The
information in this Prospectus is not complete and may be changed. The Trust may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion
Preliminary
Prospectus dated December 17, 2021
VANECK
High
Yield Muni ETF HYD ®
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. |
The
U.S. Securities and Exchange Commission ("SEC") has not approved or
disapproved these securities or passed upon the accuracy or adequacy of
this Prospectus. Any representation to the contrary is a criminal
offense. |
800.826.2333
vaneck.com
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Summary
Information |
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VanEck
High Yield Muni ETF |
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VanEck
Intermediate Muni ETF |
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VanEck
Long Muni ETF |
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VanEck
Short High Yield Muni ETF |
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VanEck
Short Muni ETF |
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Summary
Information about Purchases and Sales of Fund Shares, Taxes and Payments
to Broker-Dealers and Other Financial Intermediaries |
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Additional
Information About the Funds’ Investment Strategies and Risks |
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Tax
Advantaged Product Structure |
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Portfolio
Holdings |
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Management
of the Funds |
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Portfolio
Managers |
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Shareholder
Information |
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Index
Providers |
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ICE
Broad High Yield Crossover Municipal Index |
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ICE
Intermediate AMT-Free Broad National Municipal Index |
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ICE
Long AMT-Free Broad National Municipal Index |
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ICE
1-12 Year Broad High Yield Crossover Municipal Index |
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ICE
Short AMT-Free Broad National Municipal Index |
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License
Agreements and Disclaimers |
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Financial
Highlights |
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Premium/Discount
Information |
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General
Information |
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VANECK®
HIGH YIELD MUNI ETF |
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck
®
High
Yield Muni ETF 1
(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 Bond Transition 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)
[TO
BE UPDATED]
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Management
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, 2023.
EXPENSE
EXAMPLE
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. This example does not take into account
brokerage commissions that you pay when purchasing or selling Shares of the
Fund.
The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell or hold all of your Shares at the end of those periods.
The example also assumes that your investment has a 5% annual return and that
the Fund’s operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
[TO
BE UPDATED]
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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 [9]% of the average value of its portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
High
Yield Muni ETF.
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. By the end of the Fund’s index transition
period (as described below), the High Yield Index is expected to track the high
yield municipal bond market with an ultimate 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 investments suggested by its name. 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
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 December 13, 2021, each of the health care,
industrial development and special tax ( i.e.
,
revenue bonds backed by a special tax) sectors represented a significant portion
of the Fund.
Prior
to the selection of the High Yield Index, the Fund tracked the Bloomberg
Municipal Custom High Yield Composite Index (the "Prior High Yield Index"). The
Fund is expected to begin tracking the High Yield Index on or around March 1,
2022. The High Yield Index is an interim index that, beginning on March 1, 2021,
gradually increases exposure to securities based on their weightings in the ICE
Broad High Yield Crossover Municipal Index (the "Final High Yield Index") while
proportionally reducing exposure to certain component securities of the Prior
High Yield Index. The Fund is expected to begin tracking the Final High Yield
Index on December 1, 2022.
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. 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.
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 the Fund’s ability to
arrive at a fair value for certain securities. The illiquidity of the market
also could make it difficult for the Fund to sell certain securities in
connection with a rebalancing of the High Yield Index. 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 (“NAV”).
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 credit worthiness may decline, which may adversely
affect the value of the security.
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. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. 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 Fund 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 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
Fund’s net investment income.
Private
Activity Bonds Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of private activity bonds. The issuers
of private activity bonds in which the Fund may invest may be negatively
impacted by conditions affecting either the general credit of the user of the
private activity project or the project itself. The Fund’s private activity bond
holdings also may pay interest subject to the alternative minimum tax. See the
section of the Prospectus entitled “Shareholder Information—Tax Information” for
more details.
Health
Care Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. 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
and the ability of the facility to provide the services required, physicians’
confidence in the facility, management capabilities, 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. Hospitals and other health care facilities are additionally
subject to claims and legal actions by patients and others in the ordinary
course of business. There can be no assurance that a claim will not exceed the
insurance coverage of a health care facility or that insurance coverage will be
available to a facility.
Industrial
Development Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of industrial development bonds. 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 on
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.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. 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 municipal obligations
of issuers located in the State of Illinois. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
Illinois and by the financial condition of Illinois’ political subdivisions,
agencies, instrumentalities and public authorities.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An
investment in the Fund may lose money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the High Yield Index. As a result, an
adverse development respecting an issuer of securities held by the Fund could
result in a greater decline in NAV than would be the case if the Fund held all
of the bonds in the High Yield Index. Conversely, a positive development
relating to an issuer of securities in the High Yield Index that is not held by
the Fund could cause the Fund to underperform the High Yield 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 High Yield Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the High Yield Index and incurs costs associated with
buying and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the High Yield Index
or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the High Yield Index. Transaction costs,
including brokerage costs, will decrease the Fund’s NAV to the extent not offset
by the transaction fee payable by an Authorized Participant (“AP”). Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the High Yield Index. Errors in the High Yield Index data, High Yield Index
computations and/or the construction of the High Yield Index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the High Yield Index provider for a period of time or at all, which
may have an adverse impact on the Fund and its shareholders. Shareholders should
understand that any gains from the High Yield Index provider's errors will be
kept by the Fund and its shareholders and any losses or costs resulting from the
High Yield Index provider's errors will be borne by the Fund and its
shareholders. When the High Yield Index is rebalanced and the Fund in turn
rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the High Yield Index, any transaction costs and market
exposure arising from such portfolio rebalancing will be borne directly by the
Fund and its shareholders. In addition, the Fund's use of a representative
sampling approach may cause the fund to not be as well correlated with the
return of the High Yield Index as would be the case if the Fund purchased all of
the securities in the High Yield Index in the proportions in which they are
represented in the High Yield Index. Apart from scheduled rebalances, the High
Yield Index provider or its agents may carry out additional ad hoc rebalances to
the High Yield Index. Therefore, errors and additional ad hoc rebalances carried
out by the High Yield Index provider or its agents to the High Yield Index may
increase the costs to and the tracking error risk of the Fund. The Fund’s
performance may also deviate from the return of the High Yield Index due to
certain listing standards of the Fund's listing exchange (the "Exchange") or
legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities and/or
currencies, and/or other assets based on fair value prices. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the High Yield Index. In light of the factors discussed
above, the Fund’s return may deviate significantly from the return of the High
Yield Index. Changes to the
composition
of the High Yield Index in connection with a rebalancing or reconstitution of
the High Yield Index may cause the Fund to experience increased volatility,
during which time the Fund’s index tracking risk may be heightened.
The
High Yield Index will gradually increase exposure to securities based on their
weightings in the Final High Yield Index while proportionally reducing exposure
to certain component securities of the Prior High Yield Index. These adjustments
to the Fund's portfolio holdings are expected to increase the Fund's transaction
costs and turnover rate.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state 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
or state 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 financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk. An
investment in the Fund involves risks similar to those of investing in any fund
invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the High Yield Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the High
Yield Index provider to postpone a scheduled rebalance or reconstitution, which
could cause the High Yield Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the High Yield Index concentrates
in a particular sector or sectors or industry or group of industries. To the
extent that the Fund is concentrated in a particular sector or sectors or
industry or group of industries, the Fund will be subject to the risk that
economic, political or other conditions that have a negative effect on those
sectors and/or industries may negatively impact the Fund to a greater extent
than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart and table provide an indication of the
risks of investing in the Fund by comparing the Fund’s performance from year to
year and by showing how the Fund’s average annual returns for the one year, five
year, ten year and/or since inception periods, as applicable, compared with the
Fund’s benchmark index and a broad measure of market performance. Prior to March
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. 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.
[TO
BE UPDATED]
Annual
Total Returns (%)—Calendar Years
The
year-to-date total return as of June 30, 2021 was 5.08%.
|
|
|
|
|
|
|
|
|
Best
Quarter: |
6.39% |
1Q
2012 |
Worst
Quarter: |
-7.55% |
1Q
2020 |
[TO
BE UPDATED]
Average
Annual Total Returns for the Periods Ended December 31, 2021
The
after-tax returns presented in the table below are calculated using the highest
historical individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Your actual after-tax returns will depend on
your specific tax situation and may differ from those shown below. After-tax
returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
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Past
One Year |
Past
Five Years |
Past
Ten Years |
|
|
VanEck
High Yield Muni ETF
(return
before taxes)* |
-0.05% |
4.32% |
5.73% |
|
|
VanEck
High Yield Muni ETF (return after taxes on distributions) |
-0.08% |
4.30% |
5.68% |
|
|
VanEck
High Yield Muni ETF (return after taxes on distributions and sale of
Fund Shares) |
1.55% |
4.31% |
5.58% |
|
|
Bloomberg
Municipal Custom High Yield Composite Index (reflects no deduction for
fees, expenses or taxes)** |
4.49% |
6.23% |
7.13% |
|
|
ICE
High Yield Crossover Municipal Bond Transition Index (reflects no
deduction for fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
|
ICE
Broad High Yield Crossover Municipal Index (reflects no deduction for
fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
|
Bloomberg
US Aggregate Bond Index (reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
*
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.
**
The inception date of the High Yield Index and the
Final High Yield Index was
December 13, 2021.
See
“License Agreements and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Manager. The
following individual is 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 |
|
|
James
T. Colby III |
Portfolio
Manager |
February
2009 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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|
|
VANECK®
INTERMEDIATE
MUNI ETF |
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck
®
Intermediate
Muni ETF 1
(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 Transition 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)
[TO
BE UPDATED]
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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, 2023.
EXPENSE
EXAMPLE
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. This example does not take into account
brokerage commissions that you pay when purchasing or selling Shares of the
Fund.
The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell or hold all of your Shares at the end of those periods.
The example also assumes that your investment has a 5% annual return and that
the Fund’s operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
[TO
BE UPDATED]
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YEAR |
EXPENSES |
|
|
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 [6]% of the average value of its portfolio.
______________________
1
Prior to September 1, 2021, the Fund's name was VanEck Vectors®
Intermediate Muni ETF.
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 investments suggested by its name. 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
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 December 13, 2021, the special tax ( i.e.
,
revenue bonds backed by a specific tax) sector represented a significant portion
of the Fund.
Prior
to the selection of the Intermediate Index, the Fund tracked the Bloomberg
AMT-Free Intermediate Continuous Municipal Index (the "Prior Intermediate
Index"). The Fund is expected to begin tracking the Intermediate Index on or
around March 1, 2022. The Intermediate Index is an interim index that gradually
increases exposure to securities based on their weightings in the ICE
Intermediate AMT-Free Broad National Municipal Index (the "Final Intermediate
Index") while proportionally reducing exposure to certain component securities
of the Prior Intermediate Index. The Fund is expected to begin tracking the
Final Intermediate Index on December 1, 2022.
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. 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.
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 credit
worthiness may decline, which may adversely affect the value of the
security.
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. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. 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 Fund 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 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
Fund’s net investment income.
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 municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. 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 the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the
Fund may lose money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Intermediate 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 (“NAV”) than would be the case if
the Fund held all of the securities in the Intermediate Index. Conversely, a
positive development relating to an issuer of securities in the Intermediate
Index that is not held by the Fund could cause the Fund to underperform the
Intermediate 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 Intermediate Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Intermediate Index and incurs costs associated with
buying and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Intermediate Index
or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the Intermediate Index. Transaction costs,
including brokerage costs, will decrease the Fund’s NAV to the extent not offset
by the transaction fee payable by an Authorized Participant (“AP”). Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Intermediate Index. Errors in the Intermediate Index data, Intermediate
Index computations and/or the construction of the Intermediate Index in
accordance with its methodology may occur from time to time and may not be
identified and corrected by the Intermediate Index provider for a period of time
or at all, which may have an adverse impact on the Fund and its shareholders.
Shareholders should understand that
any
gains from the Intermediate Index provider's errors will be kept by the Fund and
its shareholders and any losses or costs resulting from the Intermediate Index
provider's errors will be borne by the Fund and its shareholders. When the
Intermediate Index is rebalanced and the Fund in turn rebalances its portfolio
to attempt to increase the correlation between the Fund’s portfolio and the
Intermediate Index, any transaction costs and market exposure arising from such
portfolio rebalancing will be borne directly by the Fund and its shareholders.
In addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Intermediate Index as
would be the case if the Fund purchased all of the securities in the
Intermediate Index in the proportions in which they are represented in the
Intermediate Index. Apart from scheduled rebalances, the Intermediate Index
provider or its agents may carry out additional ad hoc rebalances to the
Intermediate Index. Therefore, errors and additional ad hoc rebalances carried
out by the Intermediate Index provider or its agents to the Intermediate Index
may increase the costs to and the tracking error risk of the Fund. The Fund’s
performance may also deviate from the return of the Intermediate Index due to
certain listing standards of the Fund's listing exchange (the "Exchange") or
legal restrictions or limitations (such as diversification requirements). The
Fund may value certain of its investments, underlying securities and/or
currencies, and/or other assets based on fair value prices. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. For tax efficiency purposes, the Fund may sell certain
securities, and such sale may cause the Fund to realize a loss and deviate from
the performance of the Intermediate Index. In light of the factors discussed
above, the Fund’s return may deviate significantly from the return of the
Intermediate Index. Changes to the composition of the Intermediate Index in
connection with a rebalancing or reconstitution of the Intermediate Index may
cause the Fund to experience increased volatility, during which time the Fund’s
index tracking risk may be heightened.
The
Intermediate Index will gradually increase exposure to securities based on their
weightings in the Final Intermediate Index while proportionally reducing
exposure to certain component securities of the Prior Intermediate Index. These
adjustments to the Fund's portfolio holdings are expected to increase the Fund's
transaction costs and turnover rate.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state 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
or state 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 financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk. An
investment in the Fund involves risks similar to those of investing in any fund
invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Intermediate Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the
Intermediate Index provider to postpone a scheduled rebalance or reconstitution,
which could cause the Intermediate Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells
Shares
at a time when the market price is at a discount to the NAV, the shareholder may
pay significantly more or receive significantly less than the underlying value
of the Shares that were bought or sold or the shareholder may be unable to sell
his or her Shares. The securities held by the Fund may be traded in markets that
close at a different time than the Exchange. Liquidity in those securities may
be reduced after the applicable closing times. Accordingly, during the time when
the Exchange is open but after the applicable market closing, fixing or
settlement times, bid-ask spreads on the Exchange and the resulting premium or
discount to the Shares’ NAV may widen. Additionally, in stressed market
conditions, the market for the Fund’s Shares may become less liquid in response
to deteriorating liquidity in the markets for the Fund’s underlying portfolio
holdings. There are various methods by which investors can purchase and sell
Shares. Investors should consult their financial intermediaries before
purchasing or selling Shares of the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Intermediate Index
concentrates in a particular sector or sectors or industry or group of
industries. To the extent that the Fund is concentrated in a particular sector
or sectors or industry or group of industries, the Fund will be subject to the
risk that economic, political or other conditions that have a negative effect on
those sectors and/or industries may negatively impact the Fund to a greater
extent than if the Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart and table provide an indication of the
risks of investing in the Fund by comparing the Fund’s performance from year to
year and by showing how the Fund’s average annual returns for the one year, five
year, ten year and/or since inception periods, as applicable, compared with the
Fund’s benchmark index and a broad measure of market performance. Prior to March
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. 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.
