UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-10325 VANECK VECTORS ETF TRUST (Exact name of registrant as specified in charter) 666 Third Avenue, New York, NY 10017 (Address of principal executive offices) (Zip code) Van Eck Associates Corporation 666 THIRD AVENUE, NEW YORK, NY 10017 (Name and address of agent for service) Registrant's telephone number, including area code: (212) 293-2000 Date of fiscal year end: SEPTEMBER 30 Date of reporting period: SEPTEMBER 30, 2019
Item 1. Report to Shareholders
ANNUAL
REPORT
September 30, 2019 |
VANECK VECTORS® | |
Biotech ETF | BBH |
Environmental Services ETF | EVX® |
Gaming ETF | BJK® |
Pharmaceutical ETF | PPH® |
Retail ETF | RTH® |
Semiconductor ETF | SMH® |
Video Gaming and eSports ETF | ESPO® |
800.826.2333 | vaneck.com |
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Certain information contained in this report represents the opinion of the investment adviser which may change at any time. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of September 30, 2019.
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VANECK VECTORS ETFs
September 30, 2019 (unaudited)
Dear Shareholders:
The story for 2019 is simple and familiar. Slower economic growth has been combated by expansive monetary policy. The strategies in this report are designed to help you meet your investment needs in a variety of economic environments.
A comment on global growth: the two engines of the global economy, the U.S. and China, continue to move forward, albeit at a slower pace. The latest economic statistics from China are no cause for panic. China’s services sector is expanding robustly and manufacturing is struggling but not collapsing. My blog China’s Economic Growth: Continuing Despite Headlines, explains this in greater detail.
The biggest event in the markets this summer was the surge in bonds with negative interest rates in Europe. At the end of September, nearly $15 trillion worth of debt globally carried a negative yield.1 Despite moves by the European Central Bank to stimulate, not only is the European economy slowing down, but there are also concerns about just how effective central bank actions are. Looking forward, therefore, I think investors should assess their hedge against central bank uncertainty, including by considering their gold allocations. While high interest rate environments tend to be tough for gold (it does not pay any yield), against negative interest rates, gold and other hedges against central bank impotence should be strongly considered.
We encourage you to stay in touch with us through the videos, email subscriptions and research blogs available on our website, www.vaneck.com. I have started my own email subscription where I share interesting research—you can sign up on vaneck.com. Should you have any questions regarding fund performance, please contact us at 800.826.2333 or visit our website.
We sincerely thank you for investing in VanEck’s investment strategies. On the following pages, you will find performance discussions and financial statements for each of the funds for the fiscal year ended September 30, 2019. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
Jan F. van Eck
Trustee and President
VanEck Vectors ETF Trust
October 16, 2019
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Funds carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
1 | Financial Times: September was the busiest month ever for corporate debt issuance, September 30, 2019, https://www.ft.com/content/eef8234c-e3c0-11e9-b112-9624ec9edc59 |
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VANECK VECTORS ETFs
September 30, 2019 (unaudited)
Biotech
Biotech stocks had a disappointing year, with the Fund losing 12.84%. Starting the period at their highest in October 2018, they never fully recovered from low they hit on December 24, 2018 and declined slowly throughout most of the third quarter of 2019. In an article1 in early September, The Wall Street Journal noted that: “[s]hares are in a bear market despite a macro environment that should support valuations.”
According to research, not only have regulatory approvals slowed, but also, in 2018, the “composite success rates of clinical trials in all stages fell.”2 Against a figure of 59 in 2018, by the end of September 2019, the Food and Drug Administration in the U.S. had approved 28 new drugs. There have also been some noted failures in the clinical trials of drugs aimed at treating common conditions, for example, Alzheimer’s.3 In addition, despite some setbacks, U.S. President Donald Trump, appears still to be intent on trying to temper drug prices.4
Positive contributions to the Fund’s performance came mainly from three companies: Exact Sciences, Celgene and IQVIA Holdings (3.9%, 7.2% and 5.2% of Fund net assets respectively†). The companies that detracted most from performance were Sarepta Therapeutics, Biogen (2.4% and 5.1% of Fund net assets, respectively†) and Nektar Therapeutics (sold by Fund by period end†).
Environmental Services
The Fund returned 8.30% for the 12 month period under review, with environmental services companies, in general, performing strongly. As with so many other stocks, having hit a low in on December 24, 2018, environmental services stocks rose slowly but surely over the following months, to end the year up.
While large- and medium-cap stocks provided positive total returns, small-caps detracted a little from the total return of the Fund. Waste Management (10.0% of Fund net assets†), STERIS (9.9% of Fund net assets†) and Republic Services (10.0% of Fund net assets†) were the top three contributors to positive total returns. Tenneco (sold by Fund by period end†), Cantel Medical (3.2% of Fund net assets†) and Schnitzer Steel Industries (1.9% of Fund net assets†) detracted the most from performance.
Gaming
Gaming stocks had a volatile and disappointing year with the Fund posting a loss of 4.73% for the 12 month period. In the fourth quarter of 2018, gaming stocks took a switchback ride down to hit a low for the period on December 24, 2018. Thereafter, they essentially moved sideways in a similar manner, but never regained the levels at which they started the period or hit at the end of April 2019.
In Macau, China, the world’s biggest gaming hub, the improvement in the gaming industry’s fortunes over the final three months of 2018 was solid, with the greatest improvement in December. In each of these months, the gross revenue from “Games of Fortune” (as the Macau authorities describe them)5 was higher than that recorded in the same month in the prior year. In October, November and December 2018, they were 2.6%, 8.5% and 16.6%, respectively, higher than in the same months in 2017.6 Thereafter, when compared with those in 2018, monthly revenues through September 30, 2019 demonstrated variances ranging from -8.6% (August) to +5.9% (June). By the end of the third quarter, however, accumulated revenues in 2019 were down 1.7% versus the same period in 2018.7
In Nevada, the narrative for the last quarter of 2018 was also rosy, with the “gaming win”8 in each of the last three months of the year increasing incrementally year over year. Thereafter, however, the picture was not pretty. For each of the first five months of 2019, the gaming win was down year over year. Not until June, followed by both July and August, did it increase year over year.9
China (Hong Kong)-, Ireland- and U.S.-listed companies were the leading contributors to performance. Ten countries detracted from performance, with the Malaysia and companies listed in the U.K. detracting the most.
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Pharmaceutical
Pharmaceutical stocks had a disappointing 12 months. By the end of the period, they had recovered little from the low they hit on December 24, 2018 and the Fund had lost 9.88%. In addition to underperforming the broad market, pharma companies have also underperformed their biotech peers. Facing opprobrium not only for the high cost of prescription drugs, the industry is also suffering from the fallout from the opioid scandal in the U.S. In a recent poll conducted by Gallup, the industry was “ranked last in favorability by Americans.10
While Zoetis, Merck and Astrazeneca (4.7%, 5.2% and 5.3% of Fund net assets, respectively†) were the three largest positive contributors to performance, Teva Pharmaceutical Industries (3.3% of Fund net assets†), Mylan (4.0% of Fund net assets†) and Endo International (sold by Fund by period end†) were the Fund’s three largest detractors.
Retail
The Fund returned 3.82% for the 12 month period under review. Retail sales (excluding automobiles, gasoline stations and restaurants) in the U.S. over the last three months of 2018 were distinctly mixed, rising (on an adjusted, month-on-month basis) in October and November, but falling in December. Having risen in January, they fell again in February. Thereafter, though, they rose consistently, month-on-month, through August 2019.11 In mid-August, however, National Retail Federation Chief Economist Jack Kleinhenz sounded a word of caution: “Trends remain strong, but August grew somewhat slower than July, which could reflect consumers’ concerns about the unpredictability of trade policy. It is too early to assess the impact of the new tariffs that took effect at the beginning of this month, but they do present downside risks to household spending.”12
While businesses involved in specialty, food & staples and multiline retailing contributed by far the most to the positive performance of the Fund, Internet and catalog companies, together with healthcare providers and services companies, detracted from performance.
Semiconductor
The Fund returned 14.09% for the 12 month period under review. 2018 was a good year for global semiconductor sales, hitting $468.8 billion, an increase of 13.7% over 2017.13 However, equally impressive was the fact that the number of semiconductors sold in 2018 topped one trillion, i.e., 1.004 trillion, the first time this has ever happened.14 Not quite as impressive, were sales during the first six months of 2019. While second quarter sales may have been better than those in the first quarter, by June 30, 2019, cumulative global sales were still 14.5% percent lower than they were through the same point in 2018.15 Sales in July, however, were $33.4 billion, 1.7% up on June, but 15.5% less than the July 2018 total of $39.5 billion.16
Large-capitalization stocks continued to be key drivers of the Fund’s returns. Lam Research, Intel and Xilinx (4.5%, 11.5% and 3.6% of Fund net assets, respectively†) were the three top contributing companies. NVIDIA (5.3% of Fund net assets†) detracted by far the most from the Fund’s performance, followed by Skyworks Solutions (1.9% of Fund net assets†) and Qorvo (0.9% of Fund net assets†).
Video Games and eSports
Video gaming and esports stocks provided solid returns since its launch on October 16, 2018, as the Fund returned 9.31%. Shortly after its launch, the U.S. stock market, led by the technology and communication sectors, fell on the news of trade disputes between the U.S. and China. However, after this late-year selloff, the Fund benefited from broadly positive sentiment surrounding the industry. Because it holds a global basket of stocks, concerns about international trade have had a heightened effect and have contributed to volatility both positively and negatively.
Leading contributing companies over the period from inception were Sea, BANDAI NAMCO Holdings and Tencent Holdings and (4.6%, 5.0% and 7.7% of the Fund’s net assets respectively†). Those companies detracting most from Fund performance since inception were: Activision Blizzard (6.9% of Fund net assets†), NVIDIA (7.7% of Fund net assets†) and Ubisoft Entertainment (3.8% of Fund net assets†).
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VANECK VECTORS ETFs
MANAGEMENT DISCUSSION
September 30, 2019 (unaudited) (continued)
† | All Fund assets referenced are Total Net Assets as of September 30, 2019. |
1 | The Wall Street Journal: A Turn for the Worse for Biotech Stocks, September 5, 2019, https://www.wsj.com/articles/a-turn-for-the-worse-for-biotech-stocks-11567679401 |
2 | Ibid. |
3 | Eisai, Inc.: Eisai And Biogen To Discontinue Phase III Clinical Studies Of BACE Inhibitor Elenbecestat In Early Alzheimer’s Disease, September 23, 2019, http://eisai.mediaroom.com/2019-09-13-Eisai-And-Biogen-To-Discontinue-Phase-III-Clinical-Studies-Of-BACE-Inhibitor-Elenbecestat-In-Early-Alzheimers-Disease |
4 | The New York Times: Trump’s Efforts to Rein In Drug Prices Face Setbacks, July 11, 2019, https://www.nytimes.com/2019/07/11/health/drug-prices-rebate-donald-trump.html |
5 | Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/information/DadosEstat_mensal/2018/index.html |
6 | Ibid. |
7 | Gaming Inspection and Coordination Bureau, Macao SAR: Monthly Gross Revenue from Games of Fortune, http://www.dicj.gov.mo/web/en/information/DadosEstat_mensal/2019/index.html |
8 | Or “gross revenue,” defined (in short) as: the total of all: |
(a) | Cash received as winnings; | |
(b) | Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and | |
(c) | Compensation received for conducting any game, or any contest or tournament in conjunction with interactive gaming, in which the licensee is not party to a wager, less the total of all cash paid out as losses to patrons, those amounts paid to fund periodic payments and any other items made deductible as losses by NRS 463.3715. For the purposes of this section, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses, except that losses in a contest or tournament conducted in conjunction with an inter-casino linked system may be deducted to the extent of the compensation received for the right to participate in that contest or tournament. For a full definition see Nevada Gaming Control Act, https://www.leg.state.nv.us/NRS/NRS-463.html#NRS463Sec0161 |
9 | Nevada Gaming Control Board: Abbreviated Revenue Release, http://gaming.nv.gov/index.aspx?page=172 |
10 | Business Insider: Americans hate big pharma more than they do the government (but they still really dislike the government), September 7, 2019, https://www.businessinsider.com/big-pharmacy-government-are-americas-top-hated-industries-2019-9 |
11 | National Retail Federation: Retail Sales, https://nrf.com/insights/economy/retail-sales |
12 | National Retail Federation: August retail sales grew 4.1 percent over last year but new tariffs present ‘downside risk’, September 13, 2019, https://nrf.com/media-center/press-releases/august-retail-sales-grew-41-percent-over-last-year-new-tariffs-present |
13 | Semiconductor Industry Association: More Than 1 Trillion Semiconductors Sold Annually for the First Time Ever in 2018, February 14, 2019, https://www.semiconductors.org/more-than-1-trillion-semiconductors-sold-annually-for-the-first-time-ever-in-2018/ |
14 | Ibid. |
15 | Semiconductor Industry Association: Mid-Year Global Semiconductor Sales Down 14.5 Compared to 2018, August 5, 2019, https://www.semiconductors.org/mid-year-global-semiconductor-sales-down-14-5-compared-to-2018/ |
16 | Semiconductor Industry Association: Global Semiconductor Sales Decrease 15.5 Percent Year-to-Year in July, September 3, 2019, https://www.semiconductors.org/global-semiconductor-sales-decrease-15-5-percent-year-to-year-in-july/ |
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September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MVBBHTR1 | Share Price | NAV | MVBBHTR1 | ||||||||||||||||||||
One Year | (12.84 | )% | (12.84 | )% | (12.66 | )% | (12.84 | )% | (12.84 | )% | (12.66 | )% | |||||||||||||
Five Year | 2.53 | % | 2.54 | % | 2.72 | % | 13.28 | % | 13.34 | % | 14.34 | % | |||||||||||||
Life* | 17.09 | % | 17.09 | % | 17.29 | % | 241.31 | % | 241.20 | % | 245.93 | % |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Biotech 25 Index (MVBBHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the biotech industry. Biotechnology includes research (including research contractors), development as well as production, marketing and sales of drugs based on genetic analysis and diagnostic equipment (excluding pharmacies). |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK VECTORS ENVIRONMENTAL SERVICES ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | AXENVTR1 | Share Price | NAV | AXENVTR1 | ||||||||||||||||||||
One Year | 8.53 | % | 8.30 | % | 9.05 | % | 8.53 | % | 8.30 | % | 9.05 | % | |||||||||||||
Five Year | 11.13 | % | 11.09 | % | 11.67 | % | 69.50 | % | 69.20 | % | 73.62 | % | |||||||||||||
Ten Year | 11.13 | % | 11.08 | % | 11.69 | % | 187.23 | % | 185.95 | % | 202.00 | % |
1 | NYSE Arca Environmental Services Index (AXENVTR) is a rules based, modified equal dollar weighted index intended to give investors a means of tracking the overall performance of the common stocks and depositary receipts of U.S. exchange-listed companies involved in environmental services. The Environmental Services Index is comprised of equity securities and depositary receipts of companies that engage in business involved in management, removal and storage of consumer waste and industrial byproducts and related environmental services, including waste collection, transfer and disposal services, recycling services, soil remediation, wastewater management and environmental consulting services. |
Hypothetical Growth of $10,000 (Ten Year) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price over the past 10 years. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MVBJKTR1 | Share Price | NAV | MVBJKTR1 | ||||||||||||||||||||
One Year | (5.00 | )% | (4.73 | )% | (4.59 | )% | (5.00 | )% | (4.73 | )% | (4.59 | )% | |||||||||||||
Five Year | 0.05 | % | 0.13 | % | 0.52 | % | 0.24 | % | 0.65 | % | 2.62 | % | |||||||||||||
Ten Year | 6.58 | % | 6.63 | % | 7.08 | % | 89.11 | % | 89.99 | % | 98.26 | % |
1 | MVIS® Global Gaming Index (MVBJKTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the casino and gaming industry. Gaming includes casinos and casino hotels, sports betting (including internet gambling and racetracks) and lottery services as well as gaming services, gaming technology and gaming equipment. |
Index data prior to September 24, 2012 reflects that of the S-Network Global Gaming Index (WAGRT). Index history which includes periods prior to September 24, 2012 reflects a blend of the performance of WAGRT and MVBJKTR and is not intended for third party use. |
Hypothetical Growth of $10,000 (Ten Year) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price over the past 10 years. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK VECTORS PHARMACEUTICAL ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MVPPHTR1 | Share Price | NAV | MVPPHTR1 | ||||||||||||||||||||
One Year | (9.77 | )% | (9.88 | )% | (10.02 | )% | (9.77 | )% | (9.88 | )% | (10.02 | )% | |||||||||||||
Five Year | (0.24 | )% | (0.25 | )% | (0.25 | )% | (1.20 | )% | (1.26 | )% | (1.26 | )% | |||||||||||||
Life* | 8.49 | % | 8.34 | % | 8.29 | % | 88.50 | % | 86.48 | % | 85.90 | % |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Pharmaceutical 25 Index (MVPPHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the pharmaceutical industry. Pharmaceuticals include companies engaged primarily in research (including research contractors) and development as well as production, marketing and sales of pharmaceuticals (excluding pharmacies). |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MVRTHTR1 | Share Price | NAV | MVRTHTR1 | ||||||||||||||||||||
One Year | 3.79 | % | 3.82 | % | 3.70 | % | 3.79 | % | 3.82 | % | 3.70 | % | |||||||||||||
Five Year | 14.51 | % | 14.55 | % | 14.40 | % | 96.86 | % | 97.22 | % | 95.97 | % | |||||||||||||
Life* | 17.15 | % | 16.99 | % | 16.81 | % | 242.60 | % | 238.97 | % | 234.96 | % |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Retail 25 Index (MVRTHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the retail industry. Retail includes companies engaged primarily in retail distribution; wholesalers; online, direct mail and TV retailers; multi-line retailers; specialty retailers, such as apparel, automotive, computer and electronics, drug, home improvement and home furnishing retailers; and food and other staples retailers. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK VECTORS SEMICONDUCTOR ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MVSMHTR1 | Share Price | NAV | MVSMHTR1 | ||||||||||||||||||||
One Year | 14.04 | % | 14.09 | % | 14.08 | % | 14.04 | % | 14.09 | % | 14.08 | % | |||||||||||||
Five Year | 20.19 | % | 20.19 | % | 20.18 | % | 150.81 | % | 150.80 | % | 150.67 | % | |||||||||||||
Life* | 21.07 | % | 21.12 | % | 21.05 | % | 342.75 | % | 344.01 | % | 342.13 | % |
* | Commencement of Fund: 12/20/11; First Day of Secondary Market Trading: 12/21/11. |
1 | MVIS® US Listed Semiconductor 25 Index (MVSMHTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in the semiconductor industry. Semiconductors include companies engaged primarily in the production of semiconductors and semiconductor equipment. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK VECTORS VIDEO GAMING AND ESPORTS ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MVESPOTR1 | Share Price | NAV | MVESPOTR1 | ||||||||||||||||||||
Life* | 9.46 | % | 9.31 | % | 10.68 | % | 9.46 | % | 9.31 | % | 10.68 | % |
* | Commencement of Fund: 10/16/18; First Day of Secondary Market Trading: 10/17/18. |
1 | The MVIS® Global Video Gaming and eSports Index (MVESPOTR) is a rules based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in video gaming and eSports. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 12 for more information.
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VANECK VECTORS ETF TRUST
ABOUT FUND PERFORMANCE
(unaudited)
The price used to calculate market return (Share Price) is determined by using the closing price listed on its primary listing exchange. Since the shares of each Fund did not trade in the secondary market until after each Fund’s commencement, for the period from commencement to the first day of secondary market trading in shares of each Fund, the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for each Fund reflects temporary waivers of expenses and/or fees. Had each Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.
Investment return and value of the shares of each Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Fund returns reflect reinvestment of dividends and capital gains distributions. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Shares may trade at a premium or discount to their NAV in the secondary market.
The net asset value (NAV) of each VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of each fund; it is calculated by taking the total assets of each fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAVs are not necessarily the same as each ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell fund shares at NAV.
Index returns assume the reinvestment of all income and do not reflect any management fees or brokerage expenses associated with Fund returns. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Past performance is no guarantee of future results.
The Biotech Index, Gaming Index, Pharmaceutical Index, Retail Index, Semiconductor Index and Global Video Gaming and eSports Index are published by MV Index Solutions GmbH (MVIS®), which is a wholly owned subsidiary of the Adviser, Van Eck Associates Corporation. The Environmental Services Index is published by ICE Data Indices, LLC (ICE Data).
MVIS and ICE Data are referred to herein as the “Index Providers.” The Index Providers do not sponsor, endorse, or promote the Funds and bear no liability with respect to the Funds or any security.
Premium/discount information regarding how often the closing trading price of the Shares of each Fund were above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund for each of the four previous calendar quarters and the immediately preceding five years (if applicable) can be found at www.vaneck.com.
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VANECK VECTORS ETF TRUST
(unaudited)
Hypothetical $1,000 investment at beginning of period
As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2019 to September 30, 2019.
