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: MARCH 31, 2020
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ITEM 1. REPORT TO SHAREHOLDERS
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SEMI-ANNUAL REPORT March 31, 2020 (unaudited) |
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. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of March 31, 2020.
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VANECK VECTORS ETFs
March 31, 2020 (unaudited)
Dear Fellow Shareholders:
The story for 2019 was simple and familiar—slower economic growth was combated by expansive monetary policy. China continued its “drip stimulus” policies after its hard credit squeeze of 2018, resulting in satisfactory growth as we track monthly in our China blog.1
But that seems a long time ago now that COVID-19 virus has triggered a global recession in 2020. In early March, we entered a period of “heightened uncertainty” that I expected would last to mid-April. (I say “heightened” because there is always uncertainty in the world.) Now, investors are awaiting: (a) for the virus’ effects to abate, hopefully, and (b) for the pace of economic recovery to be established. A possible scenario is one that echoes the global financial crisis: a slow pace of economic recovery (uneven industry sector recovery), slow employment growth, but quicker financial market recovery.
To get our quarterly investment outlooks, please subscribe to “Investment Outlook” 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 financial statements for each of the funds for the six month period ended March 31, 2020. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
Jan F. van Eck
CEO and President
VanEck Vectors ETF Trust
April 17, 2020
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 | VanEck: China’s Economic Growth, https://www.vaneck.com/blogs/investment-outlook/china-economic-growth |
| 1 |
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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, October 1, 2019 to March 31, 2020.
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.
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Beginning
Account Value October 1, 2019 |
Ending
Account Value March 31, 2020 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period* October 1, 2019 – March 31, 2020 |
|||||||
| Biotech ETF | ||||||||||
| Actual | $1,000.00 | $ | 1,087.20 | 0.35% | $1.83 | |||||
| Hypothetical** | $1,000.00 | $ | 1,023.25 | 0.35% | $1.77 | |||||
| Environmental Services ETF | ||||||||||
| Actual | $1,000.00 | $ | 744.10 | 0.55% | $2.40 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.25 | 0.55% | $2.78 | |||||
| Gaming ETF | ||||||||||
| Actual | $1,000.00 | $ | 726.70 | 0.65% | $2.81 | |||||
| Hypothetical** | $1,000.00 | $ | 1,021.75 | 0.65% | $3.29 | |||||
| Pharmaceutical ETF | ||||||||||
| Actual | $1,000.00 | $ | 964.00 | 0.35% | $1.72 | |||||
| Hypothetical** | $1,000.00 | $ | 1,023.25 | 0.35% | $1.77 | |||||
| Retail ETF | ||||||||||
| Actual | $1,000.00 | $ | 929.60 | 0.35% | $1.69 | |||||
| Hypothetical** | $1,000.00 | $ | 1,023.25 | 0.35% | $1.77 | |||||
| Semiconductor ETF | ||||||||||
| Actual | $1,000.00 | $ | 997.60 | 0.35% | $1.75 | |||||
| Hypothetical** | $1,000.00 | $ | 1,023.25 | 0.35% | $1.77 | |||||
| Video Gaming and eSports ETF | ||||||||||
| Actual | $1,000.00 | $ | 1,146.40 | 0.55% | $2.95 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.25 | 0.55% | $2.78 | |||||
| * | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended March 31, 2020) 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 |
| 2 |
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March 31, 2020 (unaudited)
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 $39,535,676. |
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Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Biotechnology | 76.3 | % | $ | 244,108,209 | ||||
| Health Care Services | 2.0 | 6,294,833 | ||||||
| Life Sciences Tools & Services | 14.9 | 47,838,504 | ||||||
| Pharmaceuticals | 6.8 | 21,738,494 | ||||||
| 100.0 | % | $ | 319,980,040 | |||||
See Notes to Financial Statements
| 3 |
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VANECK VECTORS BIOTECH ETF
SCHEDULE OF INVESTMENTS
(unaudited) (continued)
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 319,980,040 | $ | — | $ | — | $ | 319,980,040 | |||||||||
| Money Market Fund | 5,861,761 | — | — | 5,861,761 | |||||||||||||
| Total | $ | 325,841,801 | $ | — | $ | — | $ | 325,841,801 | |||||||||
| * | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
| 4 |
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VANECK VECTORS ENVIRONMENTAL SERVICES ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
Footnotes:
| * | Non-income producing |
| † | Security fully or partially on loan. Total market value of securities on loan is $2,128,304. |
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Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Consumer Discretionary | 2.1 | % | $ | 606,168 | ||||
| Consumer Staples | 4.8 | 1,358,290 | ||||||
| Health Care | 15.5 | 4,361,004 | ||||||
| Industrials | 73.1 | 20,626,916 | ||||||
| Materials | 4.5 | 1,267,320 | ||||||
| 100.0 | % | $ | 28,219,698 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 28,219,698 | $ | — | $ | — | $ | 28,219,698 | |||||||||
| Money Market Fund | 709,976 | — | — | 709,976 | |||||||||||||
| Total | $ | 28,929,674 | $ | — | $ | — | $ | 28,929,674 | |||||||||
| * | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
| 5 |
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SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
|
Number
of Shares |
Value | |||||||
| Singapore: 2.7% | ||||||||
| 1,231,700 | Genting Singapore Ltd. # | $ | 596,030 | |||||
| South Korea: 2.0% | ||||||||
| 19,983 | Kangwon Land, Inc. # | 322,023 | ||||||
| 11,063 | Paradise Co. Ltd. # | 116,129 | ||||||
| 438,152 | ||||||||
| Sweden: 3.0% | ||||||||
| 19,724 | Evolution Gaming Group AB Reg S 144A # | 667,717 | ||||||
| United Kingdom: 3.9% | ||||||||
| 94,936 | GVC Holdings Plc # | 656,458 | ||||||
| 45,856 | Playtech Ltd. # | 95,023 | ||||||
| 132,922 | William Hill Plc # | 110,001 | ||||||
| 861,482 | ||||||||
| United States: 34.9% | ||||||||
| 11,154 | Boyd Gaming Corp. | 160,841 | ||||||
| 81,509 | Caesars Entertainment Corp. * † | 551,001 | ||||||
| 5,499 | Churchill Downs, Inc. | 566,122 | ||||||
| 5,409 | Eldorado Resorts, Inc. * | 77,890 | ||||||
| 30,369 | Gaming and Leisure Properties, Inc. | 841,525 | ||||||
| 21,760 | International Game Technology Plc † | 129,472 | ||||||
| 45,000 | Las Vegas Sands Corp. | 1,911,150 | ||||||
| 21,679 | MGM Growth Properties LLC | 513,142 | ||||||
| 70,597 | MGM Resorts International | 833,044 | ||||||
| 13,709 | Penn National Gaming, Inc. * † | 173,419 | ||||||
| 65,128 | VICI Properties, Inc. † | 1,083,730 | ||||||
| 13,544 | Wynn Resorts Ltd. | 815,213 | ||||||
| 7,656,549 | ||||||||
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Total Common Stocks
(Cost: $32,622,166) |
21,985,013 | |||||||
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SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 0.5%
(Cost: $122,572) |
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| Money Market Fund: 0.5% | ||||||||
| 122,572 | State Street Navigator Securities Lending Government Money Market Portfolio | 122,572 | ||||||
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Total Investments: 100.6%
(Cost: $32,744,738) |
22,107,585 | |||||||
| Liabilities in excess of other assets: (0.6)% | (136,890 | ) | ||||||
| NET ASSETS: 100.0% | $ | 21,970,695 | ||||||
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 $3,522,691. |
| # | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $12,804,983 which represents 58.3% 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 $667,717, or 3.0% of net assets. |
See Notes to Financial Statements
| 6 |
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Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Consumer Discretionary | 88.9 | % | $ | 19,546,616 | ||||
| Real Estate | 11.1 | 2,438,397 | ||||||
| 100.0 | % | $ | 21,985,013 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks | |||||||||||||||||
| Australia | $ | — | $ | 2,285,130 | $ | — | $ | 2,285,130 | |||||||||
| Cambodia | — | 368,563 | — | 368,563 | |||||||||||||
| Canada | 786,216 | — | — | 786,216 | |||||||||||||
| China / Hong Kong | 598,288 | 4,305,115 | — | 4,903,403 | |||||||||||||
| Greece | — | 326,969 | — | 326,969 | |||||||||||||
| Ireland | — | 1,188,100 | — | 1,188,100 | |||||||||||||
| Japan | — | 979,039 | — | 979,039 | |||||||||||||
| Malaysia | — | 702,757 | — | 702,757 | |||||||||||||
| Malta | 138,977 | — | — | 138,977 | |||||||||||||
| New Zealand | — | 85,929 | — | 85,929 | |||||||||||||
| Singapore | — | 596,030 | — | 596,030 | |||||||||||||
| South Korea | — | 438,152 | — | 438,152 | |||||||||||||
| Sweden | — | 667,717 | — | 667,717 | |||||||||||||
| United Kingdom | — | 861,482 | — | 861,482 | |||||||||||||
| United States | 7,656,549 | — | — | 7,656,549 | |||||||||||||
| Money Market Fund | 122,572 | — | — | 122,572 | |||||||||||||
| Total | $ | 9,302,602 | $ | 12,804,983 | $ | — | $ | 22,107,585 | |||||||||
See Notes to Financial Statements
| 7 |
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VANECK VECTORS PHARMACEUTICAL ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
|
Number
of Shares |
Value | |||||||
| United States: 57.7% | ||||||||
| 109,620 | AbbVie, Inc. | $ | 8,351,948 | |||||
| 98,531 | AmerisourceBergen Corp. | 8,719,993 | ||||||
| 341,830 | Bausch Health Cos, Inc. * | 5,298,365 | ||||||
| 164,593 | Bristol-Myers Squibb Co. | 9,174,414 | ||||||
| 100,058 | Catalent, Inc. * | 5,198,013 | ||||||
| 281,340 | Elanco Animal Health, Inc. * | 6,299,203 | ||||||
| 66,427 | Eli Lilly & Co. | 9,214,753 | ||||||
| 70,570 | Johnson & Johnson | 9,253,844 | ||||||
| 61,930 | McKesson Corp. | 8,376,652 | ||||||
| 117,366 | Merck & Co., Inc. | 9,030,140 | ||||||
| 432,326 | Mylan NV * | 6,445,981 | ||||||
| 63,048 | Patterson Companies, Inc. † | 964,004 | ||||||
| 289,127 | Pfizer, Inc. | 9,437,105 | ||||||
| 64,259 | Zoetis, Inc. | 7,562,642 | ||||||
| 103,327,057 | ||||||||
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Total Common Stocks
(Cost: $239,061,726) |
178,578,325 | |||||||
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SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.5%
(Cost: $2,698,352) |
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| Money Market Fund: 1.5% | ||||||||
| 2,698,352 | State Street Navigator Securities Lending Government Money Market Portfolio | 2,698,352 | ||||||
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Total Investments: 101.2%
(Cost: $241,760,078) |
181,276,677 | |||||||
| Liabilities in excess of other assets: (1.2)% | (2,236,573 | ) | ||||||
| NET ASSETS: 100.0% | $ | 179,040,104 | ||||||
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 $13,187,047. |
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Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Biotechnology | 5.5 | % | $ | 9,873,220 | ||||
| Health Care Distributors | 10.1 | 18,060,649 | ||||||
| Pharmaceuticals | 84.4 | 150,644,456 | ||||||
| 100.0 | % | $ | 178,578,325 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 178,578,325 | $ | — | $ | — | $ | 178,578,325 | |||||||||
| Money Market Fund | 2,698,352 | — | — | 2,698,352 | |||||||||||||
| Total | $ | 181,276,677 | $ | — | $ | — | $ | 181,276,677 | |||||||||
| * | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
| 8 |
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SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
Definitions:
| ADR | American Depositary Receipt |
Footnotes:
| * | Non-income producing |
| † | Security fully or partially on loan. Total market value of securities on loan is $417,954. |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Consumer Discretionary | 64.9 | % | $ | 52,816,188 | ||||
| Consumer Staples | 24.2 | 19,716,262 | ||||||
| Health Care | 10.9 | 8,865,626 | ||||||
| 100.0 | % | $ | 81,398,076 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 81,398,076 | $ | — | $ | — | $ | 81,398,076 | |||||||||
| Money Market Fund | 173,209 | — | — | 173,209 | |||||||||||||
| Total | $ | 81,571,285 | $ | — | $ | — | $ | 81,571,285 | |||||||||
| * | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
| 9 |
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VANECK VECTORS SEMICONDUCTOR ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
|
Number
of Shares |
Value | |||||||
|
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 1.7%
(Cost: $29,169,812) |
||||||||
| Money Market Fund: 1.7% | ||||||||
| 29,169,812 | State Street Navigator Securities Lending Government Money Market Portfolio | $ | 29,169,812 | |||||
|
Total Investments: 101.6%
(Cost: $2,115,317,323) |
1,762,722,710 | |||||||
