       $1,361       $1,215       $800  
Portfolio turnover rate (c)     20 %     14 %     19 %     23 %     22 %

 

(a) Calculated based upon average shares outstanding
(b) Returns include adjustments in accordance with U.S. Generally Accepted Accounting Principles. Net asset values and returns for financial reporting purposes may differ from those for shareholder transactions.
(c) Portfolio turnover rate excludes in-kind transactions.

 

See Notes to Financial Statements

42

VANECK ETF TRUST

FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period:

 

    Video Gaming and eSports ETF  
       
    Year Ended September 30,     Period Ended  
                September 30,  
    2021     2020     2019(a)  
                         
Net asset value, beginning of period   $ 61.36     $ 33.74       $30.88  
Net investment income (b)     0.04       0.03       0.12  
Net realized and unrealized gain on investments     3.73       27.67       2.75  
Total from investment operations     3.77       27.70       2.87  
Distributions from:                        
Net investment income     (0.08 )     (0.08 )     (0.01 )
Net asset value, end of period   $ 65.05     $ 61.36                      $33.74  
Total return (c)     6.15 %     82.25 %     9.31% (d)
Ratios to average net assets                        
Gross expenses     0.55 %     0.58 %     0.99% (e)
Net expenses     0.55 %     0.55 %     0.55% (e)
Net investment income     0.06 %     0.06 %     0.38% (e)
Supplemental data                        
Net assets, end of period (in millions)     $631       $522       $39  
Portfolio turnover rate (f)     33 %     25 %     27% (d)

 

(a) For the period October 16, 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

43

VANECK ETF TRUST

NOTES TO FINANCIAL STATEMENTS

September 30, 2021

 

Note 1—Fund Organization—VanEck ETF Trust (the “Trust”) (formerly known as VanEck Vectors ETF 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
     
Biotech ETF   Non-Diversified
Digital Transformation ETF   Non-Diversified
Environmental Services ETF   Non-Diversified
Gaming ETF   Non-Diversified
Pharmaceutical ETF   Non-Diversified
Retail ETF   Non-Diversified
Semiconductor ETF   Non-Diversified
Video Gaming and eSports ETF   Non-Diversified

 

Each Fund 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.

 

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 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 Pricing Committee of Van Eck Associates Corporation (the “Adviser”) provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. 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
44

 

 

  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 categorized 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. 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 taxable income to its shareholders. Therefore, no federal income tax provision is required.
   
C. 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 on Pharmaceutical 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.
   
D. 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 is 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.
45

VANECK ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(continued)

 

E. 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.
   
F. 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, 2021, 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).
   
G. 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 net investment 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. 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 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 is the investment adviser to the Funds. 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, 2022, 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 the expense limitations listed in the table below.

 

The management fee rates and expense limitations for the year ended September 30, 2021, are as follows:

 

Fund   Management
Fees
  Expense
Limitations
Biotech ETF     0.35 %     0.35 %
Environmental Services ETF     0.50       0.55  
Gaming ETF     0.50       0.65  
Pharmaceutical ETF     0.35       0.35  
Retail ETF     0.35       0.35  
Semiconductor ETF     0.35       0.35  
Video Gaming and eSports ETF     0.50       0.55  

 

Refer to the Statements of Operations for amounts waived/assumed by the Adviser.

46

 

 

Digital Transformation ETF utilizes a unitary management fee structure where the Adviser is responsible for all Fund expenses, excluding the fee payment under the investment management agreement, acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses. Effective August 4, 2021, the unitary management fee rate for the Fund is 0.50% (prior to that date, the unitary management fee rate was 0.65%).

 

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.

 

Note 4—Capital Share Transactions— As of September 30, 2021, 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 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 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, 2021, 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
Biotech ETF   $ 216,407,908     $ 219,220,626     $ 211,009,606     $ 220,621,134  
Digital Transformation ETF     19,116,563       17,749,923       56,811,273       1,194,785  
Environmental Services ETF     11,138,126       10,586,218       40,519,827       18,780,261  
Gaming ETF     25,414,430       22,623,665       86,473,521       34,746,055  
Pharmaceutical ETF     50,433,213       49,557,997       493,062,108       446,279,307  
Retail ETF     27,157,415       28,106,264       278,024,307       250,746,384  
Semiconductor ETF     956,714,564       963,082,096       12,243,011,039       10,362,474,280  
Video Gaming and eSports ETF     246,383,948       241,128,193       248,458,612       165,581,023  
47

VANECK ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(continued)