Actual Expenses
The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning
Account Value April 1, 2019 |
Ending
Account Value September 30, 2019 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period* April 1, 2019 – September 30, 2019 |
||||||||||||||||||
Biotech ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 918.80 | 0.35 | % | $ | 1.68 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,023.31 | 0.35 | % | $ | 1.78 | |||||||||||||
Environmental Services ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,077.10 | 0.55 | % | $ | 2.86 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.31 | 0.55 | % | $ | 2.79 | |||||||||||||
Gaming ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 997.40 | 0.66 | % | $ | 3.30 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,021.76 | 0.66 | % | $ | 3.35 | |||||||||||||
Pharmaceutical ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 948.30 | 0.36 | % | $ | 1.76 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,023.26 | 0.36 | % | $ | 1.83 | |||||||||||||
Retail ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,091.80 | 0.35 | % | $ | 1.84 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,023.31 | 0.35 | % | $ | 1.78 | |||||||||||||
Semiconductor ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,120.40 | 0.35 | % | $ | 1.86 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,023.31 | 0.35 | % | $ | 1.78 | |||||||||||||
Video Gaming and eSports ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,067.40 | 0.55 | % | $ | 2.85 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.31 | 0.55 | % | $ | 2.79 |
* | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2019) multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of days in the fiscal year (to reflect the one-half year period). |
** | Assumes annual return of 5% before expenses |
13 |
|
September 30, 2019
Principal
Amount |
Value | |||||||
SHORT-TERM INVESTMENTS HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.0% | ||||||||
Repurchase Agreements: 1.0% | ||||||||
$ | 119,905 | Repurchase agreement dated 9/30/19 with BofA Securities, Inc., 2.30%, due 10/1/19, proceeds $119,913; (collateralized by various U.S. government and agency obligations, 1.13% to 2.25%, due 8/31/21 to 11/15/27, valued at $122,303 including accrued interest) | $ | 119,905 | ||||
1,000,000 | Repurchase agreement dated 9/30/19 with Citigroup Global Markets, Inc., 2.32%, due 10/1/19, proceeds $1,000,064; (collateralized by various U.S. government and agency obligations, 2.50% to 9.00%, due 6/1/24 to 10/1/49, valued at $1,020,000 including accrued interest) | 1,000,000 | ||||||
1,000,000 | Repurchase agreement dated 9/30/19 with Daiwa Capital Markets America, Inc., 2.37%, due 10/1/19, proceeds $1,000,066; (collateralized by various U.S. government and agency obligations, 0.00% to 6.50%, due 11/21/19 to 10/1/49, valued at $1,020,000 including accrued interest) | 1,000,000 | ||||||
1,000,000 | Repurchase agreement dated 9/30/19 with J.P. Morgan Securities LLC, 2.35%, due 10/1/19, proceeds $1,000,065; (collateralized by various U.S. government and agency obligations, 2.75% to 2.88%, due 5/31/23 to 10/31/23, valued at $1,020,000 including accrued interest) | 1,000,000 | ||||||
Total Short-Term Investments Held as Collateral for Securities on Loan
(Cost: $3,119,905) |
3,119,905 | |||||||
Total Investments: 101.0%
(Cost: $388,335,051) |
321,635,815 | |||||||
Liabilities in excess of other assets: (1.0)% | (3,336,728 | ) | ||||||
NET ASSETS: 100.0% | $ | 318,299,087 |
See Notes to Financial Statements
14 |
|
Definitions:
ADR | American Depositary Receipt |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $3,048,816. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
Biotechnology | 55.8 | % | $ | 177,481,481 | ||||
Health Care | 32.2 | 102,518,880 | ||||||
Life Sciences Tools & Services | 12.0 | 38,298,695 | ||||||
Money Market Fund | 0.0 | 216,854 | ||||||
100.0 | % | $ | 318,515,910 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||||
Common Stocks* | $ | 318,299,056 | $ | — | $ | — | $ | 318,299,056 | ||||||||||
Money Market Fund | 216,854 | — | — | 216,854 | ||||||||||||||
Repurchase Agreements | — | 3,119,905 | — | 3,119,905 | ||||||||||||||
Total | $ | 318,515,910 | $ | 3,119,905 | $ | — | $ | 321,635,815 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
15 |
|
VANECK VECTORS ENVIRONMENTAL SERVICES ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Principal
Amount |
Value | |||||||
Repurchase Agreements: (continued) | ||||||||
$ | 1,000,000 | Repurchase agreement dated 9/30/19 with Citigroup Global Markets, Inc., 2.32%, due 10/1/19, proceeds $1,000,064; (collateralized by various U.S. government and agency obligations, 2.50% to 9.00%, due 6/1/24 to 10/1/49, valued at $1,020,000 including accrued interest) | $ | 1,000,000 | ||||
1,000,000 | Repurchase agreement dated 9/30/19 with Daiwa Capital Markets America, Inc., 2.37%, due 10/1/19, proceeds $1,000,066; (collateralized by various U.S. government and agency obligations, 0.00% to 6.50%, due 11/21/19 to 10/1/49, valued at $1,020,000 including accrued interest) | 1,000,000 | ||||||
1,000,000 | Repurchase agreement dated 9/30/19 with J.P. Morgan Securities LLC, 2.35%, due 10/1/19, proceeds $1,000,065; (collateralized by various U.S. government and agency obligations, 2.75% to 2.88%, due 5/31/23 to 10/31/23, valued at $1,020,000 including accrued interest) | 1,000,000 | ||||||
1,000,000 | Repurchase agreement dated 9/30/19 with Nomura Securities International, Inc., 2.40%, due 10/1/19, proceeds $1,000,067; (collateralized by various U.S. government and agency obligations, 2.53% to 7.00%, due 12/1/20 to 2/1/52, valued at $1,020,000 including accrued interest) | 1,000,000 | ||||||
Total Short-Term Investments Held as Collateral for Securities on Loan
(Cost: $4,113,409) |
4,113,409 | |||||||
Total Investments: 111.3%
(Cost: $38,130,292) |
40,605,708 | |||||||
Liabilities in excess of other assets: (11.3)% | (4,117,118 | ) | ||||||
NET ASSETS: 100.0% | $ | 36,488,590 |
Definitions:
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $4,084,530. |
See Notes to Financial Statements
16 |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
Consumer Discretionary | 3.3 | % | $ | 1,215,579 | ||||
Consumer Staples | 3.3 | 1,192,507 | ||||||
Energy | 3.2 | 1,179,965 | ||||||
Health Care | 13.1 | 4,776,248 | ||||||
Industrials | 71.3 | 26,004,502 | ||||||
Materials | 5.8 | 2,123,498 | ||||||
100.0 | % | $ | 36,492,299 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||||
Common Stocks* | $ | 36,492,299 | $ | — | $ | — | $ | 36,492,299 | ||||||||||
Repurchase Agreements | — | 4,113,409 | — | 4,113,409 | ||||||||||||||
Total | $ | 36,492,299 | $ | 4,113,409 | $ | — | $ | 40,605,708 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
17 |
|
SCHEDULE OF INVESTMENTS
September 30, 2019
See Notes to Financial Statements
18 |
|
Definitions:
ADR | American Depositary Receipt |
SDR | Swedish Depositary Receipt |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $353,528. |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $12,750,124 which represents 53.6% of net assets. |
Reg S | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. |
144A | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $293,874, or 1.2% of net assets. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
Consumer Discretionary | 90.5 | % | $ | 21,565,345 | ||||
Real Estate | 9.4 | 2,254,131 | ||||||
Money Market Fund | 0.1 | 21,082 | ||||||
100.0 | % | $ | 23,840,558 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks | |||||||||||||||||
Australia | $ | — | $ | 3,065,062 | $ | — | $ | 3,065,062 | |||||||||
Cambodia | — | 425,338 | — | 425,338 | |||||||||||||
Canada | 533,064 | — | — | 533,064 | |||||||||||||
China / Hong Kong | 685,833 | 4,423,333 | — | 5,109,166 | |||||||||||||
Greece | — | 364,684 | — | 364,684 | |||||||||||||
Ireland | 1,010,313 | — | — | 1,010,313 | |||||||||||||
Japan | — | 867,845 | — | 867,845 | |||||||||||||
Malaysia | — | 878,783 | — | 878,783 | |||||||||||||
Malta | — | 141,557 | — | 141,557 | |||||||||||||
New Zealand | — | 160,769 | — | 160,769 | |||||||||||||
Singapore | — | 593,150 | — | 593,150 | |||||||||||||
South Korea | — | 503,167 | — | 503,167 | |||||||||||||
Sweden | — | 293,874 | — | 293,874 | |||||||||||||
United Kingdom | — | 1,032,562 | — | 1,032,562 | |||||||||||||
United States | 8,840,142 | — | — | 8,840,142 | |||||||||||||
Money Market Fund | 21,082 | — | — | 21,082 | |||||||||||||
Repurchase Agreement | — | 366,338 | — | 366,338 | |||||||||||||
Total | $ | 11,090,434 | $ | 13,116,462 | $ | — | $ | 24,206,896 |
See Notes to Financial Statements
19 |
|
VANECK VECTORS PHARMACEUTICAL ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Number
of Shares |
Value | |||||||
COMMON STOCKS: 99.7% | ||||||||
Denmark: 5.2% | ||||||||
141,833 | Novo-Nordisk AS (ADR) | $ | 7,332,766 | |||||
France: 5.4% | ||||||||
165,650 | Sanofi SA (ADR) | 7,674,565 | ||||||
Ireland: 7.6% | ||||||||
232,322 | Amarin Corp. Plc (ADR) * † | 3,522,002 | ||||||
33,014 | Jazz Pharmaceuticals Plc (USD) * | 4,230,414 | ||||||
52,887 | Perrigo Co. Plc (USD) | 2,955,855 | ||||||
10,708,271 | ||||||||
Israel: 3.3% | ||||||||
677,300 | Teva Pharmaceutical Industries Ltd. (ADR) * | 4,659,824 | ||||||
Japan: 4.5% | ||||||||
372,972 | Takeda Pharmaceutical Co. Ltd. (ADR) † | 6,415,118 | ||||||
Switzerland: 5.0% | ||||||||
81,129 | Novartis AG (ADR) | 7,050,110 | ||||||
United Kingdom: 12.0% | ||||||||
167,302 | AstraZeneca Plc (ADR) | 7,456,650 | ||||||
176,649 | GlaxoSmithKline Plc (ADR) | 7,539,379 | ||||||
18,038 | GW Pharmaceuticals Plc (ADR) * | 2,074,911 | ||||||
17,070,940 | ||||||||
United States: 56.7% | ||||||||
103,767 | AbbVie, Inc. | 7,857,237 | ||||||
73,922 | AmerisourceBergen Corp. | 6,085,998 | ||||||
232,699 | Bausch Health Cos, Inc. * | 5,084,473 | ||||||
131,798 | Bristol-Myers Squibb Co. | 6,683,477 | ||||||
52,396 | Catalent, Inc. * | 2,497,193 | ||||||
170,088 | Elanco Animal Health, Inc. * | 4,522,640 | ||||||
64,560 | Eli Lilly & Co. | 7,219,745 | ||||||
54,972 | Johnson & Johnson | 7,112,277 | ||||||
43,694 | McKesson Corp. | 5,971,222 | ||||||
86,960 | Merck and Co., Inc. | 7,320,293 | ||||||
285,373 | Mylan NV * | 5,644,678 | ||||||
39,287 | Patterson Companies, Inc. † | 700,094 | ||||||
192,749 | Pfizer, Inc. | 6,925,472 | ||||||
53,768 | Zoetis, Inc. | 6,698,955 | ||||||
80,323,754 | ||||||||
Total Common Stocks
(Cost: $189,552,225) |
141,235,348 | |||||||
MONEY MARKET FUND: 0.2%
(Cost: $191,286) |
||||||||
191,286 | Dreyfus Government Cash Management Fund – Institutional Shares | 191,286 | ||||||
Total Investments Before Collateral for Securities Loaned: 99.9%
(Cost: $189,743,511) |
141,426,634 |
Principal
Amount |
Value | |||||||
SHORT-TERM INVESTMENTS HELD AS COLLATERAL FOR SECURITIES ON LOAN: 5.8% | ||||||||
Repurchase Agreements: 5.8% | ||||||||
$ | 412,120 | Repurchase agreement dated 9/30/19 with BofA Securities, Inc., 2.30%, due 10/1/19, proceeds $412,146; (collateralized by various U.S. government and agency obligations, 1.13% to 2.25%, due 8/31/21 to 11/15/27, valued at $420,362 including accrued interest) | $ | 412,120 | ||||
1,958,902 | Repurchase agreement dated 9/30/19 with Citigroup Global Markets, Inc., 2.32%, due 10/1/19, proceeds $1,959,028; (collateralized by various U.S. government and agency obligations, 2.50% to 9.00%, due 6/1/24 to 10/1/49, valued at $1,998,081 including accrued interest) | 1,958,902 | ||||||
1,958,902 | Repurchase agreement dated 9/30/19 with Daiwa Capital Markets America, Inc., 2.37%, due 10/1/19, proceeds $1,959,031; (collateralized by various U.S. government and agency obligations, 0.00% to 6.50%, due 11/21/19 to 10/1/49, valued at $1,998,080 including accrued interest) | 1,958,902 | ||||||
1,958,902 | Repurchase agreement dated 9/30/19 with Deutsche Bank Securities, Inc., 2.40%, due 10/1/19, proceeds $1,959,033; (collateralized by various U.S. government and agency obligations, 1.88% to 2.75%, due 9/30/20 to 9/30/22, valued at $1,998,080 including accrued interest) | 1,958,902 | ||||||
1,958,902 | Repurchase agreement dated 9/30/19 with J.P. Morgan Securities LLC, 2.35%, due 10/1/19, proceeds $1,959,030; (collateralized by various U.S. government and agency obligations, 2.75% to 2.88%, due 5/31/23 to 10/31/23, valued at $1,998,080 including accrued interest) | 1,958,902 | ||||||
Total Short-Term Investments Held as Collateral for Securities on Loan
(Cost: $8,247,728) |
8,247,728 | |||||||
Total Investments: 105.7%
(Cost: $197,991,239) |
149,674,362 | |||||||
Liabilities in excess of other assets: (5.7)% | (8,013,937 | ) | ||||||
NET ASSETS: 100.0% | $ | 141,660,425 |
See Notes to Financial Statements
20 |
|
Definitions:
ADR | American Depositary Receipt |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $8,007,761. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
Health Care | 33.1 | % | $ | 46,748,743 | ||||
Pharmaceuticals | 66.8 | 94,486,605 | ||||||
Money Market Fund | 0.1 | 191,286 | ||||||
100.0 | % | $ | 141,426,634 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||||
Common Stocks* | $ | 141,235,348 | $ | — | $ | — | $ | 141,235,348 | ||||||||||
Money Market Fund | 191,286 | — | — | 191,286 | ||||||||||||||
Repurchase Agreements | — | 8,247,728 | — | 8,247,728 | ||||||||||||||
Total | $ | 141,426,634 | $ | 8,247,728 | $ | — | $ | 149,674,362 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
21 |
|
SCHEDULE OF INVESTMENTS
September 30, 2019
Definitions:
ADR | American Depositary Receipt |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $365,081. |
Summary of Investments by Sector Excluding
Collateral for Securities Loaned |
% of Investments | Value | ||||||
Consumer Discretionary | 65.2 | % | $ | 46,419,992 | ||||
Consumer Staples | 25.2 | 17,937,088 | ||||||
Health Care | 9.6 | 6,845,925 | ||||||
100.0 | % | $ | 71,203,005 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | |||||||||||||||
Common Stocks* | $ | 71,203,005 | $ | — | $ | — | $ | 71,203,005 | ||||||||||
Repurchase Agreement | — | 373,928 | — | 373,928 | ||||||||||||||
Total | $ | 71,203,005 | $ | 373,928 | $ | — | $ | 71,576,933 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
22 |
|
VANECK VECTORS SEMICONDUCTOR ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Principal
Amount |
Value | |||||||
SHORT-TERM INVESTMENTS HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.4% | ||||||||
Repurchase Agreements: 1.4% | ||||||||
$ | 4,414,392 | Repurchase agreement dated 9/30/19 with BofA Securities, Inc., 2.32%, due 10/1/19, proceeds $4,414,676; (collateralized by various U.S. government and agency obligations, 2.00% to 5.00%, due 4/1/24 to 10/1/49, valued at $4,502,680 including accrued interest) | $ | 4,414,392 | ||||
4,414,392 | Repurchase agreement dated 9/30/19 with Citigroup Global Markets, Inc., 2.32%, due 10/1/19, proceeds $4,414,676; (collateralized by various U.S. government and agency obligations, 2.50% to 9.00%, due 6/1/24 to 10/1/49, valued at $4,502,682 including accrued interest) | 4,414,392 | ||||||
4,414,392 | Repurchase agreement dated 9/30/19 with Daiwa Capital Markets America, Inc., 2.37%, due 10/1/19, proceeds $4,414,683; (collateralized by various U.S. government and agency obligations, 0.00% to 6.50%, due 11/21/19 to 10/1/49, valued at $4,502,680 including accrued interest) | 4,414,392 | ||||||
926,354 | Repurchase agreement dated 9/30/19 with HSBC Securities USA, Inc., 2.35%, due 10/1/19, proceeds $926,414; (collateralized by various U.S. government and agency obligations, 0.00% to 2.88%, due 8/31/20 to 9/9/49, valued at $944,881 including accrued interest) | 926,354 | ||||||
4,414,392 | Repurchase agreement dated 9/30/19 with J.P. Morgan Securities LLC, 2.35%, due 10/1/19, proceeds $4,414,680; (collateralized by various U.S. government and agency obligations, 2.75% to 2.88%, due 5/31/23 to 10/31/23, valued at $4,502,680 including accrued interest) | 4,414,392 | ||||||
Total Short-Term Investments Held as Collateral for Securities on Loan
(Cost: $18,583,922) |
18,583,922 | |||||||
Total Investments: 101.4%
(Cost: $1,471,764,982) |
1,379,125,833 | |||||||
Liabilities in excess of other assets: (1.4)% | (18,389,251 | ) | ||||||
NET ASSETS: 100.0% | $ | 1,360,736,582 |
See Notes to Financial Statements
23 |
|
VANECK VECTORS SEMICONDUCTOR ETF
SCHEDULE OF INVESTMENTS
(continued)
Definitions:
ADR | American Depositary Receipt |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $18,395,783. |
Summary of Investments by Sector Excluding
Collateral for Securities Loaned |
% of Investments | Value | ||||||
Information Technology | 15.8 | % | $ | 214,417,931 | ||||
Semiconductor Equipment | 18.4 | 251,134,646 | ||||||
Semiconductors | 65.8 | 894,972,844 | ||||||
Money Market Fund | 0.0 | 16,490 | ||||||
100.0 | % | $ | 1,360,541,911 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks* | $ | 1,360,525,421 | $ | — | $ | — | $ | 1,360,525,421 | |||||||||
Money Market Fund | 16,490 | — | — | 16,490 | |||||||||||||
Repurchase Agreements | — | 18,583,922 | — | 18,583,922 | |||||||||||||
Total | $ | 1,360,541,911 | $ | 18,583,922 | $ | — | $ | 1,379,125,833 |
* | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
24 |
|
VANECK VECTORS VIDEO GAMING AND ESPORTS ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Principal
Amount |
Value | |||||||
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 0.2%
(Cost: $64,853) |
||||||||
Repurchase Agreement: 0.2% | ||||||||
$64,853 | Repurchase agreement dated 9/30/19 with BofA Securities, Inc., 2.30%, due 10/1/19, proceeds $64,857; (collateralized by various U.S. government and agency obligations, 1.13% to 2.25%, due 8/31/21 to 11/15/27, valued at $66,150 including accrued interest) | $ | 64,853 | |||||
Total Investments: 100.2%
(Cost: $36,000,047) |
38,877,692 | |||||||
Liabilities in excess of other assets: (0.2)% | (74,482 | ) | ||||||
NET ASSETS: 100.0% | $ | 38,803,210 |
See Notes to Financial Statements
25 |
|
VANECK VECTORS VIDEO GAMING AND ESPORTS ETF
SCHEDULE OF INVESTMENTS
(continued)
Definitions:
ADR | American Depositary Receipt |
Footnotes: | |
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $59,685. |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $20,792,312 which represents 53.6% of net assets. |
Reg S | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. |
144A | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended, or otherwise restricted. These securities may be resold in transactions exempt from registration, unless otherwise noted, and the value amounted to $807,033, or 2.1% of net assets. |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks | |||||||||||||||||
China / Hong Kong | $ | 2,556,305 | $ | 3,585,887 | $ | — | $ | 6,142,192 | |||||||||
France | — | 1,488,796 | — | 1,488,796 | |||||||||||||
Japan | — | 10,453,129 | — | 10,453,129 | |||||||||||||
Korea | — | 2,926,299 | — | 2,926,299 | |||||||||||||
Poland | — | 1,419,535 | — | 1,419,535 | |||||||||||||
Singapore | 1,764,645 | — | — | 1,764,645 | |||||||||||||
Taiwan | — | 918,666 | — | 918,666 | |||||||||||||
United States | 13,664,611 | — | — | 13,664,611 | |||||||||||||
Money Market Fund | 34,966 | — | — | 34,966 | |||||||||||||
Repurchase Agreement | — | 64,853 | — | 64,853 | |||||||||||||
Total | $ | 18,020,527 | $ | 20,857,165 | $ | — | $ | 38,877,692 |
See Notes to Financial Statements
26 |
|
[This page intentionally left blank.]
27 |
|
VANECK VECTORS ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2019
Biotech
|
Environmental
Services ETF |
Gaming
ETF |
Pharmaceutical
ETF |
|||||||||||||||||
Assets: | ||||||||||||||||||||
Investments, at value | ||||||||||||||||||||
Unaffiliated issuers (1)(2) | $ | 318,515,910 | $ | 36,492,299 | $ | 23,840,558 | $ | 141,426,634 | ||||||||||||
Short-term investments held as collateral for securities loaned (3) | 3,119,905 | 4,113,409 | 366,338 | 8,247,728 | ||||||||||||||||
Cash denominated in foreign currency, at value (4) | — | — | 3,658 | — | ||||||||||||||||
Receivables: | ||||||||||||||||||||
Investment securities sold | — | 1,650,384 | 3,736 | — | ||||||||||||||||
Dividends and interest | 12,410 | 38,676 | 95,306 | 366,616 | ||||||||||||||||
Prepaid expenses | 5,620 | 1,138 | 1,139 | 3,387 | ||||||||||||||||
Total assets | 321,653,845 | 42,295,906 | 24,310,735 | 150,044,365 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Investment securities purchased | — | 925,538 | 3,735 | — | ||||||||||||||||
Collateral for securities loaned | 3,119,905 | 4,113,409 | 366,338 | 8,247,728 | ||||||||||||||||
Line of credit | — | — | 70,029 | — | ||||||||||||||||
Shares redeemed | 46 | 651,660 | — | — | ||||||||||||||||
Due to Adviser | 79,609 | 7,131 | 5,895 | 31,397 | ||||||||||||||||
Due to custodian | — | 46,196 | — | — | ||||||||||||||||
Deferred Trustee fees | 44,989 | 2,551 | 6,508 | 26,380 | ||||||||||||||||
Accrued expenses | 110,209 | 60,831 | 59,118 | 78,435 | ||||||||||||||||
Total liabilities | 3,354,758 | 5,807,316 | 511,623 | 8,383,940 | ||||||||||||||||
NET ASSETS | $ | 318,299,087 | $ | 36,488,590 | $ | 23,799,112 | $ | 141,660,425 | ||||||||||||
Shares outstanding | 2,696,503 | 350,000 | 650,000 | 2,488,138 | ||||||||||||||||
Net asset value, redemption and offering price per share | $ | 118.04 | $ | 104.25 | $ | 36.61 | $ | 56.93 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||
Aggregate paid in capital | $ | 429,783,718 | $ | 41,238,856 | $ | 38,713,168 | $ | 241,925,105 | ||||||||||||
Total distributable earnings (loss) | (111,484,631 | ) | (4,750,266 | ) | (14,914,056 | ) | (100,264,680 | ) | ||||||||||||
NET ASSETS | $ | 318,299,087 | $ | 36,488,590 | $ | 23,799,112 | $ | 141,660,425 | ||||||||||||
(1) Value of securities on loan | $ | 3,048,816 | $ | 4,084,530 | $ | 353,528 | $ | 8,007,761 | ||||||||||||
(2) Cost of investments | $ | 385,215,146 | $ | 34,016,883 | $ | 28,806,559 | $ | 189,743,511 | ||||||||||||
(3) Cost of short-term investments held as collateral for securities loaned | $ | 3,119,905 | $ | 4,113,409 | $ | 366,338 | $ | 8,247,728 | ||||||||||||
(4) Cost of cash denominated in foreign currency | $ | — | $ | — | $ | 3,656 | $ | — |
See Notes to Financial Statements
28 |
|
Retail
ETF |
Semiconductor
ETF |
Video Gaming
and eSports ETF |
|||||||||||
$ | 71,203,005 | $ | 1,360,541,911 | $ | 38,812,839 | ||||||||
373,928 | 18,583,922 | 64,853 | |||||||||||
— | — | 2,990 | |||||||||||
— | — | — | |||||||||||
28,583 | 1,883,227 | 37,238 | |||||||||||
2,262 | 5,644 | 1,132 | |||||||||||
71,607,778 | 1,381,014,704 | 38,919,052 | |||||||||||
— | — | — | |||||||||||
373,928 | 18,583,922 | 64,853 | |||||||||||
— | 1,192,830 | — | |||||||||||
— | 13,128 | — | |||||||||||
11,961 | 308,027 | 11,905 | |||||||||||
5,366 | — | — | |||||||||||
6,288 | 36,425 | 62 | |||||||||||
54,148 | 143,790 | 39,022 | |||||||||||
451,691 | 20,278,122 | 115,842 | |||||||||||
$ | 71,156,087 | $ | 1,360,736,582 | $ | 38,803,210 | ||||||||
621,531 | 11,420,937 | 1,150,000 | |||||||||||
$ | 114.49 | $ | 119.14 | $ | 33.74 | ||||||||
$ | 80,419,540 | $ | 1,465,218,074 | $ | 36,068,511 | ||||||||
(9,263,453 | ) | (104,481,492 | ) | 2,734,699 | |||||||||
$ | 71,156,087 | $ | 1,360,736,582 | $ | 38,803,210 | ||||||||
$ | 365,081 | $ | 18,395,783 | $ | 59,685 | ||||||||
$ | 75,986,072 | $ | 1,453,181,060 | $ | 35,935,194 | ||||||||
$ | 373,928 | $ | 18,583,922 | $ | 64,853 | ||||||||
$ | — | $ | — | $ | 2,990 |
See Notes to Financial Statements
29 |
|
VANECK VECTORS ETF TRUST
For the Year Ended September 30, 2019
Biotech
ETF |
Environmental
Services ETF |
Gaming
ETF |
Pharmaceutical
ETF |
|||||||||||||||||
Income: | ||||||||||||||||||||
Dividends | $ | 2,633,199 | $ | 301,255 | $ | 954,848 | $ | 4,425,631 | ||||||||||||
Securities lending income | 7,249 | 4,347 | 2,236 | 36,959 | ||||||||||||||||
Foreign taxes withheld | (46,703 | ) | (3,244 | ) | (15,197 | ) | (164,467 | ) | ||||||||||||
Total Income | 2,593,745 | 302,358 | 941,887 | 4,298,123 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Management fees | 1,364,903 | 147,606 | 131,776 | 707,676 | ||||||||||||||||
Professional fees | 58,957 | 67,886 | 62,682 | 64,263 | ||||||||||||||||
Insurance | 5,744 | 508 | 660 | 2,962 | ||||||||||||||||
Trustees’ fees and expenses | 58,636 | 2,590 | 6,503 | 34,122 | ||||||||||||||||
Reports to shareholders. | 21,477 | 5,749 | 7,656 | 9,646 | ||||||||||||||||
Indicative optimized portfolio value fee | 4,970 | — | 5,933 | 4,970 | ||||||||||||||||
Custodian fees | 12,307 | 2,969 | 13,922 | 9,273 | ||||||||||||||||
Registration fees | 4,404 | 4,230 | 5,105 | 5,458 | ||||||||||||||||
Transfer agent fees | 2,388 | 2,388 | 2,387 | 2,387 | ||||||||||||||||
Fund accounting fees | 19,584 | 1,758 | 5,743 | 12,066 | ||||||||||||||||
Interest | 8,074 | 1,252 | 1,461 | 12,770 | ||||||||||||||||
Other | 9,529 | 1,040 | 4,580 | 5,703 | ||||||||||||||||
Total expenses | 1,570,973 | 237,976 | 248,408 | 871,296 | ||||||||||||||||
Waiver of management fees | (197,996 | ) | (74,358 | ) | (75,639 | ) | (150,850 | ) | ||||||||||||
Net expenses | 1,372,977 | 163,618 | 172,769 | 720,446 | ||||||||||||||||
Net investment income | 1,220,768 | 138,740 | 769,118 | 3,577,677 | ||||||||||||||||
Net realized gain (loss) on: | ||||||||||||||||||||
Investments | (21,035,447 | ) | (1,128,070 | ) | (2,438,393 | ) | (44,554,473 | ) | ||||||||||||
In-kind redemptions | 15,584,053 | 4,246,674 | 286,116 | 8,150,365 | ||||||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | (5,227 | ) | — | |||||||||||||||
Net realized gain (loss) | (5,451,394 | ) | 3,118,604 | (2,157,504 | ) | (36,404,108 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments | (54,057,304 | ) | (1,067,809 | ) | 286,219 | 7,257,515 | ||||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | — | (759 | ) | — | |||||||||||||||
Net change in unrealized appreciation (depreciation) | (54,057,304 | ) | (1,067,809 | ) | 285,460 | 7,257,515 | ||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (58,287,930 | ) | $ | 2,189,535 | $ | (1,102,926 | ) | $ | (25,568,916 | ) |
(a) | Commencement of operations for Video Gaming and eSports ETF was October 16, 2018. |
See Notes to Financial Statements
30 |
|
Retail
ETF |
Semiconductor
ETF |
Video Gaming
and eSports ETF (a) |
|||||||||||
$ | 1,444,448 | $ | 22,782,089 | $ | 177,426 | ||||||||
361 | 128,285 | 1,392 | |||||||||||
— | (1,435,843 | ) | (18,936 | ) | |||||||||
1,444,809 | 21,474,531 | 159,882 | |||||||||||
314,687 | 3,694,199 | 85,821 | |||||||||||
63,967 | 70,539 | 48,647 | |||||||||||
1,195 | 10,212 | 373 | |||||||||||
9,712 | 79,410 | 766 | |||||||||||
9,534 | 87,492 | 8,924 | |||||||||||
4,970 | 4,970 | 4,182 | |||||||||||