| Liabilities in excess of other assets: (1.6)% | (27,224,869 | ) | ||||||
| NET ASSETS: 100.0% | $ | 1,735,497,841 | ||||||
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 $59,635,815. |
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Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Application Software | 2.7 | % | $ | 47,279,489 | ||||
| Semiconductor Equipment | 17.8 | 308,031,151 | ||||||
| Semiconductors | 79.5 | 1,378,242,258 | ||||||
| 100.0 | % | $ | 1,733,552,898 | |||||
See Notes to Financial Statements
| 10 |
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The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 1,733,552,898 | $ | — | $ | — | $ | 1,733,552,898 | |||||||||
| Money Market Fund | 29,169,812 | — | — | 29,169,812 | |||||||||||||
| Total | $ | 1,762,722,710 | $ | — | $ | — | $ | 1,762,722,710 | |||||||||
| * | See Schedule of Investments for geographic sector breakouts. |
See Notes to Financial Statements
| 11 |
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VANECK VECTORS VIDEO GAMING AND ESPORTS ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
|
Number
of Shares |
Value | |||||||
| Sweden: 1.3% | ||||||||
| 164,069 | Embracer Group AB * # | $ | 1,608,224 | |||||
| Taiwan: 2.3% | ||||||||
| 954,000 | Micro-Star International Co. Ltd. # | 2,788,344 | ||||||
| United States: 36.0% | ||||||||
| 133,316 | Activision Blizzard, Inc. | 7,929,636 | ||||||
| 186,393 | Advanced Micro Devices, Inc. * | 8,477,154 | ||||||
| 66,146 | Electronic Arts, Inc. * | 6,625,845 | ||||||
| 39,499 | NVIDIA Corp. | 10,411,936 | ||||||
| 45,996 | Take-Two Interactive Software, Inc. * | 5,455,585 | ||||||
| 818,520 | Zynga, Inc. * | 5,606,862 | ||||||
| 44,507,018 | ||||||||
|
Total Common Stocks
(Cost: $113,181,017) |
123,403,590 | |||||||
|
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 8.1%
(Cost: $10,036,902) |
||||||||
| Money Market Fund: 8.1% | ||||||||
| 10,036,902 | State Street Navigator Securities Lending Government Money Market Portfolio | 10,036,902 | ||||||
|
Total Investments: 108.0%
(Cost: $123,217,919) |
133,440,492 | |||||||
| Liabilities in excess of other assets: (8.0)% | (9,928,399 | ) | ||||||
| NET ASSETS: 100.0% | $ | 123,512,093 | ||||||
Definitions:
| ADR | American Depositary Receipt |
Footnotes:
| * | Non-income producing |
| † | Security fully or partially on loan. Total market value of securities on loan is $13,309,582. |
| # | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $64,570,615 which represents 52.3% 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 $2,351,070, or 1.9% of net assets. |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Communication Services | 76.6 | % | $ | 94,570,209 | ||||
| Consumer Discretionary | 4.1 | 5,043,566 | ||||||
| Information Technology | 19.3 | 23,789,815 | ||||||
| 100.0 | % | $ | 123,403,590 | |||||
See Notes to Financial Statements
| 12 |
|
|
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||
| Common Stocks | |||||||||||||||
| China / Hong Kong | $ | 9,273,066 | $ | 11,990,371 | $ | — | $ | 21,263,437 | |||||||
| France | — | 5,370,194 | — | 5,370,194 | |||||||||||
| Japan | — | 28,503,930 | — | 28,503,930 | |||||||||||
| Poland | — | 5,536,747 | — | 5,536,747 | |||||||||||
| Singapore | 5,052,891 | — | — | 5,052,891 | |||||||||||
| South Korea | — | 8,772,805 | — | 8,772,805 | |||||||||||
| Sweden | — | 1,608,224 | — | 1,608,224 | |||||||||||
| Taiwan | — | 2,788,344 | — | 2,788,344 | |||||||||||
| United States | 44,507,018 | — | — | 44,507,018 | |||||||||||
| Money Market Fund | 10,036,902 | — | — | 10,036,902 | |||||||||||
| Total | $ | 68,869,877 | $ | 64,570,615 | $ | — | $ | 133,440,492 | |||||||
See Notes to Financial Statements
| 13 |
|
|
VANECK VECTORS ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2020 (unaudited)
|
Biotech
ETF |
Environmental
Services ETF |
Gaming
ETF |
Pharmaceutical
ETF |
||||||||||||||
| Assets: | |||||||||||||||||
| Investments, at value | |||||||||||||||||
| Unaffiliated issuers (1)(2) | $ | 319,980,040 | $ | 28,219,698 | $ | 21,985,013 | $ | 178,578,325 | |||||||||
| Short-term investments held as collateral for securities loaned (3) | 5,861,761 | 709,976 | 122,572 | 2,698,352 | |||||||||||||
| Cash | — | 335,352 | — | 23,236 | |||||||||||||
| Receivables: | |||||||||||||||||
| Investment securities sold | — | 3,607,027 | — | — | |||||||||||||
| Shares of beneficial interest sold | — | — | — | — | |||||||||||||
| Dividends and interest | 11,302 | 36,321 | 109,253 | 547,878 | |||||||||||||
| Prepaid expenses | 3,478 | 484 | 479 | 1,981 | |||||||||||||
| Total assets | 325,856,581 | 32,908,858 | 22,217,317 | 181,849,772 | |||||||||||||
| Liabilities: | |||||||||||||||||
| Payables: | |||||||||||||||||
| Investment securities purchased | — | 5,133,321 | — | — | |||||||||||||
| Collateral for securities loaned | 5,861,761 | 709,976 | 122,572 | 2,698,352 | |||||||||||||
| Shares of beneficial interest redeemed | — | — | — | — | |||||||||||||
| Line of credit | 500,678 | — | — | — | |||||||||||||
| Due to Adviser | 82,443 | 4,036 | 471 | 42,867 | |||||||||||||
| Due to custodian | — | — | 86,404 | — | |||||||||||||
| Deferred Trustee fees | 20,867 | 2,148 | 1,570 | 11,610 | |||||||||||||
| Accrued expenses | 98,030 | 27,432 | 35,605 | 56,839 | |||||||||||||
| Total liabilities | 6,563,779 | 5,876,913 | 246,622 | 2,809,668 | |||||||||||||
| NET ASSETS | $ | 319,292,802 | $ | 27,031,945 | $ | 21,970,695 | $ | 179,040,104 | |||||||||
| Shares outstanding | 2,496,503 | 350,000 | 850,000 | 3,288,138 | |||||||||||||
| Net asset value, redemption and offering price per share | $ | 127.90 | $ | 77.23 | $ | 25.85 | $ | 54.45 | |||||||||
| Net Assets consist of: | |||||||||||||||||
| Aggregate paid in capital | $ | 403,765,070 | $ | 41,239,122 | $ | 43,266,585 | $ | 281,338,180 | |||||||||
| Total distributable earnings (loss) | (84,472,268 | ) | (14,207,177 | ) | (21,295,890 | ) | (102,298,076 | ) | |||||||||
| NET ASSETS | $ | 319,292,802 | $ | 27,031,945 | $ | 21,970,695 | $ | 179,040,104 | |||||||||
| (1) Value of securities on loan | $ | 39,535,676 | $ | 2,128,304 | $ | 3,522,691 | $ | 13,187,047 | |||||||||
| (2) Cost of investments | $ | 353,501,472 | $ | 33,468,429 | $ | 32,622,166 | $ | 239,061,726 | |||||||||
| (3) Cost of short-term investments held as collateral for securities loaned | $ | 5,861,761 | $ | 709,976 | $ | 122,572 | $ | 2,698,352 | |||||||||
See Notes to Financial Statements
| 14 |
|
|
| Retail ETF |
Semiconductor
ETF |
Video Gaming
and eSports ETF |
|||||||||||
| $ | 81,398,076 | $ | 1,733,552,898 | $ | 123,403,590 | ||||||||
| 173,209 | 29,169,812 | 10,036,902 | |||||||||||
| — | 31,727 | 7,670 | |||||||||||
| — | 163,943,883 | — | |||||||||||
| — | 101,740,860 | — | |||||||||||
| 71,493 | 2,514,038 | 310,083 | |||||||||||
| 1,133 | 5,770 | 423 | |||||||||||
| 81,643,911 | 2,030,958,988 | 133,758,668 | |||||||||||
| — | 101,750,728 | — | |||||||||||
| 173,209 | 29,169,812 | 10,036,902 | |||||||||||
| — | 163,936,626 | — | |||||||||||
| — | — | 160,502 | |||||||||||
| 11,205 | 469,768 | 38,139 | |||||||||||
| 51,716 | — | — | |||||||||||
| 6,036 | 85,763 | 3,283 | |||||||||||
| 26,650 | 48,450 | 7,749 | |||||||||||
| 268,816 | 295,461,147 | 10,246,575 | |||||||||||
| $ | 81,375,095 | $ | 1,735,497,841 | $ | 123,512,093 | ||||||||
| 771,531 | 14,820,937 | 3,200,000 | |||||||||||
| $ | 105.47 | $ | 117.10 | $ | 38.60 | ||||||||
| $ | 96,404,498 | $ | 1,896,592,665 | $ | 114,908,511 | ||||||||
| (15,029,403 | ) | (161,094,824 | ) | 8,603,582 | |||||||||
| $ | 81,375,095 | $ | 1,735,497,841 | $ | 123,512,093 | ||||||||
| $ | 417,954 | $ | 59,635,815 | $ | 13,309,582 | ||||||||
| $ | 93,158,976 | $ | 2,086,147,511 | $ | 113,181,017 | ||||||||
| $ | 173,209 | $ | 29,169,812 | $ | 10,036,902 | ||||||||
See Notes to Financial Statements
| 15 |
|
|
VANECK VECTORS ETF TRUST
For the Six Months Ended March 31, 2020 (unaudited)
|
Biotech
ETF |
Environmental
Services ETF |
Gaming
ETF |
Pharmaceutical
ETF |
|||||||||||||||||
| Income: | ||||||||||||||||||||
| Dividends | $ | 1,281,760 | $ | 202,389 | $ | 363,152 | $ | 2,058,909 | ||||||||||||
| Interest | 261 | 178 | 373 | 225 | ||||||||||||||||
| Securities lending income | 12,433 | 17,378 | 1,514 | 11,335 | ||||||||||||||||
| Foreign taxes withheld | (13,813 | ) | (2,266 | ) | (6,158 | ) | (129,247 | ) | ||||||||||||
| Total income | 1,280,641 | 217,679 | 358,881 | 1,941,222 | ||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Management fees | 608,723 | 89,818 | 60,856 | 307,035 | ||||||||||||||||
| Professional fees | 15,856 | 20,957 | 19,816 | 16,278 | ||||||||||||||||
| Custodian fees | 2,351 | 1,489 | 2,721 | 1,999 | ||||||||||||||||
| Fund accounting fees | 9,498 | 4,577 | 5,375 | 5,608 | ||||||||||||||||
| Reports to shareholders | 11,979 | 5,292 | 6,063 | 7,615 | ||||||||||||||||
| IOPV fees | 1,814 | — | 2,916 | 1,952 | ||||||||||||||||
| Trustees’ fees and expenses | 2,402 | 85 | 147 | 1,131 | ||||||||||||||||
| Registration fees | 1,655 | 4,319 | 2,443 | 2,067 | ||||||||||||||||
| Transfer agent fees | 869 | 1,185 | 1,170 | 936 | ||||||||||||||||
| Insurance | 3,425 | 806 | 792 | 2,163 | ||||||||||||||||
| Interest | 6,995 | — | 295 | 3,782 | ||||||||||||||||
| Other | 1,621 | 409 | 3,228 | 972 | ||||||||||||||||
| Total expenses | 667,188 | 128,937 | 105,822 | 351,538 | ||||||||||||||||
| Waiver of management fees | (52,125 | ) | (30,136 | ) | (26,408 | ) | (40,115 | ) | ||||||||||||
| Net expenses | 615,063 | 98,801 | 79,414 | 311,423 | ||||||||||||||||
| Net investment income | 665,578 | 118,878 | 279,467 | 1,629,799 | ||||||||||||||||
| Net realized gain (loss) on: | ||||||||||||||||||||
| Investments | (16,114,169 | ) | (3,305,076 | ) | (534,799 | ) | (6,529,144 | ) | ||||||||||||
| In-kind redemptions | 10,533,358 | 1,599,132 | 348,583 | 16,301,594 | ||||||||||||||||
| Foreign currency transactions and foreign denominated assets and liabilities | — | (35 | ) | (4,367 | ) | — | ||||||||||||||
| Net realized gain (loss) | (5,580,811 | ) | (1,705,979 | ) | (190,583 | ) | 9,772,450 | |||||||||||||
| Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
| Investments | 33,177,804 | (7,704,785 | ) | (5,671,153 | ) | (12,166,525 | ) | |||||||||||||
| Foreign currency transactions and foreign denominated assets and liabilities | — | — | 455 | — | ||||||||||||||||
| Net change in unrealized appreciation (depreciation) | 33,177,804 | (7,704,785 | ) | (5,670,698 | ) | (12,166,525 | ) | |||||||||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 28,262,571 | $ | (9,291,886 | ) | $ | (5,581,814 | ) | $ | (764,276 | ) | |||||||||
See Notes to Financial Statements
| 16 |
|
|
| Retail ETF |
Semiconductor
ETF |
Video Gaming
and eSports ETF |
|||||||||||
| $ | 660,174 | $ | 14,919,177 | $ | 440,307 | ||||||||
| 302 | 6,329 | 669 | |||||||||||
| 327 | 109,185 | 10,066 | |||||||||||
| — | (986,027 | ) | (38,080 | ) | |||||||||
| 660,803 | 14,048,664 | 412,962 | |||||||||||
| 155,546 | 2,751,361 | 166,894 | |||||||||||
| 19,993 | 19,314 | 18,598 | |||||||||||
| 763 | 10,375 | 4,730 | |||||||||||
| 5,443 | 31,800 | 2,994 | |||||||||||
| 7,603 | 25,100 | 4,754 | |||||||||||
| 2,420 | 1,685 | 1,970 | |||||||||||
| 1,114 | 14,475 | 589 | |||||||||||
| 2,423 | 2,507 | 4,192 | |||||||||||
| 1,160 | 1,047 | 1,202 | |||||||||||
| 1,674 | 5,415 | 790 | |||||||||||
| 170 | 9,524 | 621 | |||||||||||
| 514 | 5,542 | 239 | |||||||||||
| 198,823 | 2,878,145 | 207,573 | |||||||||||
| (43,351 | ) | (129,917 | ) | (21,779 | ) | ||||||||
| 155,472 | 2,748,228 | 185,794 | |||||||||||
| 505,331 | 11,300,436 | 227,168 | |||||||||||
| (1,727,345 | ) | (26,460,576 | ) | (1,553,494 | ) | ||||||||
| 3,383,953 | 237,752,614 | — | |||||||||||
| — | — | (24,017 | ) | ||||||||||
| 1,656,608 | 211,292,038 | (1,577,511 | ) | ||||||||||
| (6,977,833 | ) | (259,955,464 | ) | 7,344,928 | |||||||||
| — | — | (602 | ) | ||||||||||
| (6,977,833 | ) | (259,955,464 | ) | 7,344,326 | |||||||||
| $ | (4,815,894 | ) | $ | (37,362,990 | ) | $ | 5,993,983 | ||||||
See Notes to Financial Statements
| 17 |
|
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| Biotech ETF | Environmental Services ETF | |||||||||||||||||||
|
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
|||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Operations: | ||||||||||||||||||||
| Net investment income | $ | 665,578 | $ | 1,220,768 | $ | 118,878 | $ | 138,740 | ||||||||||||
| Net realized gain (loss) | (5,580,811 | ) | (5,451,394 | ) | (1,705,979 | ) | 3,118,604 | |||||||||||||
| Net change in unrealized appreciation (depreciation) | 33,177,804 | (54,057,304 | ) | (7,704,785 | ) | (1,067,809 | ) | |||||||||||||
| Net increase (decrease) in net assets resulting from operations | 28,262,571 | (58,287,930 | ) | (9,291,886 | ) | 2,189,535 | ||||||||||||||
| Distributions to shareholders: | ||||||||||||||||||||
