ck0001137360-20230430
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PROSPECTUS |
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September
1, 2023 |
CEF
Muni Income ETF XMPT
High
Yield Muni ETF HYD
HIP
Sustainable Muni ETF SMI
Intermediate
Muni ETF ITM
Long
Muni ETF MLN
Short
High Yield Muni ETF SHYD
Short
Muni ETF SMB
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Principal
U.S. Listing Exchange for each Fund: Cboe BZX Exchange,
Inc. |
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The
U.S. Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this
Prospectus. Any representation to the contrary is a criminal
offense. |
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800.826.2333 vaneck.com
INVESTMENT
OBJECTIVE
VanEck® CEF Muni Income ETF (the “Fund”) seeks to
replicate as closely as possible, before fees and expenses, the price and yield
performance of the S-Network Municipal Bond Closed-End Fund IndexSM
(the “CEFMX Index”).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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| Management
Fee |
0.40 |
% |
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Other
Expenses(a) |
0.01 |
% |
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Acquired
Fund Fees and Expenses(b) |
1.41 |
% |
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Total
Annual Fund Operating Expenses(a) |
1.82 |
% |
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(a) Van Eck
Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except
for the fee payment under the investment management agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2024.
(b) “Acquired Fund
Fees and Expenses” reflect the Fund’s pro rata portion of the expenses charged
by the Underlying Funds (as defined herein). These expenses are based on the
total expense ratio disclosed in each Underlying Fund’s most recent shareholder
report. Because Acquired Fund Fees and Expenses are not borne directly by the
Fund, they will not be reflected in the expense information in the Fund’s
financial statements and the information presented in the table will differ from
that presented in the Fund’s financial highlights included in the Fund’s reports
to shareholders.
EXPENSE
EXAMPLE
This example is intended to help you compare
the cost of investing in the Fund with the cost of investing in other funds.
This example does not take into account brokerage commissions that you pay when
purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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| YEAR |
EXPENSES |
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| 1 |
$185 |
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| 3 |
$573 |
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| 5 |
$985 |
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| 10 |
$2,137 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 15% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at least 80% of its total assets
in investments the income from which is exempt from U.S. federal income tax
(other than federal alternative minimum tax (“AMT”)). The Fund is a “fund of
funds,” meaning that it invests all or a portion of its assets in other funds
(the “Underlying Funds”). The Fund normally invests at least 80% of its total
assets in securities of issuers that comprise the Fund’s benchmark index. The
CEFMX Index is comprised of shares of U.S.-listed closed-end funds.
The
Underlying Funds invest in municipal bonds issued by states or local governments
or agencies the income of which is exempt from U.S. federal income tax, but a
portion of this income may be subject to the AMT and will generally be subject
to state income taxes. The Fund’s investment policy to invest at least 80% of
its total assets in investments the income from which is exempt from U.S.
federal income tax (other than AMT) requires shareholder approval before it can
be changed. The Fund may count investments that generate income subject to the
AMT toward the 80% investment requirement.
The
Investment Company Act of 1940, as amended (the “Investment Company Act of
1940”), places limits on the percentage of the total outstanding stock of an
Underlying Fund that may be owned by the Fund.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the CEFMX Index by investing in a portfolio of
securities that generally replicates the CEFMX Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the CEFMX Index and does not take temporary defensive
positions that are inconsistent with its investment objective of seeking to
replicate the CEFMX Index.
The
Fund may become “non-diversified” as defined under the Investment Company Act of
1940, solely as a result of a change in relative market capitalization or index
weighting of one or more constituents of the CEFMX Index. This means that the
Fund may invest a greater percentage of its assets in a limited number of
issuers than would be the case if the Fund were always managed as a diversified
management investment company. The Fund intends to be diversified in
approximately the same proportion as the CEFMX Index. Shareholder approval will
not be sought when the Fund crosses from diversified to non-diversified status
due solely to a change in the relative market capitalization or index weighting
of one or more constituents of the CEFMX Index.
The Fund may
concentrate its investments in a particular industry or group of industries to
the extent that the CEFMX Index concentrates in an industry or group of
industries.
PRINCIPAL RISKS OF INVESTING IN
THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund is
not a deposit with a bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Fund of Funds Risk.
The performance of the Fund is dependent on the performance of the underlying
funds. The Fund will be subject to the risks of the underlying funds’
investments. The Fund will pay indirectly a proportional share of the fees and
expenses of the underlying funds in which it invests, including their investment
advisory and administration fees, while continuing to pay its own management
fee. As a result, the Fund’s shareholders will indirectly bear the expenses of
the underlying funds, absorbing duplicative levels of fees.
Risks
of Investing in Closed-End Funds. The
shares of a closed-end fund may trade at a discount or premium to its net asset
value. A closed-end fund may be leveraged as part of its investment strategy.
Investments in Underlying Funds that use leverage indirectly expose the Fund to
the effects of leverage and may cause the value of the Fund’s Shares to be more
volatile than if the Fund invested in Underlying Funds that do not utilize
leverage, diminishing the Fund’s long-term returns. Provisions of the Investment
Company Act of 1940 or regulations thereunder may dictate how the Adviser is
required to vote Underlying Fund Shares (in the same general proportion as
shares held by other shareholders of the Underlying Fund).
Underlying
Funds Risk.
The Fund may be subject to the following risks as a result of its investment in
the Underlying Funds:
Market
Risk.
The prices of the securities in the Underlying Funds are subject to the risks
associated with investing in the securities market, including general economic
conditions, sudden and unpredictable drops in value, exchange trading
suspensions and closures and public health risks. These risks may be magnified
if certain social, political, economic and other conditions and events (such as
natural disasters, epidemics and pandemics, terrorism, conflicts and social
unrest) adversely interrupt the global economy; in these and other
circumstances, such events or developments might affect companies world-wide. An
investment in an Underlying Fund may lose money.
Municipal
Securities Risk.
The Underlying Funds may invest in municipal securities. Municipal securities
are subject to the risk that litigation, legislation or other political events,
local business or economic conditions, credit rating downgrades, or the
bankruptcy of the issuer could have a significant effect on an issuer’s ability
to make payments of principal and/or interest or otherwise affect the value of
such securities. Certain municipalities may have difficulty meeting their
obligations due to, among other reasons, changes in underlying demographics.
Municipal securities can be significantly affected by political changes as well
as uncertainties in the municipal market related to government regulation,
taxation, legislative changes or the rights of municipal security holders.
Because many municipal securities are issued to finance similar projects,
especially those relating to education, health care, transportation, utilities
and water and sewer, conditions in those sectors can affect the overall
municipal market. Municipal securities include general obligation bonds, which
are backed by the “full faith and credit” of the issuer, which has the power to
tax residents to pay bondholders. Timely payments depend on the issuer’s credit
quality, ability to raise tax revenues and ability to maintain an adequate tax
base. General obligation bonds generally are not backed by revenues from a
specific project or source. Municipal securities also include revenue bonds,
which are generally backed by
revenue
from a specific project or tax. The issuer of a revenue bond makes interest and
principal payments from revenues generated from a particular source or facility,
such as a tax on particular property or revenues generated from a municipal
water or sewer utility or an airport. Revenue bonds generally are not backed by
the full faith and credit and general taxing power of the issuer. The market for
municipal bonds may be less liquid than for taxable bonds. There may be less
information available on the financial condition of issuers of municipal
securities than for public corporations. Municipal instruments may be
susceptible to periods of economic stress, which could affect the market values
and marketability of many or all municipal obligations of issuers in a state,
U.S. territory, or possession. For example, the COVID-19 pandemic has
significantly stressed the financial resources of many municipal issuers, which
may impair a municipal issuer’s ability to meet its financial obligations when
due and could adversely impact the value of its bonds, which could negatively
impact the performance of the Fund.
High
Yield Securities Risk.
The Underlying Funds may invest in high yield securities. Securities rated below
investment grade are commonly referred to as high yield securities or “junk
bonds.” High yield securities are often issued by issuers that are
restructuring, are smaller or less creditworthy than other issuers, or are more
highly indebted than other issuers. High yield securities are subject to greater
risk of loss of income and principal than higher rated securities and are
considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual municipal developments
than higher rated securities. During an economic downturn or substantial period
of rising interest rates, high yield security issuers may experience financial
stress that would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. In the event of a default, the Fund may incur
additional expenses to seek recovery. The secondary market for municipal
securities that are high yield securities may be less liquid than the markets
for higher quality municipal securities or high yield securities issued by
corporate issuers and, as such, may have an adverse effect on the market prices
of and an Underlying Fund’s ability to arrive at a fair value for certain
securities. In addition, periods of economic uncertainty and change may result
in an increased volatility of market prices of high yield securities and a
corresponding volatility in the Fund’s net asset value.
Credit
Risk.
Bonds are subject to credit risk. Credit risk refers to the possibility that the
issuer or guarantor of a security will be unable and/or unwilling to make timely
interest payments and/or repay the principal on its debt or to otherwise honor
its obligations and/or default completely. Bonds are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on the terms
of the securities, which may be reflected in credit ratings. There is a
possibility that the credit rating of a bond may be downgraded after purchase or
the perception of an issuer’s creditworthiness may decline, which may adversely
affect the value of the security. The Underlying Funds may hold securities that
are insured by a bond insurer. A downgrade of the credit rating of such bond
insurer may cause the value of the insured security to decline.
Interest
Rate Risk.
Debt securities, such as bonds, are also subject to interest rate risk. Interest
rate risk refers to fluctuations in the value of a bond resulting from changes
in the general level of interest rates. When the general level of interest rates
goes up, the prices of most debt securities go down. When the general level of
interest rates goes down, the prices of most debt securities go up. The
prevailing historically low interest rate environment increases the risks
associated with rising interest rates, including the potential for periods of
volatility and increased redemptions. In addition, debt securities, such as
bonds, with longer durations tend to be more sensitive to interest rate changes,
usually making them more volatile than debt securities with shorter durations.
In addition, in response to the COVID-19 pandemic, as with other serious
economic disruptions, governmental authorities and regulators are enacting
significant fiscal and monetary policy changes, including providing direct
capital infusions into companies, creating new monetary programs and lowering
interest rates. These actions present heightened risks to debt instruments, and
such risks could be even further heightened if these actions are unexpectedly or
suddenly reversed or are ineffective in achieving their desired
outcomes.
Call
Risk.
The Underlying Funds may invest in callable bonds. If interest rates fall, it is
possible that issuers of callable securities will “call” (or prepay) their bonds
before their maturity date. If a call were exercised by the issuer during or
following a period of declining interest rates, the Underlying Fund is likely to
have to replace such called security with a lower yielding security or
securities with greater risks or other less favorable features. If that were to
happen, it would decrease the Underlying Fund’s net investment income, resulting
in a decline in the Fund’s income.
Tax
Risk. There
is no guarantee that the Underlying Fund’s income will be exempt from U.S.
federal or state or local income taxes. Events occurring after the date of
issuance of a municipal bond or after the Underlying Fund’s acquisition of a
municipal bond may result in a determination that interest on that bond is
includible in gross income for U.S. federal income tax purposes retroactively to
its date of issuance. Such a determination may cause a portion of prior
distributions by the Underlying Fund to its shareholders to be taxable to those
shareholders in the year of receipt. Federal or state or local changes in income
or alternative minimum tax rates or in the tax treatment of municipal bonds may
make municipal bonds less attractive as investments and cause them to lose
value.
Liquidity
Risk.
Unlike the Fund, as closed-end funds the Underlying Funds are not limited in
their ability to invest in illiquid securities. Securities with reduced
liquidity involve greater risk than securities with more liquid markets. Prices
of securities not traded on an exchange may vary over time. Secondary trading of
a fixed-income security may decline for a period of time if its credit quality
unexpectedly declines. An Underlying Fund may not receive full value for assets
sold during periods of infrequent trading.
Leverage
Risk. Ordinary
borrowings by an Underlying Fund or an Underlying Fund’s investment in
derivatives may result in leverage. If the prices of those investments decrease,
or if the cost of borrowing exceeds any increase in the prices of investments
made with the proceeds of the borrowing, the net asset value of the Underlying
Fund’s shares will decrease more than if the Underlying Fund had not used
leverage. An Underlying Fund may have to sell investments at a time and at a
price that is unfavorable to the Underlying Fund to repay borrowings. Interest
on borrowings is an expense the Underlying Fund would not otherwise incur.
Leverage magnifies the potential for gain and the risk of loss. If an Underlying
Fund uses leverage, there can be no assurance that the Underlying Fund’s
leverage strategy will be successful.
Anti-Takeover
Measures Risk.
Certain Underlying Funds may have provisions in their organizational documents
intended to limit the ability of third parties to acquire control or change the
composition of the Underlying Fund’s board. This may discourage a third party
from seeking to obtain control of the Underlying Fund, which could limit the
ability of Underlying Fund shareholders to sell their shares at a premium over
prevailing market prices.
Non-Diversified
Risk.
Some of the Underlying Funds may invest a relatively high percentage of their
assets in a smaller number of issuers or may invest a larger proportion of their
assets in the obligations of a single issuer. Moreover, the gains and losses on
an investment in such an Underlying Fund may have a greater impact on the Fund’s
net asset value and may make the value of the Fund’s investment in such an
Underlying Fund more volatile than an investment in more diversified Underlying
Funds.
Investment
Restrictions Risk.
The Fund is subject to the conditions set forth in certain provisions of the
Investment Company Act of 1940 or regulations thereunder that limit the amount
that the Fund and its affiliates, in the aggregate, can invest in the
outstanding voting securities of an unaffiliated Underlying Fund. The Fund and
its affiliates may not acquire “control” of an Underlying Fund, which is
presumed once ownership of an Underlying Fund’s outstanding voting securities
exceeds 25%. This limitation could inhibit the Fund’s ability to purchase one or
more Underlying Funds in the Index in the proportions represented in the Index.
In these circumstances, the Fund would be required to use sampling techniques,
which could increase the risk of tracking error.
Illinois Risk. The
Fund may invest a significant portion of its assets in Illinois municipal bonds.
Consequently, the Fund may be affected by negative political, economic,
regulatory or other developments within the State of Illinois including the
financial condition of its public authorities and political subdivisions, to a
greater degree than a fund that invests in a broader base of securities.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Index Tracking Risk.
The Fund’s return may not match the return of the Index for a number of reasons.
For example, the Fund incurs operating expenses, including taxes, not applicable
to the Index and incurs costs associated with buying and selling securities and
entering into derivatives transactions (if applicable), especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index or (if applicable) raising cash to meet redemptions or deploying
cash in connection with inflows into the Fund. Transaction costs, including
brokerage costs, may decrease the Fund’s net asset value.
Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Index. Errors in the Index data, the Index computations and/or the
construction of the Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Index provider, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Index provider’s or others’ errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
Index provider’s or others’ errors will be borne by the Fund and its
shareholders. Additionally, when the Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Apart from scheduled rebalances, the Index provider or its
agents may carry out additional ad hoc rebalances to the Index. Therefore,
errors and additional ad hoc rebalances carried out by the Index provider or its
agents to the Index may increase the costs to and the tracking error risk of the
Fund.