6,466 | 32,858 | 8,111 | |||||||||||
7,890 | 18,536 | 6,246 | |||||||||||
2,393 | 2,387 | 2,303 | |||||||||||
5,522 | 55,542 | 2,554 | |||||||||||
1,856 | 28,151 | 495 | |||||||||||
2,000 | 24,385 | 761 | |||||||||||
430,192 | 4,108,681 | 169,183 | |||||||||||
(113,648 | ) | (386,331 | ) | (74,286 | ) | ||||||||
316,544 | 3,722,350 | 94,897 | |||||||||||
1,128,265 | 17,752,181 | 64,985 | |||||||||||
(1,842,589 | ) | (18,819,387 | ) | (206,895 | ) | ||||||||
4,293,672 | 132,684,197 | — | |||||||||||
— | — | 963 | |||||||||||
2,451,083 | 113,864,810 | (205,932 | ) | ||||||||||
(8,435,510 | ) | 17,079,544 | 2,877,645 | ||||||||||
— | — | 1 | |||||||||||
(8,435,510 | ) | 17,079,544 | 2,877,646 | ||||||||||
$ | (4,856,162 | ) | $ | 148,696,535 | $ | 2,736,699 |
See Notes to Financial Statements
31 |
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Biotech ETF | Environmental Services ETF | |||||||||||||||||||
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
|||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income | $ | 1,220,768 | $ | 2,159,885 | $ | 138,740 | $ | 96,331 | ||||||||||||
Net realized gain (loss) | (5,451,394 | ) | 9,517,436 | 3,118,604 | 1,147,292 | |||||||||||||||
Net change in unrealized appreciation (depreciation) | (54,057,304 | ) | (16,896,680 | ) | (1,067,809 | ) | 1,514,385 | |||||||||||||
Net increase (decrease) in net assets resulting from operations | (58,287,930 | ) | (5,219,359 | ) | 2,189,535 | 2,758,008 | ||||||||||||||
Distributions to shareholders: | ||||||||||||||||||||
Dividends and Distributions | (1,899,023 | ) | (3,276,012 | ) | (95,100 | ) | (155,000 | ) | ||||||||||||
Share transactions:** | ||||||||||||||||||||
Proceeds from sale of shares | 45,900,271 | 84,155,885 | 29,326,383 | 9,157,335 | ||||||||||||||||
Cost of shares redeemed | (143,308,258 | ) | (317,096,920 | ) | (19,092,505 | ) | (4,804,278 | ) | ||||||||||||
Increase (Decrease) in net assets resulting from share transactions | (97,407,987 | ) | (232,941,035 | ) | 10,233,878 | 4,353,057 | ||||||||||||||
Total increase (decrease) in net assets | (157,594,940 | ) | (241,436,406 | ) | 12,328,313 | 6,956,065 | ||||||||||||||
Net Assets, beginning of period | 475,894,027 | 717,330,433 | 24,160,277 | 17,204,212 | ||||||||||||||||
Net Assets, end of period | $ | 318,299,087 | $ | 475,894,027 | $ | 36,488,590 | $ | 24,160,277 | ||||||||||||
** Shares of Common Stock Issued (no par value) | ||||||||||||||||||||
Shares sold | 400,000 | 650,000 | 300,000 | 100,000 | ||||||||||||||||
Shares redeemed | (1,200,000 | ) | (2,500,000 | ) | (200,000 | ) | (50,000 | ) | ||||||||||||
Net increase (decrease) | (800,000 | ) | (1,850,000 | ) | 100,000 | 50,000 |
See Notes to Financial Statements
32 |
|
Gaming ETF | Pharmaceutical ETF | |||||||||||||||||
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
|||||||||||||||
$ | 769,118 | $ | 849,587 | $ | 3,577,677 | $ | 4,610,908 | |||||||||||
(2,157,504 | ) | 1,093,628 | (36,404,108 | ) | 30,537,964 | |||||||||||||
285,460 | (4,273,689 | ) | 7,257,515 | 4,781,155 | ||||||||||||||
(1,102,926 | ) | (2,330,474 | ) | (25,568,916 | ) | 39,930,027 | ||||||||||||
(849,750 | ) | (700,050 | ) | (3,869,339 | ) | (4,703,830 | ) | |||||||||||
3,636,558 | 41,979,903 | 147,451,491 | 396,537,268 | |||||||||||||||
(3,726,047 | ) | (36,543,790 | ) | (252,397,944 | ) | (440,908,308 | ) | |||||||||||
(89,489 | ) | 5,436,113 | (104,946,453 | ) | (44,371,040 | ) | ||||||||||||
(2,042,165 | ) | 2,405,589 | (134,384,708 | ) | (9,144,843 | ) | ||||||||||||
25,841,277 | 23,435,688 | 276,045,133 | 285,189,976 | |||||||||||||||
$ | 23,799,112 | $ | 25,841,277 | $ | 141,660,425 | $ | 276,045,133 | |||||||||||
100,000 | 900,000 | 2,550,000 | 6,750,000 | |||||||||||||||
(100,000 | ) | (800,000 | ) | (4,350,000 | ) | (7,400,000 | ) | |||||||||||
— | 100,000 | (1,800,000 | ) | (650,000 | ) |
See Notes to Financial Statements
33 |
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(continued)
Retail ETF | Semiconductor ETF | |||||||||||||||||||
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
|||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income | $ | 1,128,265 | $ | 876,108 | $ | 17,752,181 | $ | 13,520,717 | ||||||||||||
Net realized gain (loss) | 2,451,083 | 11,105,600 | 113,864,810 | 256,990,756 | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | (8,435,510 | ) | 11,739,531 | 17,079,544 | (105,630,663 | ) | ||||||||||||||
Net increase (decrease) in net assets resulting from operations | (4,856,162 | ) | 23,721,239 | 148,696,535 | 164,880,810 | |||||||||||||||
Distributions to shareholders: | ||||||||||||||||||||
Dividends and Distributions | (1,300,386 | ) | (1,030,346 | ) | (14,202,995 | ) | (10,499,228 | ) | ||||||||||||
Share transactions:** | ||||||||||||||||||||
Proceeds from sale of shares | 52,873,806 | 131,062,913 | 19,302,146,323 | 19,908,451,210 | ||||||||||||||||
Cost of shares redeemed | (111,684,252 | ) | (76,377,009 | ) | (19,291,227,031 | ) | (19,647,561,699 | ) | ||||||||||||
Increase (Decrease) in net assets resulting from share transactions | (58,810,446 | ) | 54,685,904 | 10,919,292 | 260,889,511 | |||||||||||||||
Total increase (decrease) in net assets | (64,966,994 | ) | 77,376,797 | 145,412,832 | 415,271,093 | |||||||||||||||
Net Assets, beginning of period | 136,123,081 | 58,746,284 | 1,215,323,750 | 800,052,657 | ||||||||||||||||
Net Assets, end of period† | $ | 71,156,087 | $ | 136,123,081 | $ | 1,360,736,582 | $ | 1,215,323,750 | ||||||||||||
** Shares of Common Stock Issued (no par value) | ||||||||||||||||||||
Shares sold | 500,000 | 1,300,000 | 188,800,000 | 191,750,000 | ||||||||||||||||
Shares redeemed | (1,100,000 | ) | (800,000 | ) | (188,800,000 | ) | (188,900,000 | ) | ||||||||||||
Net increase (decrease) | (600,000 | ) | 500,000 | — | 2,850,000 |
* | Commencement of operations |
See Notes to Financial Statements
34 |
|
Video Gaming
and eSports ETF |
|||
For the Period
October 16, 2018* through September 30, 2019 |
|||
$ | 64,985 | ||
(205,932 | ) | ||
2,877,646 | |||
2,736,699 | |||
(2,000 | ) | ||
36,068,511 | |||
— | |||
36,068,511 | |||
38,803,210 | |||
— | |||
$ | 38,803,210 | ||
1,150,000 | |||
— | |||
1,150,000 |
See Notes to Financial Statements
35 |
|
VANECK VECTORS ETF TRUST
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of year, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the year. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(c) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
(d) | The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund. |
See Notes to Financial Statements
36 |
|
VANECK VECTORS ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of year, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the year. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(c) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
See Notes to Financial Statements
37 |
|
VANECK VECTORS ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
(a) | Calculated based upon average shares outstanding |
(b) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of year, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the year. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(c) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
(d) | For the year ended September 30, 2016, 0.06% of total return, representing $0.04 per share, consisted of a payment by the Adviser (See Note 3). |
See Notes to Financial Statements
38 |
|
VANECK VECTORS ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | Calculated based upon average shares outstanding |
(b) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(c) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
(d) | Commencement of operations |
(e) | Not Annualized |
(f) | Annualized |
See Notes to Financial Statements
39 |
|
VANECK VECTORS ETF TRUST
September 30, 2019
Note 1—Fund Organization—VanEck Vectors ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and offers multiple investment portfolios, each of which represents a separate series of the Trust. These financial statements relate only to the investment portfolios listed in the diversification table below (each a “Fund” and, together, the “Funds”).
Fund | Diversification Classification |
Biotech ETF | Non-Diversified |
Environmental Services ETF | Non-Diversified |
Gaming ETF | Non-Diversified |
Pharmaceutical ETF | Non-Diversified |
Retail ETF | Non-Diversified |
Semiconductor ETF | Non-Diversified |
Video Gaming and eSports ETF* | Non-Diversified |
* | Commencement of operations for Video Gaming and eSports ETF was October 16, 2018. |
Each Fund was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in substantially the same weighting as their index.
Note 2—Significant Accounting Policies—The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The Funds are investment companies and follow accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services—Investment Companies.
The following summarizes the Funds’ significant accounting policies.
A. | Security Valuation—The Funds value their investments in securities and other assets and liabilities at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. Securities traded on the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Over-the-counter securities not included on NASDAQ and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (as described below). Certain foreign securities, whose values may be affected by market direction or events occurring before the Funds’ pricing time (4:00 p.m. Eastern Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. Short-term debt securities with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered to be Level 1 in the fair value hierarchy. The Pricing Committee of Van Eck Associates Corporation (the “Adviser”) provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes it does not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation policies and procedures. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, including a regular review of key inputs and assumptions, periodic comparisons to valuations provided by other independent pricing services, transactional back-testing and disposition analysis. |
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Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be classified either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments. | |
The Funds utilize various methods to measure the fair value of their investments on a recurring basis, which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three levels of the fair value hierarchy are described below: | |
Level 1 — Quoted prices in active markets for identical securities. | |
Level 2 — Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
Level 3 — Significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments). | |
A summary of the inputs and the levels used to value the Funds’ investments, are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments. | |
B. | Federal Income Taxes—It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. |
C. | Dividends and Distributions to Shareholders—Dividends to shareholders from net investment income and distributions from net realized capital gains, if any, are declared and paid annually by each Fund (except for dividends from net investment income on Pharmaceutical ETF, which are declared and paid quarterly). Income dividends and capital gain distributions are determined in accordance with U.S. income tax regulations, which may differ from such amounts determined in accordance with GAAP. |
D. | Currency Translation—Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day as quoted by one or more sources. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed in the financial statements. Such amounts are included with the net realized and unrealized gains and losses on investment securities in the Statement of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations. |
E. | Restricted Securities—The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments. |
F. | Repurchase Agreements—The Funds may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, to generate income from their excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires securities from a seller, subject to resale to the seller at an agreed upon price and date. A Fund, through its custodian/securities |
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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
lending agent, takes possession of securities collateralizing the repurchase agreement. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the Funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the Funds maintain their right to sell the underlying securities at market value and may claim any resulting loss against the seller. Repurchase agreements held as of September 30, 2019 are reflected in the Schedules of Investments. | |
G. | Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of offset in those agreements allows the Funds to offset any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may pledge or receive cash and or securities as collateral for derivative instruments, securities lending and repurchase agreements. For financial reporting purposes, the Funds present securities lending and repurchase agreement assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Collateral held at September 30, 2019 is presented in the Schedules of Investments. Refer to related disclosures in Note 2F (Repurchase Agreements) and Note 9 (Securities Lending). |
I. | Other—Security transactions are accounted for on trade date. Realized gains and losses are determined based on the specific identification method. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized upon notification of the ex-dividend date. Interest income, including amortization of premiums and discounts, is accrued as earned. |
In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote. |
Note 3—Investment Management and Other Agreements—The Adviser is the investment adviser to the Funds. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The Adviser has agreed, until at least February 1, 2020, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding the expense limitations listed in the table below.
The management fee rates and expense limitations for the year ended September 30, 2019, are as follows:
Management | Expense | |||||||
Fund | Fees Rates | Limitations | ||||||
Biotech ETF | 0.35 | % | 0.35 | % | ||||
Environmental Services ETF | 0.50 | 0.55 | ||||||
Gaming ETF | 0.50 | 0.65 | ||||||
Pharmaceutical ETF | 0.35 | 0.35 | ||||||
Retail ETF | 0.35 | 0.35 | ||||||
Semiconductor ETF | 0.35 | 0.35 | ||||||
Video Gaming and eSports ETF | 0.50 | 0.55 |
Refer to Statement of Operations for the amounts waived by the Adviser.
During the year ended September 30, 2016, the Adviser voluntarily reimbursed the Semiconductor ETF $340,000 for transactional losses. The per share and total return impact to the Fund is reflected in the Financial Highlights.
In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ distributor (the “Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.
Note 4—Capital Share Transactions—As of September 30, 2019, there was an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are
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issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”), consisting of 50,000 shares, or multiples thereof.
The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of market circumstances, or when the securities are not available in sufficient quantity for delivery, or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit at the Custodian for the benefit of the Funds, collateral consisting of cash in the form of U.S. dollars at least equal to 115% of the daily marked to market value of the missing Deposit Securities.
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to The Bank of New York Mellon. In addition, the Funds may impose certain variable fees for creations and redemptions with respect to transactions in Creation Units for cash, or on transactions effected outside the clearing process, which are treated as increases in capital. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.
Note 5—Investments—For the year ended September 30, 2019, purchases and sales of investments (excluding short-term investments and in-kind capital share transactions) and the purchases and sales of investments resulting from in-kind capital share transactions (excluding short-term investments) were as follows:
In-kind Capital Share Transactions | ||||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
Biotech ETF | $ | 95,562,376 | $ | 96,346,371 | $ | 46,038,624 | $ | 143,418,962 | ||||||||
Environmental Services ETF | 5,905,750 | 9,039,790 | 29,325,214 | 15,939,339 | ||||||||||||
Gaming ETF | 5,223,300 | 5,497,624 | 3,423,312 | 3,445,729 | ||||||||||||
Pharmaceutical ETF | 44,289,413 | 44,760,373 | 147,453,875 | 251,841,807 | ||||||||||||
Retail ETF | 8,443,121 | 10,792,993 | 52,596,004 | 109,586,278 | ||||||||||||
Semiconductor ETF | 184,236,880 | 185,014,584 | 19,304,732,299 | 19,289,075,909 | ||||||||||||
Video Gaming and eSports ETF | 8,766,382 | 5,099,708 | 32,440,449 | — |
The in-kind transactions in this table represent the accumulation of each Fund’s daily in-kind shareholder transactions including rebalancing activity, while the Statements of Changes in Net Assets reflect shareholder transactions including any cash component of the transactions.
Note 6—Income Taxes—As of September 30, 2019, for Federal income tax purposes, the identified cost of investments owned, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation), of investments were as follows:
Gross | Gross | Net Unrealized | ||||||||||||||
Tax Cost | Unrealized | Unrealized | Appreciation | |||||||||||||
Fund | of Investments | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||
Biotech ETF | $ | 388,658,446 | $ | 19,876,801 | $ | (86,899,431 | ) | $ | (67,022,630 | ) | ||||||
Environmental Services ETF | 38,137,543 | 3,995,933 | (1,527,769 | ) | 2,468,164 | |||||||||||
Gaming ETF | 29,759,434 | 1,115,034 | (6,667,572 | ) | (5,552,538 | ) | ||||||||||
Pharmaceutical ETF | 197,993,678 | 1,550,500 | (49,869,815 | ) | (48,319,315 | ) | ||||||||||
Retail ETF | 76,379,467 | 4,727,845 | (9,530,378 | ) | (4,802,534 | ) | ||||||||||
Semiconductor ETF | 1,471,827,120 | 10,238,792 | (102,940,080 | ) | (92,701,288 | ) | ||||||||||
Video Gaming and eSports ETF | 36,104,349 | 3,613,506 | (840,162 | ) | 2,773,344 |
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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
At September 30, 2019, the components of distributable earnings (loss) on a tax basis, for each Fund, were as follows:
Undistributed | Accumulated | Other | Net Unrealized | Total | ||||||||||||||||
Ordinary | Capital | Temporary | Appreciation | Distributable | ||||||||||||||||
Fund | Income | Losses | Differences | (Depreciation) | Earnings/(loss) | |||||||||||||||
Biotech ETF | $ | 780,450 | $ | (45,197,462 | ) | $ | (44,989 | ) | $ | (67,022,630 | ) | $ | (111,484,631 | ) | ||||||
Environmental Services ETF | 104,988 | (7,320,867 | ) | (2,551 | ) | 2,468,164 | (4,750,266 | ) | ||||||||||||
Gaming ETF | 657,523 | (10,011,509 | ) | (6,508 | ) | (5,553,562 | ) | (14,914,056 | ) | |||||||||||
Pharmaceutical ETF | 708,895 | (52,627,880 | ) | (26,380 | ) | (48,319,315 | ) | (100,264,680 | ) | |||||||||||
Retail ETF | 531,192 | (4,985,822 | ) | (6,289 | ) | (4,802,534 | ) | (9,263,453 | ) | |||||||||||
Semiconductor ETF | 14,107,586 | (25,851,366 | ) | (36,424 | ) | (92,701,288 | ) | (104,481,492 | ) | |||||||||||
Video Gaming and eSports ETF | 109,686 | (148,269 | ) | (62 | ) | 2,773,344 | 2,734,699 |
The tax character of dividends paid to shareholders during the years ended September 30, 2019 and September 30, 2018 were as follows:
2019 Ordinary | 2018 Ordinary | |||||||
Fund | Income Dividends | Income Dividends | ||||||
Biotech ETF | $ | 1,899,023 | $ | 3,276,012 | ||||
Environmental Services ETF | 95,100 | 155,000 | ||||||
Gaming ETF | 849,750 | 700,050 | ||||||
Pharmaceutical ETF | 3,869,339 | 4,703,830 | ||||||
Retail ETF | 1,300,386 | 1,030,346 | ||||||
Semiconductor ETF | 14,202,995 | 10,499,228 | ||||||
Video Gaming and eSports ETF | 2,000 | — |
At September 30, 2019, the Funds had capital loss carryforwards available to offset future capital gains, as follows:
Short-Term | Long-Term | |||||||||||
Capital Losses | Capital Losses | |||||||||||
Fund | with No Expiration | with No Expiration | Total | |||||||||
Biotech ETF | $ | — | $ | (45,197,462 | ) | $ | (45,197,462 | ) | ||||
Environmental Services ETF | (1,187,792 | ) | (6,133,075 | ) | (7,320,867 | ) | ||||||
Gaming ETF | (3,789,765 | ) | (6,221,744 | ) | (10,011,509 | ) | ||||||
Pharmaceutical ETF | (2,464,404 | ) | (50,163,476 | ) | (52,627,880 | ) | ||||||
Retail ETF | (2,057,233 | ) | (2,928,589 | ) | (4,985,822 | ) | ||||||
Semiconductor ETF | (14,622,887 | ) | (11,228,479 | ) | (25,851,366 | ) | ||||||
Video Gaming and eSports ETF | (148,269 | ) | — | (148,269 | ) |
During the period ended September 30, 2019, as a result of permanent book to tax differences primarily due to the treatment of tax gains / (losses) on in-kind redemptions, the Funds incurred differences that affected distributable earnings / (loss) and aggregate paid in capital by the amounts in the table below. Net assets were not affected by these reclassifications.
Increase (Decrease) | Increase (Decrease) | |||||||
in Distributable | in Aggregate | |||||||
Fund | Earnings / (Loss) | Paid in Capital | ||||||
Biotech ETF | $ | (13,839,610 | ) | $ | 13,839,610 | |||
Environmental Services ETF | (4,229,109 | ) | 4,229,109 | |||||
Gaming ETF | (69,646 | ) | 69,646 | |||||
Pharmaceutical ETF | (8,150,365 | ) | 8,150,365 | |||||
Retail ETF | (4,239,972 | ) | 4,239,972 | |||||
Semiconductor ETF | (132,455,325 | ) | 132,455,325 | |||||
Video Gaming and eSports ETF | — | — |
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements.
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However, the Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended September 30, 2019, the Funds did not incur any interest or penalties.
Note 7—Principal Risks—Non-diversified funds (see Note 1) generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse political and economic developments and local/regional conflicts. These risks are heightened for investments in emerging market countries. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of comparable U.S. issuers.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
Note 8—Trustee Deferred Compensation Plan—The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.
The expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.
Note 9—Securities Lending—To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with The Bank of New York Mellon, the securities lending agent and also the Funds’ custodian. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, U.S. government or U.S. government agency securities, shares of an investment trust or mutual fund, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value plus accrued interest on the securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower and/or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. The Funds may pay reasonable finders’, administrative and custodial fees in connection with a loan of its securities. Securities lending income is disclosed as such in the Statements of Operations. The collateral for securities loaned is recognized in the Schedules of Investments and the Statements of Assets and Liabilities. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in repurchase agreements collateralized by obligations of the U.S. Treasury and/or Government Agencies. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the lender securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related collateral at September 30, 2019 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.
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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
The following table presents repurchase agreements held as collateral by type of security on loan as of September 30, 2019:
Gross Amount of Recognized | ||||
Liabilities for Securities Loaned | ||||
in the Statements of Assets | ||||
and Liabilities* | ||||
Fund | Equity Securities | |||
Biotech ETF | $ | 3,119,905 | ||
Environmental Services ETF | 4,113,409 | |||
Gaming ETF | 366,338 | |||
Pharmaceutical ETF | 8,247,728 | |||
Retail ETF | 373,928 | |||
Semiconductor ETF | 18,583,922 | |||
Video Gaming and eSports ETF | 64,853 |
* | Remaining contractual maturity of the agreements: overnight and continuous |
Note 10—Bank Line of Credit—The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the year ended September 30, 2019, the following Funds borrowed under this Facility:
Outstanding Loan | ||||||||||||||||
Days | Average Daily | Average | Balance as of | |||||||||||||
Fund | Outstanding | Loan Balance | Interest Rate | September 30, 2019 | ||||||||||||
Biotech ETF | 114 | $ | 513,474 | 3.74 | % | $ | — | |||||||||
Environmental Services ETF | 5 | 206,378 | 3.89 | — | ||||||||||||
Gaming ETF | 47 | 108,027 | 3.74 | 70,029 | ||||||||||||
Pharmaceutical ETF | 318 | 371,015 | 3.75 | — | ||||||||||||
Retail ETF | 129 | 140,936 | 3.71 | — | ||||||||||||
Semiconductor ETF | 185 | 1,419,449 | 3.73 | 1,192,830 |
Note 11—Custodian Fees—The Funds have entered into an expense offset agreement with the custodian wherein they receive a credit toward the reduction of custodian fees whenever there are uninvested cash balances. The Funds could have invested their cash balances elsewhere if they had not agreed to a reduction in fees under the expense offset agreement with the custodian. For the year ended September 30, 2019, there were offsets to custodian fees and these amounts are reflected in custody expense in the Statements of Operations.
Note 12—Recent Accounting Pronouncements—The Funds early adopted certain provisions of Accounting Standards Update No. 2018-13 Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) that eliminate and modify certain disclosure requirements for fair value measurements. The adoption of certain provisions of ASU 2018-13 had no material effect on the financial statements and related disclosures. Management evaluated additional requirements, not yet adopted, and it is not expected to have a material impact to the financial statements. Public companies will be required to disclose the range and weighted average of significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years.