| Dividends and Distributions | (1,250,208 | ) | (1,899,023 | ) | (165,025 | ) | (95,100 | ) | ||||||||||||
| Share transactions:** | ||||||||||||||||||||
| Proceeds from sale of shares | 26,902,143 | 45,900,271 | 5,324,969 | 29,326,383 | ||||||||||||||||
| Cost of shares redeemed | (52,920,791 | ) | (143,308,258 | ) | (5,324,703 | ) | (19,092,505 | ) | ||||||||||||
| Increase (decrease) in net assets resulting from share transactions | (26,018,648 | ) | (97,407,987 | ) | 266 | 10,233,878 | ||||||||||||||
| Total increase (decrease) in net assets | 993,715 | (157,594,940 | ) | (9,456,645 | ) | 12,328,313 | ||||||||||||||
| Net Assets, beginning of period | 318,299,087 | 475,894,027 | 36,488,590 | 24,160,277 | ||||||||||||||||
| Net Assets, end of period | $ | 319,292,802 | $ | 318,299,087 | $ | 27,031,945 | $ | 36,488,590 | ||||||||||||
| ** Shares of Common Stock Issued (no par value) | ||||||||||||||||||||
| Shares sold | 200,000 | 400,000 | 50,000 | 300,000 | ||||||||||||||||
| Shares redeemed | (400,000 | ) | (1,200,000 | ) | (50,000 | ) | (200,000 | ) | ||||||||||||
| Net increase (decrease) | (200,000 | ) | (800,000 | ) | — | 100,000 | ||||||||||||||
See Notes to Financial Statements
| 18 |
|
|
| Gaming ETF | Pharmaceutical ETF | Retail ETF | ||||||||||||||||||||||||||
|
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
|||||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||
| $ | 279,467 | $ | 769,118 | $ | 1,629,799 | $ | 3,577,677 | $ | 505,331 | $ | 1,128,265 | |||||||||||||||||
| (190,583 | ) | (2,157,504 | ) | 9,772,450 | (36,404,108 | ) | 1,656,608 | 2,451,083 | ||||||||||||||||||||
| (5,670,698 | ) | 285,460 | (12,166,525 | ) | 7,257,515 | (6,977,833 | ) | (8,435,510 | ) | |||||||||||||||||||
| (5,581,814 | ) | (1,102,926 | ) | (764,276 | ) | (25,568,916 | ) | (4,815,894 | ) | (4,856,162 | ) | |||||||||||||||||
| (800,020 | ) | (849,750 | ) | (1,269,120 | ) | (3,869,339 | ) | (950,056 | ) | (1,300,386 | ) | |||||||||||||||||
| 6,662,304 | 3,636,558 | 297,514,573 | 147,451,491 | 51,036,813 | 52,873,806 | |||||||||||||||||||||||
| (2,108,887 | ) | (3,726,047 | ) | (258,101,498 | ) | (252,397,944 | ) | (35,051,855 | ) | (111,684,252 | ) | |||||||||||||||||
| 4,553,417 | (89,489 | ) | 39,413,075 | (104,946,453 | ) | 15,984,958 | (58,810,446 | ) | ||||||||||||||||||||
| (1,828,417 | ) | (2,042,165 | ) | 37,379,679 | (134,384,708 | ) | 10,219,008 | (64,966,994 | ) | |||||||||||||||||||
| 23,799,112 | 25,841,277 | 141,660,425 | 276,045,133 | 71,156,087 | 136,123,081 | |||||||||||||||||||||||
| $ | 21,970,695 | $ | 23,799,112 | $ | 179,040,104 | $ | 141,660,425 | $ | 81,375,095 | $ | 71,156,087 | |||||||||||||||||
| 250,000 | 100,000 | 4,950,000 | 2,550,000 | 450,000 | 500,000 | |||||||||||||||||||||||
| (50,000 | ) | (100,000 | ) | (4,150,000 | ) | (4,350,000 | ) | (300,000 | ) | (1,100,000 | ) | |||||||||||||||||
| 200,000 | — | 800,000 | (1,800,000 | ) | 150,000 | (600,000 | ) | |||||||||||||||||||||
See Notes to Financial Statements
| 19 |
|
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(continued)
| Semiconductor ETF | Video Gaming and eSports ETF | |||||||||||||||||||
|
Six Months
Ended March 31, |
Year Ended
September 30, |
Six Months
Ended March 31, |
For the Period
October 16, 2018* through September 30, |
|||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Operations: | ||||||||||||||||||||
| Net investment income | $ | 11,300,436 | $ | 17,752,181 | $ | 227,168 | $ | 64,985 | ||||||||||||
| Net realized gain (loss) | 211,292,038 | 113,864,810 | (1,577,511 | ) | (205,932 | ) | ||||||||||||||
| Net change in unrealized appreciation (depreciation) | (259,955,464 | ) | 17,079,544 | 7,344,326 | 2,877,646 | |||||||||||||||
| Net increase (decrease) in net assets resulting from operations | (37,362,990 | ) | 148,696,535 | 5,993,983 | 2,736,699 | |||||||||||||||
| Distributions to shareholders: | ||||||||||||||||||||
| Dividends and Distributions | (19,250,342 | ) | (14,202,995 | ) | (125,100 | ) | (2,000 | ) | ||||||||||||
| Share transactions**: | ||||||||||||||||||||
| Proceeds from sale of shares | 7,746,403,102 | 19,302,146,323 | 78,840,000 | 36,068,511 | ||||||||||||||||
| Cost of shares redeemed | (7,315,028,511 | ) | (19,291,227,031 | ) | — | — | ||||||||||||||
| Increase (decrease) in net assets resulting from share transactions | 431,374,591 | 10,919,292 | 78,840,000 | 36,068,511 | ||||||||||||||||
| Total increase (decrease) in net assets | 374,761,259 | 145,412,832 | 84,708,883 | 38,803,210 | ||||||||||||||||
| Net Assets, beginning of period | 1,360,736,582 | 1,215,323,750 | 38,803,210 | — | ||||||||||||||||
| Net Assets, end of period | $ | 1,735,497,841 | $ | 1,360,736,582 | $ | 123,512,093 | $ | 38,803,210 | ||||||||||||
| ** Shares of Common Stock Issued (no par value) | ||||||||||||||||||||
| Shares sold | 59,300,000 | 188,800,000 | 2,050,000 | 1,150,000 | ||||||||||||||||
| Shares redeemed | (55,900,000 | ) | (188,800,000 | ) | — | — | ||||||||||||||
| Net increase (decrease) | 3,400,000 | — | 2,050,000 | 1,150,000 | ||||||||||||||||
| * | Commencement of operations |
See Notes to Financial Statements
| 20 |
|
|
VANECK VECTORS ETF TRUST
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 the 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) | Not Annualized |
| (d) | Annualized |
| (e) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
| (f) | 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
| 21 |
|
|
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 the 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) | Not Annualized |
| (d) | Annualized |
| (e) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
See Notes to Financial Statements
| 22 |
|
|
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 the 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) | Not Annualized |
| (d) | Annualized |
| (e) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
| (f) | 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
| 23 |
|
|
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 the 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) | Not Annualized |
| (d) | Annualized |
| (e) | Portfolio turnover rates exclude securities received or delivered as a result of processing in-kind capital share transactions. |
| (f) | Commencement of operations |
See Notes to Financial Statements
| 24 |
|
|
VANECK VECTORS ETF TRUST
March 31, 2020 (unaudited)
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, collectively, the “Funds”).
Each Fund was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks in approximately the same weighting as their index.
| 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 |
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 the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. 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 categorized as Level 1 in the fair value hierarchy. The Pricing Committee of Van Eck Associates Corporation (the “Adviser”) provides oversight of the Funds’ valuation policies and procedures, which are approved by the Funds’ Board of Trustees. Among other things, these procedures allow the Funds to utilize independent pricing services, quotations from securities dealers, and other market sources to determine fair value. The Pricing Committee convenes regularly to review the fair value of financial instruments or other assets. If market quotations for a security or other asset are not readily available, or if the Adviser believes they do not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation 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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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)
| Certain factors such as economic conditions, political events, market trends, the nature of and duration of any restrictions on disposition, trading in similar securities of the issuer or comparable issuers and other security specific information are used to determine the fair value of these securities. Depending on the relative significance of valuation inputs, these securities may be categorized either as Level 2 or Level 3 in the fair value hierarchy. The price which the Funds may realize upon sale of an investment may differ materially from the value presented in the Schedules of Investments. | |
| The Funds utilize various methods to measure the fair value of their investments on a recurring basis, which includes a hierarchy that prioritizes inputs to valuation methods used to measure fair value. The fair value hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three levels of the fair value hierarchy are described below: | |
| Level 1 — Quoted prices in active markets for identical securities. | |
| Level 2 — Significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
| Level 3 — Significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments). | |
| A summary of the inputs and the levels used to value the Funds’ investments are located in the Schedules of Investments. Additionally, tables that reconcile the valuation of the Funds’ Level 3 investments and that present additional information about valuation methodologies and unobservable inputs, if applicable, are located in the Schedules of Investments. | |
| B. | Federal Income Taxes—It is each Fund’s policy to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. |
| C. | 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 Statements of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) 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. | 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 |
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| derivative instruments and securities lending. For financial reporting purposes, the Funds present securities lending assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Cash collateral held in the form of money market fund investments, if any, at March 31, 2020 is presented in the Schedules of Investments and in the Statements of Assets and Liabilities. Non-cash collateral is disclosed in Note 9 (Securities Lending). | |
| G. | Other—Security transactions are accounted for on trade date. Realized gains and losses are determined based on the specific identification method. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized upon notification of the ex-dividend date. Interest income, including amortization of premiums and discounts, is accrued as earned. |
| The Funds earn interest income on uninvested cash balances held at the custodian bank. Such amounts, if any, are presented as interest income in the Statements of Operations. | |
| The character of distributions received from certain investments may be comprised of net investment income, capital gains, and return of capital. It is the Funds’ policy to estimate the character of distributions received from these investments based on historical data if actual amounts are not available. After each calendar year end, these investments report the actual tax character of distributions. Differences between the estimated and actual amounts are reflected in the Funds’ records in the year in which they are reported by adjusting the related cost basis of investments, capital gains and income, as necessary. | |
| In the normal course of business, the Funds enter into contracts that contain a variety of general indemnifications. The Funds’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Adviser believes the risk of loss under these arrangements to be remote. |
Note 3—Investment Management and Other Agreements—The Adviser is the investment adviser to the Funds. The Adviser receives a management fee, calculated daily and payable monthly based on an annual rate of each Fund’s average daily net assets. The Adviser has agreed, until at least February 1, 2021, 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 period ended March 31, 2020, 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 the Statements of Operations for amounts waived/assumed by the Adviser.
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.
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.
Effective November 4, 2019, State Street Bank and Trust Company is the Funds’ custodian, securities lending agent and transfer agent. Prior to November 4, 2019, Bank of New York Mellon provided these services to the Funds.
For the period ended March 31, 2020, there were offsets to custodian fees under an expense offset agreement and these amounts are reflected in custody expense in the Statements of Operations.
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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)
Note 4—Capital Share Transactions—As of March 31, 2020, 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, for the benefit of the Funds, a requirement to maintain cash collateral on deposit at the custodian equal to at least 115% of the daily marked to market value of the missing Deposit Securities.