The
Fund may not be fully invested at times either as a result of cash flows into
the Fund or reserves of cash held by the Fund to pay expenses or to meet
redemptions. In addition, the Fund may not invest in certain securities included
in the Index, or invest in them in the exact proportions in which they are
represented in the Index. The Fund’s performance may also deviate from the
return of the Index for various reasons, including legal restrictions or
limitations imposed by the governments of certain countries,
certain
exchange listing standards (where applicable), a lack of liquidity in markets in
which such securities trade, potential adverse tax consequences or other
regulatory reasons (such as diversification requirements). To the extent the
Fund utilizes depositary receipts, the purchase of depositary receipts may
negatively affect the Fund’s ability to track the performance of the Index and
increase tracking error, which may be exacerbated if the issuer of the
depositary receipt discontinues issuing new depositary receipts or withdraws
existing depositary receipts.
The
Fund may value certain of its investments, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its net
asset value based on fair value prices and the value of the Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. In addition, any issues the Fund
encounters with regard to currency convertibility (including the cost of
borrowing funds, if any), repatriation or economic sanctions may also increase
the index tracking risk. The Fund’s performance may also deviate from the
performance of the Index due to the impact of withholding taxes, late
announcements relating to changes to the Index and high turnover of the Index.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. The Fund may also need to rely on borrowings
to meet redemptions, which may lead to increased expenses. For tax efficiency
purposes, the Fund may sell certain securities, and such sale may cause the Fund
to realize a loss and deviate from the performance of the Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Index. Changes to the composition of the Index in connection with
a rebalancing or reconstitution of the Index may cause the Fund to experience
increased volatility, during which time the Fund’s index tracking risk may be
heightened.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market Risk.
There can be no assurance that an active trading market for the Shares will
develop or be maintained, as applicable. Further, secondary markets may be
subject to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods in times of market stress because market makers and
Authorized Participants may step away from making a market in the Shares and in
executing creation and redemption orders, which could cause a material deviation
in the Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can be no assurance that requirements of the exchange necessary to
maintain the listing of the Fund will continue to be met or will remain
unchanged.
Passive
Management Risk. Unlike
many investment companies, the Fund is not “actively” managed. Therefore, unless
a specific security is removed from its Index, the Fund generally would not sell
a security because the security’s issuer is in financial trouble. If a specific
security is removed from the Fund’s Index, the Fund may be forced to sell such
security at an inopportune time or for prices other than at current market
values. An investment in the Fund involves risks similar to those of investing
in any fund that invests in bonds or equity securities, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause the Fund’s Index provider to postpone a scheduled rebalance
or reconstitution, which could cause the Fund’s Index to vary from its normal or
expected composition. This means that, based on market and economic conditions,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more issuers.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares.
The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different
time
than the exchange on which the Shares are traded. Liquidity in those securities
may be reduced after the applicable closing times. Accordingly, during the time
when the exchange is open but after the applicable market closing, fixing or
settlement times, bid/ask spreads on the exchange and the resulting premium or
discount to the Shares’ net asset value may widen. Additionally, in stressed
market conditions, the market for the Fund’s Shares may become less liquid in
response to deteriorating liquidity in the markets for the Fund’s underlying
portfolio holdings and a shareholder may be unable to sell his or her Shares.
Non-Diversification
Risk. The Fund may become classified as “non-diversified” under
the Investment Company Act of 1940 solely as a result of a change in relative
market capitalization or index weighting of one or more constituents of the its
Index. If the Fund becomes non-diversified, it may invest a greater portion of
its assets in securities of a smaller number of individual issuers than a
diversified fund. As a result, changes in the market value of a single
investment could cause greater fluctuations in share price than would occur in a
more diversified fund.
Index-Related
Concentration Risk. The Fund’s assets may be
concentrated in a particular sector or sectors or industry or group of
industries to reflect the Index’s allocation to such sector or sectors or
industry or group of industries. The securities of many or all of the companies
in the same sector or industry may decline in value due to developments
adversely affecting such sector or industry. By concentrating its assets in a
particular sector or sectors or industry or group of industries, the Fund is
subject to the risk that economic, political or other conditions that have a
negative effect on those sectors and/or industries may negatively impact the
Fund to a greater extent than if the Fund’s assets were invested in a wider
variety of securities.
PERFORMANCE
The bar chart that follows shows how the Fund performed for the
calendar years shown. The table below the bar chart shows the Fund’s average
annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. All returns assume
reinvestment of dividends and distributions. The Fund’s past
performance (before and after taxes) is not necessarily indicative of how the
Fund will perform in the future. Updated performance information
is available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The
year-to-date total return as of
June 30, 2023 was
-0.01%.
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| Best
Quarter: |
10.40% |
1Q 2019 |
| Worst
Quarter: |
-14.00% |
1Q
2022 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| Past
One Year |
Past
Five Years |
Past
Ten Years |
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| VanEck CEF
Muni Income ETF
(return before taxes) |
-23.76% |
0.07% |
2.07% |
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| VanEck CEF
Muni Income ETF
(return after taxes on
distributions) |
-23.78% |
0.05% |
2.06% |
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| VanEck CEF
Muni Income ETF
(return after taxes on distributions and sale of Fund
Shares) |
-12.54% |
1.16% |
2.74% |
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S-Network
Municipal Bond Closed-End Fund Index
(reflects no deduction for
fees, expenses or taxes) |
-23.46% |
0.39% |
2.40% |
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ICE
BofA US Broad Market Index
(reflects
no deduction for fees, expenses or taxes) |
-13.16% |
0.03% |
1.07% |
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See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily responsible for the day-to-day management of
the Fund’s portfolio:
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| Name |
Title
with Adviser |
Date
Began Managing the Fund |
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| Peter
H. Liao |
Portfolio
Manager |
July
2011 |
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| Griffin
Driscoll |
Deputy
Portfolio Manager |
August
2023 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck® High Yield Muni ETF (the “Fund”) seeks to
replicate as closely as possible, before fees and expenses, the price and yield
performance of the ICE High Yield Crossover Municipal Index (the “High Yield
Index”).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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| Management
Fee |
0.32 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.32 |
% |
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(a) Van Eck
Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except
for the fee payment under the investment management agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2024.
EXPENSE
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
funds. This example does not take into account brokerage commissions that you
pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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| YEAR |
EXPENSES |
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| 1 |
$33 |
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| 3 |
$103 |
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| 5 |
$180 |
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| 10 |
$406 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 11% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the benchmark index. The High Yield Index is comprised of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
long-term tax-exempt bond market with a weight of 70% in non-investment grade
municipal bonds, 25% in triple-B rated investment grade municipal bonds and 5%
in single-A rated investment grade municipal bonds (in accordance with the High
Yield Index provider’s methodology). This 80% investment policy is
non-fundamental and may be changed without shareholder approval upon 60 days'
prior written notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the
investment.
The Fund, using a “passive” or indexing
investment approach, attempts to approximate the investment performance of the
High Yield Index. Unlike many investment companies that try to “beat” the
performance of a benchmark index, the Fund does not try to “beat” the High Yield
Index and does not take temporary defensive positions that are inconsistent with
its investment objective of seeking to replicate the High Yield Index. Because
of the practical difficulties and expense of purchasing all of the securities in
the High Yield Index, the Fund does not purchase all of the securities in the
High Yield Index. Instead, the Adviser utilizes a “sampling” methodology in
seeking to achieve the Fund’s objective. As such, the Fund may purchase a subset
of the bonds in the High Yield Index in an effort to hold a portfolio of bonds
with generally the same risk and return characteristics of the High Yield Index.
The High Yield Index is rebalanced on the last calendar day of the
month.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the High Yield Index concentrates in an industry
or group of industries. As of April 30, 2023, each of the healthcare, industrial
development and special tax (i.e., revenue bonds backed by a special
tax) sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING
IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund
is not a deposit with a bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. Revenue bonds generally are not backed by the full faith and credit and
general taxing power of the issuer. The bond markets may experience reduced
liquidity due to events such as limited trading activity, reductions in bond
inventory, market volatility, and rapid or unexpected changes in interest rates.
Less liquid markets could lead to greater price volatility and limit the Fund's
ability to sell a holding at a suitable price. The market for municipal bonds
may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of
municipal obligations of issuers in a state, U.S. territory, or possession. For
example, the COVID-19 pandemic has significantly stressed the financial
resources of many municipal issuers, which may impair a municipal issuer’s
ability to meet its financial obligations when due and could adversely impact
the value of its bonds, which could negatively impact the performance of the
Fund.
High
Yield Securities Risk.
Securities rated below investment grade are commonly referred to as high yield
securities or “junk bonds.” High yield securities are often issued by issuers
that are restructuring, are smaller or less creditworthy than other issuers, or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual issuer developments
than higher rated securities, resulting in increased volatility of their market
prices and a corresponding volatility in the Fund’s net asset value. During an
economic downturn or substantial period of rising interest rates, high yield
security issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet their projected business goals or to obtain additional financing. In the
event of a default, the Fund may incur additional expenses to seek recovery. The
secondary market for high yield securities may be less liquid than the markets
for higher quality securities, and high yield securities issued by non-corporate
issuers may be less liquid than high yield securities issued by corporate
issuers. Illiquidity may have an adverse effect on the market prices of and the
Fund’s ability to arrive at a fair value for certain securities when it seeks to
do so. In addition, periods of economic uncertainty and change may result in an
increased volatility of market prices of high yield securities and a
corresponding volatility in the Fund's net asset value.
Credit Risk.
Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Interest Rate Risk.
Debt securities and preferred securities are subject to interest rate risk.
Interest rate risk refers to fluctuations in the value of a security resulting
from changes in the general level of interest rates. When the general level of
interest rates goes up, the prices of most debt securities and certain preferred
securities go down. When the general level of interest rates goes down, the
prices of most debt securities go up. Many factors can cause interest rates to
rise, including central bank monetary policy, rising inflation rates and general
economic conditions. Debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities, such as bonds, with shorter durations. A substantial investment by
the Fund in debt securities with longer-term maturities during periods of rising
interest rates may cause the value of the Fund’s investments to decline
significantly. Changing interest rates may have unpredictable effects on
markets, may result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates and/or
volatility. It is difficult to predict the magnitude, timing or direction of
interest rate changes and the impact these changes will have on the markets in
which the Fund invests.
Call Risk.
The Fund may invest in callable debt securities. If interest rates fall, issuers
may “call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Private Activity Bonds Risk. The
Fund will be sensitive to, and its performance may depend to a greater extent
on, the overall condition and performance of private activity bonds. The issuers
of private activity bonds may be negatively impacted by conditions affecting
either the general credit of the user of the private activity project or the
project itself.
Industrial Development Bond Risk.
These
revenue bonds are issued by or on behalf of public authorities to obtain funds
to finance various public and/or privately operated facilities, including those
for business and manufacturing, housing, sports, pollution control, airport,
mass transit, port and parking facilities. These bonds are normally secured only
by the revenues from the project and not by state or local government tax
payments. Consequently, the credit quality of these securities is dependent upon
the ability of the user of the facilities financed by the bonds and any
guarantor to meet its financial obligations. Payment of interest on and
repayment of principal of such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Health Care Bond Risk.
The
health care industry is subject to regulatory action by a number of private and
governmental agencies, including federal, state and local governmental agencies.
A major source of revenues for the health care industry is payments from
Medicare and Medicaid programs. As a result, the industry is sensitive to
legislative changes and reductions in governmental spending for such programs.
Numerous other factors may also affect the industry and the value and credit
quality of health care bonds, such as general and local economic conditions,
demand for services, expenses (including malpractice insurance premiums) and
competition among health care providers. The following elements may adversely
affect health care facility operations: the implementation of national and/or
state-specific health insurance exchanges; other national, state or local health
care reform measures; medical and technological advances which dramatically
alter the need for health services or the way in which such services are
delivered; changes in medical coverage which alter the traditional
fee-for-service revenue stream; efforts by employers, insurers, and governmental
agencies to reduce the costs of health insurance and health care services; and
increases and decreases in the cost and availability of medical
products.
Special Tax Bond Risk.
Special tax bonds are usually backed and payable through a single tax, or series
of special taxes such as incremental property taxes. The failure of the tax levy
to generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
California Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
Illinois Risk.
The Fund may invest a significant portion of its assets in Illinois municipal
bonds. Consequently, the Fund may be affected by negative political, economic,
regulatory or other developments within the State of Illinois including the
financial condition of its public authorities and political subdivisions, to a
greater degree than a fund that invests in a broader base of securities.
New
York Risk.
The Fund may invest a significant portion of its assets in New York municipal
bonds. Consequently, the Fund may be affected by political, economic, regulatory
or other developments within the State of New York, and by the financial
condition of its public authorities and political subdivisions.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other
circumstances,
such events or developments might affect companies world-wide. Overall
securities values could decline generally or underperform other investments.
An investment
may lose money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value than would be the case if the Fund held all
of the securities in its Index. Conversely, a positive development relating to
an issuer of securities in the Index that is not held by the Fund could cause
the Fund to underperform the Index. To the extent the assets in the Fund are
smaller, these risks will be greater.
Index Tracking Risk. The
Fund’s return may not match the return of the Index for a number of reasons. For
example, the Fund incurs operating expenses, including taxes, not applicable to
the Index and incurs costs associated with buying and selling securities and
entering into derivatives transactions (if applicable), especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index or (if applicable) raising cash to meet redemptions or deploying
cash in connection with inflows into the Fund. Transaction costs, including
brokerage costs, may decrease the Fund’s net asset value.
Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Index. Errors in the Index data, the Index computations and/or the
construction of the Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Index provider, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Index provider’s or others’ errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
Index provider’s or others’ errors will be borne by the Fund and its
shareholders. Additionally, when the Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Apart from scheduled rebalances, the Index provider or its
agents may carry out additional ad hoc rebalances to the Index. Therefore,
errors and additional ad hoc rebalances carried out by the Index provider or its
agents to the Index may increase the costs to and the tracking error risk of the
Fund.
The
Fund may not be fully invested at times either as a result of cash flows into
the Fund or reserves of cash held by the Fund to pay expenses or to meet
redemptions. In addition, the Fund may not invest in certain securities included
in the Index, or invest in them in the exact proportions in which they are
represented in the Index. The Fund’s performance may also deviate from the
return of the Index for various reasons, including legal restrictions or
limitations imposed by the governments of certain countries, certain exchange
listing standards (where applicable), a lack of liquidity in markets in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). To the extent the Fund utilizes
depositary receipts, the purchase of depositary receipts may negatively affect
the Fund’s ability to track the performance of the Index and increase tracking
error, which may be exacerbated if the issuer of the depositary receipt
discontinues issuing new depositary receipts or withdraws existing depositary
receipts.
The
Fund may value certain of its investments, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its net
asset value based on fair value prices and the value of the Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. In addition, any issues the Fund
encounters with regard to currency convertibility (including the cost of
borrowing funds, if any), repatriation or economic sanctions may also increase
the index tracking risk. The Fund’s performance may also deviate from the
performance of the Index due to the impact of withholding taxes, late
announcements relating to changes to the Index and high turnover of the Index.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. The Fund may also need to rely on borrowings
to meet redemptions, which may lead to increased expenses. For tax efficiency
purposes, the Fund may sell certain securities, and such sale may cause the Fund
to realize a loss and deviate from the performance of the Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Index. Changes to the composition of the Index in connection with
a rebalancing or reconstitution of the Index may cause the Fund to experience
increased volatility, during which time the Fund’s index tracking risk may be
heightened.