Note 13—Subsequent Events—The Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
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VANECK VECTORS ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of VanEck Vectors Biotech ETF, VanEck Vectors Environmental Services ETF, VanEck Vectors Gaming ETF, VanEck Vectors Pharmaceutical ETF, VanEck Vectors Retail ETF, VanEck Vectors Semiconductor ETF and VanEck Vectors Video Gaming & eSports ETF and the Board of Trustees of VanEck Vectors ETF Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of VanEck Vectors Biotech ETF, VanEck Vectors Environmental Services ETF, VanEck Vectors Gaming ETF, VanEck Vectors Pharmaceutical ETF, VanEck Vectors Retail ETF, VanEck Vectors Semiconductor ETF and VanEck Vectors Video Gaming & eSports ETF (collectively referred to as the “Funds”) (seven of the funds constituting VanEck Vectors ETF Trust (the “Trust”)), including the schedules of investments, as of September 30, 2019, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (seven of the funds constituting VanEck Vectors ETF Trust) at September 30, 2019, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
Individual fund constituting | Statement of | Statements of | ||||
the VanEck Vectors ETF Trust | operations | changes in net assets | Financial highlights | |||
VanEck Vectors Biotech ETF | For the year ended September 30, 2019 | For each of the two years in the period ended September 30, 2019 | For each of the five years in the period ended September 30, 2019 | |||
VanEck Vectors Environmental Services ETF | ||||||
VanEck Vectors Gaming ETF | ||||||
VanEck Vectors Pharmaceutical ETF | ||||||
VanEck Vectors Retail ETF | ||||||
VanEck Vectors Semiconductor ETF | ||||||
VanEck Vectors Video Gaming & eSports ETF | For the period October 16, 2018 (commencement of operations) through September 30, 2019 | For the period October 16, 2018 (commencement of operations) through September 30, 2019 | For the period October 16, 2018 (commencement of operations) through September 30, 2019 |
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
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VANECK VECTORS ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(continued)
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more of the VanEck investment companies since 1999.
New York, New York
November 21, 2019
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|
VANECK VECTORS ETF TRUST
(unaudited)
The information set forth below relates to distributions paid during each Fund’s current fiscal year as required by federal laws. Shareholders, however, must report dividends on a calendar year basis for income tax purposes, which may include dividends for portions of two fiscal years of a Fund.
Accordingly, the information needed by shareholders for calendar year 2019 income tax purposes will be sent to them in early 2020. Please consult your tax advisor for proper treatment of this information.
The following information is provided with respect to the distributions paid during the taxable year ended September 30, 2019:
Environmental | Semiconductor | Video Gaming | ||||||||||||||||||||||
Biotech ETF | Services ETF | Gaming ETF | Retail ETF | ETF | and eSports | |||||||||||||||||||
Record Date | 12/21/2018 | 12/21/2018 | 12/21/2018 | 12/21/2018 | 12/21/2018 | 12/21/2018 | ||||||||||||||||||
Ex Date | 12/20/2018 | 12/20/2018 | 12/20/2018 | 12/20/2018 | 12/20/2018 | 12/20/2018 | ||||||||||||||||||
Payable Date | 12/27/2018 | 12/27/2018 | 12/27/2018 | 12/27/2018 | 12/27/2018 | 12/27/2018 | ||||||||||||||||||
Amount Paid Per Share | $0.551000 | $0.317000 | $1.133000 | $0.984000 | $1.638000 | $0.010000 | ||||||||||||||||||
Ordinary Income: | ||||||||||||||||||||||||
Qualified Dividend Income for Individuals | 100.00 | % | 100.00 | % | 71.06 | %* | 100.00 | % | 60.69 | % | 100.00 | % | ||||||||||||
Dividends Qualifying for the Dividends Received Deduction for Corporations | 100.00 | % | 100.00 | % | 22.41 | %* | 100.00 | % | 52.12 | % | 11.41 | % | ||||||||||||
Foreign Source Income | — | — | 73.82 | %* | — | — | — | |||||||||||||||||
Foreign Taxes Paid Per Share | — | — | 0.022503 | ** | — | — | — | |||||||||||||||||
Pharmaceutical ETF | ||||||||||||||||||||||||
Record Date | 10/02/2018 | 12/28/2018 | 04/02/2019 | 07/02/2019 | ||||||||||||||||||||
Ex Date | 10/01/2018 | 12/27/2018 | 04/01/2019 | 07/01/2019 | ||||||||||||||||||||
Payable Date | 10/05/2018 | 01/03/2019 | 04/05/2019 | 07/08/2019 | ||||||||||||||||||||
Amount Paid Per Share | $0.234500 | $0.203200 | $0.390000 | $0.281000 | ||||||||||||||||||||
Ordinary Income: | ||||||||||||||||||||||||
Qualified Dividend Income for Individuals | 89.44 | %* | 89.13 | % | 100.00 | % | 100.00 | % | ||||||||||||||||
Dividends Qualifying for the Dividends Received Deduction for Corporations | 52.71 | %* | 89.13 | % | 58.69 | % | 58.69 | % | ||||||||||||||||
Foreign Source Income | 30.34 | %* | — | — | — | |||||||||||||||||||
Foreign Taxes Paid Per Share | 0.006060 | ** | — | — | — |
* | Expressed as a percentage of the cash distribution grossed up for foreign taxes. |
** | The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. |
Please retain this information for your records.
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|
VANECK VECTORS ETF TRUST
BOARD OF TRUSTEES AND OFFICERS
September 30, 2019 (unaudited)
Name, Address1
and Year of Birth |
Position(s)
Held with the Trust |
Term of
Office2 and Length of Time Served |
Principal Occupation(s)
During Past Five Years |
Number of
Portfolios in Fund Complex3 Overseen |
Other Directorships Held
By Trustee During Past Five Years |
|||||
Independent Trustees: | ||||||||||
David H. Chow,
1957*† |
Chairman
Trustee |
Since 2008 Since 2006 | Founder and CEO, DanCourt Management LLC (financial/strategy consulting firm and Registered Investment Adviser), March 1999 to present. | 56 | Director, Forward Management LLC and Audit Committee Chairman, May 2008 to June 2015; Trustee, Berea College of Kentucky, May 2009 to present and currently Chairman of the Investment Committee; Member of the Governing Council of the Independent Directors Council, October 2012 to present; President, July 2013 to June 2015, and Board Member of the CFA Society of Stamford, July 2009 to present; Trustee, MainStay Fund Complex4, January 2016 to present and currently Chairman of the Risk and Compliance Committee. | |||||
Laurie A. Hesslein,
1959*† |
Trustee | Since 2019 | Citigroup, Managing Director, Citi Holdings Division – Business Head, Local Consumer Lending North America (2013-2017). | 56 | Trustee, Eagle Growth and Income Opportunities Fund; Trustee, THL Credit Senior Loan Fund. | |||||
R. Alastair Short,
1953*† |
Trustee | Since 2006 | President, Apex Capital Corporation (personal investment vehicle), January 1988 to present | 67 | Chairman and Independent Director, EULAV Asset Management, January 2011 to present; Independent Director, Tremont offshore funds, June 2009 to July 2016; Director, Kenyon Review. | |||||
Peter J. Sidebottom,
1962*† |
Trustee | Since 2012 | Lead Partner, North America Banking and Capital Markets Strategy, Accenture, May 2017 to present; Partner, PWC/Strategy & Financial Services Advisory, February 2015 to March 2017; Founder and Board Member, AspenWoods Risk Solutions, September 2013 to February 2016; Independent consultant, June 2013 to February 2015; Partner, Bain & Company (management consulting firm), April 2012 to December 2013; Executive Vice President and Senior Operating Committee Member, TD Ameritrade (on-line brokerage firm), February 2009 to January 2012. | 56 | Board Member, Special Olympics, New Jersey, November 2011 to September 2013; Director, The Charlotte Research Institute, December 2000 to 2009; Board Member, Social Capital Institute, University of North Carolina Charlotte, November 2004 to January 2012; Board Member, NJ-CAN, July 2014 to 2016. | |||||
Richard D. Stamberger,
1959*† |
Trustee | Since 2006 | President and CEO, SmartBrief, LLC (business media company). | 67 | Director, Food and Friends, Inc., 2013 to present. | |||||
Interested Trustee: | ||||||||||
Jan F. van Eck,
19635 |
Trustee, Chief Executive Officer and President | Trustee (Since 2006); Chief Executive Officer and President (Since 2009) | Director, President and Chief Executive Officer of Van Eck Associates Corporation (VEAC), Van Eck Absolute Return Advisers Corporation (VEARA) and Van Eck Securities Corporation (VESC); Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | 56 | Director, National Committee on US-China Relations. |
1 | The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees. |
3 | The Fund Complex consists of the VanEck Funds, VanEck VIP Trust and the Trust. |
4 | The MainStay Fund Complex consists of MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust and MainStay MacKay Defined Term Municipal Opportunities Fund. |
5 | “Interested person” of the Trust within the meaning of the 1940 Act. Mr. van Eck is an officer of VEAC, VEARA and VESC. |
* | Member of the Audit Committee. |
† | Member of the Nominating and Corporate Governance Committee. |
50 |
|
Officer’s Name,
Address1 and Year of Birth |
Position(s)
Held with the Trust |
Term of Office2
and Length of Time Served |
Principal Occupation(s) During The Past Five Years | |||
Officer Information: | ||||||
Matthew A. Babinsky,
1983 |
Assistant Vice President and Assistant Secretary | Since 2016 | Assistant Vice President, Assistant General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Associate, Clifford Chance US LLP. | |||
Russell G. Brennan,
1964 |
Assistant Vice President and Assistant Treasurer | Since 2008 | Assistant Vice President of VEAC; Officer of other investment companies advised by VEAC and VEARA. | |||
Charles T. Cameron,
1960 |
Vice President | Since 2006 | Portfolio Manager of VEAC; Officer and/or Portfolio Manager of other investment companies advised by VEAC and VEARA. Formerly, Director of Trading of VEAC. | |||
John J. Crimmins,
1957 |
Vice President, Treasurer, Chief Financial Officer and Principal Accounting Officer | Vice President, Chief Financial Officer and Principal Accounting Officer (Since 2012); Treasurer (Since 2009) | Vice President of VEAC and VEARA; Officer of other investment companies advised by VEAC and VEARA. Formerly, Vice President of VESC. | |||
Eduardo Escario,
1975 |
Vice President | Since 2012 | Regional Director, Business Development/Sales for Southern Europe and South America of VEAC. | |||
Henry Glynn,
1983 |
Assistant Vice President | Since 2018 | Head of ETF Capital Markets Europe of Van Eck Switzerland AG. Formerly, Member of the Capital Markets team at Vanguard Group. | |||
F. Michael Gozzillo,
1965 |
Chief Compliance Officer | Since 2018 | Vice President and Chief Compliance Officer of VEAC and VEARA; Chief Compliance Officer of VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Chief Compliance Officer of City National Rochdale, LLC and City National Rochdale Funds. | |||
Laura Hamilton,
1977 |
Vice President | Since 2019 | Assistant Vice President of VEAC and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Operations Manager of Royce & Associates. | |||
Nicholas Jackson,
1974 |
Assistant Vice President | Since 2018 | Vice President, Business Development of VanEck Australia Pty Ltd. | |||
Laura I. Martínez,
1980 |
Vice President and Assistant Secretary | Vice President (Since 2016); Assistant Secretary (Since 2008) | Vice President, Associate General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Assistant Vice President of VEAC, VEARA and VESC. | |||
Matthew McKinnon,
1970 |
Assistant Vice President | Since 2018 | Head of Business Development of Asia Pacific of VanEck Australia Pty Ltd. Formerly, Director, Intermediaries and Institutions of VanEck Australia Pty Ltd. | |||
Arian Neiron,
1979 |
Vice President | Since 2018 | Managing Director and Head of Asia Pacific of VanEck Australia Pty Ltd.; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | |||
James Parker,
1969 |
Assistant Treasurer | Since 2014 | Assistant Vice President of VEAC; Manager, Portfolio Administration of VEAC and VEARA. Officer of other investment companies advised by VEAC and VEARA. | |||
Adam Phillips,
1970 |
Vice President | Since 2018 | ETF Chief Operating Officer of VEAC. | |||
Philipp Schlegel,
1974 |
Vice President | Since 2016 | Managing Director of Van Eck Switzerland AG. | |||
Jonathan R. Simon,
1974 |
Senior Vice President, Secretary and Chief Legal Officer | Senior Vice President (Since 2016); Secretary and Chief Legal Officer (Since 2014) | Senior Vice President, General Counsel and Secretary of VEAC, VEARA and VESC; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. Formerly, Vice President of VEAC, VEARA and VESC. |
1 | The address for each Officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Officers are elected yearly by the Trustees. |
51 |
|
VANECK VECTORS ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
September 30, 2019 (unaudited)
At a meeting held on June 13, 2019 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck Vectors® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the VanEck Vectors Asia ex Japan Equal Weight ETF, Australia Equal Weight ETF, Australia Hedged Equal Weight ETF, Biotech ETF, Brazil Equal Weight ETF, China Equal Weight ETF, Environmental Services ETF, Europe Equal Weight ETF, Europe Hedged Equal Weight ETF, Gaming ETF, Germany Equal Weight ETF, Global Chemicals ETF, Hong Kong Equal Weight ETF, India Equal Weight ETF, Italy Equal Weight ETF, Japan Equal Weight ETF, Japan Hedged Equal Weight ETF, Mexico Equal Weight ETF, Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, NDR CMG Long/Flat Allocation ETF, Pharmaceutical ETF, Retail ETF, Russia Equal Weight ETF, Semiconductor ETF, South Africa Equal Weight ETF, South Korea Equal Weight ETF, Spain Equal Weight ETF, Taiwan Equal Weight ETF, United Kingdom Equal Weight ETF and Video Gaming and eSports ETF (each, a “Fund” and together, the “Funds”).
The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 10, 2019. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses (for those Funds which had begun operations) of the Funds and the Funds’ peer funds (certain other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance information for the Funds against their peer groups, the Trustees considered that each Fund seeks to track a different index than the funds in its designated peer group and, therefore, each Fund’s performance will differ from its peers. They also considered the fact that each of VanEck Vectors Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF and Video Gaming and eSports ETF had only recently commenced operations and therefore each had a limited operational history that could be used for comparative purposes, since the expense information prepared by Broadridge was based on estimated amounts for each Fund and the performance comparisons provided by Broadridge covered approximately a four month period (October 30, 2018 through February 28, 2019). In addition, as noted below, the Trustees reviewed certain performance information for each Fund which was not provided by Broadridge and which did not compare each Fund’s performance to the performance of its peer group. For these and other reasons, the Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Funds.
The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 10, 2019 meeting regarding the management of the Funds and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, where applicable, the Adviser’s commitment to waive certain fees and/or pay expenses of each of the Funds to the extent necessary to prevent the operating expenses of each of the Funds from exceeding agreed upon limits for a period of time.
The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance of each of the Funds that had commenced operations prior to the date of the Renewal Meeting (the “Operating Funds”), the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Operating Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any systematic fair value adjustments to the underlying securities. Based on the foregoing, the Trustees concluded that the investment performance of the Operating Funds was satisfactory.
52 |
|
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Operating Funds’ expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that each Operating Fund had management fees (after the effect of any applicable fee waiver) below or equal to the average and/or median of its respective peer group of funds, except for each of VanEck Vectors Morningstar International Moat ETF and Morningstar Wide Moat ETF, which had management fees (after the effect of any applicable fee waiver) greater than the average and median of its respective peer group of funds. The Trustees also noted that the information provided showed that each Operating Fund had a total expense ratio (after the effect of any applicable expense limitation) below the average and median of its respective peer group of funds, except for each of VanEck Vectors Gaming ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, NDR CMG Long/Flat Allocation ETF and Video Gaming and eSports ETF, which had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its respective peer group of funds. With respect to these Operating Funds, the Trustees reviewed the amount by which these Operating Funds’ management fees and/or total expense ratios (after the effect of any applicable expense limitation) exceeded the average and/or median of their respective peer groups and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Operating Funds were reasonable in light of the performance of the Operating Funds and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreements, received by the Adviser from serving as adviser to the Funds.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Operating Fund. The Trustees reviewed each Operating Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees considered the volatility of the asset classes in which certain of the Operating Funds invest, potential variability in the net assets of these Funds and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Operating Funds effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on each Operating Fund since its inception, although the cap was not necessarily exceeded each year. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Operating Fund is reasonable and appropriate in relation to the current asset size of each Operating Fund and the other factors discussed above and that the advisory fee rate for each Operating Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist. The Trustees also determined that the profits earned by the Adviser with respect to the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.
The Trustees did not consider historical information about the cost of the services provided by the Adviser or the profitability to the Adviser of VanEck Vectors Asia ex Japan Equal Weight ETF, Australia Equal Weight ETF, Australia Hedged Equal Weight ETF, Brazil Equal Weight ETF, China Equal Weight ETF, Europe Equal Weight ETF, Europe Hedged Equal Weight ETF, Germany Equal Weight ETF, Global Chemicals ETF, Hong Kong Equal Weight ETF, India Equal Weight ETF, Italy Equal Weight ETF, Japan Equal Weight ETF, Japan Hedged Equal Weight ETF, Mexico Equal Weight ETF, Russia Equal Weight ETF, South Africa Equal Weight ETF, South Korea Equal Weight ETF, Spain Equal Weight ETF, Taiwan Equal Weight ETF and United Kingdom Equal Weight ETF because the Funds had not yet commenced operations at the time of the Renewal Meeting. The Trustees also could not consider the historical performance or actual management fees or operating expenses of, or the quality of services previously provided to, each of these Funds, although they concluded that the nature, quality and extent of the services to be provided by the Adviser were appropriate based on the Trustees’ knowledge of the Adviser and its personnel and the operations of the other series of the Trust.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 10, 2019 meeting as part of their consideration of the Investment Management Agreements.
53 |
|
VANECK VECTORS ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
September 30, 2019 (unaudited) (continued)
In voting to approve the continuation of the Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that each Investment Management Agreement is in the best interest of each Fund and such Fund’s shareholders.
54 |
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the respective Fund’s prospectus and summary prospectus, which includes more complete information. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
Additional information about the VanEck Vectors ETF Trust’s (the “Trust”) Board of Trustees/Officers and a description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities are provided in the Statement of Additional Information. The Statement of Additional Information and information regarding how the Trust voted proxies relating to portfolio securities during the most recent twelve month period ending June 30 is available, without charge, by calling 800.826.2333, or by visiting vaneck.com, or on the Securities and Exchange Commission’s website at https://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-PORT. The Trust’s Form N-PORT filings are available on the Commission’s website at https://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Fund’s complete schedule of portfolio holdings is also available by calling 800.826.2333 or by visiting vaneck.com.
Investment Adviser: | Van Eck Associates Corporation | |
Distributor: | Van Eck Securities Corporation | |
666 Third Avenue, New York, NY 10017 | ||
vaneck.com | ||
Account Assistance: | 800.826.2333 | INDUAR |
|
ANNUAL REPORT September 30, 2019 |
VANECK VECTORS® | |
Morningstar Durable Dividend ETF | DURA® |
Morningstar Global Wide Moat ETF | GOATTM |
Morningstar International Moat ETF | MOTI® |
Morningstar Wide Moat ETF | MOAT® |
NDR CMG Long/Flat Allocation ETF | LFEQ® |
Real Asset Allocation ETF | RAAX® |
800.826.2333 | vaneck.com |
|
Certain information contained in this report represents the opinion of the investment adviser which may change at any time. This information is not intended to be a forecast of future events, a guarantee of future results or investment advice. Current market conditions may not continue. The information contained herein regarding each index has been provided by the relevant index provider. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of September 30, 2019.
|
VANECK VECTORS ETFs
September 30, 2019 (unaudited)
Dear Shareholders:
The story for 2019 is simple and familiar. Slower economic growth has been combated by expansive monetary policy. The strategies in this report are designed to help you meet your investment needs in a variety of economic environments.
A comment on global growth: the two engines of the global economy, the U.S. and China, continue to move forward, albeit at a slower pace. The latest economic statistics from China are no cause for panic. China’s services sector is expanding robustly and manufacturing is struggling but not collapsing. My blog China’s Economic Growth: Continuing Despite Headlines, explains this in greater detail.
The biggest event in the markets this summer was the surge in bonds with negative interest rates in Europe. At the end of September, nearly $15 trillion worth of debt globally carried a negative yield.1 Despite moves by the European Central Bank to stimulate, not only is the European economy slowing down, but there are also concerns about just how effective central bank actions are. Looking forward, therefore, I think investors should assess their hedge against central bank uncertainty, including by considering their gold allocations. While high interest rate environments tend to be tough for gold (it does not pay any yield), against negative interest rates, gold and other hedges against central bank impotence should be strongly considered.
We encourage you to stay in touch with us through the videos, email subscriptions and research blogs available on our website, www.vaneck.com. I have started my own email subscription where I share interesting research—you can sign up on vaneck.com. Should you have any questions regarding fund performance, please contact us at 800.826.2333 or visit our website.
We sincerely thank you for investing in VanEck’s investment strategies. On the following pages, you will find performance discussions and financial statements for each of the funds for the fiscal year ended September 30, 2019. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
Jan F. van Eck
Trustee and President
VanEck Vectors ETF Trust
October 16, 2019
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Funds carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
1 | Financial Times: September was the busiest month ever for corporate debt issuance, September 30, 2019, https://www.ft.com/content/eef8234c-e3c0-11e9-b112-9624ec9edc59 |
1 |
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VANECK VECTORS ETFs
September 30, 2019 (unaudited)
Morningstar Durable Dividend
VanEck Vectors Morningstar Durable Dividend ETF (NYSE Arca: DURA®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® US Dividend Valuation IndexSM (MSUSDVTU). The index is intended to track the overall performance of high dividend yielding U.S. companies with strong financial health and attractive valuations according to Morningstar.
Commencing on October 30, 2018, VanEck Vectors Morningstar Durable Dividend ETF traded for approximately eleven months and returned +13.41%* over the period. The information technology, consumer staples and utilities sectors were the top contributors to positive performance and no single sector contributed negatively to performance for the period. That is not to say that there were no companies that detracted from performance. For example, within the materials sector, strong contributions from a few companies offset negative returns from the majority of the other companies in the sector.
Morningstar Global Wide Moat
The newest addition to our Morningstar Moat Index investment lineup, VanEck Vectors Morningstar Global Wide Moat ETF (NYSE Arca: GOATTM) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Global Wide Moat Focus IndexSM (MSGWMFNU). The index is intended to track the overall performance of global companies with sustainable competitive advantages, i.e., “moats,” and attractive valuations according to Morningstar’s equity research team. The index contains at least 50 stocks that are reviewed each quarter.
VanEck Vectors Morningstar Global Wide Moat ETF has traded since October 30, 2018 and has returned +15.01%.* All sectors contributed positively to performance, led by the information technology, consumer discretionary, and industrials sectors. Mixed results from the largest sector weighting during the period, health care, limited its contribution to positive return. While companies in the United States contributed the most to performance, those in Japan, Brazil and Belgium detracted the most.
Morningstar International Moat
Launched over four years ago as a means to capture moat-based opportunities abroad, VanEck Vectors Morningstar International Moat ETF (NYSE Arca: MOTI®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN). The index is intended to track the overall performance of wide and narrow moat rated companies in developed and emerging markets outside the U.S. with sustainable competitive advantages at attractive prices according to Morningstar’s equity research team. The index contains at least 50 stocks that are reviewed each quarter.
For the 12 month period under review, the Fund returned -4.25%.* Of several sectors contributing positively to performance, the consumer discretionary sector contributed the most, but together their performance was not sufficient to offset those sectors detracting from performance, in particular financials—the worst performing sector. While companies in Luxembourg contributed the most to performance, those in Japan detracted the most.
Morningstar Wide Moat
VanEck Vectors Morningstar Wide Moat ETF (NYSE Arca: MOAT®), now with a seven year track record, seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar® Wide Moat Focus IndexSM (MWMFTR). The index targets U.S. companies with sustainable competitive advantages, i.e., “moats,” and attractive valuations in the view of Morningstar’s team of more than 100 equity analysts.1
According to the forward-looking process of Morningstar’s Equity Research group, companies with moats have the potential to create above-average returns for longer periods of time. The index’s approach to investing in U.S. companies with wide economic moats when they are attractively priced has resulted in long-term outperformance versus the broad U.S. equity market.
The Fund returned +9.21%* for the 12 month period under review. The primary driver of performance was the Fund’s exposure to the information technology sector. In addition, stocks in the consumer staples contributed to solid positive returns. The healthcare sector was by far the largest detractor from the Fund’s performance.
2 |
|
NDR CMG Long/Flat Allocation
VanEck Vectors® NDR CMG Long/Flat Allocation ETF (NYSE Arca: LFEQ®) returned +0.29%* in the 12 month period ended September 30, 2019. The Fund takes a guided allocation approach designed to help investors manage risk in the U.S. equity market. The Fund seeks to track the Ned Davis Research CMG US Large Cap Long/Flat Index (ticker: NDRCMGLF) from Ned Davis Research (NDR), a world-renowned provider of institutional quality research. It is a rules based index that follows a proprietary model, called Market Pulse, developed by NDR and CMG Capital Management Group, Inc. (CMG).