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to the transfer agent. In addition, the Funds may impose certain variable fees 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 period ended March 31, 2020, 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 | $ | 66,746,289 | $ | 69,589,567 | $ | 26,901,812 | $ | 49,974,543 | ||||||||
| Environmental Services ETF | 6,790,482 | 5,609,916 | 5,322,689 | 5,389,101 | ||||||||||||
| Gaming ETF | 1,590,927 | 1,849,782 | 6,254,124 | 1,967,706 | ||||||||||||
| Pharmaceutical ETF | 19,393,104 | 18,993,177 | 259,191,496 | 219,816,149 | ||||||||||||
| Retail ETF | 2,400,796 | 5,911,109 | 51,038,185 | 32,011,577 | ||||||||||||
| Semiconductor ETF | 94,346,391 | 99,170,048 | 5,311,897,413 | 4,885,382,852 | ||||||||||||
| Video Gaming and eSports ETF | 14,760,993 | 6,776,169 | 70,849,459 | — | ||||||||||||
Note 6—Income Taxes—As of March 31, 2020, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) of investments owned were as follows:
| Gross | Gross | Net Unrealized | ||||||||||||||
| Tax Cost of | Unrealized | Unrealized | Appreciation | |||||||||||||
| Fund | Investments | Appreciation | Depreciation | (Depreciation) | ||||||||||||
| Biotech ETF | $ | 359,686,628 | $ | 19,805,649 | $ | (53,650,476 | ) | $ | (33,844,827 | ) | ||||||
| Environmental Services ETF | 34,185,656 | 636,287 | (5,892,269 | ) | (5,255,982 | ) | ||||||||||
| Gaming ETF | 33,331,275 | 458,653 | (11,682,343 | ) | (11,223,690 | ) | ||||||||||
| Pharmaceutical ETF | 241,762,517 | 1,051,951 | (61,537,791 | ) | (60,485,840 | ) | ||||||||||
| Retail ETF | 93,351,652 | 1,175,934 | (12,956,301 | ) | (11,780,367 | ) | ||||||||||
| Semiconductor ETF | 2,115,379,461 | — | (352,656,751 | ) | (352,656,751 | ) | ||||||||||
| Video Gaming and eSports ETF | 123,322,221 | 11,852,064 | (1,733,793 | ) | 10,118,271 | |||||||||||
The tax character of dividends paid to shareholders during the year ended September 30, 2019 was as follows:
| Ordinary | ||||
| Fund | Income | |||
| Biotech ETF | $ | 1,899,023 | ||
| Environmental Services ETF | 95,100 | |||
| Gaming ETF | 849,750 | |||
| Pharmaceutical ETF | 3,869,339 | |||
| Retail ETF | 1,300,386 | |||
| Semiconductor ETF | 14,202,995 | |||
| Video Gaming and eSports ETF | 2,000 | |||
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The tax character of current year distributions will be determined at the end of the current fiscal year.
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 | ) | |||||||
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended March 31, 2020, 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 or natural or other disasters, such as the recent coronavirus outbreak. 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 recent outbreak of respiratory disease caused by a novel coronavirus, which was first detected in China in December 2019, has subsequently spread internationally and has been declared a pandemic by the World Health Organization. The coronavirus has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, loss of life, as well as general concern and uncertainty. The coronavirus has already negatively impacted the economies of many nations, individual companies, the market and the Funds. This pandemic is expected to have a continued impact in ways that cannot necessarily be foreseen presently.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
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 securities lending agent. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, cash equivalents, U.S. government securities, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value plus accrued interest on the securities loaned. Daily market fluctuations could cause the value of loaned securities
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VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)
to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. During the term of the loan, the Funds will continue to receive any dividends, interest or amounts equivalent thereto, on the securities loaned while receiving a fee from the borrower and or earning interest on the investment of the cash collateral. Such fees and interest are shared with the securities lending agent under the terms of the securities lending agreement. Securities lending income is disclosed as such in the Statements of Operations. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in the State Street Navigator Securities Lending Government Money Market Portfolio. Non-cash collateral consists of U.S. Treasuries and U.S. Government Agency securities, and is not disclosed in the Funds’ Schedules of Investments or Statements of Assets and Liabilities as it is held by the agent on behalf of the Funds, and the Funds do not have the ability to re-hypothecate those securities. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the Fund securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related cash collateral, if any, at March 31, 2020 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities. The following is a summary of the Funds’ securities on loan and related collateral as of March 31, 2020:
| Market Value | ||||||||||||||||
| of Securities | Cash | Non-Cash | Total | |||||||||||||
| Fund | on Loan | Collateral | Collateral | Collateral | ||||||||||||
| Biotech ETF | $ | 39,535,676 | $ | 5,861,761 | $ | 35,075,763 | $ | 40,937,524 | ||||||||
| Environmental Services ETF | 2,128,304 | 709,976 | 1,544,448 | 2,254,424 | ||||||||||||
| Gaming ETF | 3,522,691 | 122,572 | 3,414,320 | 3,536,892 | ||||||||||||
| Pharmaceutical ETF | 13,187,047 | 2,698,352 | 14,323,390 | 17,021,742 | ||||||||||||
| Retail ETF | 417,954 | 173,209 | 276,456 | 449,665 | ||||||||||||
| Semiconductor ETF | 59,635,815 | 29,169,812 | 32,295,155 | 61,464,967 | ||||||||||||
| Video Gaming and eSports ETF | 13,309,582 | 10,036,902 | 3,792,769 | 13,829,671 | ||||||||||||
The following table presents money market fund investments held as collateral by type of security on loan as of March 31, 2020:
| Gross Amount of Recognized | ||||
| Liabilities for Securities | ||||
| Loaned in the Statements | ||||
| of Assets and Liabilities* | ||||
| Fund | Equity Securities | |||
| Biotech ETF | $ | 5,861,761 | ||
| Environmental Services ETF | 709,976 | |||
| Gaming ETF | 122,572 | |||
| Pharmaceutical ETF | 2,698,352 | |||
| Retail ETF | 173,209 | |||
| Semiconductor ETF | 29,169,812 | |||
| Video Gaming and eSports ETF | 10,036,902 | |||
| * | Remaining contractual maturity: overnight and continuous |
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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 period ended March 31, 2020, the following Funds borrowed under this Facility:
| Days | Average Daily | Average | ||||||||||
| Fund | Outstanding | Loan Balance | Interest Rate | |||||||||
| Biotech ETF | 28 | $ | 2,164,274 | 2.75 | % | |||||||
| Environmental Services ETF | 3 | 295,498 | 3.02 | |||||||||
| Gaming ETF | 27 | 90,570 | 3.06 | |||||||||
| Pharmaceutical ETF | 131 | 340,539 | 2.98 | |||||||||
| Retail ETF | 27 | 76,301 | 2.96 | |||||||||
| Semiconductor ETF | 77 | 1,536,018 | 2.97 | |||||||||
| Video Gaming and eSports ETF | 30 | 329,523 | 2.41 | |||||||||
Outstanding loan balances as of March 31, 2020, if any, are reflected in the Statements of Assets and Liabilities.
Note 11—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 the ASU 2018-13 had no material effect on financial statements and related disclosures. Management evaluated the additional requirements, not yet adopted, and they are not expected to have a material impact to the financial statements. Public companies will be required to disclose the range and weighted average used to develop 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 12—Subsequent Event Review—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
FUNDS’ LIQUIDITY RISK MANAGEMENT PROGRAM
(unaudited)
In accordance with Rule 22e-4 (the “Liquidity Rule”) under the 1940 Act, the Funds have implemented a Liquidity Risk Management Program (the “Program”). The Program outlines certain techniques, tools and arrangements employed for the assessment and management of Fund liquidity risk, and the terms, contents and frequency of reporting of certain issues to the Board. Liquidity is managed taking account of the Funds’ investment strategy, liquidity profile, and, importantly, the fact that for most funds redemptions are settled primarily as in-kind redemptions. In this regard, certain of the Funds qualify as “In-Kind ETFs” under the Liquidity Rule because they meet redemptions through in-kind transfers of securities, positions and assets other than a de minimis amount of cash and publish their portfolio holdings daily. In-Kind ETFs are exempt from the Liquidity Rule’s classification and highly liquid investment minimum (“HLIM”) provisions, discussed below.
Under the Program and in accordance with the Liquidity Rule, each Fund’s liquidity risk is assessed at least annually taking into consideration certain factors enumerated in the Liquidity Rule, as applicable. The Liquidity Rule calls for considering certain such factors under both normal and reasonably foreseeable stressed market conditions.
With respect to each Fund that does not qualify under the Liquidity Rule as an “In-Kind ETF,” the Liquidity Rule and the Program require that each portfolio holding be classified into one of four liquidity classification categories. The Liquidity Rule requires that such classification determinations be made taking into account relevant market, trading and investment-specific considerations as well as market depth. The relevant Funds utilize data from a third-party vendor to assist with these determinations.
Funds that do not qualify as “In-Kind ETFs” are also required to determine and periodically review an HLIM – a minimum percentage of Fund net assets that are to be invested in Highly Liquid Investments that are assets – and adopt certain related procedures. A Highly Liquid Investment is defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
The Liquidity Rule provides an exemption from the HLIM requirements for Funds that “primarily” hold Highly Liquid Investments, as defined in the Program. For the period December 1, 2018 to December 31, 2019 (the “Review Period”), the Funds that were not In-Kind ETFs qualified for an exemption and therefore have not determined an HLIM or adopted the related procedures.
The Board reviewed a report prepared by each Fund’s Adviser regarding the operation and effectiveness of the Program for the Review Period. During the Review Period, the Funds maintained a high level of liquidity and primarily held assets that are defined under the Liquidity Rule as “Highly Liquid Investments.” Further information on liquidity risks applicable to the Fund can be found in the Fund’s prospectus.
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck Vectors ETF Trust (the “Trust”) prospectus and summary prospectus, which includes more complete information. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
Additional information about the Trust’s Board of Trustees/Officers and a description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities are provided in the Statement of Additional Information. The Statement of Additional Information and information regarding how the Trust voted proxies relating to portfolio securities during the most recent twelve month period ending June 30 is available, without charge, by calling 800.826.2333, or by visiting vaneck.com, or on the Securities and Exchange Commission’s website at http://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-PORT. The Trust’s Form N-PORT Filings are available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Funds’ complete schedules of portfolio holdings are also available by calling 800.826.2333 or by visiting vaneck.com.
| Investment Adviser: | Van Eck Associates Corporation | |
| Distributor: | Van Eck Securities Corporation | |
| 666 Third Avenue, New York, NY 10017 | ||
| vaneck.com | ||
| Account Assistance: | 800.826.2333 | INDUSSAR |
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SEMI-ANNUAL REPORT March 31, 2020 (unaudited) |
VANECK VECTORS®
| Long/Flat Trend ETF | LFEQ® |
| Morningstar Durable Dividend ETF | DURA® |
| Morningstar Global Wide Moat ETF | GOAT® |
| Morningstar International Moat ETF | MOTI® |
| Morningstar Wide Moat ETF | MOAT® |
| Real Asset Allocation ETF | RAAX® |
| 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. Also, unless otherwise specifically noted, any discussion of the Funds’ holdings, the Funds’ performance, and the views of the investment adviser are as of March 31, 2020.
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VANECK VECTORS ETFs
March 31, 2020 (unaudited)
Dear Fellow Shareholders:
The story for 2019 was simple and familiar—slower economic growth was combated by expansive monetary policy. China continued its “drip stimulus” policies after its hard credit squeeze of 2018, resulting in satisfactory growth as we track monthly in our China blog.1
But that seems a long time ago now that COVID-19 virus has triggered a global recession in 2020. In early March, we entered a period of “heightened uncertainty” that I expected would last to mid-April. (I say “heightened” because there is always uncertainty in the world.) Now, investors are awaiting: (a) for the virus’ effects to abate, hopefully, and (b) for the pace of economic recovery to be established. A possible scenario is one that echoes the global financial crisis: a slow pace of economic recovery (uneven industry sector recovery), slow employment growth, but quicker financial market recovery.
To get our quarterly investment outlooks, please subscribe to “Investment Outlook” 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 financial statements for each of the funds for the six month period ended March 31, 2020. As always, we value your continued confidence in us and look forward to helping you meet your investment goals in the future.
Jan F. van Eck
CEO and President
VanEck Vectors ETF Trust
April 17, 2020
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 | VanEck: China’s Economic Growth, https://www.vaneck.com/blogs/investment-outlook/china-economic-growth |
| 1 |
|
|
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, October 1, 2019 to March 31, 2020.