[TO
BE UPDATED]
Annual
Total Returns (%)—Calendar Years
The
year-to-date total return as of June 30, 2021 was 0.74%.
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Best
Quarter: |
4.26% |
3Q
2011 |
Worst
Quarter: |
-5.13% |
4Q
2016 |
[TO
BE UPDATED]
Average
Annual Total Returns for the Periods Ended December 31, 2021
The
after-tax returns presented in the table below are calculated using the highest
historical individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Your actual after-tax returns will depend on
your specific tax situation and may differ from those shown below. After-tax
returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
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|
Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck
Intermediate Muni ETF (return before taxes)* |
5.66% |
3.97% |
4.72% |
|
|
VanEck
Intermediate Muni ETF (return after taxes on distributions) |
5.63% |
3.97% |
4.71% |
|
|
VanEck
Intermediate Muni ETF (return after taxes on distributions and sale of
Fund Shares) |
4.23% |
3.58% |
4.28% |
|
|
Bloomberg
AMT-Free Intermediate Continuous Municipal Index (reflects no
deduction for fees, expenses or taxes)** |
6.48% |
4.53% |
5.34% |
|
|
ICE
Intermediate AMT-Free Broad National Municipal Transition Index
(reflects no deduction for fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
|
ICE
Intermediate AMT-Free Broad National Municipal Index (reflects no
deduction for fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
|
Bloomberg
US Aggregate Bond Index (reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
*
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.
**
The inception date of the Intermediate Index and the Final Intermediate Index
was December 13, 2021.
See
“License Agreements and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van Eck Associates Corporation.
Portfolio
Manager.
The following individual is 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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James
T. Colby III |
Portfolio
Manager |
December
2007 |
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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 1
(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 Transition 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)
[TO
BE UPDATED]
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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, 2023.
EXPENSE
EXAMPLE
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. This example does not take into account
brokerage commissions that you pay when purchasing or selling Shares of the
Fund.
The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell or hold all of your Shares at the end of those periods.
The example also assumes that your investment has a 5% annual return and that
the Fund’s operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
[TO
BE UPDATED]
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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 [23]% of the average value of its portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Long
Muni ETF.
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 investments suggested by its name. 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
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 December 13, 2021, each of the health care and
special tax ( i.e.
revenue
bonds backed by a special tax) sectors represented a significant portion of the
Fund.
Prior
to the selection of the Long Index, the Fund tracked the Bloomberg AMT-Free Long
Continuous Municipal Index (the "Prior Long Index"). The Fund is expected to
begin tracking the Long Index on or around March 1, 2022. The Long Index is an
interim index that gradually increases exposure to securities based on their
weightings in the ICE Long AMT-Free Broad National Municipal Index (the "Final
Long Index") while proportionally reducing exposure to certain component
securities of the Prior Long Index. The Fund is expected to begin tracking the
Final Long Index on December 1, 2022.
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. 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.
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 credit worthiness may decline, which may adversely
affect the value of the security.
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. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. 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.
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 municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund 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 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
Fund’s net investment income.
Health
Care Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of health care bonds. 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
and the ability of the facility to provide the services required, physicians’
confidence in the facility, management capabilities, 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. Hospitals and other health care facilities are additionally
subject to claims and legal actions by patients and others in the ordinary
course of business. There can be no assurance that a claim will not exceed the
insurance coverage of a health care facility or that insurance coverage will be
available to a facility.
Special
Tax Bond Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. 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 the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the
Fund may lose money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in the Long 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 (“NAV”) than would be the case if the Fund
held all of the securities in the Long Index.
Conversely,
a positive development relating to an issuer of securities in the Long Index
that is not held by the Fund could cause the Fund to underperform the Long
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 Long Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Long Index and incurs costs associated with buying
and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Long Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the Long Index. Transaction costs, including
brokerage costs, will decrease the Fund’s NAV to the extent not offset by the
transaction fee payable by an Authorized Participant (“AP”). Market disruptions
and regulatory restrictions could have an adverse effect on the Fund’s ability
to adjust its exposure to the required levels in order to track the Long Index.
Errors in the Long Index data, Long Index computations and/or the construction
of the Long Index in accordance with its methodology may occur from time to time
and may not be identified and corrected by the Long Index provider for a period
of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Long Index
provider's errors will be kept by the Fund and its shareholders and any losses
or costs resulting from the Long Index provider's errors will be borne by the
Fund and its shareholders. When the Long Index is rebalanced and the Fund in
turn rebalances its portfolio to attempt to increase the correlation between the
Fund’s portfolio and the Long Index, any transaction costs and market exposure
arising from such portfolio rebalancing will be borne directly by the Fund and
its shareholders. In addition, the Fund's use of a representative sampling
approach may cause the fund to not be as well correlated with the return of the
Long Index as would be the case if the Fund purchased all of the securities in
the Long Index in the proportions in which they are represented in the Long
Index. Apart from scheduled rebalances, the Long Index provider or its agents
may carry out additional ad hoc rebalances to the Long Index. Therefore, errors
and additional ad hoc rebalances carried out by the Long Index provider or its
agents to the Long Index may increase the costs to and the tracking error risk
of the Fund. The Fund’s performance may also deviate from the return of the Long
Index due to certain listing standards of the Fund's listing exchange (the
"Exchange") or legal restrictions or limitations (such as diversification
requirements). The Fund may value certain of its investments, underlying
securities and/or currencies, and/or other assets based on fair value prices.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the Long Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Long Index. Changes to the composition of the Long Index in connection with
a rebalancing or reconstitution of the Long Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
The
Long Index will gradually increase exposure to securities based on their
weightings in the Final Long Index while proportionally reducing exposure to
certain component securities of the Prior Long Index. These adjustments to the
Fund's portfolio holdings are expected to increase the Fund's transaction costs
and turnover rate.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state 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
or state 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 financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk. An
investment in the Fund involves risks similar to those of investing in any fund
invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Long Index, the Fund generally
would not sell a security because the security’s issuer was in financial
trouble. Additionally, unusual market conditions may cause the Long Index
provider to postpone a scheduled rebalance or reconstitution,
which
could cause the Long Index to vary from its normal or expected composition.
Therefore, the Fund’s performance could be lower than funds that may actively
shift their portfolio assets to take advantage of market opportunities or to
lessen the impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Long Index concentrates in a particular
sector or sectors or industry or group of industries. To the extent that the
Fund is concentrated in a particular sector or sectors or industry or group of
industries, the Fund will be subject to the risk that economic, political or
other conditions that have a negative effect on those sectors and/or industries
may negatively impact the Fund to a greater extent than if the Fund’s assets
were invested in a wider variety of sectors or industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart and table provide an indication of the
risks of investing in the Fund by comparing the Fund’s performance from year to
year and by showing how the Fund’s average annual returns for the one year, five
year, ten year and/or since inception periods, as applicable, compared with the
Fund’s benchmark index and a broad measure of market performance. Prior to March
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. 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.
[TO
BE UPDATED]
Annual
Total Returns (%)—Calendar Years
The
year-to-date total return as of June 30, 2021 was 1.98%.
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Best
Quarter: |
6.69% |
1Q
2014 |
Worst
Quarter: |
-6.22% |
4Q
2016 |
[TO
BE UPDATED]
Average
Annual Total Returns for the Periods Ended December 31, 2021
The
after-tax returns presented in the table below are calculated using the highest
historical individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Your actual after-tax returns will depend on
your specific tax situation and may differ from those shown below. After-tax
returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
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|
Past One
Year |
Past Five
Years |
Past Ten
Years |
|
|
VanEck
Long Muni ETF (return before taxes)* |
6.37% |
4.79% |
5.98% |
|
|
VanEck
Long Muni ETF (return after taxes on distributions) |
6.34% |
4.79% |
5.97% |
|
|
VanEck
Long Muni ETF (return after taxes on distributions and sale of Fund
Shares) |
4.86% |
4.37% |
5.52% |
|
|
Bloomberg
AMT-Free Long Continuous Municipal Index
(reflects
no deduction for fees, expenses or taxes)** |
6.78% |
5.42% |
6.67% |
|
|
ICE
Long AMT-Free Broad National Municipal Transition Index
(reflects
no deduction for fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
|
ICE
Long AMT-Free Broad National Municipal Index (reflects no deduction for
fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
|
Bloomberg
US Aggregate Bond Index (reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
|
*
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.
**
The inception date of the Long Index and the Final Long Index was December 13,
2021.
See
“License Agreements and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Manager. The
following individual is 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 |
|
|
James
T. Colby III |
Portfolio
Manager |
January
2008 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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VANECK®
SHORT HIGH YIELD MUNI ETF |
SUMMARY
INFORMATION
INVESTMENT
OBJECTIVE
VanEck
®
Short
High Yield Muni ETF 1
(the
“Fund”) seeks to replicate as closely as possible, before fees and expenses, the
price and yield performance of the ICE
1-12 Year High Yield Crossover Municipal Bond Transition 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)
[TO
BE UPDATED]
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Management
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, 2023.
EXPENSE
EXAMPLE
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. This example does not take into account
brokerage commissions that you pay when purchasing or selling Shares of the
Fund.
The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell or hold all of your Shares at the end of those periods.
The example also assumes that your investment has a 5% annual return and that
the Fund’s operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
[TO
BE UPDATED]
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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 [14]% of the average value of its portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Short
High Yield Muni ETF.
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. By the end of the Fund’s index transition
period (as described below), the Short High Yield Index is expected to track the
high yield municipal bond market with an ultimate 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 investments suggested by its name. 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
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 December 13, 2021, 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.
Prior
to the selection of the Short High Yield Index, the Fund tracked the Bloomberg
Municipal High Yield Short Duration Index (the "Prior Short High Yield Index").
The Fund is expected to begin tracking the Short High Yield Index on or around
March 1, 2022. The Short High Yield Index is an interim index that gradually
increases exposure to securities based on their weightings in the ICE 1-12 Year
Broad High Yield Crossover Municipal Index (the "Final Short High Yield Index")
while proportionally reducing exposure to certain component securities of the
Prior Short High Yield Index. The Fund is expected to begin tracking the Final
Short High Yield Index on December 1, 2022.
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. 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.
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 credit worthiness may decline, which may adversely
affect the value of the security.
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. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. 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.
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 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 the Fund’s ability to arrive at a fair value for certain securities. The
illiquidity of the market also could make it difficult for the Fund to sell
certain securities in connection with a rebalancing of the Short High Yield
Index. 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 (“NAV”).
Industrial
Development Bond Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition and performance of industrial development bonds. 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 on 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 .
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of special tax bonds. 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 municipal obligations
of issuers located in the State of Illinois. Consequently, the Fund may be
affected by political, economic, regulatory and other developments within
Illinois and by the financial condition of Illinois’ political subdivisions,
agencies, instrumentalities and public authorities.
New
York Risk. The
Fund may invest a significant portion of its assets in municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund 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 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
Fund’s net investment income.
Private
Activity Bonds Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition and performance of private activity bonds. The
issuers of private activity bonds in which the Fund may invest may be negatively
impacted by conditions affecting either the general credit of the user of the
private activity project or the project itself.
The
Fund’s private activity bond holdings also may pay interest subject to the
alternative minimum tax. See the section of the Prospectus entitled “Shareholder
Information—Tax Information” for more details.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the
Fund may lose money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk. The
Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in the Short High Yield Index. As a
result, an adverse development respecting an issuer of securities held by the
Fund could result in a greater decline in NAV than would be the case if the Fund
held all of the securities in the Short High Yield Index. Conversely, a positive
development relating to an issuer of securities in the Short High Yield Index
that is not held by the Fund could cause the Fund to underperform the Short High
Yield 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 Short High Yield Index for a
number of reasons. For example, the Fund incurs a number of operating expenses,
including taxes, not applicable to the Short High Yield Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the Short
High Yield Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the Short High Yield Index. Transaction
costs, including brokerage costs, will decrease the Fund’s NAV to the extent not
offset by the transaction fee payable by an Authorized Participant (“AP”).
Market disruptions and regulatory restrictions could have an adverse effect on
the Fund’s ability to adjust its exposure to the required levels in order to
track the Short High Yield Index. Errors in the Short High Yield Index data,
Short High Yield Index computations and/or the construction of the Short High
Yield Index in accordance with its methodology may occur from time to time and
may not be identified and corrected by the Short High Yield Index provider for a
period of time or at all, which may have an adverse impact on the Fund and its
shareholders. Shareholders should understand that any gains from the Short High
Yield Index provider's errors will be kept by the Fund and its shareholders and
any losses or costs resulting from the Short High Yield Index provider's errors
will be borne by the Fund and its shareholders. When the Short High Yield Index
is rebalanced and the Fund in turn rebalances its portfolio to attempt to
increase the correlation between the Fund’s portfolio and the Short High Yield
Index, any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the Fund and its shareholders. In
addition, the Fund's use of a representative sampling approach may cause the
fund to not be as well correlated with the return of the Short High Yield Index
as would be the case if the Fund purchased all of the securities in the Short
High Yield Index in the proportions in which they are represented in the Short
High Yield Index. Apart from scheduled rebalances, the Short High Yield Index
provider or its agents may carry out additional ad hoc rebalances to the Short
High Yield Index. Therefore, errors and additional ad hoc rebalances carried out
by the Short High Yield Index provider or its agents to the Short High Yield
Index may increase the costs to and the tracking error risk of the Fund. The
Fund’s performance may also deviate from the return of the Short High Yield
Index due to certain listing standards of the Fund's listing exchange (the
"Exchange") or legal restrictions or limitations (such as diversification
requirements). The Fund may value certain of its investments, underlying
securities and/or currencies, and/or other assets based on fair value prices.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the Short High Yield Index. In light of the
factors discussed above, the Fund’s return may deviate significantly from the
return of the Short High Yield Index. Changes to the composition of the Short
High Yield Index in connection with a rebalancing or reconstitution of the Short
High Yield Index may cause the Fund to experience increased volatility, during
which time the Fund’s index tracking risk may be heightened.