Tax
Risk. There
is no guarantee that the Fund’s income will be exempt from U.S. federal or state
or local income taxes. Events occurring after the date of issuance of a
municipal bond or after the Fund’s acquisition of a municipal bond may result in
a determination that interest on that bond is includible in gross income for
U.S. federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt.
Federal, state or local changes in income or alternative minimum tax rates or in
the tax treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the
business,
or do not process creation and/or redemption orders, there may be a
significantly diminished trading market for Shares or Shares may trade like
closed-end funds at a discount (or premium) to net asset value and possibly face
trading halts and/or de-listing. This can be reflected as a spread between the
bid-ask prices for the Fund. The Authorized Participant concentration risk may
be heightened in cases where Authorized Participants have limited or diminished
access to the capital required to post collateral.
No
Guarantee of Active Trading Market Risk. There
can be no assurance that an active trading market for the Shares will develop or
be maintained, as applicable. Further, secondary markets may be subject to
irregular trading activity, wide bid/ask spreads and extended trade settlement
periods in times of market stress because market makers and Authorized
Participants may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can be no assurance that requirements of the exchange necessary to
maintain the listing of the Fund will continue to be met or will remain
unchanged.
Passive
Management Risk.
Unlike many investment companies, the Fund is not “actively” managed. Therefore,
unless a specific security is removed from its Index, the Fund generally would
not sell a security because the security’s issuer is in financial trouble. If a
specific security is removed from the Fund’s Index, the Fund may be forced to
sell such security at an inopportune time or for prices other than at current
market values. An investment in the Fund involves risks similar to those of
investing in any fund that invests in bonds or equity securities, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause the Fund’s Index provider to postpone a scheduled rebalance
or reconstitution, which could cause the Fund’s Index to vary from its normal or
expected composition. This means that, based on market and economic conditions,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more issuers.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different time than the exchange on which the Shares are traded. Liquidity
in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the exchange and
the resulting premium or discount to the Shares’ net asset value may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings and a shareholder may be unable to sell
his or her Shares.
Index-Related
Concentration Risk. The Fund’s assets may be concentrated in a particular sector
or sectors or industry or group of industries to reflect the Index’s allocation
to such sector or sectors or industry or group of industries. The securities of
many or all of the companies in the same sector or industry may decline in value
due to developments adversely affecting such sector or industry. By
concentrating its assets in a particular sector or sectors or industry or group
of industries, the Fund is subject to the risk that economic, political or other
conditions that have a negative effect on those sectors and/or industries may
negatively impact the Fund to a greater extent than if the Fund’s assets were
invested in a wider variety of securities.
PERFORMANCE
The bar chart that follows shows how the
Fund performed for the calendar years shown. The table below the bar chart shows
the Fund’s average annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1, 2022, the Fund sought to replicate as
closely as possible, before fees and expenses, the price and yield performance
of the Bloomberg Municipal Custom High Yield Composite Index (the “Prior High
Yield Index”). Therefore, performance information prior to March 1, 2022
reflects the performance of the Fund tracking the Prior High Yield Index. From
March 1, 2022 to November 30, 2022, the Fund tracked the ICE High Yield
Crossover Municipal Bond
Transition
Index and performance from March 1, 2022 to November 30, 2022 reflects the
performance of the Fund tracking the ICE High Yield Crossover Municipal Bond
Transition Index. The Fund began tracking the High Yield Index on December 1,
2022. All returns assume reinvestment of dividends and
distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The
year-to-date total return as of
June 30, 2023 was
2.77%.
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|
|
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| |
| Best
Quarter: |
5.53% |
1Q 2014 |
| Worst
Quarter: |
-7.55% |
1Q
2020 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| |
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| Past
One Year |
Past
Five Years |
Past
Ten Years |
|
|
|
VanEck
High Yield Muni ETF
(return
before taxes)* |
-15.25% |
-0.11% |
1.92% |
|
|
| VanEck High
Yield Muni ETF
(return after taxes on
distributions) |
-15.27% |
-0.13% |
1.90% |
|
|
| VanEck High
Yield Muni ETF
(return after taxes on distributions and sale of Fund
Shares) |
-7.72% |
0.91% |
2.51% |
|
|
|
ICE
Broad High Yield Crossover Municipal Index*
(reflects no deduction for
fees, expenses or taxes) |
-12.27% |
2.40% |
3.86% |
|
|
| ICE BofA US
Broad Market Index
(reflects no deduction for fees, expenses or
taxes) |
-13.16% |
0.03% |
1.07% |
|
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| |
*
Prior to March 1, 2022,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior High Yield Index. Therefore,
performance information prior to March 1, 2022 reflects the performance of the
Fund tracking the Prior High Yield Index and index data prior to March 1, 2022
reflects that of the Prior High Yield Index. From March 1, 2022 to November 30,
2022, the Fund tracked the ICE High Yield Crossover Municipal Bond Transition
Index and performance from March 1, 2022 to November 30, 2022 reflects the
performance of the Fund tracking the ICE High Yield Crossover Municipal Bond
Transition Index and index data from March 1, 2022 to November 30, 2022 reflects
that of the ICE High Yield Crossover Municipal Bond Transition Index. From
December 1, 2022, the index data reflects that of the High Yield
Index.
See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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| |
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| |
|
| Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
| James
T. Colby III |
Portfolio
Manager |
February
2009 |
|
|
| Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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| |
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
The
investment objective of VanEck®
HIP
Sustainable Muni ETF (the “Fund”) is to seek
current income generally exempt from federal income tax (other than federal
alternative minimum tax (“AMT”)).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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|
Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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| |
|
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| |
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| Management
Fee |
0.24 |
% |
|
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|
Other
Expenses(a) |
0.00 |
% |
|
|
|
Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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|
| |
(a)
Van
Eck Associates Corporation (the “Adviser”) will pay all expenses of the Fund,
except for the fee payment under the investment management agreement, acquired
fund fees and expenses, interest expense, offering costs, trading expenses,
taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has
agreed to pay the offering costs until at least September 1,
2024.
EXPENSE
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
funds. This example does not take into account brokerage commissions that you
pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would be:
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| YEAR |
EXPENSES |
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| 1 |
$25 |
|
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| 3 |
$77 |
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| 5 |
$135 |
|
|
| 10 |
$306 |
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| |
PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 14% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund normally invests at least 80% of its total
assets in investments the income from which is exempt from U.S. federal income
tax (other than AMT). The Fund is an actively managed exchange-traded fund
(“ETF”) that seeks to achieve its investment objective by investing, under
normal circumstances, in investment grade municipal debt securities that fund
issuers with operations or projects helping to promote progress towards
sustainable development, in alignment with the goals and metrics defined by the
United Nations Sustainable Development Goals (“SDGs”) 9, 11 and 12. The SDGs
were adopted by the United Nations General Assembly to achieve sustainable
development for all, and the specific goals of SDGs 9, 11 and 12 are as follows:
SDG 9 is to “build resilient infrastructure, promote inclusive and sustainable
industrialization and foster innovation,” SDG 11 is to “make cities and human
settlements inclusive, safe, resilient and sustainable” and SDG 12 is to “ensure
sustainable consumption and production patterns.” The Fund normally invests at
least 80% of its total assets in securities that support sustainable
development. The Adviser determines which operations or projects of issuers it
believes to be supportive of sustainable
development
and that promote beneficial environmental and social outcomes in U.S.
communities and cities by utilizing the rules-based investment approach
described below. The Fund's policy to normally invest at least 80% of its total
assets in securities that support sustainable development is non-fundamental and
may be changed without shareholder approval upon 60 days' prior written notice
to shareholders.
The
Adviser primarily uses a rules-based investment approach which utilizes
proprietary HIP (Human Impact + Profit) Ratings data for the application of
impact criteria to security selection and portfolio management. HIP Ratings are
produced and licensed from HIP Investor, Inc. (“HIP” or the “Data Provider”),
which provides services
to
evaluate, rate and rank issuers and their securities based on data-driven,
quantitative performance measures that demonstrate positive social,
environmental and economic outcomes or mission accomplishment. The Adviser’s
investment process begins by using HIP Ratings to screen municipal securities
based on their SDGs 9, 11 and 12 ratings by HIP, Environmental, Social and
Governance (“ESG”) ratings by HIP
and
Climate-Threat and Resilience ratings by HIP. HIP Ratings are only assigned to
the municipal securities of issuers where at least one qualified opportunity
zone is located in the issuer’s region. An “opportunity zone” is an
economically-distressed community where new investments, under certain
conditions, may be eligible for preferential tax treatment based on
certification from the Internal Revenue Service. HIP, as the Data Provider,
analyzes multiple data points of municipal securities to determine an estimate
of
the
impact (i.e.,
net benefit to the community) each municipal security provides. The HIP Ratings
used by the Adviser seek to evaluate the impact of municipal securities with
respect to the goals and metrics defined by SDGs 9, 11 and 12, climate
resilience, and overall net benefit to people, planet, and prosperity. These HIP
Ratings are used by the Adviser to narrow the universe of eligible Fund
investments to municipal securities that, based on the HIP Ratings, the Adviser
believes have been issued to fund operations or projects that support or advance
sustainable development, as well as promote positive social and environmental
outcomes. Such municipal debt securities may include, but are not limited
to, bonds issued in connection with (i) new or revitalized infrastructure
(i.e.,
roads, bridges, tunnels, buildings, transportation of people and freight,
affordable and safe housing and redevelopment of urban areas (e.g.,
green spaces), school or campus upgrades and Leadership in Energy and
Environmental Design (“LEED”) qualified real estate); (ii) information and
education systems (i.e.,
schools, research, financial services, communication services and technologies
and information services); (iii) healthier communities (i.e.,
hospitals, food and nutrition infrastructure, waste systems, air quality and
environmental management systems); (iv) cleaner energy (i.e.,
utilities, resource and material use); (v) inclusive and sustainable
industrialization towards increased gross domestic product (“GDP”); (vi) action
and resilience planning and projects to mitigate the effects of climate change
and other natural disasters and hazards; and (vii) ensuring sustainable
consumption and production patterns. The Adviser is not required to invest in
any issuer rated by the Data Provider and the Data Provider is not acting as a
sub-adviser to the Fund.
Municipal
securities that the Fund may invest in include securities issued by U.S. states
and municipal governments, any of their political subdivisions, agencies, or
instrumentalities, or by U.S. territories and possessions, such as Guam, the
U.S. Virgin Islands, and Puerto Rico, and their political subdivisions and
public corporations. The Fund may invest a significant portion of its assets in
municipal obligations of issuers located in the States of California and New
York. The Fund does not expect to invest in non-investment grade (or “junk”)
securities. The Fund may invest in debt securities of any maturity or duration
and does not have a target maturity or duration. “Duration” is a measure of a
debt security’s price sensitivity to changes in interest rates. The longer the
duration of a debt security, the more sensitive its market price is to changes
in interest rates. The Fund seeks to reduce its exposure to credit risk by
diversifying its assets among many municipal issuers and among the different
types and maturities of municipal securities available.
The
Fund’s investment policy to invest at least 80% of its total assets in
investments the income from which is exempt from U.S. federal income tax (other
than AMT) may not be changed without shareholder approval. The Fund may count
investments that generate income subject to the AMT toward its 80% investment
policy. For purposes of this policy, the term “assets” means net assets plus the
amount of any borrowings for investment purposes. This percentage limitation
applies at the time of the investment.
The
Fund is classified as a non-diversified fund under the Investment Company Act of
1940 and, therefore, may invest a greater percentage of its assets in a
particular issuer. As of April 30, 2023, each of the general obligation bonds
and special tax (i.e., revenue bonds backed by a special tax) sectors represented a
significant portion of the Fund.
PRINCIPAL RISKS OF INVESTING
IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An
investment in the Fund is not a deposit with a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Sustainable
Impact Investing Strategy Risk.
The Fund’s strategy of investing in municipal debt securities of issuers
promoting sustainable development may limit the types and number of investments
available to the Fund or cause the Fund to invest in securities that
underperform the market as a whole. As a result, the Fund may underperform funds
that do not have a sustainable investing strategy or funds with sustainable
investing strategies that do not employ HIP Ratings. In addition, the Fund
relies on the Data Provider for the identification of issuers that promote
sustainable development based on their HIP Ratings; however, there
can
be no guarantee that the Data Provider’s methodology will align with the Fund’s
investment strategy or desirable issuers can be correctly identified. Moreover,
SDGs 9, 11 and 12 may be modified or abandoned in the future and there can be no
guarantee that the Fund will be able to continue to use HIP Ratings or find an
appropriate substitute ratings system.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. Revenue bonds generally are not backed by the full faith and credit and
general taxing power of the issuer. The bond markets may experience reduced
liquidity due to events such as limited trading activity, reductions in bond
inventory, market volatility, and rapid or unexpected changes in interest rates.
Less liquid markets could lead to greater price volatility and limit the Fund's
ability to sell a holding at a suitable price. The market for municipal bonds
may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of
municipal obligations of issuers in a state, U.S. territory, or possession. For
example, the COVID-19 pandemic has significantly stressed the financial
resources of many municipal issuers, which may impair a municipal issuer’s
ability to meet its financial obligations when due and could adversely impact
the value of its bonds, which could negatively impact the performance of the
Fund.
Credit Risk. Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Interest Rate Risk.
Debt securities and preferred securities are subject to interest rate risk.
Interest rate risk refers to fluctuations in the value of a security resulting
from changes in the general level of interest rates. When the general level of
interest rates goes up, the prices of most debt securities and certain preferred
securities go down. When the general level of interest rates goes down, the
prices of most debt securities go up. Many factors can cause interest rates to
rise, including central bank monetary policy, rising inflation rates and general
economic conditions. Debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities, such as bonds, with shorter durations. A substantial investment by
the Fund in debt securities with longer-term maturities during periods of rising
interest rates may cause the value of the Fund’s investments to decline
significantly. Changing interest rates may have unpredictable effects on
markets, may result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates and/or
volatility. It is difficult to predict the magnitude, timing or direction of
interest rate changes and the impact these changes will have on the markets in
which the Fund invests.
Call Risk. The
Fund may invest in callable debt securities. If interest rates fall, issuers may
“call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Data
Risk.
Given the complexity of the investments and strategies of the Fund, the Adviser
relies heavily on quantitative models and information and data. This data is
used to construct sets of transactions and investments, and to provide risk
management insights. If the quantitative models and information and data proves
to be incorrect or incomplete, any decisions made in reliance thereon expose the
Fund to potential risks.
Special Tax Bond Risk.
Special tax bonds are usually backed and payable through a single tax, or series
of special taxes such as incremental property taxes. The failure of the tax levy
to generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
California Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk.
The Fund may invest a significant portion of its assets in New York municipal
bonds. Consequently, the Fund may be affected by political, economic, regulatory
or other developments within the State of New York, and by the financial
condition of its public authorities and political subdivisions.
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market Risk.
There can be no assurance that an active trading market for the Shares will
develop or be maintained, as applicable. Further, secondary markets may be
subject to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods in times of market stress because market makers and
Authorized Participants may step away from making a market in the Shares and in
executing creation and redemption orders, which could cause a material deviation
in the Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can be no assurance that requirements of the exchange necessary to
maintain the listing of the Fund will continue to be met or will remain
unchanged.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different time than the exchange on which the Shares are traded. Liquidity
in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the exchange and
the resulting premium or discount to the Shares’ net asset value may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings and a shareholder may be unable to sell
his or her Shares.