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 October 1, 2019 |
Ending
Account Value March 31, 2020 |
Annualized
Expense Ratio During Period |
Expenses Paid
During the Period* October 1, 2019 – March 31, 2020 |
|||||||
| Long/Flat Trend ETF | ||||||||||
| Actual | $1,000.00 | $ | 874.70 | 0.55% | $2.58 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.25 | 0.55% | $2.78 | |||||
| Morningstar Durable Dividend ETF | ||||||||||
| Actual | $1,000.00 | $ | 850.50 | 0.29% | $1.34 | |||||
| Hypothetical** | $1,000.00 | $ | 1,023.55 | 0.29% | $1.47 | |||||
| Morningstar Global Wide Moat ETF | ||||||||||
| Actual | $1,000.00 | $ | 883.30 | 0.52% | $2.45 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.40 | 0.52% | $2.63 | |||||
| Morningstar International Moat ETF | ||||||||||
| Actual | $1,000.00 | $ | 827.70 | 0.57% | $2.60 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.15 | 0.57% | $2.88 | |||||
| Morningstar Wide Moat ETF | ||||||||||
| Actual | $1,000.00 | $ | 885.90 | 0.47% | $2.22 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.65 | 0.47% | $2.38 | |||||
| Real Asset Allocation ETF | ||||||||||
| Actual | $1,000.00 | $ | 774.10 | 0.55% | $2.44 | |||||
| Hypothetical** | $1,000.00 | $ | 1,022.25 | 0.55% | $2.78 | |||||
| * | Expenses are equal to the Fund’s annualized expense ratio (for the six months ended March 31, 2020) 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 |
| 2 |
|
|
VANECK VECTORS LONG/FLAT TREND ETF
March 31, 2020 (unaudited)
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 |
| † | Security fully or partially on loan. Total market value of securities on loan is $284,184. |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Exchange Traded Fund | 100.0 | % | $ | 42,022,762 | ||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Exchange Traded Fund | $ | 42,022,762 | $ | — | $ | — | $ | 42,022,762 | |||||||||
| Money Market Fund | 296,300 | — | — | 296,300 | |||||||||||||
| Total | $ | 42,319,062 | $ | — | $ | — | $ | 42,319,062 | |||||||||
See Notes to Financial Statements
| 3 |
|
|
VANECK VECTORS MORNINGSTAR DURABLE DIVIDEND ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
See Notes to Financial Statements
| 4 |
|
|
Footnotes:
| † | Security fully or partially on loan. Total market value of securities on loan is $32,805. |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of
Investments |
Value | ||||||
| Communication Services | 9.8 | % | $ | 2,294,557 | ||||
| Consumer Discretionary | 3.1 | 729,999 | ||||||
| Consumer Staples | 20.1 | 4,696,653 | ||||||
| Energy | 7.1 | 1,665,731 | ||||||
| Financials | 15.4 | 3,604,260 | ||||||
| Health Care | 17.5 | 4,094,018 | ||||||
| Industrials | 10.7 | 2,512,710 | ||||||
| Information Technology | 8.5 | 1,989,526 | ||||||
| Materials | 0.3 | 67,628 | ||||||
| Utilities | 7.5 | 1,753,870 | ||||||
| 100.0 | % | $ | 23,408,952 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 23,408,952 | $ | — | $ | — | $ | 23,408,952 | |||||||||
| Money Market Fund | 33,813 | — | — | 33,813 | |||||||||||||
| Total | $ | 23,442,765 | $ | — | $ | — | $ | 23,442,765 | |||||||||
| * | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
| 5 |
|
|
VANECK VECTORS MORNINGSTAR GLOBAL WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
|
Number
of Shares |
Value | |||||||
| United States: 58.0% | ||||||||
| 113 | Alphabet, Inc. * | $ | 131,300 | |||||
| 43 | Amazon.com, Inc. * | 83,838 | ||||||
| 696 | American Express Co. | 59,585 | ||||||
| 654 | Amgen, Inc. | 132,585 | ||||||
| 2,226 | Bank of America Corp. | 47,258 | ||||||
| 341 | Berkshire Hathaway, Inc. * | 62,345 | ||||||
| 154 | BlackRock, Inc. | 67,755 | ||||||
| 1,206 | Bristol-Myers Squibb Co. | 67,222 | ||||||
| 535 | Caterpillar, Inc. | 62,081 | ||||||
| 971 | Cerner Corp. | 61,163 | ||||||
| 2,930 | Compass Minerals International, Inc. | 112,717 | ||||||
| 428 | Constellation Brands, Inc. | 61,358 | ||||||
| 957 | Dominion Energy, Inc. | 69,086 | ||||||
| 2,285 | Emerson Electric Co. | 108,880 | ||||||
| 566 | Equifax, Inc. | 67,609 | ||||||
| 769 | Facebook, Inc. * | 128,269 | ||||||
| 1,538 | Guidewire Software, Inc. * | 121,979 | ||||||
| 2,609 | Intel Corp. | 141,199 | ||||||
| 484 | Kansas City Southern | 61,555 | ||||||
| 2,186 | Kellogg Co. | 131,138 | ||||||
| 449 | KLA-Tencor Corp. | 64,539 | ||||||
| 353 | McDonald’s Corp. | 58,369 | ||||||
| 1,682 | Merck & Co., Inc. | 129,413 | ||||||
| 904 | Microchip Technology, Inc. † | 61,291 | ||||||
| 929 | Microsoft Corp. | 146,513 | ||||||
| 1,576 | NIKE, Inc. | 130,398 | ||||||
| 512 | PepsiCo, Inc. | 61,491 | ||||||
| 831 | Philip Morris International, Inc. | 60,630 | ||||||
| 423 | Raytheon Co. | 55,476 | ||||||
| 903 | Salesforce.com, Inc. * | 130,014 | ||||||
| 513 | ServiceNow, Inc. * | 147,016 | ||||||
| 972 | Starbucks Corp. | 63,899 | ||||||
| 629 | T. Rowe Price Group, Inc. | 61,422 | ||||||
| 1,166 | The Walt Disney Co. | 112,636 | ||||||
| 5,799 | The Western Union Co. | 105,136 | ||||||
| 258 | Tyler Technologies, Inc. * | 76,512 | ||||||
| 1,172 | United Technologies Corp. | 110,555 | ||||||
| 993 | Veeva Systems, Inc. * | 155,275 | ||||||
| 1,126 | Zimmer Biomet Holdings, Inc. | 113,816 | ||||||
| 3,623,323 | ||||||||
|
Total
Common Stocks: 100.3%
(Cost: $6,601,777) |
6,269,253 | |||||||
| Liabilities in excess of other assets: (0.3)% | (20,365) | |||||||
| NET ASSETS: 100.0% | $ | 6,248,888 | ||||||
See Notes to Financial Statements
| 6 |
|
|
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 $1,903,130 which represents 30.5% of net assets. |
| Summary of Investments by Sector | % of Investments | Value | ||||||
| Communication Services | 8.2 | % | $ | 515,579 | ||||
| Consumer Discretionary | 11.5 | 718,883 | ||||||
| Consumer Staples | 12.4 | 778,987 | ||||||
| Energy | 0.9 | 56,373 | ||||||
| Financials | 10.2 | 642,217 | ||||||
| Health Care | 20.9 | 1,309,874 | ||||||
| Industrials | 17.1 | 1,071,338 | ||||||
| Information Technology | 15.9 | 994,199 | ||||||
| Materials | 1.8 | 112,717 | ||||||
| Utilities | 1.1 | 69,086 | ||||||
| 100.0 | % | $ | 6,269,253 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks | |||||||||||||||||
| Australia | $ | — | $ | 115,860 | $ | — | $ | 115,860 | |||||||||
| Canada | 304,847 | — | — | 304,847 | |||||||||||||
| China / Hong Kong | 272,060 | 143,374 | — | 415,434 | |||||||||||||
| Denmark | — | 77,745 | — | 77,745 | |||||||||||||
| France | — | 328,997 | — | 328,997 | |||||||||||||
| Germany | — | 160,390 | — | 160,390 | |||||||||||||
| Ireland | 126,523 | — | — | 126,523 | |||||||||||||
| Japan | — | 331,810 | — | 331,810 | |||||||||||||
| Mexico | 39,370 | — | — | 39,370 | |||||||||||||
| Switzerland | — | 304,194 | — | 304,194 | |||||||||||||
| United Kingdom | — | 440,760 | — | 440,760 | |||||||||||||
| United States | 3,623,323 | — | — | 3,623,323 | |||||||||||||
| Total | $ | 4,366,123 | $ | 1,903,130 | $ | — | $ | 6,269,253 | |||||||||
See Notes to Financial Statements
| 7 |
|
|
VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
|
Number
of Shares |
Value | |||||||
| Japan: 13.8% | ||||||||
| 17,900 | Asahi Group Holdings Ltd. # | $ | 578,420 | |||||
| 25,000 | Calbee, Inc. # | 671,984 | ||||||
| 34,300 | Denso Corp. # | 1,091,672 | ||||||
| 64,400 | Japan Tobacco, Inc. # | 1,186,442 | ||||||
| 12,600 | Murata Manufacturing Co. Ltd. # | 623,910 | ||||||
| 26,600 | Nabtesco Corp. # | 606,044 | ||||||
| 21,200 | Nidec Corp. † # | 1,088,180 | ||||||
| 37,000 | Takeda Pharmaceutical Co. Ltd. # | 1,122,092 | ||||||
| 22,800 | Yaskawa Electric Corp. # | 617,477 | ||||||
| 7,586,221 | ||||||||
| Mexico: 1.0% | ||||||||
| 883,100 | America Movil SAB de CV | 528,898 | ||||||
| Netherlands: 1.4% | ||||||||
| 61,223 | ING Groep NV # | 312,106 | ||||||
| 25,970 | Royal Dutch Shell Plc (GBP) # | 450,413 | ||||||
| 762,519 | ||||||||
| Singapore: 4.0% | ||||||||
| 537,300 | CapitaLand Ltd. # | 1,074,820 | ||||||
| 186,662 | Oversea-Chinese Banking Corp. Ltd. # | 1,128,986 | ||||||
| 2,203,806 | ||||||||
| Spain: 3.1% | ||||||||
| 126,447 | Banco Bilbao Vizcaya Argentaria SA # | 389,544 | ||||||
| 32,799 | Gas Natural SDG SA # | 572,472 | ||||||
| 21,471 | Grifols SA # | 714,684 | ||||||
| 1,676,700 | ||||||||
| Sweden: 2.0% | ||||||||
| 73,882 | Elekta AB # | 601,392 | ||||||
| 45,357 | Swedbank AB # | 499,488 | ||||||
| 1,100,880 | ||||||||
| Switzerland: 12.1% | ||||||||
| 64,353 | ABB Ltd. # | 1,112,684 | ||||||
| 10,290 | Cie Financiere Richemont SA # | 547,169 | ||||||
| 123,121 | Credit Suisse Group AG # | 988,566 | ||||||
| 31,628 | Julius Baer Group Ltd. # | 1,053,928 | ||||||
| 28,875 | LafargeHolcim Ltd. # | 1,048,250 | ||||||
| 2,316 | Roche Holding AG # | 741,265 | ||||||
| 2,776 | The Swatch Group AG # | 542,357 | ||||||
| 65,802 | UBS Group AG # | 600,000 | ||||||
| 6,634,219 | ||||||||
| United Kingdom: 10.6% | ||||||||
| 120,975 | BP Plc # | 495,253 | ||||||
| 34,431 | British American Tobacco Plc # | 1,170,871 | ||||||
| 102,055 | HSBC Holdings Plc # | 571,921 | ||||||
| 916,736 | Lloyds Banking Group Plc # | 357,779 | ||||||
| 77,146 | Smiths Group Plc # | 1,161,130 | ||||||
| 811,142 | Vodafone Group Plc # | 1,120,227 | ||||||
| 133,651 | WPP Plc # | 907,111 | ||||||
| 5,784,292 | ||||||||
|
Total
Common Stocks
(Cost: $65,743,293) |
54,996,214 | |||||||
See Notes to Financial Statements
| 8 |
|
|
|
Number
of Shares |
Value | |||||||
|
SHORT-TERM
INVESTMENT HELD AS COLLATERAL FOR SECURITIES ON LOAN: 0.5%
(Cost: $292,469) |
||||||||
| Money Market Fund: 0.5% | ||||||||
| 292,469 |
State Street Navigator Securities
Lending Government Money Market Portfolio |
$ | 292,469 | |||||
|
Total
Investments: 100.9%
(Cost: $66,035,762) |
55,288,683 | |||||||
| Liabilities in excess of other assets: (0.9)% | (495,723 | ) | ||||||
| NET ASSETS: 100.0% | $ | 54,792,960 | ||||||
Definitions:
| GBP | British Pound |
| USD | United States Dollar |
Footnotes:
| * | Non-income producing |
| † | Security fully or partially on loan. Total market value of securities on loan is $785,056. |
| # | Security has been valued in good faith pursuant to guidelines established by the Board of Trustees. The aggregate value of fair valued securities is $51,654,885 which represents 94.3% 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 $554,112, or 1.0% of net assets. |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Communication Services | 10.4 | % | $ | 5,720,721 | ||||
| Consumer Discretionary | 16.5 | 9,074,607 | ||||||
| Consumer Staples | 7.3 | 3,992,223 | ||||||
| Energy | 2.7 | 1,500,444 | ||||||
| Financials | 21.4 | 11,759,818 | ||||||
| Health Care | 13.1 | 7,182,453 | ||||||
| Industrials | 16.4 | 9,051,132 | ||||||
| Information Technology | 2.0 | 1,131,801 | ||||||
| Materials | 2.7 | 1,487,403 | ||||||
| Real Estate | 5.2 | 2,845,916 | ||||||
| Utilities | 2.3 | 1,249,696 | ||||||
| 100.0 | % | $ | 54,996,214 | |||||
See Notes to Financial Statements
| 9 |
|
|
VANECK VECTORS MORNINGSTAR INTERNATIONAL MOAT ETF
SCHEDULE OF INVESTMENTS
(unaudited) (continued)
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks | |||||||||||||||||
| Australia | $ | — | $ | 1,053,418 | $ | — | $ | 1,053,418 | |||||||||
| Belgium | — | 824,151 | — | 824,151 | |||||||||||||
| Canada | 1,070,335 | — | — | 1,070,335 | |||||||||||||
| China / Hong Kong | 1,742,096 | 12,550,075 | — | 14,292,171 | |||||||||||||
| France | — | 3,727,707 | — | 3,727,707 | |||||||||||||
| Germany | — | 6,227,492 | — | 6,227,492 | |||||||||||||
| Italy | — | 1,523,405 | — | 1,523,405 | |||||||||||||
| Japan | — | 7,586,221 | — | 7,586,221 | |||||||||||||
| Mexico | 528,898 | — | — | 528,898 | |||||||||||||
| Netherlands | — | 762,519 | — | 762,519 | |||||||||||||
| Singapore | — | 2,203,806 | — | 2,203,806 | |||||||||||||
| Spain | — | 1,676,700 | — | 1,676,700 | |||||||||||||
| Sweden | — | 1,100,880 | — | 1,100,880 | |||||||||||||
| Switzerland | — | 6,634,219 | — | 6,634,219 | |||||||||||||
| United Kingdom | — | 5,784,292 | — | 5,784,292 | |||||||||||||
| Money Market Fund | 292,469 | — | — | 292,469 | |||||||||||||
| Total | $ | 3,633,798 | $ | 51,654,885 | $ | — | $ | 55,288,683 | |||||||||
See Notes to Financial Statements
| 10 |
|
|
VANECK VECTORS MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
See Notes to Financial Statements
| 11 |
|
|
VANECK VECTORS MORNINGSTAR WIDE MOAT ETF
SCHEDULE OF INVESTMENTS
(unaudited) (continued)
Footnotes:
| ‡ | Affiliated issuer-as defined under the Investment Company Act of 1940. |
| * | Non-income producing |
| † | Security fully or partially on loan. Total market value of securities on loan is $75,283,106. |
A summary of the Fund’s transactions in securities of affiliates for the period ended March 31, 2020 is set forth below:
| Affiliates |
Value
09/30/19 |
Purchases |
Sales
Proceeds |
Realized
Gain (Loss) |
Dividend
Income |
Net Change in
Unrealized Appreciation (Depreciation) |
Value
03/31/20 |
|||||||||||||||||||||||
| Core Laboratories NV | $ | — | (a) | $ | 49,123,530 | $ | (3,547,608 | ) | $ | (3,828,414 | ) | $ | 1,104,058 | $ | (55,992,125 | ) | $ | 41,927,728 | ||||||||||||
| (a) | Security held by the Fund, however not classified as an affiliate at the beginning of the reporting period. |
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Communication Services | 5.2 | % | $ | 131,483,264 | ||||
| Consumer Discretionary | 7.4 | 187,938,330 | ||||||
| Consumer Staples | 8.9 | 225,759,690 | ||||||
| Energy | 3.6 | 91,679,817 | ||||||
| Financials | 16.0 | 407,545,490 | ||||||
| Health Care | 20.6 | 525,011,557 | ||||||
| Industrials | 12.8 | 326,791,675 | ||||||
| Information Technology | 19.3 | 491,218,402 | ||||||
| Materials | 4.8 | 122,226,615 | ||||||
| Utilities | 1.4 | 35,497,916 | ||||||
| 100.0 | % | $ | 2,545,152,756 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Common Stocks* | $ | 2,545,152,756 | $ | — | $ | — | $ | 2,545,152,756 | |||||||||
| Money Market Fund | 94,234 | — | — | 94,234 | |||||||||||||
| Total | $ | 2,545,246,990 | $ | — | $ | — | $ | 2,545,246,990 | |||||||||
| * | See Schedule of Investments for industry sector breakouts. |
See Notes to Financial Statements
| 12 |
|
|
VANECK VECTORS REAL ASSET ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
March 31, 2020 (unaudited)
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 |
| † | Security fully or partially on loan. Total market value of securities on loan is $3,399,536. |
A summary of the Fund’s transactions in securities of affiliates for the period ended March 31, 2020 is set forth below:
| Affiliates |
Value
09/30/19 |
Purchases |
Sales
Proceeds |
Realized
Gain (Loss) |
Dividend
Income |
Net Change
in Unrealized Appreciation (Depreciation) |
Value
03/31/20 |
|||||||||||||||||||||
| VanEck Vectors Agribusiness ETF | $ | 629,819 | $ | 2,192,333 | $ | (2,294,252 | ) | $ | (225,663 | ) | $ | 28,789 | $ | (56,483 | ) | $ | 245,754 | |||||||||||
| VanEck Vectors Coal ETF | 438,018 | 2,910,372 | (2,653,781 | ) | (550,653 | ) | 103,333 | 29,176 | 173,132 | |||||||||||||||||||
| VanEck Vectors Energy Income ETF | — | 1,746,145 | (632,723 | ) | (676,325 | ) | 27,137 | (220,525 | ) | 216,572 | ||||||||||||||||||
| VanEck Vectors Gold Miners ETF | 623,358 | 4,383,515 | (3,611,688 | ) | (483,285 | ) | 9,748 | (138,171 | ) | 773,729 | ||||||||||||||||||
| VanEck Vectors Low Carbon Energy ETF | — | 1,299,446 | (822,759 | ) | (161,190 | ) | — | (42,453 | ) | 273,044 | ||||||||||||||||||
| VanEck Vectors Oil Services ETF | 645,333 | 1,694,650 | (1,358,670 | ) | (709,630 | ) | 25,910 | (145,632 | ) | 126,051 | ||||||||||||||||||
| VanEck Vectors Steel ETF | 658,101 | 1,395,200 | (1,267,838 | ) | (472,879 | ) | — | (104,374 | ) | 208,210 | ||||||||||||||||||
| VanEck Vectors Unconventional Oil & Gas ETF | 459,934 | 1,654,980 | (1,187,411 | ) | (635,548 | ) | 21,437 | (147,298 | ) | 144,657 | ||||||||||||||||||
| $ | 3,454,563 | $ | 17,276,641 | $ | (13,829,122 | ) | $ | (3,915,173 | ) | $ | 216,354 | $ | (825,760 | ) | $ | 2,161,149 | ||||||||||||
See Notes to Financial Statements
| 13 |
|
|
VANECK VECTORS REAL ASSET ALLOCATION ETF
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited) (continued)
|
Summary of Investments by Sector
Excluding Collateral for Securities Loaned |
% of Investments | Value | ||||||
| Agribusiness | 1.7 | % | $ | 245,754 | ||||
| Coal | 1.2 | 173,132 | ||||||
| Diversified Commodities Futures | 2.2 | 312,982 | ||||||
| Energy | 2.7 | 396,889 | ||||||
| Global Metals and Mining | 1.6 | 228,512 | ||||||
| Gold Bullion | 33.4 | 4,851,802 | ||||||
| Gold Mining | 5.3 | 773,729 | ||||||
| Government | 34.4 | 4,999,082 | ||||||
| Low Carbon Energy | 1.9 | 273,044 | ||||||
| Oil Services | 0.9 | 126,051 | ||||||
| Steel | 1.4 | 208,210 | ||||||
| Unconventional Oil & Gas | 1.0 | 144,657 | ||||||
| US Real Estate Investment Trusts | 8.7 | 1,269,943 | ||||||
| Utilities | 3.6 | 521,471 | ||||||
| 100.0 | % | $ | 14,525,258 | |||||
The summary of inputs used to value the Fund’s investments as of March 31, 2020 is as follows:
|
Level 1
Quoted Prices |
Level 2
Significant Observable Inputs |
Level 3
Significant Unobservable Inputs |
Value | ||||||||||||||
| Exchange Traded Funds | $ | 9,526,176 | $ | — | $ | — | $ | 9,526,176 | |||||||||
| Money Market Fund | 2,024,849 | — | — | 2,024,849 | |||||||||||||
| United States Treasury Obligations | — | 4,999,082 | — | 4,999,082 | |||||||||||||
| Total | $ | 11,551,025 | $ | 4,999,082 | $ | — | $ | 16,550,107 | |||||||||
See Notes to Financial Statements
| 14 |
|
|
[This Page Intentionally Left Blank.]
| 15 |
|
|
VANECK VECTORS ETF TRUST
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2020 (unaudited)
|
Long/Flat
Trend ETF |
Morningstar
Durable Dividend ETF |
Morningstar
Global Wide Moat ETF |
Morningstar
International Moat ETF |
||||||||||||||||
| Assets: | |||||||||||||||||||
| Investments, at value (1) | |||||||||||||||||||
| Unaffiliated issuers (2) | $ | 42,022,762 | $ | 23,408,952 | $ | 6,269,253 | $ | 54,996,214 | |||||||||||
| Affiliated issuers (3) | — | — | — | — | |||||||||||||||
| Short-term investments held as collateral for securities loaned (4) | 296,300 | 33,813 | — | 292,469 | |||||||||||||||
| Cash | 291,182 | 85,569 | — | — | |||||||||||||||
| Cash denominated in foreign currency, at value (5) | — | — | 2,423 | 596,985 | |||||||||||||||
| Receivables: | |||||||||||||||||||
| Investment securities sold | 1,226,470 | — | 2,398 | — | |||||||||||||||
| Shares of beneficial interest sold | — | — | — | — | |||||||||||||||
| Due from Adviser | — | 3,567 | 6,451 | — | |||||||||||||||
| Dividends and interest | 1,664 | 47,015 | 11,420 | 271,519 | |||||||||||||||
| Prepaid expenses | 974 | 391 | 381 | 1,085 | |||||||||||||||
| Total assets | 43,839,352 | 23,579,307 | 6,292,326 | 56,158,272 | |||||||||||||||
| Liabilities: | |||||||||||||||||||
| Payables: | |||||||||||||||||||
| Investment securities purchased | — | — | 2,406 | — | |||||||||||||||
| Collateral for securities loaned | 296,300 | 33,813 | — | 292,469 | |||||||||||||||
| Line of credit | — | — | — | 1,031,411 | |||||||||||||||
| Shares of beneficial interest redeemed | 1,226,154 | — | — | — | |||||||||||||||
| Due to Adviser | 18,461 | — | — | 15,866 | |||||||||||||||
| Due to custodian | — | — | 31,227 | — | |||||||||||||||
| Deferred Trustee fees | 3,984 | 1,285 | 443 | 4,053 | |||||||||||||||
| Accrued expenses | 13,093 | 9,144 | 9,362 | 21,513 | |||||||||||||||
| Total liabilities | 1,557,992 | 44,242 | 43,438 | 1,365,312 | |||||||||||||||
| NET ASSETS | $ | 42,281,360 | $ | 23,535,065 | $ | 6,248,888 | $ | 54,792,960 | |||||||||||
| Shares outstanding | 1,750,000 | 1,000,000 | 250,000 | 2,250,000 | |||||||||||||||
| Net asset value, redemption and offering price per share | $ | 24.16 | $ | 23.54 | $ | 25.00 | $ | 24.35 | |||||||||||
| Net Assets consist of: | |||||||||||||||||||
| Aggregate paid in capital | $ | 52,317,920 | $ | 28,069,813 | $ | 6,722,853 | $ | 75,565,601 | |||||||||||
| Total distributable earnings (loss) | (10,036,560 | ) | (4,534,748 | ) | (473,965 | ) | (20,772,641 | ) | |||||||||||
| NET ASSETS | $ | 42,281,360 | $ | 23,535,065 | $ | 6,248,888 | $ | 54,792,960 | |||||||||||
| (1) Value of securities on loan | $ | 284,184 | $ | 32,805 | $ | — | $ | 785,056 | |||||||||||
| (2) Cost of investments—Unaffiliated issuers | $ | 47,612,352 | $ | 26,098,487 | $ | 6,601,777 | $ | 65,743,293 | |||||||||||
| (3) Cost of investments—Affiliated issuers | $ | — | $ | — | $ | — | $ | — | |||||||||||
| (4) Cost of short-term investments held as collateral for securities loaned | $ | 296,300 | $ | 33,813 | $ | — | $ | 292,469 | |||||||||||
| (5) Cost of cash denominated in foreign currency | $ | — | $ | — | $ | 2,435 | $ | 596,134 | |||||||||||
(a) Represents consolidated Statement of Assets and Liabilities.
See Notes to Financial Statements
| 16 |
|
|
|
Morningstar
Wide Moat ETF |
Real Asset
Allocation ETF (a) |
|||||||
| $ | 2,503,225,028 | $ | 12,364,109 | |||||
| 41,927,728 | 2,161,149 | |||||||
| 94,234 | 2,024,849 | |||||||
| 4,597 | 80,969 | |||||||
| — | — | |||||||
| — | 11,410,826 | |||||||
| 11,045,998 | — | |||||||
| — | — | |||||||
| 4,967,024 | 3,170 | |||||||
| 66,785 | 458 | |||||||
| 2,561,331,394 | 28,045,530 | |||||||
| 11,042,709 | 4,999,616 | |||||||
| 94,234 | 2,024,849 | |||||||
| 4,066,208 | — | |||||||
| — | 953,702 | |||||||
| 1,010,460 | 2,326 | |||||||
| — | — | |||||||
| 190,032 | 1,705 | |||||||
| 40,357 | 11,476 | |||||||
| 16,444,000 | 7,993,674 | |||||||
| $ | 2,544,887,394 | $ | 20,051,856 | |||||
| 58,050,000 | 1,050,000 | |||||||
| $ | 43.84 | $ | 19.10 | |||||
| $ | 3,015,724,294 | $ | 29,436,374 | |||||
| (470,836,900 | ) | (9,384,518 | ) | |||||
| $ | 2,544,887,394 | $ | 20,051,856 | |||||
| $ | 75,283,106 | $ | 3,399,536 | |||||
| $ | 2,788,468,213 | $ | 12,309,245 | |||||
| $ | 104,267,105 | $ | 3,224,581 | |||||
| $ | 94,234 | $ | 2,024,849 | |||||
| $ | — | $ | — | |||||
See Notes to Financial Statements
| 17 |
|
|
VANECK VECTORS ETF TRUST
For the Six Months Ended March 31, 2020 (unaudited)
|
Long/Flat
Trend ETF |
Morningstar
Durable Dividend ETF |
Morningstar
Global Wide Moat ETF |
Morningstar
International Moat ETF |
||||||||||||||||
| Income: | |||||||||||||||||||
| Dividends—unaffiliated issuers | $ | 681,265 | $ | 374,342 | $ | 72,674 | $ | 877,546 | |||||||||||
| Dividends—affiliated issuers | — | — | — | — | |||||||||||||||
| Interest | 456 | 37 | 106 | 702 | |||||||||||||||
| Securities lending income | 1,664 | 12 | 105 | 15,246 | |||||||||||||||
| Foreign taxes withheld | — | — | (3,014 | ) | (81,031 | ) | |||||||||||||
| Total income | 683,385 | 374,391 | 69,871 | 812,463 | |||||||||||||||
| Expenses: | |||||||||||||||||||
| Management fees | 169,719 | 30,317 | 15,543 | 186,705 | |||||||||||||||
| Professional fees | 20,416 | 19,571 | 19,508 | 21,607 | |||||||||||||||
| Custodian fees | 599 | 2,274 | 2,319 | 5,900 | |||||||||||||||
| Fund accounting fees | 5,526 | 2,436 | 2,735 | 8,520 | |||||||||||||||
| Reports to shareholders | 6,720 | 3,694 | 3,620 | 7,259 | |||||||||||||||
| IOPV fees | 2,213 | 1,970 | 1,970 | 2,562 | |||||||||||||||
| Trustees’ fees and expenses | 810 | 175 | 170 | 272 | |||||||||||||||
| Registration fees | 3,011 | 3,484 | 3,065 | 2,595 | |||||||||||||||
| Transfer agent fees | 1,221 | 1,228 | 1,228 | 1,228 | |||||||||||||||
| Insurance | 1,655 | 770 | 760 | 1,740 | |||||||||||||||
| Interest | 34 | 37 | 79 | 2,443 | |||||||||||||||
| Other | 693 | 435 | 682 | 725 | |||||||||||||||
| Total expenses | 212,617 | 66,391 | 51,679 | 241,556 | |||||||||||||||
| Waiver of management fees | (25,983 | ) | (30,317 | ) | (15,543 | ) | (30,088 | ) | |||||||||||
| Expenses assumed by the Adviser | — | (5,675 | ) | (18,073 | ) | — | |||||||||||||
| Net expenses | 186,634 | 30,399 | 18,063 | 211,468 | |||||||||||||||
| Net investment income | 496,751 | 343,992 | 51,808 | 600,995 | |||||||||||||||
| Net realized gain (loss) on: | |||||||||||||||||||
| Investments—unaffiliated issuers | — | (2,380,103 | ) | (157,934 | ) | (5,985,382 | ) | ||||||||||||
| Investments—affiliated issuers | — | — | — | — | |||||||||||||||
| In-kind redemptions—unaffiliated issuers | (1,710,788 | ) | 344,322 | — | 695,427 | ||||||||||||||
| In-kind redemptions—affiliated issuers | — | — | — | — | |||||||||||||||
| Foreign currency transactions and foreign denominated assets and liabilities | — | — | (1,398 | ) | (17,849 | ) | |||||||||||||
| Net realized loss | (1,710,788 | ) | (2,035,781 | ) | (159,332 | ) | (5,307,804 | ) | |||||||||||
| Net change in unrealized appreciation (depreciation) on: | |||||||||||||||||||
| Investments—unaffiliated issuers | (10,081,489 | ) | (2,759,606 | ) | (774,568 | ) | (6,674,923 | ) | |||||||||||
| Investments—affiliated issuers | — | — | — | — | |||||||||||||||