The
Short High Yield Index will gradually increase exposure to securities based on
their weightings in the Final Short High Yield Index while proportionally
reducing exposure to certain component securities of the Prior Short High Yield
Index. These adjustments to the Fund's portfolio holdings are expected to
increase the Fund's transaction costs and turnover rate.
Tax
Risk. There
is no guarantee that the Fund’s income will be exempt from U.S. federal or state
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 or state 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 financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk. An
investment in the Fund involves risks similar to those of investing in any fund
invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Short High Yield Index, the Fund
generally would not sell a security because the security’s issuer was in
financial trouble. Additionally, unusual market conditions may cause the Short
High Yield Index provider to postpone a scheduled rebalance or reconstitution,
which could cause the Short High Yield Index to vary from its normal or expected
composition. Therefore, the Fund’s performance could be lower than funds that
may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. There are various
methods by which investors can purchase and sell Shares. Investors should
consult their financial intermediaries before purchasing or selling Shares of
the Fund.
Concentration
Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry
or group of industries to the extent the Short High Yield Index concentrates in
a particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart and table provide an indication of the
risks of investing in the Fund by comparing the Fund’s performance 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 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. 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.
[TO
BE UPDATED]
Annual
Total Returns (%)—Calendar Years
The
year-to-date total return as of June 30, 2021 was 3.65%.
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Best
Quarter: |
3.00% |
1Q
2019 |
Worst
Quarter: |
-5.03% |
1Q
2020 |
[TO
BE UPDATED]
Average
Annual Total Returns for the Periods Ended December 31, 2021
The
after-tax returns presented in the table below are calculated using the highest
historical individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Your actual after-tax returns will depend on
your specific tax situation and may differ from those shown below. After-tax
returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
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Past
One Year |
Past
Five Years |
Since
Inception
(1/13/2014) |
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VanEck
Short High Yield Muni ETF (return before taxes)* |
1.80% |
2.99% |
3.01% |
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VanEck
Short High Yield Muni ETF (return after taxes on
distributions) |
1.76% |
2.97% |
3.00% |
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VanEck
Short High Yield Muni ETF (return after taxes on distributions and
sale of Fund Shares) |
2.28% |
2.99% |
3.01% |
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Bloomberg
Municipal High Yield Short Duration Index
(reflects
no deduction for fees, expenses or taxes)** |
3.60% |
4.27% |
4.69% |
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ICE
1-12 Year High Yield Crossover Municipal Bond Transition
Index
(reflects
no deduction for fees, expenses or taxes)** |
[
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[
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[
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ICE
1-12 Year Broad High Yield Crossover Municipal Index (reflects no
deduction for fees, expenses or taxes)** |
[
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[
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[
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Bloomberg
US Aggregate Bond Index (reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.97% |
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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.
**
The inception date of the Short High Yield Index and the Final Short High Yield
Index was December 13, 2021.
See
“License Agreements and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser.
Van
Eck Associates Corporation.
Portfolio
Manager. The
following individual is 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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James
T. Colby III |
Portfolio
Manager |
January
2014 |
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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 1
(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 Transition 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)
[TO
BE UPDATED]
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Management
Fee |
0.20 |
% |
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Other
Expenses(a) |
0.00 |
% |
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Total
Annual Fund Operating Expenses(a) |
0.20 |
% |
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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, 2023.
EXPENSE
EXAMPLE
This
example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. This example does not take into account
brokerage commissions that you pay when purchasing or selling Shares of the
Fund.
The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell or hold all of your Shares at the end of those periods.
The example also assumes that your investment has a 5% annual return and that
the Fund’s operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
[TO
BE UPDATED]
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YEAR |
EXPENSES |
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1 |
$20 |
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3 |
$64 |
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5 |
$113 |
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10 |
$255 |
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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 [30]% of the average value of its portfolio.
______________________
1
Prior
to September 1, 2021, the Fund's name was VanEck Vectors®
Short
Muni ETF.
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 investments suggested by its name. 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
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 December 13, 2021, the pre-refunded sector
represented
a significant portion of the Fund.
Prior
to the selection of the Short Index, the Fund tracked the Bloomberg AMT-Free
Short Continuous Municipal Index (the "Prior Short Index"). The Fund is expected
to begin tracking the Short Index on or around March 1, 2022. The Short Index is
an interim index that gradually increases exposure to securities based on their
weightings in the ICE Short AMT-Free Broad National Municipal Index (the "Final
Short Index") while proportionally reducing exposure to certain component
securities of the Prior Short Index. The Fund is expected to begin tracking the
Final Short Index on December 1, 2022.
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. 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.
Pre-Refunded
Bonds Risk.
Pre-refunded bonds are bonds that have been refunded to a call date prior to the
final maturity of principal, or, in the case of pre-refunded bonds commonly
referred to as “escrowed-to-maturity bonds,” to the final maturity of principal,
and remain outstanding in the municipal market. The payment of principal and
interest of the prerefunded bonds held by the Fund is funded from securities
held in a designated escrow account where such securities are obligations of the
U.S. Treasury and/or U.S. government agencies. The securities held in the escrow
fund pledged to pay the principal and interest of the pre-refunded bond do not
guarantee the price of the bond. The Fund’s investment in prerefunded bonds may
subject the Fund to interest rate and reinvestment risk.
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 credit worthiness may decline, which may adversely
affect the value of the security.
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. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. 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.
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 municipal obligations of
issuers located in the State of New York. Consequently, the Fund may be affected
by political, economic, regulatory and other developments within New York and by
the financial condition of New York’s political subdivisions, agencies,
instrumentalities and public authorities.
Call
Risk.
The Fund 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 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
Fund’s net investment income.
Market
Risk.
The prices of the securities in the Fund are subject to the risks associated
with investing in the securities market, including general economic conditions,
sudden and unpredictable drops in value, exchange trading suspensions and
closures and public health risks. These risks may be magnified if certain
social, political, economic and other conditions and events (such as natural
disasters, epidemics and pandemics, terrorism, conflicts and social unrest)
adversely interrupt the global economy; in these and other circumstances, such
events or developments might affect companies world-wide. An investment in the
Fund may lose money.
Operational
Risk.
The Fund is exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third parties,
failed or inadequate processes and technology or system failures.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in its holding
a smaller number of securities than are in the Short 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 (“NAV”) than would be the case if
the Fund held all of the securities in the Short Index. Conversely, a positive
development relating to an issuer of securities in the Short Index that is not
held by the Fund could cause the Fund to underperform the Short 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 Short Index for a number of
reasons. For example, the Fund incurs a number of operating expenses, including
taxes, not applicable to the Short Index and incurs costs associated with buying
and selling securities, especially when rebalancing the Fund’s securities
holdings to reflect changes in the composition of the Short Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of the Short Index. Transaction costs,
including brokerage costs, will decrease the Fund’s NAV to the extent not offset
by the transaction fee payable by an Authorized Participant (“AP”). Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Short Index. Errors in the Short Index data, Short Index computations and/or
the construction of the Short Index in accordance with its methodology may occur
from time to time and may not be identified and corrected by the Short Index
provider for a period of time or at all, which may have an adverse impact on the
Fund and its shareholders. Shareholders should understand that any gains from
the Short Index provider's errors will be kept by the Fund and its shareholders
and any losses or costs resulting from the Short Index provider's errors will be
borne by the Fund and its shareholders. When the Short Index is rebalanced and
the Fund in turn rebalances its portfolio to attempt to increase the correlation
between the Fund’s portfolio and the Short Index, any transaction costs and
market exposure arising from such portfolio rebalancing will be borne directly
by the Fund and its shareholders. In addition, the Fund's use of a
representative
sampling
approach may cause the fund to not be as well correlated with the return of the
Short Index as would be the case if the Fund purchased all of the securities in
the Short Index in the proportions in which they are represented in the Short
Index. Apart from scheduled rebalances, the Short Index provider or its agents
may carry out additional ad hoc rebalances to the Short Index. Therefore, errors
and additional ad hoc rebalances carried out by the Short Index provider or its
agents to the Short Index may increase the costs to and the tracking error risk
of the Fund. The Fund’s performance may also deviate from the return of the
Short Index due to certain listing standards of the Fund's listing exchange (the
"Exchange") or legal restrictions or limitations (such as diversification
requirements). The Fund may value certain of its investments, underlying
securities and/or currencies, and/or other assets based on fair value prices.
When markets are volatile, the ability to sell securities at fair value prices
may be adversely impacted and may result in additional trading costs and/or
increase the index tracking risk. For tax efficiency purposes, the Fund may sell
certain securities, and such sale may cause the Fund to realize a loss and
deviate from the performance of the Short Index. In light of the factors
discussed above, the Fund’s return may deviate significantly from the return of
the Short Index. Changes to the composition of the Short Index in connection
with a rebalancing or reconstitution of the Short Index may cause the Fund to
experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
The
Short Index will gradually increase exposure to securities based on their
weightings in the Final Short Index while proportionally reducing exposure to
certain component securities of the Prior Short Index. These adjustments to the
Fund's portfolio holdings are expected to increase the Fund's transaction costs
and turnover rate.
Tax
Risk.
There is no guarantee that the Fund’s income will be exempt from U.S. federal or
state 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
or state 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 financial institutions that act as APs,
none of which are obligated to engage in creation and/or redemption
transactions. To the extent that those APs exit the business, or are unable to
or choose not to process creation and/or redemption orders, and no other AP is
able to step forward to create and redeem, there may be a significantly
diminished trading market for Shares or Shares may trade like closed-end funds
at a greater discount (or premium) to NAV and possibly face trading halts and/or
de-listing. The AP concentration risk may be heightened in scenarios where APs
have limited or diminished access to the capital required to post
collateral.
No
Guarantee of Active Trading Market.
While Shares are listed on the Exchange, there can be no assurance that an
active trading market for the Shares will be maintained. Further, secondary
markets may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods in times of market stress because market
makers and APs may step away from making a market in the Shares and in executing
creation and redemption orders, which could cause a material deviation in the
Fund’s market price from its NAV.
Trading
Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to the Exchange’s “circuit
breaker” rules. There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Passive
Management Risk. An
investment in the Fund involves risks similar to those of investing in any fund
invested in bonds, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in security prices. However, because the Fund is not “actively” managed,
unless a specific security is removed from the Short Index, the Fund generally
would not sell a security because the security’s issuer was in financial
trouble. Additionally, unusual market conditions may cause the Short Index
provider to postpone a scheduled rebalance or reconstitution, which could cause
the Short Index to vary from its normal or expected composition. Therefore, the
Fund’s performance could be lower than funds that may actively shift their
portfolio assets to take advantage of market opportunities or to lessen the
impact of a market decline or a decline in the value of one or more
issuers.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. The
market price of the Shares may fluctuate in response to the Fund’s NAV, the
intraday value of the Fund’s holdings and supply and demand for Shares. The
Adviser cannot predict whether Shares will trade above, below, or at their most
recent NAV. Disruptions to creations and redemptions, the existence of market
volatility or potential lack of an active trading market for Shares (including
through a trading halt), as well as other factors, may result in Shares trading
at a significant premium or discount to NAV or to the intraday value of the
Fund’s holdings. If a shareholder purchases Shares at a time when the market
price is at a premium to the NAV or sells Shares at a time when the market price
is at a discount to the NAV, the shareholder may pay significantly more or
receive significantly less than the underlying value of the Shares that were
bought or sold or the shareholder may be unable to sell his or her Shares. The
securities held by the Fund may be traded in markets that close at a different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid-ask
spreads on the Exchange and the resulting premium or discount to the Shares’ NAV
may widen. Additionally, in stressed market conditions, the market for the
Fund’s Shares may
become
less liquid in response to deteriorating liquidity in the markets for the Fund’s
underlying portfolio holdings. There are various methods by which investors can
purchase and sell Shares. Investors should consult their financial
intermediaries before purchasing or selling Shares of the Fund.
Concentration
Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent the Short Index concentrates in a
particular sector or sectors or industry or group of industries. To the extent
that the Fund is concentrated in a particular sector or sectors or industry or
group of industries, the Fund will be subject to the risk that economic,
political or other conditions that have a negative effect on those sectors
and/or industries may negatively impact the Fund to a greater extent than if the
Fund’s assets were invested in a wider variety of sectors or
industries.
PERFORMANCE
The
bar chart that follows shows how the Fund performed for the calendar years
shown. The table below the bar chart shows the Fund’s average annual returns
(before and after taxes). The bar chart and table provide an indication of the
risks of investing in the Fund by comparing the Fund’s performance from year to
year and by showing how the Fund’s average annual returns for the one year, five
year, ten year and/or since inception periods, as applicable, compared with the
Fund’s benchmark index and a broad measure of market performance. Prior to March
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. 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.
[TO
BE UPDATED]
Annual
Total Returns (%)—Calendar Years
The
year-to-date total return as of June 30, 2021 was 0.37%.
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Best
Quarter: |
2.62% |
2Q
2020 |
Worst
Quarter: |
-1.78% |
4Q
2016 |
[TO
BE UPDATED]
Average
Annual Total Returns for the Periods Ended December 31, 2021
The
after-tax returns presented in the table below are calculated using the highest
historical individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Your actual after-tax returns will depend on
your specific tax situation and may differ from those shown below. After-tax
returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts.
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Past
One Year |
Past
Five Years |
Past
Ten Years |
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VanEck
Short Muni ETF (return before taxes)* |
3.22% |
1.98% |
1.96% |
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VanEck
Short Muni ETF (return after taxes on distributions) |
3.22% |
1.98% |
1.95% |
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VanEck
Short Muni ETF (return after taxes on distributions and sale of Fund
Shares) |
2.54% |
1.84% |
1.84% |
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Bloomberg
AMT-Free Short Continuous Index (reflects no deduction for fees,
expenses or taxes)** |
3.71% |
2.38% |
2.44% |
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ICE
Short AMT-Free Broad National Municipal Transition Index (reflects no
deduction for fees, expenses or taxes)** |
[
] |
[
] |
[
] |
|
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ICE
Short AMT-Free Broad National Municipal Index (reflects no deduction for
fees, expenses or taxes)** |
[
] |
[
] |
[
] |
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Bloomberg
US Aggregate Bond Index (reflects no deduction for fees, expenses or
taxes) |
7.51% |
4.44% |
3.84% |
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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.
**
The inception date of the Short Index and the Final Short Index was December 13,
2021.
See
“License Agreements and Disclaimers” for important information.
PORTFOLIO
MANAGEMENT
Investment
Adviser. Van
Eck Associates Corporation.
Portfolio
Manager. The
following individual is 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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James
T. Colby III |
Portfolio
Manager |
February
2008 |
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PURCHASE
AND SALE OF FUND SHARES
For
important information about the purchase and sale of Fund Shares, tax
information and payments to broker-dealers and other financial intermediaries,
please turn to the “Summary Information about Purchases and Sales of Fund
Shares, Taxes and Payments to Broker-Dealers and Other Financial Intermediaries”
section of this Prospectus.