Non-Diversified
Risk.
The Fund is classified as a “non-diversified” fund under
the Investment Company Act of 1940. The Fund is subject to the risk that it will
be more volatile than a diversified fund because the Fund may invest a
relatively high percentage of its assets in a smaller number of issuers or may
invest a larger proportion of its assets in a single issuer. Moreover, the gains
and losses on a single investment may have a greater impact on the Fund’s net
asset value and may make the Fund more volatile than more diversified funds. The
Fund may be particularly vulnerable to this risk if it is comprised of a limited
number of investments.
State
Concentration Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in a particular state or states. Consequently, the Fund may
be affected by political, economic, regulatory and other developments
within the state or states and by the
financial condition of the state’s or states’ political subdivisions, agencies,
instrumentalities and public authorities.
PERFORMANCE
The bar chart that follows shows how the Fund performed for the
calendar years shown. The table below the bar chart shows the Fund’s average
annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with a broad measure of market
performance. All returns assume reinvestment of dividends and
distributions. The Fund’s past performance
(before and after taxes) is not necessarily indicative of how the Fund will
perform in the future. Updated performance information is
available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The
year-to-date total return as of
June 30, 2023 was
2.19%.
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| Best
Quarter: |
3.78% |
4Q 2022 |
| Worst
Quarter: |
-5.87% |
1Q
2022 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| Past
One
Year |
Since
Inception (09/08/2021) |
|
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| VanEck HIP
Sustainable Muni ETF (return before taxes) |
-8.53% |
-6.41% |
|
|
| VanEck HIP
Sustainable Muni ETF (return after taxes on
distributions) |
-8.53% |
-6.41% |
|
|
| VanEck HIP
Sustainable Muni ETF (return after taxes on distributions and sale of Fund
Shares) |
-4.62% |
-4.63% |
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|
|
ICE US
Broad Municipal Index (reflects no deduction for
fees, expenses or taxes) |
-8.01% |
-6.09% |
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See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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| Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
| James
T. Colby III |
Portfolio
Manager |
August
2021 |
|
|
| Stephanie
Wang |
Deputy
Portfolio Manager |
August
2021 |
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| |
PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck® Intermediate Muni ETF (the “Fund”) seeks to
replicate as closely as possible, before fees and expenses, the price and yield
performance of the ICE Intermediate AMT-Free Broad National Municipal Index (the
“Intermediate Index”).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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| Management
Fee |
0.24 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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(a) Van Eck
Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except
for the fee payment under the investment management agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2024.
EXPENSE
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
funds. This example does not take into account brokerage commissions that you
pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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| YEAR |
EXPENSES |
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| 1 |
$25 |
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| 3 |
$77 |
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| 5 |
$135 |
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| 10 |
$306 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 17% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Intermediate Index. The Intermediate Index is
comprised of publicly traded municipal bonds that cover the U.S. dollar
denominated intermediate term tax-exempt bond market. This 80% investment policy
is non-fundamental and may be changed without shareholder approval upon 60 days'
prior written notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Intermediate Index. Unlike many investment
companies that try to “beat” the performance of a benchmark index, the Fund does
not try to “beat” the Intermediate Index and
does not take temporary defensive positions that are inconsistent with its
investment objective of seeking to replicate the Intermediate Index. Because of
the practical difficulties and expense of purchasing all of the securities in
the Intermediate Index, the Fund does not purchase all of the securities in the
Intermediate Index. Instead, the Adviser utilizes a “sampling” methodology in
seeking to achieve the Fund’s objective. As such, the Fund may purchase a subset
of the bonds in the Intermediate Index in an effort to hold a portfolio of bonds
with generally the same risk and return characteristics of the Intermediate
Index. The Intermediate Index is rebalanced on the last calendar day of the
month.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Intermediate Index concentrates in an industry
or group of industries. As of April 30, 2023 the special tax (i.e., revenue bonds backed by a specific
tax) sector represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING
IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An
investment in the Fund is not a deposit with a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. Revenue bonds generally are not backed by the full faith and credit and
general taxing power of the issuer. The bond markets may experience reduced
liquidity due to events such as limited trading activity, reductions in bond
inventory, market volatility, and rapid or unexpected changes in interest rates.
Less liquid markets could lead to greater price volatility and limit the Fund's
ability to sell a holding at a suitable price. The market for municipal bonds
may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of
municipal obligations of issuers in a state, U.S. territory, or possession. For
example, the COVID-19 pandemic has significantly stressed the financial
resources of many municipal issuers, which may impair a municipal issuer’s
ability to meet its financial obligations when due and could adversely impact
the value of its bonds, which could negatively impact the performance of the
Fund.
Credit Risk. Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Interest Rate Risk.
Debt securities and preferred securities are subject to interest rate risk.
Interest rate risk refers to fluctuations in the value of a security resulting
from changes in the general level of interest rates. When the general level of
interest rates goes up, the prices of most debt securities and certain preferred
securities go down. When the general level of interest rates goes down, the
prices of most debt securities go up. Many factors can cause interest rates to
rise, including central bank monetary policy, rising inflation rates and general
economic conditions. Debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities, such as bonds, with shorter durations. A substantial investment by
the Fund in debt securities with longer-term maturities during periods of rising
interest rates may cause the value of the Fund’s investments to decline
significantly. Changing interest rates may have unpredictable effects on
markets, may result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates and/or
volatility. It is difficult to predict the magnitude, timing or direction of
interest rate changes and the impact these changes will have on the markets in
which the Fund invests.
Call Risk. The
Fund may invest in callable debt securities. If interest rates fall, issuers may
“call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income.
The
Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
California Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk.
The Fund may invest a significant portion of its assets in New York municipal
bonds. Consequently, the Fund may be affected by political, economic, regulatory
or other developments within the State of New York, and by the financial
condition of its public authorities and political subdivisions.
Special Tax Bond Risk. Special
tax bonds are usually backed and payable through a single tax, or series of
special taxes such as incremental property taxes. The failure of the tax levy to
generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value than would be the case if the Fund held all
of the securities in its Index. Conversely, a positive development relating to
an issuer of securities in the Index that is not held by the Fund could cause
the Fund to underperform the Index. To the extent the assets in the Fund are
smaller, these risks will be greater.
Index Tracking Risk. The
Fund’s return may not match the return of the Index for a number of reasons. For
example, the Fund incurs operating expenses, including taxes, not applicable to
the Index and incurs costs associated with buying and selling securities and
entering into derivatives transactions (if applicable), especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index or (if applicable) raising cash to meet redemptions or deploying
cash in connection with inflows into the Fund. Transaction costs, including
brokerage costs, may decrease the Fund’s net asset value.
Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Index. Errors in the Index data, the Index computations and/or the
construction of the Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Index provider, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Index provider’s or others’ errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
Index provider’s or others’ errors will be borne by the Fund and its
shareholders. Additionally, when the Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Apart from scheduled rebalances, the Index provider or its
agents may carry out additional ad hoc rebalances to the Index. Therefore,
errors and additional ad hoc rebalances carried out by the Index provider or its
agents to the Index may increase the costs to and the tracking error risk of the
Fund.
The
Fund may not be fully invested at times either as a result of cash flows into
the Fund or reserves of cash held by the Fund to pay expenses or to meet
redemptions. In addition, the Fund may not invest in certain securities included
in the Index, or invest in them in the exact proportions in which they are
represented in the Index. The Fund’s performance may also deviate from the
return of the Index for various reasons, including legal restrictions or
limitations imposed by the governments of certain countries, certain exchange
listing standards (where applicable), a lack of liquidity in markets in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). To the extent the Fund utilizes
depositary receipts, the purchase of depositary receipts may negatively affect
the Fund’s ability to track the performance of the Index and increase tracking
error, which may be exacerbated if the issuer of the depositary receipt
discontinues issuing new depositary receipts or withdraws existing depositary
receipts.
The
Fund may value certain of its investments, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its net
asset value based on fair value prices and the value of the Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. In addition, any issues the Fund
encounters with regard to currency convertibility (including the cost of
borrowing
funds, if any), repatriation or economic sanctions may also increase the index
tracking risk. The Fund’s performance may also deviate from the performance of
the Index due to the impact of withholding taxes, late announcements relating to
changes to the Index and high turnover of the Index. When markets are volatile,
the ability to sell securities at fair value prices may be adversely impacted
and may result in additional trading costs and/or increase the index tracking
risk. The Fund may also need to rely on borrowings to meet redemptions, which
may lead to increased expenses. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the Index. In light of the factors discussed
above, the Fund’s return may deviate significantly from the return of the Index.
Changes to the composition of the Index in connection with a rebalancing or
reconstitution of the Index may cause the Fund to experience increased
volatility, during which time the Fund’s index tracking risk may be heightened.
Tax
Risk. There
is no guarantee that the Fund’s income will be exempt from U.S. federal or state
or local income taxes. Events occurring after the date of issuance of a
municipal bond or after the Fund’s acquisition of a municipal bond may result in
a determination that interest on that bond is includible in gross income for
U.S. federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt.
Federal, state or local changes in income or alternative minimum tax rates or in
the tax treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market Risk. There
can be no assurance that an active trading market for the Shares will develop or
be maintained, as applicable. Further, secondary markets may be subject to
irregular trading activity, wide bid/ask spreads and extended trade settlement
periods in times of market stress because market makers and Authorized
Participants may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can be no assurance that requirements of the exchange necessary to
maintain the listing of the Fund will continue to be met or will remain
unchanged.
Passive
Management Risk.
Unlike many investment companies, the Fund is not “actively” managed. Therefore,
unless a specific security is removed from its Index, the Fund generally would
not sell a security because the security’s issuer is in financial trouble. If a
specific security is removed from the Fund’s Index, the Fund may be forced to
sell such security at an inopportune time or for prices other than at current
market values. An investment in the Fund involves risks similar to those of
investing in any fund that invests in bonds or equity securities, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause the Fund’s Index provider to postpone a scheduled rebalance
or reconstitution, which could cause the Fund’s Index to vary from its normal or
expected composition. This means that, based on market and economic conditions,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more issuers.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different time than the exchange on which the Shares are traded. Liquidity
in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the exchange and
the resulting premium or discount to the Shares’ net asset value may widen.
Additionally, in
stressed market conditions, the market for
the Fund’s Shares may become less liquid in response to deteriorating liquidity
in the markets for the Fund’s underlying portfolio holdings and a shareholder
may be unable to sell his or her Shares.
Index-Related
Concentration Risk. The Fund’s assets may be concentrated in a particular sector
or sectors or industry or group of industries to reflect the Index’s allocation
to such sector or sectors or industry or group of industries. The securities of
many or all of the companies in the same sector or industry may decline in value
due to developments adversely affecting such sector or industry. By
concentrating its assets in a particular sector or sectors or industry or group
of industries, the Fund is subject to the risk that economic, political or other
conditions that have a negative effect on those sectors and/or industries may
negatively impact the Fund to a greater extent than if the Fund’s assets were
invested in a wider variety of securities.
PERFORMANCE
The bar chart that follows shows how the Fund performed for the
calendar years shown. The table below the bar chart shows the Fund’s average
annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1,
2022, the Fund sought to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg AMT-Free Intermediate
Continuous Municipal Index (the "Prior Intermediate Index"). Therefore,
performance information prior to March 1, 2022 reflects the performance of the
Fund tracking the Prior Intermediate Index. From March 1, 2022 to November 30,
2022, the Fund tracked the ICE Intermediate AMT-Free Broad National Municipal
Transition Index and performance from March 1, 2022 to November 30, 2022
reflects the performance of the Fund tracking the ICE Intermediate AMT-Free
Broad National Municipal Transition Index. The Fund began
tracking the Intermediate Index on December 1, 2022. All returns assume
reinvestment of dividends and distributions. The Fund’s past
performance (before and after taxes) is not necessarily indicative of how the
Fund will perform in the future. Updated performance information
is available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The
year-to-date total return as of
June 30, 2023 was
2.14%.
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| Best
Quarter: |
4.57% |
4Q 2022 |
| Worst
Quarter: |
-7.53% |
1Q
2022 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| Past
One
Year |
Past
Five
Years |
Past
Ten
Years |
|
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| VanEck
Intermediate Muni ETF
(return before taxes)* |
-9.66% |
0.96% |
1.90% |
|
|
| VanEck
Intermediate Muni ETF
(return after taxes on
distributions) |
-9.66% |
0.95% |
1.90% |
|
|
| VanEck
Intermediate Muni ETF
(return after taxes on distributions and sale of
Fund Shares) |
-5.02% |
1.25% |
1.99% |
|
|
|
ICE
Intermediate AMT-Free Broad National Municipal Index (reflects no deduction for
fees, expenses or taxes)*
|
-9.39% |
1.47% |
2.47% |
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|
|
ICE
BofA US Broad Market Index
(reflects
no deduction for fees, expenses or taxes) |
-13.16% |
0.03% |
1.07% |
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*
Prior to March 1, 2022,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior Intermediate Index. Therefore,
performance information prior to March 1, 2022 reflects the performance of the
Fund tracking the Prior Intermediate Index and index data prior to March 1, 2022
reflects that of the Prior Intermediate Index. From March 1, 2022 to November
30, 2022, the Fund tracked the ICE Intermediate AMT-Free Broad National
Municipal Transition Index and performance from March 1, 2022 to November 30,
2022 reflects the performance of the Fund tracking the ICE Intermediate AMT-Free
Broad National Municipal Transition Index and index data from March 1, 2022 to
November 30, 2022 reflects that of the ICE Intermediate AMT-Free Broad National
Municipal Transition Index. From December 1, 2022, the index data reflects that
of the Intermediate Index.
See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Managers.
The following individuals are primarily and jointly responsible for the
day-to-day management of the Fund’s portfolio:
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| Name |
Title
with Adviser |
Date
Began Managing the Fund |
|
|
| James
T. Colby III |
Portfolio
Manager |
December
2007 |
|
|
| Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck® Long Muni ETF (the “Fund”) seeks to replicate as
closely as possible, before fees and expenses, the price and yield performance
of the ICE Long AMT-Free Broad National Municipal Index (the “Long
Index”).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Fee |
0.24 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.24 |
% |
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(a) Van Eck
Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except
for the fee payment under the investment management agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2024.
EXPENSE
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
funds. This example does not take into account brokerage commissions that you
pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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| YEAR
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EXPENSES |
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| 1 |
$25 |
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| 3 |
$77 |
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| 5 |
$135 |
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| 10 |
$306 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 32% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Long Index. The Long Index is comprised of publicly
traded municipal bonds that cover the U.S. dollar denominated long-term
tax-exempt bond market. This 80% investment policy is non-fundamental and may be
changed without shareholder approval upon 60 days' prior written notice to
shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Long Index. Unlike many investment companies
that try to “beat” the performance of a benchmark index, the Fund does not try
to
“beat” the Long Index and does not take
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Long Index. Because of the practical
difficulties and expense of purchasing all of the securities in the Long Index,
the Fund does not purchase all of the securities in the Long Index. Instead, the
Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the Long
Index in an effort to hold a portfolio of bonds with generally the same risk and
return characteristics of the Long Index. The Long Index is rebalanced on the
last calendar day of the month.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Long Index concentrates in an industry or
group of industries. As of April 30, 2023, each of the healthcare and the
special tax (i.e. revenue bonds backed by a special tax)
sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING
IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund
is not a deposit with a bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. Revenue bonds generally are not backed by the full faith and credit and
general taxing power of the issuer. The bond markets may experience reduced
liquidity due to events such as limited trading activity, reductions in bond
inventory, market volatility, and rapid or unexpected changes in interest rates.