Market Pulse measures the overall health of the market through an evaluation of market breadth. In this case, market breadth refers to advancing and declining price trends and countertrends at the GICS®2 industry group level. The model computes a robust moving average score daily to capture multi-industry and multi-term trend and countertrend measures to gauge overall market health. It then calculates the score’s directional trend to see if it is improving or declining. Collectively, the score and its directional trend determine the equity allocation of either 100%, 80%, 40%, or 0%. At 0%, the allocation would be entirely to cash.3
The Fund’s allocation to equities changed three times during the 12 month period. In light of deteriorating market health, the Fund’s exposure to equites was first reduced from 100% to 80% on December 4, 2018.4 However, on January 15, 2019, reacting quickly to market health decreasing further, the Fund’s allocation to equities was further reduced from 80% to 40%.5 Finally, on March 25, 2019 after the fourth quarter 2018 downturn, the market’s regained confidence triggered a trade signal to increase the Fund’s equity allocation back to 100%.
Real Asset Allocation
In its pursuit of long-term total return, VanEck Vectors Real Asset Allocation ETF (NYSE Arca: RAAX®) seeks to maximize real returns, while seeking to reduce downside risk during sustained market declines. The Fund seeks to achieve this by allocating primarily to exchange-traded products that provide exposure to real assets, which include commodities, real estate, natural resources, master limited partnerships (MLPs) and infrastructure. The Fund seeks to reduce downside risk by using a rules-based approach to determine when to allocate a portion or all of its assets to cash and cash equivalents.
Over the 12 month period, the Fund returned +0.02%.* Among the sectors that contributed most positively to the Fund’s total return were gold bullion, U.S. Real Estate Investment Trusts (REITs) and global infrastructure equities. Among the sectors that detracted most from performance were oil services equities, unconventional oil and gas equities and steel equities.
3 |
|
VANECK VECTORS ETFs
MANAGEMENT DISCUSSION
September 30, 2019 (unaudited) (continued)
* | Returns based on NAV. The performance data quoted represent past performance. Past performance is not a guarantee of future results. Performance information for the Funds reflects temporary waivers of expenses and/or fees. Had the Funds incurred all expenses, investment returns would have been reduced. Investment return and value of the shares of the Funds will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. |
1 | Equity analysts referred to are part of Morningstar’s Equity Research group which consists of various wholly-owned subsidiaries of Morningstar, Inc., including but not limited to, Morningstar Research Services LLC. |
2 | Global Industry Classification Standard (GICS®) is a widely accepted equity securities classification system developed by Morgan Stanley Capital International (MSCI) and Standard & Poor’s. |
3 | Allocations to equities (long) represented by the S&P 500 Index. The S&P 500® Index consists of 500 widely held U.S. common stocks covering the industrial, utility, financial, and transportation sectors. Allocations to cash (flat) represented by the Solactive 13-week U.S. T-bill Index. The Solactive 13-week U.S. T-bill Index is a rules-based index mirroring the performance of the current U.S. 13-week T-bill. |
4 | VanEck: Market Pulse SignalTM: Reducing Equity Exposure as Turbulence Roils Markets, December 4, 2018, https://www.vaneck.com/blogs/allocation/market-pulse-signal-reducing-equity-exposure-turbulence-roils-markets |
5 | VanEck: Market Pulse SignalTM: On Call as Uncertainty Reigned in the Market, January 15, 2019, https://www.vaneck.com/blogs/allocation/market-pulse-signal-on-call-as-uncertainty-reigned-in-the-market |
6 | VanEck: Market Pulse SignalTM: Trend Turns Positive as Concerns Persist, March 25, 2019, https://www.vaneck.com/blogs/allocation/trend-turns-positive-as-concerns-persist |
4 |
|
VANECK VECTORS MORNINGSTAR DURABLE DIVIDEND ETF
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MSUSDVTU1 | Share Price | NAV | MSUSDVTU1 | ||||||||||||||||||||
Life* | 13.46 | % | 13.41 | % | 13.73 | % | 13.46 | % | 13.41 | % | 13.73 | % |
* | Commencement of Fund: 10/30/18; First Day of Secondary Market Trading: 10/31/2018. |
1 | The Morningstar® US Dividend Valuation IndexSM (MSUSDVTU) is a rules-based index intended to offer exposure to companies that the Index Provider determines have a high dividend yield, strong financial health and an attractive uncertainty-adjusted valuation. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 11 for more information.
5 |
|
VANECK VECTORS MORNINGSTAR GLOBAL WIDE MOAT ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MSGWMFNU1 | Share Price | NAV | MSGWMFNU1 | ||||||||||||||||||||
Life* | 15.26 | % | 15.01 | % | 15.35 | % | 15.26 | % | 15.01 | % | 15.35 | % |
* | Commencement of Fund: 10/30/18; First Day of Secondary Market Trading: 10/31/2018. |
1 | The Morningstar® Global Wide Moat Focus IndexSM (MSGWMFNU) is a rules-based index intended to offer exposure to companies that the Index Provider determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 11 for more information.
6 |
|
VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MGEUMFUN1 | Share Price | NAV | MGEUMFUN1 | ||||||||||||||||||||
One Year | (4.08 | )% | (4.25 | )% | (3.91 | )% | (4.08 | )% | (4.25 | )% | (3.91 | )% | |||||||||||||
Life* | 3.04 | % | 3.11 | % | 3.83 | % | 13.47 | % | 13.78 | % | 17.15 | % |
* | Commencement of Fund: 7/13/15; First Day of Secondary Market Trading: 7/14/15. |
1 | Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN) is a rules-based index intended to offer exposure to companies that Morningstar, Inc. determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide and narrow moat companies”). |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 11 for more information.
7 |
|
VANECK VECTORS MORNINGSTAR WIDE MOAT ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | MWMFTR1 | Share Price | NAV | MWMFTR1 | ||||||||||||||||||||
One Year | 9.21 | % | 9.21 | % | 9.77 | % | 9.21 | % | 9.21 | % | 9.77 | % | |||||||||||||
Five Year | 11.52 | % | 11.54 | % | 12.15 | % | 72.53 | % | 72.68 | % | 77.41 | % | |||||||||||||
Life* | 14.40 | % | 14.39 | % | 14.97 | % | 171.87 | % | 171.76 | % | 182.11 | % |
* | Commencement of Fund: 4/24/12; First Day of Secondary Market Trading: 4/25/12. |
1 | Morningstar® Wide Moat Focus IndexSM (MWMFTR) is a rules-based index intended to offer exposure to companies that Morningstar, Inc. determines have sustainable competitive advantages based on a proprietary methodology that considers quantitative and qualitative factors (“wide moat companies”). |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 11 for more information.
8 |
|
VANECK VECTORS NDR CMG LONG/FLAT ALLOCATION ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | NDRCMGLF1 | Share Price | NAV | NDRCMGLF1 | ||||||||||||||||||||
One Year | 0.39 | % | 0.29 | % | 0.69 | % | 0.39 | % | 0.29 | % | 0.69 | % | |||||||||||||
Life* | 6.63 | % | 6.61 | % | 7.18 | % | 13.61 | % | 13.57 | % | 14.79 | % |
* | Commencement of Fund: 10/04/17; First Day of Secondary Market Trading: 10/05/17. |
1 | The Ned Davis Research CMG US Large Cap Long/Flat Index (the “NDR CMG Index”) (NDRCMGLF) is a rules-based index that follows a proprietary model developed by Ned Davis Research, Inc. in conjunction with CMG Capital Management Group, Inc. To help limit potential loss associated with adverse market conditions, the model produces trade signals to dictate the NDR CMG Index’s equity allocation ranging from 100% fully invested (i.e., “long”) to 100% in cash (i.e., “flat”). When the NDR CMG Index is long, or 100% fully invested, it will be allocated to the S&P 500 Index. When the NDR CMG Index is flat, or 100% cash, it will be allocated to the Solactive 13-week U.S. T-bill Index. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 11 for more information.
9 |
|
VANECK VECTORS REAL ASSET ALLOCATION ETF
PERFORMANCE COMPARISON
September 30, 2019 (unaudited)
Average Annual Total Returns | Cumulative Total Returns | ||||||||||||||||||||||||
Share Price | NAV | RABLND1 | Share Price | NAV | RABLND1 | ||||||||||||||||||||
One Year | 0.01 | % | 0.02 | % | (0.82 | )% | 0.01 | % | 0.02 | % | (0.82 | )% | |||||||||||||
Life* | 0.65 | % | 0.58 | % | 1.01 | % | 0.96 | % | 0.86 | % | 1.49 | % |
* | Commencement of Fund: 4/9/2018; First Day of Secondary Market Trading: 4/10/2018. |
1 | The Blended Real Asset Index (RABLND) is calculated by Van Eck Absolute Return Advisers Corporation and comprises an equally weighted blend of the returns of Bloomberg Commodity Index, S&P Real Assets Equity Index, and VanEck® Natural Resources Index. Equal weightings are reset monthly. |
Hypothetical Growth of $10,000 (Since Inception) | ||
This chart shows the value of a hypothetical $10,000 investment in the Fund at NAV and at Share Price since inception. The result is compared with the Fund’s benchmark. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
See “About Fund Performance” on page 11 for more information.
10 |
|
VANECK VECTORS ETF TRUST
ABOUT FUND PERFORMANCE
(unaudited)
The price used to calculate market return (Share Price) is determined by using the closing price listed on its primary listing exchange. Since the shares of each Fund did not trade in the secondary market until after each Fund’s commencement, for the period from commencement to the first day of secondary market trading in shares of each Fund, the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns.
The performance data quoted represents past performance. Past performance is not a guarantee of future results. Performance information for each Fund reflects temporary waivers of expenses and/or fees. Had each Fund incurred all expenses, investment returns would have been reduced. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and distributions or the sale of Fund shares.
Investment return and value of the shares of each Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Fund returns reflect reinvestment of dividends and capital gains distributions. Performance current to the most recent month-end is available by calling 800.826.2333 or by visiting vaneck.com.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Shares may trade at a premium or discount to their NAV in the secondary market.
The net asset value (NAV) of each VanEck Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of each fund; it is calculated by taking the total assets of each fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAVs are not necessarily the same as each ETF’s intraday trading value. VanEck Vectors ETF investors should not expect to buy or sell fund shares at NAV.
Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Index returns assume that dividends have been reinvested.
The Morningstar® Global ex-US Moat Focus IndexSM, Morningstar® Global Wide Moat Focus IndexSM, Morningstar® US Dividend Valuation IndexSM and Morningstar® Wide Moat Focus IndexSM are published by Morningstar. The Morningstar name and logo are registered trademarks of Morningstar. Morningstar Global ex-US Moat Focus IndexSM, Morningstar Global Wide Moat Focus IndexSM, Morningstar® US Dividend Valuation IndexSM and Morningstar Wide Moat Focus IndexSM are service marks of Morningstar. The Ned Davis Research CMG US Large Cap Long/Flat Index is published by Ned Davis Research, Inc. (“NDR”). The Blended Real Asset Index is calculated by Van Eck Absolute Return Advisers Corporation.
Morningstar and NDR are referred to herein as the “Index Providers”. The Index Providers do not sponsor, endorse, or promote the Funds and bear no liability with respect to the Funds or any security.
Premium/discount information regarding how often the closing trading price of the Shares of each Fund were above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund for each of the four previous calendar quarters and the immediately preceding five years (if applicable) can be found at www.vaneck.com.
11 |
|
VANECK VECTORS ETF TRUST
(unaudited)
Hypothetical $1,000 investment at beginning of period
As a shareholder of a Fund, you incur operating expenses, including management fees and other Fund expenses. This disclosure is intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The disclosure is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2019 to September 30, 2019.
Actual Expenses
The first line in the table below provides information about account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning
Account Value April 1, 2019 |
Ending
Account Value September 30, 2019 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period* April 1, 2019 — September 30, 2019 |
||||||||||||||||||
Morningstar Durable Dividend ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,051.10 | 0.29 | % | $ | 1.49 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,023.61 | 0.29 | % | $ | 1.47 | |||||||||||||
Morningstar Global Wide Moat ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,064.10 | 0.58 | % | $ | 3.00 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.16 | 0.58 | % | $ | 2.94 | |||||||||||||
Morningstar International Moat ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 981.50 | 0.57 | % | $ | 2.83 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.21 | 0.57 | % | $ | 2.89 | |||||||||||||
Morningstar Wide Moat ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,075.30 | 0.49 | % | $ | 2.55 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.61 | 0.49 | % | $ | 2.48 | |||||||||||||
NDR CMG Long/Flat Allocation ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,057.80 | 0.57 | % | $ | 2.94 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.21 | 0.57 | % | $ | 2.89 | |||||||||||||
Real Asset Allocation ETF | |||||||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,001.30 | 0.55 | % | $ | 2.76 | |||||||||||||
Hypothetical** | $ | 1,000.00 | $ | 1,022.31 | 0.55 | % | $ | 2.79 |
* | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended September 30, 2019) multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year divided by the number of days in the fiscal year (to reflect the one-half year period). |
** | Assumes annual return of 5% before expenses |
12 |
|
VANECK VECTORS MORNINGSTAR DURABLE DIVIDEND ETF
September 30, 2019
See Notes to Financial Statements
13 |
|
VANECK VECTORS MORNINGSTAR DURABLE DIVIDEND ETF
SCHEDULE OF INVESTMENTS
(continued)
Number
of Shares |
Value | |||||||
MONEY MARKET FUND: 0.6%
(Cost: $110,757) |
||||||||
110,757 | Dreyfus Government Cash Management Fund — Institutional Shares | $ | 110,757 | |||||
Total Investments: 100.1%
(Cost: $18,301,669) |
18,371,739 | |||||||
Liabilities in excess of other assets: (0.1)% | (16,679 | ) | ||||||
NET ASSETS: 100.0% | $ | 18,355,060 |
Summary of Investments by Sector | % of Investments | Value | ||||||
Communication Services | 9.8 | % | $ | 1,798,306 | ||||
Consumer Discretionary | 3.5 | 636,370 | ||||||
Consumer Staples | 6.5 | 1,196,195 | ||||||
Energy | 14.7 | 2,703,314 | ||||||
Financials | 11.0 | 2,008,475 | ||||||
Health Care | 23.2 | 4,265,281 | ||||||
Industrials | 12.9 | 2,374,284 | ||||||
Information Technology | 9.5 | 1,749,428 | ||||||
Materials | 1.1 | 202,147 | ||||||
Utilities | 7.2 | 1,327,182 | ||||||
Money Market Fund | 0.6 | 110,757 | ||||||
100.0 | % | $ | 18,371,739 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks* | $ | 18,260,982 | $ | — | $ | — | $ | 18,260,982 | |||||||||
Money Market Fund | 110,757 | — | — | 110,757 | |||||||||||||
Total | $ | 18,371,739 | $ | — | $ | — | $ | 18,371,739 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
14 |
|
VANECK VECTORS MORNINGSTAR GLOBAL WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Number
of Shares |
Value | |||||||
United States: 58.1% | ||||||||
98 | Alphabet, Inc. * | $ | 119,672 | |||||
1,182 | Altria Group, Inc. | 48,344 | ||||||
30 | Amazon.com, Inc. * | 52,077 | ||||||
493 | American Express Co. | 58,312 | ||||||
605 | Amgen, Inc. | 117,074 | ||||||
2,032 | Bank of America Corp. | 59,273 | ||||||
550 | Berkshire Hathaway, Inc. * | 114,411 | ||||||
134 | BlackRock, Inc. | 59,716 | ||||||
1,146 | Bristol-Myers Squibb Co. | 58,114 | ||||||
851 | Cerner Corp. | 58,013 | ||||||
1,747 | Cheniere Energy, Inc. * | 110,166 | ||||||
719 | Dominion Energy, Inc. | 58,268 | ||||||
869 | Emerson Electric Co. | 58,101 | ||||||
424 | Equifax, Inc. | 59,644 | ||||||
605 | Facebook, Inc. * | 107,738 | ||||||
815 | Gilead Sciences, Inc. | 51,655 | ||||||
1,088 | Guidewire Software, Inc. * | 114,653 | ||||||
1,101 | Intel Corp. | 56,735 | ||||||
482 | Kansas City Southern | 64,111 | ||||||
911 | Kellogg Co. | 58,623 | ||||||
497 | KLA-Tencor Corp. | 79,247 | ||||||
557 | McDonald’s Corp. | 119,593 | ||||||
701 | Merck and Co., Inc. | 59,010 | ||||||
609 | Microchip Technology, Inc. | 56,582 | ||||||
846 | Microsoft Corp. | 117,619 | ||||||
1,066 | Mondelez International, Inc. | 58,971 | ||||||
1,340 | NIKE, Inc. | 125,853 | ||||||
426 | PepsiCo, Inc. | 58,405 | ||||||
1,312 | Pfizer, Inc. | 47,140 | ||||||
1,493 | Philip Morris International, Inc. | 113,364 | ||||||
301 | Raytheon Co. | 59,053 | ||||||
732 | Salesforce.com, Inc. * | 108,658 | ||||||
229 | ServiceNow, Inc. * | 58,132 | ||||||
639 | Starbucks Corp. | 56,500 | ||||||
484 | T. Rowe Price Group, Inc. | 55,297 | ||||||
5,241 | The Western Union Co. | 121,434 | ||||||
254 | Tyler Technologies, Inc. * | 66,675 | ||||||
866 | United Technologies Corp. | 118,226 | ||||||
226 | UnitedHealth Group, Inc. | 49,114 | ||||||
406 | Veeva Systems, Inc. * | 61,992 | ||||||
836 | Walt Disney Co. | 108,948 | ||||||
511 | Yum! Brands, Inc. | 57,963 | ||||||
893 | Zimmer Biomet Holdings, Inc. | 122,582 | ||||||
3,365,058 | ||||||||
Total Common Stocks
(Cost: $5,347,174) |
5,789,218 | |||||||
MONEY MARKET FUND: 0.3%
(Cost: $17,724) |
||||||||
17,724 | Dreyfus Government Cash Management Fund — Institutional Shares | 17,724 | ||||||
Total Investments: 100.2%
(Cost: $5,364,898) |
5,806,942 | |||||||
Liabilities in excess of other assets: (0.2)% | (13,751 | ) | ||||||
NET ASSETS: 100.0% | $ | 5,793,191 |
See Notes to Financial Statements
15 |
|
VANECK VECTORS MORNINGSTAR GLOBAL WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
(continued)
Definitions:
ADR | American Depositary Receipt |
EUR | Euro |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $1,512,711 which represents 26.1% of net assets. |
Summary of Investments by Sector | % of Investments | Value | ||||||
Communication Services | 6.7 | % | $ | 390,723 | ||||
Consumer Discretionary | 13.0 | 757,217 | ||||||
Consumer Staples | 15.5 | 902,410 | ||||||
Energy | 3.9 | 225,714 | ||||||
Financials | 12.0 | 694,099 | ||||||
Health Care | 21.2 | 1,227,874 | ||||||
Industrials | 13.0 | 753,178 | ||||||
Information Technology | 13.4 | 779,735 | ||||||
Utilities | 1.0 | 58,268 | ||||||
Money Market Fund | 0.3 | 17,724 | ||||||
100.0 | % | $ | 5,806,942 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks | |||||||||||||||||
Australia | $ | — | $ | 229,335 | $ | — | $ | 229,335 | |||||||||
Belgium | — | 119,383 | — | 119,383 | |||||||||||||
Brazil | 53,608 | — | — | 53,608 | |||||||||||||
Canada | 344,910 | — | — | 344,910 | |||||||||||||
China / Hong Kong | 168,261 | 54,365 | — | 222,626 | |||||||||||||
Denmark | — | 116,709 | — | 116,709 | |||||||||||||
France | — | 304,855 | — | 304,855 | |||||||||||||
Ireland | 234,667 | — | — | 234,667 | |||||||||||||
Japan | — | 163,924 | — | 163,924 | |||||||||||||
Mexico | 110,003 | — | — | 110,003 | |||||||||||||
Switzerland | — | 173,751 | — | 173,751 | |||||||||||||
United Kingdom | — | 350,389 | — | 350,389 | |||||||||||||
United States | 3,365,058 | — | — | 3,365,058 | |||||||||||||
Money Market Fund | 17,724 | — | — | 17,724 | |||||||||||||
Total | $ | 4,294,231 | $ | 1,512,711 | $ | — | $ | 5,806,942 |
See Notes to Financial Statements
16 |
|
VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Number
of Shares |
Value | |||||||
Japan: (continued) | ||||||||
48,300 | Takeda Pharmaceutical Co. Ltd. # | $ | 1,658,214 | |||||
28,900 | Yakult Honsha Co. Ltd. # | 1,623,137 | ||||||
14,627,078 | ||||||||
Luxembourg: 1.9% | ||||||||
31,568 | Millicom International Cellular SA (SEK) # | 1,533,752 | ||||||
Mexico: 1.1% | ||||||||
1,184,100 | America Movil SAB de CV | 878,000 | ||||||
Netherlands: 3.1% | ||||||||
19,572 | Koninklijke Philips NV # | 904,611 | ||||||
55,777 | Royal Dutch Shell Plc # | 1,639,484 | ||||||
2,544,095 | ||||||||
Singapore: 4.0% | ||||||||
646,000 | CapitaLand Ltd. # | 1,650,393 | ||||||
1,297,200 | Genting Singapore Ltd. # | 825,484 | ||||||
105,300 | Oversea-Chinese Banking Corp. Ltd. # | 827,356 | ||||||
3,303,233 | ||||||||
Spain: 4.1% | ||||||||
57,655 | Grifols SA # | 1,699,950 | ||||||
218,608 | Telefonica SA # | 1,670,798 | ||||||
3,370,748 | ||||||||
Switzerland: 6.2% | ||||||||
83,929 | ABB Ltd. # | 1,652,027 | ||||||
17,255 | LafargeHolcim Ltd. # | 850,468 | ||||||
6,113 | Roche Holding AG # | 1,781,496 | ||||||
72,383 | UBS Group AG # | 822,610 | ||||||
5,106,601 | ||||||||
Taiwan: 2.4% | ||||||||
14,000 | Largan Precision Co. Ltd. # | 2,002,574 | ||||||
United Kingdom: 11.0% | ||||||||
133,038 | BP Plc # | 844,116 | ||||||
319,277 | BT Group Plc # | 701,873 | ||||||
42,386 | GlaxoSmithKline Plc # | 910,559 | ||||||
210,293 | HSBC Holdings Plc # | 1,614,923 | ||||||
2,447,679 | Lloyds Banking Group Plc # | 1,626,245 | ||||||
128,204 | Meggitt Plc # | 1,002,357 | ||||||
73,083 | Rolls-Royce Holdings Plc # | 711,725 | ||||||
42,896 | Smiths Group Plc # | 829,565 | ||||||
435,965 | Vodafone Group Plc # | 870,518 | ||||||
9,111,881 | ||||||||
Total Common Stocks
(Cost: $86,705,433) |
82,633,277 | |||||||
MONEY MARKET FUND: 0.1%
(Cost: $90,614) |
||||||||
90,614 | Dreyfus Government Cash Management Fund — Institutional Shares | 90,614 | ||||||
Total Investments: 100.2%
(Cost: $86,796,047) |
82,723,891 | |||||||
Liabilities in excess of other assets: (0.2)% | (173,669 | ) | ||||||
NET ASSETS: 100.0% | $ | 82,550,222 |
See Notes to Financial Statements
17 |
|
VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESTMENTS
(continued)
Definitions:
ADR | American Depositary Receipt |