 

Note 6—Income Taxes— As of September 30, 2021, 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)
Biotech ETF   $ 507,848,412     $ 112,857,745     $ (31,463,499 )   $ 81,394,246  
Digital Transformation ETF     61,508,333       519,001       (11,484,118 )     (10,965,117 )
Environmental Services ETF     59,353,572       10,958,914       (1,858,311 )     9,100,603  
Gaming ETF     119,926,644       19,519,206       (19,998,745 )     (479,539 )
Pharmaceutical ETF     343,003,952       13,659,698       (21,410,898 )     (7,751,200 )
Retail ETF     243,537,168       5,092,632       (8,633,902 )     (3,541,270 )
Semiconductor ETF     6,170,592,931       146,472,175       (300,025,370 )     (153,553,195 )
Video Gaming and eSports ETF     589,134,866       112,790,534       (61,758,231 )     51,032,303  

 

At September 30, 2021, 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)
Biotech ETF   $ 681,319     $ (107,489,562 )   $ (64,926 )   $ 81,394,246     $ (25,478,923 )
Digital Transformation ETF     1,632,489       (2,146,231 )     (7 )     (10,965,117 )     (11,478,866 )
Environmental Services ETF     110,196       (13,480,903 )     (3,589 )     9,100,603       (4,273,693 )
Gaming ETF     564,611       (13,704,532 )     (8,813 )     (479,207 )     (13,627,941 )
Pharmaceutical ETF     1,550,884       (87,925,089 )     (36,037 )     (7,751,200 )     (94,161,442 )
Retail ETF     1,330,445       (11,589,630 )     (10,259 )     (3,541,271 )     (13,810,715 )
Semiconductor ETF     25,320,876       (119,396,034 )     (97,455 )     (153,553,195 )     (247,725,808 )
Video Gaming and eSports ETF     18,472,320       2,029,952       (9,660 )     51,037,950       71,530,562  

 

The tax character of dividends paid to shareholders was as follows:

 

Fund   2021
Ordinary
Income
  2020
Ordinary
Income
Biotech ETF   $ 1,699,994     $ 1,250,208  
Environmental Services ETF     124,993       165,025  
Gaming ETF     349,965       800,020  
Pharmaceutical ETF     4,063,401       3,321,670  
Retail ETF     1,274,964       950,056  
Semiconductor ETF     29,249,241       19,250,343  
Video Gaming and eSports ETF     870,225       125,100  

 

At September 30, 2021, 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
Biotech ETF   $ (10,178,101 )   $ (97,311,461 )   $ (107,489,562 )
Digital Transformation ETF     (2,146,231 )           (2,146,231 )
Environmental Services ETF     (4,409,984 )     (9,070,919 )     (13,480,903 )
Gaming ETF     (3,351,540 )     (10,352,992 )     (13,704,532 )
Pharmaceutical ETF     (4,203,891 )     (83,721,198 )     (87,925,089 )
Retail ETF     (2,971,511 )     (8,618,119 )     (11,589,630 )
Semiconductor ETF     (104,617,133 )     (14,778,901 )     (119,396,034 )

 

During the year ended September 30, 2021, Video Gaming and eSports ETF utilized $890,112 of its capital loss carryforward available from prior years.

48

 

 

During the period ended September 30, 2021, as a result of permanent book to tax differences primarily due to the tax treatment of in-kind redemptions, and the accumulated earnings applicable to the redemption of shares, 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
Biotech ETF   $ (103,568,546 )   $ 103,568,546  
Digital Transformation ETF     (58,739 )     58,739  
Environmental Services ETF     (8,378,563 )     8,378,563  
Gaming ETF     (12,580,773 )     12,580,773  
Pharmaceutical ETF     (33,962,321 )     33,962,321  
Retail ETF     (56,586,756 )     56,586,756  
Semiconductor ETF     (1,705,104,401 )     1,705,104,401  
Video Gaming and eSports ETF     (76,537,801 )     76,537,801  

 

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, 2021, 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.

 

The respiratory disease caused by a novel coronavirus, which has spread internationally and declared as a pandemic by the World Health Organization, has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, loss of life, as well as general concern and uncertainty. The coronavirus has already negatively impacted the economies of many nations, individual companies, and the market. This pandemic is expected to have a continued impact in ways that cannot necessarily be foreseen presently.

 

A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.

49

VANECK ETF TRUST

NOTES TO FINANCIAL STATEMENTS

(continued)

 

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 of the Trust as directed by the Trustees.