Less liquid markets could lead to greater price volatility and limit the Fund's
ability to sell a holding at a suitable price. The market for municipal bonds
may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of
municipal obligations of issuers in a state, U.S. territory, or possession. For
example, the COVID-19 pandemic has significantly stressed the financial
resources of many municipal issuers, which may impair a municipal issuer’s
ability to meet its financial obligations when due and could adversely impact
the value of its bonds, which could negatively impact the performance of the
Fund.
Credit Risk. Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Interest Rate Risk.
Debt securities and preferred securities are subject to interest rate risk.
Interest rate risk refers to fluctuations in the value of a security resulting
from changes in the general level of interest rates. When the general level of
interest rates goes up, the prices of most debt securities and certain preferred
securities go down. When the general level of interest rates goes down, the
prices of most debt securities go up. Many factors can cause interest rates to
rise, including central bank monetary policy, rising inflation rates and general
economic conditions. Debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities, such as bonds, with shorter durations. A substantial investment by
the Fund in debt securities with longer-term maturities during periods of rising
interest rates may cause the value of the Fund’s investments to decline
significantly. Changing interest rates may have unpredictable effects on
markets, may result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates and/or
volatility. It is difficult to predict the magnitude, timing or direction of
interest rate changes and the impact these changes will have on the markets in
which the Fund invests.
California Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk.
The Fund may invest a significant portion of its assets in New York municipal
bonds. Consequently, the Fund may be affected by political, economic, regulatory
or other developments within the State of New York, and by the financial
condition of its public authorities and political subdivisions.
Texas
Risk.
The Fund may invest a significant portion of its assets in Texas municipal
bonds. Consequently, the Fund may be affected by negative political, economic,
regulatory or other developments within the State of Texas including the
financial condition of its public authorities and political
subdivisions.
Call Risk. The
Fund may invest in callable debt securities. If interest rates fall, issuers may
“call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Health Care Bond Risk.
The health care industry is subject to regulatory action by a number of private
and governmental agencies, including federal, state and local governmental
agencies. A major source of revenues for the health care industry is payments
from Medicare and Medicaid programs. As a result, the industry is sensitive to
legislative changes and reductions in governmental spending for such programs.
Numerous other factors may also affect the industry and the value and credit
quality of health care bonds, such as general and local economic conditions,
demand for services, expenses (including malpractice insurance premiums) and
competition among health care providers. The following elements may adversely
affect health care facility operations: the implementation of national and/or
state-specific health insurance exchanges; other national, state or local health
care reform measures; medical and technological advances which dramatically
alter the need for health services or the way in which such services are
delivered; changes in medical coverage which alter the traditional
fee-for-service revenue stream; efforts by employers, insurers, and governmental
agencies to reduce the costs of health insurance and health care services; and
increases and decreases in the cost and availability of medical
products.
Special Tax Bond Risk.
Special tax bonds are usually backed and payable through a single tax, or series
of special taxes such as incremental property taxes. The failure of the tax levy
to generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value than would be the case if the Fund held all
of the securities in its Index. Conversely, a positive development relating to
an issuer of securities in the Index that is not held by the Fund could cause
the Fund to underperform the Index. To the extent the assets in the Fund are
smaller, these risks will be greater.
Index Tracking Risk. The
Fund’s return may not match the return of the Index for a number of reasons. For
example, the Fund incurs operating expenses, including taxes, not applicable to
the Index and incurs costs associated with buying and selling securities and
entering into derivatives transactions (if applicable), especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index or (if applicable) raising cash to meet redemptions or deploying
cash in connection with inflows into the Fund. Transaction costs, including
brokerage costs, may decrease the Fund’s net asset value.
Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Index. Errors in the Index data, the Index computations and/or the
construction of the Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Index provider, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Index provider’s or others’ errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
Index provider’s or others’ errors will be borne by the Fund and its
shareholders. Additionally, when the Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Apart from scheduled rebalances, the Index provider or its
agents may carry out additional ad hoc rebalances to the Index. Therefore,
errors and additional ad hoc rebalances carried out by the Index provider or its
agents to the Index may increase the costs to and the tracking error risk of the
Fund.
The
Fund may not be fully invested at times either as a result of cash flows into
the Fund or reserves of cash held by the Fund to pay expenses or to meet
redemptions. In addition, the Fund may not invest in certain securities included
in the Index, or invest in them in the exact proportions in which they are
represented in the Index. The Fund’s performance may also deviate from the
return of the Index for various reasons, including legal restrictions or
limitations imposed by the governments of certain countries, certain exchange
listing standards (where applicable), a lack of liquidity in markets in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). To the extent the Fund utilizes
depositary receipts, the purchase of depositary receipts may negatively affect
the Fund’s ability to track the performance of the Index and increase tracking
error, which may be exacerbated if the issuer of the depositary receipt
discontinues issuing new depositary receipts or withdraws existing depositary
receipts.
The
Fund may value certain of its investments, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its net
asset value based on fair value prices and the value of the Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. In addition, any issues the Fund
encounters with regard to currency convertibility (including the cost of
borrowing funds, if any), repatriation or economic sanctions may also increase
the index tracking risk. The Fund’s performance may also deviate from the
performance of the Index due to the impact of withholding taxes, late
announcements relating to changes to the Index and high turnover of the Index.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. The Fund may also need to rely on borrowings
to meet redemptions, which may lead to increased expenses. For tax efficiency
purposes, the Fund may sell certain securities, and such sale may cause the Fund
to realize a loss and deviate from the performance of the Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Index. Changes to the composition of the Index in connection with
a rebalancing or reconstitution of the Index may cause the Fund to experience
increased volatility, during which time the Fund’s index tracking risk may be
heightened.
Tax
Risk. There
is no guarantee that the Fund’s income will be exempt from U.S. federal or state
or local income taxes. Events occurring after the date of issuance of a
municipal bond or after the Fund’s acquisition of a municipal bond may result in
a determination that interest on that bond is includible in gross income for
U.S. federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt.
Federal, state or local changes in income or alternative minimum tax rates or in
the tax treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market Risk. There
can be no assurance that an active trading market for the Shares will develop or
be maintained, as applicable. Further, secondary markets may be subject to
irregular trading activity, wide bid/ask spreads and extended trade settlement
periods in times of market stress because market makers and Authorized
Participants may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can be no assurance that requirements of the exchange necessary to
maintain the listing of the Fund will continue to be met or will remain
unchanged.
Passive
Management Risk.
Unlike many investment companies, the Fund is not “actively” managed. Therefore,
unless a specific security is removed from its Index, the Fund generally would
not sell a security because the security’s issuer is in financial trouble. If a
specific security is removed from the Fund’s Index, the Fund may be forced to
sell such security at an inopportune time or for prices other than at current
market values. An investment in the Fund involves risks similar to those of
investing in any fund that invests in bonds or equity securities, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause the Fund’s Index provider to postpone a scheduled rebalance
or reconstitution, which could cause the Fund’s Index to vary from its normal or
expected composition. This means that, based on
market
and economic conditions, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different time than the exchange on which the Shares are traded. Liquidity
in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the exchange and
the resulting premium or discount to the Shares’ net asset value may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings and a shareholder may be unable to sell
his or her Shares.
Index-Related
Concentration Risk. The Fund’s assets may be concentrated in a particular sector
or sectors or industry or group of industries to reflect the Index’s allocation
to such sector or sectors or industry or group of industries. The securities of
many or all of the companies in the same sector or industry may decline in value
due to developments adversely affecting such sector or industry. By
concentrating its assets in a particular sector or sectors or industry or group
of industries, the Fund is subject to the risk that economic, political or other
conditions that have a negative effect on those sectors and/or industries may
negatively impact the Fund to a greater extent than if the Fund’s assets were
invested in a wider variety of securities.
PERFORMANCE
The bar chart that follows shows how the Fund performed for the
calendar years shown. The table below the bar chart shows the Fund’s average
annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March 1,
2022, the Fund sought to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg AMT-Free Long
Continuous Municipal Index (the "Prior Long Index"). Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Long Index. From March 1, 2022 to November 30, 2022, the Fund tracked
the ICE Long AMT-Free Broad National Municipal Transition Index and performance
from March 1, 2022 to November 30, 2022 reflects the performance of the Fund
tracking the ICE Long AMT-Free Broad National Municipal Transition Index. The
Fund began tracking the Long Index on December 1, 2022. All
returns assume reinvestment of dividends and distributions. The
Fund’s past performance (before and after taxes) is not necessarily indicative
of how the Fund will perform in the future. Updated performance
information is available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The year-to-date total return as of
June 30, 2023 was
4.05%.
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| Best
Quarter: |
6.69% |
1Q 2014 |
| Worst
Quarter: |
-9.77% |
1Q
2022 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| Past
One
Year |
Past
Five
Years |
Past
Ten
Years |
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| VanEck Long
Muni ETF
(return before taxes)* |
-17.52% |
-0.33% |
1.71% |
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| VanEck Long
Muni ETF
(return after taxes on
distributions) |
-17.52% |
-0.36% |
1.69% |
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| VanEck Long
Muni ETF
(return after taxes on distributions and sale of Fund
Shares) |
-9.49% |
0.44% |
2.06% |
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ICE
Long AMT-Free Broad National Municipal Index
(reflects no deduction for
fees, expenses or taxes)* |
-15.75% |
0.61% |
2.57% |
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| ICE BofA
US Broad Market Index
(reflects no deduction for fees, expenses or
taxes) |
-13.16% |
0.03% |
1.07% |
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*
Prior to March 1, 2022,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior Long Index. Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Long Index and index data prior to March 1, 2022 reflects that of the
Prior Long Index. From March 1, 2022 to November 30, 2022, the Fund tracked the
ICE Long AMT-Free Broad National Municipal Transition Index and performance from
March 1, 2022 to November 30, 2022 reflects the performance of the Fund tracking
the ICE Long AMT-Free Broad National Municipal Transition Index and index data
from March 1, 2022 to November 30, 2022 reflects that of the ICE Long AMT-Free
Broad National Municipal Transition Index. From December 1, 2022, the index data
reflects that of the Long Index.
See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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| Name |
Title
with Adviser |
Date
Began Managing the Fund |
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| James
T. Colby III |
Portfolio
Manager |
January
2008 |
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| Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck® Short High Yield Muni ETF (the “Fund”) seeks to
replicate as closely as possible, before fees and expenses, the price and yield
performance of the ICE 1-12 Year Broad High Yield Crossover Municipal Index (the
“Short High Yield Index”).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Fee |
0.35 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.35 |
% |
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(a) Van Eck
Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except
for the fee payment under the investment management agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2024.
EXPENSE
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
funds. This example does not take into account brokerage commissions that you
pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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| YEAR |
EXPENSES |
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| 1 |
$36 |
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| 3 |
$113 |
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| 5 |
$197 |
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| 10 |
$443 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 17% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in securities that
comprise the benchmark index. The Short High Yield Index is composed of publicly
traded municipal bonds that cover the U.S. dollar denominated high yield
short-term tax-exempt bond market with a weight of 70% in non-investment grade
municipal bonds, 20% in triple-B rated investment grade municipal bonds and a
targeted 10% in single-A rated investment grade municipal bonds (in accordance
with the Short High Yield Index provider's methodology). All bonds must have a
nominal maturity of 1 to 12 years. This 80% investment policy is non-fundamental
and may be changed without shareholder approval upon 60 days' prior written
notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the
investment.
The Fund, using a “passive” or indexing
investment approach, attempts to approximate the investment performance of the
Short High Yield Index. Unlike many investment companies that try to “beat” the
performance of a benchmark index, the Fund does not try to “beat” the Short High
Yield Index and does not take temporary defensive positions that are
inconsistent with its investment objective of seeking to replicate the Short
High Yield Index. Because of the practical difficulties and expense of
purchasing all of the securities in the Short High Yield Index, the Fund does
not purchase all of the securities in the Short High Yield Index. Instead, the
Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the Short
High Yield Index in an effort to hold a portfolio of bonds with generally the
same risk and return characteristics of the Short High Yield Index. The Short
High Yield Index is rebalanced on the last calendar day of the
month.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Short High Yield Index concentrates in an
industry or group of industries. As of April 30, 2023 each of the industrial
development and special tax (i.e. revenue bonds backed by a special tax)
sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING
IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund
is not a deposit with a bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. Revenue bonds generally are not backed by the full faith and credit and
general taxing power of the issuer. The bond markets may experience reduced
liquidity due to events such as limited trading activity, reductions in bond
inventory, market volatility, and rapid or unexpected changes in interest rates.
Less liquid markets could lead to greater price volatility and limit the Fund's
ability to sell a holding at a suitable price. The market for municipal bonds
may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of
municipal obligations of issuers in a state, U.S. territory, or possession. For
example, the COVID-19 pandemic has significantly stressed the financial
resources of many municipal issuers, which may impair a municipal issuer’s
ability to meet its financial obligations when due and could adversely impact
the value of its bonds, which could negatively impact the performance of the
Fund.
Credit Risk. Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Interest Rate Risk.
Debt securities and preferred securities are subject to interest rate risk.
Interest rate risk refers to fluctuations in the value of a security resulting
from changes in the general level of interest rates. When the general level of
interest rates goes up, the prices of most debt securities and certain preferred
securities go down. When the general level of interest rates goes down, the
prices of most debt securities go up. Many factors can cause interest rates to
rise, including central bank monetary policy, rising inflation rates and general
economic conditions. Debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities, such as bonds, with shorter durations. A substantial investment by
the Fund in debt securities with longer-term maturities during periods of rising
interest rates may cause the value of the Fund’s investments to decline
significantly. Changing interest rates may have unpredictable effects on
markets, may result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates and/or
volatility. It is difficult to predict the magnitude, timing or direction of
interest rate changes and the impact these changes will have on the markets in
which the Fund invests.
High
Yield Securities Risk. Securities
rated below investment grade are commonly referred to as high yield securities
or “junk bonds.” High yield securities are often issued by issuers that are
restructuring, are smaller or less creditworthy than other issuers,
or
are more highly indebted than other issuers. High yield securities are subject
to greater risk of loss of income and principal than higher rated securities and
are considered speculative. The prices of high yield securities are likely to be
more sensitive to adverse economic changes or individual issuer developments
than higher rated securities, resulting in increased volatility of their market
prices and a corresponding volatility in the Fund’s net asset value. During an
economic downturn or substantial period of rising interest rates, high yield
security issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet their projected business goals or to obtain additional financing. In the
event of a default, the Fund may incur additional expenses to seek recovery. The
secondary market for high yield securities may be less liquid than the markets
for higher quality securities, and high yield securities issued by non-corporate
issuers may be less liquid than high yield securities issued by corporate
issuers. Illiquidity may have an adverse effect on the market prices of and the
Fund’s ability to arrive at a fair value for certain securities when it seeks to
do so. In addition, periods of economic uncertainty and change may result in an
increased volatility of market prices of high yield securities and a
corresponding volatility in the Fund's net asset value.