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SUMMARY
INFORMATION ABOUT PURCHASES AND SALES OF FUND SHARES, TAXES AND PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL
INTERMEDIARIES |
PURCHASE
AND SALE OF FUND SHARES
Individual
Shares of a Fund may only be purchased and sold in secondary market transactions
through a broker or dealer at a market price. Shares of the Funds are listed on
the Exchange, and because Shares trade at market prices rather than NAV, Shares
of the Funds may trade at a price greater than NAV ( i.e
.,
a "premium") or less than NAV ( i.e
.,
a "discount").
An
investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares of a Fund (bid) and the
lowest price a seller is willing to accept for Shares (ask) when buying or
selling Shares in the secondary market (the “bid/ask spread”).
Recent
information, including information about each Fund’s NAV, market price, premiums
and discounts, and bid/ask spreads, is included on the Fund’s website at
www.vaneck.com.
TAX
INFORMATION
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.
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ADDITIONAL
INFORMATION ABOUT THE FUNDS’ INVESTMENT STRATEGIES AND
RISKS |
PRINCIPAL
INVESTMENT STRATEGIES
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.
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 (the
"Board of Trustees") of VanEck ETF Trust (the "Trust") without shareholder
approval, except as noted in this Prospectus or the Statement of Additional
Information (“SAI”) under the section entitled “Investment Policies and
Restrictions—Investment Restrictions.”
RISKS
OF INVESTING IN THE FUNDS
The
following section provides additional information regarding the principal risks
identified under “Principal Risks of Investing in the Fund” in each Fund’s
“Summary Information” section followed by additional risk information. The risks
listed below are applicable 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.
Credit
Risk.
Debt securities, such as 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. Debt
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
debt security may be downgraded after purchase or the perception of an issuer’s
credit worthiness may decline, which may adversely affect the value of the
security. Lower credit quality may also affect liquidity and make it difficult
for a Fund to sell the security.
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. Many factors
can cause interest rates to rise, including central bank monetary policy, rising
inflation rates and general economic conditions. 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. To the extent the Fund
invests a substantial portion of its assets in debt securities with longer term
maturities, rising interest rates may cause the value of the Fund’s investments
to decline significantly.
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.
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 an issuer could have a significant effect on the
issuer’s ability to make payments of principal and/or interest or otherwise
affect the value of such securities. In addition, there is a risk that, as a
result of the recent economic crisis, the ability of any issuer to pay, when
due, the principal or interest on its municipal bonds may be materially
affected. Certain municipalities may have difficulty meeting their obligations
due to, among other reasons, changes in underlying demographics. 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. 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 Funds.
Municipal
securities can be significantly affected by political changes as well as
uncertainties in the municipal market related to 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. Municipal securities backed
by current or anticipated revenues from a specific project or specific assets
can be negatively affected by the discontinuance of the taxation supporting the
project or assets or the inability to collect revenues for the project or from
the assets.
If
the Internal Revenue Service (“IRS”) determines that an issuer of a municipal
security has not complied with applicable tax requirements, interest from the
security could become taxable and the security could decline significantly in
value.
The
market for municipal bonds may be less liquid than for taxable bonds. There may
also be less information available on the financial condition of issuers of
municipal securities than for public corporations. The reorganization of a
municipality’s debts may include extending debt maturities, reducing the amount
of principal or interest, refinancing the debt or taking other measures, which
may significantly affect the rights of creditors and the value of the securities
issued by the municipality and the value of a Fund’s investments. The taxing
power of any governmental entity may be limited and an entity’s credit may
depend on factors which are beyond the entity’s control.
Pre-Refunded
Bonds Risk.
(VanEck Short Muni ETF only.) Pre-refunded bonds are bonds that have been
refunded to a call date prior to the final maturity of principal, or, in the
case of pre-refunded bonds commonly referred to as “escrowed-to-maturity bonds,”
to the final maturity of principal, and remain outstanding in the municipal
market. The payment of principal and interest of the pre-refunded bonds held by
the Fund is funded from securities held in a designated escrow account where
such securities are obligations of the U.S. Treasury and/or U.S. government
agencies. The securities held in the escrow fund pledged to pay the principal
and interest of the pre-refunded bond do not guarantee the price of the bond.
The Fund’s investment in pre-refunded bonds may subject the Fund to interest
rate and reinvestment risk. In addition, if the Fund sells pre-refunded bonds
prior to maturity, the price received may be more or less than the original
cost, depending on market conditions at the time of sale.
High
Yield Securities Risk. (VanEck
High Yield Muni ETF and VanEck Short High Yield Muni ETF only.) 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. 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, a 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. The illiquidity of the market also could make it difficult for a
Fund to sell certain securities in connection with a rebalancing of its
respective Index. In addition, periods of economic uncertainty and change may
result in an increased volatility of market prices of high yield securities and
corresponding volatility in a Fund's NAV.
Sampling
Risk.
A Fund’s use of a representative sampling approach will result in its holding a
smaller number of securities than are in its respective Index. As a result, an
adverse development respecting an issuer of securities held by a Fund could
result in a greater decline in NAV than would be the case if the Fund held all
of the securities in its respective Index. Conversely, a positive development
relating to an issuer of securities in an Index that is not held by the Fund
could cause the Fund to underperform its respective Index. To the extent the
assets in a Fund are smaller, these risks will be greater.
Private
Activity Bonds Risk. (VanEck
High Yield Muni ETF and VanEck Short High Yield Muni ETF only.) A Fund will be
sensitive to, and its performance will depend to a greater extent on, the
overall condition and performance of private activity bonds. The issuers of
private activity bonds in which the Fund may invest may be negatively impacted
by conditions affecting either the general credit of the user of the private
activity project or the project itself. Conditions such as regulatory and
environmental restrictions and economic downturns may lower the need for these
facilities and the ability of users of the project
to
pay for the facilities. This could cause a decline in the Fund’s value. The
Fund’s private activity bond holdings also may pay interest subject to the
alternative minimum tax.
Call
Risk.
Each Fund 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, a 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 a
Fund’s net investment income. A Fund also may fail to recover additional amounts
(i.e.,
premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.
Operational
Risk.
Each Fund is exposed to operational risk arising from a number of factors,
including but not limited to, human error, processing and communication errors,
errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or system failures.
Market
Risk. The
prices of the securities in the 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. Overall securities
values could decline generally or could underperform other investments. An
investment in the Funds may lose money.
VanEck
High Yield Muni ETF, VanEck
Intermediate Muni ETF, VanEck Long Muni ETF, VanEck
Short High Yield Muni ETF and VanEck
Short Muni ETF may invest in bonds from the following industries/sectors:
Education
Bond Risk.
In general, there are two types of education related bonds: those issued to
finance projects for public and private colleges and universities, and those
representing pooled interests in student loans. Bonds issued to supply
educational institutions with funds are subject to the risk of unanticipated
revenue decline, primarily the result of decreasing student enrollment or
decreasing state and federal funding. Among the factors that may lead to
declining or insufficient revenues are restrictions on students’ ability to pay
tuition, availability of state and federal funding and general economic
conditions. Student loan revenue bonds are generally offered by state (or
substate) authorities or commissions and are backed by pools of student loans.
Underlying student loans may be guaranteed by state guarantee agencies and may
be subject to reimbursement by the United States Department of Education through
its guaranteed student loan program. Others may be private, uninsured loans made
to parents or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be applied to
redemption of bonds or may be used to re-lend, depending on program latitude and
demand for loans. Cash flows supporting student loan revenue bonds are impacted
by numerous factors, including the rate of student loan defaults, seasoning of
the loan portfolio and student repayment deferral periods of forbearance. Other
risks associated with student loan revenue bonds include potential changes in
federal legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
Electric
Utilities Bond Risk.
The electric utilities industry has been experiencing, and will continue to
experience, increased competitive pressures. Federal legislation may open
transmission access to any electricity supplier, although it is not presently
known to what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel; (b) the availability and cost of capital; (c) the
effects of conservation on energy demand; (d) the effects of rapidly changing
environmental, safety and licensing requirements, and other federal, state and
local regulations; (e) timely and sufficient rate increases and governmental
limitations on rates charged to customers; (f) the effects of opposition to
nuclear power; (h) increases in operating costs; and (i) obsolescence of
existing equipment, facilities and products.
General
Obligation Bond Risk.
General obligation bonds are not backed by revenues from a specific project or
source. Instead, general obligation bonds 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.
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 and the ability of the facility to provide the services
required, physicians’ confidence in the facility, management capabilities,
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.
Hospitals and other health care facilities are additionally subject to claims
and legal actions by patients and others in the ordinary course of business.
There can be no assurance that a claim will not exceed the insurance coverage of
a health care facility or that insurance coverage will be available to a
facility.
Housing
Bond Risk.
Housing revenue bonds are generally issued by a state, county, city, local
housing authority or other public agency. They generally are secured by the
revenues derived from mortgages purchased with the proceeds of the bond issue.
It is extremely difficult to predict the supply of available mortgages to be
purchased with the proceeds of an issue or the future cash flow from the
underlying mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner repayments
will create an irregular cash flow. Many factors may affect the financing of
multi-family housing projects, including acceptable completion of construction,
proper management, occupancy and rent levels, economic conditions and changes to
current laws and regulations.
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.
Lease
Obligations Risk.
Lease obligations may have risks not normally associated with general obligation
or other revenue bonds. Leases and installment purchase or conditional sale
contracts (which may provide for title to the leased asset to pass eventually to
the issuer) have developed as a means for governmental issuers to acquire
property and equipment without the necessity of complying with the
constitutional statutory requirements generally applicable for the issuance of
debt.
Certain
lease obligations contain “non appropriation” clauses that provide that the
governmental issuer has no obligation to make future payments under the lease or
contract unless money is appropriated for that purpose by the appropriate
legislative body on an annual or other periodic basis. Consequently, continued
lease payments on those lease obligations containing “non appropriation” clauses
are dependent on future legislative actions. If these legislative actions do not
occur, the holders of the lease obligation may experience difficulty in
exercising their rights, including disposition of the property. In such
circumstances, the Fund might not recover the full principal amount of the
obligation.
Resource
Recovery Bond Risk.
Resource recovery bonds are a type of revenue bond issued to build facilities
such as solid waste incinerators or waste-to-energy plants. Typically, a private
corporation is involved, at least during the construction phase, and the revenue
stream is secured by fees or rents paid by municipalities for use of the
facilities.
These
bonds are normally secured only by the revenues from the project and not by
state or local government tax receipts. 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. The
viability of a resource recovery project, environmental protection regulations,
and project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
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. (
VanEck
High Yield Muni ETF, VanEck
Intermediate Muni ETF, VanEck Long Muni ETF and VanEck Short Muni ETF only.)
Each Fund may invest a significant portion of its assets in municipal
obligations of issuers located in the State of California. Consequently, the
Funds 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 Funds’ 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 in
the past experienced financial and economic difficulties, which heightened 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. California has
committed to significant increases in annual payments to these systems to reduce
the unfunded liabilities, and California also has significant unfunded liability
with respect to other post-employment benefits. Moreover, many local government
agencies may face budget constraints due to mandated expenditures for health,
welfare and public safety, as well as the adverse impact local economic
conditions have had 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 each Fund.
California’s
economy is broad, it does have 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 each
Fund’s income, NAV, liquidity and/or ability to preserve or realize appreciation
of capital. Furthermore, investments in California municipal securities may be
affected by natural disasters, such as earthquakes or wildfires, which could
impair an issuer's ability to pay principal and/or interest on its
obligations.
Other
risks affecting issuers of California municipal securities include, but are not
limited to, the ongoing and evolving economic and health-related impacts of the
COVID-19 pandemic on the national, State and local economies; the impact of
federal tax law changes; the impact of international events on consumer
confidence, oil supplies and oil prices; shifts in monetary policy affecting
interest rates and the financial markets; the magnitude of pension and
post-retirement health care commitments, and the impact on the funding of such
benefits of lower-than-expected returns; the impact of consumer spending on tax
collections; increased demand for entitlement-based and claims-based programs
such as Medicaid, public assistance and general public health; access to the
capital markets in light of disruptions in the market; litigation against the
State; and actions taken by the federal government, including audits,
disallowances, changes in aid levels, and changes to Medicaid
rules.
New
York Risk. (VanEck
Intermediate Muni ETF, VanEck Long Muni ETF, VanEck
Short High Yield Muni ETF and
VanEck Short Muni ETF only). Each Fund may invest a significant portion of its
assets in New York municipal bonds. Consequently, each 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. Unfavorable developments in any economic sector may have a
substantial impact on the overall New York municipal market. As the nation’s
financial capital, New York’s and New York City’s economy is heavily dependent
on the financial sector and may be sensitive to economic problems affecting the
sector. New York and New York City also face a particularly large degree of
uncertainty from interest rate risk and equity market volatility. The New York
and New York City economy tends to be more sensitive to monetary policy actions
and to movements in the national and world economies than the economies of other
states. The economies of New York State and New York City are diversified across
the finance, insurance, real estate, entertainment and services sectors. Any
downturn in these sectors or related industries may adversely affect the economy
of the state. Certain issuers of New York municipal bonds have experienced
serious financial difficulties in the past and reoccurrence of these
difficulties may impair the ability of certain New York issuers to pay principal
or interest on their obligations. The economic, financial and social impact from
the COVID-19 pandemic has been unprecedented—and New York State was the
epicenter of the initial wave; however, the state's general obligation ratings
have remained strong.
Climate
change remains a long term threat to New York State. These threats include
rising sea levels, more severe coastal flooding, more intense storms, and
greenhouse gas emissions.
Illinois
Risk. (
VanEck
High Yield Muni ETF and VanEck
Short High Yield Muni ETF only.) Each Fund may invest a significant portion of
its assets in Illinois municipal bonds. Consequently, the Funds 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.
Unfavorable
developments in any economic sector may have a substantial impact on the overall
Illinois municipal market. Illinois has experienced significant budgetary
challenges in recent years. Certain issuers of Illinois municipal bonds have
experienced serious financial difficulties in the past and reoccurrence of these
difficulties may impair the ability of certain Illinois issuers to pay principal
or interest on their obligations. In 2017, Illinois narrowly avoided becoming
the first state to be issued a “junk” credit rating after it passed its first
budget in more than two years. However, the state’s recent budget stalemate
could still trigger a credit downgrade from one of the other major ratings
companies. Any future failures to pass a budget could have an adverse impact on
the state’s ability to pay outstanding debt obligations, including with respect
to debt owned by a Fund.