 

Except for the Digital Transformation 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. The Adviser is responsible for paying the expenses associated with the Plan for the Digital Transformation ETF, and therefore the Fund bears no costs or liabilities relative to the Plan.

 

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 on the 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 collateral, if any, at September 30, 2021 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities. The following is a summary of the Funds’ securities on loan and related collateral as of September 30, 2021:

 

Fund   Market Value
of Securities
on Loan
  Cash
Collateral
  Non-Cash
Collateral
  Total
Collateral
Biotech ETF   $ 24,961,286     $     $ 25,096,171     $ 25,096,171  
Digital Transformation ETF     7,998,120       4,964,972       3,401,388       8,366,360  
Environmental Services ETF     3,719,858       1,227,822       2,722,700       3,950,522  
Gaming ETF     19,046,196       1,210,699       18,464,889       19,675,588  
Pharmaceutical ETF     21,722,584       17,187,701       5,057,856       22,245,557  
Retail ETF     1,855,514       293,092       1,714,740       2,007,832  
Semiconductor ETF     87,531,989       86,922,750       1,856,281       88,779,031  
Video Gaming and eSports ETF     46,566,368       9,305,364       41,750,251       51,055,615  
50

 

 

The following table presents money market fund investments held as collateral by type of security on loan as of September 30, 2021:

 

    Gross Amount of
Recognized Liabilities
for Securities Lending
Transactions*
in the Statements of
Assets and Liabilities
Fund   Equity Securities
Digital Transformation ETF   $ 4,964,972  
Environmental Services ETF     1,227,822  
Gaming ETF     1,210,699  
Pharmaceutical ETF     17,187,701  
Retail ETF     293,092  
Semiconductor ETF     86,922,750  
Video Gaming and eSports ETF     9,305,364  

 

* 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 for 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, 2021, the following Funds borrowed under this Facility:

 

Fund   Days
Outstanding
    Average
Daily
Loan Balance
    Average
Interest Rate
Biotech ETF     51     $ 2,100,695       1.43 %
Digital Transformation ETF     11       680,180       1.44  
Environmental Services ETF     10       249,349       1.45  
Gaming ETF     55       370,629       1.43  
Pharmaceutical ETF     295       549,212       1.44  
Retail ETF     10       102,594       1.46  
Semiconductor ETF     191       2,241,609       1.44  
Video Gaming and eSports ETF     178       1,181,963       1.43  

 

Outstanding loan balances as of September 30, 2021, if any, are reflected in the Statements of Assets and Liabilities.

 

Note 11—Subsequent Event Review— The Funds have evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued. Effective October 1, 2021, the Funds listed in the table below converted to a unitary management fee structure, pursuant to which the Adviser has agreed to pay all of the expenses of each Fund (excluding the fee payment under the investment management agreement, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes, and extraordinary expenses).

 

Fund   Unitary
Management
Fee Rate
Biotech ETF     0.35 %      
Pharmaceutical ETF     0.35  
Retail ETF     0.35  
Semiconductor ETF     0.35  
51

VANECK ETF TRUST

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Report of Independent Registered Public Accounting Firm

 

To the Shareholders of VanEck Biotech ETF, VanEck Digital Transformation ETF, VanEck Environmental Services ETF, VanEck Gaming ETF, VanEck Pharmaceutical ETF, VanEck Retail ETF, VanEck Semiconductor ETF and VanEck Video Gaming and eSports ETF and the Board of Trustees of VanEck ETF Trust

 

Opinion on the Financial Statements

 

We have audited the accompanying statements of assets and liabilities of VanEck Biotech ETF, VanEck Digital Transformation ETF, VanEck Environmental Services ETF, VanEck Gaming ETF, VanEck Pharmaceutical ETF, VanEck Retail ETF, VanEck Semiconductor ETF and VanEck Video Gaming and eSports ETF (collectively referred to as the “Funds”) (eight of the series constituting VanEck ETF Trust (the “Trust”)), including the schedules of investments, as of September 30, 2021, and the related statements of operations, changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (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 (eight of the series constituting VanEck ETF Trust) as of September 30, 2021, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.

 

  Individual fund constituting
the VanEck ETF Trust
  Statement of
operations
  Statements of changes in net
assets
  Financial highlights  
               
 

VanEck Biotech ETF

 

VanEck Environmental Services ETF

 

VanEck Gaming ETF

 

VanEck Pharmaceutical ETF

 

VanEck Retail ETF

 

VanEck Semiconductor ETF

  For the year ended