SEK | Swedish Krona |
USD | United States Dollar |
Footnotes:
* | Non-income producing |
# | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $71,999,267 which represents 87.2% of net assets. |
Summary of Investments by Sector | % of Investments | Value | ||||||
Communication Services | 21.0 | % | $ | 17,398,212 | ||||
Consumer Discretionary | 7.8 | 6,430,838 | ||||||
Consumer Staples | 9.2 | 7,614,922 | ||||||
Energy | 8.8 | 7,306,492 | ||||||
Financials | 17.7 | 14,647,364 | ||||||
Health Care | 10.3 | 8,509,654 | ||||||
Industrials | 8.0 | 6,654,568 | ||||||
Information Technology | 4.6 | 3,760,456 | ||||||
Materials | 3.0 | 2,454,557 | ||||||
Real Estate | 6.6 | 5,449,376 | ||||||
Utilities | 2.9 | 2,406,838 | ||||||
Money Market Fund | 0.1 | 90,614 | ||||||
100.0 | % | $ | 82,723,891 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks | |||||||||||||||||
Australia | $ | — | $ | 2,438,043 | $ | — | $ | 2,438,043 | |||||||||
Belgium | — | 2,606,517 | — | 2,606,517 | |||||||||||||
Canada | 6,612,810 | — | — | 6,612,810 | |||||||||||||
China / Hong Kong | 3,143,200 | 19,564,555 | — | 22,707,755 | |||||||||||||
France | — | 3,384,588 | — | 3,384,588 | |||||||||||||
Germany | — | 1,532,997 | — | 1,532,997 | |||||||||||||
Italy | — | 872,605 | — | 872,605 | |||||||||||||
Japan | — | 14,627,078 | — | 14,627,078 | |||||||||||||
Luxembourg | — | 1,533,752 | — | 1,533,752 | |||||||||||||
Mexico | 878,000 | — | — | 878,000 | |||||||||||||
Netherlands | — | 2,544,095 | — | 2,544,095 | |||||||||||||
Singapore | — | 3,303,233 | — | 3,303,233 | |||||||||||||
Spain | — | 3,370,748 | — | 3,370,748 | |||||||||||||
Switzerland | — | 5,106,601 | — | 5,106,601 | |||||||||||||
Taiwan | — | 2,002,574 | — | 2,002,574 | |||||||||||||
United Kingdom | — | 9,111,881 | — | 9,111,881 | |||||||||||||
Money Market Fund | 90,614 | — | — | 90,614 | |||||||||||||
Total | $ | 10,724,624 | $ | 71,999,267 | $ | — | $ | 82,723,891 |
See Notes to Financial Statements
18 |
|
VANECK VECTORS MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
See Notes to Financial Statements
19 |
|
VANECK VECTORS MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
(continued)
Footnotes:
* | Non-income producing |
† | Security fully or partially on loan. Total market value of securities on loan is $1,675,091. |
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
Communication Services | 6.1 | % | $ | 151,315,552 | ||||
Consumer Discretionary | 11.1 | 276,853,048 | ||||||
Consumer Staples | 8.9 | 221,341,495 | ||||||
Energy | 4.6 | 115,201,298 | ||||||
Financials | 12.6 | 312,335,106 | ||||||
Health Care | 22.3 | 555,108,415 | ||||||
Industrials | 11.2 | 278,183,549 | ||||||
Information Technology | 18.2 | 451,736,741 | ||||||
Materials | 2.4 | 60,388,714 | ||||||
Utilities | 2.6 | 63,320,766 | ||||||
100.0 | % | $ | 2,485,784,684 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Common Stocks* | $ | 2,485,784,684 | $ | — | $ | — | $ | 2,485,784,684 | |||||||||
Repurchase Agreements | — | 1,716,834 | — | 1,716,834 | |||||||||||||
Total | $ | 2,485,784,684 | $ | 1,716,834 | $ | — | $ | 2,487,501,518 |
* | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
20 |
|
VANECK VECTORS NDR CMG LONG/FLAT ALLOCATION ETF
SCHEDULE OF INVESTMENTS
September 30, 2019
Footnotes:
(a) | The underlying fund’s shareholder reports and registration documents are available free of charge on the SEC’s website at https://www.sec.gov |
Summary of Investments by Sector | % of Investments | Value | ||||||
Exchange Traded Fund | 100.0 | % | $ | 65,838,079 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Exchange Traded Fund | $ | 65,838,079 | $ | — | $ | — | $ | 65,838,079 |
See Notes to Financial Statements
21 |
|
VANECK VECTORS REAL ASSET ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2019
Principal
Amount |
Value | |||||||
SHORT-TERM INVESTMENTS: 37.4% | ||||||||
United States Treasury Obligations: 37.4%
(Cost: $11,342,995) |
||||||||
$ | 11,376,000 | United States Treasury Bill, | ||||||
1.95% 11/29/19 | $ | 11,342,487 | ||||||
Number
of Shares |
||||||||
MONEY MARKET FUND: 0.3% (a)
(Cost: $90,157) |
||||||||
90,157 | Dreyfus Government Cash Management Fund — Institutional Shares | 90,157 | ||||||
Total Investments: 92.8%
(Cost: $27,354,958) |
28,117,761 | |||||||
Other assets less liabilities: 7.2% | 2,186,939 | |||||||
NET ASSETS: 100.0% | $ | 30,304,700 |
Footnotes:
(a) | Each underlying fund’s shareholder reports and registration documents are available free of charge on the SEC’s website at https://www.sec.gov |
‡ | Affiliated issuer – as defined under the Investment Company Act of 1940. |
* | Non-income producing |
A summary of the Fund’s transactions in securities of affiliates for the year ended September 30, 2019 is set forth below:
Affiliates |
Value
09/30/18 |
Purchases |
Sales
Proceeds |
Realized
Gain (Loss) |
Dividend
Income |
Net Change
in Unrealized Appreciation (Depreciation) |
Value
09/30/19 |
|||||||||||||||||||||||
VanEck Vectors Agribusiness ETF | $ | 761,332 | $ | 2,808,102 | $ | (2,813,753 | ) | $ | (91,833 | ) | $ | — | $ | (34,029 | ) | $ | 629,819 | |||||||||||||
VanEck Vectors Coal ETF | — | 2,744,803 | (2,093,043 | ) | (150,176 | ) | — | (63,566 | ) | 438,018 | ||||||||||||||||||||
VanEck Vectors Gold Miners ETF | — | 7,113,431 | (6,580,836 | ) | 94,362 | — | (3,599 | ) | 623,358 | |||||||||||||||||||||
VanEck Vectors Oil Services ETF | 759,353 | 4,302,136 | (3,868,606 | ) | (454,700 | ) | — | (92,850 | ) | 645,333 | ||||||||||||||||||||
VanEck Vectors Steel ETF | — | 2,990,288 | (2,029,653 | ) | (256,362 | ) | — | (46,172 | ) | 658,101 | ||||||||||||||||||||
VanEck Vectors Unconventional Oil & Gas ETF | 760,854 | 3,614,373 | (3,592,639 | ) | (247,602 | ) | — | (75,052 | ) | 459,934 | ||||||||||||||||||||
$ | 2,281,539 | $ | 23,573,133 | $ | (20,978,530 | ) | $ | (1,106,311 | ) | $ | — | $ | (315,268 | ) | $ | 3,454,563 |
See Notes to Financial Statements
22 |
|
Summary of Investments by Sector | % of Investments | Value | ||||||
Agribusiness | 2.2 | % | $ | 629,819 | ||||
Coal | 1.6 | 438,018 | ||||||
Diversified Commodities Futures | 5.5 | 1,543,709 | ||||||
Global Metals and Mining | 2.2 | 603,901 | ||||||
Gold Bullion | 23.9 | 6,713,266 | ||||||
Gold Mining | 2.2 | 623,358 | ||||||
Government | 40.3 | 11,342,487 | ||||||
Master Limited Partnerships | 2.2 | 627,669 | ||||||
Oil Services | 2.3 | 645,333 | ||||||
Steel | 2.3 | 658,101 | ||||||
Unconventional Oil & Gas | 1.6 | 459,934 | ||||||
US Real Estate Investment Trusts | 9.2 | 2,571,835 | ||||||
Utilities | 4.2 | 1,170,174 | ||||||
Money Market Fund | 0.3 | 90,157 | ||||||
100.0 | % | $ | 28,117,761 |
The summary of inputs used to value the Fund’s investments as of September 30, 2019 is as follows:
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
Exchange Traded Funds | $ | 16,685,117 | $ | — | $ | — | $ | 16,685,117 | |||||||||
United States Treasury Obligations | — | 11,342,487 | — | 11,342,487 | |||||||||||||
Money Market Fund | 90,157 | — | — | 90,157 | |||||||||||||
Total | $ | 16,775,274 | $ | 11,342,487 | $ | — | $ | 28,117,761 |
See Notes to Financial Statements
23 |
|
VANECK VECTORS ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2019
Morningstar
Durable Dividend ETF |
Morningstar
Global Wide Moat ETF |
Morningstar
International Moat ETF |
Morningstar
Wide Moat ETF |
|||||||||||||||||
Assets: | ||||||||||||||||||||
Investments, at value (1) | ||||||||||||||||||||
Unaffiliated issuers (2) | $ | 18,371,739 | $ | 5,806,942 | $ | 82,723,891 | $ | 2,485,784,684 | ||||||||||||
Affiliated issuers (3) | — | — | — | — | ||||||||||||||||
Short-term investments held as collateral for securities loaned (4) | — | — | — | 1,716,834 | ||||||||||||||||
Cash | — | 310 | — | — | ||||||||||||||||
Cash denominated in foreign currency, at value (5) | — | 767 | 18,996 | — | ||||||||||||||||
Receivables: | ||||||||||||||||||||
Investment securities sold | — | 671 | 10,852 | — | ||||||||||||||||
Shares sold | — | 10,764 | — | — | ||||||||||||||||
Due from Adviser | — | 1,404 | — | — | ||||||||||||||||
Dividends and interest | 18,354 | 8,302 | 312,952 | 2,093,489 | ||||||||||||||||
Prepaid expenses | 1,126 | 1,121 | 2,262 | 11,258 | ||||||||||||||||
Total assets | 18,391,219 | 5,830,281 | 83,068,953 | 2,489,606,265 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Investment securities purchased | — | 672 | 12,039 | — | ||||||||||||||||
Collateral for securities loaned | — | — | — | 1,716,834 | ||||||||||||||||
Line of credit | — | — | 321,591 | 333,336 | ||||||||||||||||
Due to Adviser | 1,142 | — | 38,734 | 923,202 | ||||||||||||||||
Due to custodian | — | — | 90,614 | — | ||||||||||||||||
Deferred Trustee fees | 28 | 29 | 1,001 | 54,521 | ||||||||||||||||
Accrued expenses | 34,989 | 36,389 | 54,752 | 203,305 | ||||||||||||||||
Total liabilities | 36,159 | 37,090 | 518,731 | 3,231,198 | ||||||||||||||||
NET ASSETS | $ | 18,355,060 | $ | 5,793,191 | $ | 82,550,222 | $ | 2,486,375,067 | ||||||||||||
Shares outstanding | 650,000 | 200,000 | 2,700,000 | 49,600,000 | ||||||||||||||||
Net asset value, redemption and offering price per share | $ | 28.24 | $ | 28.97 | $ | 30.57 | $ | 50.13 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||
Aggregate paid in capital | $ | 18,016,503 | $ | 5,203,707 | $ | 89,196,176 | $ | 2,541,540,721 | ||||||||||||
Total distributable earnings (loss) | 338,557 | 589,484 | (6,645,954 | ) | (55,165,654 | ) | ||||||||||||||
$ | 18,355,060 | $ | 5,793,191 | $ | 82,550,222 | $ | 2,486,375,067 | |||||||||||||
(1) Value of securities on loan | $ | — | $ | — | $ | — | $ | 1,675,091 | ||||||||||||
(2) Cost of investments – Unaffiliated issuers | $ | 18,301,669 | $ | 5,364,898 | $ | 86,796,047 | $ | 2,365,668,308 | ||||||||||||
(3) Cost of investments – Affiliated issuers | $ | — | $ | — | $ | — | $ | — | ||||||||||||
(4) Cost of short-term investments held as collateral for securities loaned | $ | — | $ | — | $ | — | $ | 1,716,834 | ||||||||||||
(5) Cost of cash denominated in foreign currency | $ | — | $ | 766 | $ | 18,987 | $ | — |
(a) | Represents Consolidated Statement of Assets and Liabilities |
See Notes to Financial Statements
24 |
|
NDR CMG
Long/Flat Allocation ETF |
Real Asset
Allocation ETF (a) |
|||||||
$ | 65,838,079 | $ | 24,663,198 | |||||
— | 3,454,563 | |||||||
— | — | |||||||
— | — | |||||||
— | — | |||||||
— | 13,571,524 | |||||||
— | — | |||||||
— | — | |||||||
313,057 | 105 | |||||||
2,258 | 1,134 | |||||||
66,153,394 | 41,690,524 | |||||||
— | 11,342,996 | |||||||
— | — | |||||||
230,050 | — | |||||||
24,115 | 1,869 | |||||||
3 | 1,196 | |||||||
529 | 164 | |||||||
48,138 | 39,599 | |||||||
302,835 | 11,385,824 | |||||||
$ | 65,850,559 | $ | 30,304,700 | |||||
2,350,000 | 1,200,000 | |||||||
$ | 28.02 | $ | 25.25 | |||||
$ | 63,591,553 | $ | 30,981,503 | |||||
2,259,006 | (676,803 | ) | ||||||
$ | 65,850,559 | $ | 30,304,700 | |||||
$ | — | $ | — | |||||
$ | 61,346,180 | $ | 23,649,486 | |||||
$ | — | $ | 3,705,472 | |||||
$ | — | $ | — | |||||
$ | — | $ | — |
See Notes to Financial Statements
25 |
|
VANECK VECTORS ETF TRUST
For the Year Ended September 30, 2019
Morningstar
Durable Dividend ETF (a) |
Morningstar
Global Wide Moat ETF (a) |
Morningstar
International Moat ETF |
Morningstar
Wide Moat ETF |
|||||||||||||||||
Income: | ||||||||||||||||||||
Dividends | $ | 275,875 | $ | 96,339 | $ | 3,452,079 | $ | 48,558,087 | ||||||||||||
Interest | — | — | — | — | ||||||||||||||||
Securities lending income | 334 | 79 | 37,136 | 81,985 | ||||||||||||||||
Foreign taxes withheld | (39 | ) | (4,829 | ) | (285,212 | ) | (47,955 | ) | ||||||||||||
Total Income | 276,170 | 91,589 | 3,204,003 | 48,592,117 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Management fees | 24,336 | 17,090 | 417,289 | 9,154,293 | ||||||||||||||||
Professional fees | 46,577 | 47,069 | 78,214 | 85,357 | ||||||||||||||||
Insurance | 372 | 370 | 1,380 | 13,156 | ||||||||||||||||
Trustees’ fees and expenses | 658 | 385 | 4,377 | 130,971 | ||||||||||||||||
Reports to shareholders | 6,899 | 6,790 | 7,360 | 128,889 | ||||||||||||||||
Indicative optimized portfolio value fee | 4,030 | 4,031 | 4,971 | 4,970 | ||||||||||||||||
Custodian fees | 4,096 | 7,225 | 27,325 | 57,348 | ||||||||||||||||
Registration fees | 5,865 | 5,867 | 5,187 | 11,037 | ||||||||||||||||
Transfer agent fees | 2,208 | 2,208 | 2,387 | 2,381 | ||||||||||||||||
Fund accounting fees | 469 | 2,326 | 15,424 | 114,074 | ||||||||||||||||
Interest | 39 | 1,387 | 12,437 | 113,769 | ||||||||||||||||
Other | 333 | 302 | 1,859 | 32,531 | ||||||||||||||||
Total expenses | 95,882 | 95,050 | 578,210 | 9,848,776 | ||||||||||||||||
Waiver of management fees | (24,336 | ) | (17,090 | ) | (98,409 | ) | — | |||||||||||||
Expenses assumed by the Adviser | (47,171 | ) | (56,825 | ) | — | — | ||||||||||||||
Net expenses | 24,375 | 21,135 | 479,801 | 9,848,776 | ||||||||||||||||
Net investment income | 251,795 | 70,454 | 2,724,202 | 38,743,341 | ||||||||||||||||
Net realized gain (loss) on: | ||||||||||||||||||||
Investments-unaffiliated issuers | 146,721 | 94,484 | (4,768,446 | ) | (54,787,731 | ) | ||||||||||||||
Investments-affiliated issuers | — | — | — | — | ||||||||||||||||
In-kind redemptions | 566,097 | — | 301,844 | 210,747,032 | ||||||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | (6,523 | ) | (33,311 | ) | — | ||||||||||||||
Net realized gain (loss) | 712,818 | 87,961 | (4,499,913 | ) | 155,959,301 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments – unaffiliated issuers | 70,071 | 442,044 | (3,099,881 | ) | 7,136,244 | |||||||||||||||
Investments – affiliated issuers | — | — | — | — | ||||||||||||||||
Foreign currency transactions and foreign denominated assets and liabilities | — | 25 | 1,157 | — | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | 70,071 | 442,069 | (3,098,724 | ) | 7,136,244 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 1,034,684 | $ | 600,484 | $ | (4,874,435 | ) | $ | 201,838,886 |
(a) | For the period October 30, 2018 (commencement of operations) through September 30, 2019. |
(b) | Represents Consolidated Statement of Operations |
See Notes to Financial Statements
26 |
|
NDR CMG
Long/Flat Allocation ETF |
Real Asset
Allocation ETF (b) |
|||||||
$ | 1,018,392 | $ | 239,678 | |||||
185,742 | 158,121 | |||||||
200 | — | |||||||
— | — | |||||||
1,204,334 | 397,799 | |||||||
295,086 | 111,688 | |||||||
61,597 | 51,481 | |||||||
860 | 397 | |||||||
2,592 | 1,021 | |||||||
7,472 | 11,939 | |||||||
4,800 | 3,871 | |||||||
2,655 | 3,132 | |||||||
8,740 | 11,465 | |||||||
2,387 | 4,758 | |||||||
3,388 | 1,503 | |||||||
10,447 | — | |||||||
5,200 | 5,535 | |||||||
405,224 | 206,790 | |||||||
(70,183 | ) | (83,936 | ) | |||||
— | — | |||||||
335,041 | 122,854 | |||||||
869,293 | 274,945 | |||||||
(2,455,189 | ) | (544,380 | ) | |||||
— | (1,106,311 | ) | ||||||
632,293 | 799,382 | |||||||
— | — | |||||||
(1,822,896 | ) | (851,309 | ) | |||||
2,238,147 | 1,020,052 | |||||||
— | (315,268 | ) | ||||||
— | — | |||||||
2,238,147 | 704,784 | |||||||
$ | 1,284,544 | $ | 128,420 |
See Notes to Financial Statements
27 |
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Morningstar
Durable Dividend ETF |
Morningstar
Global Wide Moat ETF |
Morningstar
International Moat ETF |
||||||||||||||||||
For the Period
October 30, 2018* through September 30, 2019 |
For the Period
October 30, 2018* through September 30, 2019 |
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
|||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income | $ | 251,795 | $ | 70,454 | $ | 2,724,202 | $ | 2,480,889 | ||||||||||||
Net realized gain (loss) | 712,818 | 87,961 | (4,499,913 | ) | 2,562,163 | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 70,071 | 442,069 | (3,098,724 | ) | (7,382,529 | ) | ||||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,034,684 | 600,484 | (4,874,435 | ) | (2,339,477 | ) | ||||||||||||||
Distributions to shareholders: | ||||||||||||||||||||
Dividends and Distributions | (130,030 | ) | (11,000 | ) | (2,801,050 | ) | (4,302,150 | ) | ||||||||||||
Share transactions:** | ||||||||||||||||||||
Proceeds from sale of shares | 21,719,158 | 5,203,707 | 21,706,439 | 36,581,651 | ||||||||||||||||
Cost of shares redeemed | (4,268,752 | ) | — | (20,939,444 | ) | (22,112,323 | ) | |||||||||||||
Increase in net assets resulting from share transactions | 17,450,406 | 5,203,707 | 766,995 | 14,469,328 | ||||||||||||||||
Total increase (decrease) in net assets | 18,355,060 | 5,793,191 | (6,908,490 | ) | 7,827,701 | |||||||||||||||
Net Assets, beginning of period | — | — | 89,458,712 | 81,631,011 | ||||||||||||||||
Net Assets, end of period† | $ | 18,355,060 | $ | 5,793,191 | $ | 82,550,222 | $ | 89,458,712 | ||||||||||||
** Shares of Common Stock Issued (no par value) | ||||||||||||||||||||
Shares sold | 800,000 | 200,000 | 700,000 | 1,050,000 | ||||||||||||||||
Shares redeemed | (150,000 | ) | — | (700,000 | ) | (650,000 | ) | |||||||||||||
Net increase | 650,000 | 200,000 | — | 400,000 |
* | Commencement of operations |
(a) | Represents Consolidated Statement of Changes in Net Assets. |
See Notes to Financial Statements
28 |
|
Morningstar Wide Moat ETF | NDR CMG Long/Flat Allocation ETF | Real Asset Allocation ETF (a) | ||||||||||||||||||||||||||
For the Year
Ended September 30, 2019 |
For the Year
Ended September 30, 2018 |
For the Year
Ended September 30, 2019 |
For the Period
October 4, 2017* through September 30, 2018 |
For the Year
Ended September 30, 2019 |
For the Period
April 9, 2018* through September 30, 2018 |
|||||||||||||||||||||||
$ | 38,743,341 | $ | 23,672,243 | $ | 869,293 | $ | 373,720 | $ | 274,945 | $ | 28,169 | |||||||||||||||||
155,959,301 | 150,557,254 | (1,822,896 | ) | (153,952 | ) | (851,309 | ) | (194,904 | ) | |||||||||||||||||||
7,136,244 | 45,206,643 | 2,238,147 | 2,253,752 | 704,784 | 58,019 | |||||||||||||||||||||||
201,838,886 | 219,436,140 | 1,284,544 | 2,473,520 | 128,420 | (108,716 | ) | ||||||||||||||||||||||
(29,003,400 | ) | (14,227,200 | ) | (550,200 | ) | (20,000 | ) | (83,400 | ) | — | ||||||||||||||||||
1,740,552,075 | 810,390,744 | 23,560,640 | 58,909,959 | 30,284,674 | 17,901,395 | |||||||||||||||||||||||
(997,112,445 | ) | (731,950,653 | ) | (10,687,796 | ) | (9,120,108 | ) | (15,258,996 | ) | (2,558,677 | ) | |||||||||||||||||
743,439,630 | 78,440,091 | 12,872,844 | 49,789,851 | 15,025,678 | 15,342,718 | |||||||||||||||||||||||
916,275,116 | 283,649,031 | 13,607,188 | 52,243,371 | 15,070,698 | 15,234,002 | |||||||||||||||||||||||
1,570,099,951 | 1,286,450,920 | 52,243,371 | — | 15,234,002 | — | |||||||||||||||||||||||
$ | 2,486,375,067 | $ | 1,570,099,951 | $ | 65,850,559 | $ | 52,243,371 | $ | 30,304,700 | $ | 15,234,002 | |||||||||||||||||
36,700,000 | 18,200,000 | 900,000 | 2,200,001 | 1,200,000 | 700,001 | |||||||||||||||||||||||
(20,700,000 | ) | (16,500,000 | ) | (400,000 | ) | (350,001 | ) | (600,000 | ) | (100,001 | ) | |||||||||||||||||
16,000,000 | 1,700,000 | 500,000 | 1,850,000 | 600,000 | 600,000 |
See Notes to Financial Statements
29 |
|
VANECK VECTORS ETF TRUST
For a share outstanding throughout each period:
(a) | Commencement of operations |
(b) | Calculated based upon average shares outstanding |
(c) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(d) | Not Annualized |
(e) | Annualized |
(f) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
See Notes to Financial Statements
30 |
|
VANECK VECTORS ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | Commencement of operations |
(b) | Calculated based upon average shares outstanding |
(c) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(d) | Not Annualized |
(e) | Annualized |
(f) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
See Notes to Financial Statements
31 |
|
VANECK VECTORS ETF TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
(a) | Commencement of operations |
(b) | Calculated based upon average shares outstanding |
(c) | Total return is calculated assuming an initial investment made at the net asset value at the beginning of period, reinvestment of any dividends and distributions at net asset value on the dividend/distributions payment date and a redemption at the net asset value on the last day of the period. The return does not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares. |
(d) | Not Annualized |
(e) | Annualized |
(f) | The ratios presented do not reflect the Fund’s proportionate share of income and expenses from the Fund’s investment in underlying funds. |
(g) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
(h) | Represents Consolidated Financial Highlights |
See Notes to Financial Statements
32 |
|
VANECK VECTORS ETF TRUST
September 30, 2019
Note 1—Fund Organization—VanEck Vectors ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust was incorporated in Delaware as a statutory trust on March 15, 2001. The Trust operates as a series fund, and offers multiple investment portfolios, each of which represents a separate series of the Trust. These financial statements relate only to the investment portfolios listed in the diversification table below (each a “Fund” and, together, the “Funds”).
Fund | Diversification Classification |
Morningstar Durable Dividend ETF* | Non-Diversified |
Morningstar Global Wide Moat ETF* | Non-Diversified |
Morningstar International Moat ETF | Diversified |
Morningstar Wide Moat ETF | Non-Diversified |
NDR CMG Long/Flat Allocation ETF | Non-Diversified |
Real Asset Allocation ETF | Non-Diversified |
* | Fund commenced operations October 30, 2018 |
Each Fund, except for Real Asset Allocation ETF, was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in substantially the same weighting, in an index sponsored, licensed or managed by Morningstar, Inc. or Ned Davis Research, Inc. The Real Asset Allocation ETF seeks to achieve its investment objective by investing primarily in exchange traded products (the “ETPs”) that provide exposure to real assets, which include commodities, real estate, natural resources, and infrastructure, using a proprietary, rules-based real asset allocation model.
Note 2—Significant Accounting Policies—The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The Funds are investment companies and follow accounting and reporting requirements of Accounting Standards Codification (“ASC”) 946 Financial Services—Investment Companies.
The following summarizes the Funds’ significant accounting policies.