In
addition, Illinois has been materially adversely impacted by the health-related
and economic impacts of the COVID-19 pandemic. Illinois has also faced
increasing levels of debt in recent years. There is no assurance that Illinois
can maintain its credit
ratings
for any given period of time. A downward revision or withdrawal of any such
rating may have an adverse effect on the market prices of the securities issued
by Illinois, which would in turn negatively impact the performance of a
Fund.
Index
Tracking Risk. Each
Fund’s return may not match the return of its Index for a number of reasons. For
example, a Fund incurs a number of operating expenses, including taxes, not
applicable to its Index and incurs costs associated with buying and selling
securities, especially when rebalancing the Fund’s securities holdings to
reflect changes in the composition of its Index or
(to the extent the Fund effects creations and redemptions for cash) raising cash
to meet redemptions or deploying cash in connection with newly created Creation
Units (defined herein), which
are not factored into the return of its Index. Transaction costs, including
brokerage costs, will decrease the Fund’s NAV to the extent not offset by the
transaction fee payable by an AP. Market disruptions and regulatory restrictions
could have an adverse effect on a Fund’s ability to adjust its exposure to the
required levels in order to track its respective Index. There is no assurance
that a Fund’s Index Provider (defined herein) or any agents that may act on its
behalf will compile the Fund’s Index accurately, or that an Index will be
determined, composed or calculated accurately. Errors in respect of the quality,
accuracy and completeness of the data used to compile an Index may occur from
time to time and may not be identified and corrected by the applicable Index
Provider for a period of time or at all, particularly where the indices are less
commonly used as benchmarks by funds or managers. Therefore, gains, losses or
costs associated with errors of an Index Provider or its agents will generally
be borne by the applicable Fund and its shareholders. Apart from scheduled
rebalances, the Index Providers or their agents may carry out additional ad hoc
rebalances to a Fund's Index. Therefore, errors and additional ad hoc rebalances
carried out by the Index Providers or their agents to a respective Index may
increase the costs to and the tracking error risk of the Funds. When a Fund’s
Index is rebalanced and the Fund in turn rebalances its portfolio to attempt to
increase the correlation between the Fund’s portfolio and its respective Index,
any transaction costs and market exposure arising from such portfolio
rebalancing will be borne directly by the applicable Fund and its shareholders.
For example, during a period where a Fund’s Index contains incorrect
constituents, the Fund would have market exposure to such constituents and would
be underexposed to the Index’s other constituents. Such errors may negatively or
positively impact a Fund and its shareholders. Any gains due to an Index
Provider’s or others’ errors will be kept by a Fund and its shareholders and any
losses resulting from an Index Provider’s or others’ errors will be borne by a
Fund and its shareholders. In addition, a Fund’s use of a representative
sampling approach may cause the Fund’s returns to not be as well correlated with
the return of its Index as would be the case if the Fund purchased all of the
securities in its Index in the proportions represented in such Index and can be
expected to result in greater tracking error than if the Fund used a replication
indexing strategy.
Each
Fund may not be fully invested at times as a result of reserves of cash held by
the Fund to pay expenses. In addition, a Fund may not be able to invest in
certain securities included in its Index, or invest in them in the exact
proportions in which they are represented in its Index, due to legal
restrictions or limitations imposed by the governments of certain countries, the
Exchange listing requirements, a lack of liquidity on stock exchanges in which
such securities trade, potential adverse tax consequences or other regulatory
reasons (such as diversification requirements). Moreover, a Fund may be delayed
in purchasing or selling securities included in its Index. When markets are
volatile, the ability to sell securities at fair value prices may be adversely
impacted and may result in additional trading costs and/or increase the index
tracking risk. Any issues a Fund encounters with regard to currency
convertibility (including the cost of borrowing funds, if any) and repatriation
may also increase the Index tracking risk. For tax efficiency purposes, a Fund
may sell certain securities, and such sale may cause the Fund to realize a loss
and deviate from the performance of its Index.
Certain
Funds are expected to fair value certain of the securities they hold. To the
extent a Fund calculates its NAV based on fair value prices or on the prices
that differ from those used in calculating a Fund’s respective Index, the Fund’s
ability to track its Index may be adversely affected. The need to comply with
the tax diversification and other requirements of the Internal Revenue Code may
also impact the Fund’s ability to replicate the performance of its Index. In
addition, if a Fund utilizes depositary receipts and other derivative
instruments, its return may not correlate as well with the return of its Index
as would be the case if the Fund purchased all the securities in its Index
directly. Actions taken in response to proposed corporate actions could result
in increased tracking error. In light of the factors discussed above, each
Fund’s return may deviate significantly from the return of its index. Index
tracking risk may be heightened during times of increased market volatility or
other unusual market conditions. Changes to the composition of a Fund’s Index in
connection with a rebalancing or reconstitution of the Index may cause the Fund
to experience increased volatility, during which time the Fund’s index tracking
risk may be heightened.
Each
Fund's Index will gradually increase exposure to securities based on their
weightings in the Fund's final index while proportionally reducing exposure to
certain component securities of the Fund's prior index. These adjustments to a
Fund's portfolio holdings are expected to increase the Fund's transaction costs
and turnover rate.
Passive
Management Risk. Unlike
many investment companies, the Funds are not “actively” managed. Therefore,
unless a specific security is removed from a Fund’s respective Index, a Fund
generally would not sell a security because the security’s issuer is in
financial trouble. If a specific security is removed from a Fund’s respective
Index, a 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 Funds involves
risks similar to those of investing in any Fund that invests in bonds, such as
market fluctuations caused by such factors as economic and political
developments, changes in interest rates and perceived trends in security prices.
A Fund’s respective Index may not contain the appropriate or a diversified mix
of securities for any particular economic cycle. The timing of changes in the
securities
of
a Fund’s portfolio in seeking to replicate its Index could have a negative
effect on the Fund. Unlike with an actively managed fund, the Adviser does not
use techniques or defensive strategies designed to lessen the effects of market
volatility or to reduce the impact of periods of market decline. Additionally,
unusual market conditions may cause a Fund’s Index Provider to postpone a
scheduled rebalance or reconstitution, which could cause a Fund’s Index to vary
from its normal or expected composition. This means that, based on market and
economic conditions, a Fund’s performance could be lower than funds that may
actively shift their portfolio assets to take advantage of market opportunities
or to lessen the impact of a market decline or a decline in the value of one or
more issuers.
Tax
Risk.
There is no guarantee that a Fund’s income will be exempt from U.S. federal or
state income taxes. Events occurring after the date of issuance of a municipal
bond or after a 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 a Fund to its
shareholders to be taxable to those shareholders in the year of receipt. Federal
or state 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 (“AP”) Concentration Risk.
A Fund may have a limited number of financial institutions that act as APs, none
of which are obligated to engage in creation and/or redemption transactions. To
the extent that those APs exit the business, or are unable to or choose not to
process creation and/or redemption orders, and no other AP is able to step
forward to create and redeem, there may be a significantly diminished trading
market for Shares or Shares may trade like closed-end funds at a greater
discount (or premium) to NAV and possibly face trading halts and/or de-listing.
The AP concentration risk may be heightened in scenarios where APs have limited
or diminished access to the capital required to post collateral.
No
Guarantee of Active Trading Market. While
Shares are listed on the Exchange there can be no assurance that an active
trading market for the Shares will be maintained. Further, secondary markets may
be subject to irregular trading activity, wide bid/ask spreads and extended
trade settlement periods in times of market stress because market makers and APs
may step away from making a market in the Shares and in executing creation and
redemption orders, which could cause a material deviation in a Fund’s market
price from its NAV. Van Eck Securities Corporation, the distributor of the
Shares (the “Distributor”), does not maintain a secondary market in the Shares.
Investors purchasing and selling Shares in the secondary market may not
experience investment results consistent with those experienced by those APs
creating and redeeming directly with a Fund.
Decisions
by market makers or APs to reduce their role or “step away” from these
activities in times of market stress could inhibit the effectiveness of the
arbitrage process in maintaining the relationship between the underlying value
of a Fund’s portfolio securities and the Fund’s market price. This reduced
effectiveness could result in Fund Shares trading at a discount to its NAV and
also in greater than normal intraday bid/ask spreads for Fund
Shares.
Trading
Issues. Trading
in Shares on the Exchange may be halted due to market conditions or for reasons
that, in the view of the Exchange, make trading in Shares inadvisable. In
addition, trading in Shares on the Exchange is subject to trading halts caused
by extraordinary market volatility pursuant to the Exchange’s “circuit breaker”
rules. If a trading halt or unanticipated early close of the Exchange occurs, a
shareholder may be unable to purchase or sell Shares of a Fund. There can be no
assurance that the requirements of the Exchange necessary to maintain the
listing of a Fund will continue to be met or will remain unchanged.
Fund
Shares Trading, Premium/Discount Risk and Liquidity of Fund Shares. Disruptions
to creations and redemptions, the existence of market volatility or potential
lack of an active trading market for Shares (including through a trading halt),
as well as other factors, may result in Shares trading at a significant premium
or discount to NAV or to the intraday value of a Fund’s holdings. The NAV of the
Shares will fluctuate with changes in the market value of a Fund’s securities
holdings. The market price of Shares may fluctuate, in some cases materially, in
accordance with changes in NAV and the intraday value of a Fund’s holdings, as
well as supply and demand on the Exchange. The Adviser cannot predict whether
Shares will trade below, at or above their NAV. Given the fact that Shares can
be created and redeemed by APs in Creation Units (defined herein), the Adviser
believes that large discounts or premiums to the NAV of Shares should not be
sustained in the long-term. While the creation/redemption feature is designed to
make it likely that Shares normally will trade close to the value of a Fund’s
holdings, market prices are not expected to correlate exactly to the Fund’s NAV
due to timing reasons, supply and demand imbalances and other factors. The price
differences may be due, in large part, to the fact that supply and demand forces
at work in the secondary trading market for Shares may be closely related to,
but not necessarily identical to, the same forces influencing the prices of the
securities of a Fund’s portfolio of investments trading individually or in the
aggregate at any point in time. If a shareholder purchases Shares at a time when
the market price is at a premium to the NAV or sells Shares at a time when the
market price is at a discount to the NAV, the shareholder may pay significantly
more or receive significantly less than the underlying value of the Shares that
were bought or sold or the shareholder may be unable to sell his or her Shares.
Any of these factors, discussed above and further below, may lead to the Shares
trading at a premium or discount to a Fund’s NAV. In addition, because certain
of a Fund’s underlying securities trade on exchanges that are closed when the
Exchange ( i.e.
,
the exchange that Shares of the Fund trade on) is open, there are likely to be
deviations between the expected value of an underlying security and the closing
security’s price ( i.e.
,
the last quote from its closed foreign market) resulting in premiums or
discounts to NAV that may be greater than those experienced by other ETFs. In
addition, the securities held by a Fund may be traded in markets that close at a
different
time than the Exchange. Liquidity in those securities may be reduced after the
applicable closing times. Accordingly, during the time when the Exchange is open
but after the applicable market closing, fixing or settlement times, bid/ask
spreads and the resulting premium or discount to the Shares’ NAV may widen.
Additionally, in stressed market conditions, the market for the Fund’s Shares
may become less liquid in response to deteriorating liquidity in the markets for
the Fund’s underlying portfolio holdings. There are various methods by which
investors can purchase and sell Shares. Investors should consult their financial
intermediaries before purchasing or selling Shares of the Fund.
When
you buy or sell Shares of a Fund through a broker, you will likely incur a
brokerage commission or other charges imposed by brokers. In addition, the
market price of Shares, like the price of any exchange-traded security, includes
a bid/ask spread charged by the market makers or other participants that trade
the particular security. The spread of a Fund’s Shares varies over time based on
the Fund’s trading volume and market liquidity and may increase if the Fund’s
trading volume, the spread of the Fund’s underlying securities, or market
liquidity decrease. In times of severe market disruption, including when trading
of a Fund’s holdings may be halted, the bid/ask spread may increase
significantly. This means that Shares may trade at a discount to the Fund’s NAV,
and the discount is likely to be greatest during significant market
volatility.
Concentration
Risk.
A Fund’s assets may be concentrated in a particular sector or sectors or
industry or group of industries to the extent that its respective Index
concentrates in a particular sector or sectors or industry or group of
industries. The securities of many or all of the companies in the same sector or
industry may decline in value due to developments adversely affecting such
sector or industry. By concentrating its assets in a particular sector or
sectors or industry or group of industries, a Fund is subject to the risk that
economic, political or other conditions that have a negative effect on that
sector or sectors or industry or group of industries may negatively impact the
Fund to a greater extent than if the Fund’s assets were invested in a wider
variety of sectors or industries.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGIES
Each
Fund may invest in securities not included in its respective Index, money market
instruments, including repurchase agreements or other funds which invest
exclusively in money market instruments, convertible securities, structured
notes (notes on which the amount of principal repayment and interest payments
are based on the movement of one or more specified factors, such as the movement
of a particular stock or stock index), and/or certain derivatives, which the
Adviser believes will help a Fund track its Index. Depositary receipts not
included in a Fund’s Index may be used by certain Funds in seeking performance
that corresponds to its respective Index, and in managing cash flows, and may
count towards compliance with a Fund’s 80% policy. Each Fund may also invest, to
the extent permitted by the 1940 Act, in other affiliated and unaffiliated
funds, such as open-end or closed-end management investment companies, including
other ETFs.
BORROWING
MONEY
Each
Fund may borrow money from a bank up to a limit of one-third of the market value
of its assets. Each Fund has entered into a credit facility to borrow money for
temporary, emergency or other purposes, including the funding of shareholder
redemption requests, trade settlements and as necessary to distribute to
shareholders any income required to maintain the Fund’s status as a regulated
investment company. To the extent that a Fund borrows money, it may be
leveraged; at such times, the Fund will appreciate or depreciate in value more
rapidly than its Index. Leverage generally has the effect of increasing the
amount of loss or gain a Fund might realize, and may increase volatility in the
value of a Fund’s investments.
LENDING
PORTFOLIO SECURITIES
Each
Fund may lend its portfolio securities to brokers, dealers and other financial
institutions desiring to borrow securities to complete transactions and for
other purposes. In connection with such loans, a Fund receives cash, U.S.
government securities and stand-by letters of credit not issued by the Fund’s
bank lending agent equal to at least 102% of the value of the portfolio
securities being loaned. This collateral is marked-to-market on a daily basis.
Although a Fund will receive collateral in connection with all loans of its
securities holdings, the Fund would be exposed to a risk of loss should a
borrower fail to return the borrowed securities (e.g.,
the Fund would have to buy replacement securities and the loaned securities may
have appreciated beyond the value of the collateral held by the Fund) or become
insolvent. A Fund may pay fees to the party arranging the loan of securities. In
addition, a Fund will bear the risk that it may lose money because the borrower
of the loaned securities fails to return the securities in a timely manner or at
all. Each Fund could also lose money in the event of a decline in the value of
any cash collateral or in the value of investments made with the cash
collateral. These events could trigger adverse tax consequences for the Funds.