Industrial Development Bond Risk.
These revenue bonds are issued by or on behalf of public authorities to obtain
funds to finance various public and/or privately operated facilities, including
those for business and manufacturing, housing, sports, pollution control,
airport, mass transit, port and parking facilities. These bonds are normally
secured only by the revenues from the project and not by state or local
government tax payments. Consequently, the credit quality of these securities is
dependent upon the ability of the user of the facilities financed by the bonds
and any guarantor to meet its financial obligations. Payment of interest on and
repayment of principal of such bonds are the responsibility of the user and/or
any guarantor. These bonds are subject to a wide variety of risks, many of which
relate to the nature of the specific project. Generally, the value and credit
quality of these bonds are sensitive to the risks related to an economic
slowdown.
Special Tax Bond Risk.
Special tax bonds are usually backed and payable through a single tax, or series
of special taxes such as incremental property taxes. The failure of the tax levy
to generate adequate revenue to pay the debt service on the bonds may cause the
value of the bonds to decline. Adverse conditions and developments affecting a
particular project may result in lower revenues to the issuer of the municipal
securities, which may adversely affect the value of the Fund’s
portfolio.
Illinois Risk. The
Fund may invest a significant portion of its assets in Illinois municipal bonds.
Consequently, the Fund may be affected by negative political, economic,
regulatory or other developments within the State of Illinois including the
financial condition of its public authorities and political subdivisions, to a
greater degree than a fund that invests in a broader base of securities.
New
York Risk.
The Fund may invest a significant portion of its assets in New York municipal
bonds. Consequently, the Fund may be affected by political, economic, regulatory
or other developments within the State of New York, and by the financial
condition of its public authorities and political subdivisions.
Call Risk. The
Fund may invest in callable debt securities. If interest rates fall, issuers may
“call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Private Activity Bonds Risk. The
Fund will be sensitive to, and its performance may depend to a greater extent
on, the overall condition and performance of private activity bonds. The issuers
of private activity bonds may be negatively impacted by conditions affecting
either the general credit of the user of the private activity project or the
project itself.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value than would be the case if the Fund held all
of the securities in its Index. Conversely, a positive development relating to
an issuer of securities in the Index that is not held by the Fund could cause
the Fund to underperform the Index. To the extent the assets in the Fund are
smaller, these risks will be greater.
Index Tracking Risk. The
Fund’s return may not match the return of the Index for a number of reasons. For
example, the Fund incurs operating expenses, including taxes, not applicable to
the Index and incurs costs associated with buying and selling securities and
entering into derivatives transactions (if applicable), especially when
rebalancing the Fund’s securities holdings to
reflect
changes in the composition of the Index or (if applicable) raising cash to meet
redemptions or deploying cash in connection with inflows into the Fund.
Transaction costs, including brokerage costs, may decrease the Fund’s net asset
value.
Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Index. Errors in the Index data, the Index computations and/or the
construction of the Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Index provider, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Index provider’s or others’ errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
Index provider’s or others’ errors will be borne by the Fund and its
shareholders. Additionally, when the Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Apart from scheduled rebalances, the Index provider or its
agents may carry out additional ad hoc rebalances to the Index. Therefore,
errors and additional ad hoc rebalances carried out by the Index provider or its
agents to the Index may increase the costs to and the tracking error risk of the
Fund.
The
Fund may not be fully invested at times either as a result of cash flows into
the Fund or reserves of cash held by the Fund to pay expenses or to meet
redemptions. In addition, the Fund may not invest in certain securities included
in the Index, or invest in them in the exact proportions in which they are
represented in the Index. The Fund’s performance may also deviate from the
return of the Index for various reasons, including legal restrictions or
limitations imposed by the governments of certain countries, certain exchange
listing standards (where applicable), a lack of liquidity in markets in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). To the extent the Fund utilizes
depositary receipts, the purchase of depositary receipts may negatively affect
the Fund’s ability to track the performance of the Index and increase tracking
error, which may be exacerbated if the issuer of the depositary receipt
discontinues issuing new depositary receipts or withdraws existing depositary
receipts.
The
Fund may value certain of its investments, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its net
asset value based on fair value prices and the value of the Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. In addition, any issues the Fund
encounters with regard to currency convertibility (including the cost of
borrowing funds, if any), repatriation or economic sanctions may also increase
the index tracking risk. The Fund’s performance may also deviate from the
performance of the Index due to the impact of withholding taxes, late
announcements relating to changes to the Index and high turnover of the Index.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. The Fund may also need to rely on borrowings
to meet redemptions, which may lead to increased expenses. For tax efficiency
purposes, the Fund may sell certain securities, and such sale may cause the Fund
to realize a loss and deviate from the performance of the Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Index. Changes to the composition of the Index in connection with
a rebalancing or reconstitution of the Index may cause the Fund to experience
increased volatility, during which time the Fund’s index tracking risk may be
heightened.
Tax
Risk. There
is no guarantee that the Fund’s income will be exempt from U.S. federal or state
or local income taxes. Events occurring after the date of issuance of a
municipal bond or after the Fund’s acquisition of a municipal bond may result in
a determination that interest on that bond is includible in gross income for
U.S. federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt.
Federal, state or local changes in income or alternative minimum tax rates or in
the tax treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market Risk. There
can be no assurance that an active trading market for the Shares will develop or
be maintained, as applicable. Further, secondary markets may be subject to
irregular trading activity, wide bid/ask spreads and extended trade settlement
periods in times of market stress because market makers and Authorized
Participants may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can
be
no assurance that requirements of the exchange necessary to maintain the listing
of the Fund will continue to be met or will remain unchanged.
Passive
Management Risk.
Unlike many investment companies, the Fund is not “actively” managed. Therefore,
unless a specific security is removed from its Index, the Fund generally would
not sell a security because the security’s issuer is in financial trouble. If a
specific security is removed from the Fund’s Index, the Fund may be forced to
sell such security at an inopportune time or for prices other than at current
market values. An investment in the Fund involves risks similar to those of
investing in any fund that invests in bonds or equity securities, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause the Fund’s Index provider to postpone a scheduled rebalance
or reconstitution, which could cause the Fund’s Index to vary from its normal or
expected composition. This means that, based on market and economic conditions,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more issuers.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different time than the exchange on which the Shares are traded. Liquidity
in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the exchange and
the resulting premium or discount to the Shares’ net asset value may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings and a shareholder may be unable to sell
his or her Shares.
Index-Related
Concentration Risk. The Fund’s assets may be concentrated in a particular sector
or sectors or industry or group of industries to reflect the Index’s allocation
to such sector or sectors or industry or group of industries. The securities of
many or all of the companies in the same sector or industry may decline in value
due to developments adversely affecting such sector or industry. By
concentrating its assets in a particular sector or sectors or industry or group
of industries, the Fund is subject to the risk that economic, political or other
conditions that have a negative effect on those sectors and/or industries may
negatively impact the Fund to a greater extent than if the Fund’s assets were
invested in a wider variety of securities.
PERFORMANCE
The bar chart that follows shows how the Fund performed for the
calendar years shown. The table below the bar chart shows the Fund’s average
annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March
1, 2022, the Fund sought to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg Municipal High Yield
Short Duration Index (the "Prior Short High Yield Index"). Therefore,
performance information prior to March 1, 2022 reflects the performance of the
Fund tracking the Prior Short High Yield Index. From March 1, 2022 to November
30, 2022, the Fund tracked the ICE 1-12 Year High Yield Crossover Municipal Bond
Transition Index and performance from March 1, 2022 to November 30, 2022
reflects the performance of the Fund tracking the ICE 1-12 Year High Yield
Crossover Municipal Bond Transition Index. The Fund began tracking the Short
High Yield Index on December 1, 2022. All returns assume
reinvestment of dividends and distributions. The Fund’s
past performance (before and after taxes) is not necessarily indicative of how
the Fund will perform in the future. Updated performance
information is available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The
year-to-date total return as of
June 30, 2023 was
1.84%.
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| Best
Quarter: |
3.00% |
1Q 2019 |
| Worst
Quarter: |
-5.99% |
1Q
2022 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| Past
One Year |
Past
Five Years |
Since
Inception
(1/13/2014) |
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| VanEck
Short High Yield Muni ETF
(return before
taxes)* |
-9.06% |
1.12% |
1.69% |
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| VanEck
Short High Yield Muni ETF
(return after taxes on
distributions) |
-9.06% |
1.11% |
1.68% |
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| VanEck
Short High Yield Muni ETF
(return after taxes on distributions and
sale of Fund Shares) |
-4.39% |
1.58% |
2.00% |
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ICE
1-12 Year Broad High Yield Crossover Municipal Index
(reflects no deduction for
fees, expenses or taxes)* |
-5.75% |
3.03% |
3.50% |
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| ICE BofA
US Broad Market Index
(reflects no deduction for fees, expenses or
taxes) |
-13.16% |
0.03% |
1.35% |
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*
Prior to March 1, 2022,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior Short High Yield Index. Therefore,
performance information prior to March 1, 2022 reflects the performance of the
Fund tracking the Prior Short High Yield Index and index data prior to March 1,
2022 reflects that of the Prior Short High Yield Index. From March 1, 2022 to
November 30, 2022, the Fund tracked the ICE 1-12 Year High Yield Crossover
Municipal Bond Transition Index and performance from March 1, 2022 to November
30, 2022 reflects the performance of the Fund tracking the ICE 1-12 Year High
Yield Crossover Municipal Bond Transition Index and index data from March 1,
2022 to November 30, 2022 reflects that of the ICE 1-12 Year High Yield
Crossover Municipal Bond Transition Index. From December 1, 2022, the index data
reflects that of the Short High Yield Index.
See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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| Name |
Title
with Adviser |
Date
Began Managing the Fund |
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| James
T. Colby III |
Portfolio
Manager |
January
2014 |
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| Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck® Short Muni ETF (the “Fund”) seeks to replicate as
closely as possible, before fees and expenses, the price and yield performance
of the ICE Short AMT-Free Broad National Municipal Index (the “Short
Index”).
FUND FEES AND
EXPENSES
The
following tables describe the fees and expenses that you may pay if you buy,
hold and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
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Shareholder
Fees
(fees
paid directly from your investment) |
None |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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| Management
Fee |
0.07 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.07 |
% |
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(a) Van Eck
Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except
for the fee payment under the investment management agreement, acquired fund
fees and expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to
pay the offering costs until at least September 1,
2024.
EXPENSE
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
funds. This example does not take into account brokerage commissions that you
pay when purchasing or selling Shares of the Fund.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell or hold all of your Shares at the end of those
periods. The example also assumes that your investment has a 5% annual return
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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| YEAR |
EXPENSES |
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| 1 |
$7 |
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| 3 |
$23 |
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| 5 |
$40 |
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| 10 |
$90 |
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PORTFOLIO
TURNOVER
The Fund will pay transaction costs, such as commissions, when it
purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and
may result in higher taxes when Fund Shares are held in a taxable account. These
costs, which are not reflected in annual fund operating expenses or in the
example, may affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 19% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund normally invests at least 80% of its total assets in fixed income
securities that comprise the Short Index. The Short Index is comprised of
publicly traded municipal bonds that cover the U.S. dollar denominated
short-term tax-exempt bond market. This 80% investment policy is non-fundamental
and may be changed without shareholder approval upon 60 days’ prior written
notice to shareholders.
The
Fund has adopted a fundamental investment policy to invest at least 80% of its
assets in municipal securities. Such policy cannot be changed without a
shareholder vote. For purposes of this policy, the term “assets” means net
assets plus the amount of any borrowings for investment purposes. This
percentage limitation applies at the time of the investment.
The
Fund, using a “passive” or indexing investment approach, attempts to approximate
the investment performance of the Short Index. Unlike many investment companies
that try to “beat” the performance of a benchmark index, the Fund does not try
to “beat” the Short Index and does not take
temporary defensive positions that are inconsistent with its investment
objective of seeking to replicate the Short Index. Because of the practical
difficulties and expense of purchasing all of the securities in the Short Index,
the Fund does not purchase all of the securities in the Short Index. Instead,
the Adviser utilizes a “sampling” methodology in seeking to achieve the Fund’s
objective. As such, the Fund may purchase a subset of the bonds in the Short
Index in an effort to hold a portfolio of bonds with generally the same risk and
return characteristics of the Short Index. The Short Index is rebalanced on the
last calendar day of the month.
The
Fund may concentrate its investments in a particular industry or group of
industries to the extent that the Short Index concentrates in an industry or
group of industries. As of April 30, 2023, each of the general obligation and
special tax (i.e., revenue bonds backed by a special
tax) sectors represented a significant portion of the
Fund.
PRINCIPAL RISKS OF INVESTING
IN THE FUND
Investors
in the Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
the Fund involves a substantial degree of risk.
An investment in the Fund
is not a deposit with a bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency.
Therefore,
you should consider carefully the following risks before investing in the Fund,
each of which could significantly and adversely affect the value of an
investment in the Fund.
Municipal
Securities Risk.
Municipal securities are subject to the risk that litigation, legislation or
other political events, local business or economic conditions, credit rating
downgrades, or the bankruptcy of the issuer could have a significant effect on
an issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. Certain municipalities may have difficulty
meeting their obligations due to, among other reasons, changes in underlying
demographics. Municipal securities can be significantly affected by political
changes as well as uncertainties in the municipal market related to government
regulation, taxation, legislative changes or the rights of municipal security
holders. Because many municipal securities are issued to finance similar
projects, especially those relating to education, health care, transportation,
utilities and water and sewer, conditions in those sectors can affect the
overall municipal market. Municipal securities include general obligation bonds,
which are backed by the “full faith and credit” of the issuer, which has the
power to tax residents to pay bondholders. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. General obligation bonds generally are not backed by
revenues from a specific project or source. Municipal securities also include
revenue bonds, which are generally backed by revenue from a specific project or
tax. Revenue bonds generally are not backed by the full faith and credit and
general taxing power of the issuer. The bond markets may experience reduced
liquidity due to events such as limited trading activity, reductions in bond
inventory, market volatility, and rapid or unexpected changes in interest rates.
Less liquid markets could lead to greater price volatility and limit the Fund's
ability to sell a holding at a suitable price. The market for municipal bonds
may be less liquid than for taxable bonds. There may be less information
available on the financial condition of issuers of municipal securities than for
public corporations. Municipal instruments may be susceptible to periods of
economic stress, which could affect the market values and marketability of
municipal obligations of issuers in a state, U.S. territory, or possession. For
example, the COVID-19 pandemic has significantly stressed the financial
resources of many municipal issuers, which may impair a municipal issuer’s
ability to meet its financial obligations when due and could adversely impact
the value of its bonds, which could negatively impact the performance of the
Fund.
Credit Risk. Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Interest Rate Risk.
Debt securities and preferred securities are subject to interest rate risk.