A. | Security Valuation—The Funds value their investments in securities and other assets and liabilities at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. Securities traded on the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Over-the-counter securities not included on NASDAQ and listed securities for which no sale was reported are valued at the mean of the bid and ask prices. To the extent these securities are actively traded they are categorized as Level 1 in the fair value hierarchy (described below). Certain foreign securities, whose values may be affected by market direction or events occurring before the Funds’ pricing time (4:00 p.m. Eastern Time) but after the last close of the securities’ primary market, are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board of Trustees, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADR’s and futures contracts. The Funds may also fair value securities in other situations, such as, when a particular foreign market is closed but the Fund is open. Short-term obligations with sixty days or less to maturity are valued at amortized cost, which with accrued interest approximates fair value. Money market fund investments are valued at net asset value and are considered to be Level 1 in the fair value hierarchy. The Pricing Committee of Van Eck Associates Corporation (“VEAC”) and Van Eck Absolute Return Advisers Corporation (“VEARA”) (VEAC and VEARA, collectively referred to as the “Adviser”) provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes it does not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation policies and procedures. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, |
33 |
|
VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
including a regular review of key inputs and assumptions, periodic comparisons to valuations provided by other independent pricing services, transactional back-testing and disposition analysis. | |
Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be classified either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments. | |
The Funds utilize various methods to measure the fair value of their investments on a recurring basis, which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three levels of the fair value hierarchy are described below: | |
Level 1 — Quoted prices in active markets for identical securities. | |
Level 2 — Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
Level 3 — Significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments). | |
A summary of the inputs and the levels used to value the Funds’ investments, are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments. | |
B. | Basis for Consolidation—The Real Asset Allocation ETF invests in certain ETPs through the Real Asset Allocation Subsidiary (the “Subsidiary”), a wholly-owned subsidiary organized under the laws of the Cayman Islands. The Fund’s investment in the Subsidiary may not exceed 25% of the value of the Fund’s total assets at each quarter-end of the Fund’s fiscal year. Consolidated financial statements of the Fund present the financial position and results of operations for the Fund and its wholly-owned Subsidiary. All interfund account balances and transactions between the Fund and Subsidiary have been eliminated in consolidation. |
C. | Federal Income Taxes—It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. |
D. | Dividends and Distributions to Shareholders—Dividends to shareholders from net investment income and distributions from net realized capital gains, if any, are declared and paid annually by each Fund (except for dividends from net investment income from Morningstar Durable Dividend ETF, which are declared and paid quarterly). Income dividends and capital gain distributions are determined in accordance with U.S. income tax regulations, which may differ from such amounts determined in accordance with GAAP. |
E. | Currency Translation—Assets and liabilities denominated in foreign currencies and commitments under foreign currency contracts are translated into U.S. dollars at the closing prices of such currencies each business day as quoted by one or more sources. Purchases and sales of investments are translated at the exchange rates prevailing when such investments are acquired or sold. Foreign denominated income and expenses are translated at the exchange rates prevailing when accrued. The portion of realized and unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates is not separately disclosed in the financial statements. Such amounts are included with the net realized and unrealized gains and losses on investment securities in the Statement of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations. |
34 |
|
F. | Restricted Securities—The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments. |
G. | Repurchase Agreements—The Funds may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, to generate income from their excess cash balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires securities from a seller, subject to resale to the seller at an agreed upon price and date. A Fund, through its custodian/securities lending agent, takes possession of securities collateralizing the repurchase agreement. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the Funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the Funds maintain their right to sell the underlying securities at market value and may claim any resulting loss against the seller. Repurchase agreements held as of September 30, 2019 are reflected in the Schedules of Investments. |
H. | Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of offset in those agreements allows the Funds to offset any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may pledge or receive cash and/or securities as collateral for derivative instruments, securities lending and repurchase agreements. For financial reporting purposes, the Funds present securities lending and repurchase agreement assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Collateral held at September 30, 2019 is presented in the Schedules of Investments. Refer to related disclosures in Note 2G (Repurchase Agreements) and Note 9 (Securities Lending). |
I. | Other—Security transactions are accounted for on trade date. Realized gains and losses are determined based on the specific identification method. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized upon notification of the ex-dividend date. Interest income, including amortization of premiums and discounts, is accrued as earned. |
The character of distributions received from investment in underlying funds may be comprised of net investment income, capital gains, and return of capital. It is the Funds’ policy to estimate the character of distributions received from these investments based on historical data provided by the underlying funds if actual amounts are not available. After each calendar year end, the underlying funds report the actual tax character of these distributions. Differences between the estimated and actual amounts are reflected in the Funds’ records in the year in which they are reported by adjusting the related cost basis of investments, capital gains and income, as necessary. | |
In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote. |
Note 3—Investment Management and Other Agreements—VEAC is the investment adviser to the Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF and NDR CMG Long/Flat Allocation ETF. VEARA is the investment adviser to the Real Asset Allocation ETF and its Subsidiary. VEARA is a wholly-owned subsidiary of VEAC. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The Adviser has agreed, until at least February 1, 2020, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding expense limitations listed in the table below.
35 |
|
VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
The current management fee rate and expense limitations for the year ended September 30, 2019, are as follows:
Fund | Management Fee Rate | Expense Limitations | ||||||
Morningstar Durable Dividend ETF | 0.29 | % | 0.29 | % | ||||
Morningstar Global Wide Moat ETF | 0.45 | 0.52 | ||||||
Morningstar International Moat ETF | 0.50 | 0.56 | ||||||
Morningstar Wide Moat ETF | 0.45 | 0.49 | ||||||
NDR CMG Long/Flat Allocation ETF | 0.50 | 0.55 | ||||||
Real Asset Allocation ETF | 0.50 | 0.55 |
Refer to Statements of Operations for the amounts waived/assumed by the Adviser.
The Adviser waives the management fees it charges the Funds by the amount it collects as a management fee from underlying funds managed by the Adviser. For the year ended September 30, 2019, the Adviser waived management fees charged of $18,932 due to such investments held in the Real Asset Allocation ETF.
In addition, Van Eck Securities Corporation, an affiliate of the Adviser, acts as the Funds’ distributor (the “Distributor”). Certain officers and a Trustee of the Trust are officers, directors or stockholders of the Adviser and Distributor.
Note 4—Capital Share Transactions—As of September 30, 2019, there were an unlimited number of capital shares of beneficial interest authorized by the Trust with no par value. Fund shares are not individually redeemable and are issued and redeemed at their net asset value per share only through certain authorized broker-dealers (“Authorized Participants”) in blocks of shares (“Creation Units”), consisting of 50,000 shares, or multiples thereof.
The consideration for the purchase or redemption of Creation Units of the Funds generally consists of the in-kind contribution or distribution of securities constituting the Funds’ underlying index (“Deposit Securities”) plus a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may also be substituted in an amount equivalent to the value of certain Deposit Securities, generally as a result of market circumstances, or when the securities are not available in sufficient quantity for delivery, or are not eligible for trading by the Authorized Participant. The Funds may issue Creation Units in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit at the Custodian for the benefit of the Funds, collateral consisting of cash in the form of U.S. dollars at least equal to 115% of the daily marked to market value of the missing Deposit Securities.
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to The Bank of New York Mellon. In addition, the Funds may impose certain variable fees for creations and redemptions with respect to transactions in Creation Units for cash, or on transactions effected outside the clearing process, which are treated as increases in capital. These variable fees, if any, are reflected in share transactions in the Statements of Changes in Net Assets.
Note 5—Investments—For the year ended September 30, 2019, purchases and sales of investments (excluding short-term investments and in-kind capital share transactions) and the purchases and sales of investments resulting from in-kind capital share transactions (excluding short-term investments) were as follows:
In-kind Capital Share Transactions | ||||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
Morningstar Durable Dividend ETF | $ | 8,533,304 | $ | 8,515,525 | $ | 21,715,235 | $ | 4,254,920 | ||||||||
Morningstar Global Wide Moat ETF | 3,054,955 | 2,987,877 | 5,185,611 | — | ||||||||||||
Morningstar International Moat ETF | 71,217,267 | 71,964,725 | 20,783,300 | 19,538,041 | ||||||||||||
Morningstar Wide Moat ETF | 1,184,938,329 | 1,178,263,246 | 1,740,163,455 | 992,546,731 | ||||||||||||
NDR CMG Long/Flat Allocation ETF | 31,337,209 | 30,891,384 | 23,559,430 | 10,686,567 | ||||||||||||
Real Asset Allocation ETF* | 56,570,572 | 52,875,592 | 22,996,860 | 15,007,725 |
* | Represents consolidated cost of investments purchased and proceeds from investments sold. |
36 |
|
Note 6—Income Taxes—As of September 30, 2019, for Federal income tax purposes, the identified cost of investments owned, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation), of investments were as follows:
Gross | Gross | Net Unrealized | ||||||||||||||
Tax Cost | Unrealized | Unrealized | Appreciation | |||||||||||||
Fund | of Investments | Appreciation | (Depreciation) | (Depreciation) | ||||||||||||
Morningstar Durable Dividend ETF | $ | 18,291,395 | $ | 473,372 | $ | (393,027 | ) | $ | 80,344 | |||||||
Morningstar Global Wide Moat ETF | 5,366,656 | 491,823 | (51,538 | ) | 440,286 | |||||||||||
Morningstar International Moat ETF | 86,801,782 | 2,068,108 | (6,145,999 | ) | (4,077,891 | ) | ||||||||||
Morningstar Wide Moat ETF | 2,367,785,496 | 173,340,206 | (53,624,183 | ) | 119,716,023 | |||||||||||
NDR CMG Long/Flat Allocation ETF | 61,346,180 | 4,491,899 | — | 4,491,899 | ||||||||||||
Real Asset Allocation ETF | 27,485,925 | 1,048,692 | (417,469 | ) | 631,223 |
At September 30, 2019, the components of distributable earnings (loss) on a tax basis, for each Fund, were as follows:
Undistributed | ||||||||||||||||||||
Undistributed | Realized Gains / | Other | Net Unrealized | Total | ||||||||||||||||
Ordinary | Accumulated | Temporary | Appreciation | Distributable | ||||||||||||||||
Fund | Income* | Capital (Losses) | Differences | (Depreciation) | Earnings (Loss) | |||||||||||||||
Morningstar Durable Dividend ETF | $ | 258,241 | $ | — | $ | (28 | ) | $ | 80,344 | $ | 338,557 | |||||||||
Morningstar Global Wide Moat ETF | 149,203 | — | (30 | ) | 440,311 | 589,484 | ||||||||||||||
Morningstar International Moat ETF | 2,385,132 | (4,948,968 | ) | (1,001 | ) | (4,081,117 | ) | (6,645,954 | ) | |||||||||||
Morningstar Wide Moat ETF | 29,411,967 | (204,239,122 | ) | (54,522 | ) | 119,716,023 | (55,165,654 | ) | ||||||||||||
NDR CMG Long/Flat Allocation ETF | 673,342 | (2,905,706 | ) | (529 | ) | 4,491,899 | 2,259,006 | |||||||||||||
Real Asset Allocation ETF | 253,826 | (1,591,002 | ) | (164 | ) | 660,537 | (676,803 | ) |
* | Includes short-term capital gains (if any) |
The tax character of dividends paid to shareholders during the years ended September 30, 2018 and September 30, 2019 were as follows:
2019 Dividends | 2018 Dividends | |||||||||||
Ordinary | Ordinary | Long-term | ||||||||||
Fund | Income* | Income* | Capital Gains | |||||||||
Morningstar Durable Dividend ETF | $ | 130,030 | $ | — | $ | — | ||||||
Morningstar Global Wide Moat ETF | 11,000 | — | — | |||||||||
Morningstar International Moat ETF | 2,801,050 | 4,016,200 | 285,950 | |||||||||
Morningstar Wide Moat ETF | 29,003,400 | 14,227,200 | — | |||||||||
NDR CMG Long/Flat Allocation ETF | 550,200 | 20,000 | — | |||||||||
Real Asset Allocation ETF | 83,400 | — | — |
* | Includes short-term capital gains (if any) |
At September 30, 2019, the Funds had capital loss carryforwards available to offset future capital gains, as follows:
Short-Term | Long-Term | |||||||||||
Capital Losses | Capital Losses | |||||||||||
Fund | with No Expiration | with No Expiration | Total | |||||||||
Morningstar Durable Dividend ETF | $ | — | $ | — | $ | — | ||||||
Morningstar Global Wide Moat ETF | — | — | — | |||||||||
Morningstar International Moat ETF | (3,020,555 | ) | (1,928,413 | ) | (4,948,968 | ) | ||||||
Morningstar Wide Moat ETF | (127,351,331 | ) | (76,887,791 | ) | (204,239,122 | ) | ||||||
NDR CMG Long/Flat Allocation ETF | (2,821,262 | ) | (84,444 | ) | (2,905,706 | ) | ||||||
Real Asset Allocation ETF | (1,591,002 | ) | — | (1,591,002 | ) |
During the period ended September 30, 2019, as a result of permanent book to tax differences, primarily due to the treatment of the tax gains / losses on in-kind redemptions, the Funds incurred differences that affected distributable earnings / (loss) and aggregate paid in capital by the amounts in the table below. Net assets were not affected by these reclassifications.
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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(continued)
Increase (Decrease) | Increase (Decrease) | |||||||
in Distributable | in Aggregate | |||||||
Fund | Earnings / (Losses) | Paid in Capital | ||||||
Morningstar Durable Dividend ETF | $ | (566,097 | ) | $ | 566,097 | |||
Morningstar Global Wide Moat ETF | — | — | ||||||
Morningstar International Moat ETF | (38,663 | ) | 38,663 | |||||
Morningstar Wide Moat ETF | (207,211,077 | ) | 207,211,077 | |||||
NDR CMG Long/Flat Allocation ETF | (632,293 | ) | 632,293 | |||||
Real Asset Allocation ETF | (655,776 | ) | 655,776 |
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, the Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended September 30, 2019, the Funds did not incur any interest or penalties.
Note 7—Principal Risks—Non-diversified funds generally hold securities of fewer issuers than diversified funds (see Note 1) and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. The Funds may purchase securities on foreign exchanges. Securities of foreign issuers involve special risks and considerations not typically associated with investing in U.S. issuers. These risks include devaluation of currencies, currency controls, less reliable information about issuers, different securities transaction clearance and settlement practices, future adverse political and economic developments and local/regional conflicts. These risks are heightened for investments in emerging market countries. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of comparable U.S. issuers.
NDR CMG Long/Flat Allocation ETF may invest in shares of other funds, including ETFs that track the S&P 500 Index. As a result, the Fund will indirectly be exposed to the risks of an investment in the underlying funds. Shares of other funds have many of the same risks as direct investments in common stocks or bonds. In addition, the market value of the Fund’s shares is expected to rise and fall as the value of the underlying index or bond rises and falls. The market value of such funds’ shares may differ from the net asset value of the particular fund.
Real Asset Allocation ETF may concentrate its investments in ETPs that invest directly in, or have exposure to, equity and debt securities, as well as real asset categories such as commodities, real estate, natural resources and infrastructure. Such investments may subject the ETPs to greater volatility than investments in traditional securities. The Fund is dependent on the performance of underlying funds and is subject to the risks of those funds. Changes in laws or government regulations by the United States and/or the Cayman Islands could adversely affect the operations of the Fund.
At September 30, 2019, the Adviser owned approximately 20% of Morningstar Global Wide Moat ETF.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
Note 8—Trustee Deferred Compensation Plan—The Trust has a Deferred Compensation Plan (the “Plan”) for Trustees under which the Trustees can elect to defer receipt of their trustee fees until retirement, disability or termination from the Board of Trustees. The fees otherwise payable to the participating Trustees are deemed invested in shares of the Funds as directed by the Trustees.
The expense for the Plan is included in “Trustees’ fees and expenses” in the Statements of Operations. The liability for the Plan is shown as “Deferred Trustee fees” in the Statements of Assets and Liabilities.
Note 9—Securities Lending—To generate additional income, each of the Funds may lend its securities pursuant to a securities lending agreement with The Bank of New York Mellon, the securities lending agent and also the Funds’ custodian. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, U.S. government or U.S. government agency securities, shares of an investment trust or mutual fund, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market
38 |
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value plus accrued interest on the securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower and/or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. The Funds may pay reasonable finders’, administrative and custodial fees in connection with a loan of its securities. Securities lending income is disclosed as such in the Statements of Operations. The collateral for securities loaned is recognized in the Schedules of Investments and the Statements of Assets and Liabilities. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in repurchase agreements collateralized by obligations of the U.S. Treasury and/or Government Agencies. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the lender securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related collateral at September 30, 2019 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.
The following table presents the amount of repurchase agreements held as collateral by type of security on loan as of September 30, 2019:
Gross Amount of Recognized | ||
Liabilities for Securities Loaned | ||
in the Statements of Assets | ||
and Liabilities* | ||
Fund | Equity Securities | |
Morningstar Wide Moat ETF | $1,716,834 |
* | Remaining contractual maturity of the agreements: overnight and continuous |
Note 10—Bank Line of Credit—The Funds may participate in a $200 million committed credit facility (the “Facility”) to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Funds at the request of the shareholders and other temporary or emergency purposes. The Funds have agreed to pay commitment fees, pro rata, based on the unused but available balance. Interest is charged to the Funds at rates based on prevailing market rates in effect at the time of borrowings. During the year ended September 30, 2019, the following Funds borrowed under this Facility:
Outstanding Loan | ||||||||||||||||
Days | Average Daily | Average | Balance as of | |||||||||||||
Fund | Outstanding | Loan Balance | Interest Rate | September 30, 2019 | ||||||||||||
Morningstar International Moat ETF | 344 | $ | 318,758 | 3.74 | % | $321,591 | ||||||||||
Morningstar Wide Moat ETF | 306 | 3,567,361 | 3.75 | 333,336 | ||||||||||||
NDR CMG Long/Flat Allocation ETF | 46 | 783,261 | 3.79 | 230,050 |
Note 11—Custodian Fees—The Funds have entered into an expense offset agreement with the custodian wherein they receive a credit toward the reduction of custodian fees whenever there are uninvested cash balances. The Funds could have invested their cash balances elsewhere if they had not agreed to a reduction in fees under the expense offset agreement with the custodian. For the year ended September 30, 2019, there were offsets to custodian fees and these amounts are reflected in custody expense in the Statements of Operations.
Note 12—Recent Accounting Pronouncements—The Funds early adopted certain provisions of Accounting Standards Update No. 2018-13 Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) that eliminate and modify certain disclosure requirements for fair value measurements. The adoption of certain provisions of ASU 2018-13 had no material effect on the financial statements and related disclosures. Management evaluated additional requirements, not yet adopted, and it is not expected to have a material impact to the financial statements. Public companies will be required to disclose the range and weighted average of significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years.
Note 13—Subsequent Event Review—The Funds have evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.
39 |
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VANECK VECTORS ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of VanEck Vectors Durable Dividend ETF, VanEck Vectors Morningstar Global Wide Moat ETF, VanEck Vectors Morningstar International Moat ETF, VanEck Vectors Morningstar Wide Moat ETF, VanEck Vectors NDR CMG Long/Flat Allocation ETF and VanEck Vectors Real Asset Allocation ETF and the Board of Trustees of VanEck Vectors ETF Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of VanEck Vectors Durable Dividend ETF, VanEck Vectors Morningstar Global Wide Moat ETF, VanEck Vectors Morningstar International Moat ETF, VanEck Vectors Morningstar Wide Moat ETF, VanEck Vectors NDR CMG Long/Flat Allocation ETF and VanEck Vectors Real Asset Allocation ETF (collectively referred to as the “Funds”) (six of the funds constituting VanEck Vectors ETF Trust (the “Trust”)), including the schedules of investments, as of September 30, 2019, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (six of the funds constituting VanEck Vectors ETF Trust) at September 30, 2019, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
Individual fund constituting | Statement of | Statements of | ||||
the VanEck Vectors ETF Trust | operations | changes in net assets | Financial highlights | |||
VanEck Vectors Morningstar Durable Dividend ETF
VanEck Vectors Morningstar Global Wide Moat ETF |
For the period from October 30, 2018 (commencement of operations) through September 30, 2019 | For the period from October 30, 2018 (commencement of operations) through September 30, 2019 | For the period from October 30, 2018 (commencement of operations) through September 30, 2019 | |||
VanEck Vectors Morningstar International Moat ETF | For the year ended September 30, 2019 | For each of the two years in the period ended September 30, 2019 | For each of the four years in the period ended September 30, 2019 and the period from July 13, 2015 (commencement of operations) through September 30, 2015 | |||
VanEck Vectors Morningstar Wide Moat ETF | For the year ended September 30, 2019 | For each of the two years in the period ended September 30, 2019 | For each of the five years in the period ended September 30, 2019 | |||
VanEck Vectors NDR CMG Long/Flat Allocation ETF | For the year ended September 30, 2019 | For the year ended September 30, 2019 and the period from October 4, 2017 (commencement of operations) through September 30, 2018 | For the year ended September 30, 2019 and the period from October 4, 2017 (commencement of operations) through September 30, 2018 | |||
VanEck Vectors Real Asset Allocation ETF | For the year ended September 30, 2019 | For the year ended September 30, 2019 and the period from April 9, 2018 (commencement of operations) through September 30, 2018 | For the year ended September 30, 2019 and the period from April 9, 2018 (commencement of operations) through September 30, 2018 |
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
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Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more of the VanEck investment companies since 1999.
New York, New York
November 21, 2019
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VANECK VECTORS ETF TRUST
(unaudited)
The information set forth below relates to distributions paid during each Fund’s current fiscal year as required by federal laws. Shareholders, however, must report dividends on a calendar year basis for income tax purposes, which may include dividends for portions of two fiscal years of a Fund.
Accordingly, the information needed by shareholders for calendar year 2019 income tax purposes will be sent to them in early 2020.
Please consult your tax advisor for proper treatment of this information.