Substitute payments for dividends received by a Fund for securities loaned out
by a Fund will not be considered qualified dividend income.
ADDITIONAL
NON-PRINCIPAL RISKS
Risk
of Investing in Derivatives.
Derivatives are financial instruments whose values are based on the value of one
or more reference assets or indicators, such as a security, currency, interest
rate, or index. The Funds’ use of derivatives involves risks different from, and
possibly greater than, the risks associated with investing directly in
securities and other more traditional investments. Moreover, although the value
of a derivative is based on an underlying asset or indicator, a derivative
typically does not carry the same rights as would be the case if a Fund invested
directly in the underlying securities, currencies or other assets.
Derivatives
are subject to a number of risks, such as potential changes in value in response
to market developments or, in the case of “over-the-counter” derivatives, as a
result of a counterparty’s credit quality and the risk that a derivative
transaction may not have the effect the Adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that changes
in the value of a derivative may not achieve the desired correlation with the
underlying asset or indicator. Derivative transactions can create investment
leverage and may be highly volatile, and a Fund could lose more than the amount
it invests. The use of derivatives may increase the amount and affect the timing
and character of taxes payable by shareholders of a Fund.
Many
derivative transactions are entered into “over-the-counter” without a central
clearinghouse; as a result, the value of such a derivative transaction will
depend on, among other factors, the ability and the willingness of a Fund’s
counterparty to perform its obligations under the transaction. If a counterparty
were to default on its obligations, a Fund’s contractual remedies against such
counterparty may be subject to bankruptcy and insolvency laws, which could
affect the Fund’s rights as a creditor (e.g.,
the Fund may not receive the net amount of payments that it is contractually
entitled to receive). A liquid secondary market may not always exist for a
Fund’s derivative positions at any time, and the Fund may not be able to
initiate or liquidate a swap position at an advantageous time or price, which
may result in significant losses.
In
October 2020, the Securities and Exchange Commission (the "SEC") adopted a final
rule related to the use of derivatives, short sales, reverse repurchase
agreements and certain other transactions by registered investment companies
that will rescind and withdraw the guidance of the SEC and its staff regarding
asset segregation and cover transactions. The final rule requires funds to trade
derivatives and other transactions that create future payment or delivery
obligations (except reverse repurchase agreements and similar financing
transactions) subject to a value-at-risk (“VaR”) leverage limit, certain
derivatives risk management program and reporting requirements. Generally, these
requirements apply unless a fund qualifies as a “limited derivatives user,” as
defined in the final rule. Under the final rule, when a fund trades reverse
repurchase agreements or similar financing transactions, including certain
tender option bonds, it needs to aggregate the amount of indebtedness associated
with the reverse repurchase agreements or similar financing transactions with
the aggregate amount of any other senior securities representing indebtedness
when calculating the fund’s asset coverage ratio or treat all such transactions
as derivatives transactions. Reverse repurchase agreements or similar financing
transactions aggregated with other indebtedness do not need to be included in
the calculation of whether a fund is a limited derivatives user, but for funds
subject to the VaR testing, reverse repurchase agreements and similar financing
transactions must be included for purposes of such testing whether treated as
derivatives transactions or not. The SEC also provided guidance in connection
with the newrule regarding use of securities lending collateral that may limit a
fund's securities lending activities. Compliance with these new requirements
will be required after an eighteen-month transition period. Following the
compliance date, these requirements may limit the ability of a fund to use
derivatives and reverse repurchase agreements and similar financing transactions
as part of its investment strategies. These requirements may increase the cost
of a fund’s investments and cost of doing business, which could adversely affect
investors.
Shareholder
Risk.
Certain shareholders, including other funds advised by the Adviser, may from
time to time own a substantial amount of a Fund’s Shares. In addition, a third
party investor, the Adviser or an affiliate of the Adviser, an AP, a market
maker, or another entity may invest in a Fund and hold its investment for a
limited period of time. There can be no assurance that any large shareholder
would not redeem its investment. Redemptions by shareholders could have a
negative impact on a Fund. In addition, transactions by large shareholders may
account for a large percentage of the trading volume on the Exchange and may,
therefore, have a material effect on the market price of the
Shares.
Leverage
Risk.
To the extent that a Fund borrows money or utilizes certain derivatives, it may
be leveraged. Leveraging generally exaggerates the effect on NAV of any increase
or decrease in the market value of the Fund’s portfolio securities. To manage
the risk associated with leveraging, a Fund may segregate liquid assets, or
otherwise “cover” its derivatives position in a manner consistent with the 1940
Act and the rules and SEC interpretations thereunder. A Fund may modify its
asset segregation policies at any time to comply with any changes in the SEC’s
positions regarding asset segregation.
Puerto
Rico Risk. (
VanEck
High Yield Muni ETF, VanEck
Intermediate Muni ETF, VanEck Long Muni ETF and VanEck Short High Yield Muni ETF
only.) Each Fund may invest a portion of its assets in municipal obligations of
issuers located in Puerto Rico. Consequently, the Fund may be affected by
political, economic, regulatory and other developments within Puerto Rico and by
the financial condition of Puerto Rico’s political subdivisions, agencies,
instrumentalities and public authorities. Events, including economic and
political policy changes, tax base erosion, territory constitutional limits on
tax increases, budget deficits and other financial difficulties and changes in
the credit ratings assigned to Puerto Rico’s municipal issuers, are likely to
affect the Fund’s performance. The Puerto Rican economy is reliant on
manufacturing, services and tourism, and its economic and financial operations
parallel the economic cycles of the United States. As a result, a decline in
tourism, which is an important component of the Puerto Rico economy, and U.S.
recessions have had a negative effect on the overall economy of Puerto Rico.
Puerto Rico continues to face significant fiscal challenges, including
persistent government deficits, underfunded public pension benefit obligations,
underfunded government retirement systems, sizable debt service obligations and
a high unemployment rate.
The
Puerto Rican government defaulted on nearly $2 billion in debt payments due on
July 1, 2016. In May 2017, the newly-created oversight board that oversees
Puerto Rico's finance and court-supervised debt restructuring (the "Oversight
Board") initiated a bankruptcy-like process for the general government, general
obligation debt, and certain Puerto Rico
instrumentalities,
including the Puerto Rico Sales Tax Financing Corporation, the Highways and
Transportation Authority, and the Employee Retirement System. These municipal
obligations are subject to heightened risks that may adversely affect the value
of a Fund’s portfolio and the repayment of such bonds may be subject to
significant uncertainties if Puerto Rico’s economic downturn continues. The
negotiations between Puerto Rico and its instrumentalities and their respective
creditors to restructure outstanding debt obligations remain ongoing, and it is
not possible to predict whether Puerto Rico and its instrumentalities will be
able to come to agreements with their creditors.
In
addition, due to the ongoing budget impact from the COVID-19 pandemic on Puerto
Rico's finances, the Oversight Board or Puerto Rico could seek to revise or even
terminate earlier agreements reached with certain creditors.
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TAX
ADVANTAGED PRODUCT STRUCTURE |
Unlike
many conventional mutual funds which are only bought and sold at closing NAVs,
the Shares of each Fund have been designed to be tradable in a secondary market
on an intra-day basis and to be created and redeemed principally in-kind in
Creation Units at each day’s market close. These in-kind arrangements are
designed to mitigate the adverse effects on a Fund’s portfolio that could arise
from frequent cash purchase and redemption transactions that affect the NAV of
the Fund. Moreover, in contrast to conventional mutual funds, where frequent
redemptions can have an adverse tax impact on taxable shareholders because of
the need to sell portfolio securities which, in turn, may generate taxable gain,
the in-kind redemption mechanism of each Fund, to the extent used, generally is
not expected to lead to a tax event for shareholders whose Shares are not being
redeemed.
A
description of each Fund’s policies and procedures with respect to the
disclosure of the Fund’s portfolio securities is available in the Funds’
SAI.
Board
of Trustees.
The Board of Trustees of the Trust has responsibility for the general oversight
of the management of the Funds, including general supervision of the Adviser and
other service providers, but is not involved in the day-to-day management of the
Trust. A list of the Trustees and the Trust officers, and their present
positions and principal occupations, is provided in the Funds’ SAI.
Investment
Adviser. Under
the terms of an investment management agreement between the Trust and Van Eck
Associates Corporation with respect to VanEck High Yield Muni ETF, VanEck
Intermediate Muni ETF, VanEck Long Muni ETF, VanEck Short High Yield Muni ETF,
and VanEck Short Muni ETF (the “Municipal Investment Management Agreement”), Van
Eck Associates Corporation serves as the adviser to each Fund and, subject to
the supervision of the Board of Trustees, is responsible for the day-today
investment management of each Fund. [As of June 30, 2021, the Adviser managed
approximately $80.26 billion in assets.] The Adviser has been an investment
adviser since 1955 and also acts as adviser or sub-adviser to mutual funds,
other ETFs, other pooled investment vehicles and separate accounts. The
Adviser’s principal business address is 666 Third Avenue, 9 th
Floor,
New York, New York 10017. A discussion regarding the Board of Trustees’ approval
of the Investment Management Agreement for each Fund will be available in the
Trust’s semi-annual report for the period ended October 31, 2021.
Pursuant
to the Municipal Investment Management Agreement, the Adviser is responsible for
all expenses of the Funds, including the costs of transfer agency, custody, fund
administration, legal, audit and other services, except for the fee payment
under the Municipal Investment Management Agreement, acquired fund fees and
expenses, interest expense, offering costs, trading expenses, taxes and
extraordinary expenses. For its services to each Fund, each Fund has agreed to
pay the Adviser an annual unitary management fee equal to 0.35% (with respect to
VanEck High Yield Muni ETF and VanEck Short High Yield Muni ETF), 0.24% (with
respect to VanEck Intermediate Muni ETF and VanEck Long Muni ETF) and 0.20%
(with respect to VanEck Short Muni ETF) of its average daily net assets.
Offering costs excluded from the annual unitary management fee are: (a) legal
fees pertaining to a Fund’s Shares offered for sale; (b) SEC and state
registration fees; and (c) initial fees paid for Shares of a Fund to be listed
on an exchange. Notwithstanding the foregoing, the Adviser has agreed to pay all
such offering costs until at least September 1, 2023.
Administrator,
Custodian and Transfer Agent. Van
Eck Associates Corporation is the administrator for the Funds (the
“Administrator”), and State Street Bank and Trust Company is the custodian of
each Fund’s assets and provides transfer agency and fund accounting services to
the Funds. The Administrator is responsible for certain clerical, recordkeeping
and/or bookkeeping services which are required to be provided pursuant to the
Investment Management Agreement.
Distributor.
Van
Eck Securities Corporation is the distributor of the Shares (the "Distributor").
The Distributor will not distribute Shares in less than a specified number of
Shares, each called a "Creation Unit," and does not maintain a secondary market
in the Shares. The Shares are traded in the secondary market.
The
portfolio manager who is currently responsible for the day-to-day management of
VanEck Intermediate Muni ETF’s, VanEck Long Muni ETF’s, VanEck Short Muni ETF’s,
VanEck High Yield Muni ETF’s and VanEck Short High Yield Muni ETF’s portfolios
is James T. Colby III.
Mr.
Colby has been employed by the Adviser as a portfolio manager since September
2007. Mr. Colby graduated from Brown University in 1972 with a Bachelor of Arts
in Economics and International Relations; and from Hofstra University in 1979
with a Masters of Business Administration in Finance.
See
the Funds’ SAI for additional information about the portfolio manager's
compensation and his respective ownership of Shares of each Fund.
DETERMINATION
OF NAV
The
NAV per Share for each Fund is computed by dividing the value of the net assets
of the Fund (i.e., the value of its total assets less total liabilities) by the
total number of Shares outstanding. Expenses and fees, including the management
fee, are accrued daily and taken into account for purposes of determining NAV.
The NAV of each Fund is determined each business day as of the close of trading
(ordinarily 4:00 p.m., Eastern time) on the New York Stock
Exchange.
The
values of each Fund’s portfolio securities are based on the securities’ closing
prices on the markets on which the securities trade, when available. Due to the
time differences between the United States and certain countries in which
certain Funds invest, securities on these exchanges may not trade at times when
Shares of the Fund will trade. In the absence of a last reported sales price, or
if no sales were reported, and for other assets for which market quotes are not
readily available, values may be based on quotes obtained from a quotation
reporting system, established market makers or by an outside independent pricing
service. Debt instruments with remaining maturities of more than 60 days are
valued at the evaluated mean price provided by an outside independent pricing
service. If an outside independent pricing service is unable to provide a
valuation, the instrument is valued at the mean of the highest bid and the
lowest asked quotes obtained from one or more brokers or dealers selected by the
Adviser. Prices obtained by an outside independent pricing service may use
information provided by market makers or estimates of market values obtained
from yield data related to investments or securities with similar
characteristics and may use a computerized grid matrix of securities and its
evaluations in determining what it believes is the fair value of the portfolio
securities. Short-term debt instruments having a maturity of 60 days or less are
valued at amortized cost. Any assets or liabilities denominated in currencies
other than the U.S. dollar are converted into U.S. dollars at the current market
rates on the date of valuation as quoted by one or more sources. If a market
quotation for a security or other asset is not readily available or the Adviser
believes it does not otherwise accurately reflect the market value of the
security or asset at the time a Fund calculates its NAV, the security or asset
will be fair valued by the Adviser in accordance with the Trust’s valuation
policies and procedures approved by the Board of Trustees. Each Fund may also
use fair value pricing in a variety of circumstances, including but not limited
to, situations when the value of a security in the Fund’s portfolio has been
materially affected by events occurring after the close of the market on which
the security is principally traded (such as a corporate action or other news
that may materially affect the price of a security) or trading in a security has
been suspended or halted. In addition, each Fund that holds foreign equity
securities currently expects that it will fair value certain of the foreign
equity securities held by the Fund each day the Fund calculates its NAV, except
those securities principally traded on exchanges that close at the same time the
Fund calculates its NAV.
Accordingly,
a Fund’s NAV may reflect certain portfolio securities’ fair values rather than
their market prices at the time the exchanges on which they principally trade
close. Fair value pricing involves subjective judgments and it is possible that
a fair value determination for a security or other asset is materially different
than the value that could be realized upon the sale of such security or asset.