Interest rate risk refers to fluctuations in the value of a security resulting
from changes in the general level of interest rates. When the general level of
interest rates goes up, the prices of most debt securities and certain preferred
securities go down. When the general level of interest rates goes down, the
prices of most debt securities go up. Many factors can cause interest rates to
rise, including central bank monetary policy, rising inflation rates and general
economic conditions. Debt securities with longer durations tend to be more
sensitive to interest rate changes, usually making them more volatile than debt
securities, such as bonds, with shorter durations. A substantial investment by
the Fund in debt securities with longer-term maturities during periods of rising
interest rates may cause the value of the Fund’s investments to decline
significantly. Changing interest rates may have unpredictable effects on
markets, may result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates and/or
volatility. It is difficult to predict the magnitude, timing or direction of
interest rate changes and the impact these changes will have on the markets in
which the Fund invests.
California Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
New
York Risk.
The Fund may invest a significant portion of its assets in New York municipal
bonds. Consequently, the Fund may be affected by political, economic, regulatory
or other developments within the State of New York, and by the financial
condition of its public authorities and political subdivisions.
Call Risk. The
Fund may invest in callable debt securities. If interest rates fall, issuers may
“call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Market
Risk.
The prices of securities are subject to the risks associated with investing in
the securities market, including general economic conditions, sudden and
unpredictable drops in value, exchange trading suspensions and closures and
public health risks. These risks may be magnified if certain social, political,
economic and other conditions and events (such as natural disasters, epidemics
and pandemics, terrorism, conflicts and social unrest) adversely interrupt the
global economy; in these and other circumstances, such events or developments
might affect companies world-wide. Overall securities values could decline
generally or underperform other investments. An investment may lose
money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including human error, processing and communication errors, errors of the Fund’s
service providers, counterparties or other third-parties, failed or inadequate
processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in net asset value than would be the case if the Fund held all
of the securities in its Index. Conversely, a positive development relating to
an issuer of securities in the Index that is not held by the Fund could cause
the Fund to underperform the Index. To the extent the assets in the Fund are
smaller, these risks will be greater.
Index Tracking Risk. The
Fund’s return may not match the return of the Index for a number of reasons. For
example, the Fund incurs operating expenses, including taxes, not applicable to
the Index and incurs costs associated with buying and selling securities and
entering into derivatives transactions (if applicable), especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index or (if applicable) raising cash to meet redemptions or deploying
cash in connection with inflows into the Fund. Transaction costs, including
brokerage costs, may decrease the Fund’s net asset value.
Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Index. Errors in the Index data, the Index computations and/or the
construction of the Index in accordance with its methodology may occur from time
to time and may not be identified and corrected by the Index provider, which may
have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the Index provider’s or others’ errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
Index provider’s or others’ errors will be borne by the Fund and its
shareholders. Additionally, when the Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. Apart from scheduled rebalances, the Index provider or its
agents may carry out additional ad hoc rebalances to the Index. Therefore,
errors and additional ad hoc rebalances carried out by the Index provider or its
agents to the Index may increase the costs to and the tracking error risk of the
Fund.
The
Fund may not be fully invested at times either as a result of cash flows into
the Fund or reserves of cash held by the Fund to pay expenses or to meet
redemptions. In addition, the Fund may not invest in certain securities included
in the Index, or invest in them in the exact proportions in which they are
represented in the Index. The Fund’s performance may also deviate from the
return of the Index for various reasons, including legal restrictions or
limitations imposed by the governments of certain countries, certain exchange
listing standards (where applicable), a lack of liquidity in markets in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). To the extent the Fund utilizes
depositary receipts, the purchase of depositary receipts may negatively affect
the Fund’s ability to track the performance of the Index and increase tracking
error, which may be exacerbated if the issuer of the depositary receipt
discontinues issuing new depositary receipts or withdraws existing depositary
receipts.
The
Fund may value certain of its investments, underlying currencies and/or other
assets based on fair value prices. To the extent the Fund calculates its net
asset value based on fair value prices and the value of the Index is based on
securities’ closing prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected. In addition, any issues the Fund
encounters with regard to currency convertibility (including the cost of
borrowing funds, if any), repatriation or economic sanctions may also increase
the index tracking risk. The Fund’s performance may also deviate from the
performance of the Index due to the impact of withholding taxes, late
announcements relating to changes to the Index and high turnover of the Index.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. The Fund may also need to rely on borrowings
to meet redemptions, which may lead to increased expenses. For tax efficiency
purposes, the Fund may sell
certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Index. In light of the factors discussed above, the
Fund’s return may deviate significantly from the return of the Index. Changes to
the composition of the Index in connection with a rebalancing or reconstitution
of the Index may cause the Fund to experience increased volatility, during which
time the Fund’s index tracking risk may be heightened.
Tax
Risk. There
is no guarantee that the Fund’s income will be exempt from U.S. federal or state
or local income taxes. Events occurring after the date of issuance of a
municipal bond or after the Fund’s acquisition of a municipal bond may result in
a determination that interest on that bond is includible in gross income for
U.S. federal income tax purposes retroactively to its date of issuance. Such a
determination may cause a portion of prior distributions by the Fund to its
shareholders to be taxable to those shareholders in the year of receipt.
Federal, state or local changes in income or alternative minimum tax rates or in
the tax treatment of municipal bonds may make municipal bonds less attractive as
investments and cause them to lose value.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market Risk. There
can be no assurance that an active trading market for the Shares will develop or
be maintained, as applicable. Further, secondary markets may be subject to
irregular trading activity, wide bid/ask spreads and extended trade settlement
periods in times of market stress because market makers and Authorized
Participants may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its net asset value.
Trading
Issues Risk.
Trading in shares on the exchange may be halted due to market conditions or for
reasons that, in the view of the exchange, make trading in shares inadvisable.
In addition, trading in shares on the exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the relevant exchange’s
“circuit breaker” rules. If a trading halt or unanticipated early close of the
exchange occurs, a shareholder may be unable to purchase or sell Shares of the
Fund. There can be no assurance that requirements of the exchange necessary to
maintain the listing of the Fund will continue to be met or will remain
unchanged.
Passive
Management Risk.
Unlike many investment companies, the Fund is not “actively” managed. Therefore,
unless a specific security is removed from its Index, the Fund generally would
not sell a security because the security’s issuer is in financial trouble. If a
specific security is removed from the Fund’s Index, the Fund may be forced to
sell such security at an inopportune time or for prices other than at current
market values. An investment in the Fund involves risks similar to those of
investing in any fund that invests in bonds or equity securities, such as market
fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. The Fund’s
Index may not contain the appropriate or a diversified mix of securities for any
particular economic cycle. The timing of changes in the securities of the Fund’s
portfolio in seeking to replicate its Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. Additionally, unusual market
conditions may cause the Fund’s Index provider to postpone a scheduled rebalance
or reconstitution, which could cause the Fund’s Index to vary from its normal or
expected composition. This means that, based on market and economic conditions,
the Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more issuers.
Fund Shares Trading, Premium/Discount Risk and Liquidity of
Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s net asset
value, the intraday value of the Fund’s holdings and supply and demand for
Shares. Shares may trade above, below, or at their most recent net asset value.
Factors including disruptions to creations and redemptions, the existence of
market volatility or potential lack of an active trading market for Shares
(including through a trading halt), may result in Shares trading at a
significant premium or discount to net asset value or to the intraday value of
the Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the net asset value or sells Shares at a time when the
market price is at a discount to the net asset value, the shareholder may pay
significantly more or receive significantly less than the underlying value of
the Shares. The securities held by the Fund may be traded in markets that close
at a different time than the exchange on which the Shares are traded. Liquidity
in those securities may be reduced after the applicable closing times.
Accordingly, during the time when the exchange is open but after the applicable
market closing, fixing or settlement times, bid/ask spreads on the exchange and
the resulting premium or discount to the Shares’ net asset value may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings and a shareholder may be unable to sell
his or her Shares.
Index-Related
Concentration Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to reflect the Index’s allocation to such sector or
sectors or industry or group of industries. The securities of many or all of the
companies in the same sector or industry may decline in value due to
developments adversely affecting such
sector or industry. By concentrating its assets in a particular
sector or sectors or industry or group of industries, the Fund is subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of
securities.
PERFORMANCE
The bar chart that follows shows how the Fund performed for the
calendar years shown. The table below the bar chart shows the Fund’s average
annual returns (before and after taxes). The bar chart
and table provide an indication of the risks of investing in the Fund by
comparing the Fund’s performance from year to year and by showing how the Fund’s
average annual returns for the one year, five year, ten year and/or since
inception periods, as applicable, compared with the Fund’s benchmark index and a
broad measure of market performance. Prior to March
1, 2022, the Fund sought to replicate as closely as possible, before fees and
expenses, the price and yield performance of the Bloomberg AMT-Free Short
Continuous Municipal Index (the "Prior Short Index"). Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Short Index. From March 1, 2022 to November 30, 2022,
the Fund tracked the ICE Short AMT-Free Broad National Municipal Transition
Index and performance from March 1, 2022 to November 30, 2022 reflects the
performance of the Fund tracking the ICE Short AMT-Free Broad National Municipal
Transition Index. The Fund began tracking the Short Index on December 1, 2022.
All returns assume reinvestment of dividends and distributions. The
Fund’s past performance (before and after taxes) is not necessarily indicative
of how the Fund will perform in the future. Updated performance
information is available online at www.vaneck.com.
Annual Total Returns
(%)—Calendar Years
The
year-to-date total return as of
June 30, 2023 was
0.91%.
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| Best
Quarter: |
2.62% |
2Q 2020 |
| Worst
Quarter: |
-3.95% |
1Q
2022 |
Average Annual
Total Returns for the Periods Ended December 31,
2022
The after-tax returns presented
in the table below are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Your actual after-tax returns will depend on your
specific tax situation and may differ from those shown below. After-tax returns are not
relevant to investors who hold Shares of the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement
accounts.
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| Past
One Year |
Past
Five Years |
Past
Ten Years |
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| VanEck
Short Muni ETF
(return before taxes)* |
-4.31% |
0.89% |
0.86% |
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| VanEck
Short Muni ETF
(return after taxes on
distributions) |
-4.32% |
0.88% |
0.85% |
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| VanEck
Short Muni ETF
(return after taxes on distributions and sale of Fund
Shares) |
-2.05% |
1.02% |
0.97% |
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ICE
Short AMT-Free Broad National Municipal Index
(reflects no deduction for
fees, expenses or taxes)* |
-4.44% |
1.13% |
1.25% |
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ICE
BofA US Broad Market Index
(reflects
no deduction for fees, expenses or taxes) |
-13.16% |
0.03% |
1.07% |
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*
Prior to March 1, 2022,
the Fund sought to replicate as closely as possible, before fees and expenses,
the price and yield performance of the Prior Short Index. Therefore, performance
information prior to March 1, 2022 reflects the performance of the Fund tracking
the Prior Short Index and index data prior to March 1, 2022 reflects that of the
Prior Short Index. From March 1, 2022 to November 30, 2022, the Fund tracked the
ICE Short AMT-Free Broad National Municipal Transition Index and performance
from March 1, 2022 to November 30, 2022 reflects the performance of the Fund
tracking the ICE Short AMT-Free Broad National Municipal Transition Index and
index data from March 1, 2022 to November 30, 2022 reflects that of the ICE
Short AMT-Free Broad National Municipal Transition Index. From December 1, 2022,
the index data reflects that of the Short Index.
See “License Agreements and Disclaimers” for important
information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Managers. The
following individuals are primarily and jointly responsible for the day-to-day
management of the Fund’s portfolio:
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| Name |
Title
with Adviser |
Date
Began Managing the Fund |
| |
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| James
T. Colby III |
Portfolio
Manager |
February
2008 |
| |
|
| Stephanie
Wang |
Deputy
Portfolio Manager |
December
2022 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information About Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
PURCHASE
AND SALE OF FUND SHARES
Individual
Shares of a Fund may only be purchased and sold in secondary market transactions
through a broker or dealer at a market price. Shares of the Funds are listed on
the Exchange, and because Shares trade at market prices rather than net asset
value, Shares of the Funds may trade at a price greater than net asset value
(i.e.,
a “premium”) or less than net asset value (i.e.,
a “discount”).
An
investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares of a Fund (bid) and the
lowest price a seller is willing to accept for Shares (ask) when buying or
selling Shares in the secondary market (the “bid/ask spread”).
Recent
information, including information about each Fund’s net asset value, market
price, premiums and discounts, and bid/ask spreads, is included on the Fund’s
website at www.vaneck.com.
TAX
INFORMATION
The
Funds expect to distribute net investment income, if any, at least monthly, and
any net realized long-term or short-term capital gains annually. The Funds may
also pay a special distribution at any time to comply with U.S. federal tax
requirements.
Dividends
paid by the Funds that are properly reported as exempt-interest dividends will
not be subject to regular U.S. federal income tax. The Funds intend to invest
its assets in a manner such that a significant portion of their dividend
distributions to shareholders will generally be exempt from U.S. federal income
taxes, including the federal alternative minimum tax for noncorporate
shareholders. Such distributions will generally be subject to state income
taxes.
Distributions
from a Fund’s net investment income (other than net tax-exempt income),
including any net short-term capital gains, if any, are taxable to you as
ordinary income.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of the Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer or other intermediary or its employees or associated persons to
recommend the Fund over another investment. Ask your financial adviser or visit
your financial intermediary’s website for more information.
PRINCIPAL
INVESTMENT STRATEGIES
(All
Funds except VanEck CEF Muni Income ETF and VanEck HIP Sustainable Muni
ETF)
Each
Fund uses a sampling approach in seeking to achieve its investment objective.
Sampling means that the Adviser uses quantitative analysis to select a
representative sample of securities that the Adviser believes collectively have
an investment profile similar to a Fund’s Index. The Adviser seeks to select
securities that will have, in the aggregate, investment characteristics (based
on factors such as market capitalization and industry weightings), fundamental
characteristics (such as return variability, duration, maturity or credit
ratings and yield) and liquidity measures similar to those of a Fund’s Index.
The quantity of holdings in a Fund will be based on a number of factors,
including asset size of such Fund. The Adviser generally expects a Fund to hold
less than the total number of securities in its Index, but reserves the right to
hold as many securities as it believes necessary to achieve the Fund’s
investment objective. In addition, from time to time, securities are added to or
removed from the applicable Index. Each Fund may sell securities that are
represented in its Index, or purchase securities that are not yet represented in
its Index, in anticipation of their removal from or addition to such Index.
Further, the Adviser may choose to underweight or overweight securities,
purchase or sell securities not in an Index, or utilize various combinations of
other available investment techniques, in seeking to track a Fund’s
Index.
(VanEck
CEF Muni Income ETF only)
The
Adviser anticipates that, generally, VanEck CEF Muni Income ETF will hold or
gain exposure to all of the securities that comprise the CEFMX Index in
proportion to their weightings in the CEFMX Index. However, because of
limitations imposed by the Investment Company Act of 1940 regarding investments
in other investment companies, VanEck CEF Muni Income ETF may purchase a sample
of securities in the CEFMX Index. There also may be instances in which the
Adviser may choose to underweight or overweight a security in the CEFMX Index,
purchase securities not in the CEFMX Index that the Adviser believes are
appropriate to substitute for certain securities in the CEFMX Index or utilize
various combinations of other available investment techniques in seeking to
replicate as closely as possible, before fees and expenses, the price and yield
performance of the CEFMX Index. VanEck CEF Muni Income ETF may sell securities
that are represented in the CEFMX Index in anticipation of their removal from
the CEFMX Index or purchase securities not represented in the CEFMX Index in
anticipation of their addition to the CEFMX Index. VanEck CEF Muni Income ETF
may also, in order to comply with the tax diversification requirements of the
Internal Revenue Code of 1986, temporarily invest in securities not included on
the CEFMX Index that are expected to be highly correlated with the securities
included in the CEFMX Index.