| Foreign currency transactions and foreign denominated assets and liabilities | — | — | (107 | ) | 5,045 | ||||||||||||||
| Net change in unrealized appreciation (depreciation) | (10,081,489 | ) | (2,759,606 | ) | (774,675 | ) | (6,669,878 | ) | |||||||||||
| Net Decrease in Net Assets Resulting from Operations | $ | (11,295,526 | ) | $ | (4,451,395 | ) | $ | (882,199 | ) | $ | (11,376,687 | ) | |||||||
| (a) | Represents Consolidated Statement of Operations |
See Notes to Financial Statements
| 18 |
|
|
|
Morningstar
Wide Moat ETF |
Real Asset
Allocation ETF (a) |
|||||||
| $ | 33,799,474 | $ | 286,960 | |||||
| 1,104,058 | 197,597 | |||||||
| 20,572 | 28,250 | |||||||
| 36,343 | 28,761 | |||||||
| (165,609 | ) | — | ||||||
| 34,794,838 | 541,568 | |||||||
| 6,834,392 | 73,916 | |||||||
| 22,919 | 22,406 | |||||||
| 14,616 | 1,736 | |||||||
| 69,181 | 3,179 | |||||||
| 52,614 | 7,271 | |||||||
| 2,562 | 2,097 | |||||||
| 10,757 | 242 | |||||||
| 29,252 | 6,444 | |||||||
| 1,228 | 2,458 | |||||||
| 12,460 | 814 | |||||||
| 20,381 | — | |||||||
| 11,921 | 490 | |||||||
| 7,082,283 | 121,053 | |||||||
| — | (39,622 | ) | ||||||
| — | — | |||||||
| 7,082,283 | 81,431 | |||||||
| 27,712,555 | 460,137 | |||||||
| (37,811,698 | ) | (994,115 | ) | |||||
| (809,356 | ) | (2,945,456 | ) | |||||
| 108,957,250 | (1,792,708 | ) | ||||||
| (3,019,058 | ) | (964,197 | ) | |||||
| — | — | |||||||
| 67,317,138 | (6,696,476 | ) | ||||||
| (411,706,814 | ) | (958,848 | ) | |||||
| (55,992,125 | ) | (812,523 | ) | |||||
| — | — | |||||||
| (467,698,939 | ) | (1,771,371 | ) | |||||
| $ | (372,669,246 | ) | $ | (8,007,710 | ) | |||
See Notes to Financial Statements
| 19 |
|
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| Long/Flat Trend ETF |
Morningstar
Durable Dividend ETF |
|||||||||||||||||||
|
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
Six Months
Ended March 31, 2020 |
For the Period
October 30, 2018* through September 30, 2019 |
|||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Operations: | ||||||||||||||||||||
| Net investment income | $ | 496,751 | $ | 869,293 | $ | 343,992 | $ | 251,795 | ||||||||||||
| Net realized gain (loss) | (1,710,788 | ) | (1,822,896 | ) | (2,035,781 | ) | 712,818 | |||||||||||||
| Net change in unrealized appreciation (depreciation) | (10,081,489 | ) | 2,238,147 | (2,759,606 | ) | 70,071 | ||||||||||||||
| Net increase (decrease) in net assets resulting from operations | (11,295,526 | ) | 1,284,544 | (4,451,395 | ) | 1,034,684 | ||||||||||||||
| Distributions to shareholders: | ||||||||||||||||||||
| Dividends and Distributions | (1,000,040 | ) | (550,200 | ) | (421,910 | ) | (130,030 | ) | ||||||||||||
| Share transactions:** | ||||||||||||||||||||
| Proceeds from sale of shares | 18,877,077 | 23,560,640 | 13,031,128 | 21,719,158 | ||||||||||||||||
| Cost of shares redeemed | (30,150,710 | ) | (10,687,796 | ) | (2,977,818 | ) | (4,268,752 | ) | ||||||||||||
| Increase (decrease) in net assets resulting from share transactions | (11,273,633 | ) | 12,872,844 | 10,053,310 | 17,450,406 | |||||||||||||||
| Total increase (decrease) in net assets | (23,569,199 | ) | 13,607,188 | 5,180,005 | 18,355,060 | |||||||||||||||
| Net Assets, beginning of period | 65,850,559 | 52,243,371 | 18,355,060 | — | ||||||||||||||||
| Net Assets, end of period | $ | 42,281,360 | $ | 65,850,559 | $ | 23,535,065 | $ | 18,355,060 | ||||||||||||
| ** Shares of Common Stock Issued (no par value) | ||||||||||||||||||||
| Shares sold | 650,000 | 900,000 | 450,000 | 800,001 | ||||||||||||||||
| Shares redeemed | (1,250,000 | ) | (400,000 | ) | (100,000 | ) | (150,001 | ) | ||||||||||||
| Net increase (decrease) | (600,000 | ) | 500,000 | 350,000 | 650,000 | |||||||||||||||
| * | Commencement of operations |
See Notes to Financial Statements
| 20 |
|
|
|
Morningstar
Global Wide Moat ETF |
Morningstar
International Moat ETF |
Morningstar Wide Moat ETF | ||||||||||||||||||||||||||
|
Six Months
Ended March 31, 2020 |
For the Period
October 30, 2018* through September 30, 2019 |
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
|||||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||
| $ | 51,808 | $ | 70,454 | $ | 600,995 | $ | 2,724,202 | $ | 27,712,555 | $ | 38,743,341 | |||||||||||||||||
| (159,332 | ) | 87,961 | (5,307,804 | ) | (4,499,913 | ) | 67,317,138 | 155,959,301 | ||||||||||||||||||||
| (774,675 | ) | 442,069 | (6,669,878 | ) | (3,098,724 | ) | (467,698,939 | ) | 7,136,244 | |||||||||||||||||||
| (882,199 | ) | 600,484 | (11,376,687 | ) | (4,874,435 | ) | (372,669,246 | ) | 201,838,886 | |||||||||||||||||||
| (181,250 | ) | (11,000 | ) | (2,750,000 | ) | (2,801,050 | ) | (43,002,000 | ) | (29,003,400 | ) | |||||||||||||||||
| 1,519,146 | 5,203,707 | 7,963,936 | 21,706,439 | 1,185,441,668 | 1,740,552,075 | |||||||||||||||||||||||
| — | — | (21,594,511 | ) | (20,939,444 | ) | (711,258,095 | ) | (997,112,445 | ) | |||||||||||||||||||
| 1,519,146 | 5,203,707 | (13,630,575 | ) | 766,995 | 474,183,573 | 743,439,630 | ||||||||||||||||||||||
| 455,697 | 5,793,191 | (27,757,262 | ) | (6,908,490 | ) | 58,512,327 | 916,275,116 | |||||||||||||||||||||
| 5,793,191 | — | 82,550,222 | 89,458,712 | 2,486,375,067 | 1,570,099,951 | |||||||||||||||||||||||
| $ | 6,248,888 | $ | 5,793,191 | $ | 54,792,960 | $ | 82,550,222 | $ | 2,544,887,394 | $ | 2,486,375,067 | |||||||||||||||||
| 50,000 | 200,000 | 250,000 | 700,000 | 22,200,000 | 36,700,000 | |||||||||||||||||||||||
| — | — | (700,000 | ) | (700,000 | ) | (13,750,000 | ) | (20,700,000 | ) | |||||||||||||||||||
| 50,000 | 200,000 | (450,000 | ) | — | 8,450,000 | 16,000,000 | ||||||||||||||||||||||
See Notes to Financial Statements
| 21 |
|
|
VANECK VECTORS ETF TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| Real Asset Allocation ETF(a) | ||||||||||
|
Six Months
Ended March 31, 2020 |
Year Ended
September 30, 2019 |
|||||||||
| (unaudited) | ||||||||||
| Operations: | ||||||||||
| Net investment income | $ | 460,137 | $ | 274,945 | ||||||
| Net realized loss | (6,696,476 | ) | (851,309 | ) | ||||||
| Net change in unrealized appreciation (depreciation) | (1,771,371 | ) | 704,784 | |||||||
| Net increase (decrease) in net assets resulting from operations | (8,007,710 | ) | 128,420 | |||||||
| Distributions to shareholders: | ||||||||||
| Dividends and Distributions | (700,005 | ) | (83,400 | ) | ||||||
| Share transactions:** | ||||||||||
| Proceeds from sale of shares | 7,647,599 | 30,284,674 | ||||||||
| Cost of shares redeemed | (9,192,728 | ) | (15,258,996 | ) | ||||||
| Increase (decrease) in net assets resulting from share transactions | (1,545,129 | ) | 15,025,678 | |||||||
| Total increase (decrease) in net assets | (10,252,844 | ) | 15,070,698 | |||||||
| Net Assets, beginning of period | 30,304,700 | 15,234,002 | ||||||||
| Net Assets, end of period | $ | 20,051,856 | $ | 30,304,700 | ||||||
| ** Shares of Common Stock Issued (no par value) | ||||||||||
| Shares sold | 300,000 | 1,200,000 | ||||||||
| Shares redeemed | (450,000 | ) | (600,000 | ) | ||||||
| Net increase (decrease) | (150,000 | ) | 600,000 | |||||||
| * | Commencement of operations |
| (a) | Represents Consolidated Statement of Changes in Net Assets. |
See Notes to Financial Statements
| 22 |
|
|
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) | 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. |
See Notes to Financial Statements
| 23 |
|
|
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
| 24 |
|
|
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
| (a) | Commencement of operations |
| (f) | 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
| 25 |
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|
VANECK VECTORS ETF TRUST
March 31, 2020 (unaudited)
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, collectively, the “Funds”).
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 approximately the same weighting as their index. 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.
| Fund | Diversification Classification | |
| Long/Flat Trend ETF* | Non-Diversified | |
| Morningstar Durable Dividend ETF | Non-Diversified | |
| Morningstar Global Wide Moat ETF | Non-Diversified | |
| Morningstar International Moat ETF | Diversified | |
| Morningstar Wide Moat ETF | Diversified | |
| Real Asset Allocation ETF | Non-Diversified | |
| * | Formerly known as NDR CMG Long/Flat Allocation ETF |
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 the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the NASDAQ official closing price. Securities traded on national exchanges are valued at the closing price on the markets in which the securities trade. 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 categorized as 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 they do not otherwise reflect the fair value of a security or asset, the security or asset will be fair valued by the Pricing Committee in accordance with the Funds’ valuation policies and procedures. The Pricing Committee employs various methods for calibrating the valuation approaches utilized to determine fair value, |
| 26 |
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| 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 Statements of Operations. Recognized gains or losses attributable to foreign currency fluctuations on foreign currency denominated assets, other than investments, and liabilities are recorded as net realized gain (loss) on foreign currency transactions and foreign denominated assets and liabilities in the Statements of Operations. |
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|
VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)
| F. | Restricted Securities—The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments. |
| G. | Offsetting Assets and Liabilities—In the ordinary course of business, the Funds enter into transactions subject to enforceable master netting or other similar agreements. Generally, the right of offset in those agreements allows the Funds to offset any exposure to a specific counterparty with any collateral received or delivered to that counterparty based on the terms of the agreements. The Funds may pledge or receive cash and or securities as collateral for derivative instruments and securities lending. For financial reporting purposes, the Funds present securities lending assets and liabilities on a gross basis in the Statements of Assets and Liabilities. Cash collateral held in the form of money market fund investments, if any, at March 31, 2020 is presented in the Schedules of Investments and in the Statements of Assets and Liabilities. Non-cash collateral is disclosed in Note 9 (Securities Lending). |
| H. | Other—Security transactions are accounted for on trade date. Realized gains and losses are determined based on the specific identification method. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized upon notification of the ex-dividend date. Interest income, including amortization of premiums and discounts, is accrued as earned. |
| The Funds earn interest income on uninvested cash balances held at the custodian bank. Such amounts, if any, are presented as interest income in the Statements of Operations. | |
| The character of distributions received from 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 Long/Flat Trend ETF, Morningstar Durable Dividend ETF, Morningstar Global Wide Moat ETF, Morningstar International Moat ETF and Morningstar Wide Moat 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, 2021, to waive management fees and assume expenses to prevent each Fund’s total annual operating expenses (excluding acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses) from exceeding expense limitations listed in the following table.
The current management fee rate and expense limitations for the period ended March 31, 2020, are as follows:
| Fund |
Management
Fees |
Expense
Limitation |
||||||
| Long/Flat Trend ETF | 0.50 | % | 0.55 | % | ||||
| 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 | ||||||
| Real Asset Allocation ETF | 0.50 | 0.55 | ||||||
Refer to the Statements of Operations for amounts waived/assumed by the Adviser.
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.
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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 period ended March 31, 2020, the Adviser waived management fees of $18,239 due to such investments held in the Real Asset Allocation ETF.