In addition, fair value pricing could result in a difference between the prices
used to calculate a Fund’s NAV and the prices used by such Fund’s respective
Index. This may adversely affect a Fund’s ability to track its Index. With
respect to securities that are principally traded on foreign exchanges, the
value of a Fund’s portfolio securities may change on days when you will not be
able to purchase or sell your Shares.
INTRADAY
VALUE
The
trading prices of the Funds’ Shares in the secondary market generally differ
from the Funds’ daily NAV and are affected by market forces such as the supply
of and demand for Fund Shares and underlying securities held by each Fund,
economic conditions and other factors. Information regarding the intraday value
of the Funds’ Shares (“IIV”) may be disseminated
throughout
each trading day by an Exchange or by market data vendors or other information
providers. The IIV is based on the current market value of the securities and/or
cash required to be deposited in exchange for a Creation Unit. The IIV does not
necessarily reflect the precise composition of the current portfolio of
securities held by each Fund at a particular point in time or the best possible
valuation of the current portfolio. Therefore, the IIV should not be viewed as a
“real-time” update of the Funds’ NAV, which is computed only once a day. The IIV
is generally determined by using current market quotations and/or price
quotations obtained from broker-dealers and other market intermediaries that may
trade in the portfolio securities held by each Fund and valuations based on
current market rates. The quotations and/or valuations of certain Fund holdings
may not be updated during U.S. trading hours if such holdings do not trade in
the United States. Each Fund is not involved in, or responsible for, the
calculation or dissemination of the IIV and makes no warranty as to its
accuracy.
RULE
144A AND OTHER UNREGISTERED SECURITIES
An
AP (i.e., a person eligible to place orders with the Distributor to create or
redeem Creation Units of a Fund) that is not a “qualified institutional buyer,”
as such term is defined under Rule 144A of the Securities Act of 1933, as
amended (the “Securities Act”), will not be able to receive, as part of a
redemption, restricted securities eligible for resale under Rule 144A or other
unregistered securities.
BUYING
AND SELLING EXCHANGE-TRADED SHARES
The
Shares of the Funds are listed on the Exchange. If you buy or sell Shares in the
secondary market, you will incur customary brokerage commissions and charges and
may pay some or all of the “spread,” which is any difference between the bid
price and the ask price. The spread varies over time for a Fund’s Shares based
on a Fund’s trading volume and market liquidity, and is generally lower if the
Funds have high trading volume and market liquidity, and generally higher if the
Funds have little trading volume and market liquidity (which is often the case
for funds that are newly launched or small in size). In times of severe market
disruption or low trading volume in a Fund’s Shares, this spread can increase
significantly. It is anticipated that the Shares will trade in the secondary
market at prices that may differ to varying degrees from the NAV of the Shares.
During periods of disruptions to creations and redemptions or the existence of
extreme market volatility, the market prices of Shares are more likely to differ
significantly from the Shares’ NAV.
The
Depository Trust Company (“DTC”) serves as securities depository for the Shares.
(The Shares may be held only in book- entry form; stock certificates will not be
issued.) DTC, or its nominee, is the record or registered owner of all
outstanding Shares. Beneficial ownership of Shares will be shown on the records
of DTC or its participants (described below). Beneficial owners of Shares are
not entitled to have Shares registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and are
not considered the registered holder thereof. Accordingly, to exercise any
rights of a holder of Shares, each beneficial owner must rely on the procedures
of: (i) DTC; (ii) “DTC Participants,” i.e.,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom (and/or their representatives) own
DTC; and (iii) “Indirect Participants,” i.e.,
brokers, dealers, banks and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly,
through which such beneficial owner holds its interests. The Trust understands
that under existing industry practice, in the event the Trust requests any
action of holders of Shares, or a beneficial owner desires to take any action
that DTC, as the record owner of all outstanding Shares, is entitled to take,
DTC would authorize the DTC Participants to take such action and that the DTC
Participants would authorize the Indirect Participants and beneficial owners
acting through such DTC Participants to take such action and would otherwise act
upon the instructions of beneficial owners owning through them. As described
above, the Trust recognizes DTC or its nominee as the owner of all Shares for
all purposes. For more information, see the section entitled “Book Entry Only
System” in the Funds’ SAI.
Each
Exchange is open for trading Monday through Friday and is closed on weekends and
the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. Because non-U.S. exchanges may be open on days when a Fund
does not price its Shares, the value of the securities in the Fund’s portfolio
may change on days when shareholders will not be able to purchase or sell a
Fund’s Shares.
The
right of redemption may be suspended or the date of payment postponed (1) for
any period during which the Exchange is closed (other than customary weekend and
holiday closings); (2) for any period during which trading on the Exchange is
suspended or restricted; (3) for any period during which an emergency exists as
a result of which disposal of the Shares of a Fund or determination of its NAV
is not reasonably practicable; or (4) in such other circumstance as is permitted
by the SEC.
Market
Timing and Related Matters.
The
Funds impose no restrictions on the frequency of purchases and redemptions.
Frequent purchases and redemptions of Fund Shares may attempt to take advantage
of a potential arbitrage opportunity presented by a lag between a change in the
value of a Fund’s portfolio securities after the close of the primary markets
for a Fund’s portfolio securities and the reflection of that change in a Fund’s
NAV (“market timing”). The Board of Trustees considered the nature of each Fund
(i.e.,
a fund whose Shares are expected to trade intraday), that the Adviser monitors
the trading activity of APs for patterns of abusive trading, that the Funds
reserve the right to reject orders that may be disruptive to the management of
or otherwise not in the Funds’ best interests, and that each Fund may fair value
certain of its securities. Given this structure, the Board of Trustees
determined that it is not necessary to impose restrictions on the frequency of
purchases and redemptions for the Funds at the present time.
DISTRIBUTIONS
Net
Investment Income and Capital Gains.
As a shareholder of a Fund, you are entitled to your share of such Fund’s
distributions of net investment income and net realized capital gains on its
investments. Each Fund pays out substantially all of its net earnings to its
shareholders as “distributions.”
Each
Fund typically earns income dividends from stocks and/or interest on municipal
securities. These amounts, net of expenses, are typically passed along to Fund
shareholders as dividends from net investment income. Each Fund generally
realizes capital gains or losses whenever it sells securities. Net capital gains
are distributed to shareholders as “capital gain distributions.” Dividends paid
by the Funds that are properly reported as exempt-interest dividends will not be
subject to regular federal income tax. 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. Any long-term
capital gains distributions you receive from a Fund are taxable as long-term
capital gains.
Net
investment income, if any, is typically distributed to shareholders at least
monthly and net realized capital gains, if any, are typically distributed to
shareholders at least annually. Dividends may be declared and paid more
frequently to improve index tracking or to comply with the distribution
requirements of the Internal Revenue Code. In addition, in situations where the
Fund acquires investment securities after the beginning of a dividend period,
the Fund may elect to distribute at least annually amounts representing the full
dividend yield net of expenses on the underlying investment securities, as if
the Funds owned the underlying investment securities for the entire dividend
period. If the Fund so elects, some portion of each distribution may result in a
return of capital, which, for tax purposes, is treated as a return of your
investment in Shares. You will be notified regarding the portion of the
distribution which represents a return of capital.
Distributions
in cash may be reinvested automatically in additional Shares of your Fund only
if the broker through which you purchased Shares makes such option
available.
TAX
INFORMATION
As
with any investment, you should consider how your Fund investment will be taxed.
The tax information in this Prospectus is provided as general information. You
should consult your own tax professional about the tax consequences of an
investment in the Funds, including the possible application of foreign, state
and local taxes. Unless your investment in a Fund is through a tax-exempt entity
or tax-deferred retirement account, such as a 401(k) plan, you need to be aware
of the possible tax consequences when: (i) a Fund makes distributions; (ii) you
sell Shares in the secondary market or (iii) you create or redeem Creation
Units.
Taxes
on Distributions.
As noted above, each Fund expects to distribute net investment income, if any,
monthly, and any net realized long-term or short-term capital gains, if any,
annually. Each Fund may also pay a special distribution at any time to comply
with U.S. federal tax requirements.
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
their 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. The VanEck High Yield Muni ETF and VanEck Short High Yield Muni
ETF may invest a portion of their assets in certain “private activity bonds,”
and as a result, a portion of the exempt-interest dividends paid by them will be
an item of tax preference to shareholders subject to the alternative minimum
tax. Depending on a shareholder’s state of residence, exempt-interest dividends
from interest earned on municipal securities of a state or its political
subdivisions may be exempt in the hands of such shareholder from income tax in
that state. However, income from municipal securities of states other than the
shareholder’s state of residence generally will not qualify for tax-free
treatment for such shareholder.
Distributions
from a Fund’s net investment income other than net tax exempt income, including
any net short-term gains, if any, are taxable to you as ordinary
income.
In
general, your distributions are subject to U.S. federal income tax when they are
paid, whether you take them in cash or reinvest them in the Fund. Whether
distributions of capital gains represent long-term or short-term capital gains
is determined by how long the Fund owned the investments that generated them,
rather than how long you have owned your Shares. Distributions of net short-term
capital gains in excess of net long–term capital losses, if any, are generally
taxable as ordinary income. Distributions of net long-term capital gains in
excess of net short-term capital losses, if any, that are properly reported as
capital gain dividends are generally taxable as long-term capital gains.
Long-term capital gains of a non-corporate shareholder are generally taxable at
a maximum rate of 15% or 20%, depending on whether the shareholder’s income
exceeds certain threshold amounts. The Funds do not expect that any of their
distributions will be qualified dividends eligible for lower tax rates or for
the corporate dividends received deduction.
Exempt-interest
dividends from a Fund are taken into account in determining the taxable portion
of any Social Security or railroad retirement benefits that you
receive.
Distributions
in excess of a Fund’s current and accumulated earnings and profits are treated
as a tax-free return of your investment to the extent of your basis in the
Shares, and generally as capital gain thereafter. A return of capital, which for
tax
purposes
is treated as a return of your investment, reduces your basis in Shares, thus
reducing any loss or increasing any gain on a subsequent taxable disposition of
Shares. A distribution will reduce a Fund’s NAV per Share and may be taxable to
you as ordinary income or capital gain even though, from an economic standpoint,
the distribution may constitute a return of capital.
Backup
Withholding.
A Fund may be required to withhold a percentage of your distributions and
proceeds if you have not provided a taxpayer identification number or social
security number or otherwise established a basis for exemption from backup
withholding. The backup withholding rate for individuals is currently 24%. This
is not an additional tax and may be refunded, or credited against your U.S.
federal income tax liability, provided certain required information is furnished
to the IRS.
Taxes
on the Sale or Cash Redemption of Exchange Listed Shares.
Currently, any capital gain or loss realized upon a sale of Shares is generally
treated as long term capital gain or loss if the Shares have been held for more
than one year and as a short-term capital gain or loss if held for one year or
less. However, any capital loss on a sale of Shares held for six months or less
is treated as long-term capital loss to the extent that capital gain dividends
were paid with respect to such Shares. The ability to deduct capital losses may
be limited. To the extent that a Fund’s shareholder’s Shares are redeemed for
cash, this is normally treated as a sale for tax purposes.
Taxes
on Creations and Redemptions of Creation Units.
A person who exchanges securities for Creation Units generally will recognize a
gain or loss. The gain or loss will be equal to the difference between the
market value of the Creation Units at the time of exchange and the sum of the
exchanger’s aggregate basis in the securities surrendered and the amount of any
cash paid for such Creation Units. A person who exchanges Creation Units for
securities will generally recognize a gain or loss equal to the difference
between the exchanger’s basis in the Creation Units and the sum of the aggregate
market value of the securities received. The IRS, however, may assert that a
loss realized upon an exchange of primarily securities for Creation Units cannot
be deducted currently under the rules governing “wash sales,” or on the basis
that there has been no significant change in economic position. Persons
exchanging securities for Creation Units or redeeming Creation Units should
consult their own tax adviser with respect to whether wash sale rules apply and
when a loss might be deductible and the tax treatment of any creation or
redemption transaction.
Under
current U.S. federal income tax laws, any capital gain or loss realized upon a
redemption (or creation) of Creation Units held as capital assets is generally
treated as long-term capital gain or loss if the Shares (or securities
surrendered) have been held for more than one year and as a short-term capital
gain or loss if the Shares (or securities surrendered) have been held for one
year or less.
If
you create or redeem Creation Units, you will be sent a confirmation statement
showing how many Shares you created or sold and at what price.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Fund
Shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
Non-U.S.
Shareholders.
Dividends paid by a Fund to non-U.S. shareholders are generally subject to
withholding tax at a 30% rate or a reduced rate specified by an applicable
income tax treaty to the extent derived from investment income and short-term
capital gains. Dividends paid by a Fund from net tax-exempt income or long-term
capital gains are generally not subject to such withholding tax.
Properly-reported dividends are generally exempt from U.S. federal withholding
tax where they (i) are paid in respect of a Fund’s “qualified net interest
income” (generally, a Fund’s U.S. source interest income, other than certain
contingent interest and interest from obligations of a corporation or
partnership in which a Fund is at least a 10% shareholder, reduced by expenses
that are allocable to such income); or (ii) are paid in respect of a Fund’s
“qualified short-term capital gains” (generally, the excess of a Fund’s net
short-term capital gain over a Fund’s long-term capital loss for such taxable
year). However, depending on its circumstances, a Fund may report all, some or
none of its potentially eligible dividends as such qualified net interest income
or as qualified short-term capital gains and/or treat such dividends, in whole
or in part, as ineligible for this exemption from withholding.
Any
capital gain realized by a non-U.S. shareholder upon a sale of Shares of a Fund
will generally not be subject to U.S. federal income or withholding tax unless
(i) the gain is effectively connected with the shareholder’s trade or business
in the United States, or in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the United States for 183 days or more
during the taxable year and certain other conditions are met or (ii) the Fund is
or has been a U.S. real property holding corporation, as defined below, at any
time within the five-year period preceding the date of disposition of the Fund’s
Shares or, if shorter, within the period during which the non-U.S. shareholder
has held the Shares. Generally, a corporation is a U.S. real property holding
corporation if the fair market value of its U.S. real property interests, as
defined in the Code and applicable regulations, equals or exceeds 50% of the
aggregate fair market value of its worldwide real property interests and its
other assets used or held for use in a trade or business. A Fund may be, or may
prior to a non-U.S. shareholder’s disposition of Shares become, a U.S. real
property holding corporation. If a Fund is or becomes a U.S. real property
holding corporation, so long as the Fund’s Shares are regularly traded on an
established securities market, only a non-U.S. shareholder who holds or held (at
any time during the shorter of the five year period preceding the date of
disposition or the holder’s holding period) more
than
5% (directly or indirectly as determined under applicable attribution rules of
the Code) of the Fund’s Shares will be subject to United States federal income
tax on the disposition of Shares.