(VanEck
HIP Sustainable Muni ETF only)
The
Fund normally invests at least 80% of its total assets in investments the income
from which is exempt from U.S. federal income tax (other than AMT). The Fund is
an actively managed exchange-traded fund (“ETF”) that seeks to achieve its
investment objective by investing, under normal circumstances, in investment
grade municipal debt securities that fund issuers with operations or projects
helping to promote progress towards sustainable development, in alignment with
the goals and metrics defined by the United Nations Sustainable Development
Goals (“SDGs”) 9, 11 and 12. The SDGs were adopted by the United Nations General
Assembly to achieve sustainable development for all, and the specific goals of
SDGs 9, 11 and 12 are as follows: SDG 9 is to "build resilient infrastructure,
promote inclusive and sustainable industrialization and foster innovation," SDG
11 is to "make cities and human settlements inclusive, safe, resilient and
sustainable" and SDG 12 is to "ensure sustainable consumption and production
patterns." The Fund normally invests at least 80% of its total assets in
securities that support sustainable development. The Adviser determines which
operations or projects of issuers it believes to be supportive of sustainable
development and that promote beneficial environmental and social outcomes in
U.S. communities and cities by utilizing the rules-based investment approach
described below. The Fund’s policy to normally invest at least 80% of its total
assets in securities that support sustainable development is non-fundamental and
may be changed without shareholder approval upon 60 days’ prior written notice
to shareholders.
The
Adviser primarily uses a rules-based investment approach which utilizes
proprietary HIP (Human Impact + Profit) Ratings data for the application of
impact criteria to security selection and portfolio management. HIP Ratings are
produced and licensed from HIP Investor, Inc. (“HIP” or the "Data Provider"),
which provides services to evaluate, rate and rank issuers and their securities
based on data-driven, quantitative performance measures that demonstrate
positive social, environmental and economic outcomes or mission accomplishment.
The Adviser’s investment process begins by using HIP Ratings to screen municipal
securities based on their SDGs 9, 11 and 12 ratings by HIP, Environmental,
Social and Governance (“ESG”) ratings by HIP and Climate-Threat and Resilience
ratings by HIP. HIP Ratings are only assigned to the municipal securities of
issuers where at least one qualified opportunity zone is located in the issuer’s
region. An “opportunity zone” is an economically-distressed community where new
investments, under certain conditions, may be eligible for preferential tax
treatment based on certification from the Internal Revenue Service. HIP, as the
Data Provider, analyzes multiple data points of municipal securities to
determine an estimate of the impact (i.e., net benefit to the community) each
municipal security provides. The HIP Ratings used by the Adviser seek to
evaluate the impact of municipal securities with respect to the goals and
metrics defined by SDGs 9, 11 and 12, climate resilience, and overall net
benefit to people, planet, and prosperity. These HIP Ratings are used by the
Adviser to narrow the universe of eligible Fund investments to municipal
securities that, based on the HIP Ratings, the Adviser believes have been issued
to fund operations or projects that support or advance sustainable development,
as well as promote positive social and
environmental
outcomes. Such municipal debt securities may include, but are not limited to,
bonds issued in connection with (i) new or revitalized infrastructure (i.e.
roads, bridges, tunnels, buildings, transportation of people and freight,
affordable and safe housing and redevelopment of urban areas (e.g. green
spaces), school or campus upgrades and Leadership in Energy and Environmental
Design ("LEED") qualified real estate); (ii) information and education systems
(i.e. schools, research, financial services, communication services and
technologies and information services); (iii) healthier communities (i.e.
hospitals, food and nutrition infrastructure, waste systems, air quality and
environmental management systems); (iv) cleaner energy (i.e. utilities, resource
and material use); (v) inclusive and sustainable industrialization towards
increased Gross Domestic Product ("GDP"); (vi) action and resilience planning
and projects to mitigate the effects of climate change and other natural
disasters and hazards; and (vii) ensuring sustainable consumption and production
patterns. The Adviser is not required to invest in any issuer rated by the Data
Provider and the Data Provider is not acting as a sub-adviser to the Fund.
Municipal
securities that the Fund may invest in include securities issued by U.S. states
and municipal governments, any of their political subdivisions, agencies, or
instrumentalities, or by U.S. territories and possessions, such as Guam, the
U.S. Virgin Islands, and Puerto Rico, and their political subdivisions and
public corporations. The Fund may invest a significant portion of its assets in
municipal obligations of issuers located in the States of California and New
York. The Fund does not expect to invest in non-investment grade (or “junk”)
securities. The Fund may invest in debt securities of any maturity or duration
and does not have a target maturity or duration. “Duration” is a measure of a
debt security’s price sensitivity to changes in interest rates. The longer the
duration of a debt security, the more sensitive its market price is to changes
in interest rates. The Fund seeks to reduce its exposure to credit risk by
diversifying its assets among many municipal issuers and among the different
types and maturities of municipal securities available.
The
Fund’s investment policy to invest at least 80% of its total assets in
investments the income from which is exempt from U.S. federal income tax (other
than AMT) may not be changed without shareholder approval. The Fund may count
investments that generate income subject to the AMT toward its 80% investment
policy. For purposes of this policy, the term “assets” means net assets plus the
amount of any borrowings for investment purposes. This percentage limitation
applies at the time of the investment.
FUNDAMENTAL
AND NON-FUNDAMENTAL POLICIES
Each
Fund’s investment objective and each of its other investment policies are
non-fundamental policies that may be changed by the Board of Trustees of the
Trust (the "Board of Trustees") without shareholder approval, except as noted in
this Prospectus or the Statement of Additional Information (“SAI”) under the
section entitled “Investment Policies and Restrictions—Investment
Restrictions.”
RISKS
OF INVESTING IN THE FUNDS
The
following section provides additional information regarding the principal risks
identified under “Principal Risks of Investing in the Fund” in each Fund’s
“Summary Information” section and additional non-principal risks, if applicable.
The risks listed below are applicable to each Fund unless otherwise
noted.
Investors
in a Fund should be willing to accept a high degree of volatility in the price
of the Fund’s Shares and the possibility of significant losses. An investment in
a Fund involves a substantial degree of risk. An investment in a Fund is not a
deposit with a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Therefore, you should
consider carefully the following risks before investing in a Fund, each of which
could significantly and adversely affect the value of an investment in a
Fund.
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| Risk |
CEF
Muni Income ETF (XMPT) |
High
Yield Muni ETF (HYD) |
HIP
Sustainable Muni ETF (SMI) |
Intermediate
Muni ETF (ITM) |
Long
Muni ETF (MLN) |
Short
High Yield Muni ETF (SHYD) |
Short
Muni ETF (SMB) |
| √
Principal Risk | X Additional Non-Principal Risk |
| Active
Management Risk |
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| √ |
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| Authorized
Participant Concentration Risk |
√ |
√ |
√ |
√ |
√ |
√ |
√ |
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| California
Risk |
| √ |
√ |
√ |
√ |
| √ |
| Call
Risk |
| √ |
√ |
√ |
√ |
√ |
√ |
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| Credit
Risk |
| √ |
√ |
√ |
√ |
√ |
√ |
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| Data
Risk |
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| √ |
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| Derivatives
Risk |
X |
X |
X |
X |
X |
X |
X |
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| Fund
of Funds Risk |
√ |
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| Risk |
CEF
Muni Income ETF (XMPT) |
High
Yield Muni ETF (HYD) |
HIP
Sustainable Muni ETF (SMI) |
Intermediate
Muni ETF (ITM) |
Long
Muni ETF (MLN) |
Short
High Yield Muni ETF (SHYD) |
Short
Muni ETF (SMB) |
| √
Principal Risk | X Additional Non-Principal Risk |
| Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund
Shares |
√ |
√ |
√ |
√ |
√ |
√ |
√ |
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| Health
Care Bond Risk |
| √ |
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| √ |
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| High
Yield Securities Risk |
| √ |
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| √ |
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| Illinois
Risk |
√ |
√ |
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| √ |
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| Index-Related
Concentration Risk |
√ |
√ |
| √ |
√ |
√ |
√ |
| Index
Tracking Risk |
√ |
√ |
| √ |
√ |
√ |
√ |
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| Industrial
Development Bond Risk |
| √ |
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| √ |
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| Interest
Rate Risk |
| √ |
√ |
√ |
√ |
√ |
√ |
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| Leverage
Risk |
X |
X |
X |
X |
X |
X |
X |
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| Market
Risk |
√ |
√ |
√ |
√ |
√ |
√ |
√ |
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| Municipal
Securities Risk |
| √ |
√ |
√ |
√ |
√ |
√ |
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| New
York Risk |
| √ |
√ |
√ |
√ |
√ |
√ |
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| No
Guarantee of Active Trading Market Risk |
√ |
√ |
√ |
√ |
√ |
√ |
√ |
| Non-Diversified
Risk |
|
| √ |
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| |
| Non-Diversification
Risk |
√ |
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| Operational
Risk |
√ |
√ |
√ |
√ |
√ |
√ |
√ |
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| |
| Passive
Management Risk |
√ |
√ |
| √ |
√ |
√ |
√ |
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| |
| Private
Activity Bonds Risk |
| √ |
|
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| √ |
|
| Puerto
Rico Risk |
| X |
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| X |
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| Risks
of Investing in Closed-End Funds |
√ |
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| Sampling
Risk |
| √ |
| √ |
√ |
√ |
√ |
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| |
| Shareholder
Risk |
X |
X |
X |
X |
X |
X |
X |
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| Special
Tax Bond Risk |
| √ |
√ |
√ |
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| State
Concentration Risk |
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| Risk |
CEF
Muni Income ETF (XMPT) |
High
Yield Muni ETF (HYD) |
HIP
Sustainable Muni ETF (SMI) |
Intermediate
Muni ETF (ITM) |
Long
Muni ETF (MLN) |
Short
High Yield Muni ETF (SHYD) |
Short
Muni ETF (SMB) |
| √
Principal Risk | X Additional Non-Principal Risk |
| Sustainable
Impact Investing Strategy Risk |
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| √ |
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| Tax
Risk |
| √ |
| √ |
√ |
√ |
√ |
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| Texas
Risk |
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| √ |
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| Trading
Issues Risk |
√ |
√ |
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| Underlying
Funds Risk |
√ |
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GLOSSARY
– INVESTMENT RISKS
Active
Management Risk.
In managing the Fund’s portfolio, the Adviser will apply investment techniques
and risk analyses in making investment decisions for the Fund, but there can be
no guarantee that these will produce the desired results. Investment decisions
made by the Adviser in seeking to achieve the Fund’s investment objective may
cause a decline in the value of the investments held by the Fund and, in turn,
cause the Fund’s shares to lose value or underperform other funds with similar
investment objectives.
Authorized
Participant Concentration Risk.
The Fund may have a limited number of Authorized Participants, none of which are
obligated to engage in creation and/or redemption transactions. To the extent
that those Authorized Participants exit the business, or do not process creation
and/or redemption orders, there may be a significantly diminished trading market
for Shares or Shares may trade like closed-end funds at a discount (or premium)
to net asset value and possibly face trading halts and/or de-listing. This can
be reflected as a spread between the bid-ask prices for the Fund. The Authorized
Participant concentration risk may be heightened in cases where Authorized
Participants have limited or diminished access to the capital required to post
collateral.
California Risk.
The Fund may invest a significant portion of its assets in municipal obligations
of issuers located in the State of California. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
California and by the financial condition of California’s political
subdivisions, agencies, instrumentalities and public authorities.
The
following is a summary of certain factors affecting the State’s current
financial situation that could, in turn, adversely affect the Fund’s investments
in California municipal obligations. Provisions of the California Constitution
and State statutes limit the taxing and spending authority of California
governmental entities. Payments of certain municipal obligations may also be
structurally subordinated to other obligations as a matter of California law.
These provisions may impair the ability of California issuers to pay principal
and/or interest on their obligations and the ability of the State and
municipalities to address financial downturns, including limitations on the
ability of the State or municipalities to raise taxes, fees or charges without
voter approval. In addition, California has recently experienced financial and
economic difficulties, which heighten the risks associated with investing in
bonds issued by the State of California and its political subdivisions,
agencies, instrumentalities and public authorities. Risks that threaten the
State’s fiscal condition include the significant unfunded liabilities of the
State’s two main retirement systems. Moreover, many local government agencies
continue to face budget constraints due to mandated expenditures for health,
welfare and public safety, as well as dependence on property taxes and sales
taxes, two major sources of revenue for local government. In particular, there
is an increased risk that payments to bondholders could be interrupted or that
an issuer could default on its obligations. A default or credit rating downgrade
of a small number of California municipal security issuers could negatively
impact the market values and marketability of all California municipal
securities held by the Fund. A downgrade of the State’s general obligation bond
rating could result in a reduction in the market value of California municipal
obligations held by the Fund. California’s economy has major concentrations in
high technology, trade, entertainment, manufacturing, agriculture, government,
tourism, construction and services and may be sensitive to economic problems
affecting those industries. In addition, future California political and
economic developments, constitutional amendments, legislative measures,
executive orders, administrative regulations, litigation and voter initiatives
could negatively impact California’s economy. Such developments could adversely
affect the Fund’s income, net asset value, liquidity and/or ability to preserve
or realize appreciation of capital.
Call Risk. The
Fund may invest in callable debt securities. If interest rates fall, issuers may
“call” (or prepay) their debt securities before their maturity date. If the
issuer exercises a call during or following a period of declining interest
rates, the Fund is likely to have to replace the called security with a lower
yielding security or riskier security, decreasing the Fund’s net investment
income. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Credit Risk. Credit risk refers
to the possibility that the issuer or guarantor of a security will be unable
and/or unwilling to honor its payment obligations and/or default completely on
securities. The Fund’s securities are subject to varying degrees
of credit risk, depending on the issuer’s financial condition and on
the terms of the securities, which may be reflected in credit ratings. There is
a possibility that the credit rating of a security may be downgraded after
purchase or the perception of an issuer’s creditworthiness may decline, which
may adversely affect the value of the security. Lower credit quality may also
affect liquidity and make it difficult for the Fund to sell the
security.
Data
Risk.
Given the complexity of the investments and strategies of the Fund, the Adviser
relies heavily on quantitative models and information and data. This data is
used to construct sets of transactions and investments, and to provide risk
management insights. If the quantitative models and information and data proves
to be incorrect or incomplete, any decisions made in reliance thereon expose the
Fund to potential risks.
Derivatives
Risk. Derivatives
and other similar instruments (referred to collectively as “derivatives”) are
financial instruments whose values are based on the value of one or more
reference assets or indicators, such as a security, currency, interest rate, or
index. The Fund’s use of derivatives involves risks different from, and possibly
greater than, the risks associated with investing directly in securities and
other more traditional investments. Moreover, although the value of a derivative
is based on an underlying asset or indicator, a derivative typically does not
carry the same rights as would be the case if the Fund invested directly in the
underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and the Fund could lose more than the
amount it invests. The use of derivatives may increase the amount and affect the
timing and character of taxes payable by shareholders of the Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of the Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, the Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.