At March 31, 2020, the Adviser owned approximately 15% of Morningstar Global Wide Moat ETF.
Effective November 4, 2019, State Street Bank and Trust Company is the Funds’ custodian, securities lending agent and transfer agent. Prior to November 4, 2019, Bank of New York Mellon provided these services to the Funds.
For the period ended March 31, 2020, there were offsets to custodian fees under an expense offset agreement and these amounts are reflected in custody expense in the Statements of Operations.
Note 4—Capital Share Transactions—As of March 31, 2020, 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, for the benefit of the Funds, a requirement to maintain cash collateral on deposit at the custodian equal to at least 115% of the daily marked to market value of the missing Deposit Securities.
Authorized Participants purchasing and redeeming Creation Units may pay transaction fees directly to the transfer agent. In addition, the Funds may impose certain variable fees 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 period ended March 31, 2020, 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 | ||||||||||||
| Long/Flat Trend ETF | $ | — | $ | — | $ | 18,877,017 | $ | 30,900,057 | ||||||||
| Morningstar Durable Dividend ETF | 6,855,055 | 6,726,526 | 13,028,723 | 3,193,917 | ||||||||||||
| Morningstar Global Wide Moat ETF | 1,907,800 | 2,003,655 | 1,508,393 | — | ||||||||||||
| Morningstar International Moat ETF | 35,043,356 | 37,565,054 | 7,840,962 | 20,991,448 | ||||||||||||
| Morningstar Wide Moat ETF | 615,926,541 | 625,351,432 | 1,128,397,161 | 659,222,395 | ||||||||||||
| Real Asset Allocation ETF | 28,460,753 | 31,265,553 | 10,882,545 | 6,693,639 | ||||||||||||
Note 6—Income Taxes—As of March 31, 2020, for Federal income tax purposes, the identified cost, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) of investments owned were as follows:
| Fund |
Tax Cost of
Investments |
Gross
Unrealized Appreciation |
Gross
Unrealized (Depreciation) |
Net Unrealized
Appreciation (Depreciation) |
||||||||||||
| Long/Flat Trend ETF | $ | 47,908,652 | $ | — | $ | (5,589,590 | ) | $ | (5,589,590 | ) | ||||||
| Morningstar Durable Dividend ETF | 26,122,026 | 685,289 | (3,364,550 | ) | (2,679,261 | ) | ||||||||||
| Morningstar Global Wide Moat ETF | 6,603,535 | 279,728 | (614,010 | ) | (334,282 | ) | ||||||||||
| Morningstar International Moat ETF | 66,041,497 | 1,314,858 | (12,067,672 | ) | (10,752,814 | ) | ||||||||||
| Morningstar Wide Moat ETF | 2,893,229,906 | 87,329,202 | (435,312,118 | ) | (347,982,916 | ) | ||||||||||
| Real Asset Allocation ETF | 17,689,642 | 1,043,104 | (2,182,639 | ) | (1,139,535 | ) | ||||||||||
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|
VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)
The tax character of dividends paid to shareholders during the year ended September 30, 2019 was as follows:
| Fund |
Ordinary
Income* |
|||
| Long/Flat Trend ETF | $ | 550,200 | ||
| Morningstar Durable Dividend ETF | 130,030 | |||
| Morningstar Global Wide Moat ETF | 11,000 | |||
| Morningstar International Moat ETF | 2,801,050 | |||
| Morningstar Wide Moat ETF | 29,003,400 | |||
| Real Asset Allocation ETF | 83,400 | |||
| * | Includes short-term capital gains (if any). |
The tax character of current year distributions will be determined at the end of the current fiscal year.
At September 30, 2019, the Funds had capital loss carryforwards available to offset future capital gains, as follows:
| Fund |
Short-Term
Capital Losses with No Expiration |
Long-Term
Capital Losses with No Expiration |
Total | |||||||||
| Long/Flat Trend ETF | $ | (2,821,262 | ) | $ | (84,444 | ) | $ | (2,905,706 | ) | |||
| 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 | ) | ||||||
| Real Asset Allocation ETF | (1,591,002 | ) | — | (1,591,002 | ) | |||||||
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by applicable tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on return filings for all open tax years. The Funds do not have exposure for additional years that might still be open in certain foreign jurisdictions. Therefore, no provision for income tax is required in the Funds’ financial statements. However, certain Funds are subject to foreign taxes on the appreciation in value of certain investments. The Funds provide for such taxes on both realized and unrealized appreciation.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended March 31, 2020, 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 or natural or other disasters, such as the recent coronavirus outbreak. 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
Long/Flat Trend ETF may invest in shares of other funds, including ETFs that track the S&P 500 Index. As a result, the Fund will indirectly be exposed to the risks of an investment in the underlying funds. Shares of other funds have many of the same risks as direct investments in common stocks or bonds. In addition, the market value of the Fund’s shares is expected to rise and fall as the value of the underlying index or bond rises and falls. The market value of such funds’ shares may differ from the net asset value of the particular fund.
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.
A recent outbreak of respiratory disease caused by a novel coronavirus, which was first detected in China in December 2019, has subsequently spread internationally and has been declared a pandemic by the World Health Organization.
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The coronavirus has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, loss of life, as well as general concern and uncertainty. The coronavirus has already negatively impacted the economies of many nations, individual companies, the market and the Funds. This pandemic is expected to have a continued impact in ways that cannot necessarily be foreseen presently.
A more complete description of risks is included in each Fund’s Prospectus and Statement of Additional Information.
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 securities lending agent. Each Fund may lend up to 33% of its investments requiring that the loan be continuously collateralized by cash, cash equivalents, U.S. government securities, or any combination of cash and such securities at all times equal to at least 102% (105% for foreign securities) of the market value 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. Securities lending income is disclosed as such in the Statements of Operations. The cash collateral is maintained on the Funds’ behalf by the lending agent and is invested in the State Street Navigator Securities Lending Government Money Market Portfolio. Non-cash collateral consists of U.S. Treasuries and U.S. Government Agency securities, and is not disclosed in the Funds’ Schedules of Investments or Statements of Assets and Liabilities as it is held by the agent on behalf of the Funds, and the Funds do not have the ability to re-hypothecate those securities. Loans are subject to termination at the option of the borrower or the Funds. Upon termination of the loan, the borrower will return to the Fund securities identical to the securities loaned. The Funds bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The value of loaned securities and related cash collateral, if any, at March 31, 2020 are presented on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities. The following is a summary of the Funds’ securities on loan and related collateral as of March 31, 2020:
| Fund |
Market Value
of Securities on Loan |
Cash
Collateral |
Non-Cash
Collateral |
Total Collateral | ||||||||||||
| Long/Flat Trend ETF | $ | 284,184 | $ | 296,300 | $ | — | $ | 296,300 | ||||||||
| Morningstar Durable Dividend ETF | 32,805 | 33,813 | — | 33,813 | ||||||||||||
| Morningstar International Moat ETF | 785,056 | 292,469 | 561,584 | 854,053 | ||||||||||||
| Morningstar Wide Moat ETF | 75,283,106 | 94,234 | 78,637,886 | 78,732,121 | ||||||||||||
| Real Asset Allocation ETF | 3,399,536 | 2,024,849 | 1,447,398 | 3,472,247 | ||||||||||||
The following table presents money market fund investments held as collateral by type of security on loan as of March 31, 2020:
|
Gross Amount of Recognized
Liabilities for Securities Loaned in the Statements of Assets and Liabilities* |
|||||
| Fund | Equity Securities | ||||
| Long/Flat Trend ETF | $ | 296,300 | |||
| Morningstar Durable Dividend ETF | 33,813 | ||||
| Morningstar International Moat ETF | 292,469 | ||||
| Morningstar Wide Moat ETF | 94,234 | ||||
| Real Asset Allocation ETF | 2,024,849 | ||||
| * | Remaining contractual maturity: overnight and continuous |
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|
|
VANECK VECTORS ETF TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)
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 period ended March 31, 2020, the following Funds borrowed under this Facility:
| Fund |
Days
Outstanding |
Average Daily
Loan Balance |
Average
Interest Rate |
|||||||
| Morningstar International Moat ETF | 97 | $ | 339,598 | 2.92 | % | |||||
| Morningstar Wide Moat ETF | 66 | 4,008,702 | 2.95 | |||||||
| Real Asset Allocation ETF | 17 | 506,439 | 2.96 | |||||||
Outstanding loan balances as of March 31, 2020, if any, are reflected in the Statements of Assets and Liabilities.
Note 11—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 the ASU 2018-13 had no material effect on financial statements and related disclosures. Management evaluated the additional requirements, not yet adopted, and they are not expected to have a material impact to the financial statements. Public companies will be required to disclose the range and weighted average used to develop 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 12—Subsequent Event Review—The Funds have evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.
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VANECK VECTORS ETF TRUST
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
(unaudited)
At a meeting held on February 26, 2020 (the “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”), considered and approved an investment management agreement between the Trust and Van Eck Associates Corporation (the “Adviser”) (the “Investment Management Agreement”) with respect to the VanEck Vectors Innovation 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 advance of the Meeting, the Trustees received materials from the Adviser, including expense information for other funds. The Adviser provided the Trustees with information regarding, among other things, the various aspects of the Fund’s proposed investment program, fee arrangements and service provider arrangements. 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 Meeting regarding the management of the Fund, 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 proposed to be involved in the management and administration of the Fund. The Trustees also considered the terms and scope of services that the Adviser would provide 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 at least one year following the effective date of the registration statement.
The Trustees considered the benefits, other than the fees under the Investment Management Agreement, that the Adviser would receive from serving as adviser to the Fund. The Trustees did not consider historical information about the cost of the services provided by the Adviser or the profitability of the Fund to the Adviser because the Fund had not yet commenced operations. In addition, because the Fund had not yet commenced operations, the Trustees could not consider the historical performance or actual management fees or operating expenses of, or the quality of services previously provided to, the Fund by the Adviser, 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 Meeting as part of their consideration of the Investment Management Agreement.
In voting to approve 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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VANECK VECTORS ETF TRUST
FUNDS’ LIQUIDITY RISK MANAGEMENT PROGRAM
(unaudited)
In accordance with Rule 22e-4 (the “Liquidity Rule”) under the 1940 Act, the Funds have implemented a Liquidity Risk Management Program (the “Program”). The Program outlines certain techniques, tools and arrangements employed for the assessment and management of Fund liquidity risk, and the terms, contents and frequency of reporting of certain issues to the Board. Liquidity is managed taking account of the Funds’ investment strategy, liquidity profile, and, importantly, the fact that for most funds redemptions are settled primarily as in-kind redemptions. In this regard, certain of the Funds qualify as “In-Kind ETFs” under the Liquidity Rule because they meet redemptions through in-kind transfers of securities, positions and assets other than a de minimis amount of cash and publish their portfolio holdings daily. In-Kind ETFs are exempt from the Liquidity Rule’s classification and highly liquid investment minimum (“HLIM”) provisions, discussed below.
Under the Program and in accordance with the Liquidity Rule, each Fund’s liquidity risk is assessed at least annually taking into consideration certain factors enumerated in the Liquidity Rule, as applicable. The Liquidity Rule calls for considering certain such factors under both normal and reasonably foreseeable stressed market conditions.
With respect to each Fund that does not qualify under the Liquidity Rule as an “In-Kind ETF,” the Liquidity Rule and the Program require that each portfolio holding be classified into one of four liquidity classification categories. The Liquidity Rule requires that such classification determinations be made taking into account relevant market, trading and investment-specific considerations as well as market depth. The relevant Funds utilize data from a third-party vendor to assist with these determinations.
Funds that do not qualify as “In-Kind ETFs” are also required to determine and periodically review an HLIM – a minimum percentage of Fund net assets that are to be invested in Highly Liquid Investments that are assets – and adopt certain related procedures. A Highly Liquid Investment is defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
The Liquidity Rule provides an exemption from the HLIM requirements for Funds that “primarily” hold Highly Liquid Investments, as defined in the Program. For the period December 1, 2018 to December 31, 2019 (the “Review Period”), the Funds that were not In-Kind ETFs qualified for an exemption and therefore have not determined an HLIM or adopted the related procedures.
The Board reviewed a report prepared by each Fund’s Adviser regarding the operation and effectiveness of the Program for the Review Period. During the Review Period, the Funds maintained a high level of liquidity and primarily held assets that are defined under the Liquidity Rule as “Highly Liquid Investments.” Further information on liquidity risks applicable to the Fund can be found in the Fund’s prospectus.
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This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by a VanEck Vectors ETF Trust (the “Trust”) prospectus and summary prospectus, which includes more complete information. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
Additional information about the Trust’s Board of Trustees/Officers and a description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities are provided in the Statement of Additional Information. The Statement of Additional Information and information regarding how the Trust voted proxies relating to portfolio securities during the most recent twelve month period ending June 30 is available, without charge, by calling 800.826.2333, or by visiting vaneck.com, or on the Securities and Exchange Commission’s website at http://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-PORT. The Trust’s Form N-PORT Filings are available on the Commission’s website at http://www.sec.gov and may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 202.942.8090. The Funds’ complete schedules of portfolio holdings are also available by calling 800.826.2333 or by visiting vaneck.com.
| Investment Adviser: | Van Eck Associates Corporation | |
| Distributor: | Van Eck Securities Corporation | |
| 666 Third Avenue, New York, NY 10017 | ||
| vaneck.com | ||
| Account Assistance: | 800.826.2333 | STRATSAR |
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| Item 2. | CODE OF ETHICS. |
Not applicable.
| Item 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
| Item 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
| Item 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| 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 MANAGER 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. |
Not applicable.
| 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-3(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 INVESTMENT COMPANIES. |
Not applicable.
| Item 13. | EXHIBITS. |
| (b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is furnished as Exhibit 99.906CERT. |
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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 & Chief Financial Officer |
Date June 8, 2020
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, Chief Executive Officer |
Date June 8, 2020
| By (Signature and Title) | /s/ John J. Crimmins, Treasurer & Chief Financial Officer |
Date June 8, 2020