As
part of the Foreign Account Tax Compliance Act, (“FATCA”), a Fund may be
required to withhold 30% tax on certain types of U.S. sourced income
(e.g.,
dividends, interest, and other types of passive income) paid to (i) foreign
financial institutions (“FFIs”), including non-U.S. investment funds, unless
they agree to collect and disclose to the IRS information regarding their direct
and indirect U.S. account holders and (ii) certain nonfinancial foreign entities
(“NFFEs”), unless they certify certain information regarding their direct and
indirect U.S. owners. To avoid possible withholding, FFIs will need to enter
into agreements with the IRS which state that they will provide the IRS
information, including the names, account numbers and balances, addresses and
taxpayer identification numbers of U.S. account holders and comply with due
diligence procedures with respect to the identification of U.S. accounts as well
as agree to withhold tax on certain types of withholdable payments made to
non-compliant foreign financial institutions or to applicable foreign account
holders who fail to provide the required information to the IRS, or similar
account information and required documentation to a local revenue authority,
should an applicable intergovernmental agreement be implemented. NFFEs will need
to provide certain information regarding each substantial U.S. owner or
certifications of no substantial U.S. ownership, unless certain exceptions
apply, or agree to provide certain information to the IRS.
A
Fund may be subject to the FATCA withholding obligation, and also will be
required to perform due diligence reviews to classify foreign entity investors
for FATCA purposes. Investors are required to agree to provide information
necessary to allow a Fund to comply with the FATCA rules. If a Fund is required
to withhold amounts from payments pursuant to FATCA, investors will receive
distributions that are reduced by such withholding amounts.
Non-U.S.
shareholders are advised to consult their tax advisors with respect to the
particular tax consequences to them of an investment in the Funds, including the
possible applicability of the U.S. estate tax.
The
foregoing discussion summarizes some of the consequences under current U.S.
federal income tax law of an investment in a Fund. It is not a substitute for
personal tax advice. Consult your own tax advisor about the potential tax
consequences of an investment in a Fund under all applicable tax laws. Changes
in applicable tax authority could materially affect the conclusions discussed
above and could adversely affect the Funds, and such changes often
occur.
The
High Yield Index, Intermediate Index, Long Index, Short High Yield Index and
Short Index are published by ICE Data Indices, LLC (“ICE Data”) and its
affiliates. ICE Data is referred to herein as the “Index Provider.” The Index
Provider does not sponsor, endorse, or promote the Funds and bear no liability
with respect to the Funds or any security.
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ICE
BROAD HIGH YIELD CROSSOVER MUNICIPAL
INDEX |
The
Final High Yield Index tracks the performance of lower-rated and unrated U.S.
dollar denominated tax-exempt debt publicly issued in the U.S. domestic market
by U.S. states and territories as well as their political
subdivisions.
The
High Yield Index is a modified blend of the following indices, with additional
constraints placed on certain exposure concentrations:
70%
ICE Core High Yield & Unrated Municipal Index;
25%
ICE Core BBB Municipal Index;
5%
ICE Core Single-A Municipal Index.
The
High Yield Index is rebalanced on the last calendar day of the month, based on
the rebalanced constituencies of the three component indices. ICE Data may delay
or change a scheduled rebalancing or reconstitution of the High Yield Index or
the implementation of certain rules at its sole discretion.
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ICE
INTERMEDIATE AMT-FREE BROAD NATIONAL MUNICIPAL
INDEX |
The
Final Intermediate Index tracks the performance of intermediate maturity U.S.
dollar denominated investment grade tax-exempt debt publicly issued in the U.S.
domestic market by U.S. states and territories as well as their political
subdivisions. Qualifying securities must be exempt from Federal taxes and must
not be subject to alternative minimum tax. In addition, qualifying securities
must have at least six years but less than 17 years remaining term to final
maturity, a fixed coupon schedule (including zero coupon and step up or stepdown
bonds) and an investment grade rating (based on the middle rating of Moody’s,
S&P and Fitch).
The
Intermediate Index is rebalanced on the last calendar day of the month. ICE Data
may delay or change a scheduled rebalancing or reconstitution of the
Intermediate Index Index or the implementation of certain rules at its sole
discretion.
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ICE
LONG AMT-FREE BROAD NATIONAL MUNICIPAL
INDEX |
The
Final Long Index tracks the performance of long maturity U.S. dollar denominated
investment grade tax-exempt debt publicly issued in the U.S. domestic market by
U.S. states and territories as well as their political subdivisions. Qualifying
securities must be exempt from Federal taxes and must not be subject to
alternative minimum tax. In addition, qualifying securities must have at least
17 years remaining term to final maturity, a fixed coupon schedule (including
zero coupon and step up or stepdown bonds) and an investment grade rating (based
on the middle rating of Moody’s, S&P and Fitch).
The
Long Index is rebalanced on the last calendar day of the month. ICE Data may
delay or change a scheduled rebalancing or reconstitution of the Long Index or
the implementation of certain rules at its sole discretion.
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ICE
1-12 YEAR BROAD HIGH YIELD CROSSOVER MUNICIPAL
INDEX |
The
Final Short High Yield Index tracks the performance of lower-rated and unrated
U.S. dollar denominated tax-exempt debt publicly issued in the U.S. domestic
market by U.S. states and territories as well as their political
subdivisions.
The
Short High Yield Index is a modified blend of the following indices, with
additional constraints placed on certain exposure concentrations:
70%
ICE 1-12 Year Core High Yield & Unrated Municipal Index;
20%
ICE 1-12 Year Core BBB Municipal Index;
10%
ICE 1-12 Year Core Single-A Municipal Index.
The
Short High Yield Index is rebalanced on the last calendar day of the month,
based on the rebalanced constituencies of the three component indices. ICE Data
may delay or change a scheduled rebalancing or reconstitution of the Short High
Yield Index or the implementation of certain rules at its sole
discretion.
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ICE
SHORT AMT-FREE BROAD NATIONAL MUNICIPAL
INDEX |
The
Final Short Index tracks the performance of short maturity U.S. dollar
denominated investment grade tax-exempt debt publicly issued in the U.S.
domestic market by U.S. states and territories as well as their political
subdivisions. Qualifying securities must be exempt from Federal taxes and must
not be subject to alternative minimum tax. In addition, qualifying securities
must have less than six years remaining term to final maturity, a fixed coupon
schedule (including zero coupon and step up or stepdown bonds) and an investment
grade rating (based on the middle rating of Moody’s, S&P and
Fitch).
The
Short Index is rebalanced on the last calendar day of the month. ICE Data may
delay or change a scheduled rebalancing or reconstitution of the Short Index or
the implementation of certain rules at its sole discretion.
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LICENSE
AGREEMENTS AND DISCLAIMERS |
The
information contained herein regarding the High Yield Index, the Final High
Yield Index, the Intermediate Index, the Final Intermediate Index, the Long
Index, the Final Long Index, the Short High Yield Index, the Final Short High
Yield Index, the Short Index and the Final Short Index (collectively, the “ICE
Indices”) was provided by ICE Data and its affiliates.
The
Adviser has entered into a licensing agreement with ICE Data to use the ICE
Indices. Each of VanEck High Yield Muni ETF, VanEck Intermediate Muni ETF,
VanEck Long Muni ETF, VanEck Short High Yield Muni ETF and VanEck Short Muni ETF
(collectively, the “Products”) is entitled to use its respective Index pursuant
to a sub-licensing arrangement with the Adviser.
Source
ICE Data is used with permission. ICE and NYSE are service/trademarks of ICE
Data or its affiliates. Such trademarks have been licensed, along with the ICE
Indices for use by the Adviser in connection with the Products. Neither Van Eck
Associates Corporation (the “Licensee”) nor the Products, as applicable, are
sponsored, endorsed, sold or promoted by ICE Data, its affiliates or its Third
Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make
no representations or warranties regarding the advisability of investing in
securities generally, in the Products particularly, the Licensee or the ability
of the ICE Indices to track general bond market performance.
ICE
Data’s only relationship to the Adviser is the licensing of certain trademarks
and trade names and the ICE Indices or components thereof. The ICE Indices are
determined, composed and calculated by ICE Data without regard to the Adviser or
the Products or their holders. ICE Data has no obligation to take the needs of
the Adviser or the holders of the Products into consideration in determining,
composing or calculating the ICE Indices. ICE Data is not responsible for and
has not participated in the determination of the timing of, prices of, or
quantities of the Products to be issued or in the determination or calculation
of the equation by which the Products are to be priced, sold, purchased, or
redeemed. Except for certain custom index calculation services, all information
provided by ICE Data is general in nature and not tailored to the needs of the
Adviser or any other person, entity or group of persons. ICE Data has no
obligation or liability in connection with the administration, marketing, or
trading of the Products. ICE Data is not an investment advisor. Inclusion of a
security within an index is not a recommendation by ICE Data to buy, sell, or
hold such security, nor is it considered to be investment advice.
ICE
DATA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE ICE INDICES
OR ANY DATA INCLUDED THEREIN AND ICE DATA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, UNAVAILABILITY, OR INTERRUPTIONS THEREIN. ICE DATA MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ADVISER,
SHAREHOLDERS OF THE PRODUCTS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
ICE INDICES OR ANY DATA INCLUDED THEREIN. ICE DATA MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE ICE INDICES OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL ICE
DATA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL,
CONSEQUENTIAL DAMAGES, OR LOST PROFITS, EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES.
The
financial highlights tables which follow are intended to help you understand the
Funds’ financial performance for the past five years or as indicated. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned (or
lost) on an investment in a Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by [ ], the Trust’s
independent registered public accounting firm, whose report, along with the
Funds’ financial statements, are included in the Funds’ Annual Report, which is
available upon request.
[TO
BE UPDATED]
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PREMIUM/DISCOUNT
INFORMATION |
Information
regarding how often the closing trading price of the Shares of each Fund was
above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund
for the most recently completed calendar year and the most recently completed
calendar quarter(s) since that year (or the life of the Fund, if shorter) can be
found at www.vaneck.com.
CONTINUOUS
OFFERING
The
method by which Creation Units are created and traded may raise certain issues
under applicable securities laws. Because new Creation Units are issued and sold
by the Trust on an ongoing basis, a “distribution,” as such term is used in the
Securities Act, may occur at any point. Broker dealers and other persons are
cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner which could render them statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act.
For
example, a broker dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares, and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a categorization
as an underwriter.
Broker
dealers who are not “underwriters” but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus dealing with
Shares that are part of an “unsold allotment” within the meaning of Section
4(a)(3)(C) of the Securities Act, would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
This is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, broker dealer firms should note that
dealers who are not underwriters but are participating in a distribution (as
contrasted with ordinary secondary market transactions) and thus dealing with
the Shares that are part of an overallotment within the meaning of Section
4(a)(3)(A) of the Securities Act would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
Firms that incur a prospectus delivery obligation with respect to Shares are
reminded that, under Rule 153 of the Securities Act, a prospectus delivery
obligation under Section 5(b)(2) of the Securities Act owed to an exchange
member in connection with a sale on the Exchange is satisfied by the fact that
the prospectus is available at the Exchange upon request. The prospectus
delivery mechanism provided in Rule 153 is only available with respect to
transactions on an exchange.
In
addition, certain affiliates of the Funds and the Adviser may purchase and
resell Fund shares pursuant to this Prospectus.
OTHER
INFORMATION
The
Trust was organized as a Delaware statutory trust on March 15, 2001. Its
Declaration of Trust currently permits the Trust to issue an unlimited number of
Shares of beneficial interest. If shareholders are required to vote on any
matters, each Share outstanding would be entitled to one vote. Annual meetings
of shareholders will not be held except as required by the 1940 Act and other
applicable law. See the Funds’ SAI for more information concerning the Trust’s
form of organization. Section 12(d)(1) of the 1940 Act restricts investments by
investment companies in the securities of other investment companies, including
Shares of a Fund. Registered investment companies are permitted to invest in the
Funds beyond the limits set forth in Section 12(d)(1) subject to certain terms
and conditions set forth in an SEC exemptive order or SEC regulations, including
that such investment companies enter into an agreement with such
Fund.
The
Prospectus, SAI and any other Fund communication do not create any contractual
obligations between the Fund’s shareholders and the Trust, the Fund, the Adviser
and/or the Trustees. Further, shareholders are not intended third-party
beneficiaries of any contracts entered into by (or on behalf of) any Fund,
including contracts with the Adviser or other parties who provide services to
the Fund.
Dechert
LLP serves as counsel to the Trust, including the Funds. [ ] serves as the
Trust’s independent registered public accounting firm and will audit the Fund’s
financial statements annually.
ADDITIONAL
INFORMATION
This
Prospectus does not contain all the information included in the Registration
Statement filed with the SEC with respect to the Funds’ Shares. The Funds’
Registration Statement, including this Prospectus, the Funds’ SAI and the
exhibits are available on the EDGAR database at the SEC’s website
(http://www.sec.gov), and copies may be obtained, after paying a duplicating
fee, by electronic request at the following email address: [email protected].
The
SAI for the Funds, which has been filed with the SEC, provides more information
about the Funds. The SAI for the Funds is incorporated herein by reference and
is legally part of this Prospectus. Additional information about the Funds’
investments is available in each Fund’s annual and semi-annual reports to
shareholders. In each Fund’s annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund’s performance during its last fiscal year. The SAI and the Funds’ annual
and semi-annual reports may be obtained without charge by writing to the Funds
at Van Eck Securities Corporation, the Funds’ Distributor, at 666 Third Avenue,
9th Floor, New York, New York 10017 or by calling the distributor at the
following number: Investor Information: 800.826.2333.
Shareholder
inquiries may be directed to the Funds in writing to 666 Third Avenue, 9th
Floor, New York, New York 10017 or by calling 800.826.2333.
The
Funds’ SAI is available at www.vaneck.com.
(Investment
Company Act file no. 811-10325)
For
more detailed information about the Funds, see the SAI dated [ ], as may be
supplemented from time to time. Additional information about the Funds’
investments is or will be available in each Fund’s annual and semi-annual
reports to shareholders. In each Fund’s annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund’s performance during its last fiscal year.
Call
VanEck at 800.826.2333 to request, free of charge, the annual or semi-annual
reports, the SAI, or other information about the Funds or to make shareholder
inquiries. You may also obtain the SAI or a Fund’s annual or semi-annual
reports, by visiting the VanEck website at www.vaneck.com.
Reports
and other information about the Funds are available on the EDGAR Database on the
SEC’s internet site at http://www.sec.gov. In addition, copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following email address: [email protected].
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Transfer
Agent: State Street Bank and Trust Company SEC Registration Number:
333-123257 1940 Act Registration Number: 811-10325 |
800.826.2333 vaneck.com |
MUNIPRO |