The following information is provided with respect to the distributions paid during the taxable year ended September 30, 2019:
Morningstar | ||||||||||||||||
Global Wide | ||||||||||||||||
Morningstar Durable Dividend ETF | Moat ETF | |||||||||||||||
Record Date | 12/28/2018 | 04/02/2019 | 07/02/2019 | 12/21/2018 | ||||||||||||
Ex Date | 12/27/2018 | 04/01/2019 | 07/01/2019 | 12/20/2018 | ||||||||||||
Payable Date | 01/03/2019 | 04/05/2019 | 07/08/2019 | 12/27/2018 | ||||||||||||
Ordinary Income Amount Paid Per Share | $0.160000 | $0.125700 | $0.200100 | $0.110000 | ||||||||||||
Ordinary Income: | ||||||||||||||||
Qualified Dividend Income for Individuals | 100.00 | % | 62.80 | % | 62.80 | % | 77.71 | % | ||||||||
Dividends Qualifying for the Dividends Received Deduction for Corporations | 100.00 | % | 62.14 | % | 62.14 | % | 61.83 | % | ||||||||
Morningstar | Morningstar | NDR CMG | Real Asset | |||||||||||||
International | Wide | Long/Flat | Allocation | |||||||||||||
Moat ETF | Moat ETF | Allocation ETF | ETF | |||||||||||||
Record Date | 12/21/2018 | 12/21/2018 | 12/21/2018 | 12/21/2018 | ||||||||||||
Ex Date | 12/20/2018 | 12/20/2018 | 12/20/2018 | 12/20/2018 | ||||||||||||
Payable Date | 12/27/2018 | 12/27/2018 | 12/27/2018 | 12/27/2018 | ||||||||||||
Ordinary Income Amount Paid Per Share | $1.057000 | $0.738000 | $0.262000 | $0.139000 | ||||||||||||
Ordinary Income: | ||||||||||||||||
Qualified Dividend Income for Individuals | 66.49 | %* | 100.00 | % | 95.48 | % | 10.98 | % | ||||||||
Dividends Qualifying for the Dividends Received Deduction for Corporations | 0.27 | %* | 100.00 | % | 93.20 | % | 4.43 | % | ||||||||
Foreign Source Income | 74.84 | %* | — | — | — | |||||||||||
Foreign Taxes Paid Per Share | 0.069678 | ** | — | — | — | |||||||||||
Federal Obligation Interest | — | — | 8.39 | %*** | 66.38 | %*** |
* | Expressed as a percentage of the cash distribution grossed up for foreign taxes. |
** | The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. |
*** | Certain states may exempt the portion of dividends derived from assets backed by the full faith and credit of the U.S. Government. |
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VANECK VECTORS ETF TRUST
BOARD OF TRUSTEES AND OFFICERS
September 30, 2019 (unaudited)
Name, Address1
and Year of Birth |
Position(s)
Held with the Trust |
Term of
Office2 and Length of Time Served |
Principal Occupation(s)
During Past Five Years |
Number of
Portfolios in Fund Complex3 Overseen |
Other Directorships Held
By Trustee During Past Five Years |
|||||
Independent Trustees: | ||||||||||
David H. Chow,
1957*† |
Chairman Trustee | Since 2008 Since 2006 | Founder and CEO, DanCourt Management LLC (financial/strategy consulting firm and Registered Investment Adviser), March 1999 to present. | 56 | Director, Forward Management LLC and Audit Committee Chairman, May 2008 to June 2015; Trustee, Berea College of Kentucky, May 2009 to present and currently Chairman of the Investment Committee; Member of the Governing Council of the Independent Directors Council, October 2012 to present; President, July 2013 to June 2015, and Board Member of the CFA Society of Stamford, July 2009 to present; Trustee, MainStay Fund Complex4, January 2016 to present and currently Chairman of the Risk and Compliance Committee. | |||||
Laurie A. Hesslein,
1959*† |
Trustee | Since 2019 | Citigroup, Managing Director, Citi Holdings Division – Business Head, Local Consumer Lending North America (2013-2017). | 56 | Trustee, Eagle Growth and Income Opportunities Fund; Trustee, THL Credit Senior Loan Fund. | |||||
R. Alastair Short,
1953*† |
Trustee | Since 2006 | President, Apex Capital Corporation (personal investment vehicle), January 1988 to present | 67 | Chairman and Independent Director, EULAV Asset Management, January 2011 to present; Independent Director, Tremont offshore funds, June 2009 to July 2016; Director, Kenyon Review. | |||||
Peter J. Sidebottom,
1962*† |
Trustee | Since 2012 | Lead Partner, North America Banking and Capital Markets Strategy, Accenture, May 2017 to present; Partner, PWC/Strategy & Financial Services Advisory, February 2015 to March 2017; Founder and Board Member, AspenWoods Risk Solutions, September 2013 to February 2016; Independent consultant, June 2013 to February 2015; Partner, Bain & Company (management consulting firm), April 2012 to December 2013; Executive Vice President and Senior Operating Committee Member, TD Ameritrade (on-line brokerage firm), February 2009 to January 2012. | 56 | Board Member, Special Olympics, New Jersey, November 2011 to September 2013; Director, The Charlotte Research Institute, December 2000 to 2009; Board Member, Social Capital Institute, University of North Carolina Charlotte, November 2004 to January 2012; Board Member, NJ-CAN, July 2014 to 2016. | |||||
Richard D. Stamberger,
1959*† |
Trustee | Since 2006 | President and CEO, SmartBrief, LLC (business media company). | 67 | Director, Food and Friends, Inc., 2013 to present. | |||||
Interested Trustee: | ||||||||||
Jan F. van Eck,
19635 |
Trustee, Chief Executive Officer and President | Trustee (Since 2006); Chief Executive Officer and President (Since 2009) | Director, President and Chief Executive Officer of VEAC, VEARA and Van Eck Securities Corporation (VESC); Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | 56 | Director, National Committee on US-China Relations. |
1 | The address for each Trustee and officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Each Trustee serves until resignation, death, retirement or removal. Officers are elected yearly by the Trustees. |
3 | The Fund Complex consists of the VanEck Funds, VanEck VIP Trust and the Trust. |
4 | The MainStay Fund Complex consists of MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust and MainStay MacKay Defined Term Municipal Opportunities Fund. |
5 | “Interested person” of the Trust within the meaning of the 1940 Act. Mr. van Eck is an officer of VEAC, VEARA and VESC. |
* | Member of the Audit Committee. |
† | Member of the Nominating and Corporate Governance Committee. |
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|
VANECK VECTORS ETF TRUST
BOARD OF TRUSTEES AND OFFICERS
September 30, 2019 (unaudited) (continued)
Officer’s Name,
Address1 and Year of Birth |
Position(s)
Held with the Trust |
Term of Office2
and Length of Time Served |
Principal Occupation(s) During Past Five Years | |||
Officer Information: | ||||||
Matthew A. Babinsky,
1983 |
Assistant Vice President and Assistant Secretary | Since 2016 | Assistant Vice President, Assistant General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Associate, Clifford Chance US LLP. | |||
Russell G. Brennan,
1964 |
Assistant Vice President and Assistant Treasurer | Since 2008 | Assistant Vice President of VEAC; Officer of other investment companies advised by VEAC and VEARA. | |||
Charles T. Cameron,
1960 |
Vice President | Since 2006 | Portfolio Manager of VEAC; Officer and/or Portfolio Manager of other investment companies advised by VEAC and VEARA. Formerly, Director of Trading of VEAC. | |||
John J. Crimmins,
1957 |
Vice President, Treasurer, Chief Financial Officer and Principal Accounting Officer | Vice President, Chief Financial Officer and Principal Accounting Officer (Since 2012); Treasurer (Since 2009) | Vice President of VEAC and VEARA; Officer of other investment companies advised by VEAC and VEARA. Formerly, Vice President of VESC. | |||
Eduardo Escario,
1975 |
Vice President | Since 2012 | Regional Director, Business Development/Sales for Southern Europe and South America of VEAC. | |||
Henry Glynn,
1983 |
Assistant Vice President | Since 2018 | Head of ETF Capital Markets Europe of Van Eck Switzerland AG. Formerly, Member of the Capital Markets team at Vanguard Group. | |||
F. Michael Gozzillo,
1965 |
Chief Compliance Officer | Since 2018 | Vice President and Chief Compliance Officer of VEAC and VEARA; Chief Compliance Officer of VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Chief Compliance Officer of City National Rochdale, LLC and City National Rochdale Funds. | |||
Laura Hamilton,
1977 |
Vice President | Since 2019 | Assistant Vice President of VEAC and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Operations Manager of Royce & Associates. | |||
Nicholas Jackson,
1974 |
Assistant Vice President | Since 2018 | Vice President, Business Development of VanEck Australia Pty Ltd. | |||
Laura I. Martínez,
1980 |
Vice President and Assistant Secretary | Vice President (Since 2016); Assistant Secretary Since 2008) | Vice President, Associate General Counsel and Assistant Secretary of VEAC, VEARA and VESC; Officer of other investment companies advised by VEAC and VEARA. Formerly, Assistant Vice President of VEAC, VEARA and VESC. | |||
Matthew McKinnon,
1970 |
Assistant Vice President | Since 2018 | Head of Business Development of Asia Pacific of VanEck Australia Pty Ltd. Formerly, Director, Intermediaries and Institutions of VanEck Australia Pty Ltd. | |||
Arian Neiron,
1979 |
Vice President | Since 2018 | Managing Director and Head of Asia Pacific of VanEck Australia Pty Ltd.; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. | |||
James Parker,
1969 |
Assistant Treasurer | Since 2014 | Assistant Vice President of VEAC; Manager, Portfolio Administration of VEAC and VEARA. Officer of other investment companies advised by VEAC and VEARA. | |||
Adam Phillips,
1970 |
Vice President | Since 2018 | ETF Chief Operating Officer of VEAC. | |||
Philipp Schlegel,
1974 |
Vice President | Since 2016 | Managing Director of Van Eck Switzerland AG. | |||
Jonathan R. Simon,
1974 |
Senior Vice President, Secretary and Chief Legal Officer | Senior Vice President (Since 2016); Secretary and Chief Legal Officer (Since 2014) | Senior Vice President, General Counsel and Secretary of VEAC, VEARA and VESC; Officer and/or Director of other companies affiliated with VEAC and/or the Trust. Formerly, Vice President of VEAC, VEARA and VESC. |
1 | The address for each Officer is 666 Third Avenue, 9th Floor, New York, New York 10017. |
2 | Officers are elected yearly by the Trustees. |
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VANECK VECTORS ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
September 30, 2019 (unaudited)
At a meeting held on June 13, 2019 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck Vectors® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreements between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreements”) with respect to the VanEck Vectors Asia ex Japan Equal Weight ETF, Australia Equal Weight ETF, Australia Hedged Equal Weight ETF, Biotech ETF, Brazil Equal Weight ETF, China Equal Weight ETF, Environmental Services ETF, Europe Equal Weight ETF, Europe Hedged Equal Weight ETF, Gaming ETF, Germany Equal Weight ETF, Global Chemicals ETF, Hong Kong Equal Weight ETF, India Equal Weight ETF, Italy Equal Weight ETF, Japan Equal Weight ETF, Japan Hedged Equal Weight ETF, Mexico Equal Weight ETF, Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, NDR CMG Long/Flat Allocation ETF, Pharmaceutical ETF, Retail ETF, Russia Equal Weight ETF, Semiconductor ETF, South Africa Equal Weight ETF, South Korea Equal Weight ETF, Spain Equal Weight ETF, Taiwan Equal Weight ETF, United Kingdom Equal Weight ETF and Video Gaming and eSports ETF (each, a “Fund” and together, the “Funds”).
The Board’s approval of the Investment Management Agreements was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 10, 2019. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses (for those Funds which had begun operations) of the Funds and the Funds’ peer funds (certain other index-based exchange-traded funds (“ETFs”)), information about the advisory services provided to the Funds and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Funds. In reviewing performance information for the Funds against their peer groups, the Trustees considered that each Fund seeks to track a different index than the funds in its designated peer group and, therefore, each Fund’s performance will differ from its peers. They also considered the fact that each of VanEck Vectors Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF and Video Gaming and eSports ETF had only recently commenced operations and therefore each had a limited operational history that could be used for comparative purposes, since the expense information prepared by Broadridge was based on estimated amounts for each Fund and the performance comparisons provided by Broadridge covered approximately a four month period (October 30, 2018 through February 28, 2019). In addition, as noted below, the Trustees reviewed certain performance information for each Fund which was not provided by Broadridge and which did not compare each Fund’s performance to the performance of its peer group. For these and other reasons, the Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Funds.
The Independent Trustees’ consideration of the Investment Management Agreements was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 10, 2019 meeting regarding the management of the Funds and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Funds. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreements, including, where applicable, the Adviser’s commitment to waive certain fees and/or pay expenses of each of the Funds to the extent necessary to prevent the operating expenses of each of the Funds from exceeding agreed upon limits for a period of time.
The Trustees concluded that the Adviser and its personnel have the requisite expertise and skill to manage the Funds’ portfolios. In evaluating the performance of each of the Funds that had commenced operations prior to the date of the Renewal Meeting (the “Operating Funds”), the Trustees reviewed various performance metrics but relied principally on a comparison of the “gross” performance of each Operating Fund (i.e., measured without regard to the impact of fees and expenses) to the performance of its benchmark index, in each case incorporating any systematic fair value adjustments to the underlying securities. Based on the foregoing, the Trustees concluded that the investment performance of the Operating Funds was satisfactory.
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VANECK VECTORS ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
September 30, 2019 (unaudited) (continued)
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Operating Funds’ expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that each Operating Fund had management fees (after the effect of any applicable fee waiver) below or equal to the average and/or median of its respective peer group of funds, except for each of VanEck Vectors Morningstar International Moat ETF and Morningstar Wide Moat ETF, which had management fees (after the effect of any applicable fee waiver) greater than the average and median of its respective peer group of funds. The Trustees also noted that the information provided showed that each Operating Fund had a total expense ratio (after the effect of any applicable expense limitation) below the average and median of its respective peer group of funds, except for each of VanEck Vectors Gaming ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, NDR CMG Long/Flat Allocation ETF and Video Gaming and eSports ETF, which had a total expense ratio (after the effect of any applicable expense limitation) greater than the average and median of its respective peer group of funds. With respect to these Operating Funds, the Trustees reviewed the amount by which these Operating Funds’ management fees and/or total expense ratios (after the effect of any applicable expense limitation) exceeded the average and/or median of their respective peer groups and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Operating Funds were reasonable in light of the performance of the Operating Funds and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreements, received by the Adviser from serving as adviser to the Funds.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and its profitability or loss in respect of each Operating Fund. The Trustees reviewed each Operating Fund’s asset size, expense ratio and expense cap and noted that the Investment Management Agreements do not include breakpoints in the advisory fee rates as asset levels in a Fund increase. The Trustees considered the volatility of the asset classes in which certain of the Operating Funds invest, potential variability in the net assets of these Funds and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Operating Funds effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on each Operating Fund since its inception, although the cap was not necessarily exceeded each year. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for each Operating Fund is reasonable and appropriate in relation to the current asset size of each Operating Fund and the other factors discussed above and that the advisory fee rate for each Operating Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist. The Trustees also determined that the profits earned by the Adviser with respect to the Funds that were profitable to the Adviser were reasonable in light of the nature and quality of the services received by such Funds.
The Trustees did not consider historical information about the cost of the services provided by the Adviser or the profitability to the Adviser of VanEck Vectors Asia ex Japan Equal Weight ETF, Australia Equal Weight ETF, Australia Hedged Equal Weight ETF, Brazil Equal Weight ETF, China Equal Weight ETF, Europe Equal Weight ETF, Europe Hedged Equal Weight ETF, Germany Equal Weight ETF, Global Chemicals ETF, Hong Kong Equal Weight ETF, India Equal Weight ETF, Italy Equal Weight ETF, Japan Equal Weight ETF, Japan Hedged Equal Weight ETF, Mexico Equal Weight ETF, Russia Equal Weight ETF, South Africa Equal Weight ETF, South Korea Equal Weight ETF, Spain Equal Weight ETF, Taiwan Equal Weight ETF and United Kingdom Equal Weight ETF because the Funds had not yet commenced operations at the time of the Renewal Meeting. The Trustees also could not consider the historical performance or actual management fees or operating expenses of, or the quality of services previously provided to, each of these Funds, although they concluded that the nature, quality and extent of the services to be provided by the Adviser were appropriate based on the Trustees’ knowledge of the Adviser and its personnel and the operations of the other series of the Trust.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 10, 2019 meeting as part of their consideration of the Investment Management Agreements.
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In voting to approve the continuation of the Investment Management Agreements, the Trustees, including the Independent Trustees, concluded that the terms of each Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that each Investment Management Agreement is in the best interest of each Fund and such Fund’s shareholders.
VanEck Vectors Real Asset Allocation ETF (the “Fund”)
At a meeting held on June 13, 2019 (the “Renewal Meeting”), the Board of Trustees (the “Board”) of VanEck Vectors® ETF Trust (the “Trust”), including all of the Trustees that are not interested persons of the Trust (the “Independent Trustees”), approved the continuation of the investment management agreement between the Trust and Van Eck Absolute Return Advisers Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Vectors Real Asset Allocation ETF (the “Fund”).
The Board’s approval of the Investment Management Agreement was based on a comprehensive consideration of all of the information available to the Trustees and was not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered those factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors.
In preparation for the Renewal Meeting, the Trustees held a meeting on May 10, 2019. At that meeting, the Trustees discussed the information the Adviser and Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party data provider, had provided to them in advance. The information provided to the Trustees included, among other things, information about the performance and expenses of the Fund and the Fund’s peer funds (certain other exchange-traded funds (“ETFs”)), information about the advisory services provided to the Fund and the personnel providing those services, and the profitability and other benefits enjoyed by the Adviser and its affiliates as a result of the Adviser’s relationship with the Fund. In addition, as noted below, the Trustees reviewed certain performance information for the Fund which was not provided by Broadridge and which did not compare the Fund’s performance to the performance of its peer group. For these and other reasons, the Trustees noted that the peer group performance information did not necessarily provide meaningful direct comparisons to the Fund.
The Independent Trustees’ consideration of the Investment Management Agreement was based, in part, on their review of information obtained through discussions with the Adviser at the Renewal Meeting and with the Adviser at the May 10, 2019 meeting regarding the management of the Fund and information obtained at other meetings of the Trustees and/or based on their review of the materials provided by the Adviser, including the background and experience of the portfolio managers and others involved in the management and administration of the Fund. The Trustees also considered the terms of, and scope of services that the Adviser provides under, the Investment Management Agreement, including the Adviser’s commitment to waive certain fees and/or pay expenses of the Fund to the extent necessary to prevent the operating expenses of the Fund from exceeding agreed upon limits for a period of time.
The Trustees also considered information relating to the financial condition of the Adviser and the current status, as they understood it, of the Adviser’s compliance environment.
As noted above, the Trustees were also provided various data from Broadridge comparing the Fund’s expenses and performance to that of certain other ETFs. The Trustees noted that the information provided showed that the Fund had management fees below the average and equal to the median of its peer group of funds. The Trustees also noted that the information provided showed that the Fund had a total expense ratio greater than the average and median of its peer group of funds. The Trustees reviewed the amount by which the Fund’s total expense ratio exceeded the average and median of its peer group and information provided by the Adviser providing context for these comparisons. The Trustees concluded, in light of this information and the other information available to them, that the fees paid by the Fund were reasonable in light of the performance of the Fund and the quality of services received.
The Trustees also considered the benefits, other than the fees under the Investment Management Agreement, received by the Adviser from serving as adviser to the Fund.
The Trustees also considered information provided by the Adviser about the overall profitability of the Adviser and the fact that the Adviser did not earn any profits from managing the Fund. The Trustees reviewed the Fund’s asset size,
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VANECK VECTORS ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
September 30, 2019 (unaudited) (continued)
expense ratio and expense cap and noted that the Investment Management Agreement does not include breakpoints in the advisory fee rates as asset levels in the Fund increase. The Trustees considered the volatility of the asset classes in which the Fund invests, potential variability in the net assets of the Fund and the sustainability of any potential economies of scale which may exist given where fees are currently set. The Trustees also evaluated the extent to which management fees for the Fund effectively incorporate the benefits of economies of scale. The Trustees noted that the Adviser has capped expenses on the Fund since its inception. Based on the foregoing and the other information available to them, the Trustees determined that the advisory fee rate for the Fund is reasonable and appropriate in relation to the current asset size of the Fund and the other factors discussed above and that the advisory fee rate for the Fund currently reflects an appropriate sharing with shareholders of any economies of scale which may exist.
The Independent Trustees were advised by and met in executive session with their independent counsel at the Renewal Meeting and at their May 10, 2019 meeting as part of their consideration of the Investment Management Agreement.
In voting to approve the continuation of the Investment Management Agreement, the Trustees, including the Independent Trustees, concluded that the terms of the Investment Management Agreement are reasonable and fair in light of the services to be performed, expenses to be incurred and such other matters as the Trustees considered relevant in the exercise of their reasonable judgment. The Trustees further concluded that the Investment Management Agreement is in the best interest of the Fund and the Fund’s shareholders.
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the respective Fund’s prospectus and summary prospectus, which includes more complete information. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
Additional information about the VanEck Vectors ETF Trust’s (the “Trust”) Board of Trustees/Officers and a description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities are provided in the Statement of Additional Information. The Statement of Additional Information and information regarding how the Trust voted proxies relating to portfolio securities during the most recent twelve month period ending June 30 is available, without charge, by calling 800.826.2333, or by visiting vaneck.com, or on the Securities and Exchange Commission’s website at https://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-PORT. The Trust’s Form N-PORT filings are available on the Commission’s website at https://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Fund’s complete schedule of portfolio holdings is also available by calling 800.826.2333 or by visiting vaneck.com.
Investment Adviser: | Van Eck Associates Corporation | |
Distributor: | Van Eck Securities Corporation | |
666 Third Avenue, New York, NY 10017 | ||
vaneck.com | ||
Account Assistance: | 800.826.2333 | STRATAR |
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Item 2. CODE OF ETHICS. (a) The Registrant has adopted a code of ethics (the "Code of Ethics") that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. (b) The Registrant's code of ethics is reasonably described in this Form N-CSR. (c) The Registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto. (d) The Registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto. (e) Not applicable. (f) The Registrant's Code of Ethics is attached as an Exhibit hereto. Item 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Registrant's Board of Trustees has determined that David Chow, R. Alastair Short, Peter Sidebottom and Richard Stamberger, members of the Audit and Governance Committees, are "audit committee financial experts" and "independent" as such terms are defined in the instructions to Form N-CSR Item 3(a)(2). Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The principal accountant fees disclosed in Item 4(a), 4(b), 4(c), 4(d) and 4(g) are for the Funds of the Registrant for which the fiscal year end is September 30. (a) Audit Fees. The aggregate Audit Fees of Ernst & Young for professional services billed for the audits of the financial statements, or services that are normally provided in connection with statutory and regulatory filings or engagements for the fiscal years ended September 30, 2019 and September 30, 2018, were $326,740 and $281,240 respectively. (b) Audit-Related Fees. Not applicable. (c) Tax Fees. The aggregate Tax Fees of Ernst & Young for professional services billed for the review of Federal, state and excise tax returns and other tax compliance consultations for the fiscal years ended September 30, 2019 and September 30, 2018, were $306,528 and $267,089 respectively. (d) All Other Fees None. (e) The Audit Committee will pre-approve all audit and non-audit services, to be provided to the Fund, by the independent accountants as required by Section 10A of the Securities Exchange Act of 1934. The Audit Committee has authorized the Chairman of the Audit Committee to approve, between meeting dates, appropriate non-audit services. The Audit Committee after considering all factors, including a review of independence issues, will recommend to the Board of Trustees the independent auditors to be selected to audit the financial statements of the Funds.
(f) Not applicable. (g) Not applicable. (h) Not applicable. Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The Registrant's Board has an Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)) consisting of four Independent Trustees. Messrs. Chow, Short, Sidebottom and Stamberger currently serve as members of the Audit Committee. Mr. Short is the Chairman of the Audit Committee. Item 6. SCHEDULE OF INVESTMENTS. Information included in Item 1. Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. Item 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. Item 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3 (c)) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15 (b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT COMPANIES. Not applicable. Item 13. EXHIBITS. (a)(1) The code of ethics is attached as EX-99.CODE ETH (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached as Exhibit 99.CERT. (b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is furnished as Exhibit 99.906CERT.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) VANECK VECTORS ETF TRUST By (Signature and Title) /s/ John J. Crimmins, Treasurer and CFO --------------------------------------- Date December 9, 2019 ---------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ Jan F. van Eck, CEO -------------------------- Date December 9, 2019 ---------------- By (Signature and Title) /s/ John J. Crimmins, Treasurer and CFO ------------------------------------------ Date December 9, 2019 ----------------
EX-99.CODE ETH
VANECK VIP TRUST
VANECK FUNDS
VANECK VECTORS ETF TRUST
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. COVERED OFFICERS/PURPOSE OF THE CODE
VanEck's Code of Ethics (this "Code") for the investment companies within
the complex (collectively, "Funds" and each, "Company") applies to the Company's
Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer (the "Covered Officers" each of whom are set forth in Exhibit
A) for the purpose of promoting:
o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
o full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company;
o compliance with applicable laws and governmental rules and regulations;
o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
o accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST
OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company.
Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as "affiliated persons" of the Company. The Company's and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company.
Each Covered Officer must:
o not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Company whereby the Covered Officer would benefit personally to the detriment of the Company;
o not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Company;
o not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions;
There are some conflict of interest situations that should always be discussed with the Compliance Officer if material. Examples of these include:
o service as a director on the board of any public or private company;
o the receipt of any non-nominal gifts;
o the receipt of any entertainment from any company with which the Company has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety.
o any ownership interest in, or any consulting or employment relationship with, any of the Company's service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof,
o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership.
III. DISCLOSURE AND COMPLIANCE
o Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the Company;
o Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company's directors and auditors, and to governmental regulators and self-regulatory organizations;
o Each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and
o It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.
IV. REPORTING AND ACCOUNTABILITY
Each Covered Officer must:
o report at least annually all affiliations or other relationships related to conflicts of interest that the Company's Directors and Officers Questionnaire covers;
o upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he has received, read, and understands the Code;
o annually thereafter affirm to the Board that he has complied with the requirements of the Code;
o not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith, and
o notify the Compliance Officer promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code.
The Compliance Officer or other designated senior legal officer of the Funds' investment adviser is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Governance Committee.
The Company will follow these procedures in investigating and enforcing this Code:
o the Compliance Officer or other designated senior legal officer will take all appropriate action to investigate any potential violations reported to him;
o if, after such investigation, the Compliance Officer believes that no violation has occurred, the Compliance Officer is not required to take any further action;
o any matter that the Compliance Officer believes is a violation will be reported to the Committee;
o if the Committee concurs that a violation has occurred, it will inform the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer;
o the Committee will be responsible for granting waivers, as appropriate; and any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.
V. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Funds for purposes of
Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to
registered investment companies thereunder. Insofar as other policies or
procedures of the Funds, the Funds' adviser, principal underwriter, or other
service providers govern or purport to govern the behavior or activities of the
Covered Officers who are subject to this Code, they are superseded by this Code
to the extent that they overlap or conflict with the provisions of this Code.
The Funds' and their investment adviser's and principal underwriter's codes of
ethics under Rule 17j-1 under the Investment Company Act and the adviser's more
detailed policies and procedures set forth in the Van Eck Employee Manual are
separate requirements applying to the Covered Officers and others, and are not
part of this Code.
VI. AMENDMENTS
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board.
VII. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and its counsel.
VIII. INTERNAL USE
The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion.
EXHIBIT A
COVERED OFFICERS
Jan F. van Eck, Chief Executive Officer, VanEck Funds, VanEck VIP Trust and VanEck Vectors ETF Trust
John J. Crimmins, Treasurer & Chief Financial Officer
Exhibit 99.CERT
CERTIFICATIONS
I, Jan F. van Eck, Chief Executive Officer, certify that:
1. I have reviewed this report on Form N-CSR of VanEck Vectors ETF Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets, of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's Board of Trustees (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/s/ Jan F. van Eck ------------------------------ Jan F. van Eck Chief Executive Officer |
I, John J. Crimmins, Treasurer and Chief Financial Officer, certify that:
1. I have reviewed this report on Form N-CSR of VanEck Vectors ETF Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets, of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's Board of Trustees (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/s/ John J. Crimmins --------------------------------------- John J. Crimmins Treasurer & Chief Financial Officer |
EX99-906CERT
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of VanEck Vectors ETF Trust (comprising of Biotech ETF, Environmental Services ETF, Gaming ETF, Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF, Morningstar Wide Moat ETF, NDR CMG Long/Flat Allocation ETF, Pharmaceutical ETF, Real Asset Allocation ETF, Retail ETF, Semiconductor ETF and Video Gaming and eSports ETF), do hereby certify, to such officer's knowledge, that:
The annual report on Form N-CSR of VanEck Vectors ETF Trust for the period ending September 30, 2019 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of VanEck Vectors ETF Trust.
Dated: December 9, 2019 /s/ Jan F. van Eck ---------------------------------------- Jan F. van Eck Chief Executive Officer VanEck Vectors ETF Trust Dated: December 9, 2019 /s/ John J. Crimmins ---------------------------------------- John J. Crimmins Treasurer & Chief Financial Officer VanEck Vectors ETF Trust |
This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document.